VANCOUVER, BC, CANADA – September 22, 2010 – Voice Mobility International, Inc. (VMY.H, VMII and FWB: VMY) (“Voice Mobility” or the “Company”), a Vancouver-based developer and provider of carrier and enterprise messaging solutions, today released a question and answer dialogue with CEO Jay Hutton. The questions are a collection of queries posed by shareholders in the last several months regarding the future direction of the company and the previously announced sale of select assets to AVST:
Q: There have been several important changes on the Board of Directors and within the management team recently. Can you tell us what prompted the changes and what you intend to achieve as a result of them?
A: In April I was approached by a group of shareholders that had grown increasingly frustrated with the progress of the company in the last several months. I was asked to come into the company to, among other things, accelerate the AVST transaction and to secure the best possible price for the assets being sold. I first joined the board then I assumed both the role of Chairman and CEO. I have accepted the resignation of key board members and assembled a small, focused management team to create and execute the vision of the company. I am extremely happy with our progress so far. The team is driven to not only secure the best possible deal with AVST but to create a strategy wherein AVST buys into the direction of Voice Mobility after the transaction.
Q: If you are selling your key asset what does that mean for the company after the transaction?
A: The sale of the key asset will enable the company to execute on the vision of becoming a hosted service provider for the services offered by UCN and other complimentary offerings. The payment for the asset will be on the balance sheet of Voice Mobility and will enable us to execute on a series of planned acquisitions that will allow Voice Mobility to be a premier provider of advanced hosted communications services to the SMB (Small and Medium Business) market. We plan to do up to 10 acquisitions in the first year. This means that VMI will move from being a product centered company to a service centered company and instead of selling a technology platform to enable hosting VMI will host services directly for customers. This means a departure from the unpredictable, spiky revenue history to a more predictable revenue model that is based upon subscribers as opposed to competitive wins against the likes of Cisco, Avaya, Lucent and others. AVST has the capital to grow the product business and VMI simply does not. A more intelligent way to grow our revenues is to focus on a market segment and provide services that are highly valued. In our judgment the SMB marketplace would benefit from the kind of solution set that we will be able to offer. We think we are in a position to become a major player in hosted communications. This is precisely what we intend to do.
Q: The Company has not disclosed the structure of the AVST deal. When will this be done?
A: We are working through Due Diligence with AVST and, so far, there has been nothing surprising in this process. The second step is to finalize a purchase agreement. I expect that will be done shortly. The company will then call an AGM where we intend to put the transaction to the shareholders. Prior to this meeting the company will circulate an agenda and a summary of the deal to all the shareholders. Due to mailing and notice requirements I expect our AGM to occur in November, 2010.
Q: What are the key attributes you will be looking for in acquisitions?
A: We have already targeted 6 transactions that fulfill our basic objectives.
1. The technology platform of the target company has to be similar to that of the UCN 250 so that we can replace the technology with the Voice Mobility UCN 250 platform.
2. The ARPU (Average Revenue per User) has to be enough to have the deal be immediately cash flow positive net of any debt service obligations.
3. Their needs to be an opportunity and capacity to grow the customer base.
4. There has to be an opportunity to enjoy the benefits of scale and economies by combining the operation with existing back office capability
5. The platform needs to be capable of self service. By this we mean that customers can provisions themselves and be billed electronically
Q: You recently announced the intention to acquire Tagline Communications Inc. Is this a good example of the kind of acquisition you will be looking for in the future?
A: Yes, TCI is a perfect example of a small service provider in the business of delivering Unified Communications to small and medium businesses. The company is profitable and uses a different technology platform that we would supplant subsequent to the acquisition. This would make it even more profitable and showcase the VMI technology. We would intend to expand aggressively from there.
Q: What ongoing role will AVST have if any?
A: We have an excellent working relationship with AVST and we do not expect that to change after the acquisition is completed. After all, AVST will be the provider of the platform that we use to run our business. As part of the negotiation around the acquisition we hope to leverage our knowledge of the product and the fact that we will be among the first customers of the new technology to get a good price from AVST for the platform. Since they have a vested interest in helping us succeed I expect we will receive favorable pricing and terms.
Q: Why become a service provider now; after all these years?
A: VMI spent almost a dozen years and close to $35 Million dollars trying to be among the first movers in the Unified Communications space. I remember back when we founded the company we were evangelical in our passion but what we were talking about was completely foreign to most people. We
were too early. Now Unified Communications is emerging as one of the fastest growing segments in the rapidly evolving telecom/communications marketplace. With leaders such as Microsoft and Cisco pouring millions into consumer education now is the time to provide a feature set to a marketplace that none of the big companies know how to service very well. You could make the argument that VMI was 10 years too early but there is no question that spending in this category is up and the new VMI is going to take advantage of the opportunity.
Q: What is your message to shareholders?
I would ask that shareholders continue to deliver the kind of commitment that has kept this company around for almost a dozen years. The time has arrived to derive some benefit form the investment. I will admit that the payoff is going to come in a form was not expected at the beginning of the journey but it will come. We have an aggressive plan, we are aggressively containing costs, we are only looking at acquisitions that will create immediate positive cash flow, and we have a team in place that can execute. I would like to take this opportunity to thank all of you who have hung on and urge you to keep doing so as we methodically and deliberately execute our plan.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Notice Regarding Forward Looking Statements
This press release contains projections and forward-looking statements. Statements in this press release, which are not purely historical, are forward-looking statements and can include, without limitation, statements based on current expectations involving a number of risks and uncertainties and which are not guarantees of future performance of the Company.
There are numerous risks and uncertainties that could cause actual results and the Company’s plans and objectives to differ materially from those expressed in the forward-looking information, including (i) the inability to close the acquisition of Tagline for any reason; (ii) adverse market conditions; (iii) the lack of adoption of the Company’s products by Tagline’s subscribers; and (iv) the inability to identify and complete acquisitions of other profitable companies. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Although the Company believes that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance those beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2009, its quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.