IVI Communications, Inc. (OTCBB: IVCM)

Dear Reader,

StockUpTicks is pleased to introduce you to a company that only recently began trading on the OTCBB.  Already, it’s made a dynamic splash in the market.

The company is an interesting case study in the re-emergence of some Internet sectors. Gone are the days of the fly-by-night, anything goes “dot coms.”  What remains is a Darwinian, strongest will survive marketplace where revenues, management and real deals matter… dot com or not.

With this in mind, it is impossible to ignore the relentless rise of wireless Internet access.  Regular StockUpTicks readers know our pronounced affinity for wireless as we’ve published on the subject often.  We firmly believe that wireless Internet and data transmission will have a social and business impact that will exceed even the ubiquitous mobile phone.

So take a moment to peruse today’s profile of IVI Communications, Inc. (OTCBB: IVCM).  We think you’ll find an interesting story in one of the most attractive industries in the market. 
 

About IVCM

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IVI Communications, Inc. (IVCM) currently has two wholly owned subsidiaries, Internet Business Consulting, Inc. and AppState.Net. IBC is a leading provider of turnkey wireless networks that has the expertise required to engineer, install, and support wireless applications and solutions. AppState.net is an Internet Service Provider founded in July 1999 providing wireless and dialup Internet access to the Appalachian State University town of Boone, NC. IVCM utilizes the Boone market and its student population as a test market for new services that will be marketed nationally. IVCM currently generates revenue of over $3 million annually.

IVI Communications will continue to implement its plan to acquire, consolidate and profitably operate locally branded ISPs that will offer state of the art dialup, Lickity-Split(SM) wireless Internet access, and VoIP services to residential and business customers. Through consolidation, economies of scale are achieved and profit is maximized. As more compelling content becomes available, the management of IVCM believes that the demand for broadband services will increase dramatically. ISPs having a track record of success in broadband will not only retain customers by converting their dialup customers to broadband but will acquire new customers who migrate from other dialup providers

The management team at IVCM has extensive depth and practical, hands-on experience in acquiring broadband services; having already participated in the acquisition and integration of 13 ISPs in four Western states totaling nearly 30,000 customers with annual revenue of $6.5 million. 

There are currently 3,000+ independent ISPs providing dial-up Internet access to approximately 12 million households in the U.S.  The primary focus of IVCM management is to acquire the most dominate providers in this niche market and convert their customers to IVCM's fixed wireless broadband network.
 

The IVCM Market

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IVCM management  believes that a tremendous opportunity exists to provide Wireless Broadband Internet access, where it is currently unavailable or cost prohibitive, at speeds exceeding DSL, Cable, and satellite. 

As of March 31, 2005 Jupiter Research estimates a total of 82.9 million residential subscribers in the United States, up from 80.1 million as of September 30, 2004.   Over 12 million of these subscribers are served by independent ISPs (most with less than 5,000 subscribers), yet their constituencies are fiercely loyal and do not want to subscribe to the major carriers.  The independents face a lack of bandwidth, buying power, and the opportunity to enjoy the benefit of economies of scale.  They generally offer a narrower range of services and struggle to upgrade equipment as required.

In a region-by-region strategy, IVCM intends on "Rolling Up" major independent providers and facilitating the migration of their customers from dial-up to IVCMs fixed wireless broadband service while maintaining brand loyalty.  The IVCM acquisition model is driven by the belief that “local wins.”   Locally managed sales and marketing of local brands drive customer loyalty and reduce costly churn. 

• There are 80.1 million residential subscribers in the United States. 
• Over 50% of those subscribers access the Internet via broadband. 
• Dialup is now officially on the decline. 

These startling statistics bring two questions to mind:
1. Why are the marketing and technological giants waning?
2. How are the “little guys” hanging in there?

The small ISPs survive for two reasons:
1. Rural America is loyal to its local ISPs. 
2. Their large competitors cannot deliver broadband cost effectively in their markets.

To the astute communications marketplace observer, all of this indicates that the playing field has been leveled.  And the opportunity exists in that part of the Internet that is not owned by the giants.

Simply put, IVIC’s plan is to:

A. Acquire many small local dialup ISPs
B. Retain the local brand
C. Centralize administration, customer support, and dialup network administration
D. Build out fixed wireless broadband networks (starting with unlicensed and migrating in time to licensed frequencies)
E. Create a national brand image for the broadband product
F. Acquire content for exclusive distribution by IVIC O&Os and affiliates

The broadband market closed out the second quarter with over 21 million customers and growth for the quarter of 10%.  By the end of the year, about 22.5 million households in the U.S. will have high-speed Internet access, or about 21% of all households nationwide, according to the Yankee Group, a Boston consulting Firm; by 2008, about half of all residences are expected to have a broadband hookup.  Cable enjoys the lion’s share of the broadband market with 66%.  DSL has grabbed a healthy 32% of the market and the late entrants, the satellite and wireless providers, share the remaining 2%.

But, watch out for fixed wireless broadband.  According to The Wall Street Journal; “In recent years, telephone and cable companies spent billions upgrading systems and installing equipment to be able to reach most of the nation's households with high-speed Internet service.  They are still expanding, but with broadband now available to the majority of the nation's homes, many carriers are more devoted to boosting sales in areas they already serve than to broadening their reach.”

Many consumers in areas that mainstream technology hasn't yet reached have been left waiting for years for the next advance.  As more compelling content becomes available, the demand for and profitability of broadband services will increase dramatically. While the major carriers are competing for DSL upgrades (and shipping converts boxes loaded with complicated connections that require everything from additional network cards to power strips).

The ICVM IT team has significant wireless experience dating back to1996 in both the 900 MHz and 2.4 and 5.6 GHz spread spectrum technology.  The ICVM network will not only retain customers by converting dial-up to broadband, but will gain new customers migrating from other dial-up providers.
 

IVCM and a Content Driven Industry

The strategy at IVCM is to become a media company operating its own Internet-based distribution network.  The aggregation of compelling content will drive its dial-up customers to its broadband products. Consumer interest in content is an established fact. And, it’s relatively easy to see that Entertainment on Demand (EOD) via the Internet is growing and will become an inevitable purchase point.  IVCM has positioned itself to facilitate this phenomenon.
 

The IVCM Dial Up Internet Strategy

IVCM currently leverages the combined buying power of multiple brands to negotiate master contracts with aggregators to source dial-up access using managed modem services of multiple carriers to achieve significant reductions in cost of goods sold (COGS).  While reducing cost, IVCM provides enhanced services to local ISP customers such as national V.92 dial-up (provides call waiting and quicker access to the Internet), 24/7 technical support, and reliable spam and web filtering.  To improve financial efficiency, administrative costs are shared among all brands through centralization. 

The available niche is significant; it represents a two billion dollar market that generates an estimated annual EBITDA of $300 million.  If it were possible to implement IVCM’s business model over the entire niche the projected EBITDA would be closer to $700 million.  IVCM conservatively forecasts that its combined dial-up operations will generate EBITDA of over 35% in year three trending up to over 40% in year five. (all financial and market data supplied by IVCM)
 

IVCM Strategic Alliances and a New Acquisition

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IVCM has already entered discussions to negotiate master contracts with aggregators to provide network and technical functions. IVCM is also in negotiations to provide wireless training, equipment financing, and subcontracting of fieldwork such as site surveys and tower installations. Management at IVCM has begun initial discussions with Motorola (Canopy) and Alvarion (formerly BreezeCom) for the supply of fixed wireless equipment.

On February 7, 2005 IVCM announced the Company completed the acquisition of Internet Business Consulting, Inc. (IBC) (www.ibconsulting.com), with annual revenue of $2.5 million. IBC is a leading provider of turn-key wireless networks that has the expertise required to engineer, install, and support wireless applications and solutions.  In addition, IBC is a national distributor of wireless computer networking equipment from the industry’s leading manufacturers including Motorola Canopy and Alvarion to ISPs, Local Exchange Carriers, Utilities and Enterprise customers.
 
 

Nyhl Henson, a cable television programming pioneer and entertainment industry executive, has served as President and CEO of IVI Communications since June 2000.  Mr. Henson’s career began with the launching a model cable system in Reno, Nevada for Warner Cable.  Next, he turned his attention to Warner’s Qube project in Columbus, Ohio.  On 1, The world's first commercial interactive TV service, Qube opened on December 1, 1977.  It offered an unprecedented 30 channels of television divided equally between ten broadcast TV channels, ten premium or pay-per-view channels, and ten channels with original interactive programming. Subsequent to Qube, Henson was instrumental in the conversion of Warner Communications’ Star Channel into a satellite-delivered service known as ”The Movie Channel.”  A co-creator of Nickelodeon TV, he served as the service’s first general manager and was a key contributor to the development of MTV from Nickelodeon’s “Pop Clips” program.  In 1983, he helped to create Music Village Group, a Nashville-based entertainment Company, and Music Village USA, a 40-acre theme park.  Mr. Henson was named Chairman and CEO of Country Music Television when Music Village acquired the fledgling network.  Country Music Television was later sold to Group W Cable as part of a $1.5 billion package.  Mr. Henson quickly discerned the similarities between the Internet and cable and recognized that the Internet facilitated the interactivity that Qube had sought to offer.  After the technical sector market crash in April, 2000 he assumed control of ailing Internet Ventures, Inc. a private California corporation, in June 2000.  Mr. Henson guided the company through the successful completion of a three fiscal year audit by an SEC qualified CPA firm, a reverse merge into a public reporting shell corporation (renamed IVI Communications, Inc.), subsequent filings with the SEC of quarterly (10Q) and annual (10K) reports, and the subsequent filing with the NASD for trading on the OTCBB.

Charlie Roodenburg, Charlie Roodenburg serves as EVP and COO.  He has had hands-on management responsibility for rural ISP operations since 1997, managing six brands throughout California to generate EBITDA in excess of 20%.  He was responsible for the launch of PeRKInet, a hybrid broadband service in 1998 and launched a DSL broadband offering in 1999.  Throughout his career with IVI, Roodenburg has managed the acquisition of four ISPs and the operation of ten brands in four western states.  In October 2000, Roodenburg was elevated to Executive Vice President and moved to corporate headquarters to assume responsibility for corporate administration and all IVI ISP operations.  In May 2002 Roodenburg was named Chief Operating Officer and Chief Financial Officer.  As CFO, Roodenburg has been responsible for all aspects of administration of a public reporting company including the reverse merge into a reporting but not trading public company, SEC compliance, and the Company’s campaign to be cleared for public trading by the NASD.  Roodenburg has a B.S. in Finance from the University of Southern California and an M.B.A. from Pepperdine University
 

Recent News From IVCM

LOS ANGELES, Sept. 8 /PRNewswire-FirstCall/ -- IVI Communications, Inc. (OTC Bulletin Board: IVCM - News) is pleased to announce that the NASD has approved the company's application to trade on the Bulletin Board. Trading on the Bulletin Board began September 8, 2005, at market open. The trading symbol will remain IVCM.

The OTC Bulletin Board® (OTCBB) is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equity securities. Securities quoted on the Bulletin Board are subject to filing requirements with the Securities and Exchange Commission.

Says Nyhl Henson, CEO IVCM, "The transition from the Pink Sheets to the Bulletin Board is an important step for our company. With it comes greater fundamental transparency and a more readily accessible market presence. We feel strongly that our new trading venue will provide great opportunities for IVCM and is yet another indication of the progress we continue to make."

About IVI Communications

IVI Communications, Inc. (IVCM) currently has two wholly owned subsidiaries, Internet Business Consulting, Inc. and AppState.Net. IBC is a leading provider of turnkey wireless networks that has the expertise required to engineer, install, and support wireless applications and solutions. AppState.net is an Internet Service Provider founded in July 1999 providing wireless and dialup Internet access to the Appalachian State University town of Boone, NC. IVCM utilizes the Boone market and its student population as a test market for new services that will be marketed nationally. IVCM currently generates revenue of over $3 million annually.

IVI Communications will continue to implement its plan to acquire, consolidate and profitably operate locally branded ISPs that will offer state of the art dialup, Lickity-Split(SM) wireless Internet access, and VoIP services to residential and business customers. Through consolidation, economies of scale are achieved and profit is maximized. As more compelling content becomes available, the management of IVCM believes that the demand for broadband services will increase dramatically. ISPs having a track record of success in broadband will not only retain customers by converting their dialup customers to broadband but will acquire new customers who migrate from other dialup providers.

Please visit our website at www.ivn.net for more information.

Forward-Looking Statements

This press release contains certain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Factors that could cause or contribute to such differences include, but are not limited to, market acceptance of products and technologies, competitive factors, the Company's ability to continue to secure sources of financing and other factors described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.

     For Investor Relations:
     Blue-Sky Solutions, LLC
     Stephanie Soleas
     (877)4-BLUE-IR
     ivcm@blueskyir.com
 

Press Release Source: IVI Communications, Inc. 
Tuesday September 6, 3:00 pm ET 

LOS ANGELES, Sept. 6 /PRNewswire-FirstCall/ -- IVI Communications, Inc. (OTC: IVCM.PK - News) announced today that the CEO has purchased 50,000 shares of IVCM in the open market at an average purchase price of 15.8 cents ($.158) per share. He cites his personal outlook for the company's future and significant progress within the company as reasons for the purchase.

"We knew the January acquisitions of IBC Wireless and Appstate.Net would yield tremendous benefit to the Company and its shareholders," said Mr. Nyhl Henson, CEO IVCM. "We failed to anticipate, however, that the contributions of these subsidiaries would develop at such a quick and robust pace. I'm proud of our accomplishments to date and, as we continue to execute our strategy, look forward to achieving rapid, if not exponential, corporate growth in the near term."

To read the entire release and disclaimer, CLICK HERE

Press Release Source: IVI Communications Inc. 
Tuesday July 26, 8:00 am ET

LOS ANGELES, July 26 /PRNewswire-FirstCall/ -- IVI Communications, Inc. (OTC Pink Sheets: IVCM - News) announced today that its wholly owned subsidiary, Appstate.Net has signed a trial agreement with ADZILLA New Media to add ZILLAcasting to its network, allowing for the delivery of a better browsing experience for its subscribers.

ADZILLA New Media ("Adzilla") has pioneered ZILLAcasting, a revolutionary new technology that matches Internet content to Internet users with unrivaled accuracy. ZILLAcasting transforms generic advertising into highly targeted and relevant information. It creates new revenues for Internet businesses while recognizing the unique needs of an Internet public that is demanding a more relevant, localized Internet experience.

Nyhl Henson, President and Chief Executive Officer of the Company stated, "The foundation of IVI Communications' business plan is the acquisition and operation of locally branded Internet Service Providers (ISPs). Our partnership with ADZILLA will facilitate our commitment to providing services that focus on local interests."

To read the entire release and disclaimer, CLICK HERE
 

Financial Highlights For IVCM

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State of Incorporation: NV
Fiscal Year End: March 31
Outstanding Shares: 65,675,686 as of 2004-12-31 
Authorized Shares: 100,000,000 as of 2004-12-31 
Market Cap (Millions) $15.205 
Float (Millions) 11.0
Recent Price: $0.22
52-Week High (09/07/04) $0.40 
52-Week Low (06/13/05) $0.03 
Transfer Agent: Signature Stock Transfer, Inc., Plano, TX 75093

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