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nDivision Shares Year-End 2018 Update Letter With Shareholders

January 4, 2019
DALLAS, TX / ACCESSWIRE / January 4, 2019 / nDivision Inc. (OTCQB: NDVN), the experts in increasing IT's value by replacing human labor with "digital labor," today announced that it has published a letter to shareholders from the CEO regarding

DALLAS, TX / ACCESSWIRE / January 4, 2019 / nDivision Inc. (OTCQB: NDVN), the experts in increasing IT’s value by replacing human labor with “digital labor,” today announced that it has published a letter to shareholders from the CEO regarding the company’s success during 2018. The full text of the letter was published on the company’s website at http://ndivision.com/investors#NEWS and follows.

January 4, 2019

Dear fellow shareholders,

On behalf of the nDivision management team and board of directors, I am pleased to report that 2018 was a very successful year and that we carry strong momentum into 2019.

To provide some perspective, I will remind you of some of the company’s history. When founded in July 2011, nDivision’s strategic priority was to build a business with predictable, growing recurring revenue from long-term technology services contracts that would fund all monthly operating costs, thereby creating a company with predictable financial performance and meaningful intrinsic value.

To achieve these objectives and to capitalize on the long-term upside of emerging industry trends, we invested the company’s resources in building strong Managed Services and End User Help Desk service offerings. These offerings would capitalize on addressing the growing demands being placed on corporate CIOs to trim costs, while continuing to improve their IT services on constrained budgets. We funded the growth of these offerings using cash flow from project-based professional services, and reselling computer hardware and software for a partner company.

In 2016 and 2017, market changes and unforeseen developments at a strategic business partner resulted in a substantial decline in revenue from our professional services, and hardware and software reselling business lines. This prompted us to raise approximately $1 million of equity capital to continue to fund the expansion and development of our Managed Services and End User Help Desk services. This funding helped spur our growth and confirmed our commitment to these businesses.

Capitalizing on that momentum, in February of 2018 we raised an additional approximately $3 million of equity capital and merged our business into a public entity. The funds raised were allocated to acquiring a portfolio of Managed Services contracts, establishing a sales team, and providing working capital. The transaction also resulted in our equity trading publicly on the OTCBQB financial market under the symbol NDVN.

With a small portion of the proceeds of the transaction, we acquired 58 Managed Services contracts during the first quarter of 2018. These new customer contracts were transitioned to nDivision during March, and billing began in April. The contracts have been very lucrative for the company, and through year end 2018, monthly recurring gross revenues and gross margins from them totaled approximately $70,000 and $50,000, respectively. We have increased the fees on several of the acquired contracts, and have realized only minimal attrition, leading to an overall increase in associated monthly recurring revenue. Additionally, feedback from our new customers indicates a high level of satisfaction with nDivision’s services.

The development of our sales team commenced during the first and second quarters, and in the fourth quarter, the team secured a Managed Services contract representing about $250,000 in annual recurring revenue. We also won the largest Managed Services contract in our history, representing more than $2 million in annual recurring revenue.

These wins, combined with several other new contract awards, expanded customer mandates, and the Managed Services contracts acquisition, are expected to increase our annualized recurring revenues by more than 150 percent compared to the annualized recurring revenues of January 2018. Once our new contracts begin billing at their agreed upon levels, we expect to achieve our strategic goal of covering all of our monthly operating costs with recurring contract revenue, and becoming cash flow positive during 2019.

With that as a backdrop, I am proud to share that as nDivision enters 2019 we are optimistic about our outlook.

During the first half of 2019, recurring monthly revenues from Managed Services, without the revenue contribution from continuing professional services sales, should reach levels sufficient to cover the company’s typical monthly operating costs, making nDivision cash flow positive. The pipeline of qualified sales leads is healthy and holds promise for continued wins during 2019. Our strategic partnership with a global IT service provider is generating solid recurring revenue and has the potential for additional growth. The company’s strategic partnership with IPsoft continues to create competitive advantages through the use of automation and an efficient IT operations platform, and it has the potential to expand into providing artificial intelligence and cognitive agents during 2019.

In summary, nDivision has built talented, tenured leadership and senior management teams; invested heavily in leading technologies; developed a highly efficient business model; and proven that it can grow its business across SMB and large enterprise customers.

We start 2019 with significant momentum, which was fueled by our win of a major contract with a Fortune 500 company during the fourth quarter, and we will continue to aggressively deploy our combined expertise to continue to grow nDivision into a major player in the technology industry. The management team is looking forward to building on our success in 2019 and beyond.

Thank you to all of our employees, shareholders, and partners for your ongoing support.

Sincerely,

Alan Hixon

Chief Executive Officer

nDivision Inc.

About nDivision Inc.

nDivision Inc. provides Autonomic Managed Services and End User Help Desk services to private and public entities, ranging from small businesses to global enterprises. nDivision’s services are valuable for any industry and are being provided to customers in multiple segments. The company supports over 100 customers across 45 countries, 24 hours a day, 365 days a year. nDivision leverages advanced automation technologies to replace human labor with digital labor. By the end of the first year of the service, nDivision typically automates between 60% and 80% of all incidents, across the datacenter and network. More information can be found at www.ndivision.com.

Forward Looking Statements

This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws, which statements may include information regarding the plans, intentions, expectations, future financial performance, or future operating performance of nDivision Inc. (“nDivision” or the “Company”). Forward-looking statements are based on the expectations, estimates, or projections of the Company’s management as of the date of this press release. Although nDivision’s management believes these expectations, estimates, or projections to be reasonable as of the date of this presentation, forward-looking statements are inherently subject to significant business risks, economic and competitive uncertainties, or other contingencies, which could cause the Company’s actual results or performance to differ materially from what may be expressed or implied in the forward-looking statements. Important factors that could cause nDivision’s actual results or performance to differ materially from the forward-looking statements include those set forth in the “Risk Factors” sections in the Company’s filings with the Securities and Exchange Commission, which are available for viewing on the SEC’s EDGAR website. These forward-looking statements speak only as of the date of this press release and, except as required by law, nDivision specifically disclaims any obligation to update these forward-looking statements, even if new information becomes available in the future.

InvestorRelations:

Brad Wiggins

214-272-2148

SOURCE: nDivision Inc.

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