Pervasip Corp. (PVSP-OTCQB)

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August 6, 2012 Issue

The Most Powerful Name In Corporate News and Information


With Subscribers in More Than 160 Countries Using their VoIP Mobile Platform, Video Telephone Service and App to Lower the Cost of Making a Call, Pervasip Corp. is a Big Player in the Mobile Internet Revolution

Paul H. Riss
Chairman and CEO

Company Profile:

Pervasip delivers VoIP and video telephone service anywhere in the world that has a stable broadband connection. It recently entered the mobile VoIP services and applications arena so that its VoIP can utilize any 3G/4G or WiFi connection. Pervasip differentiates itself through a unique combination of high quality voice services, flexible back-office capabilities and automated provisioning systems that enable a quick turn-up for app users who are looking for a second mobile phone line or low-cost international calling, without using any voice-plan minutes from their mobile phone carrier. It offers a feature-rich, low-cost, high-quality alternative to traditional wireless phone services.


Pervasip Corp.
75 South Broadway, Suite 400
White Plains, NY 10601
Phone: 914-620-1500


Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – August 6, 2012

CEOCFO: Mr. Riss, would you tell us about Pervasip?
Mr. Riss: We are a video and VoIP telephone company. We sell Voice over IP telephone services over any broadband connection, including the 3G and 4G wireless networks and we also sell video telephony. We have a sturdy desktop videophone that allows you to call around the world to your family, friends or business associates with a video call.

CEOCFO: Who is using your services today?
Mr. Riss: We have both business and individual users. We have some businesses that love our videophone so much that they buy it and give it to their customers. They believe that the high quality video calling gives them a competitive advantage when their customers call them and see them. We agree with that concept. We believe that we obtain more business when we use a video call. For example, when we call another telephone company in South Africa, on a videophone, we feel like we know them, but we have never met them in person. In addition to business customers, we are attracting many individual users from our recently launched worldwide calling App for your mobile phone. It is an Android App. It allows you to make phone calls from your Android phone to 60 countries with our unlimited calling plan, which sells for a price of $29.95 per month. You can also purchase 500 minutes for $9.95 or buy a phone number, voice mail box and per minute calling of only 2.9 cents a minute to more than 60 countries. We also have very low rates to any country, which you can buy from us on a prepaid basis. In addition, people have the opportunity to download the App, try it for 60 minutes of free calling and see if they like it.

CEOCFO: How does your service compare to what else might be available currently?
Mr. Riss: There are other providers that do what we do, such as Skype or Vonage, but we have several advantages. One is that some of these Apps that you download to your mobile phone from other companies, use your voice-plan minutes from your existing carrier when you make an international call. They just carry your VoIP traffic to a special gateway and forward it to the final destination. What we do is we run the call over the data side of the cell phone network, so we do not use any of your voice-plan minutes. We run over the 3G, 4G or Wi-Fi networks. We have customers that only have a $15 per month data plan with AT&T, bought our $10 a month voice plan, and they received a free phone from AT&T for that $15 data plan, with a 2-year contract, so they are only paying $25 a month for their smartphone service. For the $25 a month charge, they receive the data plan plus 500 minutes of calling from Pervasip’s cell phone service, but we do not kill you with overage charges. When I had my Verizon service, and I went over my 700 minutes, they charged me $0.35 cents per minute. If you do not buy our unlimited calling plan, and you exceed the number of minutes in the plan, we charge you only 2.9 cents per minute for any overage. We are getting some very satisfied customers who download our App and buy a data only plan from their wireless carrier. Not surprisingly, some of these people are tablet users. We can be downloaded to the iPhone, but it is a two-step download, so it is more complicated than our Android App. Therefore, we are marketing only to Android users right now. We see reports of 850,000 new Android devices being activated every day. That is a significant number of new users and creates a large addressable market for our product. We believe Android will be on your TVs very soon and will shortly thereafter take over your home. There will be a little camera on top of those televisions so that people can download a video VoIP App for making video calls from your flat screen television, using an Android operating system.

CEOCFO: Are most people aware of Pervasip and how do you get more people to know about you?
Mr. Riss: We have been under the radar for quite awhile. It is only recently, with the launching of this App, and perhaps by design, after a settlement with our lender, that we have been seeking publicity. We had $13.9 million in debt through a hedge fund that had funded us on nine occasions before it became illiquid. We are basically paying them back $1.7 million over the course of this year. Our plan is to eliminate all the debt from the hedge fund by the end of 2012. With that plan in place, we think that we are in good position to go forward and create tremendous value for the company. We are now drawing attention to the company through on-line advertising, using Facebook ads, and we plan a large campaign with Yahoo to drive users to our website. Our rates are very low, compared to traditional wireless carriers, and our quality is superb. We are signing up agent sites too, as we now have the ability to track sales from each on-line agent through the use of a promo code.

CEOCFO: What are the barriers to entry for potential competitors?
Mr. Riss: The significant barrier is time. We have been creating our VoIP platform for seven years, and it would take someone with money at least 2 years to duplicate the flexible and scalable platform that we have created. We have a cluster of servers on a server farm processing our VoIP. Some of our competitors have done this, but it is very complicated because there is a great deal of programming. Anyone can do a VoIP platform that services 5,000 customers. But to be a true competitor, someone needs to build a platform that can scale and is fully automated in the back office. I could go to sleep Friday night and wake up Saturday morning with 25,000 downloads. That would be 25,000 new sign-ups, dial-tones and phone numbers delivered and credit cards charged, for people buying our App. That is how automated we are. For new competitors to come in and do this, they would probably have to go and buy equipment from a VoIP vendor. However, they would then have scalability issues, and they would be anchored down by the limitations of their equipment vendor. We do not have that issue, because we wrote the code ourselves, and we can expand it however we want. For example, if there is a need for a great deal of video calling within South Africa, we could install our software on a server cluster in South Africa, from a laptop in the United States. We can do that without even traveling to South Africa because we are virtualized. We are in the cloud. We believe we are far ahead of any entity that would enter this industry.

CEOCFO: These are exciting times for Pervasip!
Mr. Riss: We are very excited. We love the mobile Internet revolution. Our mobile platform gives us a worldwide revenue-generating engine and we have subscribers in more than 160 countries. We know that not all VoIP is created equal and we are very pleased with our quality and scalability. Some of the larger VoIP carriers had to add equipment and build their facilities in a rush, because they were growing so fast. Therefore, they have more network challenges. In addition, there is plenty of room for us, because the market is huge. There are projections in the industry of a billion Android users in just a couple of years. There are more cell phones in the United States than there are people.

CEOCFO: Why should potential investors consider Pervasip today?
Mr. Riss: If I could answer in one word, I would say, “Instagram”, because Instagram is an App company that sold for $1 billion to Facebook. They are an App company that one year ago had 13 employees. We are an App company with 10 employees, we own our code, and we are doing video VoIP. Our video VoIP is not on our App yet, but we plan to add it to our Android App later this year. If Instagram has a photo App, imagine how valuable a company would be that has a video App, that makes video calls over the 3G, 4G and W-F- networks on a global basis.


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We love the mobile Internet revolution. Our mobile platform gives us a worldwide revenue-generating engine and we have subscribers in more than 160 countries. - Paul H. Riss does not purchase or make
recommendation on stocks based on the interviews published.