Compu-DAWN Obtains Option to Purchase a Telecommunications Entity Which Holds the Certificates -Tariffs- to Operate as a Reseller of Telecommunications Services Directly to the Consumer Throughout the United States.

CEDARHURST, NY--(BUSINESS WIRE)--March 17, 1999--Compu-DAWN, Inc. (NASDAQ:ETVC) announced today that in connection with its recent announcement dated March 16, 1999 relating to the entry into a telecommunications distributor agreement, the Company has obtained an option to purchase all of the equity of E.Comtel, LLC, a privately held telecommunications entity (an affiliate of Alliance Group Services, Inc.) that either currently holds or has agreed to procure by August, 1999, the necessary state certificates of public convenience and necessity (tariffs) as a reseller of telecommunication services directly to the consumer in all 50 states.

The option agreement allows Compu-DAWN, Inc. to acquire these assets at any time during the next 24 month period for $500,000 in a combination of cash and stock, or cash at Compu-DAWN's option or in certain circumstances. It is contemplated that if and when Compu-DAWN exercises its option, Compu-DAWN or its designee will be in a position to resell telecommunications services directly with the consumer and provide the service and operational infrastructure of the business.

"e.TV Commerce, Inc. ("e.TV"), the Company's recently created wholly owned subsidiary will continue to expand its current customer base of long distance customers which is presently over 100,000 billing telephone numbers by selling E.Comtel's telecommunication services under the distributor agreement. With such a sizeable base of business and with our expected growth and recent expansion into the internet, e-commerce and telecommunications industry, we felt it is of strategic importance to the Company to be in control our own destiny. Therefore, Compu-DAWN developed a strategy whereby it could eventually operate as its own reseller of telecommunications services directly to the consumer. The Company is expected to exercise its option under the agreement at the time when it has reached certain economies of scale in the business, subject to our satisfactory due diligence of E.Comtel and its continued compliance with state and federal telecommunications regulations, among other things. Ownership of the accounts opened under our distributor agreement with E.Comtel, LLC, an AT&T reseller, will transfer to Compu-DAWN if we acquire the E.Comtel entity that holds the necessary state certificates (tariffs). We are extremely excited about the many advantages and opportunities that this arrangement affords us," said Mark Honigsfeld, Chief Executive Officer.

Honigsfeld continued, "the ownership of customer accounts as a direct reseller will mark the true opening of our being able to offer ongoing competitive rates to our customers. It will also afford us an opportunity to maximize profit margins often enjoyed by facilities based carriers. It will allow us to promote and offer our customers various options of telecommunications services under one billing platform. We may also anticipate buying block time in certain markets at more competitive rates. In effect, we are now in a position to increase our operating gross profit margins which should increase our profitability."

Forward Looking Statements

Certain information contained in this announcement are "forward-looking statements". Compu-DAWN cautions readers that certain important factors may affect actual results and could cause such results to differ materially from any forward-looking statements which may be deemed to have been made in this announcement or which are otherwise made by or on behalf of Compu-DAWN. For this purpose, any statements contained in this announcement that are not statements of historical fact may be deemed to be forward-looking statements. Factors which may affect results include, but are not limited to, the risks and uncertainties associated with developments and regulation in the telecommunications industry, the risk of loss of management and personnel, the competitive environment within the telecommunications industry, the competence required and experience of management and economic conditions.