Nayna Networks Announces Its Intention To Acquire Abundance Networks

Will Establish A Presence In Growing India Telecom Market

 

 

Santa Clara, Calif., USA - November 9, 2005 - Nayna Networks, Inc., (OTCBB: NAYN), a provider of next generation network solutions headquartered in Santa Clara, today announced that it has entered into a letter of intent to acquire substantially all of the assets of privately-held Abundance Networks headquartered in Shelton, Connecticut, with regional sales and R&D offices in Mumbai, India, in exchange for shares of Nayna Common Stock. Abundance Networks is profitable and its acquisition is the latest step in Nayna’s expansion into high-growth markets.

As agreed by the companies, at the closing of the proposed acquisition Nayna intends to issue to Abundance 800,000 shares plus an additional number of shares equal to (i) $1,000,000 divided by (ii) the average of the closing prices of its common stock during the twenty consecutive trading days ending one day prior to the closing date. 450,000 of the shares to be issued at closing will be subject to price protection at a value of $2.00 per share with any adjustment to be made on the first anniversary of closing. In addition, 350,000 of the shares to be issued at closing will be held in escrow for fifteen months to satisfy any indemnification claims by Nayna. Abundance can earn up to an additional 1,750,000 shares based on the achievement of certain revenue and earnings based milestones through March 31, 2007. Any shares released from escrow to Abundance or issued to Abundance upon achievement of any earn out milestones will also be subject to price protection at a value of $2.00 per share with any adjustments to be made at the time of delivery of the shares to Abundance. Employees of Abundance will also be granted options to purchase up to 450,000 shares, which are also subject to price protection at a value of $2.00 per share. The transaction is subject to the successful completion of Nayna’s due diligence and the execution of definitive documents.

The Indian marketplace for broadband technology and services is thriving, making it one of the fastest growing telecom markets in the world with government analysts estimating it will grow from less than 3 million broadband subscribers to 20 million by 2007.

“Jointly this acquisition is a win-win situation for both companies,” said Naveen Bisht, president and CEO, Nayna Networks. “With a shared vision for broadband networks plus expanded engineering and operations strength, the combined companies are better positioned to increase near term market share in the rapidly growing Indian telecom market.”

Founded in 2002, Abundance is a recognized supplier of TDM/Ethernet over SONET/SDH optical Access solutions in India. The acquisition will provide Nayna an opportunity to sell its Fiber to The Premise (FTTP) ExpressSTREAM product lines into the Indian market and opens Nayna’s global sales channels to Abundance products.

“We are excited to be joining Nayna Networks. With their synergistic sales channels and robust product offering, Nayna Networks is a recognized supplier in delivering triple play broadband services to the customer,” said Suresh Pillai, president and CEO of Abundance Networks. “Nayna’s FTTP solutions can help us reach the customer’s set-top-box and desktop level. Likewise, Abundance can expand Nayna further upstream into Wide Area Networking (WAN). The result is a strong, complete end-to-end broadband solution that is easy for service providers to provision and operate.”

Abundance’s products meet or exceed the latest general requirements established by the Government of India and are approved for use in the India Telecom Network. Sales, Customer and Technical Support for India will be handled out of Abundance’s regional headquarters in Mumbai, India, where it employs nearly 50 people.

“From a customer point of view, Abundance Networks is known for technological leadership and commitment to customer service,” said Gautam Chanda, vice president, business development, Nayna Networks. “Abundance already has a strong telecom customer base in India and is well positioned to open the marketplace for Nayna. Together we hope to capitalize on what is expected to be one of the largest broadband markets for VoIP, Internet, TDM and streaming video applications in India.”

About Abundance Networks

Abundance Networks delivers next generation integrated access managed TDM/Ethernet over SONET/SDH optical solutions for the metro edge network.

About Nayna Networks, Inc.

Nayna Networks, Inc., delivers next generation network solutions. More information is available at http://www.nayna.com.

In addition, all shareholders and interested parties are invited to sign into our private Corporate Guest Book at http://www.CorporateGuestBook.com/?NAYN to receive timely updates and information on future developments.

Forward-Looking Statements

 

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. For more information regarding Forward Looking Statements and related risks, see the "Risk Factors" section of Nayna's filings with the SEC. The company undertakes no obligation to revise or update any forward-looking statements for any reason.

 

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Contact Information

Jim Connor

Nayna Networks

408-956-8000 x831

jim@nayna.com