SOURCE: CelLynx, Inc.

August 14, 2008 13:51 ET

CelLynx Issues Special Letter to Shareholders

EL DORADO HILLS, CA--(Marketwire - August 14, 2008) - CelLynx Group, Inc. (OTCBB: CYNX) today issued the following Special Letter to Shareholders:

Dear Fellow Shareholder:

CelLynx's recent transition into a public company was an important Company milestone. I welcome all of our new shareholders, and am writing to explain our favorable industry position and goals for the next year.

CelLynx is developing and plans to produce and market a next generation of cell phone amplifiers for the small office, home office ("SOHO") and vehicle. This revolutionary patent pending product, CelLynx 5BARz™, is the first single-piece unit that strengthens weak cellular signals to deliver higher quality signals for voice, data and video reception on cell phones being used indoors or in vehicles (www.cellynx.com).

The CelLynx 5BARz™ plug-and-play solution is a dramatic technological advance compared with the market's current home and vehicle alternatives that generally require professional cable and outside antenna installation, typically providing less performance often at higher cost.

Vast Market Opportunity

The world increasingly relies on cellular communications to stay connected. The most prevalent problem -- facing many of the more than two billion cellular users worldwide -- is poor signal quality in the home, office or car. That number is projected to increase to three billion cellular users by year end 2008 and grow to four billion by 2011.

According to CTIA - The Wireless Association, 40 percent of customers switching cell phone carriers are searching for a better signal at home or in their vehicle. As it costs the average carrier almost $400 to acquire a new subscriber, this switching between carriers is the industry's most serious problem.

By addressing just the customer segment with the most critical need for improved network coverage (two percent of worldwide cellular users) the market size for the CelLynx technology is estimated at about $9 billion. And as networks evolve from primarily voice -- to internet and video -- we expect the coverage quality problems will increase exponentially.

Revolutionary Proprietary Technology Solution

Most SOHO cellular amplifiers currently on the market require a receiving antenna, usually placed in an attic or on a rooftop, and a transmitting antenna to be placed at least 35 feet from the receiving antenna with each connected to an amplifier by cable.

CelLynx's 5BARz™ technology eliminates the need to distance the receiving and transmitting antennas, resulting in a one-piece unit. You simply plug the device into an electrical outlet. This feature is referred to as 'plug & play' -- the ultimate consumer friendly installation procedure. The CelLynx's 5BARz™ is lightweight, smaller than a coffee maker, aesthetically pleasing and designed to sit on a table near a window.

For vehicles, the 5BARz™ mobile unit is designed to eliminate cell phone 'dead spots' where cell signals are inadequate. Simply place the unit in a convenient location within the vehicle, place the antenna close to the windshield on the dashboard or attached to the inside windshield with the supplied suction cup, and plug in the cigarette lighter power adapter.

This 5BARz™ mobile unit includes a Bluetooth® speaker phone with caller ID to offer hands free conversation. We believe CelLynx technology is superior to current vehicle solutions requiring complex installation including roof top mounting of the antenna and, in some cases, a direct connection between the cell phone and the roof top antenna.

Commercialization

CelLynx plans to develop its products for use worldwide, and intends to use contract manufacturers in Southeast Asia for multiple manufacturing locations as well as to capitalize on an experienced technical work force and supply chain management expertise.

CelLynx management and engineering teams have extensive experience working with off shore manufacturers and have, collectively, successfully launched over 150 complex RF products in the past seven years.

The Company's marketing and sales functions will be handled in-house incorporating a multi-channel strategy that includes distribution partners, wireless service providers, retail outlets and international joint ventures. The Company anticipates both the SOHO and mobile units will be competitively priced at about $299 each.

Outlook 2009 -- Positioned for Success

CelLynx has set the following goals for the next twelve months:

--  Launch Mobile Unit. We plan to introduce the mobile 5BARz™
    production sample units to the North American marketplace in the fourth
    quarter of 2008, with an aggressive market launch beginning in the first
    half of 2009. This will be followed by introduction of an international
    model in the overseas market in mid 2009.
    
--  Launch Home Unit.  Separately, we also expect to introduce our North
    American SOHO production sample units in the fourth quarter of 2008, with
    an aggressive marketing launch to begin in the first half of 2009. This
    will be followed by introduction of an international SOHO model in mid
    2009.
    
--  Form Strategic Alliances. We intend to selectively form strategic
    alliances with industry manufacturers, suppliers, resellers, cellular
    network providers or retailers which offer strong mutual synergies.
    
--  Reinforce Management.  To facilitate growth and a successful market
    launch, CelLynx will add senior industry executives to management and its
    board of directors.
    
--  Raise Growth Capital. We believe we will raise $2 million in equity
    funding from the exercise of investor warrants upon the Company reaching
    production sample milestones expected by year end. Additionally, an
    international distribution agreement with Dollardex provides for $10
    million if CelLynx reaches certain commercial production milestones
    expected in 2009.
    
--  Go Global. We plan to take 5BARz™ global next year and have entered
    into a distribution agreement with Dollardex in which Dollardex will act as
    the exclusive distributor of CelLynx's 5BARz™ products and related
    accessories in Canada, South America, Europe, Middle East, China, India,
    Australia, Africa, and South East Asia.
    

We are making solid progress toward completion of production of the 5BARz™ home and mobile models, and we expect official introduction by year end. CelLynx is actively building relationships with prospective corporate customers and marketing partners in anticipation of product launch in the early months of 2009.

Our Company is proudly led by an accomplished group of industry veterans who believe CelLynx holds great promise. We appreciate your confidence and support.

Yours truly,

Daniel Ash
President, Chief Executive Officer and Chief Operating Officer

Forward Looking Statement

This news release includes forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. While these statements are made to convey to the public the company's progress, business opportunities and growth prospects, readers are cautioned that such forward-looking statements represent management's opinion. Whereas management believes such representations to be true and accurate based on information and data available to the company at this time, actual results may differ materially from those described. The Company's operations and business prospects are always subject to risk and uncertainties. Important factors that may cause actual results to differ include without limitation: whether the Company's technology will reach commercialization, the Company's limited operational history; requirement for and ability to raise capital; market acceptance of the Company's products; dependence on suppliers, third party manufacturers and other key vendors or partners; dependence on key personnel; continued enforceability of patent and trademark rights; and competition.

These risk factors are set forth in the Company's Form 8-K filed with the U.S. Securities and Exchange Commission on July 30, 2008. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as of the date of this press release. The Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Contact Information

  • Company Contact:
    Daniel Ash
    CEO
    Tel: (916) 941-1403
    Email: Email Contact