Pegasus Wireless to Move from Nasdaq.

Company Will Continue to Comply With All SEC Reporting Obligations

FREMONT, Calif. -- Pegasus Wireless Corp. (Nasdaq:PGWC), a leading provider of advanced wireless solutions, today announced that it has applied to withdraw its securities from listing on the Nasdaq Global Market by October 26, 2006, at which time the Company expects Pegasus Wireless stock to immediately begin trading on another listed exchange or the OTC Bulletin Board.

In a letter to Nasdaq the Company said, "Over the preceding two months, the common stock of PGWC has experienced significant volume increases, price reductions and volatility. PGWC believes that it is in its shareholders' best interest" to take this action.

The Company noted that it is in compliance with all the Nasdaq Global Market listing requirements.

Commenting on the decision, Pegasus Wireless CEO Jasper Knabb stated, "Taking into consideration current market environments and trading patterns over the last six months, the Board has determined that maintaining the listing of Pegasus Wireless' common stock on Nasdaq no longer serves the best interests of the Company and its stockholders."

The Company said that it will continue to comply with its obligations under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including filing annual reports on Form 10-KSB and quarterly reports on Form 10-QSB. The Company said that it also intends to maintain internal control and governance procedures in line with the Sarbanes-Oxley Act of 2002.

"The Board of Directors considers it critical to maintain a viable market for the Company's common stock. For this reason we are working to ensure a smooth transition to another listed exchange or the OTC Bulletin Board. Moreover, we believe that by withdrawing from Nasdaq the Company will be able to expend more of its time and resources on growing the Company and manufacturing and marketing wireless products which in turn will be more beneficial to our shareholders," Mr. Knabb concluded.

About Pegasus Wireless Corp.

Pegasus Wireless Corp. is a leading provider of advanced wireless solutions. Pegasus creates hardware and software solutions for broadband wireless networking and Internet access applications through its manufacturing facilities located in China and Taiwan. Pegasus' patented 802.11 technology is the platform for Wi-Fi technology, and the company offers cutting edge wireless products used in computer networking, industrial data transmission, and multimedia applications. Pegasus pioneered the industry's first driver-less, truly plug-and-play wireless Ethernet bridge, and the company's wireless networking products allow a higher user capacity per base station as compared to the competition. These products also offer advanced security, easy true plug-n-play installation, dynamic load balance, non-interrupting real-time roaming connectivity, e.g. VOIP, and fail-safe, self-healing mesh networking capability. Products are distributed through the company's facility located in California. Pegasus Wireless Corp. can be contacted at 510-490-8288 or by visiting their website at http://www.pegasuswirelesscorp.com/.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. These forward-looking statements, which include, without limitation, the Company's expectation that its securities will trade on another listed exchange or on the OTC Bulletin Board and the Company's intent to comply with certain provisions of the Sarbanes-Oxley Act of 2002, involve known and unknown risks, uncertainties and other factors. Such uncertainties and risks include, among others, success in reaching target markets for services and products in a highly competitive wireless technology market, the ability to maintain existing and attract future customers; the ability to finance and sustain operations, including the ability to comply with the terms of working capital facilities and/or other term indebtedness of the Company, and to extend such obligations when they become due, or to replace them with alternative financing; the ability to raise equity capital in the future; the ability to achieve and sustain profitability; the ability to maintain business relationships with product vendors and service providers; the ability to retain a skilled professional staff and certain key executives; and such other risks and uncertainties included in the Company's Annual Report on Form 10-KSB and other filings with the Securities and Exchange Commission. The Company has no obligation to publicly release the results of any revisions, which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.