SOURCE: AccessKey IP, Inc.

AccessKey IP, Inc.

March 07, 2011 10:57 ET

Update on Current Conditions to AccessKey Stockholders

ALBUQUERQUE, NM--(Marketwire - March 7, 2011) - AccessKey IP, Inc. (PINKSHEETS: AKYI), issued the following statements today which reads as follows:

The intent of this letter is to give you an accurate portrayal of the current condition, the obstacles we face and the opportunities to turn the company in the proper direction.

Without going back and revisiting old history, it is enough to say that the direction from day one was difficult or fractured. The relationship with the Nutmeg Group, even though positive from a funding aspect, meant we were a captured audience, for the notes and continuing conversion provisions, made it very difficult to attract additional outside investors. Plus they had or have enough shares to affect the market performance of the stock. No one had any idea that the SEC would effect a change of control within Nutmeg, thus appointing a Receiver through the Federal Courts, which stopped or curtailed any particular funding opportunities. Any outside source looked at the debt picture, saw the issue with the Receiver and thus did not want to get involved. We made a few attempts at settling the debt, but each and every offer was rejected, for lacking adequate capital, the only cash equivalent was stock and they did not want stock. Currently, we have negotiated a settlement for all the Nutmeg debt, which essentially is $160,000 to settle $2,700,000 in outstanding notes. This transaction must be completed by March 9th and without that payment, the company is then in default of the settlement and thus the Receiver will obtain a judgment for the entire $2,700,000 through the courts.

The Palmer issue also compounded the existing situation. The issue with Bruce, only brought the full weight of the SEC down on the company and thus impacted the trade-ability of the stock as evidenced by the PinkSheet downgrade. We have signed a consent decree and we are awaiting a final figure for the fine to be assessed from the SEC and when that is paid we can then go back to PinkSheet and have the downgrade removed.

So where are we now and what can be done going forward? The Set Top Box issue was completed via our joint agreement. However, the sales aspect of that initiative was contingent on that partner and from what we can see and realize, the sales have not materialized, even though it was given to them in accordance with the agreement. Sure, it required additional upgrades, but that is the nature of the product. Frankly, if I had it to do over, I would have stayed totally out of this business for a couple of simple reasons. Yes, the business is scalable, but it requires constant upgrades and thus, constant capital infusions to redevelop any particular feature. If we were a Cisco or Motorola, it would be relatively easy, for the engineering staff would be on the front line. We do not have those resources, and the profitability is questionable without being able to supply 'content' at the same time.

The IsoFed product, which by all accounts, including a survey done by one of the top tier Broadcasters, is sorely needed in the market. The number one issue facing broadcasters in the field is the latency problem, which you can see all the time while watching live broadcasts. Latency is delay. Our solution does not require the current utilization of satellite feeds. It is internet based, thus saving them the satellite costs and bringing the broadcast latency down to a second or less. Our partner in this product, IP World, not only is well versed in the industry, but hungry to get the initiative up to speed and thus successful. We could not have asked for a better situation. Initially, we had a number of fits and starts, but currently we have solved the start up issues and the units have functioned perfectly and one is currently being used consistently. The size of the market is more than 1000 broadcasters and affiliates and then it multiplies when one considers the use of multiple units in one locale. AccessKey needs more capital to facilitate the selling efforts and expand the market, for none of the above prospects include the foreign side, such as a BBC.

We have the knowledge to solve these problems and add shareholder value. The company has assets and those assets include NOL's, that is, net operating losses, which are an asset to the shareholders if utilized properly. We have Series B preferred stock sitting on the books, held by the principals of the company, which will be collapsed. They did not have any convertible features, but they had the majority voting rights and these will be returned to the common stock shareholders. Essentially, this means the control of the company will be returned to the common stock shareholders and will facilitate proxy votes on change of control and other related matters.

Additionally, should we not be able to grow the ISOfed business line and resulting revenues, then there is nothing stopping us from finding a private enterprise that wishes to become public, thus collapsing the old company for a new company via merger. Naturally, the company would need to mitigate the overhang debt that exists other than that previously discussed, but I do not see that as a prohibition to the forward momentum. Furthermore, we can also attempt to form licensing agreements with those same broadcasters, thus allowing them to 'self sell' the product to their affiliates, whereby AccessKey could generate margins on both the product and the license.

Finally, the company has weathered difficult times in the recent past and there are tough choices that will be required in the near future, but, eventually we intend to work our way forward toward a brighter future. The overhang debts must be mitigated one way or the other. Revenue from our products will be required to pull us toward a profitable and sustainable future.

Respectfully submitted;
George Q. Stevens

About AccessKey IP, Inc.

AccessKey IP, Inc. is a developer of cutting-edge technologies and best-of-breed products tailored to address the market opportunities created by the explosive growth of digital communications, entertainment-related services and specific consumer electronics platforms. AccessKey IP's AccessKey(tm) products, powered by the Company's patented technology, provide complete access to the coveted "Triple Play" Set Top Box (voice, video and data) and "Quadruple Play" Set Top Box (voice, video, data and wireless) offerings of cable, telecom, satellite and broadband service providers. The Company's AccessKey Home(tm) and portable flash drive-sized AccessKey PC(tm) allow subscribers to "channel surf" streaming "HD Quality" television content (IPtv), navigate the internet, watch Video on Demand (VOD) offerings, play video or internet-based games, listen to music, make phone calls (VoIP), video conference, run a full array of computing applications, securely store data and more, all from a single device and service provider network. Its wholly owned subsidiary TeknoCreations was founded to participate in the explosive growth of Consumer Electronics and Business security needs. TeknoCreations designs high quality products with attractive pricing to enhance the consumer's favorite electronics products and the expanding security needs of corporate America.

Contact Information

  • FOR INVESTOR INQUIRIES CONTACT:

    AccessKey IP, Inc.
    George Stevens
    (310) 734-4254