Conference call from June 04...
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EXUS Global Conference Call
June 18, 2004
11:00 AM
Andrew Beyer
Hello, my name is Andrew Beyer, Investor Relations for EXUS Global, which is traded on the Over-the-Counter Bulletin Board Exchange under the symbol EXGO. I’d first like to welcome everyone to the EXUS Global Conference Call.
I would like to introduce Ike Sutton, CEO of EXUS Global, to discuss the company’s current structure, its business strategies, activities of its current portfolio companies, and plans for additional potential acquisitions to the company’s investment portfolio. Mr. Sutton.
Ike Sutton, CEO
Thank you, Andrew, appreciate the introduction. I wanted to take this first opportunity to thank all of the shareholders for their continued support in EXUS. We’ve gone through a couple of turbulent years, and I think now we’re on the right track, and we’re pretty much hoping that we continue to receive continued shareholder support and wanted to take, again, this opportunity to just bring to light what EXUS is going through at the moment and what milestones they’ve achieved and what we’re looking to do in the future.
As everybody knows, EXUS is bulletin board company. We’re traded on the bulletin board market; our symbol is EXGO. We have corporate offices in New York, and we have about 1,000 shareholders. We’re a fully reporting company, which enabled us to file for BDC, business development status. We have recently updated our website, which is www.exusglobal.com and on the new website, we have pretty much listed our strategy, our portfolio companies, all our email and contact information. And basically, I hope that shareholders will be in contact with us through the website, and we’ll keep it updated to continually update our shareholders with all news and information about EXUS.
One of the recent events in EXUS was that we applied to be a BDC, a business development corporation, in March of 2004. This has been a new status and a new direction for EXUS, and I wanted to talk a little bit about being a BDC and what this means for EXUS and what this means for shareholder value. BDC, business development companies, was pretty much set by the SEC in the 1940 Investment Act. Basically, it provides public companies to provide private equity funding for small public companies and private companies that typically do not have the funding which enables the company to grow. By providing a BDC environment, the government has provided an environment which is regulated, which pools investments from different shareholders so that, basically, the company can make its investment. Our goal is to invest in certain companies that have great management, have tremendous potential, but have lack in the financing or lack in the ability to go to a bank and get their initial financing to move the company forward. We have identified several companies and, basically, we are working with management of these companies to create a business strategy, business plan. We’re looking to help them define their objectives and, in certain instances, we help them in their marketing of their product.
By being a BDC, it has its pros and its cons, and most public companies can elect in being a BDC, provided they comply with certain regulations. One of the few characteristics of a BDC is that EXUS is able to raise $5 million annually through the issuance of stock that has been approved by the SEC and is exempt from registration. So this would provide us the capital that we need in order to invest in or loan small businesses in their development.
EXUS, as a BDC, is not considered a penny stock. We are basically an investment company, and we’re exempt from all penny stock regulations that are pretty much put on small penny stock companies. So in essence, EXUS is an investment, a closed-end investment fund. We’re investing in companies that we see have tremendous potential. We raise funds through the issuance of registered shares that are exempt from registration. And our objective is to provide our shareholders with quarterly dividends in the form of stock payments. We have not issued cash stock dividends in the past, but we recently have issued a stock dividend to EXUS shareholders of our portfolio company called E-Education Network, and I’ll discuss more about E‑Education Network in a few minutes. But our game plan is that quarterly, we will be issuing stock dividends to our shareholders of these companies that will have tremendous potential in our view. Most of our shareholders are registered shareholders, which means they will actually receive a certificate in the mail from EXUS. In the case that the shareholders are trading and their stock is being held in street name, these dividends will be received by their brokers and, in turn, given to them on their brokerage accounts. So if there are registered shareholders, they will be getting the actual certificates in the mail.
Again, our portfolio companies are really what is the key to EXUS and, obviously, we’re looking to create a high value for EXUS shareholders. And we have two or three portfolio companies that have already been invested in, and there are several more to come. The first company that we have invested in is E-Education Network. They are an online e-learning company with a concept where they provide a prepaid smart education card to the users. These prepaid smart education cards enable the user to go to E‑Education’s website, register and to search for courses that are of interest to them, and each card has a value of 10 credits available to it. And the user now can select courses from English to computers to IT training to different courses that are of interest to them. They could select a course and now they have the ability to access and to review these courses over the period of the year.
One of the key marketing concepts of E-Education Network is that we’re marketing to people in underprivileged areas which cannot afford typically for education. And E-Education Network’s concept is that they’re going to be marketing to foundations, multinationals or different companies around the world that will support education for people in need. And E-Education has received a good response from that, and they are right now still in the development stage of their website. They’re coordinating with different content providers. E-Education does not develop the content by themselves but, in fact, partners with different content providers and has a revenue sharing model with the content users. So in effect, we feel that E-Education Network, as a portfolio company, will bring a great return to our shareholders, and we’re looking forward for their future development.
Another company that we are working very closely with is Maxplanet. Maxplanet at this time is a pink sheet company; the symbol is MXNT. EXUS has received a number of shares for its consulting work. In fact, we own 24 million shares of MXNT, and we are assisting MXNT to be a fully reporting company. They are behind in some of their reports, and we are working with the accountants and with Maxplanet’s lawyers to bring them up to date and current in their filings. In addition, Maxplanet basically was a portal with a tremendous following during the dotcom era. We have now worked out and found a company that has fit their progression and is really the new generation in portals. And the company is a company called Wireless, Inc., and we have right now pretty much worked out an agreement with them where they will be acquired by Maxplanet. We’re in the process of the documentation. We’re in the process of restructuring the authorization of the capital stock of Maxplanet, and we hope that this transaction will be concluded within the next three to four weeks.
Wireless, Inc. is a company that’s kind of unique and kind of novel. They have a software platform which mobilizes the masses through wireless technology, which means they enable people to go on to their website and create websites for themselves that can be seen on wireless phones. Since there’s 1.2 billion cell phones in the United States or PDAs or wireless devices and it’s growing every day, the natural mode of communication in media dissemination is definitely through the use of these devices. And Wireless, Inc. has created a platform to enable the use of these platforms.
Currently, through a test pilot that Wireless, Inc. started about three or four months ago, they currently have over 4,000 websites on their platform with about I believe they exceeded 10 million sites per view or pages per view last month, which is more than they ever thought they would achieve in such a short period of time. And at this moment, we are assisting them to create a program so that they would be licensing out their platform to carriers such as AT&T, Verizon, T-Mobile, where the carriers can then create their own mobile communities and generate traffic on their networks. In addition, there are a lot of enterprise companies that will be interested in mobilizing their communities, and this is one of the objectives of Wireless, Inc. Again, we feel that, here at EXUS, that this is a company that has tremendous growth. We’re investing with them. We’re getting in on the ground floor, and we wish them a lot of luck and support.
In addition to that, another portfolio company that we have is AGI Partners, Ltd., which is basically our consulting group. And under this group, we do provide services to other companies, and some of the things that we have on contract right now is that we have a joint venture going with a stone and marble supplier that refurbishes buildings. And that company there looks like they have about $4-5 million worth of contracts which, again, we are assisting them with some of the back office work and some of their immediate small cash needs. And we’re looking forward to helping that company grow and maybe even bring them into the public markets in the near future.
As I mentioned, we are assisting Wireless, Inc. with their marketing efforts, and we are assisting them in bringing them in front of carriers and other companies in order to pretty much secure a license agreement for their platform. And we are in the process of working with them and hope within the next two to three weeks, we could get our first test pilot going on that end.
Another company that AGI is working with is a Linux software developer that has developed a PC-friendly Linux desktop version and, again, Linux has been in the limelight in the last I guess couple of years, but at this point, I think it’s getting to be a more desirable software package, especially with all the different security problems that are coming up lately. And again, AGI is assisting Linux in a couple of areas of product development. One of the areas is helping them market their product on a worldwide basis. We might be assisting them on some of their public matters, maybe in terms of assisting them to do a public issuance.
Another company that we’re working with, just to name a couple, is Nevada Holding Group. They area pink sheet public company, and we are assisting them in securing a business. Right now, they’re a shell, and we do have a couple of candidates that we’re working with and, hopefully, if we could put something together in addition to the three million shares that we already have, we probably will earn another fee for additional shares of the company.
It is EXUS’ goal, again, as I just tried to give you a little brief outline, is to build shareholder value, build shareholder support for EXUS and for the companies that we invest in. These companies, we’re investing in a pretty early stage of these companies. We’re assisting them in their business strategy, their marketing plan and, in some cases, actually doing or contacting a lot of the contacts we have overseas in order to expand their marketing efforts. These companies are not just companies that have good visions, but we feel have great management, and the management is really the key to get these companies off the ground.
EXUS is a company that we have pretty much a small staff of dedicated people that have gone through some hard times with the company, and we’re still there committed to make EXUS grow. In addition to our small staff, we do have a number of consultants that we work with pretty much on a daily basis. Historically, these consultants have put full effort into EXUS, where EXUS didn’t have the financial capacity to pay them on an annualized basis. But these consultants have really put in I would say full-time-plus effort to make EXUS grow and develop to where it’s at today. So in addition to thanking the shareholders, I wanted to also thank a lot of the people that have strived to see the vision of EXUS and got it to this point.
