Small Cap Network Blog

Maybe you saw this morning’s letter from Voyant International’s (VOYT) CEO Dana Waldman? If you didn’t, I don’t know that you missed a whole lot - it was a brief update on some of the current projects….white space radio, RocketStream, and Aviation Broadband. There was one new item that came up though.

Remember the name ‘RocketConnect’ - I suspect we’ll be hearing it more in the near future. As near as I can tell, RocketConnect is RocketStream for consumers. RocketStream was targeting businesses and organizations with massive data transfer needs. RocketConnect is targeting end users - ordinary people at their desktops and laptops - to accelerate the speed at which they send and receive information over the web.

I couldn’t perfectly tell, but it appears as if this product is going to be piggy-backed somehow with Internet services already being provided to consumers. Maybe there’s some sort of revenue sharing arrangement being forged with ISPs. The reason I say that is simply because Waldman said to think about the potential sales volume on the same scale as cable/telco volume.

It’ll be interesting to see what it is and how it plays out.

Everything else in the letter was fairly predictable.

By the way, did everybody see Voyant’s most recent 10Q? It quietly came out Monday, and was essentially what we were looking for… a little more revenue, but nothing life-changing. They pulled in $177K. For comparison, they did $133K last quarter. So, the increases are coming. (Any increase last quarter is impressive.)

What’s been fascinating for the last two quarters now is the massive gross margins we’re seeing. Their cost of sales was $30K last quarter, and only $13.3K this quarter. That’s a gross margin of more than 90% … which is why software is such an attractive business to be in. I think margins will head lower as the other business ventures ramp up. But still, that’s impressive. RocketConnect will be the same way - once developed, it costs nothing to share it, yet it still bears revenue.

The stock is perking up today, but I don’t think the letter is the reason.

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Some of you will know exactly what the FCC’s ‘white space spectrum’ headline means; most of you will probably have no idea what it means. All of you, however, should be interested in what it means. Why? Tuesday’s decision from the FCC is a proverbial green light to cultivate a whole new means of digital information delivery, like television, radio, and Internet connectivity.

If you happen to own Voyant (VOYT) shares, this is compelling news. However, it’s equally compelling if you also happen to own Google, Motorola, Dell, or Hewlett-Packard….all of those have an interest in advancing white space technology as well.

Here’s the deal - for those of you 40 years old or older, you’ll remember there was a point in time when there was no ‘cable’ television. You got true ‘channels’, where the number of the station was also the radio frequency of the broadcast. The channel numbers ran from 2 all the way up to 51. Well, channels 2 through 20 are still reserved for broadcast, even though using air waves is almost a thing of the past. Channels 20 through 51 though, they’re no longer used by anybody….but the FCC still regulates them.

Since radio frequency ‘real estate’ isn’t infinite, some new players recognized that UHF channels 20 through 52 are the only opportunity to establish new communication lines. The cool part is, modern technology can use these channels not just for television broadcasts, but for any digital message. THIS INCLUDES INTERNET, RADIO, SOME TELEPHONY, and of course, DIGITAL TV.

See the reason for the interest? This is a whole new playground that virtually anybody can enter; there won’t be conflicting or overlapping channels to limit competition.

Better still, it’s not like there are merely 32 channels up for grabs here. Digital equipment can be tuned to receive and transmit at fractional frequencies….like 20.1, 20.2, 20.3, and so on. I don’t know how many actual ‘channels’ can be set up, but I think it numbers in the thousands. In short, there’s really no limit now to what can be done, if it’s digital.

Now, I said all that to reiterate something we haven’t mentioned in a while - Voyant is jockeying to establish a major presence in the white space spectrum. They’re already building $2 million worth of white space frequency radios, but their technology could be adapted to use for WiFi purposes, or wireless communications. 

They’ve also been quietly developing Voyant Productions - the entertainment arm of the company. If you can control the delivery method, why not generate revenue by offering what’s delivered? This may eventually mean movie/television production and distribution.

Anyway, the FCC has officially opened up those white space channels for this kind of use. I thought it was a ‘done deal’ in the summer, but a few groups balked at the decision, and managed to get it delayed. The opponents were just groups that had something to lose though, like market share. The FCC is pro-competition though (usually), so this outcome was inevitable.

It’s good news for Voyant International and any VOYT shareholders. It won’t put money in the bank immediately, but this is a big victory that could open the door to literally millions of dollars.

I’ll let you know more when I know more.

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I just got off the Voyant International (VOYT) conference call. I hope you had a chance to listen in, but if you didn’t, there’s a replay available. I would summarize it here, but I didn’t get a chance to take notes. So, I encourage you to listen to the call. However, for those of you who are as busy as I am, there are a few highlights I think are worth knowing if you can’t do the replay. 

RocketStream is going well, and a fourth customer group is starting to solidify. They’d been focused on direct sales, sales through embedding, and sales through bundling. However, the fourth venue now coming into play is telecommunication carriers like Korea Telecom (KT). Basically, it’s a referral resource. KT’s customers who are dissatisfied with their Internet speeds are being told to purchase RocketStream.

If it were just one telco company in support of RocketStream, I might think little of it. However, a U.S.-based telco has also asked Voyant to possibly help them speed up their broadband connection. The deal, if it went through, would mean installing Voyant’s technology on 6 million modems (for starters). The sweetest part about the deal? Recurring revenue, and I guess a lot of it.

They didn’t say who the telco was, or where the technology trials were. Interesting, though, that they were approached.

Nevertheless, Voyant still feels embedding and bundling is the big-time venue for RocketStream.

Aviation Broadband - the much-awaited passenger-jet broadband service - is still in the works. They just completed their second test flight, topping the results from the first test, and exceeding their own expectations for this test. This 2nd test showed high capacity at an even greater distance from ground.

The concerns about existing competition came up (inevitably), and here’s what Voyant had to say…

Aviation Broadband will be better than current satellite services. Satellite connections are very expensive, costing about 100 x the cost of Voyant’s cost to deliver the same amount of data. As for current ground-based versions, those can’t scale up because they still have to share bandwidth. The more users they add to current ground-based services, the slower it gets. Voyant’s ‘pipe’ is bigger (and has higher capacity).

What about AirCell (Aviation Broadband’s big competition already taking on market share)? AirCell is priming the pump, but Voyant can steal the market once cultivated.

Voyant provides 10x more bandwidth than Aircell, and AirCell can only provide service in North America. Voyant is focused beyond the United States, and said Europe may be the first Aviation Broadband market. Plus, Aircell’s limited bandwidth is shared among all the planes in the sky. [It became clear the competition they were panning earlier in the call was AirCell.] Voyant plans to transmit at 35 Mbps to each plane, no matter how many planes are in the air.

Voyant also added they used RocketStream to deliver movie content from Voyant Productions via Aviation Broadband, integrating all their technology. We hadn’t heard much about Voyant Productions (TV and movie content) until now, but their interest in the business is becoming a little more clear - it fits well with the jet/broadband technology. Voyant Productions is still in formation, but there is some clear monetization potential here.

Harris Corporation is the partner they’ve got to help with testing and implementation. They now have a formal collaboration agreement in place, which wasn’t in place when the trials began.

Oh, and the wireless Internet radio deal - the $2 million contract from this summer - is ahead of schedule. They didn’t say what ‘ahead’ meant, so I still don’t know when they’ll be booking revenue from that.

All in all I learned a little. There wasn’t much discussion about numbers, but now we have some more framework in place to hang the dollars on when that data starts to flow in. 

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Looking to get up close and personal with a budding bulletin board company? Here’s your chance. It’s not like you’re going to be a fly on the wall of the boardroom, but Voyant International’s (VOYT) upcoming investor conference call may shed some light on things we didn’t know about.

The call is scheduled for Wednesday, September 17th, at 2:00 PM EST.

To listen in, dial 877-741-4248 five to ten minutes prior to start time for registration if you’re in the U.S. or Canada. International callers should dial 719-325-4763. Either way, the event passcode is 5794266.

I don’t know if there will be an opportunity to ask questions or not, though based on the information in the press release it seems to be a ‘listen only’ call. I’ll let you know if I see something to the contrary between now and then.

There will be a replay available if you can’t make the call.

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I don’t think we should read too much into this, but then again, I don’t think we should overlook this and what it means either. What I’m talking about is Voyant International’s (VOYT) presence at this year’s World Airline Entertainment Association (WAEA) Conference and Exhibition. It’s taking place this weekend, and Voyant will be featuring Aviation Broadband at the show.

This is ‘the show’ when it comes to add-on services and ancillary products airlines could add/outsource to their current revenue-bearing offers. Most of the major airlines - and their decision makers - will be there, so this is a great opportunity for the company to start penetrating the market. In the meantime, the finishing touches are being added to the actual link-up technology.

Obviously Voyant won’t be walking away from the show with a check in their hand. They will, however, be planting a lot of seeds.

Philosophically, I have to think this is a sign of comfort with what Voyant has to offer. I can’t imagine these guys going to a major show and presenting something they didn’t feel would be deliverable. And don’t forget, the most recent test of the system was successful.

Anyway, just wanted to keep you filled in on the latest. Not a big deal for right now, but I do see the contacts being made at the conference turning into customers down the road.

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If the rest of the market were up for the day I’m sure I wouldn’t even mention it. But, when one of our bulletin board stocks is making a gain in this environment, I think it deserves at least a mention….particularly when it looks like it’s trying to stage a breakout.

I’m talking about our small cap pick Voyant International (VOYT). It’s up 11% for the day, which isn’t huge, but we’re also seeing this stock finally get past a fairly significant ceiling at 14 cents. Better still, it looks like the buying volume is growing again.

Nothing earth-shattering, but this move is going to put VOYT back onto my short list of stocks worth watching. It also makes me wonder if there’s some yet-to-be-released news some traders are trying to get a jump on.

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Wednesday’s discussion of Voyant International (VOYT) - and Aviation Broadband - prompted an interesting question from one of our readers. Gary accurately pointed out there’s somebody else already doing what Voyant plans to do with the Internet on passenger jets…

Check out this page on MSN:

http://travel.msn.com/Guides/article.aspx?cp-documentid=579884&page=2

No mention of VOYT.
>From your previous pumping of VOYT, airlines were supposed to be the most promising entry for this technology.
Looks like someone else will get the business.

Thanks Gary. Though nobody is effectively delivering this higher-quality broadband service on airplanes yet, I hope we didn’t imply that Voyant was the only company working on it. (We’re specifically referring to ground-based service. There’s a satellite-based broadband service available, but it’s expensive and ineffective….and probably has no future.)

Here’s some even more concerning news if the article above (about GoGo and Delta) worried you though - there’s more competition than just GoGo.

That said, AirCell (the operator and designer of the GoGo service) seems to be closest to delivery….according to the article anyway. However, don’t forget Voyant successfully tested their technology (which I assume is the same basic technology as GoGo’s) just a few weeks ago, and it worked. I can’t imagine AirCell’s product being significantly more ready than Voyant’s. I expect to see a similar article about Aviation Broadband pretty soon.

Somewhat-related…the passenger jet broadband industry is expected to be worth $1 billion annually in the foreseeable future. If Voyant can even capture a piece of that (and we think they can), it will still be a windfall. Would I like it of GoGo/AirCell fell off the face of the earth? Yep. But, even if Voyant was the only player now, competition at some point would be inevitable.

Point being, we don’t expect GoGo to get 100% of the business.

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We got a handful of good questions regarding Voyant International’s (VOYT) unheralded quarterly results from Wednesday; a few of them even made the ‘need to answer publicly‘ list. Here’s the first…

I’m excited by your assessment of the company’s future, but they don’t have enough money to keep going. The press release today says they have to raise more capital and if they don’t succeed they won’t be able to stay in business for more than a few months.

Excitement versus fear: can they survive long enough to start benefitting from their exciting product developments? They can hardly dilute a stock that currently priced at 12 cents!

Any insights would be welcome.

Thanks for the question. The bad news is, that warning appeared on the latest 10-Q. The good news is, that warning has pretty much appeared on every 10-Q since Voyant’s onset. It hasn’t been a problem yet.

Truth be told, that’s mostly boiler-plate stuff, and on there as an accounting requirement. It’s not unusual at all for most bulletin board companies….none of them really have ‘enough’ money to stay afloat. Yet, many of them do stay afloat for quite some time.

In Voyant’s case, most - if not all - of their people are being paid in stock rather than cash. And, the staff is lean to say the least. They have basically no costs either, and RocketStream (as we now know) is high-margin.

Point being, the warning doesn’t particularly worry me any more than I’d be concerned even if they had a a big stash of cash. If they’re going to fold, any cash they had on hand really couldn’t prevent it. They don’t need it to stay afloat - they haven’t had much cash in a long time. (There are much bigger things to worry about.)

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Score another one for Voyant International’s (VOYT) RocketStream - another customer has been added, further cementing the technology’s demand. Once again, it’s incremental revenue….I’m not sure how much, but any amount is going to be a significant amount for this new company.

The customer is OraMetrix, and the need is for a specific product called ‘SureSmile’. OraMetrix provides an orthodontic treatment process - dentists do the hand-work in their office, but OraMetrix remotely creates the solution using detailed CT scans of an individual patient. Of course, those data files can be huge. Hence, the need for a high-speed data transfer service like RocketStream.

Dentists previously sent a patient’s CT scans via snail mail, on CD-ROM. That’s anything but fast. Now they can transmit the CT data via the web, in a matter of seconds. OraMetrix can immediately begin creating archwires for individual patients.

The ‘impact’, as we said above, is more revenue; I’m guessing an up-front fee plus ongoing royalties of some sort. The bigger message is more credibility. Every new RocketStream customer makes it easier to sell it to a new another new customer….a snowball effect, if you will. And, there are thousands if not millions more potential customers out there.

Even bigger than that, I think quarterly earnings are due any day now for Voyant. I’ll be excited to see what kind of dollars they’ve already done with RocketStream. Remember, CEO Dana Waldman has already mentioned growth has been strong during the company’s initial launch. Stay tuned for those details.

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After the market closed last Thursday I mentioned how the Voyant International’s (VOYT) stock looked prime to reverse higher after retesting a key 61.8% retracement line (at 15 cents). Well, we did indeed see this small cap stock move higher on Friday. Today we’re seeing even more upside, this time with higher volume. That accumulation is still on the low side overall, but it’s enough to get the stock moving.

I’m not overly surprised either. As you can see for yourself, the degree of bearish volume was shrinking as the stock peeled back from the peak of 32 cents. I have to think that was profit-taking from those folks who don’t see the longer-term picture here (which is fine). Now with all the big swings out of the way, we can really start to hone in on a valuation. (For more on the volatility-versus-valuation theme, be sure to review Thursday’s blog.)

Anyway, just wanted to point out this small cap name may be gearing up for the second round - and maybe a breakout move.

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Excellent. I was worried that we’d see this small cap stock surge out of reach right out of the gate, but Voyant (VOYT) opened where it closed on Tuesday…at 12 cents. We are seeing a good deal of buying here, but I’ve yet to see a trade over 14 cents. In other words, this stock looks safe to venture into if you were worried about a lot of news-based volatility.

It looks like it’s going to be a high volume day as well. 244,000 shares have already traded hands, and we’re just nine minutes into the trading day. I expect today to be one of the biggest days ever for the stock in terms of volume, which should get the attention of anybody who may have missed the news (maybe some institutions too).

More importantly, I think this is going to jump-start the stock. I’m glad all of you were able to get in under 14 cents. Let’s just sit back and enjoy the ride.

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Though we’ve only got a couple of trading days under our belt since we mentioned bulletin board stock Voyant International (VOYT), they’ve been a good two days. Shares closed at 10 cents on Thursday - the day we issued our company profile in the newsletter. As of right now, they’re at 12.5 cents…up 25% since our first look.

Even more compelling is the volume. We’re seeing a significant amount of buying now.

The short-term line in the sand seems to be 13.5 cents. We saw VOYT peak there yesterday, not to mention peaking at that line a couple other times earlier in the year. If the stock can break past that resistance, I really like the odds of a rally. I’d be accumulating on that breakout.

On the chart below you see a peak around 38 cents. What you don’t see is the peak of 76 cents from the middle of last year. Those are my short-term and longer-term mental goals.

Are they acheivable? I think so, though we’re not going to put VOYT in a full-blown ‘trade’ framework just yet. All I know is this company’s market cap is a mere $14 million, and they’re looking at a handful of multi-million dollar deals.

In the meantime, I think this bulletin board pick is starting to get traction, reflecting the underlying company’s potential.  

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