December 1, 2003
To Our Valued Shareholders,
I came to the company in May of 2002 with a three year plan. With help from the Senior Management of GlobeTel, we feel that we are ahead of schedule in transforming GlobeTel into a company that has substance and purpose.
Before I go into our plans, I would like to address the IPW transaction. This was a transaction that we started in the spring of 2002. It was meant to be a way of partnering with a company to be the Asian Gateway for GlobeTel. We have been through a lot of surprises in this transaction. To say that both sides haven’t gotten what they started out for is an understatement. But the management of IPW and the management of GlobeTel still believe that this transaction will benefit both parties. A new shareholders meeting will be called for IPW by year’s end and the listing process will move forward based on the outcome of that meeting. GlobeTel has secured new investors that have placed the necessary money within IPW to clean up its creditor situation and give it the resources to complete the listing process. Even though we still believe that IPW can achieve its goals, we felt it necessary to write the asset down until the goal is achieved. Our future is not based on IPW and if IPW is successful, then great, our balance sheet will gain a new asset and our new partner will give us a platform to launch new projects into the region. If IPW doesn’t succeed, then our balance sheet is reflective of the current situation and we will continue to grow other relationships in the region. Our network revenue is still profitable and with the new projects being launched in the fourth quarter, 2004 is shaping up to be a banner year for the future of GlobeTel.
I would like to take a few moments and go over the three year plan, give you a status on were we are in reference to the plan and give you our goals for the future. First, the three year plan was to address the reconstruction of the company’s corporate structure, business concepts and strategies, investor strategies, market maker support, revenue growth, PR relations, stock exchange membership, and shareholder equity. It is important for shareholders to understand that we are currently in the OTCBB. In this marketplace, our shares are handled much different than companies listed on the NASDAQ or the New York Stock Exchange. We need to grow into a company that can move to one of these “Big Boards”. To do so, we need to have substance and meet certain criteria to gain access to these markets for our stock. Besides the criteria, we needed the right investor group who would back and invest into the company’s business plans, and the right market makers that could tell our story to the new investors.
Year One, GlobeTel focused on the corporate structure of the company and business concepts and strategies. May of 2002, GlobeTel was then ADGI (American Diversified Group Inc.). ADGI was incorporated in Nevada and had issues related to its by-laws. The shares issued under ADGI were in conflict with the by-laws and needed to be corrected. In July of 2002, ADGI by a vote of its shareholders reincorporated to the state of Delaware and into a new company named GlobeTel. This was a very expensive and time consuming process, but was necessary to be able to start to attract investors that GlobeTel needed to invest into its business strategies. This brings us to our next accomplished goal; business concepts and strategies. GlobeTel in the summer of 2002 needed to reevaluate its business partners and business strategies. We reconstructed the networks currently in operation and started relationships with global partners who had the wherewithal to help us grow as we produced. At that time the company’s network revenue was a little over $3million a year with $1.2 million in losses. A year later, the company now has revenues of $3million a quarter with profits. I realize that shareholders want more, but in this sector and in this economic climate, we feel that this is a very good turn around in one year.
Year Two, May 2003 to May 2004, the focus of this year was and is to develop investor strategies, market maker support, revenue growth and PR relations. As stated, without sophisticated investors, GlobeTel would never be taken seriously by the larger market makers. Without the support of sophisticated market makers, GlobeTel will never be able to break free of the constant shorting that plagues the OTCBB. To date, GlobeTel has secured multiple million dollars in funding over the past 18 months. We have secured funding that will be used to deploy the company’s 2004 projects. These projects will launch GlobeTel into retail sales and the global telecommunications marketplace. With this funding, GlobeTel hopes to ramp to a $60 million revenue run rate by the end of calendar year 2004. Major projects and acquisitions will launch us into a larger visible arena and be the stepping stone to move to “The Big Boards.” In the next few months, market maker support and a professional PR campaign will be launched. Along with our revenue growth in 2004, we hope to be able to apply to a larger exchange by the fall of 2004.
Year three, by taking the substance that we have built over the past two years in the summer of 2004, we will start the move to a larger market for our stock. Year three is about building shareholder equity. Our business concepts will start to prove themselves and the results of our hard work will be evident. By first quarter of 2005, our goal is to be in excess of $250 million dollar annual run rate. We plan on doing this by coupling traditional telecommunications services with non-telecom related products. With the use of IP as our delivery network, we plan to deploy services from banking, education, telemedicine, rich content (such as video and other streaming content) and market reach information data. We feel that the future of telecom is not just voice and data but the delivery of products and services by the use of high quality, low cost network.
To say that the management of GlobeTel is excited about the upcoming year is an understatement. November and December of this year will see the domestic launch of our Money Magic Card and the start of retail US sales. GlobeTel will start to sell on its website a low cost IP box that will allow customers to access our network from anywhere in the world with only an internet connection. Our major contracts, with the new secured funding, will start to grow the company into the vision that we all share here at GlobeTel. We will start the shareholders meetings again in December/January. The first one will be held in California and then Boston. A complete schedule will be announced in January of 2004. The plan is to hold a meeting every other month to keep shareholders and the markets informed on our progress. I do understand the need to be kept informed. In recent months, I have received several calls and emails wanting more information to be released. I assure you that we will release information as it occurs
Best wishes,
Timothy Huff
CEO GlobeTel Communications Corp
