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Pandatel Announces New Major Shareholder, New CEO, Operations Restructuring and Plan to Merge with Dowslake Microsystems

Pandatel AG, a publicly traded company at the German Prime standard market(ISIN DE0006916307), and a specialist for the Ethernet and optical networking, announces that Dowslake Venture Ltd., a major shareholder of Dowslake Microsystems, has acquired 29% of Pandatel shares from Augusta AG (Frankfurt). Dowslake Venture Ltd. intends to purchase the remaining 20.98% of Pandatel stock from Augusta subject to regulatory approval, especially an exemption from the obligation to submit a mandatory takeover offer to all the outstanding shareholders. Dowslake Venture Ltd.'s general partner, Dr. Dan D. Yang, is appointed as the new CEO of Pandatel AG, effective immediately. At the same time of her appointment, Dr. Yang has received the consent of the supervisory board of Pandatel AG, and of the board of Dowslake Microsystems to initiate the process of operations restructuring. The restructuring plan involves the merger of Dowslake Microsystems, of which Dr. Yang is a majority shareholder, into Pandatel, subject to shareholders and regulatory approval. "I'm delighted to take my new role to lead a joint effort in restructuring Pandatel," Dr. Yang said. "As a major shareholder of both Pandatel and Dowslake Microsystems, I'm sure Pandatel has all the ingredients to successfully turnaround its operations", Dr. Yang continued. "On behalf of Pandatel, we are excited about the opportunity laying in front of us," Thomas Becker, Pandatel's current CFO adds. " Combining Pandatel's IP access products with Dowslake's advanced optical networking products, together with Dowslake's North American presence and its low cost manufacturing facility in China, not only will we expand our market, but also we will be able to substantially reduce our cost and offer more competitive products. These are all compelling solutions to our customers." As part of the restructuring plan, it is intended to significantly streamline and refocus Pandatel's German operations. Upon shareholder, regulatory and board final approval, and subject to a valuation and confirmation by an independent auditing company, Pandatel is considering to offer to the Dowslake shareholders to exchange their shares with Pandatel's stocks. Prior to the exchange and upon shareholder approval, Pandatel intends to increase its current capital structure from about 8 million shares to 23 millions. Dowslake has about 15 million shares outstanding. The transaction might be valued at approximately 11 million Euro based on Pandatel stock price at last Friday's closing as subject to an appraisal by an independent auditing company. Pandatel's Q3 revenue is 2.9 million Euro with an operating loss of 5 million Euro. Pandatel's revenue has been falling more than 70% since the beginning of the market downturn, from its peak revenue of 34 million in 2001 to an estimated 10 million in 2005. Dowslake's un-audited Q3 revenue is approximately 1 million US dollars, with an operating profit of approximately 130,000 US dollars, resulting a net earning ratio of 13%. Dowslake Microsystems is one of the few companies in the telecom space with consistent revenue growth as well as profitability. The combined company will have an estimated annual sales of 14 million Euros and a combined cash reserve of more than 10 million Euros. The company targets to return to profitability by Q1 2007, following the completion of the restructuring plan. Pandatel expects to finalize the merger in Q1 2006. About Dr. Dan D. Yang Dr Yang was born in Nanjing, China, and graduated from University Paris-Orsay with a Doctorate degree in Optics and Photonics. One of pioneers of intelligent optical networking, she was also the founder of AFC Technologies in Ottawa Canada which was acquired by JDS Uniphase in 1999. Holding 9 United States patents on networking technology, Dr Yang is also a renowned high tech entrepreneur in the Ottawa and Silicon Valley business communities. In October 2000, she founded Dowslake Microsystems in the heart of Silicon Valley by putting in her own money as a major part of investment. Since then Dowslake Microsystems has emerged as a leading OEM partner to major communications system makers, thanks to her vision, dedication, strategic investment in China operations, seamless execution execution, and her total commitment to customer satisfaction. About Pandatel Pandatel is a German corporation based in Hamburg. Pandatel was formed in 1988 as Pan Dacom Telekommunikation GmbH. It went to public at Frankfurt Prime standard in November 1999. Pandatel provides Ethernet and data connectivity, multiplexing, and protocol conversion products such as Ethernet copper or fiber optic converters and multiplexers, Ethernet-over- SDH/Sonet, SDH/Sonet-over-Ethernet, and optical multi-wavelength transport products for enterprise customers. Pandatel currently sells its products through its regional offices and subsidiaries in France, UK, and Singapore. The company's current operations, product strategy will be reviewed during the restructuring. OEM partnership such as Dowslake's business model will be explored to expand market presence. For more information about Pandatel, please visit http://www.pandatel.com About Dowslake Microsystems Headquartered in Santa Clara California, with a manufacturing facility in Shanghai China, Dowslake offers to its customers the best of the world - advanced product design and low cost manufacturing. The product portfolio of Dowslake Microsystems includes a series of cost-effective building blocks for fiber optic transport technology. Recently Dowslake Microsystems has acquired Rullingnet (Hongkong) to develop advanced Ethernet-over-Sonet/SDH solutions. Dowslake customers include major telecom system makers with more than 65% of revenue from the United States, with remaining from Japan, China, and Israel. Dowslake sells its products mainly through a network of independent sales partners. For more information about Dowslake, please visit http://www.dowslakemicro.com Contact: Hartmut Schultz Kommunikation GmbH Hochlstrasse 2 81675 Munchen Tel.: +49(0)89-99-24-96-24 Fax: +49(0)89-99-24-96-22

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