(a)
Business Development
Satelinx International Inc. (“Satelinx International” , the “Company” , “we” , “our” , “us” ) was originally incorporated in the State of Nevada on August 24, 1998 as U.S. Vanadium, Inc., operating from that date as a natural resource company engaged in the acquisition, exploration, and development of certain resource properties in the State of Nevada. The Company changed its name to Vanadium International, Inc. on February 24, 1999 and explored possible high-tech industry ventures with several groups while continuing to explore the feasibility of exploiting vanadium deposits on its properties. On November 13, 2001, the Company acquired all of the issued and outstanding shares in the capital of Vectoria, Inc., a provider of Internet Protocol ("IP") telephony services incorporated in the State of Delaware on October 1, 2001. The Company subsequently changed its name to Vectoria Inc. as of November 14, 2001 and discontinued its former natural resource business in order to pursue and develop the IP telephony business of its newly acquired wholly owned subsidiary.
The Company operated its businesses through a series of subsidiaries. During the year ended December 31, 2002, management of the Company abandoned this business to look for new ventures. At December 31, 2002, the Internet access services business had been sold and all of the subsidiaries of the Company were either discontinued or were inactive. As of the filing date of this report, the Company has no subsidiaries.
On August 23, 2004, the Company concluded a reverse split of its shares on the basis of one share for every six shares held.
On August 31, 2004, the Company entered into five debt settlement agreements with various creditors whereby it was required to issue a total of 4,620,900 shares of its common stock in repayment of $46,209 of debt owed by the Company. The shares represented approximately 42% of the Company’s total issued and outstanding shares at the time of the issuance. The Company issued an additional 166,666 shares to its then President in full and final settlement of outstanding fees owing.
On September 2, 2004, the Company entered into a Share Exchange Agreement with the shareholders of Satelinx Tracking Systems Inc. (“Satelinx”), whereby the Company agreed to acquire all of the issued and outstanding shares of the common stock of Satelinx in exchange for 22,000,000 shares of the Company’s common stock. Satelinx is a provider of tracking systems and integrated asset location services with its headquarter located in Montreal, Quebec, Canada. Under the terms of the Share Exchange Agreement, the Company was required to have no more than 8,000,000 shares of its common stock issued immediately prior to the closing and no debt on the balance sheet. The Share Exchange Agreement required the issuance of 3,000,000 shares of the Company's common stock pursuant to a commitment from Satelinx to pay a finders fee at closing. The Share Exchange Agreement also required the issuance of a fee by the Company of $25,000 and 500,000 post consolidated shares to Harmony Holdings Service Ltd. at closing.
On October 15, 2004, the Company and Satelinx entered into a verbal agreement to extend the closing date to November 12, 2004 and to make certain amendments to the Share Exchange Agreement prior to that date.
On October 21, 2004, the Company effected a second reverse split of its shares on the basis of one share for every ten shares held and a name change to Satelinx International Inc. and the Company’s trading symbol changed to SLIX.
On October 26, 2004, the Company issued a total of 6,784,422
post consolidated shares in full and final settlement of all of the debt on the balance sheet, save for legal and accounting fees, which are to be paid at closing, pursuant to the Share Exchange Agreement.
On October 25, 2004, the Company issued a total of 22,000,000 shares for the acquisition and on November 17, 2004 the Company issued a total of 3,500,000 shares for fees purrsuant to the Share Exchange Agreement to be held in trust for delivery at closing. On November 17, 2004 the acquisition closed and the shares were released. This transaction effected a change in control of the Company.
(b) Business of Issuer
Current Operations
The Company carries on all of its operations through its wholly owned subsidiary, Satelinx Tracking Systems Inc.
Business of Satelinx Tracking Systems Inc.
Satelinx is a provider of tracking systems and integrated asset location services with its headquarters located in Montreal, Quebec, Canada. Satelinx has converged wireless communication (GSM) and the Internet with global positioning (GPS/GPRS) technology enabling end-to-end mobile asset and vehicle location and monitoring solutions combining realtime GPS positioning and wireless communications systems delivering precise, time-critical mobile assets status and history information for increased security, greater loss control and telematics services. Satelinx provides hardware with tracking support services for stolen vehicle and asset recovery with a low monthly fee charged to the end user.
Our Technology
Satelinx was founded in 1997 with the thought that location tracking services would become an intergral part of our lives. The Satelinx system converges wireless communications and the Internet with global positioning technology. Our Satelinx Wireless Vehicle System (“Satelinx System”) is capable of powering the key areas of mobile workforce applications; location, communication and telematics services.
The Satelinx System combines the GSM/GPS, and wireless networks (GSM/GPRS) through our network operations center (‘NOC”). Vehicle data is gathered by the Satelinx System by in-vehicle wireless devices transmitted to the NOC, a central hub that collects and processes the vehicle data and messaging where access to services such as GSM/PS/GPRS tracking and two-way voice capability are available.
The Satelinx System powers of vehicle-based services from GSM/GPS/GPRS tracking to voice and remote connectivity. After a simple 1-2-3 installation that is hidden, the system inter-operates with NOC, the command center where all vehicle subscription services are provided. The Satelinx System is fully configurable over-the-air and is remotely supported. The system can also track while simultaneously using a built-in hands free cellular phone.
Products and Services
What are Location Services
Location services provide information that is relevant to the exact location of the wireless subscriber. Presently location services are divided into four key market segments:
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Fleet Management – by knowing the location of their trucks, transport companies and/or corporate fleets can reduce costs and have real-time communications in remote areas.
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Localized Information – regionalized information that is being aggregated to provide the locations of the nearest gas stations, hotels or restaurants, entertainment, shopping, etc.
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Emergency and Safety Services – traffic, communications and navigation information being provided to help service providers to speed their response to incidents.
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Network Management – location-based billing and efficient network planning for carriers looking to provide opt-in location services to their wireless data subscribers.
Early Adopters of Location Services
Early adopters of location services in the short and long-haul trucking industry have already capitalized on the benefits of vehicle tracking and remote data communications for many years. AVL combines both GSM/GPS and wireless data networks for the purpose of tracking, monitoring and exchanging information with remote vehicles. Mirroring this demand, the adoption of vehicle-based location services in private fleets and by consumers is believed to grow to US $33 billion by 2005.
GSM/GPS & Wireless Data Networks
The Satelinx locator utilizes GSM/GPS technology to monitor vehicle whereabouts and a wireless modem to transmit the
vehicle data from the vehicle to the NOC. The Satelinx locator utilizes GSM/GPRS networks to provide databased services beyond location. GSM is the wireless global network standard and GPRS is its data enhancement that provides increased transmission speeds and an ‘always on’ connection. This wireless data capability provides real-time access and connectivity to the vehicle or fleet.
Anti-Theft
Satelinx provides information regarding where a customer’s vehicles are at all times and instant notification of any unauthorized activity. Instant alarms can be sent to the customer’s GSM handset when any vehicle is being utilized or taken without authorization. A call is made to the NOC notifying our service representative that a problem has occurred and specifying the exact breach. The customer representative then contacts the customer at a number that the customer has provided to verify the status of the vehicle. Necessary actions can be taken to immobilize, locate and retrieve the vehicle. If a thief manages to start and drive off the customer’s vehicle our NOC can monitor the exact speed, turns, direction and location the vehicle is driven to. Authorities are notified as to where the vehicle is or where it is headed to improve the efficiency of catching the thief in action, thus minimizing damages.
Security
Our system includes a panic button in case of urgent contact with the NOC and we have incorporated a sensor input system, which will notify the NOC in case of airbag deployment as a result of an accident. We are then able to speak to the customer through an ultrasonic microphone in the vehicle and automatically dispatch the necessary services needed. The system can also advise ambulances of pertinent medical data in the event of a medical emergency that can save time and save lives. If the key detection device does not recognize the key in the starter, the vehicle will not start and the ignition signal to the motor will be blocked. The devices prevent unauthorized drivers from starting a car. When the ignition is turned off, the immoblizer prevents the vehicle from being started. The Satelinx System can also be used as a home alarm system where regular phone lines are not available.
Phase 2 Products
PDA Navigation System (Personal Digital Assistant) – We intend to launch a PDA navigation system that the consumer can plug into their PDA and access the location of their vehicles. This PDA system will also enable mapping and/or driving directions to destinations.
Satelinx “TrakMate” – We also intend to introduce a watch like device with a built in GPS/GSM micro minature tracking device. Similar to the Satelinx Tracking Device, our NOC having processed the wearer’s data, can pinpoint the location of a person at any time and place. This unit will be able to be activated the moment a person is reported missing with the relevant location information relayed to the proper authorities. Removal of the device, without inputting the wearer’s personal identification number, will automatically trigger an emergency signal to our NOC, who will immediately inform the authorized contact individual. If they cannot confirm the safety of the wearer, the relevant authorities will be contacted. The unit will also be able to be set (remotely) to constantly monitor the wearer’s location 24 hours a day and store all location data for up to 1 year. The unit will look no different than any digital watch, other than the addition of a small button on the fact of the unit which is an emergency panic button. The tentative launch date is scheduled for fourth quarter of 2005. Future application pof the TrakMate are geared toward asset tracking for loss prevention of personal valuables such as laptops, motocycles briefcases, valuable parcel or cargo shipments and much more.
We are at the prototype stage of development of watch like tracking devices.
Industry Overview
Growth of Wireless Services
To date, wireless services have primarily been comprised of voice, paging and messaging. Now, the ongoing convergence of wireless and data/Internet is opening the door to new data service opportunities. At the end of 1999 there were 470 million wireless subscribers worldwide, compared with 309 million in 1998. Wireless Location Services are estimated to reach $25 billion dollars in 2005.
Growth of Anti-Theft Devices
Car theft is a rising crime in Canada, with an average of 470 automobiles stolen daily representing a 5% increase in stolen cars in Canada in the year 2001 and 21% since 1988. The national increase in vehicle thefts has been drive by share increases in specific areas of the country. Over the past decade, vehicle theft rates have doubled in the cities of London and Hamilton, Ontario, tripled in Regina, Saskatchewan and more than quadrupled in Winnipeg, Manitoba. This has resulted in a large increase in insurance rates.
Canada ranked fifth highest of 17 countries for car thefts in the 1999 International Crime Victimization Survey, with 1.6% of the population reporting that they had been a victim of car theft during the previous 12 months. Police reported data showing that Canada’s vehicle theft rate has been higher than the U.S. rate since 1996. In 2000, Canada’s rate was 26% higher than the comparable American rate.
Canada’s transportation minister has made anti-theft devices mandatory for all new vehicles built after September 1, 2005.
According to the Insurance Bureau of Canada, nearly half of all new motor vehicles sold in Canada are equipped with anti-theft systems. However, most Canadians currently do not have anti-theft devices in their vehicle. Of those who do, 36% have car alarms, 26% have kill switches to cut off vehicle systems such as the fuel pump and ignition and 21% have some form of sterring wheel lock. Car tracking has not been in the market for long. Many insurance companies have already recognized the benefits of having a tracking device inside a vehicle and given discounts for people who have installed them The discounts can vary from different insurance company to company and can range from 15% to 40%.
Our Market
Our initial markets are the automobile dealers and companies with fleets of vehicles. We will initially market our products in the Province of Quebec, Canada where an anti theft device must be installed in order by be covered by insurance. We also market internationally through our joint venture partners in Greece, Taiwan and the United States of America. We will expand our market to use other applications for our products as we continue to develop our technology.
Competition
There are currently in the North American market, three competing products, none of which offer the consumer a product with the depth and breadth of the Satelinx System:
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Lojack’s trading unit, in use since 1986, is the most widely used system at this time with close to 1 million units in circulation.
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Boomerang Tracking Inc. commenced operation in 1995 and has approximately 160,000 units on the road. Both of the above corporations in the tracking field have been profitable for years.
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Vigil Technology Locating Systems Inc. is a new and unproven entrant in the market and in March 2002 commenced production.
The latter product, while offering quicker response time and precise location is extremely expensive, costing more than twice as much as Satelinx. Lojack and Boomerang rely on older technologies and are not as comprehensive nor as responsive in real time as our Satelinx system. The Satelinx unit cost and monthly monitoring fees are no greater then that of its older competitors and much cheaper than Vigil Technology.
Research and Development
The Company has not spent any funds on research and development during the last two fiscal years.
Employees
The Company has no employees. Satelinx Tracking Systems Inc. has 7 full time employees and two consultants on a contract basis.
