Capitalizing on the Telecommunications Downturn
OVERVIEW There is no shortage of dead, dying and bankrupt ISPs, ASPs, Telecom,Hosting,Storage, and other web-based companies. They litter the landscapein thecarnage after the dot com bust and continuing shakeout. The namesarea virtual "who's-who" of every investor's worst nightmares, thislistcontinues to grow and the bottom has not been felt yet. Using the recent "Excite At Home debacle" as the latest example of whathappenswhen a company acquires too much debt; revenues without profits,bloatedoverhead for salaries, over priced assets and BAM! You have arecipe forrunning out of capital that would make Emeril proud. However, CCES sees a golden opportunity to benefit and step in when everyoneelseis going out of business. CEO of CCES Manfred Sternberg is an attorney,entrepreneurand contrarian. Mr. Sternberg has used his successful lawpractice asa stepping-stone for an active career in venture capitaland real estateinvestments. One such opportunity Mr. Sternberg is putting a lot of his time and moneybehindthese days is Houston-based Crescent Communications, Inc., (asmall publiclytraded high-speed connectivity provider). CCES was born out of three other relationships involving Mr. Sternberg.In1998, Mr. Sternberg became involved with a small ISP which was laterrenamedHTE8, Inc. Mr. Sternberg guaranteed bank loans on behalf of thefounderswho pledged their stock to him as collateral. When the companyfiled Chapter11 reorganization in the fall of 2000, Mr. Sternberg tookover the reignsof the company in order to save his investment. At thesame time, anotherclient of Mr. Sternberg's; Berens Industries, Inc.,(a small publiclytraded software company) was seeking a solution forits investors as itwas on the brink of shutting down after running outof capital. Fittingly, one of Mr. Sternberg's legal clients was seeking investmentopportunitiesto diversify away from his oil & gas holdings. Mr. Sternbergand his partnersinvested new capital into Berens Industries and tookcontrol of the tinypublic company. Berens Industries then purchasedapproximately $1.5 millionin equipment and other assets from the bankruptestate of HTE8 for lessthan ten cents on the dollar. Mr. Sternberg andhis partners renamed thenew public company, Crescent Communications,Inc. (Sternberg having beenraised in New Orleans "The Crescent City").Crescent began trading underits new stock symbol CCES on September 25,2001 less than two months afterthe transactions were finalized. Since then, Crescent has been gobbling up all the commercial internetconnectivitycustomers it can from the misfortunes of others. In a littleover twomonths Crescent became the number two independent internet companyinHouston. Crescent is gaining market share quickly, with a virtuallydebtfree balance sheet, a lean and hungry management team and a stateof theart high speed network. Larger competitors are actually walking away from their customers andshuttingdown or going out of business with little or no advance notice.Crescentis picking up customers and the assets these companies leavebehind forpennies on the dollar. Crescent has doubled its revenues asit buildsa premium operation in the Southwest. Mr. Sternberg and his partners have big plans for Crescent, which mayincludesome additional mergers and acquisitions down the road as wellas offeringother products like voice over internet and wireless services.Rest assuredthough, Mr. Sternberg's first priority is to make Crescentprofitableand run it under sound business management principles. Nooverpriced acquisitionshere, just bargain hunting in a buyers market. "The market for internet connectivity will continue to grow, that...weare all assured of, states Manfred Sternberg. "If you can imaginethefuture of the internet and access to it playing a larger and largerrolein your life and your business, then Crescent will be there to meettheneeds of the small to medium sized business. We intend to be a survivor,nota victim, in this latest consolidation phase". Management is focused on the bottom line and the company continues tomovecloser to profitability. CCES stock is currently trading near itshistoricallow with the number of outstanding shares and float beingvery small.These factors combined should lay the groundwork for a verystrong moveupward. PROFILE CCES was formed to acquire assets of other broadband and internet companieswhichare going out of business due to high overhead and poor managementata fraction of their value. The Company believes that it will achieveitspurpose by providing affordable co-location facilities to internetserviceproviders. Crescent Communications is a broadband Network Service Provider (NSP)servingas a nexus for connectivity, application hosting and delivery,and securityto the small-to-mid-tier business market (10 to 1,000 employees). Crescent's services are driven by exclusive relationships with ApplicationServiceProviders (ASPs) and their customers, by Multi-Tenant and Multi-DwellingUnit(MTU and MDU) deployments, and by individualized solutions for largerenterprises. In contrast with traditional Internet Service Providers (ISPs) and theirexpensive"one-customer-at-a-time" acquisition models in a commoditizedmarket,Crescent is growing its subscriber base through arrangementsthat expandits ability to reach end-users in a "one-to-many" relationship,whilein an environment of reduced competition. In particular, relationshipswithASPs are resulting in growth in connectivity customers while creatingmultiplerevenue streams for the Company. Crescent's Home Page http://www.crescentb.com Corporate Financial Snapshot Approximate as of 1/9/02 Shares Outstanding: 3.8M Shares in the Float: 2.2M Market Cap: $ 1.17M 52 Wk Hi/Lo: 1.50/.10 Recent Price: .31 Recent News and Press Releases Crescent Communications Reports Quarterly Results First quarterly revenuesfromnew operations CRESCENT COMMUNICATIONS INC - Quarterly Report (SEC form 10QSB) Crescent Communications, Inc.. The Best Kept Internet Secret - CCES! Crescent Communications Acquires InfoHighway Assets in Texas; ExpandsRelationshipWith Boxer Properties SERVICES Carrier Services With the proliferation of the web and communications, traditional businessmodelshave been discarded. Businesses can grow and prosper like neverbefore,expanding into geographical regions as markets dictate. The metropolitan-centricbusinessmodel of yesterday meant that business needed to be close tolarge urbancenters to survive and flourish. That is no longer the case.Businessescan locate nearly anywhere and still be in contact with theircustomerbase, vendors, suppliers and strategic partners. Large telecommunicationsandInternet carriers have large networks that give businesses this new-foundfreedom. Crescent has formed close partnerships with these mega carriers, in ordertoprovide their customers with this freedom. CCES customers make useofsuper-fast Internet connectivity, Virtual Private Networking, VoiceOverIP communications, and the world's largest fiber optic cabling networks.Clientshave the freedom to travel, expand and grow nationally and internationally. Application Hosting Crescent Broadband provides hosting services to Application Service Providerswhovalue an infrastructure with the ability to reach their customers.Thiskey differentiator sets Crescent apart from traditional hostingproviders--unlikeother providers, Crescent values each customer of theASP, not just theASP itself. Crescent is positioned to deliver the connectivityand otherservices to assist the ASP in serving its target customer base.As a consequence,the ASP enjoys increased levels of performance, monitoringand service. Crescent's pricing for application hosting is built on a per-user basisforproviding state-of-the art servers and multiple backbone connectivityina hardened facility with 24-hour security (through partnerships withLevel(3)and Colo.com), monitoring, and maintenance. E-Commerce Sites E-Commerce is not a relatively new idea, but the implications and resultsincreaseinfinitely when you apply that idea to the Internet. Onlineretailerssaw their business increase over 200-percent in 2000, as consumerscontinueto gain confidence in purchasing goods and services over theirPC. Crescent Broadband offers effective solutions for providing e-commercetoaugment its client's Internet strategies. No fuss - No hassle. CCESisequipped with secure servers, and complete e-Commerce software solutionstohandle the complexities involved with online transactions. Virtual Private Network (VPN) VPNs are networks deployed on a public network infrastructure that employthesame security, management, and throughput policies applied in a privatenetwork.VPNs are an alternative WAN infrastructure that replace or augmentexistingprivate networks that utilize leased-line or Frame Relay/ATMnetworks.Benefits of using VPNs include cost savings and extending connectivitytotelecommuters, mobile users and remote offices as well as to new constituencies,suchas customers, suppliers and partners. VPNs are fundamental in achievingglobalreach and ubiquitous access, thereby enabling new business applicationsinthe Internet economy. Virtual private networks (VPNs) connect branch offices and remote usersbyutilizing a shared or public network, such as the Internet, whileprovidingthe same security and availability as a private network. BecauseVPNsuse an existing shared WAN infrastructure, costs are less expensiveanddeployment is faster than traditional private networks. Telecommuters,mobileusers, and branch offices all require dependable access to companyintranetsso businesses of all sizes are beginning to see the advantagesof deployingVPNs. Network Intergration Crescent Broadband installs and tests every aspect of a company's networkstrategyto ensure its success. CCES advises on new technologies andproposes cost-efficientmethods for implementing a new network. Crescent provides customers with hands-on expertise in the followingareas,including the newest technologies: Cabling Systems Hardware Implementation Network Operating Systems WAN Connections CCES experts ensure the transition to a new network is seamless. Voice Over IP Crescent Broadband carries the latest IP Telephony technologies to improvetheirclient's bottom line. Voice Over IP allows a business to placephone callsover the Internet, versus traditional carrier routes. Thismeans lessreliance on carriers and cuts long-distance costs. This technologyisperfectly-suited for businesses that have multiple distant locationsthatneed to be in touch with each other very frequently during the businessday.Long distance usually means large phone bills. Voice Over IP technologymakesthis setup more economical. Voice Over IP is also perfect for companies that rely on conference calls,especiallyvideo conferencing. Often, businesses already have most ofthe networkingcomponents in place. Usually the addition of one or twonetwork componentsis all that is necessary to start a company with aVoice Over IP network. Web Hosting Web sites need web servers, CCES web servers host business-only sitesandensure that storage space and speed are not determining factors forInternetpresence. Management Jeff Olexa President and COO Mr. Olexa, age 41, has 17 years experience in Technical and Consultativesellingin the Telecommunications and Internet industries. Mr. Olexawas previouslyemployed with CXR Telecom, and National Business Group,a nation-wideintegration company where he served as Regional Managerover the SouthCentral Region. In this capacity Mr. Olexa was responsiblefor growingthe overall company to $40 million in sales and the Southwestregion fromstartup to over $6 million in revenue. Mr. Olexa had fullprofit and lossresponsibility for the South Central Region. Prior tohis commercial experience,Mr. Olexa was in the armed forces where hemaintained an Air Force telecommunicationfacility. This facility utilizedwireless communications, including line-of-sitemicrowave communicationsand other broadband technologies between Greece,Turkey and Italy. Manfred Sternberg Chief Executive Officer Mr. Sternberg age 41,is a graduate of Tulane University and LouisianaStateUniversity School of Law. Mr. Sternberg is licensed to practicelaw inTexas, Louisiana and the District of Columbia and is Board CertifiedinConsumer Law by the Texas Board of Legal Specialization. Some of Mr.Sternberg'sclients include The Bank of New York, First City ServicingCorp., Citicorp,Bank of America, Transamerica Insurance Co., Wells FargoBank, LippoBank,and Baker Hughes, Inc. Mr. Sternberg's many investmentand general counselactivities include ownership interests in a varietyof companies suchas a private local telephone equipment reseller, twopublic software companies,and several finance companies. James Hausman Chief Financial Officer Mr. Hausman, age 45, has 13 years of experience in the Telecommunicationsindustry.Mr. Hausman served for 12 years as the CFO of Houston CellularTelephoneCompany, the largest wireless provider in Houston, Texas, wherehe helpedbuild this $1 Billion entity from startup. Mr. Hausman hasmost recentlyworked with emerging telecommunications companies to sourcefunding fromprivate capital and debt markets, while assisting with thedevelopmentand implementation of their strategic growth plans. Mr. Hausmanis a CPAwith a BS in Accounting from the University of Kentucky. Mr.Hausman alsoserves as a board member of several charitable organizationsin Houston. Recent SEC Filings CCES filings with the SEC can be found at the Securities and ExchangeCommissionsweb site http://www.sec.gov . The latest filing was a form4 on 12/6/01. CONTACTS IR CONTACT PERSON: Jeff Olexa Ph: (713) 682-7400 Email: [EMAIL PROTECTED] This profile contains "forward-looking statements" within the meaningofSection 27a of the Securities Acts of 1933 and Section 21E of theSecuritiesExchange Act of 1934. Although the Company believes that theexpectationsreflected in such forward-looking statements are reasonable,it can giveno assurance that such expectations will prove correct. Forward-lookingstatementsthat can be identified by the use of words such as "anticipate","believe","estimate", "expect", "intend", "may", "will", "plan", "forecast"andsimilar words and expressions. Such forward-looking statements involverisksand uncertainties that may cause actual results, performance, achievementsandthe timing of certain events to differ significantly from the resultsdiscussedor implied in the forward-looking statements. Therefore, noforward-lookingstatement can be guaranteed. Important factors to consider in evaluating such forward-looking statementsincludeuncertainty that demand for our services will increase and othercompetitivemarket factors, changes in Crescent' business strategy oran inabilityto execute Crescent's strategy due to unanticipated changesin its business,its industry or the economy in general, unforeseen difficultiesin integratingacquisitions and other factors set forth more fully inCrescent's AnnualReport on Form 10-K for the fiscal year ended December31, 2000, and otherfilings with the Securities and Exchange Commission. It is not possible to foresee or identify all factors affecting Crescent'sforward-lookingstatements and investors therefore should not considerany list of factorsaffecting Crescent's forward-looking statements tobe an exhaustive statementof risks, uncertainties or potentially inaccurateassumptions. Crescentdoes not have a policy of updating or revisingforward-looking statements,and thus it should not be assumed that Crescent'ssilence over time meansthat actual events are bearing out as expressedor implied in such forwardlooking statements. ========================================= Disclaimer: MAG publishes reports providing informationon selected companies thatMAGbelieves has investment potential. MAG is not a registered investmentadvisoror broker-dealer. This reportis provided as an information serviceonly,and the statements and opinionsin this report should not be construedasan offer or solicitation tobuy or sell any security. MAG accepts noliabilityfor any loss arisingfrom an investor's reliance on or use ofthis report.An investment inThe Above named company is considered tobe highly speculativeand shouldnot be considered unless a person canafford a complete lossof investment.MAG has been hired by a third partyconsultant, and is contractedtoreceive a cash advertising fee of $500-$5000for the publication andcirculationof this report. Subsequently MAG maybuy or sell shares ofthe stock ofthe above mentioned company in theopen market. This reportcontains forward-lookingstatements, which involverisks, and uncertaintiesthat may cause actualresults to differ material! lyfrom those set forthin the forward-lookingstatements. For further detailsconcerning theserisks and uncertainties,see the SEC filings of the abovementioned companyincluding the company'smost recent annual and quarterlyreports. _______________________________________________________________________ Powered by List Builder To unsubscribe follow the link: http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=11414&subid=315DE954F6D8C32E&msgnum=14
