Business of DigitalFX International, Inc.
General Overview
We are a direct selling company offering streaming video via enhanced email service, live webcasting tools, and video on demand capabilities through a network of independent distributors. As such, we are the only company in the marketplace combining Web 2.0 applications as the products, and a multi-tiered system as the sales force. Based in Nevada, our distribution network spans over 17 countries, yet most of our revenues currently are derived from the U.S. market.
Starting in fiscal 2009, we shifted our product focus to internet marketing products for small business users, and in March 2009 we intend to launch the CommF5 Suite (“F5”) product line which will enable our users to easily create and distribute email marketing campaigns at an affordable price. F5 is powered by technology provided by AttainResponse, LLC, a Colorado based company (“AttainResponse”). In December 2008, we acquired an option to purchase up to 48 percent of AttainResponse. AttainResponse’s technology will be sold exclusively through our company.
In 2006, VMdirect, the predecessor of our company and today one of our subsidiaries, went through a reverse merger to create DigitalFX International, Inc. as a publicly traded holding company for three business divisions (VMdirect—product subscriptions for Affiliates, hello World—retail social networking product; and FirstStream—product subscriptions for small and medium sized businesses, which will shortly be replaced by the F5 product). From 2003 through 2006 we attained a significant level of growth primarily because free online video postings (YouTube, MySpace, FaceBook, etc.) were not prevalent and video mail was a relatively new application. This growth pattern was reversed due to competition and to mismanaged product launches in late 2006, throughout 2007 and most of 2008. Our Affiliate and customer base continued to decline as we struggled to stabilize our product offerings. In an effort to turn revenues around, we went through a complete management and products overhaul during the fourth quarter of 2008.
