Los Angeles, October 11, 2016 -- GAWK Inc. (OTC PINK: GAWK) CEO Scott Kettle reviews the balance of the fiscal year with a letter to shareholders.
Dear Shareholder:
Your Company is seriously undervalued! Our prospects couldn’t be brighter. GAWK has, in a mere two years, gone from $0 revenue to a $7 million run-rate in annual revenue. We have brought together four businesses that were originally friendly competitors, but which had key technology and/or personnel that added to our infrastructure or know-how. We are now diversified, in that all our acquisitions are carefully structured as different parts of the Company that fit together seamlessly. GAWK is approaching profitability projected by the end of our fiscal year. And we’re just getting started.
The cloud communications business is a large, fragmented market, with no clear leaders, and we are making great progress in defining our niches. While anticipated future growth of this sector varies from research firm to research firm the consensus is we are in a sector that is still in its infancy and anticipated to exceed $200 Billion within the next 5 years. As this is an industry that’s driven by scale as we continue our growth trajectory we look to achieve a similar valuation to those in our sector. The market values our competitors at 5 times revenues. By the same standards, GAWK’s market cap should be significantly higher than we are currently trading at, which is one tenth of our current annual revenue run rate.
I’ll take this opportunity to outline some of our plans. Your Company is in the two hottest areas of communications, Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS). Our goal is to be one of the premiere VOIP providers in the world. Stay tuned for an upcoming announcement that will grow our opportunities in these arenas.
Behind the scenes, Gawk’s infrastructure has established worldwide Internet connectivity as well as connections to various major carriers. By connecting to Gawk, customers get access to every mobile and fixed line carrier that exists in the world. Our advanced network is a network of networks. Access to this state of the art network is based on usage, not a licensing or set fee, enabling customers to get up and running quickly and without long-term commitments.
As a Full Service business class telecom provider, we are now able to provide our customers with high margin products that build high customer retention. We perceive End-to-End security as a critical element in these products, and one in which we enjoy a clear advantage. Not surprisingly, security is top of mind for most businesses as a concern about cloud phone systems but security encompasses a broad range of concerns. The greatest challenge is security around voice calls, call records, and the physical security of the data center, where the Hosted PBX is located. Other security concerns for businesses, particularly larger enterprises, are data privacy and regulatory or compliance issues. As a cloud communications provider we have and are continuing to develop customized solutions targeted to key verticals such as healthcare and financial services—solutions that address their industry-specific security concerns and needs such as compliance.
Gawk has a three-pronged security philosophy that revolves around encryption, with the three types of data—data at rest, data in motion, and data that stays on clients and travels on devices— encrypted throughout. Gawk encrypts data at every point throughout the organization and the platform undergoes a thorough compliance process annually. Gawk encrypts voice and messaging so that, even if unauthorized users are able to get access to the voice stream, encryption prohibits them from reassembling it.
Most recently, GAWK has expanded our service offerings to Call Centers, so we can handle inbound as well as outbound services, reaching 100 million people each month in 21 Countries and 31 Major Cities for Cloud and Edge Data Center Services.
Last month, GAWK announced that for the period ended July 31, 2016, it had broken all earning records: Revenues surged to $1,319,429, or 136%, from $558,079 for the same period in 2015. Gross profit rose 133%, to $385,599, from $165,450. For the six months ended July 31, 2016, revenue leaped 351%, to $2,780,082, from $616,661 for the same six months of 2015, and gross profit for the first six months of 2016 escalated to $791, 219, or 253%, over the previous year’s $224,032. Current assets are up 14%, or $890,604, compared to $783,665, in 2015. Unusual for an organization of GAWK’s size, the Company has attracted analyst coverage - Shayne Heffernan, of LiveTradingNews www.livetradingnews.com,
GAWK continues to roll up customers, and expand our tech reach while continuing a significant investment in cyber security.
Thanks for your continuing confidence in GAWK and its management.
Sincerely,
Scott Kettle
CEO
About GAWK, Inc.
Gawk, Inc. offers a suite of cloud communications, cloud connectivity, cloud computing, and managed cloud-based applications solutions to small, medium, and large businesses; and offers domestic and international voice services to communications carriers worldwide. It offers a suite of advanced data center and cloud-based services, including fault tolerant, high availability cloud servers, which comprise platform as a service, infrastructure as a service, and a content delivery network; managed network services that converge voice and data applications, structured cabling, wireless, and security services, as well as include Internet access via Ethernet or fiber at speeds ranging from 10 Mbps to 10 Gbps; and data center solutions, including cloud services, colocation services, and business continuity services, such as storage and security. www.gawkinc.com
Forward-Looking Statements
All statements in this release that are not strictly historical facts are "forward-looking statements." Such forward-looking statements are based on GAWK's current assumptions, beliefs and expectations, and involve risks, uncertainties and other factors that may cause GAWK's actual results to be materially different from any results expressed or implied by such forward-looking statements. Some can be identified by the use of words such as "expect," "plan," "possibility," "offer," "if," "negotiate," "when," "believe," "will," "estimate," "continue," and similar expressions. Risks, uncertainties, and other factors that could cause or contribute to such differences include, but are not limited to: ongoing and future intellectual property enforcement actions; the ability to successfully litigate or settle claims of patent infringement; GAWK's ability to obtain necessary financing, generate sufficient cash flow, and maintain appropriate indebtedness; and the increasing development of market competition in the area of telecommunications. These factors and others are described in more detail in GAWK's public filings with the Securities and Exchange Commission, including the risks discussed in the "Risk Factors" section in GAWK's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Copies of these reports can be found on GAWK's website (http://gawkinc.com) under the heading "Investor Relations." GAWK is providing this information as of the date of this release and, except as required by law, does not undertake any obligation to update any forward-looking statements contained herein as a result of new information, future events or otherwise.
Contact:
GAWK Inc.
Investor Relations
888.754.6190 Ext. 3
Tuesday, October 11, 2016
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