Response from Stuart Brazier (CEO):
First, let me say that I continue to be impressed with the new management. Stuart has always addressed anything I have asked him honestly and promptly. His reply to my recent questions gives me continued hope that this may well be a diamond in the rough...or at least a precious stone of some sort! ;-) Let's hope things can be developed in accordance with the new business plan! As you will read, the newsletter is soon to be deployed, and the business plan seems to denote more product variety. I am especially intrigued by the reference to industries that "cannot be named at this time" and the "series of news which will have a VERY positive impact on revenues". But judge for yourselves. (I am hoping the formatting does not disappear as it did in my previous lengthy posts. If it does, my apologies in advance!)
To: Todd Pagel <pagel@ragingbull.com>
Hi Todd - Good to hear from you. I hope you don't mind, but I have copied
Jana on this e-mail so she can incorporate your questions and my responses
in the second Investor Newsletter. My answers and comments can be found
under your questions:
First: Analyst coverage...Have you been presenting the PlayStar business
plan to any analysts/brokerages, and when do you foresee initiation of
analyst coverage? Will it be one or more initially?
ANSWER - I will be completing business plans for both PlayStar Casino and
NetEngine this week. I should also have signed up a couple of new deals
that will round off the company's product offering. After I am confident we
are ready, my higest priorities will be to (1) engage an IR firm to increase
our profile in the investment community, (2) to engage a PR firm to increase
our profile in the media (3) to sign up as many analysts as possible. I
will be using stockvault.com a site that I own to sign up these
analysts.
Second: Float and Outstanding shares...The Investors portion of the
www.playstar.com website shows 28.5M shares issued and outstanding. Is this
an accurate number? Does the company know what the approximate public
"float" is? (By the way, I believe that same Investors webpage links to out
of date SEC information. In my opinon, it is very important to keep this
page constantly current, because it is the first place potential investors
will look for information.)
ANSWER - The PlayStar web site will be changing in the next week. I agree
with you, ALL INFORMATION should be kept current. Due to teething problems,
I have experienced delays in getting the website changed. This should not
occur in the future. As to float, my firts Investors Newsletter will
address this when it is sent out this week.
Third: Can you give me an approximate range of revenue percentage for the
joint venutre deal with MasterPay? The press release mentions "variable
rates". Can you elaborate on this? Ed Tarter has posted that he believes
this one deal is worth approximately 8.5 cents per share. Does the company
think this is realistic, overstated, or conservative? Off the record, what
kind of price targets are you shooting for in the next 6-12 months?
ANSWER - I anticipate the revenue projections for the company should not be
based soley on the MasterPay agreement. While I think the projections are
realistic, in the next few weeks we will be announcing some news that should
have a VERY positive impact on our revenue streams. Until this series of
news is released, I would ask you to consider how long it took to build
Rome.
Fourth: I posted that the name NetEngine appears to be in use already. It
is a domain name for WorldNews.com, a news searchengine, and the name of
proprietary geographic location software from ESRI
(http://www.esri.com/software/netengine/index.html). Was the company aware
of this, and would you foresee any problems arising due to this situation?
ANSWER - Yes the company was aware of this fact and we do not anticipate any
problems with this. NetEngine will not be marketed to consumers and does
not need its own website. More important will be a series of product
related sites that will provide information to Internet merchants. In
addition, since the marketing plan calls for branding of the company's
products, I anticipate an extensive number of links to the NetEngine and
PlayStar Casino products.
Fifth: Is the MasterPay deal the kind of deals PlayStar is concentrating
on, i.e., having a third party assume account adminstrative duties in a 3
way venture with offshore banks? Are other deals possible with MasterPay
and other banks? Are there any other ventures nearing final stages?
Timeframe for announcement? It seems we will need a series of good news in
order to push the share price north of $2, in order to call the warrants.
From what I have read, the company indicated that it had operational funding
through June-July. Do you believe there are enough potential deals/projects
in the pipeline to succeed in calling the warrants before June?
ANSWER - While you have listed many related questions, I would like this
address them in two parts: (1) I am very interested in rapid yet
sustainable growth. This strategy would not be possible to implement if we
had to rely on our existing resources. As a result, and with the
anticipation that acquiring these resources is tied to our stock price, my
intention is to leverage off of the resources of our JV partners (NetEngine
Network and QuickConnect). While I would like to see a $6 stock, there are
simply too many variables to manage to rely on this as the ONLY means of
obtaining additional funds. By leveraging off our JV resources, we can
expand into different geographic areas and markets where our competition are
less likely to compete, for example because of the restrictions imposed on
the export of encryption technology and because they have downloadable
casinos. (As Sun Tzu said - Attack where the enemy does not defend and
defend where the enemy does not attack). By deploying this strategy, we
will (2) create both positive cash flow without the attendant overhead and
generate a number of newsworthy items to stimulate the market. As you
eloquently put it - are there enough potential deals/projects in the
pipeline to succeed in calling the warrants before June? I believe the
answer is yes but must caution you that the SEC would think an appropriate
disclaimer would be most appropriate at this time.
Sixth: Quick Connect...What is the status? Is it operational yet? Are
there any licensees or revenue being generated yet?
ANSWER - As you may be aware, we have now introduced a two tier component to
the program. Associates will receive 30% of the casino's net win on players
they introduce to PlayStar. If an Associate introduce two websites to
PlayStar that sign up as Associates, the referring Associate becomes a
Master Associate and earns a 20% overriding commission on their respective
casinos' net win. In addition, the Master Associate qualifies for 50% of
the casino's net win in their own casino gateway. Part of the delay to the
program launch is because we are incorporating the QuickConnect tracking and
reporting functions into CashEngine. With the attractive commission rates
and preliminary responses from Associates, I am confident of rapid growth
and profitability
Seventh: It is a common technique to include in a trailing paragraph of a
press release telling who your competition is and their stock symbols. This
makes the release appear on the radar screens of people who watch those
stocks. It also highly targets your message to motivated investors within
that industry. I suggest PlayStar utilize this technique in the next
release, or better yet, hire a professional online PR firm to promote it. I
think I understand the gaming competition, but can you tell me who the
company sees as competition in the encryption technology industry?
ANSWER - I will be sure to follow your good suggestions in the next
releases. As to who are our competition? This is a very difficult question
to answer. Difficult because we straddle many different industries -
gaming, Internet Payment Gateways, associate marketing programs, certificate
issuance and others that I cannot mention at this time. Assuming that you
have a good handle on our gaming competitors, I will focus on the publicly
traded Internet Payment Gateways only at this time:
- Accesspoint (www.accesspoint.com) symbol - ASAP
- BCE Emergis (www.bceemergis.com) symbol - IFM
- CyberCash (www.cybercash.com) symbol - CYCM
- Digital Courier (www.digitalcourier.com) symbol DGIT
- iMall (www.imallinc.com) symbol IMAL
- Merchant Online (www.merchantonline.com) symbol MOL
- NDC eCommerce (www.ndcecommerce.com) symbol NDC
Eighth: Possible IPO of Cyberstation? Is this a near term possibility to
raise funds, or will PlayStar wait until momentum/growth has been firmly
established? Are there any current plans for this? (I am hoping that you
did not forget my previous suggestion of approaching David Wetherell, CEO of
CMGI, with your revised business plan. I still think they might be
receptive.)
ANSWER - I will have to get back you on the Cyberstation IPO front. I have
not forgotten your suggestion to contact David Wetherell. This is an item
on my task list for when we are ready.
Thanks for your continued support. Regards Stuart |
