digital dispatch initiating coverage

Please see disclaimers on the last two pages of this report.

Mobile Data Solutions

DDS Wireless International Inc. (DD-T, $2.50) Recommendation: BUY Greg Reid, CFA (416) 642-3807; [email protected] Marcel Valentin (416) 640-4952; [email protected] June 3, 2008

All values in C$ unless otherwise noted.

Current Price $2.50 Target Price (12-Month) $4.50 Target Return 80%

Adjusted Old New

EPS 2007A EPS 2008E EPS 2009E

N/A N/A N/A

($0.05) $0.21 $0.33

Recommend. N/A BUY Target N/A $4.50

Company Profile DDS Wireless International is a global provider of wireless mobile data solutions focusing on real-time dispatching, vehicle location and tracking, and computerized routing and scheduling, most notably in the taxi market. Through the StrataGen Systems acquisition, the Company also services 4 of the top 5 and 10 of the top 20 North American transit operators.

Entering a New Phase - Targeting More

Aggressive (but Profitable) Growth

• Taxi industry mobile data solution leader entering next growth stage.With recent acquisitions, new markets, and future acquisition intentions, DD is targeting to grow revenues from $21M in ‘07 to $100M by 2011.

• Recurring revenue base will likely increase from ~ 60% today. DD is expanding into new segments such as Transit & small taxi fleet markets. With acquisitions, becoming more software-focused.

• A long history of profitability. DD has been profitable for 16 of the last 17 yrs. With improving growth prospects and a low share count we expect a return to solid EPS growth.

• Initiating coverage with BUY rating and $4.50 DCF-based target. Target implies 14x ‘09E EPS and 1.4x ’09 EV/sales. We estimate that over 80% of our 2008E sales forecast is “in the bag”.

Financial Summary

Shares Out (mln) 13.8 52-Week RangeMarket Cap $34.5 Avg Weekly VolumeNet Cash (mln) $0.7 Fiscal Year End Dec-31Enterprise Value $33.8 Tangible BV/Share $1.88

12/06A 12/07A 12/08E 12/09ERevenue (mln) $23.6 $20.6 $35.1 $43.6EV/Revenue 1.4x 1.6x 1.0x 0.8xGAAP Diluted EPS $0.19 ($0.28) ($0.05) $0.05Adjusted Diluted EPS $0.15 ($0.05) $0.21 $0.33Price/Adj. Earnings 16.9x n.m.f. 11.9x 7.6xEBITDA (mln) $2.4 ($1.9) $2.9 $5.5

Adjusted Diluted EPS Q1 Q2 Q3 Q4F2007A ($0.02) A ($0.01) A $0.02 A ($0.04) AF2008E $0.01 A $0.04 E $0.07 E $0.09 EF2009E $0.03 E $0.06 E $0.10 E $0.14 E

$2.25-$3.1511,630

* Excludes amortization of intangibles, foreign exchange, stock-based compensation expenses & associated tax effects Source: Company reports, WWCM

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DDS Wireless International Inc.

Greg Reid, CFA (416-642-3807; [email protected]) June 3, 2008– 2

Investment Summary and Outlook We believe that DDS Wireless International Inc. (“DDS Wireless”) is poised to re-accelerate growth by leveraging dominance in routing and dispatch solutions for taxis into new markets, including transit fleets and mobile advertising. The Company has an extensive, global customer base dominated by large taxi fleets with more than 100 vehicles, which provides a solid recurring revenue stream. Recent acquisitions have expanded the Company’s pipeline, the product line and cross-selling opportunities. Simply put, recent acquisitions provide a new leg of growth for DDS Wireless to build upon a strong recurring revenue base.

We are initiating on DDS Wireless with a BUY rating and a $4.50 target price. We arrive at our valuation using a 10-year DCF with a 12.5% discount rate and 4% terminal value. This target implies 14x our 2009 EPS forecast. Management has a track record of operating the company to generate solid profitability. With over 80% visibility on this year’s revenue forecast and a low valuation relative to the peers, we believe the risk/reward is favorable on DDS Wireless.

Investment Positives More aggressive growth as targeting $100 million in revenues by 2011. DDS Wireless is expanding the business beyond taxi dispatch and into complementary markets, including paratransit and advertising. This implies a compound annual revenue growth rate of 48% from 2006 through 2011.

Becoming more software focused with a large recurring revenue base. In 2007, about 75% of revenue came from existing customers in the form of new sales as well as support and maintenance contracts. We estimate that pro forma recent acquisitions, roughly 60% of revenues are recurring. There is no single customer that accounts for more than 10% of sales.

More than just taxis. After nearly twenty years of global leadership in turnkey wireless enterprise solutions for large taxi fleets, DDS Wireless has expanded into new markets. DDS Wireless now has a web-based managed dispatch service for small taxi fleet operators that we expect will allow the Company to tap into this large but underpenetrated market. The recent Mobisoft and StrataGen acquisitions expand the Company’s focus into the paratransit market and add critical mass.

Transit industry trends on their side. There is an ongoing trend of transit organizations to deploy systems beyond just “schedule and dispatch” to those inclusive of automatic vehicle location (AVL), mobile data terminals (MDTs), and interactive voice response (IVR). The U.S. Disabilities Act requires transit operators to provide paratransit services. United Kingdom also has a disability mandate and similar laws could be coming to France, the Nordic countries and the European Union. This will drive demand from DDS Wireless’ customer base.

A strong history of profitability with almost 16 consecutive years of profitability. Although 2007 was not profitable, we believe this was a one-time



anomaly due to the slowdown in the large taxi market, the appreciation of the Canadian dollar, and ramped spending on new business initiatives. We expect profitability to return in 2008 and believe that approximately 80% of our 2008 forecast is already “in the bag”. The company’s break even point is approximately $28 million in revenues while revenue guidance for the year is $36 million to $38 million. Each $1 million of revenue above the $28 million break even level adds about 2.5 cents to EPS.

Investment Risks Much of DDS Wireless’ business is conducted outside of Canada, which can create foreign currency exposure. In 2007, foreign sales accounted for approximately 37% of the Company’s revenues, while a large portion of the operating expense base is in Canadian dollars. The Company’s revenue growth has been hampered by the depreciating U.S. dollar and this could be an ongoing issue.

Acquisitions could be challenging and divert resources away from core operations. DDS Wireless recently announced two acquisitions, one in the United States in a new vertical (paratransit) and another in Finland, which sells into the core taxi business. Integrating new geographies, markets and product portfolios could be challenging. However, results to date suggest a successful integration of both recent acquisitions.

Contracts delays impact short term results. DDS Wireless is a market leader in the large taxi fleet markets (more than 100 vehicles). From time-to-time, contracts can be pushed into subsequent quarters causing lower top line results and decreased profitability in individual quarters compared to investor expectations.

Valuation and Recommendation As seen in Exhibit 1, our $4.50 target price is based on a discounted cash flow model using a 12.5% discount rate and 4% growth in our terminal value. Our target implies 14x our 2009 EPS estimate, in-line with the peer group average in Exhibit 2. We forecast 24% revenue growth and 57% EPS growth in 2009 as the Company gains traction in the newly addressed markets. As the Company executes in these new markets, we believe there could be upside potential to our forecasts. We also note our estimates exclude potential acquisitions that management is more aggressively targeting.

Exhibit 1: 10-Year Discounted Cash Flow Valuation

$ 4.51 10 .0 % 1 1.0 % 1 2.5% 1 3.0% 14 .0 % 1 5.0%0% $ 5.0 2 $ 4.49 $3 .87 $3 .69 $ 3.3 8 $3 .121% $ 5.2 6 $ 4.67 $3 .98 $3 .80 $ 3.4 6 $3 .182% $ 5.5 6 $ 4.89 $4 .13 $3 .92 $ 3.5 6 $3 .263% $ 5.9 5 $ 5.16 $4 .30 $4 .07 $ 3.6 7 $3 .344% $ 6.4 7 $ 5.52 $4 .51 $4 .25 $ 3.8 0 $3 .445% $ 7.2 0 $ 5.99 $4 .78 $4 .47 $ 3.9 7 $3 .566% $ 8.3 0 $ 6.65 $5 .13 $4 .76 $ 4.1 7 $3 .71

D I S C O U N T R A T E

TERM

INAL

GRO

WTH

RA

TE

Source: WWCM estimates



Exhibit 2: Peer Valuation

All values in US$ unless otherwise notedFY Price

Company Name Ticker End Mkt Cap 2-Jun-08 C07E C08E C09E C07E C08E C09E C07E C08E C09E C07E C08E C09E C07E C08E C09EConstellation Software CSU-T Dec $572 $27.00 $0.52 $2.05 $2.32 52x 13x 12x n.m.f. 294% 13% 2.3x 1.8x 1.6x 15% 23% 15%Datacom Wireless (C$) DAT-V Dec $8 $0.25 ($0.27) ($0.08) ($0.04) n.m.f. n.m.f. n.m.f. n.m.f. n.m.f. n.m.f. 0.5x 0.4x 0.4x 9% 14% 11%DDS Wireless International (C$) DD-T Dec $34 $2.50 ($0.05) $0.21 $0.33 n.m.f. 12x 8x n.m.f. n.m.f. 57% 1.6x 1.0x 0.8x -13% 71% 24%Grey Island Systems (C$) GIS-V Sept $32 $0.34 $0.02 $0.03 $0.05 21x 13x 7x n.m.f. 59% 85% 1.0x 0.8x 0.7x 42% 22% 27%Hemisphere GPS (C$) HEM-T Dec $251 $4.88 ($0.01) $0.21 $0.29 n.m.f. 23x 17x n.m.f. n.m.f. 38% 4.0x 3.0x 2.4x 27% 34% 23%init AG (€) IXX-FRA March 80 € 8.20 € 0.55 € 0.65 € 0.84 € 15x 13x 10x 53% 18% 29% 1.7x 1.5x 1.2x 34% 15% 25%Ituran Location & Control ITRN-Q Dec $283 $12.78 $2.20 $0.69 $0.88 6x 19x 15x 168% -69% 28% 1.7x 1.7x 1.6x 20% -1% 10%LoJack Corporation LOJN-Q Dec $162 $8.79 $1.13 $0.72 $0.94 8x 12x 9x 31% -36% 31% 0.5x 0.6x 0.5x 4% -5% 6%SiRF Technology, Inc. SIRF-Q Dec $430 $7.13 $0.99 ($0.22) $0.25 7x n.m.f. 29x 10% n.m.f. n.m.f. 0.9x 1.1x 1.0x 33% -16% 7%

Trimble Navigation Ltd. TRMB-Q Dec $1,620 $40.43 $1.25 $1.54 $1.82 32x 26x 22x 40% 23% 18% 1.3x 1.1x 1.0x 30% 16% 14%Wireless Matrix WRX-T April $62 $0.75 ($0.00) $0.04 $0.10 n.m.f. 21x 7x n.m.f. n.m.f. 184% 1.5x 1.3x 1.0x 31% 16% 24%WebTech Wireless (C$) WEW-T July $211 $3.62 ($0.07) $0.13 $0.40 n.m.f. 27x 9x n.m.f. n.m.f. 199% 10.8x 4.2x 2.1x -20% 159% 97%

Average 20x 18x 13x 61% 48% 68% 2.3x 1.5x 1.2x 18% 29% 24%Average (ex-Digital Dispatch) 20x 19x 14x 61% 48% 69% 2.4x 1.6x 1.2x 20% 25% 24%Average (ex-Digital Dispatch and WebTech Wireless) 20x 17x 14x 61% 48% 53% 1.5x 1.3x 1.1x 24% 12% 16%

Revenue GrowthEarnings GrowthEPS P/E EV/Revenue

Source: Thompson ONE, Bloomberg, WWCM estimates

Company Overview Founded in 1987, British Columbia-based DDS Wireless International Inc. is a global provider of wireless mobile data solutions that improve vehicle fleet dispatching/routing and increase workforce productivity. In June 1999, the Company acquired the Transport Business Units of MDSI Mobile Data Solutions Inc., establishing a European and Asian presence. The Company has installed over 75,000 wireless mobile data devices and over 200 wireless data systems on four continents with the taxi market comprising the majority of business. DDS Wireless has offices in Canada, India, the United Kingdom, Sweden, Singapore and the United States. The 2007 acquisitions of Mobisoft and StrataGen increased the headcount by roughly 55 people to 190. The Company now has two dominant segments – Taxi and Transit.

Historically, the Company has focused on the taxi and limousine market. Products and services include dispatch software, in-vehicle mobile devices and wireless communication infrastructure. Beyond the taxi market, the Company also provides solutions for the roadside assistance, transit/paratransit, emergency services, airport shuttle, courier, and other industries requiring vehicle location, tracking, and advertising. DDS Wireless also now provides mobile data systems that facilitate debit and credit card processing. In order to expand the market opportunity further, DDS Wireless expanded into public transit market. After a recent re-organization, DDS Wireless’ business is now segmented into four operating groups: Taxi, Transit, Commercial Fleet and Wireless Devices.

Prior to 2007, the Company had been profitable for 16 consecutive years. While 2007 was not profitable, we believe this is a short-term aberration as DDS Wireless worked to integrate the StrataGen and Mobisoft acquisitions and ramped a new business opportunity (in-cab advertising) and dealt with an appreciating Canadian dollar and a slowdown in the large taxi fleet market.



Exhibit 3: Corporate Timeline

Date EventQ1/'08 NY Transit Authority accepts StrataGen license upgrade.

Digital Dispatch changes name to DDS Wireless InternationalQ4/'07 Wireless TV Studios Inc. of New York commences legal action in New York Federal Court for

alleged breach of contract and copyright infringement.Acquisition of StrataGen Systems closes. Deal is worth US$6 millionAcquisition of Mobisoft Oy closes worth €5.2 million (€3.0 million cash and 1,280,000 Digital Dispatch shares).

Q2/'07 Agreement with deCarta to integrate web-based mapping into the Company's eFleet solution

Q3/'06 Issued a special cash dividend of $0.60 per share or $7.2 millionQ2/'06 Renewed normal course issuer bid for 5% of common shares

MACT Holding Company Limited, a wholly owned subsidiary of Macquarie Bank Limited, and DDS Wireless are working together to bring new dispatch and payment technology to the taxi industry in Sydney, Australia.

Q2/'05 Announced normal course issuer bid to acquire 5% of common sharesQ3/'04 Terminated LOI to acquire Maddocks and issued revenue warning

Signed LOI to acquire Maddocks Systems for $10 millionQ1/'04 Complete $17 million financing at $6 per shareQ4/'03 Digital Dispatch becomes a public entity.

1999 Acquired Transportation business unit of Mobile Data Solutions1987 Digital Dispatch founded by Vari Ghai

Source: Company reports, WWCM

Capital Structure In November 2003 DDS Wireless became publicly traded on the Toronto Stock Exchange. Today, management and insiders hold approximately 59% of all shares (7.7 million) and investment firm Howson Tattersall owns approximately 12% of outstanding shares. The Company issued 2.8 million special warrants at $6 per share in Q1/04. In Q4/07, DDS Wireless issued 1.28 million shares as consideration for the Mobisoft acquisition and 0.65 million for StrataGen. At March 31, 2008, DDS Wireless had 13.8 million shares outstanding.



Exhibit 4: Broad Base of Global Customers

Date Event Value ($000s)Q2/'08 Platinum Taxi of Melbourne, Australia to outfit 100 out of 200 vehicles. Chicago's SCR Medical Transportation upgrades hardware. $1,000Q1/'08 New York Transit Authority accepts StrataGen license upgrade. ~$2,000

Duffy's Taxi of Winnipeg, Manitoba and Kumar Transportation of Memphis, Tennessee sign long-term service agreements $1,0001-800-GOT-JUNK selects eFleet N/A

Q4/'07 Contract with Golden Triangle Taxi of Cambridge, Ontario $450MOU to supply up to 2,000 mobile data terminals over 18 months to ORIX Auto Infrastructure Services Limited of Mumbai, India N/ADeal to become primary solutions provider for Access Services Inc.'s (ASI) paratransit fleet in Los Angeles. Primary solutions provider $3,320

Q3/'07 Order to equip Detroit's SMART agency with complete para-transit management solution. Prime contractor $2,150South African-based Emcom agrees to purchase Vector530 mobile data terminals for Eskom, the primary South Africa electricity supplier. Potential for 5,000 vehicles

N/A

Deal to equip 20 transportation services vehicles of Yale University N/ADeal to equip 80 vehicle fleet of Brampton Kwik Cab of Brampton, Ontario N/A

Q2/'07 Follow on order with Sammenslutningen Københavns Taxa of Copenhagen, Denmark. Inclusive of this order, purchases from East Texas Council of Governments, Silver Cab of P.G. in Maryland, Longview Transit Management in Texas, SCR Medical Transportation in Chicago and All Yellow Taxi in Los Angeles.

$1,000

Framework agreement signed wi th Europe's largest taxi fleet TAXIS G7 of Paris, France. Minimum 1,000 units to be purchased. ~$6 million Approved for taxi management solution across 13,000 New York City cabs N/A

Q1/'07 60 mobile data terminals purchased by Yellow Cab of Bellingham, WA N/AQ3/'06 Ace Cab of Las Vegas selects DDS Wireless solutions for 675 taxis N/A

Order from Regional Transportation District of Denver to outfit 300 vehicles $1,000Q2/'06 2 contracts: Town Car International of Long Island City, New York for 400 vehicles and Yellow Cab Company of Bloomfield, Connecticut ~$1,000

2 contracts: Delta Sunshine Cabs (1972) of Surrey, British Columbia, and Biloxi City Cab of Biloxi, Mississippi, with fleet sizes of 50 and 35 respectively

~$1,000

2 contracts: Empress Taxi Ltd. of Victoria, and Guildford Cabs of Surrey, with fleet sizes of 87 and 40 respectively ~$1,000SCR Medical Transportation of Chicago, and Victor Valley Transit Authority of Hesperia, have chosen to deploy 150 Vector 530™ and 35 iPilot 8000™ mobile computers respectively

N/A

Q1/'06 Chilliwack Taxi & Imperial Limousine company of Chilliwack, B.C. and Newton Whalley Hi-Way Taxi Ltd. share PathFinder solution N/A

Q4/'05 TA (Dispatching) Limited of Hamilton, Bermuda signs initial contract for 300 vehicles N/A2 contracts: United Cab Class Ltd. in Fort McMurray, Alberta and San Gabriel Transit Inc. of El Monte, California. ~$1,000Contract with the ComfortDelGro Group of Singapore $1,000New contract with its oldest local customer, the Yellow Cab Company Ltd. of Vancouver, British Columbia N/A

Q3/'05 2 contracts: Yellow Cab Company of D.C. Inc of Washington, DC and Taxis G7 of Paris, France ~$1,0002 contracts: American Automobile Association (AAA) Auto Club South of St. Petersburg, Florida and unnamed existing client in Southern California

~$1,000


Growth Strategy – Enter New Markets & Increase Recurring Revenues DDS Wireless has historically grown via penetrating the taxi vertical for mobile data devices and software. With the largest market share in the North American taxi market, the Company is looking to leverage the business capabilities into new vertical markets and new geographies. We expect M&A to be a key part of the growth strategy going forward as the Company is targeting to get to $100 million in revenue over the next three years.



Exhibit 5: Growth Strategy

• Lead in target markets. DDS Wireless has a leadership position in the North American and certain international taxi and paratransit markets. This strong reputation helps attract new customers but also generates significant revenues from the installed customer base. This includes maintenance contracts, replacements and enhancements, and incremental sales as customers grow.

• New verticals. DDS Wireless has used technology developed for the taxi market to expand into the

black car, transit/paratransit, roadside assistance, ambulance and courier markets and fare box markets. • Geographic Expansion. The Company has seen solid taxi growth outside North America through a

direct sales approach as well as strategic alliances with application software vendors and system integrators. Non-North American taxi markets generated $6.9 million in sales in 2007, up from $5.1 million in 2006. Notable contracts and pipeline opportunities are present in South Africa, India, Australia, Eastern Europe and the Middle East.

• Entering the small taxi fleet market with a low-cost ASP solution. The TaxiBook ASP solution from

Mobisoft will be launched in North America and expanded in Europe and the Middle East. • Recurring revenues. DDS Wireless is focusing on generating recurring revenue from areas such as

debit and credit card transaction fees, taxi fare cards, sharing of ad revenues from PIMs, eFleet ASP subscriptions and TaxiBook subscriptions.


Addressing Three Issues Up Front We believe there has historically been three “strikes” held against DDS Wireless by potential investors. The first revolved around a perception of stagnant growth due to the high penetration in the large fleet taxi vertical. However, as we will subsequently outline, DDS Wireless has embarked upon growth strategies that leverage the Company’s strengths within new adjacent verticals. These new markets include: small fleet taxis (less than 50 vehicles and comprising the majority of the overall taxi market), paratransit, fixed route transit, truck fleets and commercial advertising.

The second overhang on DDS Wireless has been the historical illiquidity of the Company’s stock. Until recently, management and insiders controlled a majority position that we estimate sized the float at less than 10% of the shares outstanding. With recent acquisitions, we estimate that directly and indirectly, the President and CEO own 59% of the issued and outstanding shares. The CEO has indicated that he expects to be diluted down to less than 35% over time as new acquisitions and/or financings enter the mix.

Finally, following a 2004 financing for $17 million, the Company was unable to allocate their excess cash to grow the business and eventually issued a $7.2 million special cash dividend in 2006. In 2004, DDS Wireless had announced a letter of intent to acquire Maddocks Systems, a supplier of software to the trucking industry. Upon further due diligence, the Company realized that revenue synergies first expected could not be achieved. Other concerns were also uncovered causing DDS Wireless to walk away from this acquisition. Between 2004 and 2006, the Company investigated numerous acquisition targets but none met their criteria. With an excess of cash on the balance sheet, several shareholders suggested that management return the cash to shareholders. In 2005,



the Company bought back 695,000 shares. However, this did nothing to help improve share liquidity. Thus, in 2006 the Company issued a special dividend. Given that the CEO was the largest shareholder, some investors were not pleased with the 2006 special dividend. While management said if they had to do it again they might have done it differently, we believe this has no bearing on our investment thesis and consider this a dead issue.

Four Business Units – Branching Out From Taxi Turnkey Wireless Mobile Data Solutions DDS Wireless’ wireless mobile data solutions improve fleet management productivity by reducing costs associated with the dispatch and routing of vehicles as well as offering patrons increased payment options. The solutions utilize GPS to locate vehicles and software in the dispatching and routing processes. The Company also engages in overall systems integration, project implementation services, technical consultation, system engineering, system installation, training and ongoing customer support.

DDS Wireless has historically focused on selling wireless hardware, software, and services for taxi dispatch and routing. With recent acquisitions the Company is making a bigger foray into paratransit dispatch and routing as well as moving more aggressively at the small taxi fleet market.

Exhibit 6: Four Business Units

1) Taxi – Digital Dispatch - Computerized dispatching and turnkey wireless fleet management solutions for taxi fleets. Three parts – Enterprise fleet solution, hosted taxi dispatch service, mobile media solution. • TaxiBook - Recently acquired Mobisoft adds a service-based managed fleet dispatch solution to address

the needs of small taxi fleets. More than 2,000 taxicabs in Finland and 200 in the U.K. use this service. • Mobile commerce and Internet-type interactive multimedia information, entertainment, and advertising

solution for taxis through passenger information monitors (PIM). Working with taxi companies and advertising partners.

2) Transit – StrataGen - Combined DDS Wireless heritage of supplying mobile devices and wireless infrastructure to transit companies with products/services from two recent acquisitions to provide an end-to-end solution. • StrataGen’s advanced scheduling, dispatching, and client management software for larger public

paratransit transportation services in the US. ADEPT system licensed to over 45 public transportation services, almost all with long-term software maintenance contracts.

• Mobisoft’s service-based managed scheduling and dispatching solution has 18 customers in the U.K. and ~10 in Finland. MobiRouter product is suitable for smaller services in the U.S. and in other countries as well as for other services such as school buses, couriers, and distribution companies.

3) Commercial fleet – eFleet – Catering to commercial fleets such as limousines, waste management and work trucks. Integrates computer aided wireless dispatch, GPS fleet tracking, GPS navigation, two-way text messaging, and point-of-sale payment processing into a single hosted system offered as a subscription service. 4) Wireless devices – Digital Wireless – The hardware manufacturing, quality control and hardware development hub of DDS Wireless. In addition to developing for in-house use, this division also markets products as an OEM directly to customers and third-party solutions providers. Source: Company reports



Taxi Market – DD’s Bread and Butter (68% of 2008E Revenue) DDS Wireless’ taxi business is the Company’s largest revenue generator and can be divided into three segments: enterprise taxi market, small taxi market, and mobile media. We discuss each of these below.

Dominant North American Market Share in Large Taxi Fleets DDS Wireless commands dominant market share of large North American taxi fleets (those with over 50 vehicles) with over 100 installed systems and 75,000 wireless data devices deployed. Management estimates DDS Wireless’ market share in North America at 75% to 80%. According to the Taxicab, Limousine & Para-transit Association, there are approximately 6,300 taxicab companies in the United States, representing about 234,000 taxicabs. Approximately 85% of these fleets have less than 50 vehicles.

We estimate that DDS Wireless generates more than 95% of the taxi revenue today from the large taxi fleet market. Growth of this segment in North America has been slowing as most large taxi fleets have already implemented wireless dispatching, routing and tracking solutions. Thus, the majority of revenues come from maintenance agreements and system upgrades. One notable exception is the Province of Quebec where taxi companies have, until recently, been prohibited by law from installing mobile data solutions. As the laws have recently changed, DDS Wireless believes there is a multi-thousand unit opportunity in Quebec over the next few years. Outside of North America, DDS Wireless is seeing strong growth in several markets, including Asia, Africa, and New Zealand. In addition, management noted large international opportunities may arise in the UAE and Russia.

Exhibit 7: Taxi Customers

Customer Fleet Size LocationTaxis G7 5,100 Paris, FranceRadio Taxis 2,200 London, U.K.ORIX 2,000 Mumbai, IndiaTaxi Stockholm 1,800 Stockholm, SwedenComfort Cabs 1,500 Singapore, SingaporeHelsinki Taxi 1,400 Helsinki, FinlandCopenhagen Taxis 800 Copenhagen, DenmarkAce Cab 675 Las Vegas, USAMetro Cab Assoc. 280 Allston, USAHTD 200 Helsinki, FinlandBroadway Cab 200 Portland, USA

Taxi

Source: Company reports

Small Taxi Fleet Market is Under Penetrated While mobile data solutions for the large cab fleets are a mature market, the majority of small fleets do not have a mobile data solution. Traditional dispatching systems were not well adopted by smaller cab companies due to increased process complexity and costs. Dispatching required a key decision



maker who could quickly analyze computer data (and in some cases verbal requests) and allocate taxis to the destinations. This often necessitated the hiring of additional call center staff to process incoming calls and relay the information to the decision maker. These additional costs usually meant that dispatch and routing systems were deployed by only the largest taxi firms.

Lower cost, hosted solutions are being offered today that enable even small cab companies to deploy dispatch solutions with minimal cost and technical expertise. As roughly 85% of the 234,000 taxis in North America consist of fleets with less than 50 vehicles, this is a large un-penetrated market opportunity. To better address this market with a hosted solution, in 2007 DDS Wireless acquired Mobisoft Oy.

Mobisoft Opens New Geographies/Applications Addressing Small Fleets The Mobisoft Oy acquisition in October 2007 brought a customer base that includes over 2,000 taxis in Finland and 20 local transit authorities in the United Kingdom. Mobisoft specializes in automated, real-time dispatching and wireless data transfer applications for the passenger transport market. The company’s target markets include taxi companies (about 70% of the mix) and transit companies (approximately 30% of the mix). Today, the headcount stands at 45 people, in Finland, Cambridge, U.K., Oxford, U.K. and Stockholm, Sweden. The Finnish taxi market is dominated by Mobisoft and DDS Wireless that together have 4,000 to 4,500 units installed and almost 50% market share.

Total consideration for Mobisoft Oy was approximately $7.7 million, comprising $4.2 million in cash and $3.1 million in stock (1.28 million shares). The balance of the acquisition price was acquisition costs. The purchase price equates to ~1.3x trailing twelve month revenue or 8.1x price/earnings.

The acquisition broadened DDS Wireless’ product offering with TaxiBook, an ASP-based hosted dispatch and routing solution that can be thought of as “DDS Lite”. This is a solution that has gained popularity amongst smaller fleets since infrastructure investment is minimal. In addition to hosting the solution where fleet customers access a website to track and dispatch vehicles, DDS Wireless rents (or sells) mobile data terminals and resells air time. The solution costs ~$100 per month per vehicle as well as an initial $6,000+ set up fee. If we assume that DDS Wireless could capture 10% market share of the small North American taxi fleets (which comprise roughly 85% of the 234,000 unit market), this represents a total monthly revenue opportunity of more than $2 million or approximately $25 million per year. Typically, these contracts range from three to five years.

For 2008, DDS Wireless expects $4.6 million in revenue from TaxiBook, including call center, ASP, and transaction-based fees. We note that this can be considered a high margin recurring revenue business. Management believes this business can grow significantly in North America for the next several years given the lack of penetration of this market and the belief that no one in North America properly addresses the small taxi market.



Management also believes the “killer app” that will drive demand for TaxiBook is the ability of smaller cab companies to process debit and credit card transactions with this wireless package. In the past, credit/debit card payment was not a viable option and the lack of these payment options impeded the ability of smaller fleets to attract corporate accounts. DDS Wireless now offers merchant services hardware that should help simplify the payment process for passengers, drivers and corporate customers.

In addition to taxi fleets, Mobisoft’s MobiRouter solution is a wireless transit application for multiple passenger transport that is gaining traction especially in the United Kingdom. The solution has appeal in that it can accommodate not only fixed routes but also flexible routes, which are more difficult to schedule. This unit becomes part of the DDS Wireless’ Transit business unit which we discuss later in the report.

Exhibit 8: Mobisoft Oy Profile

Acquisition Details Financial DetailsRevenue (€MM) Earnings (€MM) Price/Revenue Price/Earnings

Date Total Cash Stock 07 €4.1, 70% are recurring €0.6 1.3x 8.1x21-Aug-07 €5.2 €3.0 €2.2 08 Estimates €5.0, 78% are recurring €0.8 1.0x 6.5x

Customers Revenue• Stable European base of customers • 1/3 of revenue from transit and school bus routing• Command about 50% of Finland's small taxi market • $3.8M is recurring revenue that is already booked• Finnish taxi patrons pay €0.80 fee that carriers remit to Mobisoft• 20 local transit authorities in the United Kingdom• No North American presence• Landed 3rd largest cab company in Ireland - 400+ taxis• Started in transit dispatch business in UK in 2000

Purchase Price (€MM)


Mobile Media – An Emerging Taxi Market with Advertising Sizzle In addition to dispatching software and hardware, a new taxi market is starting to emerge – credit and debit card equipment and processing and in-vehicle advertising. According to the Taxicab, Limousine & Paratransit Association, most of the taxicab companies in the United States today do not accept credit cards. Traditionally, smaller taxi cab companies have been reluctant to deploy credit card transaction systems due to the added processing fees, extra hardware costs and the potential to lose credit card slips.

There now appears to be an increase in regulatory activity to force taxi cab companies to accept credit and debit card payments. For example, a New York City Taxi & Limousine Commission (TLC) mandate came into effect in October 2007 requiring all licensed taxis in New York City (about 13,000) to implement “technology-based customer service improvements” by their next scheduled inspection. This technology included: credit/debit card payment systems, PIMs, trip sheet automation and text messaging to drivers.

Four companies (including DDS Wireless) were awarded notices to proceed with the project. Two of the companies created joint ventures and landed two large taxi fleets (in excess of 7,000 vehicles). The third company was a startup that has run into financial difficulties and the fourth company was Digital Dispatch.



DDS Wireless plans to capture a significant portion of this business through several avenues. First is the rental of the PIMs, which management believes could bring in recurring revenues of $40 per month per vehicle. Second, DDS Wireless plans to charge monthly maintenance fees as well as support fees for credit or debit transactions. Lastly, the PIMs enable commercial, on-screen advertising. Should DDS Wireless be able to capture a portion of the advertising revenue, it would fall directly to the bottom line. As of the end of 2007, over 1,250 cabs have signed up and DDS Wireless had installed over 700 iView PIMs in New York City cabs.

DDS Wireless is using the New York City project as an anchor to market the solution to other large taxi fleets across North America. We expect the Company to bring in both financial and advertising partners (i.e. media companies) to help this market roll out. In addition to selling PIMs and collecting debit and credit card transaction fees, we believe DDS Wireless is targeting revenue share deals with content/advertising providers. According to DDS Wireless, the full ad inventory on a PIM can generate roughly $1,600 per month in revenue. It appears that several cab companies in various geographies are in the process of evaluating vendors for this technology and service offering such that this segment could provide a meaningful revenue opportunity to DDS Wireless as early as the next one to two years.

Paratransit – StrataGen Systems’ Forte (28% of 2008E Revenue)

Demographics and Legislation Driving Industry Growth According to American Public Transportation Association there are about 6,000 transit agencies with 36,000 vehicles providing paratransit services in the United States. These organizations require dispatch, vehicle location, and communication services. DDS Wireless estimates that, of the fleets currently using computer aided dispatch systems, only about 25% currently have in-vehicle mobile terminals.

In the United States, paratransit is not a temporary phenomenon given the natural growth in ridership (from population demographics), government laws, and a push towards intelligent transportation systems (ITS). The American Disabilities Act requires “each public entity which operates a fixed route system to provide paratransit and other transportation services…”. Even if money is lost on paratransit, fixed transit agencies must provide the service. These agencies are looking to pare operational costs and are increasingly looking towards automatic, dispatching, routing and scheduling systems. New York City provides a good example of paratransit growth. Five years ago, New York City scheduled roughly 8,000 trips per day while today the city does just under 20,000 per day. Six years from now, the city forecasts 50,000 trips per day will be booked.

According to StrataGen, the top 45 paratransit authorities in the U.S. (8,000+ trips per day) represent an opportunity of about US$100 million over the next five years (for software and hardware). Generally, government funding cycles are every five years and system replacements or upgrades are common as transit authorities look to drive increased efficiencies. StrataGen



believes that this translates into approximately 200 to 300 opportunities per year with $150,000 typically the lower end of deal valuations. According to StrataGen, two recent wins, ASI in Los Angeles and Smart in Detroit, were system replacements.

Another emerging trend in the transit market is customer desire to buy an entire ITS line from a single vendor. Historically, solutions have been put together from hardware and software from various vendors. Large players like INIT and Orbital Sciences have often acquired companies to provide a full solution or partnered with companies like DDS Wireless and Mentor who have provided the MDTs.

Entering the Paratransit Market via Acquisition In 2007, DDS Wireless undertook a strategy to aggressively expand beyond the taxi market into other niche verticals that offer solid growth potential. To execute this strategy, DDS Wireless combed the fragmented universe of dispatching and routing solutions and acquired StrataGen Systems to expand into the transit/paratransit market. The Company also acquired Mobisoft Oy, which expanded the taxi market footprint but also brought a transit industry software offering that has had success in Europe.

StrataGen was acquired in December 2007 for US$6 million. US$4.5 million was paid in cash at closing and US$1.5 million will be paid in 15 monthly installments of US$0.1 million. StrataGen Shareholders were also issued 0.65 million shares. For the nine months ending September 30, 2007, StrataGen revenues were US$3.4 million and profits were US$0.7 million.

Started in 1998, Seattle-based StrataGen provides best-in-class real-time scheduling and client management software targeted at the paratransit market. The company’s ADEPT product is tailored to automatically optimize routing and scheduling mainly for transit fleets. ADEPT particularly excels in systems where the routes are variable. StrataGen was a strong software technology company, but lacked critical sales and marketing capabilities. Combined with hardware from DDS Wireless, the combined entities represent a one-stop shopping solution for paratransit customers.



Exhibit 9: StrataGen Systems Profile Acquisition Details Financial Details

Date Total Cash Other Revenue Earnings Price/Revenue Price/Earnings10-Oct-07 $6.0 $4.5 15 monthly payments of US$0.1M $6.0, 58% recurring $1.0 1.0x 6.0xUS$2.3 million earnout if land US$2.25M service contract 70% gross margins

Customers Competitors• 4 of top 5 agencies • Trapeze is primary competitor, $60 million/year in revenue• 10 of top 20 agencies • Displaced Trapeze for $3 million Los Angeles Access Services Inc. contract• New York - paratransit contract in 2002 • Displaced Trapeze in Bakersfield, California• New Jersey • Trapeze solution relies on proprietary radio networks• Boston • Trapeze solution is client/server based• Detroit SMART - $2.5 million, $0.5 million maintenance & 1.6 million project • Trapeze solution has no web interface• Chicago Transit Authori ty - $2.3 million contract 2002 • Enghouse Systems, '07 revenue of C$55 mi llion• Kentucky• Miami Other• Orange County • Will become #2 player in the world• Johnson County SEATS - $65,000 contract in 2000 • Solutions installed in over 40 countries• Wichita Transit • 25 employees at time of acquisitions

Purchase Price (US$MM) 08 Estimates (US$MM)


A Strong Customer Base in the Transit Market StrataGen is now the number two player in the paratransit space and has gained critical mass by capturing business with four of the top five and 10 of the top 20 agencies in North America. In the Paratransit vertical, the Company has locked up about 9,000 of the 36,000 paratransit vehicles in the United States. Through the merger with DDS Wireless, StrataGen can now leverage the ADEPT software with a broad line of hardware products that include: AVL modules, mobile data terminals and credit/debit card processing units. Our conversations with transit authorities indicated that sourcing from multiple vendors is fraught with complexity and costs, and thus this acquisition is being viewed favorably in the industry. DDS Wireless had partnered with StrataGen on past projects and through the acquisition, can now capture margin lost on product markups from multiple vendors. As a result of the StrataGen acquisition, DDS Wireless now provides a vertically integrated solution allowing the Company to aggressively bid for market share.

Leveraging Strength at the High End to the Mid Market While StrataGen has historically played at the high end of the market, the company is starting to address opportunities in the mid-market. Over time, we would not be surprised to see DDS Wireless leverage StrataGen’s ADEPT scheduling systems to offer smaller transit agencies a hosted solution built on DDS Wireless hardware. In addition, we believe that StrataGen could eventually expand beyond paratransit into the fixed transit market.

The company’s primary paratransit competitor is Toronto-based Trapeze (owned by Constellation Software) and StrataGen has successfully displaced Trapeze in some accounts. Trapeze entered this space by purchasing a real-time prediction scheduling application that we believe is not as robust as the StrataGen offering. Other competitors include Routematch and Transched which is owned by Enghouse. We believe the key technical differences amongst products include processing speed, quality of the schedule solution, and the amount of rework required. With StrataGen’s software, NYC increased the load factor by 30% and saved 10% on a cost-per-trip basis.



Targeting a $20 Million to $25 Million Revenue Base Over the Next Two Years (From $10 Million in 2008) StrataGen’s business is dominated by high-margin revenues with follow-on orders for even higher-margin maintenance annuities. DDS Wireless’ Transit division is targeting $10 million to $11 million of revenue in 2008. Announced contracts in Detroit and Los Angeles represent about $3.5 million to $4 million, while $3 million in maintenance fees comes from the installed base. Viewed another way, the Transit division is targeting 2008 revenues of $6 million from StrataGen, $1 million from DDS Wireless hardware (historical run rate to this market), and $3 million to $4 million from transit software from Mobisoft.

Commercial Fleet - eFleet (1% of 2008E Revenue) In 2006, DDS Wireless launched eFleet to cater to the dispatching and fleet tracking requirements of commercial fleets such as work trucks, waste management vehicles and limousines. eFleet is essentially a very high-end hosted service consisting of computer-aided wireless dispatch, GPS fleet tracking, GPS fleet navigation, two-way text messaging, and mobile point-of-sale payment processing. eFleet interfaces with all the key back-end systems that support these types of fleets.

DDS Wireless has won a significant share of the Black Limousine market. The Company estimates that 3,500 of New York City’s 12,500 black cars are using DDS Wireless solutions. Notable black car fleet customers include Aggregate Share (3,500 vehicles) of New York City and Town Car International (400 vehicles) of Long Island City. In addition to the Black Limo market DDS Wireless has tapped into other commercial fleets including 1-800-GOT-JUNK and DHL.

It is still early days in this segment as DDS Wireless is targeting 1,000 subscribers by the end of 2008 compared to the 425 at the end of 2007. To date, sales have been minimal and this business has posted small losses. DDS Wireless has recently changed to a more indirect sales model by partnering with leading back-end software providers in focused verticals such as Visual Dispatch and Livery Coach.

Wireless Devices - Digital Wireless (3% of 2008E Revenue) DDS Wireless provides a broad range of hardware solutions to address taxi fleet needs. These can be broadly categorized as tracking hardware, communication devices and peripherals. DDS Wireless’ hardware terminals are generally in three categories. The basic Vector sells for about $800, a mid-level iView sells for approximately $1,800 and a top end iPilot terminal is expected to have a sticker price near $2,000.



Exhibit 10: Hardware Family and Product Pricing

Description Description· configurable mobile computer for drivers.· GPS receiver

iPilot 8000™ · magnetic card reader for payment processing SmartPay™ · credit and debit card payments· touchscreen display· optional map display software· optional audio interface· high-end device · interactive multimedia terminal for passengers· provides maps, news, city information, taxi regulations · print transaction receipts

iView 8000™ · facilitates credit and debit card transactions SmartPrint™ · print trip details· mid-range device · output daily driver logs

GDT 890™ · pushbutton interface

· mapping softwareeBox™ · expansion module for peripherals

· similar functionality to iPilot 8000™

Vector 530™· low-end device

GPS 530™ · continuous reporting where GPS not possible

· basic communication and tracking deviceVector AVL™ · GPS, real-time vehicle locating

· similar functionality to iPilot 8000™

· pushbutton interface


In seeking to expand to new markets beyond the traditional taxi vertical, DDS Wireless is using the Digital Wireless division as a wedge into new markets. To find the most promising vertical, DDS Wireless has engaged system integrators and application providers to sell hardware and systems to non-traditional customers. Where these integrators can wedge solutions in new markets, DDS Wireless will examine whether or not to expand the product line, either organically or through acquisitions, and/or sell directly to these markets.

DDS Wireless’ hardware strategy has resulted in two notable pipeline opportunities coming close to fruition. The first is an opportunity to outfit a fleet of several thousand utility vehicles in South Africa. The second opportunity is with Steelcom Electronics in New Zealand. DDS Wireless units could potentially be deployed across 4,500 fire and ambulance vehicles as part of an emergency response system.

Don’t Take our Word for it…Here is What Customers Said As seen in Exhibit 11, DDS Wireless’ taxi, paratransit and transit customers had positive feedback on DDS Wireless.



Exhibit 11: What the Experts Say about DDS Wireless Criteria Did you contact

references?What did they say?

Did you pay any site visits?

Have you acted as a reference account?

Was pricing favourable?

Anything you don't like or DD can improve?

How do you see the product line evolving?

What do you think of DD's StrataGen and MobiSoft acquisitions?

Something that worked, could handle the fleet size

Contacted two DDS works. Bit pricey though

No Yes, for two other prospects

No Would like DDS to supply their own meters

See bigger taxi companies merging and sharing dispatching

No comment although he has recommended StrataGen to a peer.

Something that worked. Flexible route scheduling. Support for existing hardware.

Yes. Our own and those supplied by DDS

Some negatives but this was true for a ll OEMs

N/A N/A Met our requirements.

Better support for credit and debt card transactions.


StrataGen acquisition makes sense. Concern whether software can be integrated into broader DDS platform.

Work with existing software.

Two others Some "growing pains"

N/A No As an overall system, yes

Better project management, merchant services.

Credit and debit card integration.

No comment.

Efficiency, auto-dispatching

Six All positive. Yes Yes Yes. Some cabbies can disconnect GPS. We know when this happens though

Better GPS connectivity to hardware. Continued evolutions of firmware.

No comment.

Versatility and robustness

N/A N/A N/A N/A Cheaper alternatives but pricing not the most important criteria

Not at this point. Over-air programming No comment.

Expansion of demand response scheduling system

Yes DDS is very responsive and provides good support.

Yes Yes In overall picture, yes.

DDS does a great job. Any reduction to development cycle is always appreciated

No comment Potential for good and bad. Good if DDS provides same level of support. Bad if DDS does not.

Pass several technical hurdles.

Yes Mostly positive. DDS is successfulin markets they enter

No Yes Not the primary criteria


No comment Good. In this space, anyOEM that can expand the product line is doing a good thing.

Mentor, Mobile Knowledge

Would not disclose

Trapeze, Orbital

N/A

Searched globally

Looked at over 10

What other solutions did you investigate?

Only DDS. Incumbent not invited


Financial Overview Revenue Model – Becoming more Software Focused DDS Wireless generates revenues from four sources: hardware sales/rentals, network engineering, software licensing and software maintenance. Contracts often rollout over three to twelve months and often involve a multi-year maintenance revenue stream. Software is usually recognized on a percentage of completion basis with maintenance realized pro rata over the life of the contract which, in many cases, is five to 10 years. Hardware revenue is typically recognized when shipped and upgrade cycles occur every three to five years. There is a seasonality component to revenues with about 60% usually booked in the back half of the year. As a reference, a complete system with 300 high-end units could generate about $600,000 in hardware sales, $100,000 in annual maintenance fees, $50,000 to $100,000 in infrastructure and another $100,000 in project fees.



Exhibit 12: Revenue and Profit History

-$2

$0

$2

$4

$6

$8

$10

Q1/F04A Q3/F04A Q1/F05A Q3/F05A Q1/F06A Q3/F06A Q1/F07A Q3/F07A Q1/F08A

C$(M

M)

Revenue Net Income


2007 was a Year of Transition For 2007, DDS Wireless saw revenue decrease 13% to $20.6 million and recorded the first annual loss in 16 years due to decreased order volumes, foreign currency fluctuations, and startup costs on new projects. Taxi market revenue decreased 13% to $15.6 million while non-taxi oriented markets decreased 14% to $5.0 million. No customers accounted for greater than 10% of revenues during the year. Both Mobisoft and StrataGen were acquired in Q4/07 and added a combined $1.7 million to 2007 revenues.

Exhibit 13: Revenue Mix and Growth

Revenue 2004 2005 2006 2007Taxi - NA $9.6 $11.1 $12.8 $8.7Taxi - International $9.3 $8.8 $5.1 $6.9Non-Taxi $3.5 $7.3 $5.7 $5.0

$22.4 $27.2 $23.6 $20.6

GrowthTaxi - NA 16% 15% -32%Taxi - International -5% -42% 37%Non-Taxi 109% -21% -14%

22% -13% -13% Source: Company reports



Gross margins for 2007 declined to 48.3% from 51.9% in 2006. The Company targets gross margins of 50%. Operating expenses increased due to the acquisitions of Mobisoft and StrataGen (added $0.9 million to Q4 operating expenses) and to the New York City Taxi and Limousine Commission mobile media initiative which was launched during the year. For the year, DDS Wireless reported a net loss of $3.4 million versus a profit of $2.3 million in 2006. This included a $1.7 million net foreign exchange loss as well as $0.4 million of intangible asset amortization. Total non cash expenses were $2.8 million, resulting in a cash loss of just $0.6 million.

Q1/08 Results DDS Wireless reported Q1 revenues of $7.0 million, up 82% from the year-ago quarter but down 4% sequentially. The year-over-year increase was due to the acquisitions of StrataGen and Mobisoft in Q4/07 while the sequential decline can be attributed to normal seasonality.

Exhibit 14: Q1/08 Revenue Mix

C$(MMs) Q1/08 Mix Q1/07 Y/Y Growth Q4/07 Q/Q GrowthTaxi $4.7 68% $3.4 39% $5.5 -15%Transit $2.0 28% $0.2 983% $1.5 32%eFleet $0.1 1% $0.0 100% $0.0 39%Hardware & Infrastructure $0.2 3% $0.2 -2% $0.2 17%

$7.0 100% $3.9 82% $7.3 -4% Source: Company reports

Gross margin at 45% was flat with the 44% in Q4/2007 and decreased from 52% in the year-ago quarter. The Company’s gross margin target is 50% and includes the amortization of capitalized assets for sale. Excluding this amortization expense, Q1 gross margin would have been 47%.

Cash operating expenses increased 37% from $2.5 million in the year-ago quarter to $3.5 million in Q1/2008. The rise in cash operating expenses is attributable to the acquisitions being included in a full quarter of operations.

GAAP earnings were ($0.6) million or ($0.05) per share. Backing out non-cash expenses, adjusted EPS was $0.00.



Exhibit 15: Q1/2008 Performance

Year end (C$(MMs)) Actual Q/Q Y/YQ1/F08A Q4/F07A Change Q1/F07A Change

Revenue $7.0 $7.3 -4% $3.9 82%Gross profit $3.2 $3.2 0% $2.0 59%

Gross margin 45.4% 43.5% 181 bp 51.7% (638 bp)S,G&A $3.5 $4.0 -12% $2.5 37%EBITDA ($0.2) ($0.8) n.m.f. ($0.6) n.m.f.

EBITDA margin n.m.f. n.m.f. N/A n.m.f. N/AOperating profit ($0.9) ($1.3) n.m.f. ($0.8) n.m.f.

Operating margin n.m.f. n.m.f. N/A n.m.f. N/ANet income ($0.6) ($1.0) n.m.f. ($0.6) n.m.f.

Net margin n.m.f. n.m.f. N/A n.m.f. N/AAdjusted EPS - diluted * $0.01 ($0.04) n.m.f. ($0.02) n.m.f.

Cash $0.7 $1.1 -36% $10.9 -94%Total Debt $0.0 $0.0 n.m.f. $0.0 n.m.f.Net Cash $0.7 $1.1 -36% $10.9 -94%

Cash flow from operations $0.8 ($2.1) n.m.f. ($0.3) n.m.f.Free cash flow $0.3 ($2.9) n.m.f. ($0.5) n.m.f.

* Excludes amortization of intangibles, foreign exchange, stock-based compensation expenses and associated tax effects Source: Company reports, WWCM

Balance Sheet The Company exited the March 2008 quarter with $0.7 million of cash and $1 million in debt. Contractual commitments due over the next year for acquisitions include $1.1 million from Mobisoft (can be paid in cash or shares) and $1.5 million from StrataGen (payable in cash over 15 months). The Company has a $4.2 million revolving credit facility including a €150,000 facility in Finland.

Forecast – DDS Wireless Targeting $100 Million in Revenue By 2011 Our model is premised on DDS Wireless growing the business beyond the traditional Taxi division. With the acquisition of StrataGen and Mobisoft, we anticipate expansion of the business into transit and paratransit markets as well as small taxi fleets that should help increase hardware sales and software license/maintenance agreements. Key points on our forecast include:

• Taxi - We forecast $24 million in 2008 Taxi revenues, up 38% year-over-year driven almost entirely by the inclusion of Mobisoft’s business. We project 10% to 15% growth in 2009 and 2010 driven by uptake in the smaller fleet market with DDS Wireless’ hosted TaxiBook solution. The Company’s bread and butter enterprise taxi business will continue to generate $11 million to $12 million annually in maintenance revenues and small orders. New enterprise deals in the taxi market will be driven by non-North American markets combined with occasional upgrades for North American clients. For 2008, we estimate $7 million of new enterprise taxi deals of which only 30% will be from new customers. By



2010, we estimate that Taxi will be 52% of company revenues, down from 83% in 2007.

• Transit – We forecast $10 million in Transit revenues in 2008 with roughly 40% of that coming from maintenance contracts, ASP, and small recurring orders. Of the $6 million in enterprise licenses, we believe $3 million or almost half of the total is in the bag with the already announced ASI and SMART deals.

• For 2008, we estimate total recurring revenue of $19 million to $21 million or ~60%. This consists of a maintenance backlog of $14 million to $15 million per year and another $5 million to $6 million of revenues coming from the recurring ASP model.

• The Company maintains a sizable annual maintenance backlog on both software and hardware (in the $14 million to $15 million range). Software maintenance, upgrades and re-licensing, typically generates $11 million to $12 million per year. Replacement hardware, primarily units that expire and are no longer under warranty, bring in another $3 million to $4 million per year on a consistent basis.

• Six thousand MDTs were sold in 2007 and 8,000 are targeted for 2008.

• Management guidance for 2008 is for revenues of $36 million to $38 million and profitability.

80% of Our 2008 Revenue Forecast is Highly Visible We estimate that $29 million to $30 million of our 2008 revenue forecast is highly visible. The remainder ($6 million to $7 million) depends on the timing and installation of enterprise deals in the pipeline. In addition, the Company’s cost structure ($14 million to $15 million of operating expenses) sees breakeven occur at $28 million to $29 million of revenues. Once above that revenue level, approximately 50% of every new dollar in revenues goes to operating profit. In other words, each $1 million of incremental revenue above $28 million adds 2.5¢ per share to the bottom line.

Exhibit 16: Low Share Count Drives High EPS Leverage

Revenues Operating Profit After tax Per share$28 $0.0 na Break even$29 $0.5 $0.4 $0.03$30 $1.0 $0.7 $0.05$31 $1.5 $1.1 $0.08$32 $2.0 $1.4 $0.10$33 $2.5 $1.8 $0.13$34 $3.0 $2.1 $0.15$35 $3.5 $2.5 $0.18$36 $4.0 $2.8 $0.20$37 $4.5 $3.2 $0.23$38 $5.0 $3.5 $0.25

We assume a 30% tax rate Source: WWCM estimates



Exhibit 17: Financial Forecast (Excludes Potential Acquisitions)

Year end (Dec. 31), C$(MMs) F2006A F2007A F2008E F2009E F2010ETaxi N/A $17.2 $23.7 $26.0 $30.0Transit N/A $2.2 $10.0 $15.0 $20.0eFleet N/A $0.2 $0.4 $0.8 $4.0Hardware & Infrastructure N/A $1.0 $1.0 $1.8 $3.7

Revenue C$(MMs) $23.6 $20.6 $35.1 $43.6 $57.7

Year-Over-Year Growth %Taxi N/A N/A 38% 10% 15%Transit N/A N/A 350% 50% 33%eFleet N/A N/A 139% 117% 400%Hardware & Infrastructure N/A N/A 6% 76% 106%Total -13% -13% 71% 24% 32%

Mix %Taxi N/A 84% 68% 60% 52%Transit N/A 11% 28% 34% 35%eFleet N/A 1% 1% 2% 7%Hardware & Infrastructure N/A 5% 3% 4% 6%Total 100% 100% 100% 100% 100%

Gross Profit $12.3 $9.9 $16.7 $20.9 $27.7 % 52% 48% 47% 48% 48%

Research and development $3.6 $4.4 $5.2 $6.0 $7.4Selling and marketing $3.1 $3.8 $3.9 $4.8 $5.6General and administrative $3.2 $3.6 $5.2 $5.2 $5.2Other $0.0 $0.0 $0.0 $0.0 $0.0Total OpEx (ex non cash expenses) $9.9 $11.9 $14.3 $16.0 $18.2

% 42% 58% 41% 37% 32%Year-Over-Year Growth % -2% 20% 20% 12% 14%

EBITDA $2.4 ($1.9) $2.9 $5.5 $10.3 % 10% n.m.f. 8% 13% 18%

Operating Income $2.2 ($4.6) ($1.0) $0.9 $5.1 % 9% n.m.f. n.m.f. 2% 9%

Tax rate -4% 26% 29% 30% 30%Net earnings (loss) $2.3 ($3.4) ($0.7) $0.6 $3.6

% 10% n.m.f. n.m.f. 1% 6%EPS (diluted)

GAAP $0.19 ($0.28) ($0.05) $0.05 $0.26Adjusted * $0.15 ($0.05) $0.21 $0.33 $0.52

Shares (Diluted) 12.4 12.0 13.8 13.8 13.8

* Adjusted EPS excludes amortization of intangibles, foreign exchange, stock-based compensation expenses and associated tax effects Source: Company reports, WWCM



Appendix I: Competitor Overview Overview • Niche competitors in each vertical and geography.

• For the American taxi market, the Company’s competitors include Mobile Knowledge Inc., Raywood Communications Pty Ltd., and Mentor Engineering Inc. Internationally, dependent on the region, DDS Wireless’ competition includes Auto Cab, Raywood Communications Pty Ltd., SigTec Signalling Technology Pty Ltd., Finn Frogne A/S, GPC Computer, Sunit Oy, and Auriga Communications Ltd.

• DDS Wireless’ principal competition for providing wireless mobile data solutions for the roadside assistance and transit/paratransit markets includes Mentor Engineering Inc., QSI Corporation, Ltd., CET Technologies Pte Ltd., Petards Mobile Intelligence Software Ltd., GreyHawk Technologies, Inc., Radio Satellite Integrators, Inc., Trapeze Software Group, Inc., INIT Innovations in Transportation, Inc., Affiliated Computer Services, Siemens AG (parent) and Siemens Corp. (USA).

Primary Competitors

Mentor Engineering Inc. Formed in 1998, Canadian-based and privately held Mentor Engineering is focused on providing AVL solutions across a broad range of vehicle fleets including taxis and transit. The company’s taxi solutions include GPS-based dispatching and routing systems. For public transit fleets, the company offers real-time scheduling wirelessly communicated to control centers, passenger kiosks and electronic bus stops signs.

Sigtec/Raywood Communications Sigtec is an Australian-based systems integrator and software development company focused on CAD, event notification and GPS location-based solutions. The company is focused primarily on the markets of Australia, New Zealand, United Kingdom, Singapore and Indonesia.

Founded in the late 1970s, Australian-based Raywood was a pioneer in wireless dispatch solutions and claims to have developed the first fully computerized taxi dispatch system. In March 2007, privately-held Raywood was acquired by Sigtec for an undisclosed sum. According to company press releases, the combined company had roughly $20 million in annual revenues.

Trapeze Group Privately-held Trapeze Group is a market leader in transit dispatch and routing. The company offers a broad range of ITS solutions and claims to have more than 850 customers in over 15 countries. Trapeze has a good client base especially in North America and the United Kingdom.



Exhibit 18: Telematics Industry Overview

Commercial Consumer Government Fixed Transit Fleets Long

Haul Insurance OEM Paratransit Personal Rail Service Taxi AVL Data Terminals Dispatch Predictive

AlgorithmsRemote Services Routing Scheduling Signage

BSM Wireless X X XDigital Dispatch X X X X X X X X X XGrey Island Systems X X X X X Xinit X X X X X X XIturan X X X X XLoJack X X X XMentor Engineering X X X X X X X XMobile Knowledge X X X X XOrbital X X X X X X X X XQUALCOMM X X X X X X X X XRouteMatch X X X X X X XSigtec/Raywood X X XSiemens X X X X X XSkywave X X X XTrapeze Software X X X X X X XTrimble X X X X X X X X XXATA X XWebTech Wireless X X X XWireless Matrix X X X X X X X X

VERTICAL PRODUCTS AND SERVICESVERTICAL SEGMENT

Source: Company websites



Mobile Knowledge Ottawa-based Mobile Knowledge is focused on taxi, black car and limousine solutions and has solutions that have been deployed with over 150 customers throughout the world. The company’s roots extend back 30 years and have evolved to GPS-based solutions. Mobile Knowledge currently has an installed base of over 50,000 mobile data terminals.

RouteMatch Software Founded in 1999, Atlanta-based RouteMatch Software provides intelligent transportation systems solutions for over 200 transportation agencies and companies in 38 U.S. states. RouteMatch’s solutions focus on optimizing routing and scheduling and typically integrate into broader asset tracking systems. The company targets the mid level market with a hosted ASP model. The company has partnered with DDS Wireless on past projects.

init init AG is a vendor focused on telematics analytics software, transit scheduling algorithms and transit hardware. The company has won a few large North American deals (US$25 million in Seattle and $35 million in British Columbia last year).

Smaller Firms are Being Acquired As previously discussed, the majority of companies in the vehicle dispatching and routing market are small, niche players focusing on specific products, services and/or geographies. This creates a thriving merger and acquisition environment as larger companies look to expand their footprints with the taxi and transit industries.

We note that there are two major players in the transit/paratransit market that could be suitors for smaller companies. Siemens (SI:NYSE) does not provide financial details regarding their telematics solutions. Orbital Sciences (ORB:NYSE) transportation segment only represents about 5% of the company’s total business. Orbital recently sold this business to Affiliated Computer Services (ACS) for US$43 million. According to press reports this business had US$50 million in trailing twelve month revenues.



Exhibit 19: Merger and Acquisition Activity Strong as Smaller Firms Taken Out

Date Acquirer Target Amount Paid ($MM) TTM Revenus ($MM) Multiple18-Apr-08 Affiliated Computer Services Orbital Sciences (Transportation Unit) $43 N/A N/A4-Feb-08 Mobile Knowledge Think Fleet N/A N/A N/A24-Jan-08 Trimble Geo-3D N/A N/A N/A21-Dec-07 NXP GloNav $85 N/A N/A20-Dec-07 XATA GeoLogic $18 N/A N/A17-Dec-07 Atheros Communications u-Nav Microelectronics $54 N/A N/A10-Oct-07 Hexagon AB Novatel $390 $80 4.9x2-Oct-07 Digital Dispatch Systems & Digital Dispatch Ltd. StrataGen Systems US$6 N/A N/A

21-Aug-07 Digital Dispatch Systems & Digital Dispatch Ltd. Mobisoft Oy $6 $4 1.4x14-Aug-07 Sigtec Technisyst N/A N/A N/A6-Aug-07 SiRF Technology Centrality Communications $238 N/A N/A23-Jul-07 TomTom Tele Atlas $2,000 $285 7.0x12-Jul-07 Broadcom Global Locate $143 N/A N/A9-Jul-07 Wireless Matrix Sapias $3 N/A N/A

17-Apr-07 Trapeze Group Grampian Software Holdings N/A N/A N/A2-Mar-07 Sigtec Raywood Communications N/A N/A N/A11-Jan-07 General Electric Terion N/A N/A N/A10-Dec-06 Trimble @Road $496 $100 4.9x8-Dec-06 BSM Technologies SecTrack NV $2 N/A N/A26-Oct-06 Vista Equity Partners Indus International* $240 $122 2.0x19-Sep-06 Masternaut GE Mobile Solutions N/A N/A N/A31-Aug-06 Shah Capital Partner Thales Navigation $170 N/A N/A31-Aug-06 Investor group led by Hellman & Friedman LLC and Texas Pacific Group Intergraph $1,300 $594 2.2x2-Aug-06 Hughes Telematics Networkcar $18 N/A N/A29-Jul-05 Vista Equity Partners MDSI Mobile Data Solutions $70 $49 1.4x23-Jun-05 Grey Island Systems NextBus $3 $3 1.0x23-May-05 Trapeze Group Education Planning Solutions N/A N/A N/A9-Dec-04 Trapeze Group Anite (Public Sector Division) N/A N/A N/A20-Sep-03 Raywood Communications Expertech N/A N/A N/A

Average 3.1x Source: Company reports, WWCM



Appendix II: Management and Directors Exhibit 20: Management Team and Directors

Name Title Previous Companies Joined DDS WirelessVari Ghai President and Chief Executive Officer Mobile Data International, Motorola, Glenayre Electronics, Datap Systems FounderSteven Juliver President, Digital Dispatch Systems Inc. EOS Technologies, Motorola, Southern Arizona Institute of Advanced Technology 2008Brent Gushulak Vice President of Sales, Transit Business Division Sun Microsystems, Government of British Columbia, TELUS, BC Hydro, Insurance Company of

British Columbia, IBM Canada2007

Mike Nienhuis President, StratGen Systems StrataGen Systems, The Active Network Dec-07James Hutton Vice President of Business Development Voice Mobility, Ascend Communications May-07George Lipski President, DW Digital Wireless Starvision Multimedia, Newbridge Networks, MPR Teltech Dec-06Cliff Snelling Vice President of Marketing SmarTalk Technologies, dba Telecom Canada, Glenayre Electronics Nov-06Raymond D. Fast President, DDS eFleet Services Guardian Mobile Monitoring Systems, webBASIS, Image Power, Cyberion Networking, Norsat

International, Microtel Pacific ResearchDec-06

Name Title Companies Date AppointedVari Ghai President and Chief Executive Officer Mobile Data International, Motorola, Glenayre Electronics, Datap Systems FounderErik Dysthe Investor MDSI Mobile Data Solutions, Orcatron Systems Nov-03Daniel Daviau Principal, Former Chairman Genuity Capital Markets CIBC World Markets Jun-04

Mark Joseph President ad Chief Operating Officer, Veolia Transit Yellow Tranportation/Connex North Holding Company, Yellow Cab Company Nov-03

Sal Visca Chief Technology Officer, Business Objects Business Objects, Marqui, Infowave Systems, IBM Nov-06




Appendix III: Glossary

ASP “Application Service Provider”: an organization that hosts software applications on servers that customers can access through the internet.

AVL “Automatic Vehicle Location”: a system usually incorporating GPS technology that can monitor the location and movement of vehicles.

CAD “Computer Assisted Dispatch”: software and GPS systems that facilitate the efficient dispatch of vehicles or field service technicians to specific locations.

DIM “Driver Information Monitor”: a data terminal located in a vehicle’s driver compartment that facilitates data, voice and video communications.

DRT “Demand Responsive Transport”: transit services that adapt to customer needs so that fixed routes do not have to be adhered to.

GPS “Global Positioning System”: a constellation of 24 satellites that can be read to determine a receiver’s geographic coordinates.

ITS “Intelligent Transportation System”: technology used to enhance the management, dispatching, scheduling and routing of vehicular fleets.

MDT “Mobile Dispatch Terminals”: a device installed in a vehicle that has user interfaces for displaying and requesting information.

OEM “Original Equipment Manufacturer”: the company that designs a hardware or software product and arranges for the assembly and manufacturing of the product.

PIM – “Passenger Information Monitor”: a data terminal located in a vehicle’s passenger compartment that facilitates data, voice and video communications.



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