Release - general update on business focus
APRIL 6, 1998
Millennium Communications Inc.: Company Update
TORONTO, ONTARIO--Millennium Communications Inc. ("Millennium")
announces that it is has been developing secure, robust online
transactional processing software for the purpose of allowing
merchants to accept credit card, debit card and direct withdrawal
payments for its clients. It is currently completing custom
development of online transactional processing software for
Playspace International, pursuant to an agreement with Playspace
International first announced June 11, 1997.
Playspace International is a provider of online entertainment that includes
internet lotteries and casinos. Gross transaction processing
volume from this agreement had been expected to be in excess of
$1.5M in the first year of processing. Implementation was delayed
as custom development took longer than expected. It is now
targeted that revenues from this agreement will be in excess of
$1.5 M this current year. To date, processing revenues have not
been received, however Millennium expects revenues to begin within
the next 30 days and targets remain the same.
Millennium is currently in talks with Playspace International to further develop
joint marketing and sales initiatives and is looking to open
markets with other providers of online entertainment. The software
that Playspace will use is designed to allow access through
Microsoft Internet Explorer or Netscape Navigator's browser and
check order status, approval status and dynamically assign a
tracking number to the transaction.
Millennium Communications Inc. has discontinued the operations of
all its virtual reality activities, both in Canada and in the
United States, and has decided to focus its energies on building
value in its core business of electronic commerce processing.
On July 3, 1997, Millennium Communications Inc. had announced that
Millennium Communications through its subsidiary LBE had entered
into a Memorandum of Understanding with one of the largest U.S.
-based theme park designers which was expected to result in sales
of 16-80 virtual reality simulators at up to 50 centers in the
next 5 years.
In furtherance of this Memorandum of Understanding,
Millennium completed development of two fully functional simulator
units. These development units were made available to the client
and modifications were made to the core operating systems. In
addition, Millennium invested over $150,000 CDN to make
modifications to the Ride and Ride control software for its
virtual reality systems.
The Memorandum of Understanding has for
all intents and purposes expired. The theme park developers have
been unable to close the necessary financing to build and operate
the theme parks into which Millennium's systems were to be placed
although it is Millennium's understanding that they continue to
seek such financing.
Over a period of many months, Millennium was called upon by the theme park developers and by the theme park
designers to seek out its own sources of capital for this project
and to insure the lender's risk of project financing. Millennium
attempted unsuccessfully to procure such financing and was
unwilling to assume the full risk of "partnership" without an
increased stake in the project. To hedge its risk and maintain
the viability of the virtual reality business, Millennium also
attempted to secure similar contracts in France and other key
centres in Europe, however due to the extremely long decision
cycles and significant capital investment required to compete in
the Virtual Reality business, Millennium was unsuccessful in
securing contracts on a timely basis.
Millennium believes that its virtual reality systems remain marketable, but Millennium is
concerned with increased market competitiveness, the pace of
technological change, coupled with long sales cycles and uneven
cash flow expectations. At this time there will not be any
agreements signed with the theme park developer or any other
potential virtual reality clients as Millennium has decided that
the pursuit of this industry in not in the best interests of its
shareholders due to the capital risk involved.
Millennium has decided to refocus its sales people on electronic
commerce projects which generally have a shorter sales cycle,
lesser initial capital costs, and more synergy with the other
business units of Millennium.
Millennium Communications Inc. and The Winners Exchange Ltd.
entered into a license agreement to develop software for credit
card processing on September 3rd, 1997. Millennium processed
$67,000.USD for the Winners Exchange Ltd. The Winners Exchange
license agreement is still valid, however Millennium does not
expect to process significant revenues at the present time because
the chargebacks from the client were in excess of 4 percent.
Winners Exchange needs to reduce these chargebacks before credit
card processing can be viable for Millennium. Millennium expected
$600,000 in profits from this contract in 1998. Millennium at this
point does not believe that this will be achieved but it believes
that it will replace this goal by securing other clients using the
same software.
FOR FURTHER INFORMATION PLEASE CONTACT:
Millennium Communications Inc.
Tony Rothschild
President
(416) 360-6450
The Alberta Stock Exchange has neither approved nor disapproved of
the information contained herein. |
