DONOBi Announces First Phase of Major Cost Reductions and Realignment Plan to Streamline Operations and Shorten Path to Profitability

DONOBi Announces First Phase of Major Cost Reductions and Realignment Plan to Streamline Operations and Shorten Path to Profitability

BREMERTON, Wash., Oct. 13 /PRNewswire-FirstCall/ -- DONOBi, Inc. (BULLETIN BOARD: DNOB) , a cutting-edge provider of integrated voice, Internet, and television services to businesses, multi-family properties, and consumers in emerging regional markets, announced the completion of the first phase of a major streamlining and cost reduction plan, cutting annualized overhead and cost of goods expenses by nearly $400,000.

The overall plan, which management expects to implement over the next two to three calendar quarters, represents a fundamental shift in the way DONOBi provisions and delivers its service platform, and has been designed to allow the Company to support a national rollout of its rural market targeted ISP, Digital TV Package and VOIP solutions vs. the current structure of providing more regionally based solutions. Under the plan, efficiencies will be realized by shifting a number of both fixed and variable operating costs downstream to channel partners, as well as creating strategic relationships with tier-one service providers to wring out additional savings via economies of scale. In addition to restructuring the company's service platform, the streamlining plan is being implemented to bring the Company closer to its goal of realizing profitable operations in the near term, while building a more versatile infrastructure for the deployment of additional value added service offerings in the future.

The first stage of the plan, which has now been fully implemented, realizes an approximate 20% reduction in personnel costs through job realignment. In dollar terms, this represents an annual overhead savings of approximately $204,000. In addition, the Company was able to restructure agreements with vendors and a number of ongoing contractual relationships, producing an approximate 17% savings in the costs of goods sold. At the present run rate, the implementation of these changes equates to annual savings of approximately $180,000, bringing total annualized cost reduction to just under $400,000.

Bill Wright, DONOBi Chairman and CEO, said, "One of the basic premises of our business plan is that we can become more efficient as we grow. Generally those changes come through more efficient cost of goods and purchasing. In this case we were able to also identify efficiencies through job realignment without impacting our high level of customer service. The prior implementation of our proprietary software and the increased management tools available today has assisted in our realizing these cost savings."

About DONOBi, Inc.

DONOBi, Inc. is an Internet solutions company providing voice, digital television, Wi-Fi and Internet services to business, residential and municipal customers over a variety of mediums, including fiber optic and high-speed wireless technologies. The Company provides high-quality communications, content and IT services to its growing customer base, and through its Shared Tenant Services division, offers sophisticated technology-driven services and solutions that specifically address issues facing the apartment, hospitality, commercial property and government housing industries -- the ability to obtain high-speed Internet access at a reasonable per unit cost. The Company's overall strategy is to maintain a next-generation, technological advantage and become a dominant, bundled solutions provider for small to medium-sized businesses and residents within emerging regional markets throughout the U.S. For more information, please visit the Company's web site at www.donobi.com.

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this news release may contain or constitute forward-looking statements. These forward-looking statements are based on current expectations and are subject to risk and uncertainties. In connection with the "safe harbor" provisions of the Private Securities Litigation Act of 1995, DONOBi provides the following cautionary statement identifying important factors which, among others, could cause the actual results or events to differ materially from those set forth or implied by the forward-looking statements and related assumptions.

Source: DONOBi, Inc.

CONTACT: Bill Wright, President & Chief Executive Officer of DONOBi, Inc., +1-360-473-1160, or bwright@donobi.com

Web site: http://www.donobi.com/

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