Letters from the CEO
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Prime Holdings
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Friday, May 20, 2005
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Information for Prime Holdings PMHJ PRIM PMGJ
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posted by pmhj at 9:36 PM
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April 16, 2002
Letter From the CEO
Dear Shareholder,
With the coming of spring, I can’t help but reflect on the symbolism changing seasons represent.
As with most companies surviving the downturn in the market and the horrid events of September 11, PrimeHoldings has not operated without challenges.
At times, it felt as if the trends were going against us, and forces beyond our control were bearing down. I feel fortunate to say we are still here.
If we were to look back, we could probably be bitter about events that occurred and find excuses to suggest why we aren’t performing where we would like to be for our shareholders.
Instead, however, we have taken the approach of looking at our business with an objective lens. We have been evaluating our portfolio companies and doing research to support our future direction. This is where we are. We have decided to maintain those holdings that could be brought to profitability with limited resources.
We chose to close down Navilor in order to adequately fund the bCard operations.
With GolfAgent we allowed the license to expire in order to close the TimeMarker transaction.
JustGiftIdeas was abandoned because it didn’t fit into our long-term business objectives.
With the expected turbulent future, we knew that it was important to not just drive revenues, but also create a profitable, self-sustaining business. The results of our decisions are already bearing fruit. When faced with dropping exhibitor attendance and cash flow crunches, Neil Pickard, CTO (Chief Geek), Ivan Lazarev, CEO and their team got creative. They cut overhead by approximately 57% (pre-audit) by consolidating their physical operations, reducing staff, and revamping their shipping methods. The major cost cutting initiative was the implementation of the recyclable bCard system. This refocused their efforts on the bcard account concept vs. the high cost physical account token (the actual card). Even more amazing, in light of 9/11 and being forced to dramatically cut overhead because of poor trade show attendance, they managed to grow their business by approximately 30% (pre-audit). The challenges they faced gave birth to brilliance. bCard was the first company to integrate a smartcard with a Compaq Ipaq (hand held device). They also introduced a wireless application that streamlined their registration process while giving them a superior technical edge in the industry.
Now, let me tell you about TimeMarker. TimeMarker is currently an untapped asset. Because of its high-growth and vertical market potential, we chose to keep TimeMarker under the PrimeHoldings umbrella. The wireless exchange platform TimeMarker provides enabling location-based, dynamic pricing of time-perishable goods and services has the potential to transform the way exchanges and markets currently function (see March 21, 2001 press release). We are currently in negotiations with funding sources to support this market rollout. In a future shareholder letter, I will give examples and details of how TimeMarker will benefit businesses, consumers, retailers and shareholders.
Looking forward, the company is currently undergoing a complete accounting audit. Based on the overhead cuts and growth over the past months, we expect great news regarding bCard’s profitability. We have just entered into an agreement with a very established, reputable Wall Street firm who will provide advisory and investment banking services for the company. With the guidance of our Wall Street firm and our attorney, we are working diligently to become full reporting.
We plan to launch TimeMarker in the near future and will keep you informed as this develops.
Spring symbolizes change, a renewed commitment and time for growth. My belief in and commitment to Primeholdings is stronger than ever. I plan to establish and build our current holdings and create an environment where they can flourish. Our goal is to keep bCard in the forefront of the smartcard industry and launch TimeMarker in to vertical markets. Primeholdings will then have a solid infrastructure for the aggressive growth potential of ecommerce with future acquisitions more focused on undervalued assets vs. raw startups.
Finally, I want to thank you, the shareholders. The loyalty and encouragement from shareholders has meant a great deal to the company and to me. I have been truly amazed at the effort our vendors, attorneys, bankers, landlords and employees have put into to helping us survive. Thank you for your continued support.
Sincerely, Tom Aliprandi
CEO
P.S. We are in the process of building a shareholder database via our website and mailings. We plan to use this to communicate regularly with our shareholders via email. This will save us a great deal of time and money and keep you in the know. If you would like to be included in this database, please send an email to info@primeholdings.com and supply us with your name, mailing address, phone number and email address.
July 23, 2002 Shareholder Update
Dear Shareholder,
Many of you may have read our recent press releases regarding the audit, which is nearing completion, and the filings. bCard has just finished up a successful spring season with shows most recently for Compaq/Hewlett-Packard, Altiris and the E-Gov 2002 show in Washington D.C., which was sponsored by Oracle, among others. As of now, bCard has issued more than 750,000 physical bCards, up over 50%, while increasing digital identities to over 1,000,000, up 43%. bCard 2001 un-audited financials showed over $1.8 million in revenues.
With the existing targets and new business opportunities, we can expand our revenue base to historical levels. After debt restructuring is complete, we can possibly see an earnings per share in the near-term.
Already in 2002, bCard orders and profitability have exceeded that of 2001. We are aggressively implementing bCard's streamline technology and systems by aligning ourselves with complimentary companies with different core competencies. Detailed press will follow once the involved parties have given approval to the final draft.
To bring these goals to fruition, we have engaged Ralph Adams as Director of New Business Development. Mr. Adams brings over 25 years of experience in the restructuring and management of companies. His references and his successes are outstanding. He has successfully turned around more than seven companies from annual losses or low profits into highly profitable businesses. August kicks off the fall season with the Drug Discovery™ 2002 in Boston. Also on August 4th, bCard’s Vice President and COO Neil Pickard has been invited to speak at the CEMA Summit 2002, discussing current technology tools available for event marketing. To help inform and answer questions shareholders may have regarding these plans, Mr. Adams will be interviewed live to explain the debt restructuring for PrimeHoldings and new business development initiatives for bCard in the month of August, date to be announced.
As always, we appreciate your loyalty and patience through this growth process.
Sincerely, Tom Aliprandi, CEO
September 9, 2002
Letter From the CEO
Dear Valued Shareholder:
These past few months, we have kept you advised of our efforts to complete necessary procedures to render PrimeHoldings.com as a ‘full reporting’ company. As you know, we have considered various avenues to achieve this goal, each of which varies in cost and time frame.
Needless to say, we are very excited about our prospects for the near future. As we continue our efforts to bring PrimeHoldings.com to full reporting status, we have discovered a very viable, potential opportunity to build tremendous value for our shareholders. We are currently reviewing the different aspects of developing an existing full-reporting entity from which PrimeHoldings.com shareholders would receive proportionate dividends. Should we select this route, we anticipate that many new avenues of opportunity will open up for us and for our shareholders.
We are now completing work to finish necessary filings and to expand our ‘due diligence’ with a view to spinning-off one of the divisions of the Company. Of course, as always, we will continue to provide regular updates concerning these matters.
Within the past three weeks, we have repositioned UniQuest Communications, Inc. and have had cooperative discussions with a highly-regarded NASDAQ company. In addition, we have recruited an independent sales organization with an existing customer base of over 25,000 potential customers. In line with our rapidly evolving business activities and expansion, we have relocated our offices from our Midvale location, with the bCard staff into a larger and much more economical facility in Sandy, Utah.
There has been much excitement surrounding these changes. As you are probably aware, in the past, the posture of the Company has been necessarily defensive in order to survive. That posture is rapidly shifting to the offensive in preparation for flourishing business. We optimistically anticipate that UniQuest will have substantial new sales during the forthcoming week.
In the meantime, bCard has launched into what we believe will be another successful season, with additional trade shows on its already demanding and diversified schedules.
In summary, we believe that the forthcoming year will demonstrate an amazing come-back for PrimeHoldings.com. Based on information, which we now have, we believe that PrimeHoldings.com will be self-sustaining, even after the first month of new telecom sales during the month of September.
In the meantime, we will make substantial progress towards obtaining full reporting status. It seems we have come full circle - back to the roots from which we began, and are looking forward to our future.
Sincerely,
Thomas Aliprandi CEO
October 7, 2002 Letter From the CEO
Dear Valued Shareholder,
During the last three weeks we have made measurable progress towards obtaining full-reporting status and being re-listed on the NASDAQ BBX exchange. As you know we have considered various avenues to achieve this goal. These possible scenarios include acquisitions of, or mergers with, existing BBX/OTCBB Companies as well as spinning-off one of the divisions of the Company.
Last week's meetings and negotiations were pivotal and productive. We came away from these meetings having direction and viable solutions to build back shareholder value. Already in motion is the plan to develop an existing full-reporting entity from which PrimeHoldings.com shareholders would receive proportionate dividends. It is also our opinion that spinning-off one of the divisions of the Company would greatly complement our efforts to regain shareholder value by also providing proportionate shareholder dividends. TimeMarker is the likely candidate for a spin-off. We acquired TimeMarker at its pre-launch phase, so auditing their financials would take minimal time and effort.
Over the next two weeks we will be meeting with the Directors of TimeMarker and PrimeHoldings to expand our ‘due diligence’ and establish a more concrete plan. As we continue to negotiate these opportunities, as always, we will continue to provide regular updates concerning these matters. Our telecom division has recently begun selling and developing its customer base. In the meantime, the bCard staff has had little time to feel at home at our new Sandy, Utah location, jumping right back into a more demanding Trade Show season. Neil and Ivan and their expanding staff began their demanding travel schedules in September.
I am very optimistic about what the coming weeks will bring for PrimeHoldings.com. We will keep you advised of our efforts to complete the necessary procedures to render PrimeHoldings.com as a ‘full-reporting’ company and to build back shareholder value.
Kindest regard,
Tom Aliprandi CEO
From the Desk of: Thomas Aliprandi, Chief Executive Officer
March 27, 2003
Dear PrimeHoldings Shareholders:
As we near the end of the first quarter 2003, I want to update you on our current progress and share my excitement about our company as we begin to enter a new phase of product development, marketing efforts and internal growth.
You are all aware from reading our press releases and the last letter from Dr. Charles Flemming, one of our new high-powered advisory board members, that we have been operating for the past year without any significant growth and/or maintenance capital.
Personally, I have not taken a payroll check for more than two years and have not been able to staff our company with the infrastructure to assist in sales and other general administration efforts. As you know, I have kept the company solvent through a series of 504 transactions that have diluted our stock. With the financing in place (see below) we should not need to raise any additional capital through 504 transactions. So, the good news is that we have weathered the storm and the company is still intact. With the help of many who have offered services without pay, I have been able to stay afloat, pay creditors and commence some incredible business for our company.
I believe that we are ready to embark on a new phase of growth, success and profitability. With the above as background, I want to summarize some of our recent activities and share many of the opportunities that have recently opened up to PrimeHoldings.
• 10% Dividend – As most of you should now be aware, we issued a 10% stock dividend to all Prime shareholders on the 10th of March. We did this to say “thank you” to all of you. The dividend also helped us resolve some “naked shorting” problems. We are happy that we could do this.
• Ashlin Capital Financing – In January we posted a letter to all of you from Dr. Charles Flemming discussing his involvement with Prime and his commitment to our future. The Investment Banking Firm that he is associated with has agreed to provide interim financing for us to help us meet our business plan and exploit the many opportunities available to us. I have also agreed to give a lender restricted shares of Prime’s common stock as collateral for additional bridge financing. This stock is restricted and will not find its way to market. This financing should be in place next week.
• TimeMarker Spin Off – We have issued a couple of press releases discussing the TimeMarker spin off and the dividend that will be given to all Prime shareholders in the spin off. We intend to have this done within the next two weeks once we receive the necessary capital to pay for the filings with the SEC.
• InstaCall/ Z-Tel – Our subsidiary, UniQuest, entered into an agreement to distribute InstaCall, a pin less international calling program designed particularly for cellular telephone users. This comprehensive, prepaid and interactive product allows cellular telephone users to make pin less international calls at very low rates. This is a tremendous product for UniQuest. We have also spent the time and effort to create our own InstaCall brand and web site—“Cellfrog.” The market for this is ever expanding and we believe that we can add significant revenues to our bottom line. The only impediment is capital and Ashlin’s financing will help us move forward with this product that will assist in generating our own customer base. In August 2002, UniQuest entered into a “Master /Agent” agreement with Z-Tel to market its product. Z-Tel’s product is a flat rate phone service that offers unlimited long distance as well as very competitive local exchange rates. It is available domestically. As soon as capital is in place we will hire in-house sales representatives to market this product.
• Vertu Technologies – Prime is feverishly working to complete a strategic relationship with Vertu Technologies, LLC, a Utah based technology company that has assembled a basket of proprietary and innovative software products for the hospitality, beverage and restaurant vertical. Vertu is also developing an inventory management product that will, it believes, enable users to save significantly costs on food and beverages by automating inventory systems. Vertu intends to market these unique hardware and software products and services to the hospitality, beverage and restaurant industries in the U.S. and in Latin America. Vertu, with the help of UniQuest, is also exploring integrating a variety of wireless concepts in client locations, using 802.11g and other “WiFi” methodologies. The relationship, as presently contemplated, will mean that Prime will take a 50% equity position in Vertu, in exchange for an infusion of capital and assistance in developing Vertu’s products and marketing. Vertu brings a very talented team of people to the space, and some of Vertu’s products are currently installed in working restaurants. Prime also anticipates that Vertu and Prime will beta test Vertu’s products at an up-scale restaurant in Salt Lake City. We feel that Vertu offers truly unique and necessary products and services to these industries and that our combined ability to dominate this niche market is achievable.
• Websites – The PrimeHoldings, UniQuest and CellFrog websites have been done for more than a month. Again, this is clearly a function of funding. Once funding is in place, these sites will be posted quickly.
These are some of the projects we are working on presently. I have never felt more confident in our present course and our future destination. We really have remarkable long and short-term prospects. These will create corporate earnings and enhance the value of each shareholder’s investment in PrimeHoldings.
I look forward to serving each of you in this coming year!
Sincerely,
THOMAS ALIPRANDI, Chief Executive officer
April 21, 2003
Dear PrimeHoldings Shareholders:
In my quarterly letter to you last month, I discussed several partnerships and opportunities pending that hold great fiscal promise for our company. I feel impressed to update you on our progress as we head into our second quarter.
As I shared with you last month, I am very excited about our progress even without significant growth and/or maintenance capital. I am increasingly confident in our ability to turn this company around. We now have superior partners and excellent products and services. As I update you on the matters discussed last month, I hope each of you will share my enthusiasm for our present circumstances and my commitment for our future.
· Ashlin Capital Financing – Through a transaction utilizing restricted shares, we did obtain some temporary financing last month that enabled us to facilitate the 10% PRIM dividend and move the Vertu products along (see below). Ashlin Capital’s mezzanine financing should be available this month. This will give us more financial stability and allow us to exploit the present deals in the telecommunications and hospitality industries. We will also be able to enhance our infrastructure, particularly in the sales department. We are also authorized to initiate our stock repurchase agreement once Ashlin’s financing is available to us.
· FNUSA Network – As you may have seen in a current press release, PrimeHoldings recently engaged FNUSA Network for two purposes: first to assist it in creating and promulgating positive press about our company. FUSA Network will help in putting out press releases and helping the market understand the great things that are happening inside our company; and second to help protect our stock against the ravages of naked short sellers. FNUSA has a network of affiliates and customers that have banded together to curtail the short sellers and to motivate the Depositary Trust Corporation to place more stringent regulations on the buying and selling of stock. We believe that these are constructive and pro active measures that will help our company in the short and long run.
· TimeMarker Spin Off – As mentioned last month, we will complete the required filings with the SEC in the next few weeks to finish the Time Marker spin off and issue the dividend to the affected shareholders. The necessary 51% shareholder vote has taken place and the capitalization structure of TimeMarker is being changed to facilitate the dividend issuance.
· InstaCall -- Because of the work done last month on the “Cellfrog” web site, UniQuest, is nearly ready to distribute InstaCall, a pin less, prepaid, interactive, inexpensive international calling program designed particularly for cellular telephone users. We feel that this can be a significant telecommunications product for UniQuest, because the international telecommunications business is growing and needs a product like InstaCall. We believe we can start marketing this product and/or our own InstaCall brand this quarter.
· Z-Tel –We are still waiting for capital to properly initiate more aggressive sales through our Master/Agent Agreement with Z-Tel and market its mainline product: a flat rate phone service that offers unlimited long distance as well as very competitive local exchange rates as well as the new Personal Voice Assistant.
· Vertu Technologies – We finished our Joint Venture Agreement with Vertu Technologies last month. As mentioned in my last letter, Vertu has proprietary and innovative software products for the hospitality, beverage and restaurant industries that are presently in place in several locations. We are upgrading the existing product line and making them ready for mass marketing. We are working with Vertu’s principals to contract with several large restaurant chains to install the Vertu products. These products are innovative to the restaurant and hospitality businesses as there are presently, no products on the market that integrate and streamline the diverse technologies that many restaurants have in place. The integration of POS, costs, production and inventory allows restaurant operators to have a clear picture of their operations and allows them to make informed purchasing and operating decisions.
Historically, restaurant owners and operators have been slow to embrace new technologies as they are often labor intensive and generally ineffective. Vertu’s products integrate a particular restaurant’s systems seamlessly, increase the efficiencies and allow the operator to spend time expanding and managing his/her business. In essence, Vertu’s hardware and software products bring the same type of labor and cost saving applications to the hospitality industry and are currently enjoyed by retailers. We believe that we will have products ready to distribute by the end of this quarter. I am most excited about this division. The product has proven itself in the market, has bolt on applications, is proprietary and is in high demand in an industry that is starving for such a product and service. There are several other prospects on the horizon that could dramatically enhance the sales efforts of these products. I will share them with you as they mature.
The shift from an Internet-based holding company with interests in various companies to a software licensing and telecommunications provider has clearly taken place.
We have our own proprietary products and we are quickly working toward a more focused purpose. This migration may result in a name change for PrimeHoldings.com, Inc. to better reflect the company’s core business.
We hope to have a great second quarter!
Everyday I bear in mind that my number one job is to increase the value of each shareholder’s investment in PrimeHoldings!
This is my objective and my pledge to each of you.
Tom Aliprandi, CEO
May 08, 2003
About Vertu Technologies, LLC Vertu Technologies, LLC, through a joint venture with PrimeHoldings.com, develops unique, innovative and proprietary software and hardware products for the hospitality, beverage and restaurant industries (referred to collectively as the “Restaurant Industries”). Vertu Technologies’ products include an inventory of software, hardware products and wireless applications for deployment in the Restaurant Industries. Vertu intends to become a leading provider of proprietary software and hardware products in these industries.
Management intends to market Vertu’s products by leveraging their collective relationships within the hospitality, beverage and restaurant industries to place these products in up-scale independent restaurants as well as domestic and international restaurant chains. The company is now testing (and will soon be ready to roll out 4th quarter) its flagship “inventory management system.”
The Restaurant Industries’ Industry Problems
The Restaurant Industries operate on an intangible set of inconsistent and often archaic systems. Budgets and projections are based on the number of seats or size of an operation and the economic model is usually reverse engineered to fit the size of the operation. Secondary considerations are given to the viability and pricing of the product as well as the sustainability of the operation, given actual costs. Quite often, actual pricing is generalized or set as a function of the P&L. If total cost of goods can be maintained, no questions are asked. Management attrition is significant often because of costs are not effectively controlled, leading to a n apparent short-term fiscal health that leads to long-term fiscal losses. In other words, because the Restaurant Industries are an apparent “cash” business (lots of cash is received daily), the restaurant in question seems healthy. However, because there is no long-term planning and economic accountability, today’s cash usually evaporates into tomorrow’s expenses! Thus, inability to control costs --when quite often the goals are unattainable due to improper pricing, purchasing or a lack of inventory control—leads to economic loss and failure. This is the precise problem that universally plagues the Restaurant Industries.
No Accountability
Furthermore, textbook economic principles are generally not practiced in restaurants. Restaurants have a tendency to price at levels that "feel right" without analyzing the cost of goods or changes in market pricing. These prices are not driven by the rule of supply and demand that dominate most industries. Most operations practice "cash drawer" accounting, balancing their books and the end of the period and counting anything left in the account after operating expenses as profit. These operations do not realize their maximum profitability because they lack the ability to understand their true economic health, because they do not have combined and organized accounting, inventory and costing systems.
Chain vs. Independent
Multi-unit or franchise operators often have the luxury of creating systems and costing software because of volume and revenue generated by the size of their operations. However, these chain restaurants lack the basic software for the costing and accounting of their inventories. Franchisees are often given all the supplies to open and operate the franchise, but none of the tools to manage it. A point of sale system is specified or included in the franchise, but there is seldom software for costing or inventory control. Menu items will be “costed” at a corporate level but the tools needed to adjust the pricing based on region are not passed on to the operators. The success of the operation lies in the ability of the parent company to negotiate volume discounts and proprietary purchases as well as the branding of the parent company to drive business based on name recognition. Individual franchisees are left to either create or purchase their own internal systems. This perpetuates the above problem. A restaurant may have a great brand, but without proper management tools, the best business will fail. Often if a business is successful, the systems are ignored until it becomes a crisis and at that time, it is too late. It has been long argued that Chain Restaurants are choking out the independents due to better marketing, locations, and volume. While this statement is partially true, the chains that employ control systems and software are able to run more efficiently over a broad network of stores. These networks give them the ability to track and monitor day to day changes in pricing, vendors, and overall cash flow. The main reason that independent operations fail and non-tech chains suffer is there inability to install and operate systems that will help them achieve their goals and/or maintain proper accountability. Quite often, the success of a non-tech chain can be credited to the operator who independently seeks out the necessary software and systems. A struggling operation does not have the time or resources to invest in the accurate accounting or costing of their product. Their main concern is getting though any given meal period--day or week. This leads to lax accounting and control practices, which deny the operators the time they need to identify and fix any errors in costing or shrinkage. Because the main problems that the Restaurant Industries face are found in independent as well as chain size restaurant companies, Vertu has developed products that are user friendly, easy to install and maintain, affordable to both small and larger operators and efficient to operate.
Vertu’s Solutions
Vertu’s products are effective in multi-unit and franchise applications and small, independent operations. There are numerous independent restaurants in America that are on the backside of the technology but are quickly embracing it. Operators are beginning to realize the value of technology and control based systems. In the past, computer illiterate operators have passed their knowledge from teacher to apprentice like a sort of witchcraft. The success or failure of an operation relied on the ability of the individuals running them. The stars of the independent operations have gone on to become the superstars of the franchise world because of their ability to create systems and software that helped them run a profitable business. Success of an operation is not dictated by who did it first or best but by who did it the smartest.
A new generation of Tech Savvy operators are emerging who is demanding a seamless operating system to help them maximize their profitability and manage their operations. With the Vertu system these small operators will enjoy many of the systems that the chains have used for many years. Properly installed, followed and maintained, the operators can see an actualized savings and profitability. We can confidently add 5-10% to the bottom line, with systems to help monitor their Profit and Loss. Vertu systems will give the same advantages to any operation that are currently enjoyed by only the most advanced restaurant groups. Vertu systems are designed to take the guesswork out of costing and inventory management so operators are not at the mercy of their individual managers or chefs.
Vertu’s products can help restaurants minimize overcharges by vendors by closely monitoring the price changes from order to order, maintaining inventory levels that will help with the Actual vs. Theoretical food costs, and demonstrate the losses that occur due to non-adherence to company specifications, training errors, improper costing and purchasing.
Vertu can assist these operators in pricing their menus profitably by showing them exact plate cost, food cost, bar cost and inventory value. Many of these systems currently exist individually but not in a seamless application. Data from one program must be manually entered into another and another until the potential savings are lost to redundant systems. Projections show that the restaurant and hospitality industries will have double-digit growth over then next 5 years. The industry continues to grow and reinvent itself. This is largely due to the fact that with the recent world events people will be staying home rather than traveling abroad.
If they do travel, they will be staying within the United States. Those who don't travel will allow the dining experience to continue; as it is simple pleasure or extravagance they will still allow. Vertu is the future for the restaurant industry. Although, many in the industry are slow to recognize the need for automation and technology, Vertu’s products have the potential to revolutionize the way restaurants are run—and will help all shapes and sizes (independent to full franchise) become effect and profitable.
Vertu Technologies’ Products Product / Description Vertu Client Keeper. Windows-based Software Package that tracks membership and club or restaurant patron’s food & drink use and buying habits. Vertu POS. Linux-based Point-of-Sale and Retail software System aimed at smaller to medium operations. Vertu Check Stream Window’s-based software that tracks labor and employee timekeeping integrates with all popular existing accounting software to eliminate double entry. Vertu Food & Beverage Inventory Manager. Windows-based (though platform agnostic) software package enabling restaurants, bars & clubs to track food & beverage inventory, actual vs. theoretical inventories as well as yields, attritions through theft or loss. Vertu Wireless. Integration of all of the above software products in a wireless environment, giving the restaurant itself a wireless “hotspot” or wireless “LAN” that can be used by the facility and its employees. This concept will also incorporate “handheld” PDA’s for server use. Vertu Technologies, LLC Management
The Company brings together the talents of five individuals with a combined 25 years experience with technology in the hospitality, food and beverage industries.
Spencer Taylor. (34). Mr. Taylor has 15 years of programming and computer experience relating to private clubs with attention to liquor cost controls, POS systems, membership database and other computer systems. Mr. Taylor has served as IT Manager for Anchor Investments since 1995. Mr. Taylor has developed private club membership software that is currently in use by 15 private clubs throughout the Salt Lake City market. Most recently, Mr. Taylor was responsible for all IT Management at William Tell, Inc., which owns and operates over 50 establishments including Applebee’s, Hooters, Sonic Drive Inn’s, and Famous Dave’s in several locations throughout Utah. With William Tell Inc., Mr. Taylor was also responsible for 20 + quick service, casual dining, and nightclubs, to include 3 nationally franchised concepts. Responsibilities include product management, troubleshooting, implementation, new technologies, and theft/loss management, management of internal LAN; setup a WAN for centralized management of all stores data. While at William Tell, Inc. Mr. Taylor successfully implemented an automated payroll system, with exports from multiple POS systems to a centralized payroll system. Actualized massive cost savings over previous “contracted” companies offering support. Implemented a system to assist in every location Actual vs. Theoretical Inventory control systems, with automation and simplification to keep the Managers out of the office and working where they were needed. Developed customized software to maintain and automate reporting from the POS systems to the Corporate office, and into the Accounting software suite to eliminate the need for double key entry of items, also allowed for a more real time flow of information from the stores with alerts to the regional managers, and principals if necessary. Mr. Taylor holds a Bachelor of Arts Degree in Political Science from the University of Utah and was awarded the Lyndon Baines Johnson Internship from the Hinckley Institute of Politics among other recognitions.
Garry Maxwell. (37). Mr. Maxwell has over 20 years of restaurant and hospitality experience. At Fresco Italian Café, he assisted with menu and style development, kitchen design and property flow. Serving as Executive Chef at Salt Lake Brewing Company, he oversaw the operations and menu development at Squatters Pub Brewery, as well as the design and construction of Fuggles Microbrewery. He also served as Chef at Fuggles for two years. Restaurant Hospitality as well as “Best Après Ski Dinning” by Ski Magazine named Fuggles “Top Five Intermountain Restaurants” in 1996 in 1997. In 1997, Mr. Maxwell opened Café Bacchus in Salt Lake. Café Bacchus was voted “Best New Restaurant” by City Weekly reader’s poll for 1997. He was also featured in Salt Lake Magazine as well as the Salt Lake Tribune as one of the top chefs to watch in 1998. Mr. Maxwell spent two years at the Sundance Resort working as Banquet Chef and Event Coordinator. Here he became more familiar with coordinating all aspects of food and beverage for event execution. In 2001, he opened Third & Main Bar and Grill in Salt Lake City. Third & Main has been featured in Sunset Magazine and Restaurant Hospitality. Third & Main received Salt Lake City Magazine’s “Best New Restaurant” award for 2002. Additionally, Mr. Maxwell has consulted for Sizzling Platter Inc. (Sizzler, Red Robin, Ruby River, Hoppers Seafood and Grill) where he designed the kitchen and initial menu for the Hoppers Seafood and Grill concept. While with Sizzling Platter, he also helped develop menu ideas for Sizzler International. Most recently, he has been working with William Tell Inc., (Green Street, The Puck Restaurant and Sports Bar, Rhino’s A Bar, Applebee’s, Famous Dave’s) to streamline and standardize kitchen operations. He has been developing menu and recipe costing systems, standard operating procedures and accurate order/par systems.
William Darcey. (35). Mr. Darcy has over 10 years experience in real estate, commercial banking, and business and financial analysis. He has extensive experience in analyzing and structuring commercial transactions and has been involved in many multi-million dollar commercial construction and renovation projects along the Wasatch Front. He has held licenses for title search and examination and escrow closing from the State of Utah and holds a Bachelor of Science Degree in Political Science from the University of Utah. Mr. Darcy will receive his MBA from the University of Utah in May 2003
PRIMEHOLDINGS.COM, INC.
June 25, 2003
Dear Valued Shareholder,
As we approach the end of our second quarter I want to update you with our progress. It has been a long road with a great deal of personal and collective sacrifice as well as continued shareholder commitment. As you all know, we have had virtually no working capital for the past two years and I have relied on many people to do work for us without payment. These dedicated individuals-employees and consultants-have done this because I have committed to stay with Prime until it is successful again and because they believe in what we are trying to accomplish.
As I bring you up to date, I hope each of you will recognize how the pieces of the puzzle are coming together. We are still anticipating an exciting year and expect great success in our final two quarters this year. The following are highlights of our progress to date:
· Ashlin Capital Financing - We initiated Ashlin Capital's funding instrument on June 14. This funding should be completely drawn down upon by the end of June into July enabling us to initiate some of our pending project contracts in the telecom and software management industries and help us revitalize our subsidiary, TimeMarker. In the meantime, we have received bridge capital from two groups through the pledging of stock. This was made possible in part by Ashlin's commitment to fund. These bridge loans have helped us maintain our current path and focus.
· TimeMarker Spin Off - We have been able to pay down 50% of the necessary filing costs to spin off TimeMarker as a public company and issue TimeMarker stock dividends to Prime's shareholders. We are excited about getting this entity filed as a full reporting entity. We are currently negotiating with another public company in the golf space to either purchase TimeMarker outright or license its software to this company.
· Vertu Technologies - As I informed you in my last letter, we executed a Joint Venture Agreement with Vertu Technologies last quarter. Vertu has recently gone through some internal changes with one of its partners leaving the company. Although this distracted our development slightly, it is now revitalized. A new entity was formed, called "Cost Control, LLC" with it's own software and hardware technologies. This group is planning to install some of its hardware and software products this quarter. As our funding with Ashlin closes this month, we anticipate bringing Cost Control fully under the Prime umbrella. We are very excited about this relationship as it diversifies our company and Cost Control's products are innovative to the restaurant and hospitality businesses (multi billion dollar industries.) I will inform you as this continues to develop.
· InstaCall/Cellfrog - Lack of capital halted our roll out of the InstaCall product -- a pin less, prepaid, interactive, inexpensive international calling program designed particularly for cellular telephone users. This can still be a significant telecommunications product for our subsidiary, UniQuest, because the international telecommunications business is growing and needs a product like InstaCall. In conjunction with our international telecom opportunity (discussed below) InstaCall is a natural follow on product.
· International Long Distance Facilitation - With our telecom contacts and relationships, Prime has the opportunity to facilitate unilateral agreements with several international countries to terminate US originated calls. This preferential international arrangement initially will likely terminate calls internationally to four countries to start. Prime will use the available Nortel DMS 250/300 gateway switches in NY, LA and Dallas to handle this anticipated traffic of over 100 million minutes per month. We believe that this can grow exponentially for the next year and bring significant revenues to Prime.
There are other prospects also that we are investigating that could also enhance the sales efforts of the above opportunities. I will continue to update you as we advance forward. As I mentioned above, we are progressing in many areas because of the selfless help of many people.
Recently, we have changed servers for our website and the transition has taken longer than expected. I am confident that with Ashlin's funding instrument in place that we can drive revenues through both software licensing and telecom traffic as well as make TimeMarker a full reporting company.
Again, I will continue to update you on the progress.
Highest regard,
Tom Aliprandi, CEO
Letter from the CEO - September 1, 2003
Dear Valued Shareholders,
As we approach the last month of our third quarter 2003, I want to update you with our company’s progress.
As you all know, we have operated with virtually no working capital for the last year and have relied on many committed individuals who have dedicated themselves to the success and eventual turn around of Prime without compensation. With that as a background, I want to bring you up to date and garner your support.
With your cooperation and assistance we can further propel the various opportunities we have been working on for the past several months and mature the business relationships now in place. This will continue to foster the ingenuity, mobility and corporate diversity that are and have been the hallmarks of Primeholdings.
I have mentioned Ashlin Capital’s commitment to provide funding to Prime several times over the last few months in my letters to you and in press releases. Ashlin’s private equity funding was initiated this past June. We anticipated that Ashlin’s equity infusions would have been completed last month; unfortunately, Ashlin’s funding was delayed. Notwithstanding the delays outside Ashlin’s control, its pending capital investment is still on track to fund in September and October. Dr. Charles Flemming and the entire Ashlin Capital team remain as committed as ever to becoming investors in Prime and in helping shape and direct Prime’s ultimate and complete success.
With that in mind, this is the proposed plan: While the company has not received any working capital for the last several months, there are many things we can accomplish while we await funding. With most of our authorized and issued common stock pledged as security on a loan, there is little stock now available to facilitate funding. There are two options: we reverse split our common stock or we increase the authorized common stock. No shareholder is excited about a reverse split, no matter how minor. Therefore, the least drastic solution is to increase our authorized common stock.
This allows us to obtain some interim funding to protect our business operations and push along our current projects. At the same time we must take advantage of moving the domicile of our company and its subsidiaries to Nevada. Nevada is one of the most security friendly states for public companies and it does not assess any corporate tax. While Nevada is more convenient for us to operate and manage our corporate matters, its annual maintenance fees are also less expensive than Delaware’s.
With our intention to spin off TimeMarker through Nevada it makes logical sense to move the domicile of all our companies to better facilitate consistent incorporation sites. Please complete the consent form and fax to 801.942.9232 to accomplish both of these proposals.
Thus, once we have increased our authorized shares of common stock (and as we are changing corporate domiciles), we can obtain adequate capital and not only move forward current projects but also take advantage of an opportunity introduced to us by Ashlin Capital. For example, we can augment our asset base by securing an equity position in the Ashlin facilitated relationship with Briza Technologies. Briza Technologies conceives and manufactures wireless credit card payment solutions, Internet security devices, and related application services for provider management. Briza is associated with top-level experts around the world in the various fields of wireless, software development partnerships, information technology, electronics, manufacturing, and credit card processors. This will allow Briza to develop and implement its patent pending wireless credit card payment, SMS solutions. Briza is currently in the process of introducing an application service provider host server in Brazil using a carrier grade world-class platform, that will also allow Briza to establish multi-channel connectivity to almost any financial institution, credit card payment gateways, and wireless operators, worldwide. Exploiting this present opportunity with Briza will enhance our company significantly in the future. It is also critical to keep our progress going with Cost Control, LLC, by paying some of the personnel. Since its inception, the Cost Control principals have received no funding from Prime but have continued to work without payment. They have arranged and tested Cost Controls’ proprietary restaurant and hospitality products in two high profile restaurants in Park City, Utah. The products have tested very successfully. In one case, food costs were cut by 18% and the bottom line increased by 108%! We believe that Cost Control will engage its first paying customer by October 2003.
Finally, it is imperative that we maintain our financial commitments with legal professionals as well as our creditors, (at least at a minimum level) until funding is adequately provided. This only makes sense since most of these individuals have been supportive for so long, without any compensation. People will only work for free for so long. As you may know, I have not cashed a paycheck for over two years. My ability to work without payment is quickly coming to an end too. We have all worked too hard to let the many opportunities before us slip away. I am committed to work as hard as I can to bring our company to financial success, but I, like all those who have worked for Prime for so long, need to have a way to receive some minimal pay. The above proposals will give us the mechanism to trigger some small, but necessary capital infusions into Prime.
We have slowly and progressively advanced over unforeseen obstacles and are now ready to move steadily forward and succeed. Again, I am grateful for your past cooperation and support and anticipate your continued support to me and my team now and in the future.
Sincerely,
THOMAS ALIPRANDI, CEO
Letter from the CEO - September 9, 2003
Dear Valued Shareholder,
While some of you have already read my previous letter dated September 1, 2003 it has become more imperative than ever that you read and respond to this one as soon as possible.
To date, we have 59% of the necessary signatures needed to authorize the relocation of corporate domiciles and the increase of the authorized shares. I thank the shareholders that responded in such a timely manner. I am not sure how I can stress the importance of this in another way, but this must happen for Prime to survive . . . period.
Ashlin Capital is indeed planning to complete the funding for PrimeHoldings as soon as possible yet, until then we are at a standstill. We have had no funding since June. We are approaching four months without adequate funding to keep the company alive. Some have asked, “can’t you hang on a little longer”? Others have asked me “why not just do a proxy to get this done”?
While these suggestions are valid they are capital intensive and time consuming. Unfortunately, my ability to leverage both capital and time is presently hampered. I have personally leveraged my car, land and stock to preserve Prime and its shareholder base.
Doing this while without compensation has gotten us to this point. My hands are tied until we either reverse split the stock, (which few want to do) or increase the authorized to take in minimal funds to stay on track until Ashlin completes funding.
The choice has and always will be yours—our shareholders. I wish I had the capital and time available to do a full-blown proxy, but I don’t. I don’t have the $12,500 or the five weeks to delay.
Creditors and attorneys must be handled even at minimum level while keeping our software and business developments on the right track.
Please go to www.primeholdings.com/nevada and sign the consent. Finally, please go to our web site and look for the following link: /newprime/index.shtml and see what we have done to improve our website and prepare our company for all the great opportunities we want to pursue this year.
We will build upon this new website as we grow this year and next year. Our web designer was kind enough to let us view for the next 36 hours without receiving payment for all his work.
Please do not ignore this letter. I need all of your help one more time!
Regards,
THOMAS ALIPRANDI, CEO
October 2, 2003
Dear Supportive Shareholder,
I am pleased to announce that we received the necessary signatures needed to authorize the relocation of corporate domiciles and increase our authorized shares of common stock. Your expedient actions and commitment is what got the job done. I sincerely thank and congratulate you. I was pleased to get the necessary 51% through an amazing group of 65 shareholders.
Your actions have allowed Prime to survive and move to the next level without the extensive costs and time restraints associated with a proxy mailing and without doing a reverse split—a directive that most shareholders vehemently oppose. Presently, we are reviewing a potentially more favorable “bridge funding” instrument until Ashlin adequately funds Prime. This will give us some interim capital to continue work on some of our projects. The main goal is to keep Prime on track with our software and ASP (Application Service Provider) business model in the hospitality vertical. With this model we will license the software to the end user rather than charging a large initial service and software fees up front.
This will give us several upsides for us and the customer with each contract:
First, with each contract we will have a constant recurring revenue stream that will eventually exceed the revenue from a single sale; second, we will always receive our fees as we can discontinue services upon non payment; and third, under this type of a business model, we will have the ability to offer more ongoing support to help our customers use our products more effectively and manage their businesses more efficiently.
I am pleased with how far long we have progressed with our hospitality software. The two developers have made great product development strides with virtually no capital. Because of their commitment and experience we are just a few weeks from having our first paying client, with more to likely soon follow. Our beta test is also almost complete with one of Utah’s finest restaurants. Future PR will be released detailing this client and the test results. We will also post to our website industry support and updates from various publications like “ Hospitality Technology”.
In addition to our hospitality software products, we intend to complete our corporate relocation from Delaware and Utah to Nevada and to complete the necessary filings for TimeMarker so that it can become a full-reporting entity. In my September 1, 2003 letter I pointed out that we could augment our asset base by securing an equity position in the Ashlin facilitated relationship with Briza Technologies. I am now proceeding to finalize our agreement with Briza. Briza, you may recall, conceives and manufactures wireless credit card payment solutions, Internet security devices, and related application services for management providers.
Briza is currently in the process of introducing an application service provider host server in Brazil using a carrier grade world-class platform that will also allow Briza to establish multi-channel connectivity to almost any financial institution, credit card payment gateway, and to a host of wireless operators, worldwide. Briza’s wireless credit card payment validation via Encrypted SMS is unique because it provides a mobile payment evolution using the established Short Message Service (SMS) infrastructure of existing mobile operator companies. The wireless credit card payment validation via Encrypted SMS system is patent pending and should secure a monopoly on this mobile credit card payment solution. In addition to this innovative and patent pending product, Briza has a management team that combines the talents of experienced, well connected and creative individuals who have worked together for some time. The terminal market in Brazil is estimated to be over 442 thousand units per year with 5.1 billion transactions. Briza’s premier partner in entering the market will be major credit card processor in Brazil that controls 54 percent of the credit card debt transactions market. Briza is forecasted to sell 24,000 units the first year either directly to major credit card processors in Brazil or their associates, generating an estimated 5.1 billion transactions going through Briza’s encryption gateway at $0.03, which equals a revenue stream of approximately $153 million. Our role with Briza will be as an equity partner. This is good for our company because, in addition to enhancing our asset base, we may be able to integrate the Briza technology into our Cost Control partner’s technology package. We anticipate that we will put out some press on the above undertakings as they progress.
Again, I am grateful for all of your support and patience through these last rocky eighteen months. We can fill in our infrastructure a bit and bring in additional support to help manage our business. With additional personnel and some funding in place, we can now attack our opportunities with vigor, ingenuity and confidence.
Sincerely,
THOMAS ALIPRANDI, CEO
Letter from the CEO - December 3, 2003
Dear Valued Shareholder,
I hope your Thanksgiving was safe and enjoyable for you and your families. I am pleased to update you with the continued progress of our hospitality software. With a concentrated focus on the software we have been able to streamline the sales efforts and software development costs dramatically. While remaining under-capitalized we have been able to attain a clear path to a completed software package for the hospitality vertical.
We are less than $15,000 away from finishing the project with wireless applications to handhelds (PDA’s) to provide real time remote access. This will be completed by mid January 2004.
The good news for us is that we now have paying customers even though the product is not entirely completed!
We have several paying customers in the wings and we have lined up a beta test with a premier facility for the first part of next year. Attached to my letter is a letter from our accountant. By this letter, he further validates revenue from our software model. Even though we are not a fully reporting company, we offer this financial information to keep you, the shareholder, informed. Please do not inundate the accountant with phone calls for more information. He was kind enough to evaluate our client’s status and financial documents. I would not like to abuse the favor the accountant provided. I just want you to be completely informed. The revenues are quite modest, but valid just the same.
With the thousands of restaurants and hospitality installations available you can surmise the value and potential licensing revenues this software could provide by applying an ASP (Application Service Provider) model to the hospitality vertical.
I will keep you informed as this progresses.
Tom Aliprandi, CEO
Feb 24 2004
Dear Growing Number of Valued Shareholders,
I need your assistance to take our company to the next level—a level of significant, sustained revenues with attractive profit margins. As you are likely well aware, some amazing events have recently transpired with our company.
In the latter part of December we signed an agreement with Alexander Lindale, LLC to help us raise enough capital to fund partial operations and to help with some financial PR for the company. Our goal was to get enough capital to finish our current products and then start aggressively growing our business. Since then, our stock value has risen by as high as 7000%! Taking advantage of every dollar during this incredible process has been paramount to our success. With complete focus on our current business operations, recent acquisitions and closely monitoring our core sustainable organic growth, share value will take care of itself --as we all witnessed during January.
During last fall and early winter while our stock price languished in thousandth of a penny region, I raised as much capital as I could in order to pay for Cost Control's software development and to get the product in a form to be tested. Because the stock price was so low, I had to sell large blocks of stock for a few thousand dollars—but each dollar was poured into finishing the Cost Control product.
With this committed focus during the past few months (most of the time was without any capital) we:
• Finished Version 1 of our restaurant software product;
• Completed beta testing at installation site;
• Secured the first sale of our product to a third party;
• Signed and LOI (letter of intent) to acquire an innovative company (Briza Technologies, Inc.) that has a unique international telecommunications and patent pending micro payment system via a SMS wireless platform;
• Updated our website—we will continually update for greater shareholder interactivity;
• Developed brand name and logo for our software; and
• Set up exhibition space at upcoming industry trade shows and initiated a branding/marketing project.
Again, this was all accomplished on a shoestring budget. The primary reason for our dramatic upsurge, success and turnaround is that we have had some capital and we have had a handful of dedicated individuals--that had the courage and belief to do what seemed impossible—help us for more than 2 years without any compensation—I mean no compensation, not money or stock etc.
While the lack of capital impeded our progress the last few years, the past two months of some regular capital has put us back in the game.
While I am excited and grateful that our tides have turned for the better, we must continue aggressively pushing forward and stay steadfast and focused. In my past letters to you, I ruminated my thoughts and have tried to stay positive and forceful in my commitment to Prime, but it has not been easy.
I have always had a model in my head of what Prime can be; however, in the darks months of the last 2 years, I wondered if we could survive without capital—it was like trying to travel across the country in your car without fuel!
With Prime's increase in fortunes of late, Prime's model as a premier holding company of emerging and profitable businesses is coming to fruition quickly.
While I am more confident and excited than in the past, this letter-writing task has been difficult. This past week my father lost his battle with cancer. While deeply saddened by his passing, I am inspired by the massive support you have all given me through e-mails and heartfelt phone calls. I thank you so much.
Again, your commitment to me continually fuels my drive. I am more committed now than ever. I am taking up again the mantle of Prime's leadership now with verve and vitality. My Dad's literal final and reassuring advice to me as a father was to protect our company and save the shareholders' value in Prime by “just taking care of business, one day at a time.” I will do this. I committed to my father to do this. For me it will be important to immerse myself in work more than ever before and to keep my Dad's wishes alive in me.
So, how do we go forward? We must keep capital coming into the company. I am ready to now increase our infrastructure, even though I intend to keep all expenses to a bare minimum. I plan to out source as much as I can and run a “virtual” office to keep expenses low. But, I need help to do all of this and I need funds to keep the car moving. While some employees can start part-time and on a per project basis, other positions will require salaries, employment contracts, health insurance and stock options etc. At the same time it will be essential to start paying off the creditors who have been helpful to Prime and willing to work with us over the years. When we initiated the contract with Alexander Lindale our stock was trading between .0001 and .0003 with 350mm shares available.
From a capital standpoint, this equates to $18,000 at a minimum and no more than $75,000K in total capital. As I said I used large blocks of this stock last fall and early winter to fund Cost Control, leaving a small block stock to raise money as our stock price increased. The positive momentum that started in December can now initiate our sustained growth. But we need additional authorized stock in order to do this. I am completely focused on delivering constant regular revenues from fundable projects. This, I believe will bring about powerful changes. So far, it has served us well. While I do not want to build this company solely through acquisitions, the present opportunities with Briza, et al., will serve the relatively quick need for revenue and will also provide us the tools to serve long-term goals with significant revenues. Briza is ready to launch--in a big way while the affordable project of our restaurant software is almost ready to launch.
Our next focus with our restaurant software is to attain 20 installation sites quickly and provide them with the best service possible. This will give us with a model for expansion and allow us to work out the regular “bugs” that accompany software such as this. As I said, to finish these acquisition, etc., we need capital. We are at a crossroads. We have finally put in place the products, projects and partners that will help us achieve success and we have expended all of our treasury stock. We don't want to effect a reverse. That is an easy but an uncomfortable solution. The only way to for all shareholders to preserve their shares and for us to receive the next round of financing is to increase our authorized shares of common stock one more time. We need to add an additional 500 million shares as soon as possible. My investment bankers tell me that they would like this to be done in the next week so that we do not lose the momentum we now have. So, I am asking for your support one more time to help us increase our authorized shares so that we can finish all that we have started over the last year.
Attached you will find a consent form www.primeholdings.com/consent. Please sign it and remit it to me via fax at 801.606.7304.
Lastly, once we have moved our current projects along, our board has committed to a stock repurchase program whereby PrimeHoldings will buy back large blocks of stock and retire them into treasury, thereby alleviating the dilution caused by the new additional shares. While we are presently not in a position to do right now, we would like to institute this program this year, if possible.
Thanks again to all of you for your support and help. Let's join together one last time to market our software product, finish our acquisition of Briza and other opportunities and begin marketing our products internationally and domestically and get our company, finally, into the “black”!
It is time to thrive not just survive.
Kindest regards,
Thomas Aliprandi, CEO
March 2, 2004
Dear Shareholders:
Thanks for your support, calls, e-mails and general help during this exciting but difficult time. My letter posted last week rambled a bit but I had a lot to say and I wanted to “get it all out there”!
Now as I reflect on what I said to all of you and what I have asked you to do, I want to take a minute and clarify where we are, summarize what we have before us and identify what we need to do in the next few months.
There is an old adage that when it rains it pours. This applies to good as well as bad situations. Last year when we struggled, it seemed that all the “bad stuff” came out of the woodwork; now that things have turned around, everyone wants to be part of our
company and the opportunities are many, varied and exciting. The pouring rain is now the good rain!
This is what we have before us and I will sum up what we have to do in the coming weeks:
• Cost Control, LLC : We need to finish the acquisition of the company, get at least 20 installations done and roll this great software package out to the restaurant industry in a big way. We hope to finish the acquisition as soon as I can commit to hire some people to help with the sales and marketing. We have identified some impressive experts in the restaurant arena, but we need to pay them. This will also include a part-time technical support person to start. We have in place our new corporate name and logo to unveil as soon as we complete. The website is being developed as you are reading this letter . Pending: a potential contract with restaurant sales group with existing distribution channel.
• Briza Technologies : We also need to finish this acquisition as soon as possible. The tentative date for closing is set for Wednesday March 10, 2004 at the Ashlin Capital offices in NY. As you will recall, Briza's primary business is designing, manufacturing and marketing wireless credit card payment solutions and Internet security devices—with the initial applications in Brazil . The market for these products is huge. We have paid part of the acquisition price and we will need additional capital to finish the transaction. We also just completed the acquisition of IT-Bibow which will also require financial support to maintain operations in Brazil .
• Tele Celular Sul Particicipacoes S.A .: This is a Brazilian digital cellular telephone company (NYSE: TSU), that has a market cap of $491.23 million, and had gross revenues of $348.05 million for the trailing twelve months as of September 30, 2003 (Source: Yahoo Finance). Briza signed an agreement to recharge Tele Celular's customers prepaid cellular telephones, which will generate some impressive revenue, but again we will need capital to complete the products, maintain commitments etc. This is an astounding opportunity that literally fell into our laps through Briza.
• Telecom--generally : We have many opportunities to secure destination long distance services and collect fees for facilitating these services. As recently as yesterday we committed to participate in setting up a facilities based telecommunications provider of international voice and data communications. The customers will be large users of international voice and data communication services. While I have known about this opportunity for some time, we have not been in a position to contribute until now. With this partnership we will be in the highly profitable, low cost, high volume business of voice and data telecommunications. I have waited for this opportunity to mature and now it is time to “seize the day”! With my highly regarded and very successful contacts in this industry we can accomplish some great things! While our direct agency contract with Z-Tel could be quite lucrative if we set up a large infrastructure to expand and market quickly, it is highly competitive, extremely volatile and overwhelmingly cost prohibitive meaning: not cost efficient.
• TimeMarker : We intend to finally spin off TimeMarker as a separate public entity and issue the shares set aside last year to do this.
Finally, as some capital comes into the company I want to start paying off our corporate debts and restore our company's solvency.
Our creditors have been more than patient over the years. It is important that our company be debt-free as we move forward. I have everything in place to do this effectively and quickly-we just need the cash to close up these long standing loose financial ends. That is a quick summary. I am moving ahead full steam and am putting together the small team that will help exploit all of these opportunities and bring profits into our company.
I continue to need you expeditious help in getting the signature needed to effect our capital structure change. We now need 109 million shares to authorize the change and begin launching all that is in place.
Please go to www.primeholdings.com/consent to help.
Kindest regard,
THOMAS ALIPRANDI, CEO
March 5, 2004
Dear Shareholders:
This is my third letter in one week, a record for me! I want to post one more short letter to alleviate some apparent concerns and let you know what we have determined to do with Briza and TimeMarker.
As you will recall from my letters last year when things were quite dismal, we wanted to spin off TimeMarker (one of our wholly owned subsidiaries) and put something in it that had value. The plan was always to give each Prime Holdings shareholder 1 share of the spun off TimeMarker for every 10 shares of Prime owned. We did this last February (2003) but could never finish all of the filings because of capital constraints—we used what little money we had to develop Cost Control's products, etc.
When the Briza opportunity surfaced a little over a month ago, it seemed natural to put it in TimeMarker and finally finish the spin off with this asset in it. Many of you are concerned that spinning off TimeMarker with Briza in it at this time is not the best restructuring arrangement. Several of you have been Prime shareholders for many years and some have recently joined the ranks of Prime shareholders—but we want to be fair to all of you. After careful consideration, we will not spin off TimeMarker at this time, but will have Prime acquire Briza. Briza will not be a wholly owned subsidiary as the current Briza shareholders will control some of the Briza stock, post –acquisition. It will be a Prime subsidiary. We will then go forward and build Briza—a direct benefit to Prime. When we will spin off TimeMarker later and put an asset in it, the Prime shareholders will all receive TimeMarker shares in the new entity. I believe that this course of action will benefit all of you, old and new shareholders alike, as we work to build up value for your investment in Prime. I hope that this answers all of your questions and assuages your concerns.
We believe strongly in Prime's future and in its ability to use current and future acquisitions to build revenues and shareholder value.
Kindest regard,
THOMAS ALIPRANDI, CEO
Letter from the CEO - March 10, 2004
Dear Valued Shareholder,
Just a quick update before I leave to tie up our telecommunications transaction. As I mentioned to you in my last letter, this telcom opportunity surfaced a couple of weeks ago and its potential is quite staggering. I know the people involved very well and Prime's involvement can be significant. Becoming a facilities based telecommunications provider will likely strengthen every facet of our company. Recently, we released PR's regarding Briza's exciting LOI's (Letters of Intent) with Tel Sul and Valista. While these proposed transactions are at the basic LOI stage, they provide the basic framework for the comprehensive agreements that will complete the contracts. Some people discount the value of an LOI, but it takes a fairly serious commitment for two diverse parties to actually agree to potential terms, draft an agreement (the LOI) memorializing these terms and then execute it. With this in mind, Briza's CEO, Ivan Silva, will remain in Brazil with a view to signing these agreements within the next few days.
This means we will put off the Briza acquisition until he returns to the US . When Ivan returns we will immediately schedule the closing with Prime, Ashlin Capital and Briza in Salt Lake City . I will keep you updated as these progress as well as information with regard to our telcom relationship. Cost Control, LLC is just about to launch its website and actively pursue sales. There are many irons in the fire right now. The time to strike is now! The acquisition documents are presently being drawn up for this entity along with new name and logo. It is important to know that with your committed support to Prime and me we reached the necessary 51% vote to adjust our capital structure. This will allow Prime to keep growing.
I am now more confident than ever. It is time to take Prime to the next level—fast! Thanks again for you help and support.
Regards, Tom Aliprandi, CEO
Letter from the CEO - April 6, 2004
Dear Valued Shareholder,
It’s that time again to update you on Prime’s recent progress and undertakings.
I hope the last few weeks of extraordinary news—as disseminated in the various press releases-- was viewed positively as we have worked very hard to add to Prime’s asset base and increase value for all of you, Prime’s valued shareholders, who have supported the company and me through what seemed to be from time to time, insurmountable odds. I promise you, this is just the beginning and there is no letting up in sight. We have defined our goals; we have achieved some of our goals; and we will not let up until our company is profitable and all of our short and long term objectives are achieved!
While I would like to list all of what we have accomplished over the last few weeks, it seems superfluous to recount it all and a waste of your valuable time—it’s all in the press releases. With the recent acquisitions we have closed and strategic partnerships we have completed; our path to revenues and corporate growth is open and achievable. In short, we could not have accomplished all we did in these past weeks without your commitment and faith in my vision and me.
Let us address what you collectively allowed me to do:
First, Busboy is ready to initiate growth through steady incremental sales. This, in my opinion, provides Prime with long-term security through a viable product and service that will adapt, mature, and expand as the multi-billion dollar hospitality vertical industry grows, redefines and refines itself. This will not necessarily lead to explosive growth; however, this vertical business offers tremendous security and staying power for Prime, long-term. While this may not be the immediate “home run” for Prime, it should consistently provide singles and doubles—to use my favorite sports metaphor! This opportunity will likely provide steady revenue because of the products’ reliability and the demand for such products in the hospitality industry.
Second, with the Briza acquisition, we accomplish medium-term growth goals. Since we first signed a letter of intent to acquired Briza, Briza activity exploded and the company signed numerous viable and profitable contracts with impressive third party international companies and institutions. As these contractual relationships mature, Prime will benefit greatly from Briza’s efforts, contacts and unique products now marketed throughout Latin America. Briza will not need to expand its infrastructure and the investment risk for Prime is minimal. The financial returns, however, can be incredible. This will provide Prime will further fiscal stability and needed capital for efficient growth.
Third, our Target partnership, offers both aggressive short and long-term growth prospects through immediate and long-term revenues. While this relationship supports immediate Prime goals, it will likely provide long-term fiscal strength through natural expansion and capital efficient growth. We opened our telecom operations for business on March 19, 2004 and as of April 4, 2004, 17 days later, we generated $47,869.84 in revenue, and growth will likely become exponential as more bandwidth is provided to accommodate client traffic. For those of us who have hung in there when the light was dim, this diverse operational move - intended to produce revenue and bottom line results – is pivotal to the integrity and prosperity of our company, its stock, its shareholders and overall future.
As I look at where we are now versus our position six months ago, I can’t help but be enormously thankful for your support in allowing me to do what was needed to get the job done. While the road to where we need to be has not ended, we are well on our way. I want to make one thing very clear to all of you. Despite our success of late, I still maintain no salary and no stock position at all. I do not have any shares to sell and have not sold one single share of Prime’s stock. Yet, with what we have in “the hopper” and your continued support, I feel this will change as success warrants it—i.e. I will start to take a salary.
I have always maintained that nothing good can happen without good people; we have and will all see much good come from our unyielding shareholder support and the uncompromising integrity of this public investment segment.
With warm regards,
THOMAS ALIPRANDI
Letter from the CEO - April 8, 2004
Dear Valued Shareholder,
During this week of the deeply religious and reflective Passover and Easter holidays, our business has continued to grow at an exciting and hectic rate. Reflection always gives way to insight and as I look back on where we were a year ago, I remember that our business was stagnant and I was struggling just to stay afloat. I felt as though I were breathing through a straw!
Patience, luck, the work of some good people and your support helped us get through the year and now I look at our company. It is now as I always imagined it could be: a small and lean infrastructure, profitable subsidiaries with dynamic and robust businesses, growth capital available through investment bankers, potential exponential growth and a tremendous collection of helpful and supportive shareholders from all walks of life! I now see that the past year was a crucible we had to pass through to be ready to the good time now facing us.
This is the insight that now guides my decisions and the management of our company. Having been through a famine ( I literally lost everything I had last year--my car, home, toys and my financial security), I have no desire to gorge in times of plenty—preservation and responsible spending have now replaced the notions of excess and overindulgence that have plagued many companies of late.
I sincerely treat every dollar as though it may be the last! We are in the process of adding some helpful additions to our website to help all of you chart our growth and better understand our current and future organizational structure. We will add in a section soon that summarizes Target’s weekly revenues that will be administered by an accounting firm in Boca Raton , FL.
Also, we will add in a section that displays our organizational structure. As our structure changes, we will modify the changes online. In essence, although we are a Pink Sheet company and are not subject to the same SEC reporting requirements as a fully reporting company, I intend to act like a fully reporting company. That means that I will disclose to you all that we are doing and, if required, I will put to your vote decisions that affect our company. I have no interest in hiding behind the “Pink Sheets”; I want each of you to know everything that we do, why we do it, what it costs and how it will benefit us!
So, let’s recap where we are with our business so we can go into the final stages of this holiday season with confidence and great hope!
• Target will finish its first 3 weeks of business with about $50,000 in revenues. Something good happens every day that adds to the company. I will let you know in the near future how Prime will continue to help and profit from this vigorous business. As stated above, we will have revenue summaries available for your review on a regular basis. I believe that this business will surprise all of us with it longevity and profitability.
• Briza is forging ahead quickly and efficiently. As you all know, Briza has made several acquisitions since it became associated with Prime and it is now pursuing many divergent and exciting contracts in Latin America . I will share Briza’s financial pro forma with you as soon as it is in place. I think that this will be a steady and high growth business.
• BusBoy Technologies (Cost Control Corporation) is looking to sign up several new clients in the coming weeks. It is very interesting that our Briza CEO believes that he can find many restaurants in South America that will want to buy the BusBoy product! This is the by product of owning diverse business—there is always a way to find synergy.
I believe that we will find ways for all of our businesses to profit from each other and link together symbiotically.
Again, I want to thank all of you—long timers as well as recent shareholders for your support in making some difficult decisions over the past several weeks. Another important insight I have gleaned through my reflection is the importance of people in our business. The investor who puts in $5.00 is as important to me as the million-dollar investor. I owe the small investor the same fiduciary responsibility as the large investor.
Without all of you, there simply is no company—you are the true flesh and blood of our little business and I am grateful for you, I respect you and I want to protect your investment in our company. Have a wonderful Passover and Easter holiday week.
Best regards,
Tom Aliprandi, CEO
Letter from the CEO - April 21, 2004
Dear Valued and Supportive Shareholder,
Once again, it is time to update you with the recent events and developments of Prime.
Things are coming together faster than I ever anticipated. With this in mind, we are maintaining Prime’s laser focus on capital efficient organic growth. With every day that passes the Prime mission becomes more clearly refined and defined toward medium and long-term sustained growth.
Personally, I feel Prime is about to move to the next level. As some of you already know, I spent most of the first half of my life on the baseball field playing in high school, college and the Florida leagues into my early twenties. While a knee injury sidelined my major league aspirations, I learned many valuable lessons about teamwork, perseverance, mental toughness and commitment to winning from some of the finest coaches still in the game: from Prep School Coaches to General Managers of Major League teams. Having given you a brief history, you now know why I often wax lyrical in my letters with baseball metaphors.
I often look at business through the eyes of a baseball player and measure my success and failures accordingly. While critical games are often won by hitting singles and doubles; occasionally, a home run rules the day—but always showing up for the game and getting to the plate and taking your swings will ensure steady momentum and improvement.
This is what I feel was accomplished by Prime through last year. We showed up every day at the park and played the game--often without gloves, bats or even baseballs, but we played every day as though it were the World Series. Then, late last year, our fortunes changed and we started winning. Now our days are made up of base hits and steady “scoring”.
Now, seemingly without notice, we have the “bases loaded” and heart of the batting order coming up…with no outs! Enough about baseball –I will summarize briefly where we are on all fronts.
Target Communications is exploding. The revenue and minute numbers are coming in today or tomorrow. We believe that our first month’s operation will show revenues over $80,000. With the new network equipment being added soon, next month should be even better. As you know, we will soon have audited numbers available for your review on our website. We hope to have this in place in the next 2-3 weeks. I expect big things here. Steady growth and big revenues. With the anticipated growth potential of this joint venture, we may perhaps initiate the authorized “share buy back” sooner than projected.
Our proprietary BusBoy technology will soon be installed in a flagship restaurant in Salt Lake City—the first of many installations. We are preparing for the big HITEC show in June and intend to come home with orders! I see this business as steady growth—singles and doubles (continuing our baseball theme). This is a good, solid business model that will help our company long-term. On a side note, our web developer hit a home run with the penguin animation on the home page.
Briza is currently finishing its telecommunications software applications in Latin America and has many current and potential future partnerships that should all be profitable for Prime. We are still investigating the peripheral business potential in Latin America and the U.S. applications of the technology. I spent a day with Briza’s CEO and Ashlin Capital in New York this past Monday and although the business is more than exciting, there are many developmental and core questions we need to answer about the business and its investment requirements. When we finish establishing a capital efficient plan to quickly expand, I will let you know where we are with Briza and what its contributions will be to our company.
We have settled some of Prime’s liabilities that have plagued us for the past 3 years. Slowly we are leaving these behind and hope to be essentially debt free soon. Many of our creditors have been incredibly patient and supportive. We want to take care of them, but we can’t settle all the matters at once. We are tackling them one at a time.
Once we have these issues behind us, I will start taking a salary. I want to resolve most of our debts before I come back on a steady payroll.
We now have a mechanism whereby each of you can sign up on our website and soon will be able to receive specific information about the company and our business, our stock, etc. I think this is another step towards treating Prime as if it were a “fully reporting” company—at least to our shareholders.
We truly want you to be aware of everything we are doing to build up our company.
Sign up: www.primeholdings.com/contact.shtml
Also, we are going to add an interim CFO to help us through this process. He is very experienced in financial matters as well as working operationally with emerging companies such as Prime. We will announce this soon. We also have a programmer that will help maintain the BusBoy software and possibly help us with Briza.
Again, I will announce his involvement as soon as we have come to terms. As we bring some additional personnel on board to help us, we will better define and refine our 12-month and 24-month goals and objectives.
We will also have a detailed and specific two-year pro forma that we will make available for review on the website along with an investor kit. We are moving forward rapidly. We are adding to our company critical mass and have many opportunities to work on, mature and ultimately exploit.
As always, I remain anxiously engaged in helping Prime realize its potential and destiny.
Respectfully,
Tom Aliprandi
Letter from the CEO - May 5, 2004
Dear Valued and Supportive Shareholder,
I wanted to take this opportunity to update you with the most recent events and developments with Prime and its interests.
As most of you have recently become aware, Prime Holdings will no longer be pursuing the development of the Briza model. While we did acquire Briza with the assistance of Ashlin Capital, we no longer feel that the pursuit and development of the Briza model is in Prime’s best interest.
It is unfortunate that this information was disseminated in such an abrupt fashion. I would have preferred to convey our decision not to continue to support the Briza concept to you in a more professional manner.
As you may recall from my last letter, I stated that there were many developmental and core questions that needed to be answered about the business and its investment requirements. These unanswered questions specifically related to the capital needs required to fulfill Briza’s business plan and the returns expected from those infusions. After further due diligence, we determined that Prime’s investments would be better served in other areas which would yield faster and greater gains for the company and its loyal shareholders.
We must be extremely prudent with our precious capital and when making investment decisions there must be no uncertainty or speculation. While I wish Briza well, my responsibility is to maintain capital efficient growth…period. I believe that we must continue to support the interests that are already producing revenue and growth for Prime. The results yielded by Target and BusBoy are tangible – not speculative.
Developments subsequent to our meeting in New York , made it abundantly clear to me where Prime’s focus should reside. While the focus and support will be to continue to grow these businesses, we will always be open to exploring profitable opportunities which are in line with Prime’s goals.
As I write this letter to you, I have received some updated information regarding Target Communications. For the last seven-day period beginning on Wednesday, April 28 th and ending Tuesday May 4 th, revenues were $28,179. This supports a projected run rate of just over $124,000 per month.
This, my valued shareholders, is the kind of information I would like to provide you with on a regular basis – tangible not speculative. In addition, we expect to take delivery of the additional network equipment at our Houston Technical Operations center next week.
As I had communicated to you previously, this equipment will serve to augment the network and allow Target to quadruple its business. These results, along with the pending BusBoy transactions require 100% of our support and commitment.
We must not jeopardize these flourishing opportunities by pursuing a “developmental model.” As always, I will continue to update you on the progress of Prime’s interests.
Respectfully,
Tom Aliprandi
Letter from the CEO - May 11, 2004
Dear Valued Shareholder,
While working in Florida with Target this past week, some interesting developments arose with Briza and Target that I would like to address – and I want to clarify some misgivings and apparent misunderstandings with respect to Briza.
So, let’s start with Briza. Ashlin Capital first introduced us to the Briza opportunity last January. Ashlin had reviewed Briza’s business plan and based on many of the representations therein, passed it on to me to review. I liked the apparent opportunity, I shared it with others to review and in conversations with Ashlin Capital and Ivan Silva (Briza’s CEO) the business plan seemed to have merit and the capital needs were not egregious. Mr. Silva repeated to Ashlin Capital representatives and to me that his total capital requirements to begin cash flowing were $39,000, paid out over a three-month period.
We checked out his references and confirmed the existence of certain relationships he purported to have in South America. It seemed as though it were a good investment—minimum risks with excellent potential return on investment. On January 19 th, we signed a LOI with Briza just before the Mr. Silva left for a two- month trip to Brazil. Over the following two months I remained in touch with Silva according to the terms of the LOI.
We financed his activities of reviewing and signing a series of agreements and LOI’s in preparation for the deployment of the Briza network. His funding requirements escalated as far as timing and we provided the bulk of the investment quickly. Among the many LOI’s Silva signed in South America, the significant one was with Valista for the license use of its proprietary software for the Briza network to interface with the networks of the cellular telephone companies and financial institutions in Brazil. Silva represented that this relationship was strong, that we could acquire the license without any up front costs and that it was crucial to our deployment.
He represented that this agreement was “in the bag.” In fact, Valista sent a draft of a license agreement for us to review and its terms were consistent with Silva’s representations. With Silva still in Brazil, in late March we negotiated the terms of the Acquisition Agreement with Ashlin Capital’s assistance, and on March 27 th we reached agreement whereby we acquired 81% of Briza. We gave Silva the ability to earn a significant equity stake in Prime, based upon performance.
Silva signed the Acquisition Agreement via electronic signature. Soon after the acquisition agreement was completed, I was informed that Valista had changed the terms of the software license agreement, and demanded a $100,000 up front payment, in addition to the already agreed to 35 % on a revenue share basis. We told Silva that this was unacceptable and he indicated that we could develop our own software for a fraction of the cost.
We then agreed to meet last month in New York to discuss this and the future of our relationship. On April 19 th I flew to New York to meet with Silva who had just returned to the US. Upon reviewing his pro forma, I realized that with Valista out of the picture, it would now take an additional $283,000 over five months to fully deploy the Briza network. Silva wanted $50,000 to $100,000 immediately.
This was a total shift in his business plan and we had to weigh the risks again against the possible rewards. After careful review, we determined the following: we own 81% of Briza; putting $283,000 into Briza is irresponsible as we are unsure that Briza can develop timely (and on budget) the software necessary to deploy the Briza products. Silva indicated that it would take many months to develop the software, many months to test it and months then try to ensure that the market will accept such software and the products attendant to it. Part of our decision to invest in Briza was the timing.
There are many companies with similar software and product offerings — but with the Valista solution attached to Briza’s products, we thought we could beat the curve and get to market ahead of the competition. So, as you can see, our decision to acquire Briza was based on minimal cost to get the product to market as well as the Valista relationship and its “zero” cost software solution. With Valista out of the picture, the future did not look too bright for Briza and we informed Silva that we would not provide the additional funding.
Shortly thereafter he posted on his website that he did “not intend to do further business with PrimeHoldings.”
We still own 81% of his company as we paid the amount agreed upon for that interest.
Again, when we measured the risk of another $283,000 against the possible rewards attached thereto, the correct and responsible decision was to not provide further funding—we have a “cash cow” in Target Communications that will need additional capital and a further cash investment in Target (as discussed below) is a much safer risk with far great financial reward on the near horizon. Summary: the risks exceeded the rewards.
I believe the decision to abort Briza’s funding is the correct decision and is a positive step for Prime. We will attempt to work out a settlement with Briza that is equitable and fair for both Briza and Prime. Settling equitably with partners creates good business “karma”! Now let’s talk about Target.
I spent the last week working with Target and I am more encouraged than ever. Anyone who has worked in Telecom knows that attempting to start an international long distance company with tier one carriers is a multi million dollar investment—assuming that the principals have A+ contacts in that space. With Target, we have accomplished that with a very small investment. As you know, Target did $86,000 in revenues the first month of operation! We are on track to do between $120,000 and $130,000 this month. We are growing daily and adding new customers regularly. Last week we finished the acquisition of additional network access equipment and that was not easy, but we did it. This will allow us to do up to 40,000,000 minutes per month. When at capacity, the revenues from this equipment are anticipated to be in the $500,000 to $600,000 monthly range.
We hope to need additional equipment this summer. The equipment is presently being configured in Houston and will be operational in about 2 weeks. Target has an office in Boca Raton, Florida and will have full office capabilities in about 10 (ten) days.
As I have said from the beginning, this opportunity (Target) literally “fell into my lap” and we are very fortunate to have a majority interest in this dynamic and very profitable business.
Finally, I am still trying to build an infrastructure with Prime. I am taking it very slowly to keep costs low. I am not on payroll—no one is on payroll. I pay those who help on a contract basis. I am hoping to have health insurance soon—but as of yet, I have not added any costs to our operation.
I receive between 150 and 250 e-mails per day and I try to answer them all. You shareholders are the heart of our company and I want you to understand the struggles we have endured and now that things are moving in a positive direction, I want you to share the joy and relief I feel with turning our company around.
Again, I did not do this alone. I have received help from many people—people who went without any pay for years simply because they believed in me and in our company. We will be successful. We will overcome all odds—and if that means cutting off funding for a subsidiary because it is not in the best interest of the entire company, I will do that. I am not afraid to make hard decisions.
In the end, we will win because of determination, perseverance, great partners, excellent shareholders, hard work and good solid opportunities that bring revenues into our company.
With respect, Tom Aliprandi
Letter from the CEO - May 20, 2004
Dear Valued Shareholders:
Here is the CPA's review of Target's first month's revenues. This CPA review of Target's first calendar month's revenues is the first of our regular monthly reports that will be posted on our webstie for your review. Kindest regards, Tom Aliprandi Elizabeth A. Dunn, CPA, P.A. Certified Public Accountant 3351 N.W. Boca Raton Blvd. Boca Raton , FL 33431 May 19, 2004 Target Communications, LLC 40 SE 5 th Street, Suite 500 Boca Raton, FL 33432 Subject: April Revenue Announcement Dear Sir or Madam: Our Office has been engaged to perform a limited procedure of the revenues for Target Communications, LLC. (http://www.targetusa.net). We have reviewed the revenues for the month of April 2004. Our procedures were limited to:
• Reviewing original sales invoices for the above period.
• Review client financial records to reconcile revenues.
• Subsequent cash collection of revenue.
Based upon the above procedures the April 2004 revenue is $88,343.29. This review reflects the total minutes for period April 1, 2004 through April 30, 2004.
Very truly yours,
Elizabeth A. Dunn, CPA, P.A.
Letter from the CEO - May 25, 2004
Dear Supportive Shareholder,
As we approach the end of May I want to let you know how well Prime is succeeding as a company, update you as to its progress in the marketplace and reassure you of its steady progress toward profitability.
This has been an eventful May. Looking at the businesses we now have and manage, and juxtaposing their current revenues and future revenue potential against our capital investments, we are progressing quickly toward our goal of sustainable organic growth while maintaining capital efficiency. We made a tough decision this month with regards to Briza. It was clearly a mathematical decision. We reduced our risk with very little loss. With a limited amount of growth capital available to us, it is critical that we use this capital to invest in and develop businesses and opportunities that have a clear and fast path to consistent revenues. This is the simple litmus test we must employ when we make decisions regarding Prime’s capital, time and management investments.
The business model for PrimeHoldings is clearer and more refined today than it has been for the past five years. Our focus is now on revenue productivity from a limited cost basis. This is where Prime is headed. Our goal is to boost return on investment, quickly, efficiently and exponentially!
In the past, Prime had a successful subsidiary that taught us many valuable lessons that we now employ in the way we approach our present business holdings. Prime invested virtually all its available investment capital into this subsidiary, because it was the only subsidiary that produced consistent revenues and seemed to have a capital efficient business model. While annual sales hit over $1.8 million in a relatively short period of time, the business was capital intensive because it required additional infrastructure and on going capital infusions.
In most businesses this is the norm but in a public holding company environment the infrastructure must support significant growth to provide dividends. Soon, the revenues curtailed when we could not invest the capital required. Target and BusBoy do not fit in this mold; they fit perfectly into our new model—sustained growth and revenues (Target had revenues the first day it commenced business!) with fixed investments exclusive of costly infrastructure additions.
Target will continue to grow with limited personnel additions. We may need to buy another new access server (switch) this summer, but this is good. It will mean that our business has outgrown our current equipment capacity. A new access server is purchased, configured and then managed by the same small group of employees that manage our current equipment.
Target’s business grows and new customers are added without requiring significant infrastructure expenses. And, as you have seen from our press releases, this is a regular occurrence!
Busboy is configured in the same model. We will soon have two full-time employees and one part-time employee. We may need to add one or two more salespeople and installation service personnel to our roster, but that is about all we will need. The software is done and working. Our current team can install and manage our customer base. As this business grows—we have some great news coming very soon in that regard—the revenues will grow without increased capital requirements or escalating infrastructure demands. The immediate goal for BusBoy is to have premier installations in place that lend credibility across diverse verticals within the hospitality restaurant industry. With Panini’s Restaurant online we have the “best new restaurant” in Salt Lake as our first premier restaurant installation. We hope to have two more premier installations in two different verticals prior to our first exhibitor show in June. Our financial business model has evolved to provide a greater “up side” for Prime. We charge a monthly base fee to each customer and charge a percentage of the savings our products help the customer realize. The percentage payment is based upon variables that differ from customer to customer. This should give Prime a very healthy return on its Busboy capital investment.
That is the state of the company this May 2004. We are progressing and improving. We have some great people working with us and we hope soon to be able to make them employees; however we will always run “lean and mean.” Slowly but surely we continue to eliminate our debts with the creditors who hung on and worked with us. I have great hope and confidence in what we are doing and the decisions we are making.
As you know, I try to respond to every question and request you address to me. It is sometimes hard because we have a large shareholder base and I am inundated daily with questions and requests. But my management style has become much more “hands on” and that trend will continue. I look forward to a great end of May and a better summer quarter this year and would again, like to thank you for your continued support.
Without your support and faith in me we could not have accomplished any of this . . . period.
Respectfully,
Tom Aliprandi, CEO
Letter from the CEO - June 15, 2004
Dear Valued Shareholders:
Here is the CPA's review of Target's May 2004 revenues.
Kindest regards, T
om Aliprandi
Elizabeth A. Dunn, CPA, P.A.
Certified Public Accountant
3351 N.W. Boca Raton Blvd.
Boca Raton , FL 33431
June 15, 2004 Target Communications, LLC
40 SE 5 th Street, Suite 500
Boca Raton, FL 33432
Subject: May 2004 Revenue Announcement
Dear Sir or Madam:
Our Office has been engaged to perform a limited procedure of the revenues for Target Communications, LLC. We have reviewed the revenues for the month of May 2004. Our procedures were limited to:
• Reviewing original sales invoices for the above period.
• Review client financial records to reconcile revenues.
• Subsequent cash collection of revenue.
Based upon the above procedures the May 2004 revenue is $110,127.17. T
his review reflects the total minutes for period May 1, 2004 through May 31, 2004.
Very truly yours,
Elizabeth A. Dunn, CPA, P.A.
June 22, 2004
Dear Valued Shareholders,
As the end of second quarter of 2004 approaches I want to update you with our recent events and developments.
April and May tested our commitment to make Prime a revenue generating, efficient capital growth company. In May we acquired the necessary network capacity to keep up with Target’s growth pattern and maintained BusBoy’s scheduled commercial launching at two upcoming industry trade shows. These last few months have been a graduate class in growth management and leadership. With Target, the capital investment required to purchase state-of-the-art network equipment further establishes Prime’s commitment to sustainable organic growth. We now have our own network. In April we were very close to capacity with current bandwidth requirements. In May, Target managed to squeeze an additional 25% in revenues and bandwidth out of its existing network. Acquiring and developing our own network (facilities based) is paramount to keeping up with growth. This is now done. As the network settles into place we will see increased revenues later this summer.
Many of you have asked questions about Prime’s ownership in Target as well as our continuing involvement (if any) with Briza. I want to answer these questions now. Prime’s capital investment into Target has been significant. It has stretched us to the limits. Many of you have asked what Prime’s equity ownership in Target is and/or will be. As I indicated in the past, our aggregate equity will be determined by our ultimate total investment. Right now Prime has the right to acquire up to 60% of Target’s equity ownership. Right now our investment has accrued about 51% of Target’s equity.
As Target grows, Prime may be able to acquire a slightly larger part of its equity ownership by providing growth capital. Please be aware that this ownership percentage could change to further benefit Prime by assisting Target in acquiring stakes in other telecom entities.
As for Briza, I have been speaking with Briza’s CEO and discussing a proposal made by Ashlin Capital’s CEO that would allow Prime to reconsider its involvement with Briza. You may recall that I was concerned that Briza’s capital requirements might have outstripped Prime’s then available resources. But an Ashlin Capital financial analysis of Briza that I initiated has convinced me that there can be a very significant revenue upside with Briza. Additionally, to protect Prime’s capital limitations, I decided to have Briza raise its own growth capital by merging Briza into our TimeMarker subsidiary, and spinning it off as its own public entity. The new TimeMarker-Briza company will then raise its own private/public capital to complete the deployment of the Briza network in Brazil.
Because of his continued, unpaid support of Prime, I have asked the CEO of Ashlin Capital to serve as the Interim Chief Financial Officer of the new TimeMarker-Briza entity to facilitate the capital raising and the deployment of the Brazilian network. Those of you that were shareholders when we approved the TimeMarker spin off last year will receive a stock dividend. I want to do the same for newer shareholders also. I am not yet sure what form this will take, but I will propose a formula shortly.
This, I believe, is an excellent solution that allows all of Prime’s shareholders to benefit from the revenue possibilities of Briza. As for Busboy, things are progressing quite well. We are attending a trade show this week.
For those shareholders interested in attending the Orlando Show in October we have a limited amount of passes that we could provide you on a first come first serve basis. We have several large contracts ready to finalize in the coming weeks. With Busboy’s new pricing structure we expect these contracts to bring exceptional revenues into Prime.
As always, I appreciate your support and confidence. These last few weeks have been taxing; but we have some exceptional opportunities in front of us and we intend to exploit these for the benefit of Prime and all of you, its shareholders.
Kindest regard,
THOMAS ALIPRANDI
Elizabeth A. Dunn, CPA, P.A.
Certified Public Accountant
3351 N.W. Boca Raton Blvd.
Boca Raton , FL 33431
July 18, 2004
Target Communications, LLC
40 SE 5 th Street, Suite 500
Boca Raton, FL 33432
Subject: Jun 2004 Revenue Announcement
Dear Sirs:
Our Office has been engaged to perform a limited procedure of the revenues for Target Communications, LLC. We have reviewed the revenues for the month of June 2004. Our procedures were limited to:
• Reviewing original sales invoices for the above period.
• Review client financial records to reconcile revenues.
Based upon the above procedures the June 2004 revenue is $35,762. This review reflects the total minutes for period June 1, 2004 through June 30, 2004.
Very truly yours,
Elizabeth A. Dunn, CPA, P.A.
Letter from the CEO - July 29, 2004
Dear Valued Shareholders,
It’s that time again -- between press releases and shareholder letters – wherein we have generated not only a lot of questions but also abundant speculations.
Here are the updates and information you deserve---information that will answer some of your questions and clarify various issues. Target’s accountant-reviewed numbers are prepared for internal purposes and posted on our website to keep you better informed as to Target’s progress and growth. As soon as the accountant, Elizabeth Dunn, provides us with the completed review we post the review to our website—no sooner, no later.
We anticipate that Target’s June numbers will be posted today or tomorrow. While Target’s revenues decreased sharply in June, it was expected since our former primary provider’s network was down for much of June. Also, as you may recall, we purchased additional network equipment (an access server, etc.) and now officially control our own network with connectivity from LA to NY and NY to Mexico through our network in Houston.
However, it took considerable time to configure the equipment, especially with a limited budget. During this time we were presented with a very challenging situation. While using our initial shared network, we managed to maintain and control capacity even when capacity neared its limits. Target’s underpaid and over worked engineers managed to stretch our capacity and extra 25% in May, thus allowing us to grow in spite of our limitations. With new customers coming on we were forced to purchase our own equipment sooner than expected.
We intended to finance the access server over time, but we were required to acquire it last month—at a cost of $211,000.00. This challenged our meager resources to the limit.
Here is our present problem: Since we were forced to set up our own network in June, we must be able to keep up with the necessary growth financially. As we began to migrate customers from our current network as well as add new customers, our termination fees to Mexico exceeded our financial capabilities. Please understand that this is a good problem-- but a challenge just the same. The Mexican carriers requires that our partners in Mexico to prepay their telecom services. So, when we are billed by them (our partners) it is to pay them for prepaid expenses; and thus we have virtually no “grace” payment period. We receive a billing and we are expected to pay it immediately.
Paying our termination fees quickly ensures good relations with our Mexican partners. Because we could not pay as quickly as require in June, and in an effort to protect Target’s name and prevent client downtime, we were forced to place traffic with other carriers. We are now sending those revenues to another carrier. This is very frustrating. We must fix this going forward by increasing our investment capital on a more regular basis.
BusBoy had a brilliant showing at its first commercial launch at the recent Dallas Trade Show--- signing up 264 new clients! We expected to come away with a handful of new clients, but we did not expect sales to explode in 3 days! With this initial unexpected success, BusBoy has attracted numerous publication interviews, requests from vendors, magazines and trade journals and in inundated with requests for proposals from potential third party customers. Clearly, we are going through some growing pains trying to keep up with growth and opportunity with both companies right now; hence, Briza remains in the wings as we strive to keep each business moving forward with minimal capital available from the public market.
Allow me to clarify some major issues with regard to corporate funding, priorities and commitment to increase shareholder value.
First, the past successes, failures or varied interpretations of such remain in the past. I will not compromise Prime’s future by reliving past experiences. I will and have learned from past successes and mistakes and hope the mistakes are not repeated. I refuse to “conduct autopsies” to find blame or point fingers. It serves no purpose. I will be happy to address any clarification with regard to historical events in Prime’s past if it can serve a positive purpose for Prime and its current business and future success.
Second, with that said, here is where we are: Since authorizing the increase of authorized shares earlier this year, our goal was to raise the 1 million dollars through the public market via the ever disappearing 504 exemption rule. With a million dollars, we felt we could achieve profitability with our subsidiaries and possible look to add other companies or opportunities to our parent company. This has been my absolute focus, purpose and ardent commitment—to keep the capital at a sufficient level to grow our businesses. Our growth has exceeded our expectations and the capital has not kept up with expansion. The majority of our efforts are in finding the next traunch of capital, just to maintain our growth curve. This eats up the majority of our time and impedes our ability to help manage and promote growth. We need a better and more constant source of capital—immediately. When we reconfigured the company last year and put our business plan into action, it was not as important to know what was on the agenda as much as who will help manage the business and support the growth expected.
Right now, Target is operating with (3) full-time and (2) part-time employees-- none of which is on payroll. Target’s 2 executives are taking the minimum of $250.00 a month in order to qualify for their self-paying health insurance.
At the same time they have brought to our company more than $2 million in leveraged equipment to help us get a jump start in revenues from day we opened Target’s doors for business on March 19, 2004.
BusBoy employs (2) full-time employees and (1) part-time employee—none of whom is on a steady payroll. And finally, Prime has (2) employees and (1) advisor who also do not receive any regular or steady payment. What little money I am able to pay to these fine people is far below what they deserve and have earned.
This has now has to change—immediately. We have built (2) great companies with outstanding infrastructures that have proven so far to be more than just viable business ventures—they are companies that can grow and dominate niche markets. Target was on a $1 million run rate in its second month in business; and BusBoy has hit great numbers within the last eight months. It is impossible to keep going as we currently are.
We need to change to keep these businesses flourishing. We need to operate like a real company—with employees that get paid every month and a support staff that helps manage and grow the infrastructures. It is obvious that we have assembled a team of great people who can produce results. We now must come up with a solution to compensate and reward them—just like all businesses in America compensate and reward their executives and employees.
Incent an employee and you get results. We have gotten exceptional results without the incentive (or even compensation) to our people—but this cannot go on any longer. Please understand what has been done by this incredible team of people. What has been their collective motive? They want to help us build something greater than themselves.
They have gone without pay, stock, stock options, health benefits and the security of what next month could bring—and have done it for almost 2 years. These people are relentlessly disciplined at confronting the brutal facts of their current realities and prevailing in their business challenges. This is the team to move us forward. The only solution is to fix our capital structure so that we can attract responsible and well-capitalized investment partners that can help us manage the growth by capitalizing our efforts.
I have the investment partners all in place—we just need to bring our structure back to a manageable realm and move forward. Once this is done, our stock will be stronger and we not just keep up with our growth, we will accelerate our progress and manage our own future; thereby becoming masters of our own destiny and not slaves to our past fiscal inadequacies.
So, I ask for your suggestions—what is the best course to take? How do we correct our corporate structure so that we can attract the capital we need to fund our explosive growth? As you all know, I will do what I firmly believe is in the best interests of our company and you our loyal and enduring shareholders.
With respect,
Tom Aliprandi
Letter from the CEO - July 29, 2004
Dear Shareholders,
I did not plan on writing a letter this week, but with the overwhelming support and voluminous responses I received to my last letter, I want to thank you. While I have received advice from some incredible business mentors, it was important for me to have your opinions about our current course of action and future capital requirements and sources. Many of you responded and have been very supportive. We may need to do some challenging things to correct our capital structure, but I believe that it will be in best interests of our company—in the short and long-term. The hundreds of you who have responded have been incredibly encouraging in helping me find the correct solution.
A few of you have indicated that I may have been irresponsible with investment capital and that I am taking a “fat salary.” Nothing could be further from the truth. Please understand, the money we have raised—has virtually all gone to our subsidiaries, Target, Busboy and a small amount to Briza. Without sounding as though I am feeling sorry for myself, through these past three years, I have not taken a salary. I have paid minimal bills when we had any money. I lost my stock, my car, my home, my property and most of my toys. I have been “lean and mean” for over 3 years now and I cannot do it any longer. I am not saying this to impress you but to impress upon you that I have maintained a consistent focus towards preserving one thing---our company.
I need to be able to finish capitalizing our subsidiaries as they are our future and I need to start paying those people who have helped over the years with little if any compensation. Also, it is important for you to know that we were unable to raise the full $1 million from the market. Clearly, the investment capital raised is not enough to see both Target and BusBoy through to profitability. It is my opinion that BusBoy will provide steady growth throughout a variety of hospitality verticals. While demand for this service remains high, implementation demands and commitment to our initial group of clients remains paramount. Thus, over the next few months our likely focus will be more on servicing the existing clients rather than generating new ones. This should become interesting in light of the fact that more shows are on the immediate horizon. Some of you have questioned the experience and planning of our Target management group.
The target managers have over 50 years experience in telecom. They have superior contacts in the industry and are ready to grow our business quickly. It is important for all of you to understand that it would cost a start up telecom company about $4-5 million to have the equipment and infrastructure that Target has. We have leveraged this for less than $500,000. Now, we have our own network infrastructure in place. If we are able to adequately carry network costs, termination fees and billing cycle revenues for 30 and 60 day periods then we should resume the dynamic growth pattern we initially experienced and achieve profitability quickly.
As I said in my last letter, we need to be a real company again, with employees, offices, payroll, stock options for key employees and the capital to grow and expand. At the same time, we must continually pay down debts with our long time creditors. So, I thank all of you for your great collective vote of confidence. We must move expeditiously to get our capital structure back to a position that we can take advantage of the public markets and fund our growth. Presently we have a few options before us that may serve this purpose well.
We have such great potential—we are literally inches away from huge successes with Target and Busboy. I appreciate and respect all of you and want to make your investments in Prime worth every cent!
Respectfully,
Tom Aliprandi, CEO
Elizabeth A. Dunn, CPA, P.A.
Certified Public Accountant
3351 N.W. Boca Raton Blvd.
Boca Raton , FL 33431
August 18, 2004
Target Communications, LLC
40 SE 5 th Street, Suite 500
Boca Raton, FL 33432
Subject: July 2004 Revenue Announcement
Dear Sirs:
Our Office has been engaged to perform a limited procedure of the revenues for Target Communications, LLC. We have reviewed the revenues for the month of July 2004. Our procedures were limited to:
• Reviewing original sales invoices for the above period.
• Review client financial records to reconcile revenues.
• Review subsequent Cash collections of accounts receivable.
• Review of Revenue/Minutes billed volume.
Based upon the above procedures the July 2004 revenue is $ 69,378. We noted that the minutes billed during the month of July rose to 6,267,150 from 3,532,024 in June 2004. This review reflects the total minutes for period July 1, 2004 through July 31, 2004.
Very truly yours,
Elizabeth A. Dunn, CPA, P.A.
Letter from the CEO - August 20, 2004
Dear Valued Shareholders,
I want to write a short letter with some information and a promise of a more detailed letter soon, once everything is in place. We stand at the most important crossroads in our company’s history. We face the challenges of a significant transition but have great hope that the structural changes we are enacting will serve as a springboard to larger revenues, more consistent capital investments and, as always, far greater shareholder value.
I will update you soon on Busboy and its progress in fulfilling its contractual obligations and I will share with you the new sales channel that recently opened up. I will bring all up to speed with regards to Target. After a slight lull in June and July—caused by capital constraints--August looks to be our best month this year, with amazing projected gross revenues for the fall. In fact, Sunday August 8th was our biggest revenue day this year with sales of $5,124.82. We are looking to outstrip our fiscal projections and end this year with a bang!
We have incredible news that we will put out once the capital structure reorganization is finished. We have had to make some hard decisions, but I know that everything we have done and that we will do is the best for our company and for its committed and patient shareholders. I will give greater details and more information in my next letter.
Sincerely,
THOMAS ALIPRANDI, CEO
Letter from the CEO - August 20, 2004
Dear Valued Shareholders,
I want to write a short letter with some information and a promise of a more detailed letter soon, once everything is in place. We stand at the most important crossroads in our company’s history. We face the challenges of a significant transition but have great hope that the structural changes we are enacting will serve as a springboard to larger revenues, more consistent capital investments and, as always, far greater shareholder value.
I will update you soon on Busboy and its progress in fulfilling its contractual obligations and I will share with you the new sales channel that recently opened up. I will bring all up to speed with regards to Target. After a slight lull in June and July—caused by capital constraints--August looks to be our best month this year, with amazing projected gross revenues for the fall. In fact, Sunday August 8th was our biggest revenue day this year with sales of $5,124.82. We are looking to outstrip our fiscal projections and end this year with a bang!
We have incredible news that we will put out once the capital structure reorganization is finished. We have had to make some hard decisions, but I know that everything we have done and that we will do is the best for our company and for its committed and patient shareholders. I will give greater details and more information in my next letter.
Sincerely,
THOMAS ALIPRANDI, CEO
Elizabeth A. Dunn, CPA, P.A.
Certified Public Accountant
3351 N.W. Boca Raton Blvd.
Boca Raton , FL 33431
September 17, 2004
Target Communications, LLC
40 SE 5 th Street, Suite 500
Boca Raton, FL 33432
Subject: August 2004 Revenue Announcement
Dear Sirs:
Our Office has been engaged to perform a limited procedure of the revenues for Target Communications, LLC. We have reviewed the revenues for the month of August 2004. Our procedures were limited to:
• Reviewing original sales invoices for the above period.
• Review client financial records to reconcile revenues.
• Review subsequent Cash collections of accounts receivable.
• Review of Revenue/Minutes billed volume.
Based upon the above procedures August 2004 revenue rose to $115,454 in August from $69,378 in July. The minutes billed during the month of August continue to rise to 10,810,613 from 6,267,150 in July. This review reflects the total minutes for period August 1, 2004 through August 30, 2004.
Very truly yours,
Elizabeth A. Dunn, CPA, P.A.
Letter from the CEO - September 17, 2004
Dear Valued Shareholders,
It is that time again--to update you with the recent happenings that affect your company, Primeholdings.com, Inc. I know and understand that some of you have not been tracking my letters of late and were surprised on September 8 th when your brokerage account showed 1/100 of your previous Prime share holdings.
Please recognize that I intended through my past (3) letters, to share with all shareholders, intimations as to what we needed to do with our capital structure and why. I never used the phrase “reverse split” so as not provide the shorters any useful conclusive information. We have had many shorters lately playing havoc with our stock.
I was confident that most of you understood what I meant when I said that there was a need for “corporate restructuring.” I was relieved when virtually all of you responded to me positively with understanding resolution --- your responses and support paved the way to helping us straighten out our capital structure. Please understand, a reverse split was never the desired directive, but given the market situation and our need to keep the revenues growing, it was an immediate necessity for many reasons. With so many shares outstanding, our ability to raise money was not only hampered but we also lost funding opportunities because of the sheer numerosity of our outstanding shares.
Thank you to all those who helped me get the job done. Here are the realities. We have not taken in any appreciable funding from 504 stock issuances since June. It has been very challenging to keep (2) growing companies stable for (3) months without any funding. We had a small $10,800 funding placement in early August that barely kept us alive. As stated in my last letters, no one in the company is on payroll, no one has health insurance and no one has been issued any stock, including me.
I turned all my stock in months ago to help raise funds for Target and Busboy. We have built these companies on a literal shoestring. None of these capital deficiencies has changed--but must and will change quickly.
But first, let me update you as to our subsidiaries’ present situation and future outlook. Let’s start alphabetically--with Busboy. Recently, we had another successful show in Los Angeles at the Western Foodservice & Hospitality Expo. While this show was an entirely different type of exhibition than the recent show in Dallas, conservative estimates have us attaining approximately 325 to 385 new installations. While Dallas had many individual client installations, the LA show provided “groups” of multiple installations. This is why it is more difficult to access totals accurately. As the next few weeks unfold we will have more precise numbers. Some groups that signed on had (2) restaurants while some had (40) and even (100) locations. We also were fortunate do initiate (2) joint venture opportunities with point-of-sale hardware providers.
The scenario could play out with us providing the back office ASP software model to their existing customer bases, while introducing Busboy and its suite of products as a full-service “one stop” partner to prospective clients.
Next week we are also meeting with our potential Casino client for the second time. We remain optimistic that this will be our first Casino installation. Also, please note that we have another BusBoy Show in October in Orlando. We welcome your attendance. Please notify BusBoy at sales@busboytech.com by October 18, 2004 so we can provide passes. We will likely have management from all three companies in attendance to answer any questions. Please visit the BusBoy site and look at the new additions of industry news, headlines and client log sections for your information and updates. www.busboytech.com .
With Target, our revenues and prospects continue to grow despite capital restraints. Recently the company was notified by one of its clients that it had been put into first route choice for carrying Telco traffic into Mexico. This client happens to be a billion dollar multinational telecom company and their minute traffic should sharply increase with us over the next few months.
Congratulations to the Target management on a job well done, despite the hurricane in Florida and all the challenges that came with this drastic and inclement weather! Target also increased its telecom route portfolio by adding the Dominican Republic, Somalia, Thailand, and Cuba.
Please note that our revenues have been reflecting a low cost per minute, primarily to Mexico. With these new routes the RPM (revenue per minute) increases significantly.
This will soon be reflected in considerably higher total revenues for Target. Please be aware that we are also working with a local funding group to provide equipment and receivables financing to liberate us from market dependence. Target management will also be attending, not exhibiting, at next week’s Telecommunications Convention in Las Vegas. Again please understand that our management teams from Primeholdings, Target and BusBoy have tirelessly sacrificed a steady income, health insurance, typical corporate benefits and ownership in shares to provide Primeholdings the best possible chance for survival. Just imagine what it’s like to receive minimal funding and then have all involved agree to put the lion’s share back into the company rather than pay their personal expenses. This weighs heavy on my conscience and psyche. In addition to no pay and no benefits while all the time increasing performance demands and fiscal expectations, two of our principals signed personally (provided personal guarantees) on a significant loan to pay our termination fees to Mexico last month. This got us back on track with revenues for both companies.
Again, these additional sacrifices occurred when we were unable to take out adequate funding from capital markets. I thank you, our shareholders, for supporting us and our management team and personnel from both our subsidiaries who have sacrificed for the greater good and whose vision of the “big picture” created the many opportunities we now have. We have the most incredible team and I can’t wait to soon introduce everyone to you in the very near future.
Kindest regards,
Tom Aliprandi
October 7, 2004
Dear Valued Shareholder,
As we approach the last quarter of 2004, I would like to update you with detailed information regarding various events and the accomplishments of Prime.
It was a challenging third quarter and the vital need to provide adequate growth capital proved to be the biggest challenge. While no one in the company received a payroll check, we were able to maintain the integrity of our network capabilities with Target and manage the migration of data to BusBoy’s ASP platform. Please understand that since the first quarter of this year our plan was to generate capital efficient growth while continually driving revenues…period. It is my firm opinion that this is the only clear path to sustained organic growth. Then and only then, will share value be accurately reflected.
It must also be acknowledged, that we were unable to extract sufficient capital from the market. This is the reason why we are public; to raise capital thereby enabling us to execute our plan…period. This critical issue is the main reason why we had to restructure Prime. The lack of cooperation from the capital markets made it necessary for two (2) of us to personally guarantee a good amount of the capital necessary to keep on track with growth.
I hope you recognize the level of commitment we all have for getting Prime to profitability. There is no benefit to killing our stock value, at least not for those of us who have sincere intentions. There is a critical balance that must be achieved between share price, trading volumes, and capital needs. This balance coupled with the strict SEC guidelines that place limits and restraints on our abilities to properly capitalize a company – regardless if it’s a rapidly growing company like Target – present difficult challenges for us.
While we are well aware of the true value of the company and its shares, we continue to be at the mercy of the market. For example, last week we were capable of extracting only $3,200.00 from the market. This is due directly to the lack of “market awareness.”
Going through the exercise of trying to divide that up amongst the leaders of each strategic business unit and pay for upcoming flights can be enlightening. I think you get the picture.
Now let me share with you the good news. BusBoy continues to add new customers while continually migrating data from clients to our newly upgraded server and enhanced ASP software platform. We have also started billing customers who have begun using the platform. These clients/customers are those who have all their necessary data entered to the system and can now take advantage of the BusBoy services. I am projecting that by late October to early November we will start posting revenue results, goals, and forecasts. BusBoy will again be exhibiting their wares at the upcoming FS/TEC www.fstech.com from October 25th to the 27th in Orlando, FL. If anyone would like to come visit and get passes, please kindly notify us by the 8th of October. There has been a tremendous amount RFP, s (request for proposals) from large distribution channels that would like to introduce the BusBoy services to their clients. This was due in large part to the last show’s exposure, advertisements, and editorial coverage. BusBoy is getting very busy!
With Target, the revenues continue to grow at an amazingly aggressive rate despite being undercapitalized. The management’s experience and knowledge of their craft is clearly what kept us not only alive, but also growing. It’s important to note that Mexico has perhaps the most complex telecommunications system in the world with regards to dialing plans to its various cities. While it is the most called country from the USA, it presents serious challenges to carriers who route traffic into the country. This is both good and bad, but for Target it represents an opportunity. Specifically, many cities in Mexico have several carriers in the same area code and this creates the need for the US carriers equipment to recognize city destinations all the way out to the ten (10) digit level, whereas normally you would only require three (3) digits to route the call to the NIR (area code). Few carriers have the ability to route traffic to such an extent as it takes tremendous amount of memory and costly SCP’s (Signaling Control Points). Target has these systems in place and is able to capitalize on its abilities to perform these enhanced functions. I only wish that I could make everyone understand as I do, the value of the assets and resources Target has in place today, and the amount of revenue it can generate without investing another dollar in equipment.
Conservatively, the company could grow to $12M in yearly revenues without any further investment in equipment or infrastructure. Target, in my opinion, with adequate capitalization, is about to explode. I say that for a variety of reasons. For one, our business revenues up to now have been based on low cost high volume Mexican traffic. We have just added more routes to higher revenue per minute countries. The rates per minute to these new countries are dramatically higher. As recently as today, these routes have been tested and approved for accepting traffic from newly added customers. Please note that some of these customers are billion dollar multinational companies who demand the quality network services Target provides. I hope that you can sense the excitement and urgency I feel with regards to these opportunities. It is time to take Prime to the next level and in order to do this we must remained focused and act swiftly with great determination. In the coming weeks I will be raising capital, issuing shares to directors and officers, and getting employees on payroll and health insurance. These measures are extremely critical as they are the key component to keeping this company on the aggressive growth curve it currently enjoys. We must keep this train rolling! Thank you, valued shareholder, for taking the time to read this update and I sincerely hope that you have come to understand how challenging it has been for all who have been involved with Prime’s road to recovery.
It is difficult to put into words the passion and gratitude I have for those who have helped, without steady pay, stock, or even health insurance. The psychological and emotional stress these situations bring on can be overwhelming to say the least.
My personal advantage has been that I have gone for so long without that “security” I almost don’t know any other way. These folks have clearly believed in Prime and what they are capable of doing and you have showed them the power of your support and faith in me. We truly have some of the most incredible people I know helping us to succeed. They are clearly, team players.
I thank you for your continued support and please know that I will continue to do everything in my power to bring value to you in return. I will continue to update you on our progress and achievements. On a side note, I would like to thank my brother for helping me finally get some transportation after losing my car January of ’03. I am not living “high on the hog”. My “new” car—for those who have been wondering--- it is a 1994 Jeep Cherokee with 178,000 miles on it, but hey…it works…for now.
With much respect,
Thomas Aliprandi, CEO
Letter from the CEO - July 20, 2005
Dear Valued Shareholder,
I am writing this letter to inform you that Primeholdings has once again reached a crossroad which requires our utmost consideration. Over the past fifteen months we achieved revenues in excess of $2.75 million despite being grossly undercapitalized. It’s not hard to imagine what could have been accomplished had the company been properly funded. I never thought we would ever have a problem with "growth funding" through the Pinksheets as long as we had revenues. On a few occasions our annualized revenues were 7-8X that of our market cap which is remarkable. We find ourselves in a situation whereby it is impossible to adequately fund the company solely through the Pinksheets. Even with steady revenue announcements, consistent growth for a year and half, and the proven track record of Target's management, the stock failed to reflect our true value. The Pinksheets are clearly not designed to facilitate growth for companies with our revenue/business model.
We are now contemplating other avenues by which to achieve our objectives. Over the last few months we have been in the process of obtaining funding for debt restructuring through unique means via the banking community. Once completed, this will facilitate the restructuring of our debt load thereby alleviating some of the current financial pressure. Because of the inability to properly fund the company through the Pinksheets, we were forced to cut back on our aggressive revenue drive. This was mainly due to the imbalance between the credit terms extended to us by our foreign partners/providers as compared to those we are required to extend our upper tier customers. The cumulative monthly cash flow deficit this created, together with the modest losses associated with a start-up, makes the situation unmanageable.
The immediate goal is to set up funding arrangements that will facilitate growth to profitability without the dependence on the Pinksheet market. Recently, we have been presented with two very strong and favorable deal sheets from very reputable groups in the investment banking community. One of the firms manages over $400 million in equity investment capital and represents approximately 10% of the “PIPE” (Private Investment in Public Entity) market. The one stipulation required to bring this to fruition is that we must be a full-reporting company. Our immediate reaction to this requirement was that to get the company to a full-reporting status in a short time is a very tall order. After further consideration and subsequent discussions we found that this in fact could be accomplished via an existing full-reporting OTC-Bulletin Board company that has been made available to us by an old friend and valuable ally of Prime.
The process would begin with the acquisition of the full-reporting company. The new entity would then acquire the assets of Target Communications. As payment for those assets, stock in the new entity would then be issued to all shareholders holding common stock in Prime. Implementing this process in such an expeditious manner will allow the investment firms to act much quicker in supporting our capital funding needs. More importantly, this arrangement has no financial limits unlike those imposed in the Pinksheets via 504 exemptions. On a side note, due to our economic prudence, Prime can still raise in excess of $700,000 through its 504 exemption in the current year.
Of special interest to the Primeholdings shareholders is that collectively, they will have majority interest in the new entity, which will then have ownership in Target’s assets. Another exciting aspect of this proposed scenario is that the shareholders of Prime maintain their equity stake in Primeholdings and gain an interest in the new entity positioned to be properly funded because of its public reporting status. Mergers and acquisitions can become a reality and Prime gains credibility leaving the Pinksheets for the OTC Bulletin Board. The opportunities are endless provided we can get this done quickly. Clearly this move puts the Prime shareholders in a much better position to recoup their value while placing Target in much better position to attain its lofty revenue goals.
Henry Ford once said:
Obstacles are those frightful things you see when you take your eyes off your goal.
I have not lost my focus nor desire to make our company prosper. Despite the obstacles we’ve faced in the way of shorters, bashers, and various other negative forces attempting to impact our good intentions, we are determined to succeed. My eyes remain steady on our goal! Thank you to all that have supported me and the rest of our management team and know that we will continue to work diligently to bring value to you all.
Kindest regards,
Tom Aliprandi, CEO
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