Mobility Electronics Announces Sale of Handheld Cradle Assets

Business Wire, Feb 26, 2007

SCOTTSDALE, Ariz. -- Mobility Electronics, Inc. (NASDAQ:MOBE), a leading provider of innovative portable power and computing solutions, announced today that it has sold substantially all of the assets related to its handheld cradle business to CradlePoint, Inc. for $2.1 million plus potential additional consideration based on future performance. The divestiture of the handheld cradle business is part of Mobility's strategy to increase the Company's focus on its family of portable power solutions.

At closing, Mobility received $50,000 in cash and a promissory note for $1.5 million, bearing interest at the rate of 6% annually, to be paid within two years as CradlePoint sells the inventory acquired in the transaction. Mobility will also receive: (1) a cash payment of $250,000 within the next six months, (2) 5% of CradlePoint's revenues for five years with a minimum payment of $300,000 due within three years; and (3) 100% of the first $200,000, and 50% thereafter, of any sales beyond the first $1.8 million of inventory purchased by CradlePoint at the closing.

Mobility's handheld cradle business consists of charging, modem and Ethernet cradles for handheld computing devices. During 2006, the handheld cradle business generated approximately $12.4 million in revenues for Mobility Electronics. In the last six months of 2006, the business generated approximately $3.4 million in revenues, with a resulting operating loss before allocation of corporate overhead of approximately $4.4 million, including an inventory impairment charge of approximately $3.0 million recorded during the fourth quarter of 2006 in association with exiting the handheld cradle business.

"We believe divesting the handheld cradle business provides a number of strategic benefits for the Company," said Charles Mollo, CEO of Mobility Electronics. "This transaction will enable us to further increase our focus on portable power solutions, while also allowing us to potentially receive additional compensation in the coming years if CradlePoint's handheld cradle business performs well. We believe the more streamlined operations will reduce our operating expenses and allow us to better execute on our strategies for growing the portable power solutions business in the future."

"Our business focus of 'Simplifying Mobile Broadband' will be greatly enhanced by the addition of these products and the existing customers," said Patrick Sewall, President and Founder of CradlePoint, Inc. "This transaction also allows us to capitalize on our existing technology and expertise in WiFi and cellular, and to leverage those technologies to expand and enhance the reach of the handheld cradle product line."

About CradlePoint, Inc.

CradlePoint, Inc., is a privately held firm based in Boise, ID, and is a developer of wireless networking solutions that allow easy and convenient network access for users of cellular mobile phones and modems. CradlePoint's patent pending technology provides value to carriers in the form of superior network access-limiting, subscriber management, and simplifying wireless Internet access for the end user.

The Company also sells personal cellular-enabled Travel Routers to cellular operators and their distributors.

More information about CradlePoint products is available at www.cradlepoint.com as well as through leading resellers, retailers and OEM partners. For additional information call (208) 424-5054.

About Mobility Electronics, Inc.

Mobility Electronics, Inc., based in Scottsdale, Arizona, is a developer of universal power adapters for portable computers and mobile electronic devices (e.g., mobile phones, smartphones, PDAs, digital cameras, etc.) and creator of the patented tip technology. Mobility Electronics' iGo brand offers a full line of AC, DC and combination AC/DC power adapters for portable computers and mobile electronic devices. All of these adapters leverage the Company's tip technology, which enables one power adapter to power/charge hundreds of brands and thousands of models of mobile electronic devices through the use of interchangeable tips.

The Company also offers foldable keyboards and other accessories for the mobile electronic device market.

Mobility Electronics' products are available at www.iGo.com as well as through leading resellers, retailers and OEM partners. For additional information call 480-596-0061, or visit www.mobilityelectronics.com.

Mobility Electronics, iGo and Oimproving your mobile experience are registered trademarks of Mobility Electronics, Inc. All other trademarks or registered trademarks are the property of their respective owners.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, relating to the sale of the company's handheld cradle business; the potential for receiving additional future consideration from CradlePoint; and the belief that the sale of the company's handheld cradle business will provide a number of strategic benefits for the company, including the belief that it will reduce the company's operating expenses and allow it to better execute on its strategies for growing the portable power solutions business in the future. These forward-looking statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In particular, factors that could cause actual results to differ materially from those in the forward-looking statements include the failure to complete the sale of the company's handheld cradle business; the performance of CradlePoint's business following the acquisition of the handheld cradle assets; the sell through rates of the Company's power adapters; delays or cessation of shipments of the Company's products to key customers; the timing and success of new product introductions; the development and introduction of new products by us and our competitors; the performance of suppliers and subcontractors; industry and general economic or business conditions; and other factors detailed in our filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made and are not guarantees of future performance. We undertake no obligation to publicly update or revise any forward-looking statements.