Frontline Communications Closes Provo Acquisition; Acquisition Financing Also Closes [7th April 2003]

PEARL RIVER, N.Y., Apr 7, 2003 (BUSINESS WIRE) -- Frontline Communications Corp. (FNT) , www.fcc.net, announced today that it has closed on the acquisition of Proyecciones y Ventas Organizadas, S.A. de C.V. (Provo), based in Mexico City, Mexico, with operations in Dallas, Texas.

The closing, effective immediately, resulted in the issuance of 220,000 shares of Frontline Series C Convertible Preferred Stock to the shareholders of Provo. The acquisition will be presented to the shareholders of Frontline in order to obtain their approval of a number of matters related to the structure of the transaction. Upon such approval, the Series C Preferred Stock issued to Provo will convert into unregistered common stock representing approximately 66% of the combined Company. In the event the shareholders of Frontline do not approve the conversion, the preferred stock will remain outstanding on a non-convertible, non-voting basis, and the purchase price of the acquisition will be increased, with the additional consideration to the Provo shareholders being paid in the form of secured debt. Further details and terms will be provided prior to the shareholders meeting, the date of which has not yet been announced.

Simultaneously with the acquisition, Frontline closed a $550,000 debt financing with IIG Capital, LLC, an investment banking firm headquartered in New York City. The loan was made by IIG's "IIG Equity Opportunities Fund, Ltd." Approximately $275,000 of the proceeds will go directly to working capital of Provo. The balance of the proceeds will be used to satisfy, at a negotiated reduction, an outstanding debt obligation of the Company totaling approximately $725,000, and to pay certain costs of the Provo transaction. In addition, the Frontline Board retained the services of the investment banking firm GunnAllen Financial Inc., of Tampa, Florida, which rendered a favorable opinion as to the fairness of the Provo acquisition to the Frontline shareholders.

Commenting on the acquisition, Frontline CEO, Stephen J. Cole-Hatchard stated, "Putting this transaction together and finally getting it to closing took a great deal of time and effort on the part of many of the executives and employees at both Frontline and Provo. I am extremely proud of and grateful to all of those involved, as well as to our many shareholders who have patiently awaited this new beginning for our Company." Cole-Hatchard also noted, "Yesterday we were a $5 million revenue producing internet business holding our own in a tough economy - today we are part of a $100 million distribution and communications company with solid cash flow, terrific growth potential, and a number of new products and services that are expected to be launched soon."

The Chairman of Provo, Ventura Martinez del Rio Arrangoiz, indicated that he, and the executive officers and employees of Provo, are very pleased with the transaction, and briefly described the intended operational plans of the combined entity. Mr. Martinez del Rio said, "We plan on consolidating many of the internal functions and administrative tasks of our respective companies quickly, with the goal being to start realizing cost savings and operational efficiencies of the combined entities as soon as possible". Mr. Martinez del Rio further stated that the new Company structure will include a focused corporate staff to handle all reporting, administrative, financial and legal duties of the combined companies, which will remain in Pearl River, New York, in addition to the combined companies' current workforce and executives in Mexico and Dallas.

The Company also announced that at the corporate level, Mr. Martinez del Rio will take on the role of Chairman of the Board, currently held by Frontline CEO, Stephen J. Cole-Hatchard. Mr. Cole-Hatchard will become the CEO of the combined entity, working out of the New York office with the company's CFO and General Counsel, and remain a member of the Board. Ventura Martinez del Rio Requejo, the son of Chairman Martinez del Rio and currently in charge of operations at Provo, will head the Provo division in Mexico as its President, and serve as a member of the Board of Directors. Frontline's founder, Nicko Feinberg, will lead the Frontline division in the U.S., including the Pearl River and Dallas operations, as its President and a member of the Board. In addition, Miguel Madero, a financial adviser and investment banker in Mexico City, Mexico, will also serve as an independent Board member.

About Provo

Provo (www.provo.com.mx), a Mexican corporation, maintains a dominant position within the prepaid calling card and cellular phone airtime markets in Mexico. Provo is currently anticipating expanding its existing services to the continental United States, and intends to begin marketing cash cards, payroll cards and other forms of payroll and money transfers in the near future. Provo and its affiliates have been in operation for over seven years, and had combined reported (unaudited) revenue in 2002 of approximately $100 million, with operating profits of approximately $800,000.

About Frontline

Founded in 1995, Frontline Communications Corporation provides high-quality Internet access and Web hosting services to homes and businesses nationwide. Frontline offers Ecommerce, programming, and Web development services through its PlanetMedia group, www.pnetmedia.com. The Company had revenue of approximately $5 million in 2002, and is traded on the American Stock Exchange under the symbol FNT.

The statements which are not historical facts contained in this press release are forward looking statements that involve certain known and unknown risks and uncertainties, including but not limited to, the ability to successfully integrate the acquired companies' businesses into Frontline, changes in the market for Internet or distribution services, regulatory and technological changes, economic factors, increased competition, foreign currency devaluation, foreign market risk, and the nature of supplier of customer arrangements which become available to the Company in the future. The Company's actual results may differ materially from the results discussed in or implied by any forward-looking statement. The words "intend," "expect," "should," "project," and "anticipate," and similar expressions identify forward looking statements. Readers are cautioned not to place undue reliance on these forward looking statements which speak only as of the date they were made.

Frontline Communications, Pearl River
Stephen J. Cole-Hatchard, 845/623-8553 X 2200
Fax: 845/623-8669
scolehatchard@fcc.net
or (Investor Relations)
845/623-8553 X 2200
Fax: 845/623-8669
investorrelations@fcc.net