[GRAPHIC OMITTED]
EXHIBIT 99.2
C-PHONE CORPORATION ENTERS INTO LETTER OF INTENT TO
SELL VIDEOCONFERENCING ASSETS TO
MOTION MEDIA FOR $1 MILLION
- - - - -
UNLESS SHAREHOLDER APPROVAL IS OBTAINED, IT IS LIKELY THAT NO FUNDS WILL
BE AVAILABLE FOR DISTRIBUTION TO SHAREHOLDERS ON SHUT DOWN OF COMPANY
- - - - -
THE COMPANY ALSO INTENDS TO WITHDRAW ITS APPEAL OF THE DELISTING OF ITS
COMMON STOCK ON THE NASDAQ SMALLCAP MARKET
WILMINGTON, NC - JANUARY 8, 2001 -- C-PHONE CORPORATION (NASDAQ: "CFON") today
announced that it has entered into a Letter of Intent with Motion Media
Technology Inc. ("Motion Media") for the sale of C-Phone's videoconferencing
assets for $1 million. Motion Media is a subsidiary of Motion Media PLC Group
(London Stock Exchange).
As the transaction must be approved by C-Phone shareholders, the
earliest the transaction could close would be in several months. Until the
closing, C-Phone must maintain operations, which will result in continuing
operating deficits. Motion Media initially will purchase some of C-Phone's
component inventory and acquire a non-exclusive license for a recently developed
POTS-only product design, which has not yet been put into production. This
initial transaction will provide C-Phone with funds which should enable it to
continue its operations until the closing; however, the total purchase price of
the videoconferencing assets will be reduced by these advance payments.
Paul Albritton, President and CEO, stated "We have attempted to find a
purchaser for our Company and/or our business for the past several months and
the proposed transaction with Motion Media has been the best that we have been
able to obtain. Shareholder approval of the transaction will be required under
applicable law. The cost of maintaining our business while seeking such
approval, along with the associated cost of preparing proxy materials and
holding a shareholders' meeting, will significantly reduce the net proceeds to
be received.
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While we are still seeking a possible business combination for the remainder of
our Company without its videoconferencing business, the likelihood of success in
this endeavor is remote. Therefore, we intend to voluntarily withdraw our appeal
of the delisting of our common stock on the Nasdaq SmallCap Market. In the event
our proposed transaction with Motion Media is approved by our shareholders, the
funds remaining for eventual distribution to our shareholders may be as much as
$0.05 per share. If the Motion Media transaction is not approved by our
shareholders, then, in all likelihood, C-Phone will cease its operations, in
which event it is unlikely that any funds will available for distribution to our
shareholders."
Mr. Albritton further stated "We are pleased that Motion Media will be
taking over our videoconferencing business. They have the technical expertise,
background and financial wherewithal to provide the right products to service
our customers."
C-Phone Corporation has been a provider of video communications
products for general business and the security, education and healthcare
markets. Information on the Company and its products can be found at
www.cphone.com.
Statements made in this press release, other than those concerning historical
information, should be considered forward-looking and subject to various risks
and uncertainties. Such forward-looking statements are made based on
management's belief as well as assumptions made by, and information currently
available to, management pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including among others those
identified in C-Phone's Annual Report on Form 10-KSB for the fiscal year ended
February 29, 2000, C-Phone's Quarterly Report on Form 10-QSB for the fiscal
quarter ended August 31, 2000 and C-Phone's Current Report on Form 8-K dated
November 20, 2000, as well as factors such as future economic conditions, the
willingness of customers to continue to purchase C-Phone's products, the ability
of C-Phone to sell or license its technology, the ability of C-Phone to sell its
remaining inventory and assets and the absence of any unforeseen contingent
liabilities. C-Phone undertakes no obligation to release publicly the result of
any revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date of this press release or to reflect the
occurrence of other unanticipated events.
This release and prior releases are available on the KCSA Public Relations
Worldwide website at www.kcsa.com.
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