ORS Orsus Xelent Technolgies New Common Stock

Orsus Xelent Technologies, Inc. (NYSE Amex: ORS), a designer and manufacturer of award-winning mobile phones for the Asian market, announced today results for the year ended December 31, 2010.

• Full year 2010 sales were $24.4 million, down from $77.4 million in 2009, but about in line with prior guidance.
• Reflecting lower sales and a decision to provide a non-cash allowance for doubtful accounts of $33.84 million, the Company incurred a net loss in 2010 of $47.4 million, compared with a net loss of $6.4 million in the prior year.
• Gross margins of 7.5% in 2010 compared with 12.2% in 2009 with the decline primarily due to the year over year decrease in sales volume. Further, with a continuing inability during 2010 to sell higher margin special application phones, the Company reverted to sales of lower priced, low margin phones in its highly competitive traditional mass markets.
• While the Company believes over time it will receive installment payments on accounts receivable from its largest customer (accounting for most accounts receivable) it determined it was prudent to write down all receivables aged more than 360 days that were not covered by the $44 million third party guarantee in place through December 31, 2010. Entering 2011, the Company reported receivables of $60 million, and said an extension of the guarantee agreement has been principally agreed to by the parties and a new agreement is expected to be signed shortly.
• Further affecting reported results was an accrued possible penalty for purchase contracts signed after December 31, 2008 amounting to $12.6 million of which $9.3 million was reported as "other expense net" for the year 2010, which compared with $2.9 million in 2009.

Mr. Guoji Li, CEO of the Company, stated, "The Company was unable to reach the objectives established at the beginning of 2010 for our product strategy and operating results. We simply were unable to establish sales channels for our higher priced products, and our production costs were too high to compete effectively at the low end of the market."

He added, "Given our pressing cash flow problem and the 'going concern' issues raised by it, we have an uphill climb ahead. If we can obtain the cash needed, we are adjusting our marketing development strategies and are focused on potential operating improvements in 2011. In particular, our operating plan calls for entry into new developing markets in 2011 for 3G products, such as in Africa, while we adjust our R&D to meet the requirements of the telecom operators and market trends in the PRC which we were unable to accomplish in the past year. In the PRC, we continued to see double digit growth in the overall market (12.7% sales growth in 2010 versus 2009) and more rapid growth in the CDMA market (+31% in 2010 year over year)."

Mr. Li added, "Of course, of most immediate importance, is our serious cash flow situation. We are exploring a variety of options to strengthen our cash position including a strategic merger and an offering and sale of equity."

Another step announced by the Company near year end was the possibility of a reverse stock split, as approved by shareholders at the annual meeting in December. The Company said it is continuing to review this matter.

SEE ATTACHED TABLE

              ORSUS XELENT TECHNOLOGIES, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
               FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
         (In thousands, except number of shares and per share data)

                                       ------------------------------------
                                           Year ended         Year ended
                                       December 30, 2010  December 30, 2009
                                       -----------------  -----------------

Net sales                              $          24,407  $          77,392

Cost of sales                                     22,579             67,970
                                       -----------------  -----------------

Gross profit                                       1,828              9,422
                                       -----------------  -----------------

Operating expenses:
Selling expenses                                     104                350
General and administrative expenses                  347                831
Research and development expenses                      -                 54
Depreciation and amortization                         26                 64
Loss from write-off trade deposits                     -             11,937
Allowance for doubtful accounts                   33,836              1,914
                                       -----------------  -----------------

(Loss)/income from operations                    (32,485)            (5,728)

Other income/(expenses)
Interest expense                                  (1,280)              (912)
Other (expenses)/income, net                      (9,337)            (2,911)
                                       -----------------  -----------------

(Loss) before income tax expense                 (43,102)            (9,551)

Income tax expense                                     -               (910)
Deferred taxes                                    (4,290)             4,093
                                       -----------------  -----------------

Net (loss)                                       (47,392)            (6,368)

Other comprehensive income
Foreign currency translation
 adjustment                                          502                243
                                       -----------------  -----------------

Comprehensive (loss)                   $         (46,890) $          (6,125)
                                       =================  =================

Basic and diluted                      $           (1.57) $           (0.21)

Weighted average number of common
 shares outstanding - basic and
 diluted                                      30,256,000         29,756,000
                                       =================  =================

About Orsus Xelent Technologies, Inc.

Incorporated in the State of Delaware and headquartered in Beijing, China, Orsus Xelent Technologies, Inc. is an emerging designer and manufacturer of award-winning mobile phones for the Asian market, primarily the People's Republic of China ("PRC"). The Company's business encompasses the design of mobile phones, related digital circuits, and software development, and it is a recognized pioneer in mobile phone integration technology. It introduced the region's first wristwatch-style cellular phone, and it continues to break new ground with state-of-the-art phones that include advanced features such as fingerprint recognition and touch-screen displays. The Company also is focused on developing and marketing, under its Proxlink trademark, special application mobile phones for specialized users in a wide variety of professions in business and government. Since the Company's launch in 2004, it has established "Orsus" as a popular brand and achieved a significant share of the world's largest mobile phone market. It maintains more than 179 service call centers across the PRC, with additional offices in Shanghai, Hong Kong, Shenzhen, and Tianjin. For more information, please visit the Company's web site: www.orsus-xelent.com.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the Securities and Exchange Commission.

Contacts: PRC: Orsus Xelent Technologies, Inc. Guoji Liu CEO Tel: 010-861085653777