SOURCE: Alternet Systems, Inc.

Alternet Systems, Inc.

June 24, 2010 12:29 ET

Alternet Systems (ALYI) Management Issues Shareholder Letter Discussing New Initiatives

MIAMI, FL--(Marketwire - June 24, 2010) -  Alternet Systems, Inc. (OTCBB: ALYI), a leader in Secure Mobile Commerce and Mobile Financial Services, today issued the following letter to shareholders from Chairman and CEO, Henryk Dabrowski.

Dear Alternet Shareholders:

What a quarter! Since the official launch of our new mobile commerce subsidiary, Utiba Americas, at the Mobile Money Transfer show in Mexico City in March, we have been in hot pursuit of business development and sales opportunities. Exhibiting again at the GSMA Mobile Money conference in Rio de Janeiro in late May, we again positioned ourselves to be one of the global leaders in the Mobile Commerce and Mobile Financial services providers. In a short three month period we have developed a sales funnel with more than 50 qualified opportunities, far more than we initially expected in our planning sessions, and a great way to jump start Utiba Americas.

Our timing and choice of partner have proven instrumental. We have been lucky to hit the market right at a time when mobile operators and financial institutions have decided that mobile commerce and banking have passed the proof of concept phase and will provide important new revenue streams and differentiation going forward. At both the Mexico and Rio shows, we were impressed with the number of prospective customers implementing mobile commerce services this year. We enjoyed showing off the strengths of the Utiba platform, which, after ten years of deployment, accounts for approximately 30% of the worldwide mobile commerce traffic and clearly leads the technology pack. Utiba America offers customers this powerful platform as a Software as a Service (SaaS) so they can deploy services without taking large technology risks, thus breaking the barriers to mobile commerce. 

Given the number of proposals currently being considered by customers, we expect to have completed customer deployments in 4 countries in the Americas by the end of the year, and be on track to have customers in over 14 countries from Canada to Argentina before the end of 2011. The mobile commerce race is on. 

In Utiba America's operations, we are finishing the build out of our Miami Super Point of Presence (POP), which gives us the ability to serve 12 countries in the region, and we are already planning the implementation of subsequent POPs in Mexico and Brazil, to serve these large markets as their demand grows. We are hard at work staffing operations in Miami and in the region.

Our other newly formed subsidiary, International Mobile Security (IMS), has also reached an important milestone this quarter. As announced in May, IMS is close to concluding the acquisition of intellectual property to support its plan to offer a comprehensive suite of mobile security services. The due diligence is progressing well and we expect to close the transaction by the end of July. The acquisition will not only give IMS proprietary intellectual property, but also an existing sales pipeline. 

With the acquisition, IMS will have an exciting suite of consumer security services, which it will bring to market selling to regional cellular operators. Its products provide much needed protection to cellular users and their sensitive data, as can be seen in the following examples:

  • Cyber Sexting & Bullying. IMS offers parents the ability to monitor and control potentially inappropriate, offensive, and harmful messages being sent or received by minors, both from the cell phone, or computer.
  • Remote Data Destruction. IMS offers the smart phone users the ability to remotely back up, and in cases of theft, destroy data. 

Additionally, IMS is launching a product to control 'Texting while Driving,' an internationally recognized danger, which recently drew fire from United Nations Secretary-General Ban Ki-moon, who stated, "Texting while driving kills." The application will be available to the general public and to corporations.

The amazing growth of cellular phone subscriptions creates market needs and opportunities addressed by Alternet's operating companies. In 2010 the number of cellular subscriptions worldwide is expected to surpass 5 billion, or close to 80% penetration of the global population. Currently, more than one billion people across the globe possess a cellular phone, but do not have a banking account, indicating tremendous potential for mobile commerce and banking services. In a recent study, McKinsey & Company estimated the direct (fee) revenue derived by mobile banking services at US$5 billion in 2012.

Similarly, we have all observed our increasing dependence on our mobile phones, which now act as mobile computing devises, but without the security we acknowledge needing for computers. The global mobile security market is expected to surpass $4 billion dollars in 2014, according to an ABI Research study published in January 2010.

Alternet is on the right track and motivated. Management believes in the company vision and they are sure that their efforts will show short term results both in our market valuation and our share price. We look forward to sharing more news with you in the months to come. Please sign up for the investor newsletter, available at our website at www.alternetsystems.com, and check in at our subsidiary web sites, www.utibaamericas.com and www.internationalmobilesecurity.com for additional information.

The Company's shares have seen substantially more trading volume in 2010 than in 2009, and the share price has correspondingly demonstrated the dramatic increases and decreases that are frequently common within the Over-The-Counter Market (OTC(BB). In my opinion, the trading difference between this year and last is largely a result of the Company entering into transactions that include common stock as a currency. Alternet is a fully reporting public Company and recent transactions that resulted in the issue of new stock have been correspondingly disclosed in our public filings. In order to fulfill our business plan, the company will require financing to fund organic growth plans and to fund future acquisitions. We currently have a 2010 plan that calls for $2.5 million and an additional $3 million in 2011. We have held multiple meetings and presentations with potential investors, and expect to close financing in the upcoming quarter on favorable terms.

Thank you for your continued support,

Henryk Dabrowski
Chairman and CEO
Alternet Systems, Inc.

About Alternet Systems Inc. (www.alternetsystems.com)
Alternet Systems Inc. (OTCBB: ALYI), a US corporation headquartered in Miami, Florida, is a leading enabler of Secure Mobile Commerce and Communications in the Americas and Caribbean. Alternet has regional presences in 17 countries throughout the region through a network of fulfillment partners and agents. Alternet's subsidiaries provide a comprehensive suite of hosted and Software as a Service (SaaS) applications for the Utility, Transportation, Financial, and Telecommunication, and Retail industries. Alternet subsidiaries include Utiba Americas, a joint venture with Utiba Pte Ltd., the leading provider of mobile payment and financial transaction software, and International Mobile Security (IMS) a newly formed provider of mobile communications security products and services.

"SAFE HARBOR STATEMENT" UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the Company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

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