Under the terms of the agreement with ActiveTelco, Tut isissuing to ActiveTelco shareholders a combination of common stockand options with an expected aggregate value of approximately $2.9million. In addition, Pleasanton-based Tut Systems has agreed topay off convertible notes in the amount of $650,000 plus accruedinterest, and to assume the liabilities of approximately$500,000.

In various partnerships with service providers, Tut Systems hasdeployed its solutions in commercial and residential properties ofthe country's largest real estate investment trusts, and in theflagship properties of major hotel chain worldwide. For the ninemonths ended on Sept. 30, Tut Systems' revenues totaled $66.1million, up from $17.2 million. Net loss applicable to Common fell23 percent to $6 million. Results reflect increased sales ofExpresso MDU products, partially offset by amortization.