Viper Networks Issues Corporate Update
SAN DIEGO--(BUSINESS WIRE)--July 15, 2004--Viper Networks issued the following corporate update today: Dear Fellow Shareholders, Customers, Partners and Employees: Fiscal 2003 and the first six months of 2004 were periods of important and exciting innovations, reflected in acquisitions and many new Viper products that advanced our mission of enabling people and businesses throughout the world to communicate clearly and cost effectively.
Viper Networks has built "Your Internet Phone Company" by refining technology and expanding our state-of-the-art global VoIP (Voice over Internet Protocol) network that allows calls to be placed to any phone in the world at substantial savings using an existing Internet connection, and receive calls through a unique IP-PSTN switching network.
We believe it is time to add some focus with regard to Viper Networks' exciting growth and continued activity as we further progress on our business plan.
Viper Stock Price Fluctuations
Viper's recent share price fluctuations cannot be tied to any change in the Company's plans, activities or operations. The Company is proceeding in every area according to the previously announced "Viper Networks, Inc. 2004 Business Plan." In fact, Viper is running three full quarters ahead of our benchmarks in terms of product release, minutes generated on our global VoIP Network, and the expansion of sales and marketing channels.
We do not anticipate stepping away from the 2004 objectives of $22 million in annualized revenue by end of this year nor realizing a total of $14 million in booked revenue for the year. We still plan to achieve profitability by year-end. No specific event has occurred that can account for the recent decline in share price. In fact, the Company is in a better position today than when the share price reached a high of $1.89 just a few months ago.
There are no suspicious situations we are aware of, however we are taking some general precautionary measures to counter possible issues frequently faced by "Pink Sheet" listed companies.
Our primary strategy is to stay on course and continue to grow the Company according to our plan and continue to build on the fundamentals of revenue growth and profitability. We are confident that our ongoing performance will overcome any external force which might negatively impact our price per share.
Performance and Accomplishment Review
As we continue to build and grow our Company, we would like to put into perspective some of the benchmarks we have achieved thus far.
-- August 2003: Viper Networks introduced its lead product the "vPhone" to rave reviews and significant initial orders around the world.
-- November 2003: Viper Networks purchased Mid-Atlantic International for a combination of cash and stock. This acquisition created our own Network Operation and Billing Center in Michigan, plus thirteen gateways in the Middle East and Africa coupled with new sales channels.
-- January 2004: Viper Networks purchased Adoria Communications in Massachusetts for a combination of cash and stock. This acquisition created our own wholesale traffic division plus brought gateways in Europe, India, Nepal and Sri Lanka along with new sales channels. It also included the residual traffic on the network prior to our acquisition.
-- February 2004: Viper Networks attended the Internet Telephony '04 convention and trade show in Miami, Fla., taking "Best of Show" award for its vPhone product.
-- March 2004: Viper Networks enters into the retail market via CompUSA.
-- April 2004: Viper Networks launches its WI-FI vPhone product.
-- April 2004: Viper Networks submits products to major Television retail sales channel for testing and approval for TV sales. This procedure is still in process without interruption.
-- May 2004: Viper Networks purchased a fifty percent (50%) interest in Software Innovations LLC, which owns Brazil Telecom and operations in El Salvador Central America. This acquisition brought additional gateways and sales channels in Latin and Central America plus positioned Viper Networks as a legitimate player in the global IP network arena.
-- May 2004: Viper Networks forms NextPhase Technologies and spins off all non-VoIP divisions to focus all Company resources on VoIP.
-- May 2004: Viper Networks engages Prospect Financial Advisors as its exclusive financial advisor and placement agent in connection with a placement of equity capital to institutional investors.
-- June 2004: Viper Networks completed its internal audit and submitted all financial data to an SEC approved auditing company as part of our plan to register the Company with the SEC and become fully-reporting.
-- June 2004: Viper Networks launches its new slogan, "Your Internet Phone Company", and begins online advertising on high profile web sites including Yahoo.com and Pinksheets.com.
-- June 2004: Viper Networks signs agreement with 1.6 billion dollar retail channel Tiger Direct for sales of vPhones, IP Adapters and Wi-Fi phones. Viper Networks has received and shipped the initial stocking orders for Tiger Direct.
-- June 2004: Viper Networks signs agreements with PC Mall and the College Book stores of America.
-- June 2004: Viper Networks forms new wholesale traffic division and combines Adoria and Mid-Atlantics business operations.
-- July 2004 Viper Networks enters the Business to Business market by releasing its IP-PBX system for corporations around the world and will offer IP-based cross platform calling, conferencing, find me/follow me, and traditional voice mail.
Sales and Operations
We are currently expanding our channels of sales and distribution and are working diligently each day to build our sales in the retail, catalog, online, wholesale, and other sectors.
Questions abound as to how long it will take for several of our retail and potential television and retail relationships to reach completion and begin to show measurable results. Large organizations move methodically towards their objectives and as much as the Company would like to accelerate the process we must respect their market positioning integrity. We have received a tremendous response from various retailers who have an interest in our products because we possess a cutting edge product that in most cases with be the first of its kind on their shelves.
Recently, we have launched "business-to-business" oriented products, including the WI-FI vPhone and IP-PBX, in keeping with our business plan that allows us to gain market share from several sectors of VoIP. These products allow Viper access into the multi-million dollar potential enterprise telecommunications space, as well as diversify our business so we may serve more than the consumer and retail markets.
We are also expanding our sales presence in other countries around the world. In August we will be opening an International sales office in Dusseldorf, Germany that will allow us to establish a presence and serve the European countries with our products and services.
A frequently asked question is how Viper Networks and its products compare with other voice over the Internet companies, to which we say there is simply no other company in our business which has taken a multiple layered market approach while building out its own dedicated worldwide network.
Viper Networks progressive plan of building each product channel with ever increasing devices and services is a rational, well-planned business model built upon owning our own global network and operating a debt-free company.
Marketing -- "Your Internet Phone Company"
In June of 2004, we launched our first major advertising and promotions of Viper Networks, the Company. We chose the phrase "Your Internet Phone Company" to emphasize the fact that Viper is more than the vPhone or other VoIP hardware we offer. We have built, and own a global VoIP network that can terminate low cost calling to virtually any destination in the world. Online advertisements, which include "Your Internet Phone Company," have been running in major forums including Yahoo.com and Pinksheets.com. We look to continue advertising Viper and its products and services through these and other creative and effective methods.
Viper is currently reviewing proposals from some of the world's largest Public Relations firms to assist us with the exposure of our Company. We hope to partner with an organization that will help us build brand recognition and market awareness.
Financial Statements
Viper Networks is a debt-free company with approximately 110,000,000 common shares issued and outstanding, of which the officers and directors beneficially own roughly 65%.
Despite challenging economic conditions and other factors facing a growth stage company, experienced record growth with revenue increasing from $437,496 in fiscal 2003 to $1,721,088 for the quarter ended March 31, 2004 and $1,091,651 for the quarter ended June 30, 2004 or a total of $2,812,739 for the six months ended June 30, 2004. This record increase in revenue from fiscal 2003 to the first six months in 2004 was due primarily to acquisitions and stronger than expected retail and online sales.
Although revenue growth in the Company's two Networks Operations subsidiaries, Mid-Atlantic International and Adoria Communications, were relatively flat from the first three months ended March 31, 2004 to June 30, 2004, we remain extremely optimistic as we are in the process of combining these two entities into a single, international wholesale traffic division that will be lead by Mr. James Balestraci. By combining these two divisions, the Company expects to streamline operations, reduce expenses and increase both gross revenues and margins.
In addition, we continue to expand our global VoIP network, including recent investments in Brazil and El Salvador, which are expected to contribute significant revenue in both wholesale traffic and retail channels, starting in July of 2004.
Revenue from the Company's retail products dramatically increased from the first three months ended March 31, 2004 to June 30, 2004. Revenue from vPhone sales increased 373% and retail network traffic increasing 485%. This does not take into account the multiple retail channels the Company has entered and continues to enter, as significant revenue is not expected to be generated until the third and fourth quarters of 2004.
The foundation is in place, our plan is set, the opportunities exist and we can now move toward our goals and objectives.
Forward Split
In order to recognize the long-standing goodwill of our shareholders, the Company's Board of Directors has authorized a forward split of the current common shares of the Company, with a ratio and record date to be set within the next 90 days. It is the opinion of the Company that this will serve the shareholders fairly and equitably, and will allow for additional growth of the Company.
Form 10-SB
As previously announced, the Company has retained SEC counsel to prepare and file a Form 10-SB registration statement to the U.S. Securities and Exchange Commission through the Electronic Data Gathering Analysis and Retrieval (EDGAR) System. The Form 10-SB is the General Form for Registration of Securities of Small Business Issuers Under Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act"). Pursuant to the Exchange Act, the Company will become fully-reporting. The Company expects to complete the audit of its consolidated financial statements in the next 6 to 8 weeks and file the Form 10-SB immediately thereafter. Upon effectiveness of the Form 10-SB, the Company will apply to list its common stock on the OTC Bulletin Board.
Dividend
As previously announced, the Company is initiating a process to separate all of its non-VoIP (Voice of Internet Protocol) businesses through a spin-off, which would result in a separate publicly traded company. Additionally, as a reward to the shareholders, the Company plans to distribute its holdings in this new entity to shareholders of record upon effectiveness of a registration statement.
This transaction enables both companies to focus on their respective core areas of expertise while maintaining a strong relationship between the two organizations to ensure product innovation and resource sharing, as well as independent access to capital and debt markets.
NextPhase Technologies is deploying a national wireless Wi-Fi network through Metro Area "HotZones," or Mesh Wi-Fi Networks, which are complete Wi-Fi broadband zones that cover entire metropolitan areas. These Wi-Fi metro "HotZones" utilize wireless 802.11 (Wi-Fi) and 802.16 (WiMax) to deliver high-speed broadband connections to a number of Wi-Fi devices (i.e. Laptops, Desktops, Wi-Fi enabled phones, PDAs, cell phones, tablet PCs, and more) throughout the zone, providing Wireless DSL-like services to businesses, residences, and mobile users. Ultimately these citywide "HotZones" will provide 384 kps to 100 mbs to subscribers. The Network will be used to serve a broad range of applications where high speed IP connectivity is necessary. Users may connect to the network from home, office, and public areas easily while traveling inside the HotZone or from one HotZone to another. Users can also roam on other networks, which NextPhase has agreements with.
The Road Ahead
Our pragmatic approach and daily checks and balances with strict adherence to the fundamentals means that there are simply no surprises at Viper Networks. We know exactly where we are going and measure each step we take against our plan for the future and our goal to become a major Voice over the Internet communications company, which is being built without the traditional growth limitations which plague so many other companies.
Viper Networks' house is in order, our worldwide customer base expanding each week and our registration process to become a fully-reporting company well underway.
We thank you for your continued support and look forward to reporting more good news as events transpire.
Ronald G. Weaver, Chief Executive Officer
Jason A. Sunstein, V.P. Finance, and Secretary
Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the results predicted and reported results should not be considered an indication of future performance. In addition to the factors discussed in the filings with the Securities and Exchange Commission, among the other factors that could cause actual results to differ materially are the following: adverse changes in the business conditions and the general economy; competitive factors, such as rival companies' pricing and marketing efforts; availability of third-party material products at reasonable prices; the financial condition of the customer; risks of obsolescence due to shifts in market demand; and litigation involving product liabilities and consumer issues. Viper Networks Inc. cautions readers not to place undue reliance upon any such forward looking statements, which speak only as of the date made. Viper Networks Inc. expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the company's expectations or any change in events, conditions or circumstances on which any such statement is based.
Contacts
Viper Networks, Inc.
Jason Sunstein, 800-482-2124
Jason@vipernetworks.com
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