Author Topic: IVI.V - Ivrnet  (Read 9026 times)

unusualstocks

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IVI.V - Ivrnet
« on: May 20, 2016, 12:34:53 PM »
I wrote the below in late December, 2015. Since that time the company has announced it has launched its Nextext product in the North American market and began earning revenues in April 2016 as a result of this launch.

Link to original article: http://www.unusualstocks.net/members-only/2015/12/26/new-position-ivrnet-iviv

Introduction

One thing that I have learned when investing in tiny, nano-cap companies is just how important investing in a company with a ‘margin of safety’ is. However, it isn’t always possible to purchase companies with a large ‘margin of safety’ because there are very few tiny companies that actually have one and the ones that do have a solid ‘margin of safety’ generally are priced at a bit of premium for that reason alone.

'Margin of safety’, to me, can mean several things. In the world of nano and micro-caps, recurring revenues amongst a fairly diversified customer base can provide that ‘margin of safety’, just as management showing a commitment by participating significantly in a private placement or by purchasing shares on the open market can provide a ‘margin of safety’. 

When I began doing research on Ivrnet (IVI.V) several months ago I was immediately attracted to the current “margin of safety” in the company. Once understanding the potential for the business, coupled with the downside protection because of the current business, I took a sizable position. The company has moved into an aggressive sales phase after transitioning from a R&D phase for new and updated product offerings, and I think we are at a very exciting point in time in the company's lifecycle. I am happy to share with you details about the company and why I feel it can provide significant upside from current levels.

Company Overview

Note: Throughout this article I will reference the “legacy” products of the company. This simply refers to the products as they exist/are before any of the revisions and improvements are transitioned and sold into the marketplace.

Ivrnet is a communications company that develops and operates intelligent software applications that facilitate automated transactions that include personalized communication between people; mass communication for disseminating to thousands of people at the same time; and personalized communications between people and automated systems. Ivrnet makes these applications accessible via voice, text, phone, email, fax, and the internet.

The Network Services division of the company consist of the basic texting services, audio conferencing, call management systems. Nothing too exciting here, except that the recurring revenue stream from this business unit is very attractive, providing a stable base for the business while the company focuses on the rollout of its Hosted Services and Hosted Applications division. AdCentral is the next phase for the company’s text services. More on this later.

The Hosted Services segment of the business is one of the segments that presents real opportunity for future growth. The division consists of a newly developed and soon to be released IvrnetCentral (“ICentral”), and hosted within this platform will be the current ITSportsNet (“ITSN”) and Ivrnet for Communities (“Communities Central”) services. Currently, ITSN and Community Central service over 1.2 million users and 1300 organizations across North America. When these services are hosted within the new ICentral, clients and users will experience a more user-friendly process and increased efficiencies. More on the potential of ICentral later.

The Hosted Applications segment of the business also presents significant opportunity for future growth. This segment consists of Safepay/Telepay (“Telepay”), which is a credit card processing system that allows governmental entities, corporate, and retail clients to process credit card payments over the phone in a compliant manner. These services meet the Payment Card Industry Standard (“PCI”) for automatically processing payments over the phone. The nice thing about Teleplay is that it allows the card holder to pay over the phone without ever exposing his/her card number to a live agent, thereby reducing any significant risk of fraud.

The Telephony Applications segment of the business consist primarily of CallTrak, Call Monitoring services, and Automated Reporting services. CallTrak is utilized solely by the auto dealer industry, and is sold exclusively by a reseller.


Management Overview

The company is led by David Snell (CEO) and Chris Topolniski (COO). David joined the company in 2003 and Chris joined in 2012. When Chris joined, he and David began the process of redeveloping the company, building a platform that would allow the company to transition its legacy products into new and improved product offerings. The company has made a lot of progress in doing this and 2016 will be the year that many of these could pay dividends as the company is now embarking on a very focused sales effort.
 

Share Structure

I am pretty comfortable with the share structure.There are roughly 70 million outstanding shares with 93 million fully diluted shares. Insider ownership is roughly 35% with management participating significantly in the last private placement in June, 2015. The issued warrants are exercisable at $.07, $.09, and $.12.

 
Brief Financial Overview

Ivrnet has essentially operated at breakeven over the past few years. The financials show a company with rather consistent revenues each quarter over the past few years. It’s pretty consistent because roughly 85-90% of the companies revenues are recurring with around 75% gross margins.

Without any real growth, the company has just done its thing quarter over quarter, basically operating the company at breakeven from year to year. This explains the relatively small range of stock price movement over the past few years. However, with the strong recurring revenue base for its legacy products, and with significant new products ready to launch, the company is nearing what could be a real inflection point (see my past article on “Inflection Points” by clicking here).

Cash is definitely low, only $70k on the balance sheet. While this is concerning, it may not be an issue since the company is operating at breakeven with cash flow and profit being generated. But, if traction for it’s new products doesn’t occur quickly, I suspect we could see the company enter into a non-dilutive transaction for additional working capital.

 
Investment Thesis

My investment thesis for Irvnet is centered around three main areas:

1. Margin of Safety with legacy products provides very limited downside risk

As noted above, over the past few years the company has operated around breakeven simply by continuing to service customers with their legacy products while building out its new ICentral offering and other improvements to existing products. Funds for the companies R&D for the new platform and products were raised from several private placements, as well as with profit and cash flow generated from operations. So, while the company moves it’s focus to selling ICentral and its other products, the business will continue to plug away with its existing legacy products. It’s a nice backdrop for the company to operate against as it scales ICentral and its new products to existing and new customers.

2. Potential for ICentral, Teleplay, and AdCentral

The potential for all three products is quite significant. The company has spent extensive capital and resources in the development of ICentral, which is going to provide a completely new, innovative, and self-sufficient way of managing the ISTN and Community Central products. It has significant scalability that would allow the company to sell the product to very large customers without having to spend resources like they have had to to on the legacy ITSN and Community Central products. And with ICentral, the company will be able to target new potential markets that the legacy products couldn’t effectively manage, such as property management companies. With significant gross margins and recurring revenues for ICentral, any growth (which we can be fairly confident there will be) should provide very positive monetary results for the company.

I am most excited about the potential for Telepay. The company has some smaller clients utilizing the product (including the Government of Alberta), but the real catalyst here would be landing a deal that I know the company has been going after with the British Colombia government as look to become PCI compliant with their payment systems. The company has additional business opportunities in the pipeline for Telepay as well.

The last product worth noting is AdCentral, which is essentially replacing the company’s legacy bulk text messaging services. December 2015 is when the company is launching the AdCentral product and it anticipates its first customers being various transit authorities and/or private companies hired by the transit authorities to run their technological infrastructure back-end and/or their sales/marketing departments. The company expects immediate incremental revenues with the launch of AdCentral.

3. Significant Reduction in expenses as the company moves from R&D to Sales

The development of ICentral cost the company close to $2 million in total. The reason for the significant costs were because the company needed to re-code ITSN platforms, thus the company had to commit significant resources to the ICentral development to allow ITSN and Ivrnet for Communities to co-exist under one program. In addition, many resources were spent ensuring that ICentral is incredibly user-friendly, thus eliminating many of the current support costs required by the company in supporting its current user base. The new ICentral further will allow the company to increase its capacity significantly without having to hire additional staffing to support the application. Based on the above explanation, Ivrnet’s Operating Leverage could drive significant net income to the company via increased gross margins by increasing sales while overhead and fixed costs remain relatively constant.

 
Conclusion

An investment in Ivrnet allows one to invest in a company with significant downside protection with the companie’s consistent revenues and legacy products. Coupled with the downside protection is a significant opportunity for returns should the company get traction with any of the new product offerings (iCentral, Telepay, AdCentral). There are competitors in the space, but very few, if any, with the competitive advantages that Ivrnet has, especially now with the new ICentral product that is incredibly scalable and priced very competitively given the company’s low overhead structure. There is also a risk that the company doesn’t gain traction with their new products, and if this is the case there is downside protection that exists. However, after speaking with Chris (the COO) and others I feel pretty confident that 2016 could be a milestone year for Ivrnet, and one that can provide investors with tremendous returns from current levels.

Disclosure: Long IVI.V with a cost basis of $.045
« Last Edit: May 20, 2016, 12:42:42 PM by unusualstocks »


snowball82

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Re: IVI.V - Ivrnet
« Reply #1 on: June 30, 2018, 12:26:43 PM »
New letter to shareholders, I added to my large position at $ 0.025. Vertical software company with 80 % recurring revenues. 

https://ivrnet.com/news/2018/06/26/default/ivrnet-publishes-2018-president-s-letter-to-shareholders/?utm_content=73599742&utm_medium=social&utm_source=facebook

cameronfen

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Re: IVI.V - Ivrnet
« Reply #2 on: June 30, 2018, 01:09:11 PM »
What strikes me when reading this is there are a lot of silicon valley companies doing the things ivrnet is doing.  Geo targeting ads - look at kiip.  Online payments: stripe, square, and shopify even has an open source option.  One to many sms service look at twillio.  All these companies are way better funded than ivrnet and while ivrnet has its little transit/cananda niche, but there is lots of competition out there. 

snowball82

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Re: IVI.V - Ivrnet
« Reply #3 on: June 30, 2018, 06:17:28 PM »
@cameronfen, I can understand why you think Goliath should win. That said maybe you should keep David’s company under your radar. I see them as also offering solutions to differents lucrative markets with Safepay and Ivrnet central. 

https://ivrnet.com/news/2018/02/06/default/ivrnet-starts-work-with-renowned-real-estate-developer/

I own a large position

« Last Edit: June 30, 2018, 06:19:04 PM by snowball82 »

cameronfen

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Re: IVI.V - Ivrnet
« Reply #4 on: June 30, 2018, 06:54:14 PM »
@cameronfen, I can understand why you think Goliath should win. That said maybe you should keep David’s company under your radar. I see them as also offering solutions to differents lucrative markets with Safepay and Ivrnet central. 

https://ivrnet.com/news/2018/02/06/default/ivrnet-starts-work-with-renowned-real-estate-developer/

I own a large position

I mean the company looks interesting and ill investigate further.  But I kind of got the impression from the original post that they were really cutting edge in the product when really they were not (and thats fine as lots of investments are boring unsexy companies). 

snowball82

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Re: IVI.V - Ivrnet
« Reply #5 on: August 19, 2018, 05:59:03 PM »
@cameronfen, I can understand why you think Goliath should win. That said maybe you should keep David’s company under your radar. I see them as also offering solutions to differents lucrative markets with Safepay and Ivrnet central. 

https://ivrnet.com/news/2018/02/06/default/ivrnet-starts-work-with-renowned-real-estate-developer/

I own a large position

I mean the company looks interesting and ill investigate further.  But I kind of got the impression from the original post that they were really cutting edge in the product when really they were not (and thats fine as lots of investments are boring unsexy companies).

@cameronfen

Frankly, it is not the easyest company to understand. Thay have many solutions with differents names (Nextext, Ivrnet Central, Safepay...) offering lots of possibilities (sites management, telephony suite, texting/Rich Communications Services ...) 

That said the last fews recents communications from Ivrnet help to see :

https://www.fscwire.com/newsrelease/revamped-nextext-sales-team-accelerates-product-growth

https://ivrnet.com/news/2018/08/15/default/ivrnet-renews-calgary-transit-partnership/


Please let us know if you have more info about Rich Communications Services (RCS) potential. 






« Last Edit: August 19, 2018, 06:01:46 PM by snowball82 »

snowball82

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Re: IVI.V - Ivrnet
« Reply #6 on: August 09, 2019, 12:31:06 PM »
This new segment should add some new montly recurring revenues. 70,000 professional members is a large organisation.

"Ivrnet Develops Additional Revenue Stream - Completes First Deployment of Community Central for Professional Associations
 
 
Calgary, Alberta, (August 9th, 2019) - Ivrnet Inc. (TSXV: IVI) is pleased to announce the completion of a milestone installation of its membership management platform Ivrnet Central, expanding the already large market for Ivrnet Central to professional associations.

In process since early 2019, Ivrnet Central was installed in Q2 for one of the premier engineering associations in Canada with over 70,000 professional members.  Ivrnet Central will provide management and payment capabilities for several thousand of these members who procure ancillary services through the association.  It is anticipated that usage of Ivrnet Central by the association will continue to grow over time and has already become the largest installation of Ivrnet Central to date. 

“This new install is one of 3 significant new projects obtained through Ivrnet’s new agent channel”, stated Andrew Watts, CEO of Ivrnet.  “We believe these new clients are the tip of the spear, with many more projects envisioned for this sales channel.  I cannot be more pleased with how well these initial projects have gone.”

The completion of this new project provides more than a new client for Ivrnet, but also a potential entry path for Ivrnet into thousands of professional associations across North America.  By starting slowly with one of the premier associations in the Canada Ivrnet believes it has laid the ground work for future projects and developed a strong reference account for the industry.


About Ivrnet

Ivrnet is a software and communications company that develops, hosts, sells and supports value added business automation software. Our products and services are delivered through the traditional phone network and the Internet. These applications facilitate automated interaction through personalized communication between people; mass communication for disseminating information to thousands of people concurrently and personalized communication between people and automated systems. Ivrnet's applications are accessible through nearly any form of communication technology, at any time, from anywhere in North America via voice, phone, fax, email, texting and the Internet.

Forward-looking Information

This press release contains forward-looking statements including statements relating to Ivrnet’s anticipation that usage of Ivrnet Central by its first professional association client will continue to grow over time and the belief that the successful deployment of Ivrnet Central to that professional association will open a large new market for Ivrnet and lead to many more projects for this sales channel. These statements reflect Ivrnet’s current beliefs and are based on information currently available to Ivrnet including Ivrnet’s understanding of the potential usage of Ivrnet Central by the members of this first professional organization client and the number of professional organizations in North America that offer similar services to their members. However, these statements require Ivrnet to make assumptions it believes are reasonable and, as such, are subject to inherent risks and uncertainties. There can be no guarantee that usage by this first professional association will continue to grow or that Ivrnet will be able to make additional sales or deployments of Ivrnet Central to further professional associations due to a variety of potential factors including, but not limited to, lack of willingness of professional associations or their members to adopt and use the product, the inability of Ivrnet to successfully market or develop the product to new or others developing competitive or alternative products. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond Ivrnet 's control. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected effects on Ivrnet. These forward-looking statements are made as of the date of this press release. Except as required by applicable securities legislation, Ivrnet assumes no obligation to update publicly or revise any forward-looking statements to reflect subsequent information, events, or circumstances.

 For further information:, please contact  Andrew Watts, President and CEO, Ivrnet Inc.; Tel/fax 1.800.351.7227; E-mail: investors@ivrnet.com

 
 


 
 
« Last Edit: August 09, 2019, 12:32:38 PM by snowball82 »

snowball82

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Re: IVI.V - Ivrnet
« Reply #7 on: August 23, 2019, 04:55:39 AM »
I did some search with Google and found than Brookfield Residential Properties Inc. continue to build large communities like Levingston:

https://experiencelivingston.com/homeowners-association/

And than Homeowners Associations choose Ivrnet central vertical software to manage fees and activities :


http://livingston-connect.com/index.php?src=gendocs&ref=Pay%20Fees&category=Main

Still own my position




« Last Edit: August 23, 2019, 04:58:30 AM by snowball82 »

Foreign Tuffett

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Re: IVI.V - Ivrnet
« Reply #8 on: August 26, 2019, 09:48:53 PM »
The vast majority of this company's debt is at 17% (!) interest.  At 6/30/19 they were out of compliance with some loan covenants.....

Unless I am missing something company looks like it is teetering on the precipice of insolvency.

snowball82

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Re: IVI.V - Ivrnet
« Reply #9 on: August 27, 2019, 02:18:07 PM »
The vast majority of this company's debt is at 17% (!) interest.  At 6/30/19 they were out of compliance with some loan covenants.....

Unless I am missing something company looks like it is teetering on the precipice of insolvency.

@Foreign Tuffet I think you will find some responses there :

"but the company has progressed to a point where it believes less expensive capital is an option...

Over the last 3 months Ivrnet has explored options with alternate financers and has several proposals on the table. "We want to ensure that Ivrnet takes the right deal for the company, not just the first deal that comes along, so we have presented to them a relaxation of the loan repayment to provide time to evaluate and select the best deal", stated Conrad Krebs of RC Morris. As part of the loan restructuring, RC Morris will allow Ivrnet to make interest only payments for up to 18 months. The intent, however, is to remove the RC Morris loan before that time.

"RC Morris' goal has always been to work with clients that could not find alternative financing and help them grow to the point that we are no longer needed. We are proud of the positive impact this has on our clients and feel Ivrnet is ready to take this step", continued Mr. Krebs.

https://www.accesswire.com/529703/RC-Morris-Relaxes-Repayment-Terms-Ivrnet-Seeks-to-Replace-with-Less-Costly-Capital

https://ivrnet.com/news/2018/08/29/default/august-2018-letter-from-the-president-to-shareholders/