Current Larry Oakley's Stock Pick:

Date Posted: 06/16/08

Elysium Internet, Inc. (OTC BB: USBF)

An Emerging Growth Situation

I interviewed CEO Scott Gallagher Friday 6/13/2008. His company has become public via a reverse merger with US Biodefense Inc, which has been trading as USBF on the Bulletin Board. As soon as all of the associated transactions are completed, the name of the public company will be changed to Elysium Internet, Inc. & a new symbol will be given to the company to reflect the merger. For the time being, watch USBF – when these changes are implemented, I’ll do an update, so stay tuned.

What Elysium Is & Does

Elysium Internet, Inc. is a direct navigation Internet media company. It is building targeted industry-specific direct navigation based Internet directories & portals that generate significant traffic for the benefit of its advertising partners. The company uses an ad based subscription model to generate the majority of its revenue.

Elysium aggressively acquires prime Internet real estate. For example, it has recently acquired such Internet domains as Pediatricians.com, Psychiatrists.com, Podiatrists.com, Auditors.com, Therapists.net, & SECLawyer.com.

Since its founding, Elysium has amassed a direct navigation Internet real estate portfolio worth millions. Scott Gallagher believes that by delivering the absolute best user experience on the Internet & building niche brands around premium Internet domains, Elysium Internet will become a leader in the exploding Internet Media space.

Background

In the Internet age cultural changes are occurring on a timeline never before seen in human history. The Internet has changed the way we shop, communicate, access information, pay our bills, & virtually every other aspect of our lives in some form or fashion. These shocking changes have created a new class of wealth as evidenced by the emergence of companies like YouTube.com, MySpace.com, Face Book, Marchex, & Google. More importantly young to middle aged people around the globe consider Google, Amazon, AOL, Ebay, Craigslist, & others the blue chip companies of the era. The emerging Internet generation prefers Google.com for their information, not the New York Times or their respective local newspapers. Gone are the days when newspapers, radio stations, & other old media giants dominated the multi billion dollar advertising industry. But with change comes opportunity.

Elysium Opportunity

Imagine if you could go back in time & purchase prime real estate on Park Avenue in New York City or ocean front property in Southern California. In the new media Internet age, a small & rapidly closing window exists to do just that. Elysium Internet has begun that process – not by acquiring real estate like ocean-front property, etc. – it acquires Internet real estate – commonly called URLs, or Internet addresses, or Internet domains, or Internet sites.

Why do that? --- One reason is that many addresses either have great value now, or will have at some point in the future. Let’s look at just one example: -- Chris Clark, 43, who lives in North Potomac, MD, sold the domain name pizza.com for $2.6 million after maintaining the site for just $20 a year since 1994. The online auction was launched on 3/27/2008. The first bid was $100, jumping to $2.6m a week later.

Direct Navigation

According to Juniper Research, “Direct navigation is the largest untapped market for paid search advertisers & agencies. With Google having increasingly become a gateway to the Internet & a navigation tool, Internet users have become accustomed to typing domain names into the address bar, creating a new source of traffic for marketers.”

Direct Navigation traffic, also called type-in traffic, refers to traffic generated by a person either typing a URL (a web site address) directly in the browser address bar or going to a site directly from a bookmark. It’s a continual stream of highly targeted traffic that does not rely on search engine placement or paid advertising or links from other web sites. It is the purest & most targeted form of traffic on the web, & considered by many to be the highest octane virtual fuel that drives the Internet.

Limited Opportunity

Good type-in domains are getting scarce by the day, time is running out for the unique opportunity of finding good domains at affordable prices, & if a company doesn't own good domains now, chances are they may never experience the continual flow of natural type-in traffic.

Type-in traffic is highly valued by those who understand it, know how to get it, & know how to use it. But as more businesses become aware of the natural, continual flow, & high conversion rates of direct navigation traffic, this type of traffic will increase in value exponentially in a very short time.

Exposure of a little-understood industry is always good -- perhaps Elysium & others are opening the eyes of companies who may have previously dismissed the value of type-in traffic. Perhaps another effect from this exposure is looming on the horizon: The more who become aware of the value of good domains with intrinsic targeted traffic, the higher prices will rise; & buying a good domain may soon be beyond the reach of many of us.

Here’s a quote from Steve Forbes at T.R.A.F.F.I.C. EAST 2007: "Internet traffic & domains are the prime real estate of the 21st century. This market has matured, & individuals, brands, investors, & organizations who do not grasp their importance or value are missing out on numerous levels"

Elysium’s Portfolio of Dot Com Names

Elysium owns a portfolio of more than 2,000 mostly dot com domain names. It is focusing on building out entire sectors such as legal, finance, healthcare, & social/jobbing targeted sites.

Some of its key brands are:

TheDirectory.com -- Will become its lead local search/advertising site. Scheduled for launch after six directories have been launched.

Therapists.net – its current operating directory (Under TherapeuticDirectory.com). The brand will be the first one to launch its new directory platform.

Auditors.com – Scheduled for launch in mid June, expected to become the leading information directory for the entire accounting & finance industry.

Pediatricians.com – Scheduled for launch in June 2008, management is confident that this directory will become the leading source of online advertising for many of the 50,000 Pediatricians in the US. In addition to the subscription revenue model, it will be building an e-store & partnering with leading content providers.

Psychiatrists.com – Scheduled for launch in June 2008, this directory is expected to become the leading source of online advertising for many of the 45,615 Psychiatrists in the US. Psychiatry is the fourth largest specialty in the US.

Podiatrists.com – Scheduled for launch in June 2008, expected to become the leading source of online advertising for many of the 14,000 Podiatrists in the US. Roughly 25% of all Podiatrists are self employed & thereby control their own ad spends.

SECLawyer.com/SecuritiesAttorney.net – Scheduled for launch in June. The beta version of this site generated over 300,000 visitors a month leveraging Elysium’s domain portfolio. Elysium owns a dot com domain for every SEC filing available such as: S1Filing.com, S3Filing.com SB2Filing.com, S8Filing.com, & many others, as well as what it believes to be the best domain portfolio in the world for the securities attorney industry.

144D.com – Will become a lead generation site for securities attorneys looking to sell restricted stock under the new rules.

LocalPhysician.com – Will be the first of its locally targeted domain brands, others scheduled are; LocalAttorney.net (the dot com is owned by Marchex & the dot org is owned by Name Media) LocalOBGYNs.com & many others.

LocalAttorney.net – With Marchex (NASDAQ: MCHX) owning LocalAttorney.com & Name Media (recently filed for its $172 Million IPO) owning LocalAttorney.org, Elysium has plans to build the site into the largest local driven lawyer directory on the net. It expects the site to be profitable almost immediately. Some of its lead gen sites will be: NevadaLawyer.com, CaymansAttorney.com, BostonSECAttorney.com, NewYorkSECAttorney.com, & hundreds more.

LocalOBGYNs.com –Will become the largest locally targeted OBGYN directory.

LocalStockBrokers.com – Will become a national stockbroker directory & industry portal for the money management industry.

LocalPlumbersDirectory.com – Will become a leading online source to find plumbers locally. Site will be zip code driven under Elysium’s advertising subscription model.

eBoxing.com – Will become an advertising driven informational site/blog to discuss the sport of boxing (very big in Europe at the moment) & to find gyms, fight schedules, etc. Boxing.com is owned by Communicate.com (OTC BB: CMNN) & has been rumored to by for sale for over $1 million.

Ale.Biz – Will become a locally targeted bar & restaurant directory. The site will have user generated content & focus on the 18 to 34 years old demographic.

TheFund.net – Will become a private equity & hedge fund directory. Fund.com recently sold for nearly $10 million, becoming the biggest domain sale in history.

CellualrJukebox.com – Is being built right now to become a leader in the booming ring tone & cell phone content market. Over 3 billion people a day use cell phones around the world.

Recent News

6/9/2008 -- Elysium Internet, Inc announced plans to launch CheaperPharmacy.com, a comparison search engine of prices in the health space in mid to late July. Scott Gallagher said: "We plan to position CheaperPharmacy.com as a leading price comparison search engine initially through the rollout of our premium health related directories; www.Therapists.net, Pediatricians.com, Psychiatrists.com, & Podiatrists.com. In January of this year the health category received 437 million online visitors, with 87 million unique visitors. These statistics, coupled with the aging baby boom population & weak US economy illustrate the ongoing need for clarity of pricing in this hugely important online sector."

Jupiter research estimates that the market for indirect or Internet influenced sales of health products & services will grow to $11 billion by 2010. The average annual US household spend in the health & beauty category is in the range of $2,900 per year, & 71% browse multiple online stores prior to completing a purchase.

6/4/2008 --Elysium announced it plans to launch its proprietary Local Search Platform over its first 50 local city directories by July 1st. In addition it plans to launch its second subscription based Internet directory brand Auditors.com by 6/6/2008.

Scott Gallagher commented, "Our majority owned subsidiary Dice Ventures, Inc. has built a state-of-the-art platform able to monetize local search traffic by generating search engine optimized, expandable landing pages in seconds. We plan to launch the platform over 50 geo domains as city directories by July 1st. The local search channel will become our second significant revenue stream, allowing us to further leverage our directory brands for our ad partners. While Auditors.com is coming to market a few weeks behind our initial schedule, we believe the quality of the end product will be well worth the wait to both our users & our advertisers. Our directory platform continues to evolve & improve since the successful launch of www.Therapists.net a few weeks ago."

6/1/2008 -- In the company’s 8K submission to the SEC, it said in part: ”we entered into an Internet Domain Name Purchase Agreement with Smash Clicks, Inc., pursuant to which we agreed to purchase 100% of the domain names Pediatricians.com, Psychiatrists.com, & Podiatrists.com in exchange for a Convertible Promissory Note in the amount of $1,000,000. The Note is payable by us in quarterly installments of $300,000 beginning on January 1, 2009, payable in either cash or stock at our option. If we elect to make payments in stock, the amount of shares to be issued will be calculated at 94% of the average closing price of our common stock for the preceding five trading days as traded on the over the counter bulletin board stock market. The Promissory Note is due October 31, 2009.”

Scott Gallagher commented: "With today's domain acquisitions we have added three of the best currently available dot com domains in the directory space to our growing portfolio. We successfully launched Therapists.net a short time ago. The site nearly surpassed our internal revenue projections for the month in its first full day of operations. We'll be launching Auditors.com in the next week or so & then look to launch Pediatricians.com, Psychiatrists.com, & Podiatrists.com all by the 4th of July. Having our first five directories running & generating cash will enable us to continue to seek out accretive category killer domains like those acquired today, build our Internet real estate portfolio, grow our cash flow, & provide significant value for our stockholders."

My Opinion

I feel that this company will progress rapidly. This is a good time to take a position, before the investing public realizes what is happening. I realize that its technical aspects are not the easiest to understand, but please understand that I am just beginning to investigate the company. I expect that after I get into it further, I’ll be able to tell you more in much less words. Please forgive the length of this editorial – it often takes quite a bit of time to get the nut of the situation across in a few words. Scott Gallagher told me there are about 12.7 million total outstanding shares, & the float is about 2 million shares. The price closed 6/16/2008 at $0.15. Call CEO Scott Gallagher at 727-417-7807 & check www.ElysiumInternet.com.

My comments in this column are strictly my personal opinion. At times, I will include forward-looking information as that term is defined in the Private Security Reform Act of 1995. Such information & the related company are subject to many risks & uncertainties. There can be no assurance that actual results, business conditions, business developments, losses & contingencies, local & foreign factors, & other matters will not differ materially from those suggested in any of my forward-looking statements. Such differences are the result of all sorts of factors (some examples: market conditions, competition, advances in technology, acquisitions, mergers, potential litigation, personnel changes, market changes, capital availability, etc., etc.).

Do not run out & buy a stock just because I am enthusiastic about the situation. Call the company before you buy -- satisfy yourself first. I always include a phone number for that purpose. My purpose in this column is to respond to your request for my personal opinion. You have the responsibility of making your own investment decisions. Do not give up that responsibility.

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