Pannaway Technologies Acquires Access Division From TelStrat International, Ltd.

Acquisition Creates the Most Comprehensive, Integrated IP Broadband Access Portfolio Available Providing Telcos With a Seamless Path to an All-IP Future


PORTSMOUTH, NH--(Marketwire - August 14, 2007) - Pannaway Technologies, Inc., designers and developers of converged IP broadband access platforms for telecommunications companies, announced today that it has entered into a definitive agreement to acquire the Access division of TelStrat International. TelStrat's innovative Inteleflex® broadband loop carrier (BLC) platform enables telecommunications providers to bridge today's circuit-switched and emerging packet-based networks to deliver converged voice, video and data communication and entertainment services. TelStrat is also recognized as the first company in North America to deploy next-generation 2.4 GPON-based FTTH from a full-service broadband loop carrier platform.

The combined entity of Pannaway and TelStrat creates the most comprehensive, fully integrated IP-based portfolio available which includes circuit switch, carrier-grade IP, and next-generation 2.4 GPON technologies across its broad range of platforms. Each of these platforms is based on the same underlying architecture which serves to accelerate platform integration and provides optimal solutions for all sizes of Central Office (CO), Wire Center and Remote Terminal (RT) environments. This platform flexibility enables telcos to expand their subscriber densities in each of these applications by leveraging the high capacity MAGNM-20 chassis, the medium capacity Inteleflex chassis, or the award-winning stackable Broadband Access Switch (BAS) family.

The cash and stock transaction is expected to close by the end of August 2007 and will expand Pannaway's telco customer base to over 300. As part of the transaction, Bob Carroll, founder and CEO of Telstrat, has joined the board of Pannaway Technologies. Sid Schmid, formerly GM of Telstrat's telecommunications division, has joined Pannaway as an Executive Vice President and will lead the integration efforts. Telstrat, as a result of this transaction, will focus all of its efforts on its longstanding Enterprise Business Division and its CallParrot Business Call Recording product line.

"Following its recently announced MAGNM-20 chassis announcement, this acquisition brings together the broadband access and transport technologies that telcos need to compete -- all under one roof," said Jeff Heynen, Directing Analyst, Broadband and IPTV at Infonetics Research. "Independent telcos prefer companies with products that can offer a range of access technologies -- from POTS to VDSL to GPON -- to support a wide range of customers and applications. The combination of Pannaway and TelStrat satisfies that demand for a common IP platform and positions Pannaway as a leading supplier to independent telcos."

Pannaway's acquisition will enable ILECs, CLECs and Municipalities to quickly roll out new services while enhancing their existing offerings -- ultimately increasing broadband access revenue. New notable capabilities include:

--  Acceleration of technology into the MAGNM-20 platform.
--  Inclusion of Inteleflex as a key component of the Pannaway portfolio,
    enhanced with Pannaway's 10Gigabit transport across an all IP backplane,
    ensuring telcos who have invested in this platform that extensive future
    development and support will continue.
--  The ability for telcos to easily transition at their own pace, from
    SONET/ATM and TDM to a fully converged IP infrastructure.
--  Industry-leading systems approach combining IP, 1 to 10Gigabit, SONET,
    TDM, FTTH 2.4 GPON and 100/1000Mbps Active Ethernet, xDSL, T1, POTS and
    Special circuits.
    

"I am pleased to have found such a strong match with Pannaway and elated to be an ongoing and active member of the Pannaway board," said Bob Carroll, CEO of TelStrat. "I am impressed with the commitment of the investment team and strong balance sheet that Pannaway enjoys, underscored by its continued zero debt position. Pannaway has both the resources and the technology arsenal to continue to serve our existing customers well, while focusing on the continued development of integrated IP broadband solutions."

Mark Carpenter, President for Pannaway adds, "The various integrated technologies and broad range of platforms that come into play as a result of this acquisition strengthen the capabilities of our entire broadband solution portfolio and will become our customers' catalyst for growth as they move toward an all-IP future."

About TelStrat International, LTD.

TelStrat® provides communication solutions for wireline access networks and enterprise telecommunications environments. The company's innovative Inteleflex® broadband loop carrier platform enables telecommunications providers serving smaller cities and rural markets to bridge today's circuit-switched networks and emerging packet-based services to deliver converged voice, data and video communication and entertainment services. TelStrat also offers the CallParrot™ Business Call Recording portfolio, which enables call center quality monitoring and business liability protection, and a variety of remote access products sold under the Nortel name. Founded in 1993, TelStrat has consistently maintained an unsurpassed commitment to customers and their business needs. The company is headquartered in Plano, Texas. For more information, please visit www.telstrat.com.

About Pannaway Technologies

Pannaway delivers customer-proven broadband access and transport solutions that enable wireless and wireline telecommunications service providers to offer new advanced services to their subscribers. Based on industry-standard IP (Internet Protocol) technologies, Pannaway's multi award-winning Service Convergence Network (SCN™) architecture enables providers to reduce expenses, increase revenue and compete more effectively through the delivery of converged services.

For more information, please visit www.pannaway.com

This press release contains forward-looking statements that are based upon management's current expectations and are inherently uncertain. Forward-looking statements are based upon information available to us as of the date of this press release and we assume no obligation to revise or update any such forward looking statement to reflect any event or circumstance after the date of this release. Actual results and the timing of events could differ materially from current expectations due to a number of factors.

The acquisition of TelStrat by Pannaway is subject to the satisfaction of customary closing conditions.

Contact Information: Contacts: Kevin Brown Pannaway Technologies 603-766-5142 kbrown@pannaway.com Dale Allaire BridgeView Marketing 603-766-3681 dale@bridgeviewmarketing.com