OAKLAND, Calif. -- Zhone Technologies, Inc. (Nasdaq:ZHNE) announced today that it has filed a Form S-3 Registration Statement with the Securities and Exchange Commission. When effective, the Registration Statement will allow Zhone to sell, from time to time, up to $100 million of its common stock or other securities. This multi-purpose shelf registration may be used to raise additional capital for the Company. The registration statement may also be used by certain of Zhone's stockholders to reduce their holdings in Zhone. The terms of any offering will be established at the time of any sale. "Having a shelf registration in place provides Zhone with flexibility to sell various types of securities and to move quickly to access capital markets when favorable opportunities exist," said Kirk Misaka, Chief Financial Officer of Zhone Technologies. The Company plans to use the net proceeds from any sale of its securities to provide working capital for general corporate purposes which may include financing of future acquisition activity and to provide additional liquidity reserves. Pursuant to certain contractual registration rights, the Registration Statement also covers potential future re-sales of up to 32.3 million of already outstanding shares of Zhone common stock. These stockholders have not disclosed specific plans to sell all or any portion of their Zhone shares, or the timing of sales, if any. All of such shares are currently subject to a lock-up agreement that expires on May 11, 2004. A Registration Statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective. This announcement shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. A written prospectus, when available, meeting the requirements of Section 10 of the Securities Act may be obtained from Investor Relations, Zhone Technologies, Inc. 7001 Oakport Drive, Oakland, CA 94621. Zhone Technologies Inc.