PNET -
(OTCBB)
Phon-Net.com Inc.
750 West Pender Street
Vancouver
Suite 600
BC V6C 2T7,  Canada
Phone: (604) 437-3787
Sector: Technology
Industry: Software & Programming

PHON-NET.COM Inc. is a fully reporting Florida company.

PHON-NET.COM makes the Internet interactive through innovative software, for which a patent is pending. The PHON-NET Direct Connect icon allows any consumer with a connection to the Internet to contact any participating business and speak to a representative in person while simultaneously viewing the company's web site. Credit card transactions handled in this way are completely secure.

PHON-NET.COM is the only company in the world offering direct telephone Internet interactivity together with the effectiveness, convenience and security that it provides.

With patents pending in the US, and Canada, coupled with their aggressive marketing/advertising campaigns, it looks as if this company is on its way to major profits.
Click here for a look at some of their past Ads

Business Plan Summary

The Potential of PHON-NET.COM
PHON-NET.COM will profit by making the Internet fully interactive, using its simple, patent pending Direct Connect technology. The market is very large and easily tapped. Direct Connect is inexpensive for businesses, yet the potential return on investment is gigantic.
Market Size
Sixty-eight million businesses worldwide will soon have an online presence. The U.S.A. has sixteen million businesses and in Canada there are over one million businesses that could benefit from our services.
90% of online customers worldwide access the Internet with a single phone line dial-up connection.
Distribution
Planned marketing of PHON-NET products is through multiple channels.
Direct Marketing
Direct marketing of the Direct Connect bundle is currently being executed. Soon, the product will be rolled out in the USA.
Online
Direct Connect will be offered through online classified ads and through multiple web sites.
Directories
Business using online "Yellow Pages" style business directories will be able to purchase Direct Connect for themselves through CALLME.CA in Canada and 411CALLME.COM in the United States.
Wholesale
The icon will be offered wholesale to selected companies who want a large number of icons because they have a large number of business lines. Some may elect to resell the icon to their database. Others may decide to affliate themselves with PHON-NET.COM.
Through telephone related companies
Large strategic corporations, such as telephone related companies, will be offering Direct Connect to their existing fee based customers and new customers attracted by the system.
Revenue
Each Internet business site will pay $269/year per license to allow 114 million consumers to access up to 16 million businesses in the United States alone.
Financing
In Q1, 2000 PHON-NET has completed financings netting $1,000,000. Monthly burn rate is $50,000 a month and is expected to remain constant. The company can easily present growth from revenue and cash.
"88 percent of Internet users believe that interactive web sites are the most efficient way for online companies to get to know their customers. But 60 percent rate sending personal information over the Internet as riskier than using the telephone."
   - from the December '99 Internet User survey conducted by the CyberDialogue.com

About the company

PHON-NET.COM was launched in 1998 to develop and license unique e-commerce software that enables web sites to offer voice interactivity with their customers. PHON-NET.COM is poised to capitalize on high growth opportunities in both the business-to-consumer and business-to-business markets.

PHON-NET.COM's main product is the Direct Connect software, which allows the consumer to speak to a business sales representative while viewing the web site. This is done using the user's home computer and telephone, with no need for additional hardware such as a sound card, speakers, or microphone. The simple, patented (pending) product is poised to revolutionize the Internet because until the advent of Direct Connect, the Internet has not been person-to-person voice interactive to any significant extent. For the high speed user there is a Callme feature which instantly notifies a business to call a consumer and allows businesses to immediately confirm a call back to the customer. The product is without cost to the consumer.

PHON-NET.COM is approaching the critical point where awareness of both the Company and of its product will begin to grow exponentially. With major milestones achieved and significant news pending, PHON-NET.COM represents a unique and exciting opportunity in both the short term and medium term.

THE OPPORTUNITY

Customer service is in a downtrend on the Internet. Direct Connect will change that trend dramatically. From now on a company can create a convenient, personal, one on one relationship with the consumer through an Internet web site. Any business knows that it must listen to its customers' needs in order to address them. Direct Connect is an inexpensive solution for a business wishing to initiate and maintain personal contact with their customer base. For the consumer the connection is simple and very convenient.

Closing the sale is a critical point in any transaction. Often questions regarding delivery terms, return policies, and volume discounts, remain unanswered as the customer becomes frustrated and browses on to another site. The impulse to buy is lost. Point and click sales on the Internet force customers to initiate the close themselves rather than being guided by a sales representative. More of these sales can be captured using Direct Connect, where the customer is talking to a company representative by phone while viewing the web site. With Direct Connect the sale becomes an interactive, personal, multimedia experience, where the customer is lead through purchase options on the web site and assisted through a close by a real person.

Safety of financial information is still a major concern for the majority of Internet users. Surveys show up to 85% of respondents are worried about using their credit card to transact online. The vast majority of consumers feel safe using the telephone. Businesses displaying the Direct Connect icon on their site hold an advantage over their competitors by offering the most secure and user friendly method of payment available on the Internet.

Privacy of personal information is another concern for many Internet users. Consumers are apprehensive of having unknown parties exchange information about their personal buying habits and preferences. With Direct Connect, full privacy is assured. Customers choose what personal information they wish to disclose over the phone.

THE PRODUCT

To the eyes of the Internet user, Direct Connect is an icon displayed on a web page that allows a viewer to quickly connect to the company's office and talk to a real person. The icon functions similarly to a hotlink, only instead of taking the user somewhere else, the icon brings the company's phone representative straight to the user, while the consumer can stay right there on the web page. The software actually pauses the Internet connection and automatically dials the business for the consumer, seamlessly reconnecting the consumer to the Internet when the call is finished. Direct Connect software takes a minute or so to download the first time the consumer uses it, and from then on remains on the consumer's computer and updates itself automatically as improvements become available.

THE MARKET

68 million businesses worldwide will soon have an online presence. Each of these businesses, many of which will purchase multiple icons, represents a positional client for PHON-NET.COM. The icon licensing agreement with each business is renewed annually, so cash flow is renewable annually! The profit margin is very high.

The telephone modem is the dominant technology used by Internet consumers, and will continue to be for several years to come because it is inexpensive and well established. Currently over 90% of U.S. Internet users connect to the net using a dial-up service and have a single phone line in their homes. A recent study by U.S. News Online found that nearly two-thirds of U.S. adults own a PC. Email was the most popular activity, followed by researching online, and word processing. None of these activities require anything more that a phone modem to be done effectively, and it appears that most consumers are not interested in paying for higher speed connections in any case. 62% of those surveyed said they were not planning to upgrade their current PC, and more than two thirds of those surveyed said that they were happy with the speed of their computers. These facts build a strong case for easy business and consumer acceptance of Direct Connect.

INTERACTIVITY - THE WAVE OF THE FUTURE

Current statistics show that shopping cart abandonment rates reach to 80%, where would-be customers leave their purchases on the electronic market floor and click through to another site. Unless the site can immediately inspire the shopper to order, the potential sale is lost. To do this the site must become interactive.

Internet research company Cyber Dialogue conducted a study that illustrates market readiness for Direct Connect as an interactivity solution. This study showed that 88% of Internet users believe that interactive web sites are the most efficient way for online companies to get to know their customers. The study also showed that 60% of users rate sending personal information over the Internet as riskier that using the telephone.

Direct Connect bridges the gap by enabling interactivity over a dial up Internet connection. With Direct Connect the user can simply click an icon to talk with a company representative who can then answer their questions and take their credit information over the phone. The Market is ready for the Direct Connect solution.

EXIT STRATEGY

PHON-NET.COM is a potential take-over target for telecommunications companies for two reasons. First, Direct Connect, owing to its patent pending creates the ability for a Telco to offer a product unique to it and no other Telco. Differentiated from the competition, a Telco could build massive brand awareness and superior brand competitiveness. Secondly, a feature of the Direct Connect software permits PHON-NET.COM to choose which long-distance carrier will host the call. To the selected carrier, this represents a sale every time a consumer clicks on the Direct Connect icon and requires long distance service. In the mature long-distance market, this equates to a block segment that may amount to millions of minutes of call time. This places PHON-NET.COM in a very attractive light as an acquisition target.

Investor Relations 1-877-347-2270
www.phon-net.com

Business Development Highlights of 2000

2000 November 7 News: Phon-Net announces submission of a Canadian patent application

November 2 News: PHON-NET ANNOUNCES LAUNCH OF NEW SOFTWARE VERSION

October 31 News: Phon-Net announces common stock re-listed on OTC Bulletin Board

September News: PHON-NET.COM announces effective SB-2 registration statement and status as a reporting company

February 16 News: Rollout of CALLME.CA - Canadian interactive business search directory. PHON-NET.COM Announces CALLME.CA for Canadian Businesses and Consumers; International Calling; Now All Web Pages Are InterActive Globally.

January 26 News: PHON-NET.COM DOWN UNDER: New Zealand and Australia Get Connected With PHON-NET Direct Connect and Brocker Technology Group. Two License Agreements signed with Brocker Technology Group (NZ) Limited (To:BKI), a publicly-held New Zealand corporation. One license agreement covers New Zealand and the other covers Australia. The agreements grant Brocker the exclusive license to use, market, distribute and sub license our Phon-Net Direct Connect software throughout Australia and New Zealand. We understand that Brocker has established relationships with Telecom New Zealand and Telstra in Australia, that provide Brocker with access to a large segment of the New Zealand and Australian market for Direct Connect.

January 18 News: Phon-Net.com - U.S.A. First; All Businesses and 97% of Online Consumers Can Now Direct Connect Using Their - One Line - One Phone - One PC. Distribution agreement signed with Volt Information Sciences, Inc. (NYSE: VOL). Volt, with executive offices located in New York City, is a leading national provider of staffing services, telecommunications and information solutions, and electronic publishing, including telephone directories.

January 13 Phon-Net raises $600,000 in a private placement financing.

PNET Statistics

Key Ratios & Statistics

Price & Volume

Recent Price $ 0.25

52 Week High $ 8.50

52 Week Low $ 0.14

Avg Daily Vol (Mil) 0.07

Beta NA

Share Related Items

Mkt. Cap. (Mil) $ 10.69

Shares Out (Mil) 42.76

Float (Mil) 15.00

Dividend Information

Yield % 0.00

Annual Dividend 0.00

Payout Ratio (TTM) % 0.00

Financial Strength

Quick Ratio (MRQ) 1.57

Current Ratio (MRQ) 2.59

LT Debt/Equity (MRQ) 1.03

Total Debt/Equity (MRQ) 1.10

Valuation Ratios

Price/Earnings (TTM) NM

Price/Sales (TTM) 514.70

Price/Book (MRQ) 18.56

Price/Cash Flow (TTM) NM

Per Share Data

Earnings (TTM) $ -0.18

Sales (TTM) $ 0.00

Book Value (MRQ) $ 0.01

Cash Flow (TTM) $ -0.15

Cash (MRQ) $ 0.01

Mgmt Effectiveness

Return on Equity (TTM) -816.06

Return on Assets (TTM) -453.83

Return on Investment (TTM) -525.01

Profitability

Gross Margin (TTM) % 100.00

Operating Margin (TTM) % NM

Profit Margin (TTM) % NM

Mil = Millions   MRQ = Most Recent Quarter   TTM = Trailing Twelve Months
Asterisks (*) Indicates numbers are derived from Earnings Announcements
Pricing and volume data as of 11/03/2000

Price Performance

Period Actual(%) vs.
S&P 500(%) In
Industry Industry
Rank

4 Week -54.3 -54.9 2 88

13 Week -51.6 -50.3 19 58

26 Week -77.8 -77.7 10 54

52 Week 77.3 70.3 82 80

YTD -71.4 -70.6 33 51

Note: Rank is a Percentile that Ranges from 0 to 99, with 99 = Best

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