***New HotPennyStocks.com Profile***
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- Date: Wed, 24 Apr 2002 22:32:26 -0400
Dear Members,
This company is starting to show people that they have something to prove.
Elite Technologies recent accomplishments are indicative of what the future
could hold for this rapidly developing and expanding gem. The way this company
has been able to change product lines, acquire companies, then integrate what
they have put together into a wonderfully synergistic entity has astonished me.
I have always thought that the best way to grow a company and build shareholder
value was through the acquisitions of already established companies, when I
read about what ETCH has accomplished, this is exactly what I mean. The
efficiency in which ETCH did this is truly amazing, and what a success it
turned out to be! By virtue of Elite’s aggressive acquisition pattern,
revenues in Fiscal Year 2001 increased to $13,268,877, an increase of 4,300%
over Fiscal Year 2000. With management like this at the helm, anything is
possible for this rising star.
This is just the beginning of what looks to be a very bright future folks! The
risk/reward ratio is outstanding. Everything looks like it's set in place for
ETCH to take full advantage of all its resources. The sheer potential of ETCH
is enough to blow your mind! If word should begin to spread, I think it'll
spread like wild fire. The word on ETCH will be out before you know it. Good
luck investing tomorrow and as always, Invest With Cents.
***THE BASICS***
Symbol: ETCH
Name: Elite Technologies, Inc.
Company Web Site: http://www.elitetechinc.com
52-week Trading Range: $0.012 x $0.27
Price as of 04/24/2002: $0.019
Bid: $0.0111 Ask: $0.0190
Shares Outstanding: 99.35 Million according to latest 10QSB (02/28/2002)
Shares in the Float: approx. 20 Million
Market Cap: $1.89 Million
Market Stock Trades On: OTC BB
Press Releases:
http://bigcharts.marketwatch.com/news/SymbolSearch/symbolnews.asp?arig=charting&news=comprel&symb=ETCH&sid=147239
Message Board: http://ragingbull.lycos.com/mboard/boards.cgi?board=BB%3AETCH
12 Month Chart:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ETCH&sid=147239&o_symb=ETCH&x=7&y=15
***ABOUT THE COMPANY***
Elite is a technology company primarily focused on the hardware distribution
and communications sector of the technology industry. Through its subsidiaries,
Elite offers information technology ("IT") products, services, and solutions to
small, medium and large enterprises. Elite seeks to generate growth through
strategic acquisitions, increased sales, and operational efficiencies achieved
through centralization and standardization of its subsidiaries’ business
procedures .
From 1998 until 2000, Elite offered a variety of IT services, including IT
staffing, custom software development and integration, Internet hosting,
content and technical development, hardware sales and service, and content
delivery platforms. Elite also served as an authorized solution provider and
application developer for leading enterprise-level software products. During
this period, Elite expanded its products and services through targeted
acquisitions and internal growth.
As part of its acquisition strategy, Elite acquired AMG in April 2000.
Following this acquisition, Elite suspended most of its other operations to
focus on developing and marketing AMG’s Internet “pay-by-minute” browser
(kiosk) products. As a result, revenues in Fiscal Year 2000 decreased to
$298,230 from $1,937,317 in Fiscal Year 1999. Despite this decrease, Elite
positioned itself to acquire additional companies to augment AMG’s kiosk
products, including companies providing content, hardware and related IT
services.
In line with its stated strategy, Elite acquired International Electronic
Technology of Georgia, Inc. (“IET”), AC Travel, Inc. (“AC Travel”), and
Icon Computer Parts Corp. (“Icon”) in June 2000, June 2000, and February
2001, respectively. IET and Icon distribute hardware through small, mid-sized,
and large resellers, including Sam’s Club in Puerto Rico, a division of
Wal-Mart Stores, Inc. All three businesses were acquired to create synergy with
AMG’s kiosk products and expand Elite’s overall products and services base.
By virtue of Elite’s aggressive acquisition pattern, revenues in Fiscal Year
2001 increased to $13,268,877, an increase of 4,300% over Fiscal Year 2000.
Since July 2001, Elite has acquired World Touch Communications, Inc. (“World
Touch”), a provider of telecommunications products and services including
voice-over IP (“VoIP”), and has incorporated Intelligent Software Solutions
of Georgia, Inc. (“ISS”) and Icon USA, Inc. (“Icon USA”). Through World
Touch, Elite has expanded into the telecommunications sector. Through ISS, a
Microsoft OEM distributor for the Caribbean, Elite has developed a software
distribution outlet. And through Icon USA, Elite has added a domestic partner
to Icon, its Puerto Rico subsidiary.Elite’s objective is to become a leader
in hardware and software distribution and VoIP telecommunications delivery.
Elite intends to grow through strategic acquisitions that create added value
for its existing subsidiaries, increased sales that target burgeoning markets
in Puerto Rico, the Caribbean, and Latin America, and increased operational
efficiencies that reduce costs and increase productivity across its core
businesses.
Elite has suspended operations of Scanlan Music, Inc., Temporary Help
Connection, Inc., and AC Travel, Inc. due to decreased product and service
demand and changed economic conditions. Additionally, Elite has integrated the
products and services of Elevation Strategic Partners, Inc. and Virtual
Enterprises, Inc. into its other subsidiaries.
***INDUSTRY BACKGROUND***
COMPUTER HARDWARE AND PERIPHERALS
Computer hardware sales were, for many years, the core profit center in the IT
industry. The focus later shifted toward software. This shift toward software
put pressure on smaller manufacturers and distributors, until such time as only
a handful of major manufacturers and wholesalers remained. Medium to large
wholesalers and distributors continue to thrive, especially ones that use
hardware provision as an entry into an organization's IT department to offer
additional goods and services.
The worldwide IT products and services distribution industry generally consists
of:
* manufacturers and software publishers, which Elite collectively terms
suppliers or vendors, and which sell directly to distributors, resellers and
end-users;
* distributors, which sell to resellers; and
* resellers, which sell directly to end-users and, in certain cases, to other
resellers.A variety of reseller categories exist, including value-added
resellers (“VARs”), corporate resellers, systems integrators, original
equipment manufacturers (“OEMs”), direct marketers, independent dealers,
reseller purchasing associations, PC assemblers, and computer retailers. Many
of these resellers are heavily dependent on distribution partners with the
necessary systems, capital, inventory availability, and distribution facilities
in place to provide fulfillment and other services. Different types of
resellers are defined and distinguished by the end-user market they serve, such
as large corporate accounts, small- to medium-sized businesses (“SMBs”), or
home users, and by the level of value they add to the basic products they sell.
Distributors generally sell to resellers and purchase a wide range of products
in bulk directly from vendors. Characteristics of the local reseller and vendor
environment, as well as other factors specific to a particular country or
region, have shaped the evolution of distribution models in different
countries. According to a December 2001 IDC report, total worldwide IT spending
on hardware, software, and services was estimated at approximately $996 billion
for calendar year 2001. Despite the current economic downturn that has impacted
overall demand for IT products and services, distribution continues to serve a
significant role in delivering IT products to market in a low-cost manner. The
technology distribution industry has undergone significant consolidation as a
result of several factors. More restrictive terms and conditions from vendors,
reductions in the number of vendor-authorized distributors, a high level of
price competition among distributors, and evolving vendor business models
(e.g., direct selling to a fragmented market) have driven several of the weaker
competitors from the market. During 1999 and early 2000, a number of
significant players within the IT distribution industry substantially exited or
merged with other players within the distribution market. As a result of this
recent consolidation, the U.S. market is served by two major IT distributors
and a number of other smaller IT distributors. Markets outside the United
States, which represent over half of the IT industry’s sales, are
characterized by a more fragmented distribution channel; however, consolidation
has taken place in these markets as well. Additionally, suppliers and resellers
pursuing global strategies continue to seek distributors with global sales and
support capabilities. A number of emerging industry trends provide new
opportunities and challenges for distributors of IT products and services. For
example, the focus on driving efficiency in business models, and, in
particular, in the supply chain, provides distributors with an additional means
to serve both suppliers and reseller customers by becoming providers of IT
supply chain services. Furthermore, the growing presence and importance of
fulfillment capabilities also provide distributors with new business
opportunities as new categories of products, customers, and suppliers emerge.
Data storage products, for example, enjoyed increasing demand with the growing
use of the Internet, data warehousing, and e-mail, and the resulting need for
faster dependable data access and richer content. Finally, manufacturer-direct
sales initiatives, developed in an effort to duplicate the success of the
direct sales business model, have been widely adopted by large suppliers.
Although the manufacturer-direct model may remove distributors from their
traditional role, Elite believes that this direct sales model presents new
partnership opportunities, such as providing logistics and fulfillment services
and third-party products to suppliers and reseller customers. INTERNET KIOSKSAs
a relatively new industry, Internet kiosks provide a specific product to a
specific marketplace. More than just a leisure activity, the Internet has
become a vital link to communications. In many instances, consumers (both
business and residential) have a need to gain access to the Internet while not
at a traditional "desktop computer". Although laptops continue to provide this
service, many instances arise where the convenience of a laptop with a modem
connection is not available. In this case, an Internet kiosk is the solution to
the need. Allowing a consumer to access the Internet, retrieve e-mail, shop,
make travel plans, or even play interactive games online, the kiosk unit
provides inexpensive access to a host of on-line services. Industry analysts
have estimated that the overall number of kiosks sold in the United States will
increase twenty fold from 21,000 in 1996 to 445,000 by 2003.
VOICE-OVER IP (VoIP)
Voice communication is currently conducted primarily through telephone lines
operation by regional telephone companies. Despite substantial competition
among these carriers and their resellers, traditional forms of international
long distance voice communication remain relatively expensive. This heightened
cost is maintained because traditional voice communication takes place over
independent circuits that must be open throughout the conversation. As only one
conversation can be conducted over a circuit, the cost to complete the call is
relatively expensive. Additionally, traditional phone service customers pay a
universal fee and a federal excise tax totaling approximately 15%. These taxes
are not currently required of VoIP or Internet telephony companies.
VoIP stands for voice-over Internet Protocol. It is also called IP telephony,
next generation voice services, converged networks, and XoIP (Anything over
Internet Protocol). Whatever it is called, the basic technology is essentially
the same. In its simplest form, VoIP service involves the conversion of
electronic voice impulses by a speaker into digitized data, which is
subsequently compressed and transmitted over a private network. Upon reaching
its destination, this data is unscrambled and transmitted to the listener. By
sending this signal over a private network, voice data is transmitted such that
conversations can occur in real-time with toll-quality clarity at costs that
are well below those offered by traditional telecommunication companies.
International Data Corporation projects that the Internet telephony market will
surpass $11.9 billion in 2003, up from only $100 million in 1998. Two key
features are driving this growth: first, VoIP’s relative cost-savings;
second, VoIP’s enhanced services, including e-commerce, video, fax, online
customer support, voice-mail, and pages. This “one-pipe, multiple-services”
functionality provides a converged network that delivers significant savings
and performance for small, medium, and large enterprises.
***THE COMPANY'S SERVICES***1. Hardware and Software Distribution
Elite markets computer hardware, networking equipment, and software through
four of its subsidiaries: International Electronic Technology of Georgia, Inc.,
Intelligent Software Solutions of Georgia, Inc., Icon Computer Parts Corp., and
Icon USA, Inc. These products are marketed to reseller customers throughout the
United States, the Caribbean, and South America who in turn market and sell
directly to end-user customers. Additionally, Elite provides supply chain
optimization by assisting its vendors in marketing their products through an
aggregated distribution outlet, providing a value-added compliment to products
that otherwise would be marketed alone.
Elite offers its customers aggregation of, and access to, a broad array of
products and services by distributing and marketing more than six hundred
products from dozens of suppliers, including many leading hardware suppliers,
networking equipment suppliers, and software publishers. Elite's broad product
offering includes:
* desktop personal computers ("PCs"), servers, and workstations;
* personal digital assistants;
* wireless devices;
* mass storage devices;
* CD-ROM, CD-RW, and DVD drives;
* monitors;
* printers;
* scanners;
* modems;
* networking hubs, routers, and switches;
* network interface cards;
* components;
* business application software;
* entertainment software;
* consumer electronics; and
* computer supplies and accessories.
In conjunction with Elite’s distribution business, Elite provide various
services to customers, including technical support, warranty authorization and
approval, and tailored financing programs. Elite is focused on providing a
broad range of products and services, quick and efficient order fulfillment,
and consistent on-time and accurate delivery to its customers around the world.
Elite’s distribution subsidiaries distribute products from leading computer
hardware vendors, network equipment vendors, and software publishers and
include products by companies such as 3Com, Adobe, APC, Cisco Systems, Epson,
Hewlett-Packard, IBM, Iomega, Intel, Microsoft, NEC/Mitsubishi Electronics,
Novell, Quantum/ Maxtor, Seagate, Sony, Symantec, Toshiba, Veritas, View and
View, and Western Digital. Products are generally warranted by the
manufacturers. Elite distributes the products and allows return of defective
products by its customers. Elite does not independently warrant the products
distributed by its subsidiaries; however, it does warrant the following: (1)
its services with regard to products that it configures for its customers, and
(2) products that it builds to order from components purchased from other
sources. Historically, warranty expense has not been material.2. Internet
“Pay-by-Minute” Kiosks
Through its subsidiary, AMG, Elite designs, builds and markets an Internet
"pay-by-minute" browser (kiosk) to various distribution outlets for primary use
in hotels, airports and entertainment establishments. Elite sells a variety of
Internet kiosk units, customizable for their individual application and
environment. Elite markets its kiosks through direct sales, Web promotion
corporate sponsorship programs, and its hardware distribution subsidiaries. The
kiosks not only provide connectivity to the public, but also allow advertisers
and retailers to promote their offerings in an interactive format.
Elite specializes in Internet kiosks that function as public Internet
“pay-by-minute” stations. Elite’s public Internet kiosks have two
separate niche markets: (1) automated business center; and (2) entertainment
access.
Elite’s automated business center provides a solution for business travelers
by allowing them to access e-mail, send or receive a fax, make color copies, or
surf the Internet. The target markets for these automated business centers are
frequently traveled business locations, such as hotels, suites, convention
centers and airports. Payment options include cash, credit cards and optional
coupons to make it easy to meet the versatile needs of today's traveler.
Automated business centers may also be coupled with a unique,
revenue-generating coupon program. A hotel with an advertising kiosk may issue
each guest $10 dollars in coupons to be used at the kiosk. While using the
coupons, a guest is offered various services sponsored by advertisers who pay
for their advertising space on the kiosk. The guest may print out these
advertisements for a small fee or for free, depending on the revenue plan of
the kiosk operator. The kiosk operator, in turn, receives revenues from those
companies advertising on the kiosk. Advertisements may offer directions,
discounts, phone numbers, or other information helpful to a typical business
traveler.Elite’s automated business centers currently offer the following
capabilities:
1. Internet browsing with single click access to stock quotes, news, search
engines, and more;
2. Send and retrieve E-mail;
3. Send and receive fax capabilities;
4. Color copy capabilities;
5. Full screen display advertising;
6. Scroll bar advertising with web site links;
7. Daily usage log of transactions;
8. Automated monitoring of the browser software to ensure the application is
always running;
9. Daily automated re-booting of the automated business center;
10. Password protected operating system.
Elite intends to develop automated business centers with the following
additional capabilities:
1. Video E-mail;
2. Video conferencing;
3. Full screen display advertising with coupon program;
4. Internet usage destination log;
5. Word processing and spreadsheet capabilities;
6. Document editing capabilities;
7. Telephony capability.
The entertainment access Internet terminal caters to restaurants, coffee shops,
turnpike stations, auto service stations, grocery stores, shopping malls,
convenience stores, roller rinks, arcades, movie theaters, and museums. The
kiosk offers over two thousand single-click web sites. The entertainment access
Internet terminal is programmable, enabling custom programming, for the various
sites. It also includes on-line sports books, trivia, car manufacturers,
classifieds and dating services.
3. Telecommunication Services
Elite provides next generation voice solutions to small, medium, and large
enterprises through its recently acquired subsidiary World Touch
Communications, Inc. Built around World Touch’s branded VoiceBay (tm) VoIP
product lines, World Touch offers end-to-end IP services ranging from carrier
connectivity to enterprise-wide deployment. World Touch, a relative start-up in
the telecommunications sector, markets its quality VoIP solutions to
international enterprises seeking to lower their long-distance costs while
accessing the benefits of next generation voice services. Working with its
customers, World Touch develops a customized VoIP model built around one of its
VoiceBay (tm) product lines. Based upon that model, World Touch maximizes a
variety of industry relationships to build a dynamic VoIP package with
excellent connectivity rates and reliable hardware and software platforms.
World Touch’s product lines are grouped into four trademarked categories: *
VoiceBay (tm) Carrier – a solution for service providers seeking quality
connectivity and termination diversity;
* VoiceBay (tm) Enterprise – a solution for companies, government agencies,
and educational communities implementing VoIP at the network center or the
network edge;
* VoiceBay (tm) At Home – a solution for consumers with reliable broadband
access offering softphone and IP phone dialup for low-long distance calls at
amazing rates;
* VoiceBay (tm) First Step – a low-cost, PC-based solution designed to
introduce customers to the benefits of VoIP without investing in additional
hardware.In addition to its VoIP product line, World Touch also offers
customers traditional call re-origination (callback), a service that allows
international telecommunication customers to make low-long distance phone calls
using U.S.-based telephone lines.
***BUSINESS STRATEGY***
Elite’s core business strategy is to generate growth through through
strategic acquisitions that create added value for its existing subsidiaries,
increased sales that target burgeoning markets in Puerto Rico, the Carribean,
and Latin America, and increased operational efficiences that reduce costs and
increase productivity across its core businesses.
Elite continues to seek acquisition targets to grow its business through the
acquisition and roll up of synergistic companies that meet certain criteria.
These criteria include:
*A minimum revenue stream of $5 million annually;
*Profitable or nearly profitable;
*Strong management able to commit for a minimum of three years following
Elite’s purchase of the company; and
*Products or services in line with the general direction of Elite.Other
specific strategies designed to increase sales and increase operational
efficiencies include:
* Reduce Operating Costs Through Continuous Improvements in Systems and
Processes. Elite constantly strives to reduce costs in its business through
initiatives designed to streamline business processes and further increase
operating efficiency. These initiatives include centralization and
standardization of business procedures among Elite’s core companies.
* Reduce Operating Costs Through Consolidation. In addition, Elite has
implemented restructuring programs designed to reduce operating expenses
through consolidation of facilities and streamlining of functional areas
including product management, IT resources, sales, marketing, operations, and
other administrative functions. For example, AMG shares warehouse facilities
with IET. Additionally, AMG’s kiosk products are marketed through Elite’s
hardware distribution outlets. * Continue to Provide Outstanding Execution for
Reseller Customers. Elite is committed to providing superior service and
improving timely and efficient product delivery throughout its distribution
network. Elite management work directly with subsidiary companies to review
customer expectations and ensure customer satisfaction. Responsiveness to
customers, processing accuracy, and order fill rate are high priorities.*
Increasing Focus on Large Distribution Outlets. Elite has historically provided
greater focus and resources in supporting small and medium-sized reseller
customers. Elite intends to maintain its dedication to this segment while
increasing its focus on large distribution outlets. Elite has recently begun
offering products in Puerto Rico through Sam’s Club, a division of Wal-Mart
Stores, Inc. Elite believes its increased focus on large distribution outlets
such as Sam’s Club will create additional growth and profit opportunities.
* Establish Market Share in Emerging Product Areas. Elite intends to target
emerging IT product and service segments in their developmental stages and
establish product expertise. This will allow Elite to keep its broad product
line current with emerging trends.
***SALES AND MARKETING***
Elite employs sales representatives who assist resellers with product
specifications, system configuration, new product/service introductions,
pricing, and availability. Elite’s sales organization generally focuses on
resellers in the following market sectors: * Value-added resellers, or VARs;
* Corporate resellers; and
* Direct and consumer marketers. Elite’s product management and marketing
groups also promote sales growth, create demand for vendors’ products and
services, and facilitate customer contact. For example, marketing programs are
tailored to meet specific supplier and reseller customer needs. These needs are
met through a wide offering of services by Elite’s in-house marketing
organization, including advertising, direct mail and fax campaigns, sales
promotions, trade shows and other events. Elite offers various credit terms to
qualifying customers as well as prepay, credit card, and cash on delivery
terms. Elite closely monitors reseller customers’ credit worthiness through
Elite’s standardized information system, which contains detailed information
on each customer’s payment history as well as other relevant information. If
Elite’s receivables experience a substantial deterioration in their
collectibility, Elite’s financial condition and results of operations may be
adversely impacted.
***COMPETITION***
Elite operates in a highly competitive environment, both in the United States
and internationally. Both the IT products and services distribution industry
and the telecommunications industry are characterized by intense competition,
based primarily on:
* price;
* product and services availability;
* speed and accuracy of delivery;
* effectiveness of sales and marketing programs;
* credit terms and availability;
* ability to tailor specific solutions to customer needs;
* quality and breadth of product lines and services; and
* availability of technical and product information.
Elite believes it can compete favorably with respect to each of these factors.
1. Hardware and Software Distribution
Elite’s hardware and software distribution subsidiaries compete in the U.S.
against full-line distributors such as Tech Data, Ingram Micro Inc., and Synnex
Information Technologies, as well as specialty distributors such as Gates/
Arrow in desktop and enterprise products, Daisytek in consumables, and Avnet in
industrial and enterprise products. The hardware and software distribution
industry has limited barriers to entry and is subject to rapid change. Many
national, regional and local companies, including full service agencies, serve
the industry and specialized temporary services agencies. In addition to the
competitors named above, Elite’s competitors also include a variety of small
and medium-sized computer hardware manufacturers and distributors.
Competition in this industry is typically characterized by pricing pressures,
product availability and potential obsolescence, speed and accuracy of
delivery, effectiveness of sales and marketing programs, credit availability,
ability to tailor specific solutions to customer needs, quality of product
lines and services, and availability of technical support and product
information. Elite’s ability to compete favorably is principally dependent
upon its ability to control inventory and other operating costs, react timely
and appropriately to short-and long-term trends, price its products
competitively, increase its net sales and maintain economies of scale. In the
early 1990s, the United States computer industry moved toward open sourcing
pursuant to which vendors authorized multiple distributors to sell to resellers
on equal terms rather than relying on exclusive relationships. As a result, the
competitive environment has become more intense, leading to accelerating
industry consolidation and declining gross margins.2. Internet Kiosks
Elite’s kiosk subsidiary competes against other kiosk companies located both
inside and outside the United States. These include Infotouch, Cyber Kiosk,
NetBooth, PC Kiosk, and Internet Media Group. Many of Elite’s competitors in
this sector have substantially greater financial, technical and marketing
resources, larger customer bases, longer operating histories, greater name
recognition and more established relationships in the industry than Elite has.
Additionally, the kiosk industry is subject to rapid technological change. In
addition the companies named above, additional competitors may include small
regional entitities or international entities establishing a domestic presence.
Eltie’s ability to compete favorably in this rapidly evolving market depends
on successfully marketing of its kiosk units through direct sales, hardware
distribution outlets, and distribution partners. In addition, Elite must
differentiate its kiosks from its competitors through ongoing product research
and innovation. 3. Telecommunication ServicesElite’s telecommunications
subsidiary competes against other VoIP providers and carriers including
DialPad, InfoNet, DeltaThree, iBasis, ITXC, and Net2Phone. These companies
offer PC-to-phone or phone-to-phone services that are similar to the services
Elite offers. The long distance telephony market and, in particular, the
Internet telephony market, is highly competitive. There are several large and
numerous small competitors, and Elite expects to face continuing competition
based on price and service offerings from existing competitors and new market
entrants in the future. The principal competitive factors in the market include
price, quality of service, breadth of geographic presence, customer service,
reliability, network capacity and the availability of enhanced communications
services.
Many of Elite’s competitors in this sector have substantially greater
financial, technical and marketing resources, larger customer bases, longer
operating histories, greater name recognition and more established
relationships in the industry than Elite has. As a result, certain of these
competitors may be able to adopt more aggressive pricing policies, which could
hinder Elite’s ability to market its Internet telephony services. One of
Elite’s key competitive advantages is the ability to route calls through
Internet service providers, that allows Elite to bypass the international
settlement process and realize substantial savings compared to traditional
telephone service. Any change in the regulation of Internet service providers
could force Elite to increase prices and offer rates that are comparable to
traditional telephone call providers.
***GOVERNMENT REGULATION***
The primary area of Elite’s business activities potentially affected by
present or future government regulation is its telecommunications services.
Voice-over-Internet telephony is currently unregulated by the Federal
Communications Commission (FCC). However, efforts to regulate this service may
increase. On May 16, 2000, the U.S. House of Representatives passed H.R. 1291,
the Internet Access Charge Prohibition Act. The bill prohibits the FCC from
imposing on Internet service providers any access fees to support the Universal
Service Fund that are imposed on telephone companies if the "contribution"
would be based on a measure of the time that telecommunications services are
used in the provision of Internet access service. Despite the prohibition
against access surcharges, the bill does allow the FCC to charge access fees
for Internet telephone services, regardless of whether a telephone or other
apparatus is used to place a call. The bill failed in limiting the FCC to flat
rate charges on Internet phone use. Thus, the FCC can choose any method it
wants, including a fee based on the per-minute usage by consumers. Although no
rulings regarding any limitations have yet been made by the FCC, there is no
assurance such regulations may not be adopted in the future. The FCC is
currently considering whether to impose surcharges or other common carrier
regulations upon certain providers of Internet telephony, primarily those that
provide Internet telephony services to end users located within the U.S. While
the FCC has presently decided that information service providers, including
Internet telephony providers, are not telecommunications carriers, various
companies have challenged that decision. Congressional dissatisfaction with FCC
conclusions could result in requirements that the FCC impose greater or lesser
regulation, which in turn could materially adversely affect Elite’s business,
financial condition, operating results and future prospects. The FCC has
expressed an intention to examine the question of whether certain forms of
phone-to-phone Internet telephony are information services or
telecommunications services. The two are treated differently in several
respects, with certain information services being regulated to a lesser degree.
The FCC has noted that certain forms of phone-to-phone Internet telephony
appear to have the same functionality as non-Internet telecommunications
services and lack the characteristics that would render them information
services. If the FCC were to determine that certain Internet-related services
including Internet telephony services are subject to FCC regulations as
telecommunications services, the FCC could subject providers of such services
to traditional common carrier regulation, including requirements to make
universal service contributions, and/or pay access charges to local telephone
companies. It is also possible that the FCC may adopt a regulatory framework
other than traditional common carrier regulation that would apply to Internet
telephony providers. Any such determinations could materially adversely affect
Elite’s business, financial condition, operating results and future prospects
to the extent that any such determinations negatively affect the cost of doing
business over the Internet or otherwise slow the growth of the Internet. State
regulatory authorities may also retain jurisdiction to regulate the provision
of intrastate Internet telephony services. Several state regulatory authorities
have initiated proceedings to examine the regulation of such services. Others
could initiate proceedings to do so.
The regulatory treatment of Internet telephony outside of the U.S. varies
widely from country to country. A number of countries that currently prohibit
competition in the provision of voice telephony also prohibit Internet
telephony. Other countries permit but regulate Internet telephony. Some
countries will evaluate proposed Internet telephony services on a case-by-case
basis and determine whether it should be regulated as a voice service or as
another telecommunications service. Finally, in many countries, Internet
telephony has not yet been addressed by legislation. Increased regulation of
the Internet and/or Internet telephony providers or the prohibition of Internet
telephony in one or more countries could materially adversely affect Elite’s
business, financial condition, operating results and future prospects. The
other area of Elite’s telecommunications services, call re-origination
(callback), is also an area of potential government regulation. Callback is a
service approved and supported by the FCC. The FCC has determined that
international callback serves the public interest by promoting competition in
international markets and driving down international phone rates. The FCC,
however, also recognized a foreign government's sovereign right to prohibit the
provision of callback within its territory. Under the doctrine of international
comity, the FCC prohibits U.S. carriers from offering the uncompleted call
signaling form of callback in countries that expressly prohibit callback. The
FCC has provided a reporting mechanism whereby foreign entities can demonstrate
that they have passed a law specifically banning callback. Elite offers
callback only in international areas where it is a widely accepted and legal
means of lowering international telecommunication costs. Increased regulation
of callback, either domestically or internationally, could materially adversely
affect Elite’s business, financial condition, operating results and future
prospects.
***INTELLECTUAL PROPERTY RIGHTS***
Elite's success in the information technology services business will depend, in
part, upon its hardware and software deployment, methodology, and other
proprietary intellectual property rights. Elite does not hold any patents or
registered copyrights. Instead, Elite intends to rely on a combination of trade
secret, nondisclosure and other contractual arrangements and technical
measures, and copyright and trademark laws, to protect its proprietary rights.
Elite generally enters into confidentiality agreements with its employees,
consultants, clients and potential clients and limits access to and
distribution of its proprietary information.
However, there is no assurance others may not infringe on Elite’s rights.
Although Elite believes its services and products do not infringe on the
intellectual property rights of others, other parties may nevertheless make
infringement claims against Elite in the future.
***RECENT NEWS DEVELOPMENTS***
Elite Technologies Sub Selected by Sam's Club
TUESDAY, JANUARY 08, 2002 9:13 AM
- PRNewswireATLANTA, Jan 8, 2002 /PRNewswire via COMTEX/ -- Elite
Technologies, Inc. (ETCH) announced today that its wholly owned subsidiary,
Icon Computer Parts of Puerto Rico, has been selected as a vendor by Sam's
Club. Icon will be selling its computer systems, monitors and peripherals to
Sam's Clubs located throughout Puerto Rico. The monitors and systems will be
sold at Sam's Club under Elite's own "ICON" brand name.
Sam's Club currently has seven locations in Puerto Rico which, on a revenue
basis, includes one of the largest Sam's Club's in the chain. Sam's Club has
more than 43 million members worldwide and offers exceptional value on brand
name merchandise at "members only" prices for both business and personal use.
Sam's Club (www.samsclub.com ) is a division of Wal-Mart Stores, Inc. (WMT) .
Scott Schuster, Chairman of Elite, stated, "We have been working to obtain the
vendor number from Sam's Club for over nine months. This represents an
extraordinary opportunity for Icon and Elite. Elite believes this will at least
double the current revenue of Icon during the next 12 months to more than 24
million. Elite expects to expand the Sam's Club relationship to the United
States and Mexico in the immediate future. This is a great first step in
Elite's vision of building the ICON Brand Name of products on an international
basis."
Elite Technologies, Inc., (www.elitetechinc.com ) through its subsidiary
companies which include AMG, IET (www.ietcomputers.com ) and ICON
(www.icon-cp.com ), provides hardware wholesale and retail distribution of
computer parts and systems. Additionally, Elite designs, manufactures and
distributes Internet "pay by minute" Kiosks throughout the US and other
countries. Worldtouch (www.world-touch.com ), another wholly owned subsidiary
of Elite provides long distance telecommunications services internationally.
Notice: This release and oral statements made from time to time by company
representatives concerning the same subject matter may contain so- called
"forward-looking statements." These statements can be identified as
"forecasts," "projects," or words of similar meaning and by the fact that the
statements frequently are used in discussing regulatory submissions and
approvals, development programs, etc. Many factors may cause actual results to
differ from forward-looking statements, including inaccurate assumptions and a
broad variety of risks and uncertainties, some of which are known and others of
which are not. No forward-looking statement is a guarantee of future results or
events, and one should avoid placing undue reliance upon those statements.
SOURCE Elite Technologies, Inc.
from...
http://bigcharts.marketwatch.com/news/articles.asp?guid={0D337CCE-9A33-4967-A2A0-FD44403F0838}&newsid=795257413&symb=ETCH&sid=147239
Elite Technologies Sub Appointed Distributorship
THURSDAY, JANUARY 03, 2002 10:57 AM
- PRNewswireATLANTA, Jan 3, 2002 /PRNewswire via COMTEX/ -- Elite
Technologies, Inc. (ETCH) announced today that it's wholly owned subsidiary,
Intelligent Software Solutions, Inc., has been appointed by Admor Technology
Group to supply Admor's products throughout the Caribbean, South America and
parts of the US.
Admor (www.admor.com ) is a computer memory manufacturer. ISS distributes
software (including Microsoft Products) and Silicon Products to computer
resellers. ISS is headquartered in the Atlanta, GA area. Admor is located in
Irvine, CA.
Scott Schuster, Chairman of Elite, stated, "By obtaining a distribution
agreement with Admor, ISS will be providing extremely competitive pricing on
its memory products. This will allow ISS to establish itself as a leading
provider of computer memory in the distribution network ISS has already
established."
Elite Technologies, Inc., through its subsidiary companies, which include AMG,
IET and ICON, provides hardware wholesale and retail distribution of computer
parts and systems. Additionally, Elite designs, manufactures and distributes
Internet "pay by minute" Kiosks throughout the US and other countries.
Worldtouch, another wholly owned subsidiary, provides long distance
telecommunications services.
SOURCE Elite Technologies, Inc.
from...
http://bigcharts.marketwatch.com/news/articles.asp?guid={6FCED518-A2CF-4E88-A66A-943AFE5442EF}&newsid=795066502&symb=ETCH&sid=147239
***CONTACT INFORMATION***
Dave Peacos of Elite Technologies, Inc.,
+1-770-559-4975
URL: http://www.elitetechinc.com
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