LOS ANGELES, Oct. 27, 2004 (PRIMEZONE) -- Victory Capital Holdings Corporation (OTCBB:VTYC):
Dear Shareholder:
As we move into the fourth quarter of 2004, the Board of Directors and Management of Victory Capital Holdings Corp. would like to update and inform our shareholders and other interested parties about our past contractual developments, our fourth quarter goals and our outlook for 2005.
Since my recent appointment as CEO of Victory Capital, I have had the opportunity to review our subsidiary holdings and evaluate the vendor, supplier agreements and relationships, and would like to convey the resulting conclusions to the public. I will be presenting these conclusions by analyzing each subsidiary and the agreements entered into throughout 2004.
During 2004 the Company's subsidiaries entered into the following contractual arrangements:
OnDemand Communications, Inc.
The purpose of forming OnDemand Communications was to bring communication back to its core; simple communication between people across communication modes and networks -- creating total communication convergence. OnDemand is positioned to take advantage of its technology relationships by integrating these with radical, newly available, disruptive technologies and infrastructures to enhance and simplify communication. OnDemand technology is a combination of patented algorithms from several research areas: artificial intelligence, user modeling and telecommunications. Through leveraging newly available, open-source telecommunications infrastructure to provide seamless access to the Internet for communications, while routing calls to the legacy wireless and Public Switched Telephone Network (PSTN) where required, OnDemand will actively converge these media into the Meta network.
April -- August, 2004; The Company announced several agreements and negotiations with Asgard Holding, Inc. (Pink Sheets:AGDH) Fka Virtual Gaming Enterprises, Inc. (Pink Sheets:VGME) to offer its unified communications platform to the existing and future clients of Asgard Holdings. The orders presented by Asgard have not materialized, and after incurring customizable programming cost for http://www.unityvoice.com/freelife we have decided to terminate this relationship due to lack of performance.
April 17, 2004; The Company launched http://www.unityvoice.com and began enrolling customers for this platform. To date, our customers include Keller Williams Realty, Hyman-Nelson Realtors, Realty Executives, 24hr Insurance, Car Lease Plus, Bender Realty, Servimex Insurance Agency, Noble Clean, Reliant Electronics, LLC, Solutions 21, Made You Look Entertainment, Realexcel.com and The Real Estate Movement.
It is our conclusion that this platform has a practical place in the market, and provided with sufficient grass roots marketing dollars, can be an explosive force in the Virtual Office sector. It is our goal to enroll an additional 45,000 individual customers in 2005, through this platform, which should realize gross annual revenues of $11,677,500.
VoIP OnDemand, Inc.
The purpose of forming VoIP OnDemand was to provide an additional product that OnDemand Communications has available to market to both existing customers and new customers alike. Victory Capital has solidified significantly lower pricing with the executed March 31, 2004, Ntera Carrier Services Agreement. The pricing available to VoIP OnDemand through this contractual relationship surpasses most Tier 1 telecoms.
It is our conclusion that our VoIP OnDemand subsidiary will derive zero to limited revenue in 2004. However management is in current negotiation with several global retailers to provide VoIP termination, and, if executed, could produce explosive re-occurring revenue growth for 2005 and beyond.
Global Card, Inc.
The purpose of forming Global Card was to fill a void in the stored value card and payroll debit card industry. For example, a customer would use our Global Card solution to handle payroll which would significantly reduce the overall payroll cost normally associated with the issuance and reconciliation of paper checks. The American Payroll Association estimates the potential cost savings for lost paycheck replacements alone is estimated at $48 million annually. The cost to the employer ranges between $0.25 and $1.00 per payroll transaction, a tremendous cost savings versus the traditional methods employed. With most employers paying between $8.00 and $12.00 to reconcile each payroll check, the Global Card Payroll Solution Card offers this cost reduction savings.
January 1, 2004 -- May 10, 2004; The Company entered into several Joint Marketing Programs with Asgard Holding, Inc. (Pink Sheets:AGDH) Fka Virtual Gaming Enterprises, Inc. (Pink Sheets:VGME) to offer the Global Card suite of solutions to their existing customer base. To date, Victory Capital has yet to receive a customer order from this arrangement, and I have decided to terminate this program for lack of performance.
August 3, 2004; The Company executed a Network Participation Agreement with Next Estate Communications, Inc. We have concluded that this agreement has value for the Company based on the large number of convenient, non-invasive loading stations throughout North America. As we roll out our program platforms in 2005, this agreement will be the catalyst for lowering cost and increasing our overall net profit for our Global Card subsidiary.
August 12, 2004; The Company announced that it will be launching the "My Family" Dual-Pak pair of stored value PIN-based cards, designed to serve the customer who needs to load and send money quickly, conveniently and cost effectively.
The "My Family" Dual-Pak is targeting two key markets that are exploding with demand and opportunity: the individuals who our sending money to relatives in their homeland at record setting levels; and the parent and child/student and the continuous need for additional money to be sent from home for the many expenses of a higher education.
A recent Los Angeles Times article entitled "Funds Sent to Mexico Hit All Time Record" stated, "The central bank of Mexico projected that 2004 remittances would hit $16.3 billion, up 22% over 2003. Executives at Denver-based Western Union Financial Services, Inc., a unit of First Data Corp., estimate that 175 million people around the globe send more than $150 billion a year back to their home countries."
We have concluded that the "My Family" Dual-Pak is targeted to a niche market and has explosive growth and revenue opportunity for the Company. We will be deploying this program during the first quarter, 2005. It is our 2005 goal to enroll 100,000 new customers through this program offering, which should realize gross annual revenue of $4,740,000.00.
It is our conclusion that our Global Card subsidiary will derive zero to limited revenue in 2004, but is poised for tremendous revenue growth for 2005, provided that each platform program is cost sensitive and individually marketed and managed by the executive staff of Victory Capital.
To summarize, although 2004 has shown the Company many obstacles and challenges, the positives greatly surpassed the negatives. The Company's current capitalization structure remains at just over 21 million shares issued and outstanding, with 40.06 million held in Treasury that have yet to be issued, totaling just over 61 million on a fully diluted basis. Our customer relationships are stronger than ever, giving us the opportunity for growth through referrals and introductions into new markets. Our goal is to execute and capitalize on this ever growing and expanding marketplace.
Thank you for your continued support of Victory Capital Holdings. The Board of Directors and the management team sincerely appreciate your continued interest in the exciting developments for the remainder of 2004 and our new product launches for 2005. Please look for more exciting news in the coming days, weeks, and months.
Sincerely, Jon Fullenkamp CEO Victory Capital Holdings Corporation