CirTran Corporation (CIRX)

[HarryOsbornJr]

We recorded a $2,417,283 gain on our derivative valuation for the year ending December 31, 2008, as compared to a loss of $1,076,629 recorded for the year ending December 31, 2007. The favorable swing in the derivative valuation is primarily the result of factors relating to the differing debt levels of the underlying convertible securities, together with the varying market values of our common stock.

As a result of these factors, our overall net loss from operations was reduced to $3,911,212 for the year ending December 31, 2008, as compared to a net loss of $7,232,524 for the year ended December 31, 2007.