Options Media Group Holdings, Inc. (OPMG)

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Investors Conference Call Transcript 11-7-11

Audio link below Courtesy of Trading-Tigress
http://www.trading-tigress.com/myjukebox_files/confcall11072011.mp3

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Conference Call, Keith St. Clair Comments, November 7, 2011

Transcript, no guarantee of accuracy, typed from audio


Thank you. Good afternoon everybody. I’d like to start with two specific things. I’m very grateful that there are nearly 200 shareholders on this call. Secondarily, I have been advised to read a Safe Harbor Statement, which I will. I will talk for 35 minutes and will open up the call for 25 minutes. Please note that my statements will include forward looking statements (goes on to detail legalese of forward looking statements)

The reality: Thank you for joining. I’m Keith St. Clair, Chairman of OPMG. As most of you know we are in the process of changing our corporate name to Phoneguard, I may use the names interchangeably.

I will make the presentation today, but here with me are the CEO, Scott Frohman, the COO Michael Moran, and our CFO Jeff Yesner (sp).

What I would like to do today is discuss the topics that will be covered on the call. We will first discuss the history of Phoneguard and our emigration from OPMG to Phoneguard, the creation of our anti-texting software, personal security product suite, acquisition of important source codes, intellectual property, filing of copyrights and patents to protect this property.

I also wanted to spend a few minutes discussing the new management team, all of whom are sitting in the room here with me, and I can only say that I’m intensely excited about them. This management has already made significant moves to recapitalize the company in order to ensure that we have resources needed to move forward on the opportunities that lay before us. We will take a look at the new management team, and outline some of the roles and responsibilities during this talk. We live in a very interesting economic time, and at the heart of any great emerging technology company, it is the product of this company we’re proudest of. Products we have put together in only a few short months after acquiring intellectual property. We see little competition in our space. The features in our product suite are without the most robust in the industry,. I will take you during this brief discourse through some of the product enhancements we’ve made and the packaging we’ve completed, and explain to you why we, sitting in this room, are so excited about the ground-breaking products we have. Integrated into our discussion about products and channels, we are also going to discuss substantive changes to our board of directors. We will be announcing new board members today, and they have been carefully selected for their ability to help us market our products to the teens, enterprise and parent customers that you will find on the newly developed website. The strength of the board members being appointed strongly complement the management team to reinforce the distribution channels that we have for this business and I could not be more excited to talk about this management team and the new board we are about to tell you about. As most of you know earlier this year, grammy nominated songwriter/singer Justin Bieber signed on as our celebrity spokesperson and we completed a soft launch of our product and his promotional activities during the July timeframe. Our involvement with the high profile celebrity goes well beyond simply a product endorsement, as the subject of distracted driving is very important not only to
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Justin, but to everyone in the Bieber group. I will outline some of the specific promotions that have already taken place and cover some of the upcoming activities. I want to stress, however, we are just getting started* in this relationship, and we will tell you a little bit about what the next year holds for us. At the end of the talk, I’m going to go over one of the most important subjects, not only just for the investors, but also to the management team and the board of directors. The generation of revenue as a result of the programs we have initiated over the last four months.

Ladies and gentlemen, we have put together an incredible set of managers, directors, products, retailers, enterprise distributors and a remarkable customer base in an incredibly short, short, short period of time. What I’d like to do is take each of those areas and expand on each one, and then open for questions.

Let’s talk about first of all, the reason for Phoneguard, and the opportunities in this current market environment, the fact that this texting and driving is an epidemic in this country. The government has decided it will be its cause for the year 2012. We are uniquely positioned, and on the threshold of a major social problem that is causing thousands of deaths that is causing thousands every year. Just let me give you a couple of facts from the government’s website and you will understand what an important difference we are making to this space. Government figures show that in the year 2009 ( “statististics I didn’t get) So here is Phoneguard situation in a major social environment, supported by government, a situation where major corporations suffer liabilities. If you read your newspapers you will see every day, every week, evidence of corporations facing huge risks and huge costs as a result of not contracting appropriate phone solutions. I believe that our product enables connectivity through the GPS in a way that Facebook does has advertising potential in a way that Groupon has. I think those are important aspects to remember in a growing technology. So the reason it’s needed is real, the product is real, the Phoneguard operation is a strength in itself. Phoneguard migrated as a name from Options Media Group, migrating from an anti-virus technology into an anti-texting technology and into a personal security platform. If any of you would like to go onto the new website you will see that the component constituents of the application on on the hand-held is remarkable. It is a remarkable series of products, and everyone should be clearly aware that we did make a big commitment some months ago to acquire the IP, the intellectual property, the source code, rights to the patent, the trademarks of this product and we made that commitment, and then decided to expand the product. That’s a very brief history of the last four months

So, where are we today. Let’s talk about the reality of today. I told you that we now have a management team that has been significantly strengthened. Scott Frohman remains as the CEO, one of the founders of the company. He has an enormous wealth of knowledge and history of the product, the history and the team. I can’t be more excited to have on my left side, Jeffrey Yesner, our new CFO, very excited that we have such strong financial control at the helm. On the other side of the table here is Mike Moran, our new COO who brings with him a wealth of incredible experience in the operational and marketing side. The other thing we’ve done is brought in new control for our IT group and we’ve moved a lot of our IT development from off-shore to onshore here in the U.S., and we brought in a team from a competitor who is now

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managing and running the IT platform. The culmination of the CEO, new CFO, and new COO and a new IT team and bringing the new team together has been very, very exciting to have this team, this product and this marketing opportunity. In terms of the product, I just want to express an overview of some of the modifications that have taken place and reinforce, not only having a strong commitment to product, but there has been a strong commitment to capitalizing the company. And that recapitalization has included many of the people at this table here. Both the Chairman and CEO of this company invested in the last round of financing and that’s a statement of our belief and our commitment for this product and company, and the market economy we find ourselves in.

In terms of the product, significant modifications have been completed, for sure. We have a teen product, a parent product and enterprise product. To overview some of the more interesting features, that have not been fully launched yet, I would ask you to look at the website, and watch for our press releases over the next four to six weeks in terms of our ability to be a very strong player in this market. In addition to what we mentioned earlier on about reducing distracted driving and making a difference, which is our primary thrust and certainly Justin’s – we are here to make a difference. But, we’re also a public company with a fiduciary duty and a responsibility to you, the shareholders. I’ve sat on shareholder calls with other companies much bigger than us where we haven’t seen anything like the over 200 people on this call – which reflects to me how great the product is and how great the company can be and what an opportunity it is for the existing shareholders.

So, basically, : New team, new series of products, a new marketing strategy, new videos coming through…I think it’s relevant because I’ve been asked a lot of questions asking about Justin’s involvement, and just so you know, over Labor Day we did film for a large part of that Labor Day weekend in Atlanta, that we have in the can a fully filmed commercial with Justin and plan to launch that probably at the CES conference in January which is the largest mobile conference in the country. We will be sharing a stand with two very, very significant partners, and as a marketing guy, I think I would say, “watch this space,” because there will be announcements about the CES show, there will be announcements about the video, and there will certainly be announcements about our partnerships at that show which I think this shareholder group, this management group, and the new board will be very excited about.

So, in terms of Justin’s involvement, which a lot of people ask about, just to give you a couple of factors here, we did the soft launch in July, we put a small PSA together, we tested the product in the marketplace. The PSA got *500,000 You Tube views. The Twitter and Tweet program which was a forerunner of what we’re going to kick again got over a million hits, and we had over 50,000 unique accesses to our site 15,000 downloads (check this number) 15:54 of the test product. When you think where the company was four months ago and where it is today that we could generate that level of interest and volume before we were completely finished with the product and web, marketing and distribution channels, I think that bodes very, very well for the future. It was the genesis of the endorsement agreement, and we feel very comfortable about it.

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We had a sweepstake where Justin donated his tour jacket from his last World Tour, and we ran that sweepstake and the winner has now been identified and we’ll be distributing that jacket very
shortly. I’m sure it will generate significant noise when we give it to the winner. We are also going to start another sweepstake which will link with the video release and that sweepstake will involve activities around Justin’s North American tour which starts after the summer next year. That’s going to be very, very interesting and very exciting. But once again, I want to stress that Justin is but a part of this product and distribution, and his primary interest was to make the difference in a society.

Let’s move on very quickly to the distribution channels we are starting to work through. We have identified three very clear, distinct distribution channels. Enterprise, Retail and Consumer and delighted to say that those of you who follow the PRs, you see that we’ve entered into some very significant enterprise contracts, retail contracts and we are ready to re-launch the consumer brand with the new web and the celebrity-endorsed products.

I think even more exciting than that I’m very hopeful that in the course of the next two weeks we will identify a new board to the shareholders which will be exciting and reinforce those three channels. Today, I can announce two of those board appointments, and anyone who recognizes sales, marketing and distribution will recognize the enormous value of what I’m about to say. I can report today that Russ Strunk has resigned from the board and has been succeeded by Dr. Ervin Braun. Dr. Braun is an exceptional individual, one of the top docs in America, he has been a participant for 15 years in major real estate development, he’s been representing major music and entertainment talent, he’s a director of the Board of Trustees of (something Med), and he is also on the Advisory Board of Pencils of Promise, a tremendous charity which is also supported by Justin Bieber, and he was named CFO of SB Projects*, a media consulting company developing and branding music relationships in 2008. Ervin was absolutely responsible for helping me to drive the Justin Bieber relationship with Phoneguard and nobody’s more excited than me to welcome Ervin to the Board as we development this team and board to take this business forward. (*SB Projects is Scooter Braun’s mgmt/media company)

I’m also delighted to say that I will announcing in the next 24 hours the appointment of another board member who plays a very, very important part in a strategic future with us in the retail space. I’m going to announce a new retail contract tomorrow – I’m going to announce direct sales-online contracts. I can assure you, we are having very very interesting discussions with carriers and phone manufacturers as well, as we speak. But I can advise you today that Taki Skouris, who is the Chairman, Founder and CEO of Cellaris – if you look at their website, they have 1,000 mall locations around the country, are a real powerhouse in telephone accessories in the media space, and he will be joining our Board. He strengthens very significantly our opportunities in the retail world. I’m delighted to have Ervin Braun and Taki Skouris join our Board as a reinforcement of where we’ve come, but more importantly, where we’re going. And, where we’re going is somewhere very special. In additional to Taki’s joining the Board, I can formally announce that 200 of their stores will be launching our product in early December, that there will be significant branding in the malls, and that as a commitment to their belief in the

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future of this business, their Executive Management will be investing in Phoneguard stock and gifting some of that stock to their franchisees in order to show their ongoing commitment to
Phoneguard. I think over the next few days we will see some interesting orders from our business partners.

Bottom line from my perspective as Chairman of this company, we have come a very long way. We have made traction in our product, distribution, operations, our IT and development side, management group, and now an expanding board with real depth of experience ability to help us grow. I feel in a much stronger space today than I did when I got involved five months ago. I want to go on the record and thank the staff of Phoneguard. And I want to reinforce again and again, we are at the forefront of an epidemic. Ten years ago, the words “designated driver” did not exist. It’s now in every dictionary. It’s because society faced an epidemic called drunk driving that did not get dealt with harshly enough until such time as society got involved. This is a replication ten years later of the same challenge and opportunity. Somewhere in America today, someone has been maimed, killed, injured. We are at the forefront of that challenge, and it is our obligation institute our product, and we will. Having said that, as we drive this company forward together, and the operative word here is together, the shareholders, management, and Board, let’s work together to drive the value and also make a difference in society.


Q & A:

1.Q First question: Who are you trying to sell this to? The individual driver might not want to buy this. Are you looking at this as an app to insurance companies?

A: Basically, as I said, we are selling through 3 channels: Enterprise and corporations that have risk; Retail and selling to the consumer. As far as the consumer, I tend to disagree with you a bit – as a parent, I don’t want my children texting and driving and having the opportunity to get into a texting-driving accident. But please go on the web. You will see the product. You will see that we have a personal security system- -you can locate your phone. We have a panic button, we have a geo-fencing component, and we have a speed alert component. This is a very unique and robust set of products. So, we are selling to all three areas in a very strong way.

2.Q: Have you seen progress with the government side, and also the insurance – could one get a discount if this product is on the phone?

A: I would like to pass that to Mike Moran, our new COO. Moran: There is a lot of visibility around this issue with the state laws. What is happening through the government legislative body is a huge undercurrent of legislation around requiring police depts. to log if there was texting involved with the accident based on the time stamp on the phone. When that legislation moves through, this will become the equivalent of drinking and driving. Liability has shifted to the driver. Lawyers are beginning to shift their focus and their energy here. 23 states have laws against texting and driving. St. Clair: Rhode Island has a law that states if you are caught texting and driving, you will have to have an app to allow you to drive again.


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3.Q: In the last conference call, it was stated that nothing toxic would happen to the stock. In the last few months, dates have been missed, stock has plummeted, now we are on the DTC chill list, our investor relations contact, Joe Noel is MIA most of the time – his email never works. What can we expect going forward so that we can keep our confidence in the company?

A: Let me first start with the DTC. The DTC is a regulatory body, as you know. I spoke for a half an hour to the DTC today. They have put a lot of companies on the chill list. The reason our stock was put on the list is because of the high volatility of the stock. Justin Bieber got involved and we got huge volume. Then, we were not completely ready with our product, and had a soft launch. So the DTC saw the spike in volume, and put us on the chill. We have spoken to our attorneys, and they are sending a request to lift the chill. So that’s under control.
Secondarily, regarding toxicity: For a company of our size, and stage in development our stock trading at .02 is a very under priced product. We have changed a lot in the last four months, we have changed the company, the management, board, website the product, and now we’re ready to go. I don’t want to comment on any call that was made before my tenure, I only want to comment about the future.

4.Q: I’m a little concerned about the outstanding shares. We have a lot of outstanding shares at this point. Also, do you see a reverse split or buy back in the future?

A: Frohman answers: At this point, we don’t have plans to do a reverse stock split. In terms of the outstanding shares, we didn’t do anything toxic like a harsh debt offering that could significantly dilute shareholders in a very aggressive manner. We also have lots of warrants out with the Bieber group. If those warrants end up getting converted, it will add a significant amount of cash to the company. At this point, we believe we are in a good place and we are looking to move forward from here.

5.Q: I was wondering why the company continues to use Joe Noel, when he is unresponsive, unavailable and uninformative? And also, will there ever be a ticker change something closer to Phoneguard?

A: First of all, thank you for your information, this is the first we have heard of the IR in this way, and we will react accordingly. What I would say here is that we are developing as a company – we have developed a larger financial base, we will be with stronger accountants going forward, we’ll expand our legal group and investor relations dept and PR. We hear you. If you would like to send me an email, I will respond directly to you.

6.Q: What do you plan in terms of commercial launch, do you plan on bringing on any big box retailers where we can purchase this application?
A: Very easy question: Yes. We have a lot of negotiations going on. We’re talking to big box retailers. I mentioned earlier on, we are talking to carriers, we are talking to phone manufacturers. We have a whole series of relationships coming. The Cellaris partnership is
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clearly a big retail launch. We have a lot of online traction as well. So the answer to your question is yes, retail stores to play a very big part of our future
Caller: Thank you very much, and please keep us in mind for the future, we are the life blood of this company
St Clair: Thank you, I believe you and I respect you, and I hope you respect the fact that we are here and talking and we are sharing everything. Thank you very much.

7.Q: I have a question regarding the Justin Bieber commercial. Is that going to be a televised commercial? And also, are you looking for this campaign to be as aggressive as MADD was?

A: Good question, 3 parts – Justin, commercial and MADD. 1. The video was shot, it’s in the can. We have a video. We are strategizing at the moment how best to utilize that to drive revenue, and we’re having discussions with the Bieber camp. We’ll certainly have it in the street before, or at the CES conference the 10th-13th of January 2012. It is what you would call a commercial video. It is not a PSA similar to what we put out last time. We are definitely negotiating that. Next, this is definitely, definitely the MADD of the future. We have spoken with government, we have spoken to the AD council which works with the government – we are definitely in the same space that MADD was 5-6 years ago, and believe this will be a major social thrust.

8.Q: I do want to say I appreciate your coming to Phoneguard. I want to echo the sentiments of the previous caller about Joe Noel; I hope you will take that into consideration. I have a couple of questions: Will we be getting any more details on Puregrowth? Why did we pay the Pennystockprofessor for a newsletter a couple of weeks ago? I think a huge fan base of Bieber is global, is there a global role out there?

A. Regarding the global rights, yes we do have the rights globally, we want to get it right first at home and then roll it out. Noel: we heard the previous question, we understand and we’ll react accordingly. Regarding the newsletter and IR/PR, we want to educate as best as we can. So: Global, yes, Noel-we are going to work on that relationship, and last, we will always consider any form of IR and PR to help the company.

9.Q: What is going to be Bieber’s involvement? He’s on a lot of talk shows, we’re always waiting to see if there is going to be some mention of Phoneguard, could you let us know if he is going to be doing that kind of promotion through talk shows and appearances?

A. It is something we are discussing. Clearly, he endorses a lot of products. If you go to our website, you will see that Justin has lent his name to a lot of television appearances – this is something we are negotiating and will sort out in the future
Caller: And do you have another endorser in mind to target the parent demographics?
St. Clair: Good question. Without tipping any hands, once again, it’s a simple answer: Yes. We have several celebrities, several sports people who are wanting to come to the cause, and support the cause, and that’s something I think you will see unfold into our 2012 programs, so very good question!


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10.Q. I would like to know when the product will be available for the Iphone and what’s the possibility that your product would be available at the Apple Stores throughout the US?

A. Clearly Apple’s OS is different from everybody else. The strength for our product on Blackberry and Android is that it is an enforced product. It is difficult to enforce the product through Apple, it has to be accepted by the person and put on by themselves. I would say, watch this space, we are negotiating, we are talking. It is available on Apple, it is a lesser product, it is up to personal desire to use it as opposed to somebody enforcing the product. At the end of the day, Droid and Blackberry, very strong, Apple coming. In a year’s time, I see the company as being a very strong enterprise player, very strong retail player, strong consumer player and a company who can make a difference. We hope to have strong revenues and shareholder value.
Caller: asks about overhead and revenue: Jeff Yesner answers: Since I came on board, we are very cognizant of expenses. We are working to reduce expenses by 33% by the end of this coming month. (discusses accounting rules) Are costs stabilized going forward? Yes. Have most of the development costs been completed? Yes. Go on the website, see all those products, they are all done, dusted, controlled, owned, and ready to go.

11.Q. How is Phoneguard as an app compared to ATT and other big companies who have the app built in? Also regarding patent application.

A. How do we compare to competition; it seems to me that our competition is much shallower, less robust. Ours is significantly more robust. Moran: primary utility application in terms of blocking text is not a complex application and in consumer market, ATT does only that and on Blackberry. In terms of the guardian application, devices interacting with web portal, tremendous complication, -- parent or guardian and corporations – we have a whole level of software. Carriers are more on the marketing side and handset manufacturers don’t specialize in developing the software, so we have a lot of interest from the handset market for our software. So, we don’t see this as an app. We see it as a suite of products. We have the web portal which adds a tremendous amount of value. – you can locate your phone, you can track your phone and if you lost it you can see where it’s going – the panic button sends a text message to the parent or friend allowing for Google maps to see exactly where you are. No one else has such a full product suite.

12.Q. Caller asks about image of company. Is anyone monitoring the Facebook page, there seems to be a lot of negative comments. The website, also.

A. We have been made aware of Facebook. It’s a part of life these days. We note your comment and we’ll act accordingly.

13.Q. Welcome Mike Moran to the team. I’d like to get a little of his background. Enterprise solutions: do you see AON selling this to major Fortune 500 companies going forward?

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A. Moran: I have an extensive background in management consulting specifically for one of the big four in doing turnarounds. I’m an entrepreneur at heart so I’m scrappy and can streamline an organization. My career falls into to buckets: management consulting, and enterprise software sales. So, the corporate enterprise space is very near and dear to my heart and I’m really excited about that opportunity.
St. Clair: Your second question was about Enterprise. You note that we did sign the contract with AON. All I can tell you is that it is a very exciting contract and we are progressing that on many, many, many fronts. Once again as a marketing guy “watch that space”, there will be announcements. We are very excited about the enterprise space, and in particular, the AON relationships. Everything has been very well received in the corporation space. We have found ourselves through that relationship opening up many, many doors, many major corporations. There is an amazing amount of interest. I would say that is one of the most interesting and most prospectively fruitful relationships we have built recently. Great question.

I would like to close by saying that as a company we have metamorphasized. We have a tremendous new management team, technologies, products, tremendous celebrity spokesperson, we have an amazing developing board of directors, we have an operations group that is second to none and at the end of the day if you aggregate all of that into the right product, the right marketing and distribution channels, with the right people, the answer is success. I really appreciate 200 people sitting through an hour of time. We will be doing this on a regular basis. I would like to thank you all for the investment you have made in this company, and the time you have given today to have the chance to understand us a little bit more, and for us to answer some of your questions. We have a group of people here in the management team with the newly developing board, who are very excited about the future. My job is to make a difference in society and create wealth for all of us. Thank you very much.