A B2B must read
This is what the Ceo of FPGP said on the Yahoo message board:
As promised, I have been visiting the Yahoo message board and have observed many questions and comments about FPGP and driversshield.com. Today, I am going to respond to a few of those questions that appear to be the most popular and important. In time, as we move forward, I believe all of your questions will be answered. This forum will also
allow me a chance to keep you better informed and give you insight into my personality, vision and management style. I hope you will appreciate and enjoy my comments, as they are designed to help you with your decisions concerning FPGP, whether you're a buyer, seller or observer of our company. You deserve answers to your questions and I'm going to try
and give you the most accurate, honest and current information available.
Running a public company is an extremely difficult task. In addition to all the rules and regulations governing every business, the SEC and the NASD impose additional rules and guidelines on public companies. I mention this because there are limits imposed on many of my comments. Of course our legal counsel has their opinions on these comments too. What
does this all mean? I can't always say everything I might want to, but I'll do my very best. With that said, let's get right to some of your questions.
What's the nature of our partnership with EDS?
Let me begin with some news we have just been informed of. FPGP and driversshield.com are being given prominent mention in EDS' annual report. Dick Brown, the CEO of EDS, has included a statement about FPGP and driversshield.com in the EDS "Letter to Shareholders". I recommend you look for it when it comes out in a couple of weeks. It extols the virtues of EDS' partnership with us and will send a powerful message to anyone interested in our Company.
As for the financial aspects of our partnership, EDS is building and hosting the web site. They will be hosting the entire call center operation and become responsible for many aspects of operating the driversshield.com web-based business. The web site is hosted and managed at EDS' headquarters in Plano, Texas, which has the latest technology, equipment and redundancies to ensure the best possible results. EDS will also be assisting in the nationwide sales and marketing as well. This is NOT a vendor-client relationship - IT IS A PARTNERSHIP. EDS is putting up significant resources, talent and technology, and will share in the net revenues of the Company. As with any partnership, the parties each contribute something and then share in the profits based upon their contribution. EDS will not make any money unless driversshield.com makes money. EDS is putting up the bulk of the resources to build and run the
web site operation, removing a substantial financial burden from FPGP. This has reduced our need to raise any immediate capital to build and host the driversshield.com web site and call center. There are initiatives underway with respect to equity ownership of FPGP and driversshield.com; however, I am not at liberty to discuss them at this time. A most
important fact concerning our relationship is that EDS would not enter into a partnership with us, or anyone else, unless they believed that the venture would produce SIGNIFICANT financial rewards for them. When I say significant, I mean significant to EDS - and that's a very large number. Since FPGP currently owns the majority share of the pie, this
will mean an even larger number for FPGP and our shareholders. There will be more to report on this very soon.
What about institutional money?
It is my understanding that institutional purchases of our stock are being made in the open market. Institutions call me all the time seeking information on our progress - they don't get any information that you don't. It is important to note that institutions do not tell us when and how much they are buying in the open market, as they do not usually want anyone to know that. This way the market cannot act on the
information. They buy in odd lots and at different times so as not to send any signals to other buyers and sellers. They don't like to be the ones affecting the market price. They usually accumulate stock over time, not all at once. Some even go so far as to use several different clearing houses so no one can track their movements and holdings with
any degree of accuracy.
Is the site "Live"?
The driversshield.com web site is now "live" and will be ready for field trials in a matter of days. That doesn't mean we are finished building it. We have a long way to go until it's fully developed. However, prospective clients will be able to begin using it over the next few
weeks as we continue to add more features. We have given many demos of the site and have submitted numerous letters of intent and contracts for review by those insurance companies that have asked to move forward with us. It is very important to mention here that insurance companies are by nature VERY CONSERVATIVE and move VERY SLOWLY on contracts, especially with something as revolutionary as this.
The reactions from insurance companies that have seen the site has been almost exactly the same. They are all suprised, fascinated, intrigued and interested in pursuing a relationship with driversshield.com. Many are telling us that driversshield.com is the best "customer relationship
management" program on the market. It would be unreasonable to assume we will capture all of them as clients. We won't. But we will begin to capture some, and as time goes on and our momentum and reputation build, we will capture more than enough to meet our projections - which are very conservative in comparison to market size. We don't need to capture
hundreds of insurance companies to be very successful. A mere handful of medium-sized companies is all we need to become a huge hit. If we capture only three percent (3%) of the marketplace, we will be tremendously successful. Of course, we plan on capturing much more than that, but these stats should give you some perspective to use as a guide.
How do we make money?
Many of you are asking, if driversshield.com doesn't charge anything for its services, how will it make any money? The company derives its revenue in several ways. First, we receive referral fees from the collision repair facilities that participate in our program. After all, we are delivering greater volumes of work to them than they would be able to get without our help. Secondly, we give away to the consumer a free trial membership in our nationwide auto club program called the "driversshield Auto Services and Discounts Program". After the free trial membership, we will charge for the renewal to this program, creating a valuable annuity. This is the same auto club we already sell to some of the nation's finest banks and credit card companies. They charge approximately $100.00 per year for it
and buy it from us on a wholesale basis for a fraction of that amount. This will be our opportunity to "retail" the program and make significantly more money from it than we do now. Through the wholesale program, we currently have about 500,000 paid members. This program alone is a tremendous financial opportunity for FPGP and we have just begun to capitalize on it. This is already a profitable program for the Company and should become a substantial success in and of itself.
We are creating a web site just for the driversshield Auto Services and Discounts Program and it will be ready to go live in about three (3) weeks. Watch for it.
What about year-end numbers?
With regard to our year-end numbers, they will be ready at the end of this month. We don't hold back this information from you. It just takes about ninety (90) days for any public company to go through their year-end audit and get the information out to shareholders. That's why Nasdaq gives all public companies ninety (90) days for a year-end report
(twice as long as a quarterly). It's not the same as a quarterly report and takes far more work to get it complete. I also stated in a previous release, although 1999 was far better for us than the previous year, we are building an Internet company and a new business strategy and that
takes time and money. That means it takes profits from the other units of the company. The good news is the Company has profitable units to take money from, not like many other Internet companies with no sales and profits at all to speak of - just losses. Although we don't forsee being profitable until late fall, as stated in a previous release, we are still in solid shape and debt free. Remember, our starting point is with sales of about fifteen (15) million dollars. This gives us tremendous credibility in the marketplace.
What else?
In closing, there are many initiatives that are taking place at this time that I simply can't talk about at all. They involve negotiations with regard to equity investments and many other things that I know you would like to see the Company participate in. Remember, it is generally better to raise capital with a stock price that reflects the true value of the company so you're not creating too much dilution - so long as you can hold off and you believe great things are on the horizon. Since we believe we are close to signing up customers and generating revenues, giving away large pieces of the company might not be the best move right
now. I promised in previous releases that we would partner with the best companies in the world and build on those relationships. We have been doing exactly that, and it should pay off with big dividends for those with a little patience. Our stock has seen a very large gain in a very
short period of time. Will it keep going straight up? I can't make you that promise, but if you add up all the information on us, it sure looks like we have an excellent chance of seeing significant growth in the near and long term. The Company's services are built on a solid foundation, with tremendous proof of concept and a partner/client list that reads like the who's who of the
world's best companies. If we weren't the "real deal", why would so many of them want to be affiliated with us?
Finally, in my opinion, this is not a stock for day traders. Our vision and plans extend far beyond this week.
To those of you that are shareholders and friends, I am grateful for your support and confidence. On behalf of myself and the rest of the team at FPGP, we will continue to work very hard to make your investment a success. Without you, we wouldn't have such a terrific company.
I'll speak to you again in about a week or so. So keep a lookout for me.
Best regards to all of you,
Barry |
