For More Information... For more information regarding Eagle Ventures Intl. Inc. as an investment opportunity, be sure to review the entire research report in a printable PDF format by clicking the link below:  Eagle Ventures Intl. Inc. Report  Or, to discuss Eagle Ventures, contact:  The Micro Cap Press  15233 Ventura Blvd. Suite #310 Sherman Oaks, CA 91403 http://www.microcappress.com  1-800-277-9081    Quick Stats Last traded ($)  0.65 52-Week High  ($)  1.01 52-Week Low  ($)  0.51 Avg. Volume (3 mo.) 10,887 Shares Out 76M Market Cap  53.2.M Beta 4.9   Recent Results (Fiscal 2006) Revenues $30,157  COGS 10,845 Gross Profit 19,312 EBITDA 2,767 Net Income $2,061  * As reported by company

Feature Report: Eagle Ventures Intl. Inc.

As we mentioned in Tuesday's newsletter, the Micro Cap Press has uncovered a new company we highly recommend adding to your watchlist. The organization has projected more than 100% sales growth in 2008, and we fully believe they are capable of meeting that mark simply by staying on their present course.

The name of the company is Eagle Ventures International, Inc. (EGVI.PK). Our view of EGVI is quite positive - the stock's current valuation is comparable to a true start-up's valuation. Yet, this company is not a start-up. Eagle Ventures International is about to end its second full year of substantial sales growth. Moreover, they're already profitable, and anticipating significant growth in the bottom line as well. 

We've been very impressed by what we've seen so far from this young telecom operation, and we suspect you will be impressed as well once you review the rest of this research report.
 

Overview

You may be more familiar with Eagle Ventures International, Inc. through the consumer side of its organization - TelExtreme. TelExtreme is a wholly-owned subsidiary offering VoIP (Voice over Internet Protocol) services to broadband and WiFi customers in the consumer and small business markets. 

The company's three business segments are: residential calling plans, international calling plans, and pre-paid (pay-as-you-go) mobile plans. 

TelExtreme moved into a high growth phase in 2006 following a couple of year's worth of infrastructure development. The operation currently has a presence in the US, Philippines, Hong Kong, Malaysia, Brazil, and Mexico. Management intends to carry out an aggressive plan over the next 12 to 18 months, implementing full operations and infrastructure in approximately a dozen new markets. These new growth initiatives should considerably widen the net in Europe, Asia, the Middle East, and South America. 

Eagle has approximately 76 million outstanding shares, translating into a market cap of about $53 million. Their stock trades as a pink sheet stock under the ticker 'EGVI'. 

As a pink sheet equity, SEC filings are not required for Eagle Ventures International. However, the key information and figures required for a thorough research report have been provided by the company. It should also be noted that Eagle Ventures has announced they intend to voluntarily become a fully-reporting company as of the end of fiscal 2007. To that end, they have also stated 2006 results were audited, and 2007's results will be audited when the year is complete. 

And those numbers? Quite impressive. In fiscal 2006, the company produced revenues of $30.1 million, and an EBITDA of $2.7 million. In 2007, the company projects a top line of $42.9 million and an EBITDA of $6.1 million. Eagle Ventures expects TelExtreme to more than double its 2007 revenue in fiscal 2008, and nearly double it again in 2009. 

The projections seem aggressive on the surface, but based on the strong growth already reported to us by the company, the goal appears to be achievable. Hence, we have substantial reasons for bringing this micro cap name to your attention.
 

Competitive/Industry Analysis

The attraction to Eagle Venture's business model is two-fold: 

• The forecasted growth in demand for VOIP is very strong
• The company's growth/marketing model is unique, but effective 

As prolific as VOIP services have become, the surface has only been scratched. An independent research firm has estimated that the number of VOIP users in the U.S. is likely to double between 2007 and 2010. The current 15.1 million users could become 32.4 million within the next three years. On a global basis, the number of VOIP users is expected to be 413 million by the end of 2010. 

Moreover, the fact that this telecom segment has supported enough long-term revenue for several players (such as Vonage) validates the viability of the industry. In fact, we believe the scope and size of the market should allow multiple service providers an opportunity to thrive, much like mobile phone services have since the mid-90's. 

To that end, competitive pricing and functionality is the key. The TelExtreme value proposition is based on offering broadband and WiFi consumer products that are "plug-n-play" compatible with existing phones, and a service package that offers customers flat-rate minutes to make local, long distance, and international calls. In some cases, monthly phone bills can be reduced by as much as 50%.

In simplest terms, we believe TelExtreme's further penetration into the VOIP segment should come relatively easily. The cost of entry is low, and the consumer is price/service sensitive. 

Sales Growth 

The expansion plan of TelExtreme is what differentiates this VOIP provider from its competition - it's a fairly personal/individual promotion effort in an industry where impersonal (mass market) techniques are usually the norm. 

TelExtreme plans to continue building an affiliate sales channel - a viral marketing model which encourages exponential growth. The international network of independent affiliates are paid a generous percentage of their sales for both the initial customer acquisition as well as recurring monthly service costs.

Simultaneously, TelExtreme's growth is equally supported by its low customer-acquisition expense. Rather than the typical $400 it costs other telecom providers to add a new subscriber, TelExtreme's cost is only about $120...roughly 1/3 of what other companies pay per new customer. 

Though unorthodox, the idea is also a proven one. It's akin to the growth directive used by Excel Communication's word-of-mouth customer referral strategy, and MCI's Friends & Family campaign used in the U.S. during the 1990's. Both were effective, in terms of progress as well as cost. The company already has an active affiliate base in excess of 30,000 persons, and the growth in that number is accelerating. 

These multi-faceted distribution channels will be backed by a targeted advertising campaign into specific niche markets. Through its parallel niche marketing strategies, TelExtreme believes that it can acquire and retain 100,000 customers in the near term, leading to exponential growth with a goal of 250,000 customers by Q4 2008. 
 

Financial Analysis

Company

As stated above, the company did approximately $30 million in revenues and produced nearly $2.8 million in EBITDA for its year ending on Dec 31, 2006....an audited result. They are projecting $42.9 million in revenues, and $6.1 million in estimated EBITDA for year end 2007. Looking out beyond that, the picture is even more compelling.

The impressive part of the financial picture is net income. It's strong by any standard - around 10% of sales. But, by small cap standards where years of losses are often sustained, it's particularly impressive.

As discussed in the company overview, the company's market cap is approximately $53.0 million.

There are two basic ways to make a valuation judgment, both of which suggest EGVI is a strong value at its current price of 65 cents. 

Price/Earnings: Xfone's P/E of 22.9, as well as WPCS's P/E of 14.9, are in line with the telecom industry average P/E of 18.7 and the long-distance provider average P/E of 14.7. Based on TelExtreme's 2007 projection, the current P/E is 10.5...about one-third to one-half of their competitions' equity prices.

Price/Sales: The industry-wide telecom P/S ratio is about 1.78, while the long-distance provider's average P/S is about 2.07. TelExtreme's price/sales ratio is - based on 2007's numbers - estimated to be about 1.1...one-half to five-eights of the competition's. 

To reiterate a point already made, 2006's numbers have been verified with an audit, and 3/4 of 2007 has already been booked. The projections are lofty, but the company has already taken in more than $60 million in sales to date. The compensation model, pricing, and growth plan clearly work; the issue now is a much simpler one of scaling up the operation. As such, the relative valuations really are as compelling as they seem.

Sector 

TelExtreme is classified as a telecom stock. Yet, there are very few other stocks or companies to make legitimate direct comparisons to. In some senses it's an outright telecom carrier, not unlike AT&T (NYSE: T) or Verizon (NYSE: VZ). In other ways, since their focus is offering long-distance connections (and international connections in particular), a better comparison might be made against the pure long-distance providers - most of which are not known names - like Primus Telecommunications (OTCBB: PRTL). Or, one could justify comparing TelExtreme to a company strictly providing VOIP service, such as Vonage Holdings Corp. (NYSE: VG). 

To provide a relevant landscape, several telecom peers have been compared. 

PEER GROUP: Diversified Communication Services
 

We expect TelExtreme to do at least as well as its peers. In fact, TelExtreme may be poised to outperform many of its peers on a margin basis. Though not the only service provider VOIP the technology, TelExtreme is the only provider utilizing such a unique means of distribution/promotion.
 

Opportunity Analysis

The numbers and results to date alone speak for themselves. The company drove $30 million in sales last year, and is on track to drive more than $40 million this year. To achieve results of that magnitude, the strategy has to be viable. 

Moreover, we believe TelExtreme has achieved a level of growth momentum that could indeed allow them to double sales in 2008, and nearly double them again in 2009, as planned. Why? The majority of the marketing and promotional effort has only recently begun. 

For investors, the case seems to be straight-forward. Summarizing some of the key points detailed above, EGVI shares offer: 

• Positive Environment to Enter VOIP Market - Forecasted Growth in Demand 
• A Proven Concept - VOIP Technology Has Been Accepted And Is In Use 
• An Undervalued Company - Low Forecasted P/E and P/S Relative to Comparable Peers 
• Unique Marketing/Incentive - Affiliate Sales Positions the Company Differently Than Competition 
• Mostly Undiscovered Opportunity - A Relatively New Issue, Minimal Public Relations Effort To-Date 

Despite impressive historical results and even more impressive forecasts, we feel EGVI is still available at trading levels commensurate with early-stage valuations. However, this undervalued level may not persist for long. It's generally difficult to keep a 40% increase in annual sales off of investor's radars. Should they achieve next year's forecast for a 100% increase in revenues - as we believe they can - the news and investor interest is likely to spread quickly. We feel the stock will be trading at its full value by or before then. 
 

For More Information...

We believe Eagle Ventures International offers a highly compelling proposition. The VOIP industry is still young, yet already proven. And, TelExtreme's unique promotional venue may be the ideal market penetration model.

For more information regarding Eagle Ventures as an investment opportunity, be sure to review the complete research report in a printable PDF format by clicking here.

Or, contact: 
The Micro Cap Press 
15233 Ventura Blvd. 
Suite #310 
Sherman Oaks, CA 
91403 
(800) 277-9081 
http://www.microcappress.com

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Pacific Shores Investments, LLC has been paid a fee of $30,000 cash from The Global Funding Group and 250,000 shares of newly issued restricted stock by Eagle Ventures International, Inc. for coverage of the Company.

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