CirTran's 10-K Filing Shows 'Major Improvement' in 4th Quarter of Fiscal 2006Last update: 4/17/2007 3:59:11 PMSALT LAKE CITY, Apr 17, 2007 (BUSINESS WIRE) -- CirTran Corporation (CIRT), an international full-service contract manufacturer of IT, consumer and consumer electronics products, today filed its Form 10-KSB for the year ended December 31, 2006, showing results buoyed by a strong performance in the fourth quarter of the fiscal year. Stronger sales with higher gross profit margin in the fourth quarter accompanied with gains of $2,838,094 on derivative evaluations brought CirTran more than $1 million closer to break-even for the year, cited as a "major improvement" by its Chairman and CEO Iehab J. Hawatmeh. Sales for the quarter were $1,732,090, an increase of 17.75% over $1,471,101 for same period in 2005. Net profit for the quarter was $932,316, a 168% improvement over the loss of $1,367,251 during the same period a year ago. Shareholders' equity also increased during the year, growing by $350,893 to $1,618,947 as of December 31, 2006, as compared to $1,268,054 at the end of fiscal 2005, a 27.7% increase. In the fourth quarter, shareholders' equity grew by more than $1 million over what CirTran reported in its 10-Q filing at the end of the third quarter, September 30, 2006, a 185% increase. CirTran ended fiscal 2006 with sales of $8,739,208 and a net loss of $2,980,288. The decrease in revenue, from the $12,992,512 reported for fiscal 2005, was impacted greatly by the loss of an anticipated $2.5 million in sales to Advanced Beauty Solutions, LLC (ABS) of Los Angeles. ABS, for several years the largest marketer of direct response/sold-on-TV products manufactured by CirTran, filed for bankruptcy in 2005. In addition, CirTran reported interest expense for fiscal 2006 of $3,032,229, as compared to $1,225,252 for 2005, primarily for a non-cash charge of $2,467,394 in accretion expense relating to the convertible debentures. Mr. Hawatmeh said CirTran is now directly marketing products previously sold by ABS, after purchasing some of its former customer's assets in June of 2006, including product inventory, intellectual property, customer lists, and a 30-minute infomercial. "We believe that a corner was turned in the fourth quarter of fiscal 2006 as CirTran regained momentum in sales and in moving toward profitability," Mr. Hawatmeh said. "As a result, we entered 2007 with revenues recovering on products previously sold by ABS, and are very excited about the launch and potential of The Real Deal Grill(TM), endorsed by four-time former world heavyweight boxing champion Evander Holyfield." He said that CirTran plans to announce financial results for the first quarter shortly. About CirTran Corporation Founded in 1993, CirTran Corporation (CIRT) () is a premier international full-service contract manufacturer. Headquartered in Salt Lake City, its ISO 9001:2000-certified, non-captive 40,000-square-foot manufacturing facility is the largest in the Intermountain Region, providing "just-in-time" inventory management techniques designed to minimize an OEM's investment in component inventories, personnel and related facilities while reducing costs and ensuring speedy time-to-market. In 1998, CirTran acquired Racore Technology (), founded in 1983 and reorganized as Racore Technology Corporation in 1997. Continuing to grow, in 2004 CirTran formed CirTran-Asia as a high-volume manufacturing arm and wholly owned subsidiary with its principal office in ShenZhen, China. Today, CirTran-Asia operates in three primary business segments: high-volume electronics, fitness equipment, and household products manufacturing, focusing on the multi-billion-dollar direct response industry. This press release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. With the exception of historical information contained herein, the matters discussed in this press release involve risk and uncertainties. Actual results could differ materially from those expressed in any forward-looking statement. The Company disclaims any obligation or intention to update any forward-looking statements. All trademarks are properties of their respective owners. SOURCE: CirTran Corporation CirTran Corporation, Salt Lake CityIehab J. Hawatmeh, 801-963-5112iehab*cirtran.comCopyright Business Wire 2007
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DURHAM DURHAM JONES & PINEGAR, P.C. ------- 111 East Broadway, Suite 900 JONES & P O Box 4050 ------- Salt Lake City, Utah 84110 PINEGAR 801.415.3000 ------------- 801.415.3500 Fax www.djplaw.com May 1, 2007
Board of Directors CirTran Corporation 4125 South 6000 West West Valley City, Utah 84128
Gentlemen:
We have assisted CirTran Corporation, a Nevada corporation (the "Company"), in the preparation of the Registration Statement on Form S-8 (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration of 50,000,000 shares of the Company's common stock (the "Shares") to be issued and sold by Company's 2006 Stock Plan (the "Plan").
We have examined the Company's Certificate of Incorporation, as amended to date, and the Company's By-Laws, as amended to date, and have examined and relied on the originals, or copies certified to our satisfaction, of such records of meetings, written actions in lieu of meetings, or resolutions adopted at meetings, of the directors and stockholders of the Company, all as provided to us by the Company, and such other documents and instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below.
In our examination of the foregoing documents, we have assumed (i) the genuineness of all signatures and the authenticity of all documents submitted to us as originals, (ii) the conformity to the originals of all documents submitted to us as certified or photostatic copies, (iii) the authenticity of the originals of the latter document, and (iv) the legal competence of all signatures to such documents.
We express no opinion herein as to the laws of any state or jurisdiction other than the state laws of the State of Utah, and the federal laws of the United States of America.
Based upon and subject to the foregoing, we are of the opinion that when (i) the Registration Statement becomes effective, and (ii) certificates representing the Shares are duly executed, countersigned, registered, and delivered upon receipt of the agreed upon consideration therefor, the Shares will be duly authorized, validly issued, fully paid and non-assessable.
It is our understanding that this opinion is to be used only in connection with the offer and sale of the Shares while the Registration Statement is in effect.
We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act and to the use of our name therein and in the related Prospectus under the caption "Legal Matters." In giving such consent, we do not hereby admit that we are in the category of
HANSEN, BARNETT & MAXWELL, P.C. A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS Registered with the Public Company AND Accounting Oversight Board BUSINESS CONSULTANTS 5 Triad Center, Suite 750 Salt Lake City, UT 84180-1128 Phone: (801) 532-2200 Fax: (801) 532-7944 www.hbmcpas.com
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors Cirtran Corporation
As independent registered public accountants, we hereby consent to the use of our report dated April 16, 2007, with respect to the consolidated financial statements of Cirtran Corporation, in the Registration Statement of Cirtran Corporation on Form S-8 relating to the registration of 50,000,000 shares of common stock.
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