Sent from Floyd--->Floyd refutes Coyote networks press release dated 12/10/98. Charges fraud and market manipulation in regards to CYOE's statement about Crescent Communications and Eugene Curcio. Declares CYOE's investment in Crescent Communications worthless.
"We did extensive due diligence on Crescent,"
Coyote Network Systems Refutes TheStreet.Com's "Misleading" Release
Crescent Has Letters of Intent For 30 Million International Minutes per Month; Coyote "Insiders" Have Not Sold A Single Share and Have No Intention To Sell
Westlake Village, CA – December 10, 1998 – Coyote Network Systems, Inc. (Nasdaq: CYOE) today said the accusations made yesterday in articles by a reporter from TheStreet.Com (TSC) about Coyote Network Systems and Crescent Communications are potentially misleading.
The facts are as follows:
A significant portion of Coyote's second quarter revenue consisted of an equipment sale to Comdisco, which then leased the equipment to Crescent Communications, an emerging international carrier. Coyote received full cash payment from Comdisco upon shipment of the equipment. As earlier reported, the equipment consisted of Coyote's DSS Switches and compression equipment from another manufacturer.
Crescent Communications has Letters of Intent for more than 30 million minutes per month to international locations. As quoted in Kaufman Brothers Intraday Note published yesterday, "Crescent Communications is indeed incorporated in Nevada but is based in Long Beach (CA)," and has the necessary licenses and tax identifications.
Crescent Communications was the subject of extensive due diligence by Coyote. Likewise, Crescent Communications also was the subject of due diligence by Comdisco. Comdisco purchased the communications equipment from Coyote and leased it to Crescent Communications.
"We did extensive due diligence on Crescent," said Daniel W. Latham, president and chief operating officer, Coyote Network Systems. "We have been working closely and have been in constant communications with Crescent for the last three months working on site surveys, project management and network design, regarding Crescent's international carrier services. Our sale of the equipment to Comdisco was on a non-recourse basis with amounts reserved for service contingencies, all of which was reflected in our second quarter financial reporting."
The TSC reporter also referenced Coyote's S-3 Registration Statement filed last week. The Registration Statement had two employees and one board member ("its insiders") included, whose total was less than 4% of the shares to be registered. These same "insiders" have owned more than twice that number of shares since approximately July 1997 and have neither sold nor plan to sell a single share. The reference in the S-3 to "short selling" related only to the possibility of "short sales" under the Plan of Distribution for the JNC Series "A" Preferred Shares. Coyote's "insiders" and "affiliates" can not and will not "short sell" Coyote stock.
Given the nature and gravity of the situation, Coyote Network Systems and Crescent Communications are hopeful that TSC will correct the articles with complete and accurate statements. "Coyote is confident about its business, proud of its customers and vendors and will do all in its power to refute such misleading information," said Latham.
About Coyote Network Systems
Headquartered in Westlake Village, CA, Coyote Network Systems (CNS) provides telecom equipment and network services that enable and deliver local, long distance and Internet services. Coyote Technologies provides scalable Class 4/5 telecom switches and IP (Internet Protocol) gateway systems. Headquartered in Houston, TX, American Gateway Telecommunications provides international long distance services to carriers. Headquartered in Los Angeles, CA, Interactive Network Systems markets international long distance services to affinity groups. CNS is authorized to provide competitive local exchange carrier (CLEC) services in California. For more information, please visit the Company's Web site: cyoe.com, or call 1-818-735-5385.
The statements in this news release may be considered "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance suggested in this news release. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. For more complete information, please refer to the Company's Form 10-K and Form 10-Q filings with the SEC.
NEWS RELEASE
Contact: Tony Squeglia
Coyote Network Systems
(818) 735-5385
E-mail: A.Squeglia@cyoe.com
Crescent Communications & Coyote Technologies Sign $37 Million Equipment & Services Contract
Crescent to Use Coyote DSS Switches to Provide Wholesale International Voice & Data Services
Westlake Village, CA – September 24, 1998 – Coyote Technologies, a subsidiary of Coyote Network Systems (OTCBB: CYOE), today announced it has signed a three-year equipment and services contract with Crescent Communications, Inc. valued at more than $37 million. The contract calls for Coyote Technologies to provide Crescent with five DSS Switches, compression equipment, network management and billing systems, and related services such as network design, diagnostic engineering, maintenance, billing, customer care and rating software. Crescent plans to provide wholesale international long distance voice and data services.
Approximately $13 million of the equipment portion of the agreement is scheduled to be shipped this month. The total equipment portion, valued at $28 million, is expected to be delivered by early 1999. In addition, Coyote Technologies has contracted for Newbridge Networks to provide compression equipment and network management, and with Info Directions to provide their CostGuard® billing system. Comdisco, Inc. has agreed to provide lease financing for the initial portion of the equipment order.
"We chose Coyote Technologies because they offer excellent technology and deliver a cost-effective, solutions-oriented approach," said Gene Curcio, chairman, Crescent Communications. "We look forward to a rewarding relationship with Coyote."
"We are pleased that Crescent has selected us as their network supplier," said Daniel W. Latham, president and chief operating officer, Coyote Network Systems. "We are committed to providing carriers with innovative, cost competitive solutions that enable them to be successful. Our solutions-oriented approach enables Crescent to provide high quality services to their customers at very competitive prices."
About Crescent Communications
Headquartered in Long Beach CA, Crescent Communications, Inc. was formed to provide primarily wholesale telecommunication services to select international markets.
About Coyote Network Systems
Headquartered in Westlake Village, CA, Coyote Network Systems provides telecom equipment and network services that enable and deliver local, long distance and Internet services. The Company's telecom equipment subsidiary, Coyote Technologies, provides scalable Class 4/5 telecom switches and IP (Internet Protocol) gateway systems. The Company's network services subsidiary, American Gateway Telecommunications, provides international long distance services to carriers. The Company is authorized to provide competitive local exchange carrier (CLEC) services in California. For more information, please visit the Company's Web site: cyoe.com, or call 1-818-735-5312.
The statements in this news release may be considered "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance suggested in this news release. Such factors include, but are not limited to, actual and potential competition, risks associated with consolidation in the industry and with international expansion, general and economic conditions, the need to manage growth, and certain product, technology and regulatory risks. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For more complete information, please refer to the Company's Form 10-K and Form 10-Q filings with the Securities & Exchange Commission.
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