Nascent Pharma Holdings Inc (NASC)

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WRAPMAIL, INC.
The Email Branding Pioneer
Rob Goldman September 25, 2012
[e-mail]
WRAPMAIL, INC. (OTC:PK - WRAP - $0.0251)
Price Target: $0.60 Rating: Speculative Buy
COMPANY SNAPSHOT INVESTMENT HIGHLIGHTS
WRAPMail, Inc. is a pioneer in the email branding and
marketing solutions arena. The Company’s proprietary
cloud-based technology platform enables users to
transform their emails into branding and marketing
tools. WRAPmail’s solutions offer a rich email
letterhead solution that includes graphics, text, and
animation that promote brand awareness, showcase
or market a website, products, and services. The
innovative approach, which appears to have no direct
competition, has garnered thousands of users, and is
based on a one-to-one email communication rather
than mass email campaigns.
WRAPMail, Inc. is transforming our traditional,
blank slate emails into branding and marketing
tools, thereby increasing brand awareness and
sales. The innovative platform is tailored to
enterprises, small businesses and individuals.
The size of WrapMail’s addressable market is in
the billions. Separately, The Radicati Group
estimates that by 2013 there will be nearly 1.9 billion
email users sending over 500 billion emails per day.
Users wrap their existing outgoing emails with
images and links that promote the sender’s
brand, product or services. The rich letterhead
solution can be customized and include graphics,
animation, text, video, and audio.
WRAPmail, which boasts over 6,200 clients,
including Verizon, Re/Max and Toshiba,
generates revenue from license fees and their
own advertising network. Users can also earn fees
as an affiliate, which we believe is a potentially
lucrative aspect of the service. We were so
impressed with the effectiveness that Goldman Small
Cap Research now counts itself as a client.
Given the viral nature of the service, WRAP could
generate as many as 500,000 new users in the
next 2-3 years.
WRAP’s CEO recently purchased 700,000 shares
in the open market, reducing an already small
41.4 million share float.
As WRAP gains critical mass, it could emerge as an
M&A candidate. Thus, our price target of $0.60
reflects the future value of WRAP’s revenue and
users. We rate WRAP Speculative Buy.
KEY STATISTICS
Price as of 9/24/12 $0.0251
52 Wk High – Low $0.205 – 0.016
Est. Shares Outstanding 171.4M
Market Capitalization $4.3M
3 Mo Avg Vol 970,100
Exchange OTC:PK
COMPANY INFORMATION
WRAPmail, Inc.
445 NE 12th Avenue
Fort Lauderdale FL 33301
954-591-8742
www.wrapmail.com
[e-mail]
WRAPMAIL, INC. (OTC:PK - WRAP)
www.goldmanresearch.com
Copyright © Goldman Small Cap Research, 2012 Page 2 of 11
COMPANY OVERVIEW
Founded in Florida in 2005, WRAPmail combines its proprietary technology with custom marketing content and
provides a next generation marketing e-mail platform for organizations and individuals. The Company provides
a "rich" e-mail letterhead solution to organizations and individuals allowing e-mail correspondence to be written
on letterhead as opposed to a blank sheet of paper, which is today’s current practice. The Company refers to a
"rich" e-mail message as one that includes one or more of the following: graphics, pictures, text, audio, video,
animation and links. WRAPmail has developed a platform of rich e-mail software features based on industry
standards packaged as an integrated, turnkey server-centric product that resides in the cloud. WRAPmail’s
focus is the one-on-one email although email-campaigns may also be accommodated.
The genesis behind the innovative WRAPmail platform is to leverage the ubiquitous yet untapped power of
user’s current email and the insatiable desire for traffic to one’s corporate and/or social network site. If used
properly, emails, which are sent daily on a person-to-person basis, or a very small group, can become
complete and/or complementary marketing tools that promote, brand, sell and cross-sell products and
services, and drive traffic to the designated website.
In essence, WRAPmail offers the most cost-effective marketing solution on the market by simply
turning every regular one-on-one email into a marketing tool.
Image I. Re/Max “WRAPmail Sample”
Source: www.WRAPmail.com
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Copyright © Goldman Small Cap Research, 2012 Page 3 of 11
As of mid-3Q12, over 6,200 clients have been launched. WRAPmail clients span virtually every industry and
include household names such as Verizon (NYSE – VZ), Toshiba (OTC – TOSSY), RE/MAX, and others. In
our view, while WRAPmail can be used in any line of business, it is particularly suited to Real Estate,
Electronics, Copier Dealers, Automotive and Boat Dealers, TV/Radio, Restaurants, MLM/Network Marketing,
Hotels, Cruise, Sports, Attorneys, Newspapers, Builders/Contractors, Financial Services, Travel, Furniture,
Education, and Manufacturing.
Image II. Toshiba Business Solutions “WRAPmail Sample”
Source: WRAPmail, Inc. Website
WRAPmail Solutions
WRAPmail PRO is tailored for small and medium organizations and individuals. The revenue model is based
upon 3rd party advertising as part of the WRAP or above/below the WRAP. Users receive up to 25% of the ad
revenue generated which is a very similar model to Google (NASDAQ – GOOG) Adsense.
WRAPmail PRO+ is an ad-free solution where there are no 3rd party ads present (unless the organization/user
elects to participate in the ad-share program) and instead elects to pay $50/user/year.
WRAPmail Enterprise is a dedicated server solution which includes full webmail, WRAPmaker, Reporting,
Repeater emails and a Campaign module. Enterprise is either hosted by WRAPmail or on clients’ own server.
The Campaign module features the ability to send email blasts/newsletters using the same proprietary
WRAPmail technology with everything embedded so images display without download. Cost: $3,500/year +
$40/user/year. Campaign module: $0.005/email. Hosting is an additional cost.
WRAPMAIL, INC. (OTC:PK - WRAP)
www.goldmanresearch.com
Copyright © Goldman Small Cap Research, 2012 Page 4 of 11
Image III. Verizon Business “WRAPmail Sample”
Source: www.WRAPmail.com
WRAPmail Customization:
Each user has access to a dashboard whereby elements of the wrap can be modified (e.g. personalized with a
picture and contact information.) This solution is especially suited for the MLM/Networking Marketing and real
estate businesses. The Company also offers dynamic links based upon the sender so that tracking from email
to order from a website is possible. Plus, email and/or automated delivery of SMS (text message) based upon
clicks/website actions is available.
Some of the most popular features include WRAPmaker, a tool which creates WRAPs, and the ability to
engage real-time tracking reports and modify settings found on the dashboard.
Over the past few years as the economy has struggled, affiliate programs have thrived as they enable users to
generate fees from ad revenue sharing or fee sharing. We believe that the WRAPmail program is robust and
very attractive, especially to individuals or sole proprietors, which could drive a real viral engagement.
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Affiliate programs
Free Affiliate program:
All users can sign up for the free affiliate program and receive 10% commission on:
? Ad revenue from ads displayed in their emails
? Any new PRO+ signups ($5/user/year)
? Any Enterprise signups ($350/year plus $4/user/year)
Super affiliate program:
$60 to join gets super affiliates up to 25% commission on:
? Ad revenue from ads displayed in their emails
? Any new PRO+ signups ($12.50/user/year)
? Any Enterprise signups ($875/year + $10/user/year)
? 10% of Ad revenue from ads displayed in the emails from users signed up with the super affiliate code
Image IV. Broward College “WRAPmail Sample”
Source: www.WRAPmail.com
WRAPMAIL, INC. (OTC:PK - WRAP)
www.goldmanresearch.com
Copyright © Goldman Small Cap Research, 2012 Page 6 of 11
BEHIND THE SCENES
WRAPmail is a server/cloud- based solution. Users create emails just as they always have, and do not see the
rich content. Users are not required to change their e-mail address and the administrator can “construct” with
or without the help of the WRAPmail Production & Design team, multiple e-mail letterheads using the included
WRAPmaker that allow for including different graphics, links, promotions, surveys and/or audio. With some
WRAP solutions, the email makes a “stop” after leaving the user’s desktop and that “stop” is where the email
gets wrapped. WRAPmail will either reside on a dedicated WRAPServer or a shared WRAPServer located in
WRAPmail’s secure hosting facility. Installation in a client’s data center is also possible.
Webmail users can enjoy the easy-to-use toolbars for Gmail, AOL (NYSE – AOL), Microsoft LIVE/Hotmail
(NASDAQ – MSFT), Yahoo! (NASDAQ – YHOO). The toolbar now lets users stay in their familiar webmail
interface and when composing an email the WRAP appears in the text area and the user simply types
inside it and hits send.
WRAPmail has nearly unmatched delivery capability. Emails that have been sent are always delivered and
they show up without red x’s where there are pictures and links (unless delivered to a non-standard email
client), as opposed to most mass-email programs. WRAPmail has completely tested Microsoft Outlook, Lotus
Notes, Mac Mail, Entourage, Gmail, Yahoo!, AOL, Hotmail, MSN among others and the solutions are 100%
compatible. The innovations continue and some of the latest solutions are:
? RSS Feeds inside a Wrap - currently being used by WRAPmail featuring missing kids via the Center for
Missing and Exploited Children (Amber Alert).
? Pre-made templates for major Real Estate firms, MLM organizations and General themes.
? Webmail functionality so users can send and receive emails from/to the WRAPmail Dashboard using
their existing email address.
? WRAPMaker where users can make unlimited WRAPS based on their own images, the available
image library or directly from a website.
Image V. WRAPmail Platform Schematic
Source: www.WRAPmail.com
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MARKET OPPORTUNITY
The size of WRAPmail’s addressable market is enormous. The Radicati Group estimates that by 2013 there
will be nearly 1.9 billion email users sending over 500 billion emails---per day. With hundreds of billions of
email messages estimated to be sent daily by the end of 2013, if the Company were to only capture 0.05% of
all emails in which a revenue share opportunity was generated though a click-through, plus limited penetration
on the enterprise and WRAPmail Pro+ offerings, the Company could generate tens of millions in revenue, with
high operating profitability.
As noted in the figure below, according to industry experts IAB, Internet advertising revenues in the United
States totaled $31.7 billion for the full year of 2011, a 22% increase over 2010. What we find interesting is that
email comprises the smallest portion of all ad spending. However, given the crossover of the WRAPmail
offering, we believe that it would fall under both email and display-related revenue, thus demonstrating a huge
revenue opportunity that represents tens of billions.
Revenue (Ad Formats)
Full Year
2010 *
Full Year
2011
% $ % $
Search 44.8% $11,661 46.5% $14,768
Classifieds and Directories 10.0% $2,597 8.1% $2,580
Lead Generation 5.1% $1,323 4.8% $1,522
E-mail 0.7% $195 0.7% $213
Mobile* 2.5% $641 5.0% $1,596
Display-related
-Digital Video Commercials 5.4% $1,404 5.7% $1,809
-Ad banners / display ads 22.9% $5,963 21.5% $6,811
-Sponsorships 2.8% $718 3.5% $1,121
-Rich media 5.9% $1,539 4.1% $1,315
Total display-related 37.0% $9,624 34.8% $11,056
Figure I. The IAB Internet Advertising 2011 Revenue Report
Source: www.iab.net
Regardless of the market size, WRAP’s business opportunity is two-fold: 1) Be the first vendor to broadly offer
rich one-on-one email wrapping to organizations and individuals and 2) Create a brand new advertising
revenue stream by incorporating 3rd party ads inside personal one-on-one emails. As new distributors are
brought on and a new sales team built, investors can expect a full court press for the sign-up of new clients.
WRAPMAIL, INC. (OTC:PK - WRAP)
www.goldmanresearch.com
Copyright © Goldman Small Cap Research, 2012 Page 8 of 11
EXECUTIVE MANAGEMENT
Rolv E. Heggenhougen, CEO
Mr. Heggenhougen has founded and managed technology organizations in Norway, Sweden, Denmark, Latvia,
Switzerland, Germany, China, Australia, and the US. His first company; iGroup ASA (OSE: IGR) went public in
2001. From 1989 to present, he has served as Founder & Chairman of McKenzie Webster Limited, a
technology investment and consulting company and etechnologycorp, a Connecticut- based technology
company. Mr. Heggenhougen holds and has held several BOD-positions in private and public companies in
Europe, Australia and the US.
Greg Partin, CTO
Over 15 years in the field of software development of enterprise systems. Fluent in multiple technologies such
as .NET, HTML 5, Ajax, MVC, WCF, SQL, Web services and cloud-based architecture and design. Bachelor’s
degree in Computer Science from Bowling Green State University, Master’s degree in Computer Information
Systems from Nova Southeastern University
Mr. Partin has held numerous different leadership positions in several different internet-based companies.
COMPETITIVE ADVANTAGES
In our view, WRAP, as the only offering of this type in the market, has significant advantages over traditional
branding and marketing tools and strategies.
? WRAP transforms bland blank slate emails into a dynamic letterhead that promotes branding and leads
to increased website traffic that can be converted into business leads or product sales and/or service
revenue.
? The innovative WRAP approach allows unique customization features and is based upon a direct,
person-to-person contact from a trusted source rather than an opt-in or mass email campaign which
may never reach its intended recipient, since it is viewed as spam.
? The multi-tiered solution offering and revenue share model, along with cloud-based platform and
integration with all email clients make for a seamless, “always-on” marketing tool that is a great
complement to other, short-term, heavy marketing campaigns.
? Emails often arrive with a red x where there is a picture and are sent from one machine. The WRAP
platform eliminates that problem.
? At the end of the day, efficacy of the product will determine its success. Given its functionality and
feature-set, we believe that WRAP could enjoy higher than average CTR (click-through-rates.)
? Broad-based enterprise usage, affiliate programs, and ease-of-use are some of the features that could
prompt a viral effect on signups, making the platform an attractive M&A target by email client and social
media marketing providers.
? A key feature of the WRAPmail solution is link tracking which is also available in real time. Reports are
also available on users’ Dashboard in various forms to show important statistical data of who is clicking
on what link and when.
? The WRAPmail solutions enable webmail functionality so users can use their existing email addresses.
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RISK FACTORS
In our view, WRAP’s biggest risks are the timing and scale of new user sign-ups, particularly in the enterprise
space. A secondary concern would be the typical balance between the advertiser-supported level of service
and the fee-based solutions. Furthermore, it is a bit early to gauge CPM (impressions) or CPC (cost-per-click)
rates that will be used in revenue generation and revenue sharing until a critical mass of users is in the WRAP
ranks. Execution risks in sales and the management of marketing and distributors could push meaningful
revenue generation out to a later date, or in a smaller ramp, thus impacting the Company’s revenue ramp or
time to significant profitability. Competition from larger firms or even from newer entrants is a typical concern
and is also consistent with firms of WRAP’s size and standing.
CONCLUSION
We believe that WRAPmail’s unique and innovative email branding platform could represent the next phase of
broad-based website and organizational branding and marketing. Moreover, as the Company gains critical
mass, it is likely that the service is used as an “always-on” marketing tool in conjunction with mass marketing
campaigns. With hundreds of billions of email messages estimated to be sent daily by the end of 2013, if the
Company were to only capture 0.05% of all emails in which a revenue share opportunity was generated though
a click-through, plus limited penetration on the enterprise and WRAPmail Pro+ offerings, the Company could
generate tens of millions in revenue, with high operating profitability.
In the near term, aside from new major sign-ups, there are a number of milestones ahead. These include new
distributorships abroad, sales and marketing hires in the U.S. and prospective strategic partnerships in the
CRM, Hosting and Lead generation space.
As noted above, given the viral nature of the service, WRAP could generate as many as 500,000 new users in
the next 2-3 years and one of the secondary drivers could be the affiliate revenue potential, along with its
positioning as a solid corporate citizen in the community with its promotion of the optional RSS feed from the
Center for Missing and Exploited Children.
Separately, the recently announced open market purchase of 700,000 of WRAP stock by the Company’s
founder should provide a great deal of confidence in WRAPmail’s future prospects.
As WRAP gains critical mass, it could be considered as an M&A candidate by external email client providers,
or other players in the email marketing arena. Thus, our price target of $0.60 reflects the future value of
WRAP’s revenue and users. We rate WRAP Speculative Buy.
WRAPMAIL, INC. (OTC:PK - WRAP)
www.goldmanresearch.com
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Recent Trading History For WRAP
(Source: Stockta.com)
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Copyright © Goldman Small Cap Research, 2012 Page 11 of 11
Analyst: Robert Goldman
Rob Goldman has over 20 years of investment and company research experience as a senior research analyst and as a
portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's
Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging
Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique
investment management firm and Blue and White Investment Management, where he managed Small Cap Growth
portfolios and The Blue and White Fund.
Analyst Certification
I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views
about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or
indirectly, related to the recommendations or views expressed in this research report.
Disclaimer
This Opportunity Research report was prepared for informational purposes only. Goldman Small Cap Research, (a
division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research and
Goldman Opportunity Research. The Select product reflects the Firm’s internally generated stock ideas while the
Opportunity product reflects sponsored research reports. It is important to note that while we may track performance
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stocks in the Opportunity format may have a higher risk profile, they typically offer greater upside as well. Goldman Small
Cap Research has been compensated by the Company in the amount of $3500 for a research subscription service. The
Firm does not accept any equity compensation. All information contained in this report was provided by the Company. Our
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control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her
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