Agoracom

PROTOCALL TECHNOLOGIES INCORPORATED

CORPORATE PROFILE
November, 2007

Protocall Technologies (OTCBB: PCLI) has developed a proprietary software platform and service that enables retailers to burn thousands of premium movies, television, console video game and consumer software products at their stores and website distribution centers. The company’s proprietary service works on readily available desktop computer hardware and can store thousands of products in a virtual electronic inventory until they are needed.

The company’s DVD on-demand service, which is marketed under the name TitleMatch, includes touch-screen stations for customers to see what products are available at store locations and a behind-the-counter production station for store employees to produce DVDs and CDs on-demand along with all the printed packaging in just minutes. The result is a greater selection of immediately available products for the consumer and virtual inventory for the retailer. It is a win-win for all involved since retailers can save money by not having to carry thousands of titles in inventory and consumers can have a greater selection without ever being disappointed because a product is unavailable or sold out.

In September 2007, the DVD CCA, an organization of top Hollywood studios and hardware makers, issued long-awaited final approval for a copy-protection system called CSS to be used with recordable DVDs. CSS is used on commercially-pressed DVDs to limit unauthorized copying and its availability for recordable DVDs was crucial to movie studios releasing their libraries for on-demand production.

There are over 80,000 movies and television episodes now available on DVD with new titles being released every week. Console video game titles also number in the thousands. For retailers, the cost of managing a product inventory this large is prohibitive and invariably restricts product availability and sales. The company’s service, which is targeted at the multi-billion dollar entertainment market, offers expanded product availability with no physical inventory.

Protocall recently completed an agreement with a national retailer that plans to begin using the company’s service in the first quarter of 2008. In addition, the company is in discussions and/or contract negotiations with other national retailers that plan to use its service in a variety of retail venues including video stores, grocery chains, product distribution centers, college book stores, highway travel centers and convenience stores.

Protocall also provides outsourced fulfillment services to web retailers where consumer orders are routed to the company’s facilities for on-demand production and shipment to the retailer’s customer. The on-demand process is transparent to consumers and ensures 100% product availability. In 2007, Protocall signed agreements with Overstock.com and RightStuf.com to provide fulfillment services for both software and movie products. The company also provides fulfillment services to Tigerdirect.com and is in discussions and/or contract negotiations with other large web retailers to use its outsourcing services. Protocall anticipates revenue from these services to grow significantly as more movie titles become available for on-demand production.

MARKET OPPORTUNITY

DVD players are now used in over 80% of U.S. households and sales of DVD movies and television episodes generate over $25 billion in annual sales and rental revenue for retailers. The majority of these sales occur through traditional retail channels; however physical distribution methods cannot keep pace with the growing number of DVD titles and increasing consumer demand for a more varied selection beyond the latest new release. Moreover, as demonstrated by Amazon and Netflix, sales of previously released or “long-tail” titles can continue indefinitely and collectively produce greater sales than new release titles if a sufficient offering is available to consumers. DVD on-demand brings the long-tail product mix to store and web retailers without the cost of pre-manufactured inventory.

Business Growth & Strategy

Based on Protocall’s continued investments in R&D, systems development, market testing and long-standing business relationships, the company is uniquely positioned in the entertainment industry to benefit from the recent DVD CCA decision to approve copy protection for on-demand production. These investments, in combination with lower pricing for hardware, have drastically reduced the cost for retailers to implement Protocall’s TitleMatch service to approximately $5,000 per store – down from about $50,000 several years ago. The company believes by lowering up-front implementation costs and expanding the range of available products, it can accelerate wide scale adoption by retailers and simultaneously increase the barriers to entry for potential competitors.

Revenue Streams

Protocall’s revenue is primarily derived from site licensing and order transaction fees that are charged to retailers for using the company’s service. Additionally, Protocall provides advertising capabilities through trailer inserts onto DVDs at the time of production, in-box promotions and touch-screen advertisements. There are no minimum purchase requirements in Protocall’s content licensing agreements and there are no limitations on the price at which Protocall can resell products to its customers. Protocall typically pays content owners directly for their products and includes the cost in its transaction fees to retailers. The price Protocall pays for content is generally lower than standard wholesale pricing due to savings by content owners on packaging, storage and transportation costs.