ACCESS Newswire Inc. (ACCS) Business, 2011

Issuer Direct Corporation (Issuer Direct Corporation and its business are hereinafter collectively referred to as “Issuer Direct”, the “Company”, “We” or “Our” unless otherwise noted). We are a Delaware corporation formed in October 1988 under the name Docucon Incorporated. In December 2007, we changed our name to Issuer Direct Corporation. Our executive offices are located at 500 Perimeter Park Drive, Suite D, Morrisville, North Carolina, 27560.

The Company strives to be a market leader and innovator of disclosure management solutions and cloud–based compliance technologies. With a focus on corporate issuers, the Company alleviates the complexity of maintaining compliance with its integrated portfolio of products and services that enhance companies' ability to efficiently produce and distribute their financial and business communications both online and in print.

We work with a diverse client base in the financial services industry, including brokerage firms, banks, mutual funds, corporate issuers, shareholders and specialty firms such as accountants and the legal community. For example, corporate issuers utilize our cloud-based technologies and services from document creation all the way to dissemination to regulatory bodies and shareholders. With this example, we generate revenue from all of our services during the lifecycle.

During the second quarter of 2011, the Company acquired the customers of Edgar Tech Filing Services. In January 2012, the Company also acquired the customers of SEC Compliance Services, Inc. Through both of these agreements, the Company was able to grow its client base by an additional 135 corporate issuers. Both of these transactions are explained in more detail in the Company’s Management Discussion and Analysis section of this filing.

Our offerings are classified into four areas of corporate focus: (1) Disclosure Reporting, (2) Shareholder Communications, (3) Proxy Services, and (4) Direct Transfer. These four core business streams comprise our Disclosure Management System (DMS).

Our Disclosure Management System (DMS) is a business process outsourcing (BPO) model whereby we act under contract as a back-office extension of the corporate issuer’s management and board of directors. Our disclosure process aims to be disruptive in areas of normal regulatory business functions of the public markets, where we can clearly improve processes, streamline complexities, while reducing expenditures generally associated with reporting and disclosure requirements.

Our disclosure management system is the only secure workflow technology available today that allows officers, directors and compliance professionals the ability to manage the entire back-office functions of their respective companies from one interface.

As a fully registered Securities and Exchange Commission Filing Agent, we assist corporate issuers, mutual funds, law firms, resellers, and individuals with all of their securities filing needs. Many U.S. companies are required to file corporate documents with the Securities and Exchange Commission (“SEC”); including registration statements, annual reports, quarterly reports, prospectuses, information statements, material event filings, proxy statements, ownership documents, and more.

Since 2009, the SEC has been phasing in requirements for companies who must file public reports with the SEC to supplement their disclosure reporting requirements with XBRL (eXtensible Business Reporting Language) filings. XBRL is a freely available XML-based specification that uses accepted financial reporting standards and practices to exchange financial statements across all software and technologies, including the Internet. It is an XML-based framework that provides the financial community a standards-based method to prepare, publish in a variety of formats, and reliably extract and automatically exchange financial statements of publicly held companies. XBRL is not about establishing new accounting standards but enhancing the usability of the ones that we have through the digital language of business, XML.

The SEC phase in approach began in 2009 and just recently ended this past June 2011, requiring all reporting companies to file quarterly reports on Form 10-Q and annual reports on Form 10-K, 20-F and 40-F in interactive data.

We market our interactive reporting directly under the brand Issuer Direct and to our resellers under the brand Issuer Services and QX Interactive. Our strategy over the next handful of years is to increase our core disclosure business from the filing agent community both in XBRL and EDGAR filings.

As one of the largest financial printers in the southeast, we are focused on both corporate issuers and mutual funds.

We pride ourselves on having our typeset, design, print and fulfillment operations under one roof; giving compliance professionals the ability to meet regulatory deadlines and take advantage of our technology and on demand facilities to communicate their message with markets, shareholders and other vital constituents.

Today we produce a comprehensive array of documents for many of the nation's leading corporations, mutual funds, law firms, and investment banks. Our financial printing expertise gives us the edge in the market - giving customers the confidence and time to focus on their business execution. Our production staff has a deep understanding of the regulatory requirements that drive many of the printed materials that are distributed today - such as the new Summary Prospectus for funds and Notice and Access for corporate issuers.

During the year we continued to leverage our post sale fulfillment and iFUND platform to a broader base of clientele. This technology when combined with our Print-on-Demand (POD) production environment gives us a leg up on the competition in the literature fulfillment marketplace. Our technological advancements make our process more efficient and transparent to multiple parties and at the same time form one interface. As regulations continued to change and companies opt to print fewer and fewer large run projects, we expect print on demand to be a greater portion of our print business; this would include summary prospectuses for our mutual fund and broker clients, custom notice & access cards for corporate issuers, reminder mailings, and short run production on a one to one or one to many delivery method.

We foresee continued success with our mutual fund and ETF clients as well as significant opportunities to service a broader base of larger corporate issuers in the coming years. Additionally, we continue to explore very strategic relationships’ with niche markets that service a segment of the marketplace in which we believe we can be a leader both short and long term.

As part of our commitment to shareholder disclosure and improved corporate transparency, we expanded our core news wire services into a comprehensive shareholder communication system that assist our client’s investor relations departments. Our offerings include a blend of proprietary datafeed technologies such as EDGAR filings, press releases, stock charts and historical data, corporate vitals, as well as the compliance driven modules of whistle blower, corporate governance and our e-Notify request system.

We have strategic partnerships with content providers whereby we re-distribute certain content to the desktops of users on an on-demand basis. Additionally, we power the financial tear sheet market by utilizing our shareholder compliance platform to parse data in a condensed format that the financial markets refer to as a tear sheet.

Our Proxy system, branded as iProxyDirect, is a comprehensive technology platform that encompasses issuers, shareholders, banks, brokers and vital constituents during the proxy process. iProxyDirect is one of the only voting platforms where corporate issuers, mutual funds, and mutual fund administrators can setup, manage, communicate and monitor the entire proxy process from one online system. iProxyDirect offers Notice & Access options, material on demand fulfillment, digital delivery, and secure document hosting and real-time voting.

We operate our transfer agent business under the brand Direct Transfer, which is a wholly owned subsidiary. Our shareholder services business provides a complete array of agency and registrar services beyond traditional transfer activities. By combining our online workflow technologies, corporate issuers and their constituents can manage, issue, monitor, communicate and disseminate all facets of shareholder information within minutes.

Our commitment to compliance and safeguarding of information goes beyond our SSAE 16 business process (formally SAS-70). We maintain our client’s books and records in the manner we would expect ours to be managed, and that second-to-none service has enabled us to sustain our valued clients, withstand regulatory change and competitiveness by other providers. Corporate issuers have the ability to take advantage of the following:

· Issue, manage and monitor all corporate stock of the company online

· Issue physical certificates, book entry as well as DWAC FAST electronic participation

· Print on Demand Digital Certificate Library

· Communicate with shareholders with the click of a mouse with e-Notify

· Setup, monitor and direct an annual meeting and proxy vote

· Warrant, escrow and rights offerings

· Corporate re-org services including CUSIP, FINRA and state filing needs

The Disclosure Management System also provides for several SaaS Solutions to both the corporate issuer and reseller community

Compliance Cloud (issuerservices.net)

This platform is our cloud-based compliance workflow technology platform utilized by the reporting community to track, manage, change and approve both disclosure reports and XBRL filings. We currently do not derive any revenues from this technology. Our revenues come purely from the professional services associated with this platform to the reseller community. Future versions will allow for real-time editing of interactive reports. We believe this feature will generate licensing revenues and access fees on a per filing basis.

XBRLCheck (XBRLCheck.com)

XBRLCheck is a secure, free interactive data previewer for the disclosure marketplace. We derive revenues from private branding or white labeling our data previewer for other filing agents or web platforms. Additionally our XBRLCheck system is part of the planned real-time editing of interactive reports.

Interactive Fund Platform (ifp.iFUNDdirect.com)

The IFP is a mutual fund material platform whereby users can search, view, print and request mutual fund and ETF reports. The IFP is a virtually a real-time search archive for todays mutual fund market. Additional the IFP, when combined with traditional Print on demand (POD) system acts as the material delivery system for several mutual funds today.

Section 16

Section 16 ownership disclosure (under Forms 3,4,5) was one of our first SaaS solutions created in 2008. Our platform automates the common tasks of ownership disclosure that each officer and director in today’s public companies are required to file yearly. We derive revenues on a per issuer (CIK) per year as well as a per filing basis as needed. This platform replaces older and cumbersome systems by allowing for LIVE filing by the agent completing the form. The technology allows for archiving of previously filed forms to be accessed, edited and filed as amendments or updated form in seconds.

Disclosure Data Feeds

During 2011, we expanded the individualized portions of our iR Direct system into separate datafeed services, such as SEC filings, Stock information and News releases. Our SEC datafeed includes access to all company filings in PDF, HTML, as well as our XBRL interactive data previewer. Companies current in their reporting are required to make available all their filings on their corporate website on the same day of filing. Our datafeed network constantly updates hundreds of issuer’s corporate websites with thousands of filings in a variety of formats. Datafeeds are licensed both as a stand along service or as a suite within the iR Direct system.

· Issuer Direct

· Issuer Services

· Direct Transfer (Wholly owned subsidiary – Direct Transfer LLC)

· iProxy Direct

· iR Direct

· XBRL Check

· QX Interactive (Wholly owned subsidiary – QX Interactive LLC)

Our strategy incorporates a blend of organic growth fostered by the selective pursuit of winning operational and financial strategies along with prudent acquisitions of systems and technologies that dovetail our corporate key strengths and initiatives. As the market begins to rebound, it is evident to us that issuers are seeking a single sourced, less complex way of reporting and staying compliant.

The premise of our disclosure management system (DMS) is to provide a comprehensive set of services that comprise an end-to-end solution, enabling us to be the service provider of choice to the small-and mid cap markets.

Our sales organization is focused not only on increasing the number of clients we serve, but also on increasing revenue per client by increasing the number of services each client utilizes. During fiscal 2012, we plan on focusing on our cloud-based disclosure management system to both corporate issuers and the reseller community.

We also will continue to develop disruptive technologies that will differentiate us in the market. We have become known as the leading single source provider of disclosure management solutions for public companies. Our commitment to quality, scalability and accuracy will continue in each new solution we bring to market. We intend on evaluating complimentary verticals and system that can dovetail uniquely and seamlessly into our current platforms.

During 2011, we refined our organization, and we believe certain product service add-ons can be maintained and fostered by a newly created team we call our Issuer Services Group, which is dedicated to directly maintaining the client relationship while seeking to expand offerings and identify opportunities. We plan to continue to foster this services group approach for the foreseeable future as we believe this method of delivery will reduce overall delivery costs and drive higher customer satisfaction.

During fiscal 2012 we will continue to work on building our brand identity of Direct Transfer (our transfer agency), iFund Direct (our mutual fund regulatory portal fulfillment system), iProxy Direct (our proprietary proxy voting platform) and our new iR Direct system (our shareholder communications platform). These leading solutions depend upon our proprietary technologies and software that generally derives higher than average gross margins and over the long term will make up a good portion of revenue from each and every corporate issuer and fund we serve. Additionally we intend to see an increase in the services offerings related to financial reporting, specifically the new interactive data filing requirement referred to as XBRL.

We also work in partnership with other filing agents, transfer agents and virtual CFOs to provide services to their target clients under agreements and white label services.

During 2011, we updated our workflow solutions and portal technologies to corporate issuers and mutual funds markets. Authorized users of a corporate issuer or mutual fund/administrator can do the following with our workflow portal:

· Create, monitor and approve regulatory filings

· File LIVE ownership documents and other popular EDGAR forms

· Monitor proxy/annual meeting votes in real-time

· Create, manage and distribute news and other corporate information to markets and holders

· Manage and communicate with shareholders

· Monitor share activity and issue stock certificates

· Manage more than one corporate issuer or fund family at the same time

We will continue to make investments in equipment, technology and facilities, as we mature our business from a service-oriented only business to more of a blended technology enabling service company. In all of our offerings, quality, turn-around times, accuracy, and scalability as well as the need to preserve the confidential content of our clients is of utmost importance and part of our core values.

The business services industry as it relates to compliance and reporting is highly fragmented, with hundreds of independent service companies that provide a full range of financial reporting, document management services and with a wide range of printing and technology software providers. The demands for many of our services historically have been cyclical and reliant on capital market activity. During 2011 we spent a considerable amount of time growing several new service offerings beyond our traditional compliance reporting and transaction services, these new offerings will afford the Company the ability to even out our revenue seasonality and provide a new baseline of reoccurring quarterly revenues.

The financial print and reporting industry is highly fragmented and made up of dozens of service providers that provide a limited range of document management, financial reporting, and printing services. Printing services, specifically financial printing services in general are competitive and highly commoditized, with a tendency to produce slimmer margins than financial reporting and related shareholder disclosure services. Much of the industry is made up of small “mom and pop” shops that offer basic reporting conversion services. Beyond that, there are the dominant providers that offer a deeper breath and well rounded blend of products and services to the capital markets. We are one of the few companies in the industry that are focused on providing a complete solution of disclosure reporting and shareholder communication delivery, including proxy and transfer agency.

The largest financial printers generally gear their operations towards the largest publicly traded companies in the market, whereas we believe we have a greater ability to provide a complete solution to a broader audience in the medium and smaller-cap public markets.

The market for our services is highly competitive. We believe we offer a comprehensive set of solutions for our clients that few competitors, if any, can match. However, competition exists for each of the individual solutions we provide. Factors in this competition include speed, accuracy, price, customer service and the quality of supporting products and services.

We believe we are positioned to be the disclosure management provider of choice as a cost-effective alternative to both small regional providers and global providers. We believe we benefit from our location in North Carolina, as we do not experience significant competition for sales, customer service or production personnel.

As of December 31, 2011, our customers include a wide variety of issuers, mutual funds, law firms, brokerage firms, banks, individuals, and other institutions. We did not have any customers during the year ended December 31, 2011 that accounted for more than 10% of our revenue.

A greater portion of our printing, distribution and solicitation of proxy materials business segments will be processed during our second fiscal quarter (calendar quarter). Therefore, the seasonality of our revenue makes it difficult to estimate future operating results based on the results of any specific quarter and could affect an investor’s ability to compare our financial condition and results of operations on a quarter-by-quarter basis. To balance the seasonal activity of print, distribution and solicitation of proxy materials, we will continue to grow our other revenue streams since they are linked to predictable periodic activity that is cyclical in nature.

As of December 31, 2011, we employed 22 full-time and two part-time employees as compared to 20 full-time employees and two part-time employees at December 31, 2010, none of which are represented by a union. In January 2012, we opened an office in San Leandro, CA and hired six employees. As of the date herein, our employees work between our corporate office in North Carolina, and our Florida, California, and Colorado operations.

Our headquarters are located in Morrisville, North Carolina. We occupy 16,059 square feet of office space pursuant to a six-year lease, and we believe we have sufficient space to sustain our growth through 2016. Additionally, we maintain a presence in south Florida and in Colorado. In January 2012, we assumed a lease for 1,100 square feet of office space through October 2012 in San Leandro, CA.

We maintain both a general business liability policy and an errors and omissions policy in excess of $5,000,000 specific to our industry and operations. We believe that our insurance policy provides adequate coverage for all reasonable risks associated with operating our business. During fiscal 2011, we also obtained a Directors and Officers insurance policy standard for our industry and size.

The securities and financial services industries generally are subject to regulation in the United States and elsewhere. Regulatory policies in the United States and the rest of the world are tasked with safeguarding the integrity of the securities and financial markets with protecting the interests of both issuers and shareholders.

In the United States, issuers (public companies) are subject to regulation under both federal and state laws, which often require public information and notification filings. At the federal level, the Securities and Exchange Commission regulates the securities industry, along with the Financial Industry Regulatory Authority, or FINRA, formally known as NASD, and NYSE market regulations, various stock exchanges, and other self-regulatory organizations (“SRO”).

We operate our filing agent business and transfer agent business under the direct supervision and regulations of The Securities and Exchange Commission.

Our transfer agency business, Direct Transfer is subject to certain regulations governed by the SEC, including without limitation, with respect to registration with the SEC, annual reporting, examination, internal controls, tax reporting, escheatment services. Our transfer agency is approved to handle the securities of NYSE/AMX, NASDAQ and the Over the Counter listed securities.

Our mission is to assist corporate issuers with these regulations, communication and compliance of rules imposed by regulatory bodies. The majority of our business involves the distribution of content, either electronically or paper, to governing bodies and shareholders alike. We are licensed under these regulations to disseminate, communicate and or solicit on behalf of our clients, the issuers.