Cirus Successfully Negotiates Return of 10,140,000 Shares And Cancels Services Contract; Cirus Makes Downward Revisions to Reported Revenues and Income.
NEW YORK--(BUSINESS WIRE)--Oct. 5, 2001--(OTC BB: CTLE)
Cirus Telecom, Inc. has successfully negotiated the return of 10,140,000 common shares, that were previously held by 9278 Communications, Inc. (OTC BB: NTSE). 9278 was a founding member of DMS Acquisition Corp., which was merged into Cirus Telecom, Inc. in February 2001. This event will benefit the company and its shareholders by lowering the number of shares issued and outstanding to 51,820,890.
In addition, 9278 and Cirus have agreed to cancel a $24 million contract, under which 9278 would have purchased telecom services from Cirus. Cirus believes that due to the changing pricing models that the telecommunications industry is presently undergoing, it would have only generated a 3% margin on $24,000,000 of phonecard pin activations. This traffic would have also utilized over 90% of Cirus' switching capacity. Cirus is discontinuing phonecard pin sales and activations. This event frees up switching capacity which will be utilized to generate revenues from a highly profitable retail customer base where the margins range from 30%-40%.
A customer of Cirus has returned $1,038,500 of telecom pin sales delivered to the customer in Q3, 2001. The return is due to one of Cirus's underlying telecom providers being unable to provide the necessary services due to their network issues. The result to operations is a negative adjustment of $15,500 in net profits previously realized.
Cirus Telecom, Inc. is a New York based company providing retail and wholesale telecom services to small and medium sized telecom consumers throughout the United States. The Company offers its customers domestic and international voice and data services at substantially lower prices than those of commonly utilized telecom service bureaus. The switching network architecture used by Cirus is highly scaleable, cost effective, and is rapidly deployable. Cirus' focus is on providing lucrative direct connections to key locations in Central and South America, the Caribbean and Asia.
Cirus also owns and operates five "Cirus Talk" multi-service telecom centers in New York and Florida. These calling cafes provide direct international dialing, phone card sales and money transmission services to domestic and international locations.
Forward-looking statements and comments in this press release are made pursuant to safe harbor provisions of the Securities Exchange Act of 1934. Such statements relating to, among other things, the prospects for the company to complete the transaction and enhance operating results, are necessarily subject to risks and uncertainties, some of which are significant in scope and nature. These risks may be further discussed in periodic reports and registration statements to be filed by the Company from time to time with the Securities and Exchange Commission in the future.