NEW YORK, July 9, 2002 (PRIMEZONE) -- Exus Networks, Inc. (OTCBB:EXUS), a global provider of end-to-end telecommunications services, released today the following letter to its shareholders:
Dear Fellow Shareholders,
The purpose of this letter is to bring you up to date with respect to our Company's business and recent developments. Since January 15, 2001, when the Company completed its merger with E*twoMedia, a Nevada corporation, and now a wholly owned subsidiary of Exus (the "Company"), much has taken place -- both corporately and in the world around us. The horrific events of September 11th changed our world. Our way of life in the United States, the freedoms we all take for granted, but cherish so much, were viciously exploited and jeopardized. The economy of the entire world was put on the line. Corporately, prior to September 11th, our Company was in the process of structuring its management and operations, organizing financing, broadening its geographic territory, and preparing to introduce our unique Shared Satellite program. For the last nine months post September 11th, these efforts were put on hold and now I can say that we are back on course.
As you know from the Form 8-K Current Report which we filed in May with the Securities and Exchange Commission, our Company has engaged new certified public accountants, Feldman Sherb & Co., to be our auditors. With this engagement, we have completed the process of bringing the Company's public filings up to date. Management has dedicated itself to accomplishing this goal and to thereafter remain in full and timely compliance with our responsibilities as a "fully reporting" public company.
Our Market Opportunity
Our strategy is to leverage our presence in emerging markets and our expertise in global satellite networks to provide "end-to-end" satellite-based communications solutions. We estimate that the market for "end-to-end" shared satellite network service is an order of magnitude of $10 - $15 billion worldwide. The following markets within satellite based services market offer opportunities for our company:
-- Telecom Service Provider and Internet Service Provider Market
A primary focus of our business strategy is to provide our products and services to new telecom and Internet service providers. As a result of continuing deregulation, there has been growth in the number of these providers, which represents an opportunity for us to develop more local resellers around the world. These local resellers are able to utilize the systems and connections we provide to deliver services to more customers in their territories. Typically these local partners provide retail Internet access, data, voice services and other value added services, including video conferencing.
-- Enterprise Market
A growing number of enterprises are contracting for "end-to-end" satellite-based communications solutions in order to focus on their core competencies. This offers opportunities for the Company to develop more enterprise customers where we can build and operate their satellite-based networks. The Company is focusing resources to support these services in Central Asia where there has been a great deal of activity during the last nine months. Enterprises also offer the opportunity for the Company to supply Content Delivery Networks for applications like Distant Learning.
-- Government Market
The increased activities of Governments in Central Asia provide an opportunity in supporting their communication requirements. Distance-learning and teleconferencing via satellite are seen as key solutions in educating the populace and promoting peace in the world. The World Bank has embarked on a $30 million program to create a Global Learning Network via Satellite and Exus has had meetings to discuss our participation in this program. In addition, Exus is participating in a United Nations tender to provide the UN with Internet connectivity in Uzbekistan.
-- Broadcaster Market
The evolution of the Broadcast market toward digital processing, storage, retrieval and distribution of content provides another market opportunity for Exus. We are expanding our business by developing next-generation Live-on-Demand video, as well as Multimedia Broadcast solutions for broadcasters globally.
Our vision is to provide complete, customized solution of products and services to meet the broad range of infrastructure and service needs of our customers. By offering "one stop shopping" for end-to-end network solutions, we are addressing the needs of emerging markets. In addition, we anticipate that continuing deregulation worldwide will result in the formation of a significant number of new competitive service providers over the next two to three years. In order to offer broadband telecommunications services to their customers, these service providers will need the kind of infrastructure, broadband structure and broadband connections that we provide. The convergence of video, voice, and data services, combined with the growth in the use of applications for the Internet is driving global demand for satellite-based broadband communications solutions. This is especially true in many countries throughout the world, where modern high-capacity facilities are not readily available or are not competitive with our solution offerings.
We believe we may have a first to market opportunity to provide on-location, live data broadcasting via satellite and become a wholesale provider of network services that power local resale partners around the world. We believe we also have an opportunity to provide content delivery for enterprises that need to distribute their own content live over the Internet from any location in the world using our Shared Satellite Network.
Exus Broadband Solution -- Satellite & Power Line Communications
Exus' Shared Satellite program enables Exus to deliver broadband connectivity to the emerging markets on demand instead of a dedicated channel. By installing a satellite dish, an Exus customer will have access to Shared Broadband Connectivity at 10% the traditional cost for dedicated service. Further, Exus is working on a strategic partnership for integrating Power Line Communication (PLC) technology to enable our Broadband Network to be extended to the consumer using existing electrical wiring. PLC technology will drastically reduce the cost of broadband delivery to the consumer. For example, we are working with a Children's Hospital that wants broadband high-speed Internet access in the patient's rooms, so the children will be online for messaging and games. Working within their limited budget, Exus' solution will enable the hospital to deploy a broadband connection to each room via the existing electrical system without the cost of rewiring the entire hospital. Our Shared Satellite program will also enable the delivery of high-speed Internet on demand so the hospital will pay for usage rather than for a dedicated connection. Exus will provide an "end-to-end" solution that will fit the budget. Our goal is to have the PLC technology ready for deployment for 1st quarter 2003.
Executing Exus' business plan will require additional investment. We are also pleased to report that even though approximately $500,000 of debt was due this month, our major lender has not only extended the debt for another year but also lowered the interest rate. We also registered with the SEC an Employee Stock Option Plan to enable our employees to participate financially in our growth. We have been receiving tremendous support from all involved. As you can imagine, the execution of our business plan requires additional capital. Cash flow from operations is not sufficient at this point to satisfy our current liquidity requirements. We are actively working on several proposals, including a possible private placement, and as soon as the board determines the best action for the company you will be informed.
We thank our shareholders, customers, employees, and partners for your continued confidence and support, and look forward to reporting our continued progress to you in the quarters and years ahead.
Very Truly Yours,
Isaac Sutton,
Chairman and CEO
Exus Networks, Inc.
About Exus Networks Incorporated
Based in New York, Exus Networks is a global provider of a broad array of value-added, satellite and terrestrially based communication services to a diverse client base that includes medium to large multi-national businesses, Internet service providers (ISP's), and governmental agencies. Through service agreements and strategic relationships with satellite, teleport, and terrestrial network operators and the Company's satellite gateway and data center in New York, Exus Networks benefits from the growing need for affordable, premium quality managed data networking services. This is particularly true in emerging markets, where Exus benefits from a first-mover advantage. Markets in which the Company is currently active include Poland, Ukraine, Kazakhstan, Uzbekistan, Greece, and Cyprus. To learn more about the Company, please visit its Web site at http://www.exus.net.
This communication may contain forward-looking statements which involve risks and uncertainties. That include, among others, our history of operating losses and negative cash flow, limited access to operating capital, risks associated with operating in international markets, technological changes and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. More information is included in Exus' filings with the Securities and Exchange Commission which may be accessed through the SEC's Web site at http://www.sec.gov.