Dialogic Announces A $39.5 Million Debt Exchange

Dialogic Inc. (NASDAQ:DLGC), a leading provider of communications technologies that power advanced networks, announced today that it has signed securities purchase agreements with a broad group of its largest existing shareholders and their affiliates. Under the terms of the securities purchase agreement, the purchasers have been issued convertible notes in the amount of $39.53 million in exchange for debt and term loan pre-payment premiums. The convertible notes will be converted into common shares in Dialogic Inc. (“Company”) upon stockholder approval, which is expected at the June stockholder’s meeting. All debt and loan pre-payment premiums covered by the convertible notes will be exchanged at the rate of $1.00 per share of common stock with the exception of $2.96 million representing interest from the first quarter of 2012 that was not paid in cash, was added to principal and will now convert at the rate of $0.87 per share of common stock. Upon the conversion of the convertible notes into common shares following stockholder approval, the Company expects to reduce the principal of its long-term debt held by Tennenbaum Capital Partners, LLC and certain of its affiliates from $92.83 million to $59.88 million, to eliminate its related party long-term debt of $5.07 million and to increase its common shares outstanding from 31.48 million to approximately 71.45 million. Consistent with the reduction in debt, the Company expects to reduce its 2012 quarterly cash interest by $2.60 million or $10.60 million annually.

This press release does not and shall not constitute an offer to sell or the solicitation of any offer to buy any of these securities.

For additional information, please refer to Dialogic’s current report on Form 8-K to be filed with the Securities Exchange Commission with respect to this transaction.

About Dialogic

Dialogic (NASDAQ: DLGC) develops products and technologies that enable operators to provide – and subscribers to enjoy - an enhanced mobile experience. Whether our products are used in mobile value-added service solutions or to transform, connect and optimize communications services, Dialogic understands that mobile experience matters. Our technology touches over two billion mobile subscribers a day and our network solutions carry more than 15 billion minutes of traffic per month.

For more information on Dialogic and the communications solutions built on Dialogic ® technology, visit www.dialogic.com and www.dialogic.com/showcase. Also, find us on the following social networking sites:

This press release may contain forward-looking statements regarding future events that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. These forward-looking statements involve risks and uncertainties, as well as assumptions that if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include but are not limited to, anticipated stockholders approval of the debt exchange, our level of our indebtedness, reducing operating expenses, including our ability to achieve expected savings in future cash interest expense and other risks and uncertainties described more fully in our documents filed with or furnished to the SEC. More information about these and other risks that may impact Dialogic's business is set forth in the "Risk Factors" section in our Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the SEC. These filings are available on a website maintained by the SEC http://www.sec.gov/ . All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

Dialogic is a registered trademark of Dialogic Inc. or a subsidiary. All other company and product names may be trademarks of the respective companies with which they are associated. (DLGC- IR)

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