Cyber Digital, Inc. Announces Company's Consideration of 'Certificate Only' Trading as Part of an Overall Re-Structure Initiative.Business Editors HAUPPAUGE, N.Y.--(BUSINESS WIRE)--July 28, 2003 Cyber Digital, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: CYBD), announced today that it is considering a strategy which includes the possible adoption of "custody only" or "certificate only" trading of its shares as a measure to protect naked short selling Naked short selling, or naked shorting refers to the practice of selling a stock short without first borrowing the shares or making an "affirmative determination" that the shares can be borrowed. on the Company's stock. The Company continues to be concerned about what it perceives as an artificially depressed stock price. Mr. J.C. Chatpar, Chairman of Cyber Digital, stated, "We are one of a very few telecom companies with voice and broadband systems available for the creation of critical 'last mile' networks. Federal Communications Commission's (FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. ) deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. policy of 2003 requires competitive service providers to build their own critical 'last mile' networks instead of leasing such networks from Bells, thus opening the market for our systems. Furthermore, we are progressing well in Nigeria. Our systems are based on our cutting-edge proprietary hardware and software technology developed over many years. We believe comparable technology, if developed today, would cost over a few hundred million dollars. The hard cash investment that went into the company to achieve all this progress is several times higher than the company's market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. . Therefore, we are frustrated by what we believe to be 'naked shorts', which have driven down our valuation substantially. We are beginning to institute an overall restructure of our company in order to maximize the shareholder value and financing opportunities." In a 'naked' short sale of stock, the short positions are not declared, and the shares are not borrowed to cover the short sale. The shares are actually sold without delivering the stock to the buyer. This effectively creates 'virtual' shares that are not backed up by real shares, thus artificially inflating ownership and devaluating the price of the stock. Under 'custody only' trading, the investor continues to use their broker for purchases and sales and would request the physical delivery of all of their shares. The certificates received by the Company's transfer agent for selling by an investor would be cancelled and a new certificate for an equal number of shares would be issued in the name of the buyer. Therefore, no certificates would be issued in the name of Depository Trust Company Depository Trust Company (DTC) DTC is the world's largest central securities depository. It accepts deposits of over 2 million equity and debt securities issues (valued at $23 trillion) from over 65 countries for custody, executes book-entry deliveries (valued at over $116 trillion or CEDE To yield up; to assign; to grant; to surrender; to withdraw. Generally used to designate the transfer of territory from one government to another. TO CEDE, civil law. To assign; to transfer; as, France ceded Louisiana to the United States. & Co., and Cyber Digital shares would no longer clear through the DTC DTC See: Depository Transfer Check DTC See: Depository Trust Company DTC See Depository Trust Company (DTC). system. This procedure is one way to ensure buyers that share purchases will be from bona fide [Latin, In good faith.] Honest; genuine; actual; authentic; acting without the intention of defrauding. A bona fide purchaser is one who purchases property for a valuable consideration that is inducement for entering into a contract and without suspicion of being stockholders and not from naked short naked short The investment position of the underwriting firm for a new issue when the underwriting firm has sold more shares short than will be issued. sellers. It would be in the best interests of all shareholders to ensure that they participate in this 'custody only' trading since the share price will more properly reflect the company's status. The Company has not yet made a final decision regarding the implementation of 'custody only' trading and it intends to seek prior approval from its stockholders. Mr. Chatpar continued, "We are focused on success. We appreciate the patience of our investors, many of whom have been with us since the inception. We believe that the incoming changes to our overall restructure strategy will result in a more realistic valuation of the company." About Cyber Digital, Inc. Cyber Digital, Inc., is a leading manufacturer and software developer of advanced digital voice switches and Internet Protocol (IP) systems for network operators worldwide. Website is www.cyberdigitalinc.com This press release contains forward-looking statements, pursuant to the "safe harbor" provisions as fully described in Cyber's SEC filings. |
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