Fonix Proceeds with Acquisition of LecStar Telecom

SALT LAKE CITY, UT - Fonix® Corp. (OTCBB: FNIX) announced it is continuing definitive document preparation, its due diligence review and the process of obtaining regulatory approvals with respect to the previously announced acquisition of the capital stock of LTEL Holdings Corp. (and its LecStar Telecom and Datanet subsidiaries). Fonix management anticipates that, subject to the completion of the matters described above, the acquisition will close by Jan. 30, 2004, or as soon thereafter as circumstances permit. "We continue to believe that this transaction offers significant strategic and financial benefits to Fonix, and all parties are working diligently to complete it," said Roger D. Dudley, executive vice president and chief financial officer of Fonix. Fonix management does not presently anticipate that the financial terms on which the transaction will close will be materially different from those previously announced.