DZS files for chapter 7 protection

It is with utmost disappointment that we share that DZS was unable to secure the necessary working capital from either its current lender or any prospective lenders to sustain the business going forward.

As a result, on Friday, March 14, the Company commenced a liquidation proceeding under chapter 7 of the United States Bankruptcy Code. All United States operations ceased, and all United States employees were terminated as of the time of the chapter 7 filing.

The Company's foreign subsidiaries, including those in Germany, the United Kingdom, and Australia may continue to exist outside of the United States liquidation. A Chapter 7 Trustee will be appointed soon to control the liquidation process in the United States and evaluate how to proceed with foreign subsidiaries and affiliates. Subsidiaries and affiliates outside of the United States will experience near term business disruption with day-to-day operations, which will include various IT (i.e., outlook/email), and other software programs. Please be patient as the Trustee assesses the situation and the manner in which to proceed, whether it be a going concern sale, administration under applicable local law, orderly liquidation or some other path.

During the Company's 25 years, Zhone/DZS developed industry leading broadband access and connectivity solutions that today enable high-speed, secure and reliable internet access services to many service providers around the world.

Over the past nearly two years, the Company has been balancing its technology initiatives while optimizing operating expenses and securing the necessary working capital to stabilize the business. Please know that the Company has been working with extreme urgency to obtain a new working capital facility that would maintain the business and has otherwise been evaluating all possible strategic alternatives. Unfortunately, we have not been successful in those efforts.

As a result of the Chapter 7 asset liquidation process, the Company is hopeful that its market-leading broadband access, connectivity and cloud software solutions are acquired, and customers and suppliers are restored.

The Company expects that employees, creditors, customers and other interested parties will receive a notice of the bankruptcy filing from the United States Bankruptcy Court for the Eastern District of Texas with additional information, including the identity of the Chapter 7 Trustee their contact information.

About DZS

DZS Inc. (OTC: DZSI) is a developer of Network Edge and Connectivity systems and Cloud Edge software solutions enabling broadband everywhere.

DZS, the DZS logo, and all DZS product names are trademarks of DZS Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or product names are all subject to change.

This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Private Securities Litigation Reform Act of 1995. These statements reflect the beliefs and assumptions of the Company's management as of the date hereof. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "plan," "project," "seek," "should," "target," "will," "would," variations of such words, and similar expressions are intended to identify forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. The Company's actual results could differ materially and adversely from those expressed in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, those risk factors contained in the Company's SEC filings available at www.sec.gov, including without limitation, the Company's annual report on Form 10-K, quarterly reports on Form 10-Q and subsequent filings. In addition, additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of these risks. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. DZS undertakes no obligation to update or revise any forward-looking statements for any reason.

For further information see: www.DZSi.com
DZS on Twitter: https://twitter.com/dzs_innovation
DZS on LinkedIn: https://www.linkedin.com/company/DZSi/

Press Inquiries:

Kenny Vesey, Thatcher+Co.
Phone: [phone]
Email: [e-mail]