Small Cap Profits Exclusive CEO Interview's

27th April 2010

TEMN CEO Interview

Participants

• Dominick Bianco

• Dennis Duffy

Dominick Bianco: This is Dominick Bianco, Senior Financial Analyst with SmallCapProfits.com. Today, I am here today with the CEO of TEAM Nation Holdings, Mr Dennis Duffy. Mr Duffy, before we get started can you tell us a little about your Company and a little bit about your background.

Dennis Duffy:   My background goes back to the 1960s in the title insurance market, my specific history was with the largest firm in the nation and then the second largest first was TICOR, and the second was SAFECO where I ended up as National Marketing Manager of each of those firms working on a national scope and working specifically to increase their market and their production of title products. Secondarily, I took another company public called American Title Company and that was a very good success on our operations. Sold that company and ended up acquiring a company called Cal Counties and TEAM Nation and we plan on duplicating the same system. .

Dominick Bianco:How long has TEAM Nation been around in its existent form?

Dennis Duffy In existing form since July 5th 2008.

Dominick Bianco:  You went public, through a reverse merger?

Dennis Duffy: Actually it was an acquisition, a full acquisition. We had a company called TEAM Nation Holding Corporation and we acquired the assets. Similar in its appearance it would look like a reverse merger, yes.

Dominick Bianco:  Can you tell us about the [title own] escrow insurance business and where you fit into that?

Dennis Duffy

Title and escrow business as you know starting about latter part of ’07 and into ’08 really got tight. The lack of refinancers and the lack of sales in the resale market now in the commercial market really hampered most title companies, so some of the nation’s largest title insurance companies. For example, LandAmerica filed bankruptcy; other companies First American, Fidelity had significant losses. We took the opportunity of jumping into the marketplace through the acquisition of Cal Counties and Cal Counties by the way has a penny in acquisition by TEAM, but we took Cal Counties, grew it in the Southern California market from a 35th in the marketplace up to number seven in the marketplace, so we are in the Top 10 and have grown revenues where we have been profitable in the title side now since the beginning of ’08 all the way through in now 2010. We are profitable, we have grown the Company and we feel good about that.

Dominick Bianco:  That’s great. Are you only providing title insurance in California or other parts of the country as well?

Dennis Duffy: We just filed an application in the State of Pennsylvania. We have four partners in the Company that we started and operated TEAM, but Janis Okerlund, my partner has qualified in the State of Pennsylvania. We have filed TEAM Title Company in Delaware and we are now looking to file title insurance applications in title agency applications in 35 States and that process is ongoing at the moment.

Dominick Bianco:  Where do you see your future growth coming from, residential or the commercial side of the business?

Dennis Duffy: I would say at the moment primarily residential, although we do plan in getting into the commercial and sub-division market as those markets return to the – right now there is a complete void on the commercial side, it just doesn’t warrant the effort at the moment, but when that market returns we plan on being there.

Dominick Bianco:  How are you marketing your product to the end user?

Dennis Duffy: Two means; we do it through our website, we do have connectivity, both companies Cal Counties and TEAM Nation, and by the way TEAM Nation manages Cal Counties Title Company. So we do, we have websites, but we also have approximately 68 sales representatives that are out in the marketplace and we have a national marketing manager for our TEAM Solutions product which includes termite, home protection, the house warranty, and some other items such as termite that we offer to real estate brokers and agents.

Dominick Bianco:  So you are marketing directly to the real estate brokers.

Dennis Duffy: Yes, we are, and the agents are one-on-one in the Southern Californian markets, soon to be in the other markets.

Dominick Bianco:  Now, can you tell us a little bit more about your TEAM Solutions product and what your competitive advantages are.

Dennis Duffy:

TEAM Solutions is an ancillary service to the title insurance, so when we have 68 sales reps out there and they are out producing the product for title insurance we can also tie in with our ancillary services and sell termite and other products that are related to the closing service such as the escrow and closing function, the house inspection, again the termite. These products are being sold now through all of our sales reps and referred to our TEAM Nation Solutions programme and we can go out and earn additional revenue and keep our cost of sales down to a minimum.

Dominick Bianco:  What successes have you had in marketing your product to real estate agents and brokers?

Dennis Duffy:We feel that we have been extremely successful. Again, if you go back we acquired Cal Counties and started the TEAM management function in June ’08. Again in Orange County, California that company Cal Counties was number 35 in its market position and in Los Angeles it did not even show up on the market share charts, and now we are number 8 in Orange County and Number 7 in Los Angeles, so we are in the Top 10, and that was all done through individual sales efforts by our staff.

Dominick Bianco:  Who are your top competitors in those areas?

Dennis Duffy: Chicago Title, Fidelity Title, Lawyers in Los Angeles County and First American. I would say those are the only companies that are ahead of us in the market share arena.

Dominick Bianco:  How many sales agents do those companies have?

Dennis Duffy: First American is taking a different approach so their sales representation is lower than us, I would guess they probably have between 40 and 50 sales reps, about half of what we have in that marketplace whereas Fidelity, Chicago, and Lawyers probably have three to four times the amount of sales force we have; they probably have 200-300 sales reps in those companies

Dominick Bianco:  Alright. What do you see in the housing market as far as a relationship business, do you think it has a market in Orange County, Los Angeles that is going to improve over the next year, which will help your business.

Dennis Duffy: You know, right now, about 65% of our business is resale which is great in the marketplace because the income pro rata is significantly higher. So as we look at the real estate economy right now there are a lot of short sales, a lot of short paying and there is a high demand for first time home buyers. I expect that will continue throughout this year. California has a new programme to subsidise and give tax breaks on first time home buyers, so I see that continuing, but I see the market not dropping down and market prices on real estate starting to edge up a little bit, so as the recovery comes back and as we retain our market share position we will have significant growth. .

Dominick Bianco:  What are you currently doing for revenues?

Dennis Duffy: Could you restate that question, I don’t know if I totally understand?

Dominick Bianco:  At the end of 2009, what were your total revenues?

Dennis Duffy: Total revenues in TEAM were approximately $2.5 million, total revenues in Cal Counties that is Management Company was about 13.5 million.

Dominick Bianco:  And you acquired Cal Counties when?

Dennis Duffy: Cal Counties is right now a management company, there is a pending AK that we have to acquire Cal Counties into TEAM when TEAM reaches a certain point and its stock has grown, which is described in that document, and then the acquisition will take place.

Dominick Bianco:  Thank you, I was wondering what I was missing there. Perfect. Now, are you currently in the market to arrange for capital?

Dennis Duffy: Yes, we are.

Dominick Bianco:  Are you working with any investment bankers or how are engaged in that process?

Dennis Duffy: We have grown it on our own; we actually have not raised any capital. We have looked at one firm that has offered a form of line for the sale of new shares of the stock, but we have not worked with investment bankers at this point. We feel our game plan is good, we have shown increase in revenue, we will continue to show increase of revenue, but we need to have the right mix to attract the revenue what we need for the capital to grow in these national environments.

Dominick Bianco:  How much money are you looking to raise?

Dennis Duffy: Ideally to become a title insurance company and to grow into the 35 States on the TEAM side of things we need approximately $5 million.

Dominick Bianco:  And how many shares do you currently have outstanding?

Dennis Duffy: Outstanding shares, right around 85 million.

Dominick Bianco:  And issued.

Dennis Duffy: Issued approximately 55 million.

Dominick Bianco:  Do you think your market cap fairly reflects the value of your Company?

Dennis Duffy:  You know, I imagine anyone in my position would tell you no. I think based on historical revenues and historic experience with TEAM it probably did, but now that we have news and the growth of the Company and we have the Company moving in its direction, we don’t just have a market plan, we are actually out there doing the job and getting our Company qualified in States. For example the Title Insurance Company in Delaware and the Title Company in the State of Pennsylvania, we are showing that we are a growing Company, so I would say based on that growth and what we are doing now, no, but the market cap should be higher.

Dominick Bianco:  Generally speaking, how long does that process take, to get approved in those States?

Dennis Duffy: In the State of California where we need to grow Cal Counties prior to the acquisition that growth takes about a year. The Department of Insurance has stringent requirements that take a lot of time. To get into the 35 States with TEAM it will take us about 90-120 days, and that process is already about 60 days into its process again in the paper flow of things. I would expect in the next 30-90 days we will be in the 35 States.

Dominick Bianco:  Do you have any additional capital requirements to be registered in those States?

Dennis Duffy:  Some, but not onerous. The 5 million in the capital market would include that qualification in those 35 States.

Dominick Bianco:  Is this the first time being the CEO of a publicly traded Company?

Dennis Duffy: CEO, yes.

Dominick Bianco:  Have you been involved in any other publicly traded companies?

Dennis Duffy: Yes, American Title Company, we had a holding company called ANFI and I was very instrumental in taking that company public. I was the Executive Vice President of that firm.

Dominick Bianco: Since going public this is your first CEO duty in a publicly traded company, what challenges have you faced in being a CEO of a publicly traded company?

Dennis Duffy: Starting in July ’08 we probably experienced the most difficult and challenging public market that existed in the last several years, so just trying to get recognition, acquire growth opportunities and look at capital venture - was just non-existent in ’08; ’09 looked better; ’10 looks like it is going to loosen up a little bit, but basically acquiring the capital for growth has been our biggest challenge.

Dominick Bianco: How much debt do you currently have on the books?

Dennis Duffy: We have approximately $2.7 million worth of debt to a small business bank that was used for acquisition and operating capital.

Dominick Bianco: When is that debt due?

Dennis Duffy: It is a five year note.

Dominick Bianco: I am looking at your balance sheet and can you tell us about your long term investments.

Dennis Duffy: Long term investments, we have some bonds that are on Cal Counties side. Investments in title plants, we are at the same time looking at marketing and establishing growth companies. We are also managing, as I indicated, Cal Counties. For that management structure we have acquired a title plant. Also we are looking at acquiring an additional title plant so we can do our own internal production of products and services for title companies.

We are also farming out human resources and legal services, two title companies.

Dominick Bianco: That is great and is there anything else that you would like to say to our subscribers.

Dennis Duffy: No, I guess what is at the top of my mind is that we are a real company- we are a growth orientated company. We are conservative in our nature and our products and services, so we compete in the marketplace with a good line of products and services and if they are excited at all about recovery and looking at title insurance and escrow and closing services and they would like to be part of a growth company I think we have a lot to offer.

Dominick Bianco: Great, thank you very much, and behalf of SmallCapProfits.com we look forward to speaking with you in the future.

Dennis Duffy: Thank you.

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