This will in all likelihood be my last update to you as your Chief Executive Officer. As you may have seen by our recent press release, we are in the process of investing in an international food distribution business, headed by Mr. Anshu Bhatnagar. Effective January 2, 2017, Mr. Bhatnagar will replace me as Chief Executive Officer, but I will remain with the company, serving as President of Real Estate Operations. I am certain this was quite a surprise to most of you; however the realities of the real estate marketplace and our desire to bring shareholder value dictated it.
Over the past two years we made significant progress in our business model. The company I inherited was losing almost $5 million dollars per year and survived by continually raising funds and diluting shareholders. Other than servicing prior obligations, we have not raised one penny in debt or equity capital in well over a year now, operating by our own means. During 2016 we were able to produce the first quarterly profit in the company's history and while accomplishing these lofty goals we improved our products and technology.
However, the tide in real estate technology is running against the small vendor model. The US real estate business is controlled by fewer than five enterprises. Vertical integration was bound to eliminate vendors as these entities replaced consultants with engineers on staff. Furthermore commoditization, as we have clearly seen in video technology, was also bound to amplify and negatively impact our revenue model.
Nevertheless, our superlative technology group has developed a dynamic new entry into the business-to-consumer segment, a dramatic first for the company. We will update you on this as various roll outs proceed.
Many of you may ask 'why a food company'? Firstly, international food distribution is an exponentially growing business that can result in hundreds of millions of dollars in revenues. Mr. Bhatnagar is uniquely qualified and has shown success leading different food operations in his prior positions. The public company vehicle gives our food operations tremendous flexibility in its various capital needs, thus fueling the segment's expansion.
On the other hand the 'public company' was an impediment to RealBiz due to its high operating and management costs. The only advantage for shareholders was to use the vehicle for fundraising, something we have refused to do, focusing instead on business fundamentals.
I have enjoyed being your CEO for these past nearly two years. I leave you with a small but potentially profitable real estate technology business that has a potent new weapon in its arsenal, one that I still will be managing as President of the Real Estate Division of RealBiz. The new food division is expected to bring public company size revenues and a possible stock exchange uplisting to come on the heels of our upcoming two hundred-to-one reverse split.
On behalf of all the employees of RealBiz I wish you and your loved ones a wonderful and prosperous New Year.
/s/ Alex Aliksanyan
Chief Executive Officer
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This letter contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, initiatives, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. Our forward-looking statements can often be identified by words such as: “anticipate,” “opportunities,” “looking forward,” “expansion,” “vision,” “possible,” “see,” “potentially,” “expect,” “believe,” “future,” “foreseeable,” “should,” “will” and similar references to future periods. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks described from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. These risks include those filed under “Item 1A. Risk Factors” in the Company’s most recent Annual Report on Form 10-K and in the Company’s subsequent reports on Forms 10-Q and 8-K. All such forward-looking statements whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by these cautionary statements.
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