Digital Dispatch Systems Inc.
TSX : DD

Digital Dispatch Systems Inc.

August 21, 2007 08:00 ET

Digital Dispatch to Acquire Mobisoft Oy

Agrees to Acquire ASP Solution for Small Taxi and Transit Fleets

RICHMOND, BRITISH COLUMBIA--(Marketwire - Aug. 21, 2007) - Digital Dispatch Systems Inc. ("Digital Dispatch") (TSX:DD), a leading provider of mobile data solutions, announced today that it has signed a binding letter of intent to acquire all of the shares of Mobisoft Oy ("Mobisoft"). Subject to execution of a definitive agreement and regulatory approvals in both Finland and Canada, the closing of this transaction is expected to occur on or before September 30, 2007.

The total consideration payable by Digital Dispatch is EUR5.7 million, payable by EUR3.0 million in cash and the remainder in Digital Dispatch stock issued from treasury with the number of Digital Dispatch shares to be issued based on the lesser of the weighted average trading price of Digital Dispatch for the five trading days prior to acquisition closing date and CDN$3.50 per share.

Mobisoft is a growing and profitable international Finnish software company specializing in application service provider (ASP) oriented automated dispatching and wireless data transfer applications for passenger transport. Providing automated dispatching and scheduling, GPS and digital map based routing and location systems in Europe for over ten years, Mobisoft is well positioned to capitalize on the increasing demand for passenger transport. Mobisoft's focus on real-time scheduling and dispatching for passenger transport allows it to provide complete systems to address all the needs of any transport operator or provider including taxi companies, local transit authorities, and transit companies.

According to Vari Ghai, CEO of Digital Dispatch, "The acquisition of Mobisoft is very strategic. The enterprise taxi dispatch market for large fleets is maturing and saturating. According to the Taxicab, Limousine & Paratransit Association (TLPA), approximately 85% of taxi fleets are less than 50 vehicles. The hosted ASP recurring revenue model of Mobisoft provides us with the ideal solution to address this huge opportunity. With Digital Dispatch's strong brand recognition in taxi and Mobisoft's proven product offering, we expect to quickly exploit this exciting opportunity. Mobisoft's MobiRouter and MobiTravel Center products for school buses, airport shuttles and transit authorities provide us with additional products and customers to expand our non-taxi business. In addition to further strengthening our European presence with their offices in Oxford, UK and Finland which augment our offices in Cambridge, UK and Sweden, we also expect to sell our mobile data terminal (MDT) products to their existing and new customers by offering a complete one-stop solution."

"This merger enables our team to expand into the North American market and validates our efforts to develop the first hosted ASP taxi fleet management system for small fleets with shared call centers," stated Heikki Karintaus, CEO and Managing Director of Mobisoft. "Digital Dispatch provides us with an exciting partnership to leverage their strong market presence, brand recognition and financial resources to accelerate Mobisoft's growth by offering our recurring revenue rental program on a global basis."

The combination of technical development and strong mobile data engineering skills along with many years of passenger transport experience has enabled Mobisoft to develop highly advanced IT wireless solutions for multiple forms of passenger transport including the TaxiBook automatic booking and dispatching system, and the MobiRouter journey combination system. Over two thousand taxis in Finland are already controlled using Mobisoft software and its use in the United Kingdom is expanding through the marketing efforts of Mobisoft's UK subsidiary. Mobisoft's MobiRouter software offering is used for scheduling public Demand Responsive Transport (DRT) services and is a market leader in the United Kingdom for such services. MobiRouter is also a market leader and is widely used in Finland by government agencies.

Forward-Looking Statements

This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to, the successful negotiation and execution of the definitive acquisition agreement by September 30, 2007 and the related integration of the acquisition referred to in this press release. Additional factors also include the need to develop, integrate and deploy applications to meet our customer's requirements; the possibility of development or deployment difficulties or delays; the dependence on our customer's satisfaction with Digital Dispatch's products; the timing of entering into significant contracts; our customers' continued commitment to the deployment of our solutions; the risks involved in developing integrated software and hardware solutions and integrating them with third-party communication and other services; the performance of the global economy and growth in software industry sales; market acceptance of the Company's products and services; customer and industry analyst perception of the Company and its technology vision and future prospects; the success of certain business combinations engaged in by the Company or by competitors; political unrest or acts of war; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to acquisitions and international expansion; reliance on large customers; concentration of sales; international operations and sales; management of growth and expansion; dependence upon key personnel and hiring; reliance on a limited number of suppliers; industry growth; competition; intellectual property; product defects and product liability; currency exchange rate risk; concentration of ownership; and including but not limited to other factors described in Digital Dispatch's reports filed on Sedar, including its Annual Information Form and financial report for the year ended December 31, 2006.
In drawing a conclusion or making a forecast or projection set out in the forward-looking information, the Company takes into account the following material factors and assumptions in addition to the above factors the Company's ability to execute on its business plan; the acceptance of the Company's products and services by its customers; the timing of execution of outstanding or potential customer contracts by the Company; the sales opportunities available to the Company; the Company's subjective assessment of the likelihood of success of a sales lead or opportunity; the Company's historic ability to generate sales leads or opportunities; and that sales will be completed at or above the Company's estimated margins. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

About Mobisoft Oy

Visit www.mobisoft.fi for more information.

About Digital Dispatch Systems Inc.

Digital Dispatch Systems Inc. is a worldwide provider of mobile data solutions for fleet and mobile workforce management. Founded in 1987, we have an installed base of 75,000 wireless mobile data devices and nearly 200 wireless data systems in four continents. We offer products and services to manage vehicle fleets and mobile workforces, including dispatch software, wireless communication infrastructure and a range of in-vehicle mobile devices. Visit www.digital-dispatch.com for more information.

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