GIFT CEO'S comments:
PRODIGY(R) interactive personal service 05/27 09:23 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: BBMA35C Chris Forte Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 10:25AM ET
Since this is my first post, I'd like to thank Gary and the
rest of you for allowing me be here.
Chris - for the initial amnesty program, we identified
activities and companies in those activities that would
likely be infringing now or in the future. The activities
generally included the software and publishing industries
since those are the ones that are able to use the system
today with the available bandwidth. We came up with 75,000
companies.
As to the Web based businesses that do not appear on
anyone's database, we are inviting them to license through
our new Web site e-data.com which should be
activated by tomorrow (6/1). At that site, we will take
credit card payments using the First Virtual Payment System.
As to numbers of licensees, that is certainly difficult if
not impossible to predict. I think we'll just have to wait
for some data to come in.
Arnold F
PRODIGY(R) interactive personal service 05/27 09:23 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: JTHP74A Debra Watson Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 10:41AM ET
Hi Debra,
We believe that every company that utilizes the claims of
the patent for on-demand electronic distribution should
purchase a license. Included are content providers,
resellers and service providers - in other words - the
distribution chain.
Because e-distribution is still in its infancy, even the
"big players" are "little fish" in terms of revenues today.
In the Amnesty Program, companies determine their prior
fiscal year's net revenue, fit it into a licensing
level, and send us a check. Therefore, we will always base
this year's license on last year's net revenue. As a
company's net revenue grows from year to year, so should
their licensing fee. The Amnesty Program has guaranteed
rates through 2002. If a company can forecast its growth,
it will be able to forecast its license costs over the
period. If there is no growth, the license costs increases
by a 10% factor from year to year.
The limited financial information is due to a fairly unique
situation. The corporation that owns the patent (now called
E-data) has been public for years. It was never a reporting
company. Reporting is voluntary until we hit certain
mandatory factors. At any rate, we are in the process of
audits by BDO Seidman for 12/94 and 12/95. They will be
completed before 6/30. As soon as possible after 6/30, we
will file the necessary forms with the SEC with 10K and 10Q
disclosures. After comments, we will be reporting. It may
also be possible that we will be able to apply for a full
NASDAQ listing at that time.
Arnold F
PRODIGY(R) interactive personal service 05/27 09:24 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: JWHD03A Marvin Schere Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 10:45AM ET
Hi Marvin,
At this minute, the company's financials will not warrant a
NASDAQ listing. However, we believe that it is possible
that revenue flow will develop quickly and that our earnings
and other activities will rapidly provide us with the
balance sheet we need.
Arnold F
PRODIGY(R) interactive personal service 05/27 09:24 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: JTHP74A Debra Watson Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 10:57AM ET
E-data has adopted the tag line "At the Source of Digital
Commerce" which is simply a follow-up to changing our name
to reflect our focus.
We will utilize revenues from the patent to build a company
based upon digital commerce applications. These types of
applications will be the backbone for growth of the Internet
over the next decade. We are already working on several.
We are involved in conversations with companies from various
industries and tech companies for partnering to provide the
basis for more effective business operations using the
Internet as the communications vehicle for a global society.
We believe that we may have the basis for several "killer
apps."
At any rate, it is certainly important to build a company
that will continue to grow shareholder values after the
patent expires.
Arnold F.
PRODIGY(R) interactive personal service 05/27 09:24 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: JTHP74A Debra Watson Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 11:27AM ET
ELSI is a consortium of compnies that are moving to make
electronic software distribution (ESD) a viable distribution
channel on the Internet.
This is all in response to Microsoft's embracing of ESD. At
an industry conference in SF 3 weeks ago, estimates of ESD
were $5.8 billion by the year 2000. Nobody knows whether
that number is real, but everyone knows that it will be a
big number.
What is needed to make it all a reality are:
more bandwidth (cable, ADSL, etc. - arriving soon)
secure transmissions of data
industry records of purchasers
ability to pay securely
ability to return unwanted software
etc, etc.
In response to Microsoft's initiative, the industry got
together and made it all possible.
Therefore, if anything ELSI is helping to make our patent
more valuable since E-data owns the system and method for
on-demand electronic distribution. Arnold F.
PRODIGY(R) interactive personal service 05/27 09:25 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: JTHP74A Debra Watson Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 11:34AM ET
David Fink is our lead patent counsel. He was formerly
Exec. VP of Refac, an AMEX-listed patent exploitation firm.
Mr. Fink has extensive experience with cases against major
companies.
Actually in answer to your specific question "Is he a Pit
Bull or a Poodle?" -
David is the best of all worlds. He's a pit bull who looks
like a poodle!
Arnold F.
PRODIGY(R) interactive personal service 05/27 09:25 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: JTHP74A Debra Watson Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 12:14PM ET
Debra,
Time frames are hard to predict. I believe that
stockholders will get an idea of where we're all going by
the end of the summer. By that time the Amnesty Program
will be over. We can then have some gauge - as well as some
pretty good statistical info. I also believe that by that
time, we're likely to have a lot of licenses.
Also by that time, it is likely that we will have been able
to make some announcements about the digital commerce
applications that we are turning into operating companies.
As to estimates of the litigation:
In the NY case, as we all know by now, the Judge has set a
pre-trial scheduling conference for June 7. On that date,
the schedule for depositions, document production,
interrogatories, etc. will be set. That's also when the
defendants will begin to spend money. Will they make a
business decision to license the patent? We'll have to see.
We're certainly prepared to defend. How long could the case
take? The estimate from counsel is several years.
In the CT. case we're still working on serving all of the
defendants so anything resembling a trial is a long way off.
We're involved in settlement negotiations with a large
number of the defendants in both cases. We expect to
announce those settlements shortly.
Arnold F
PRODIGY(R) interactive personal service 05/27 09:25 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: JTHP74A Debra Watson Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 12:34PM ET
Debra,
You have several questions in one, but I'll try to answer
them all.
On a scale of 1 to 10, how good of a manager and leader am I
I'll say 9, nobody's perfect. I believe in team work with
little or no hierarchy in decision making. E-data will
become a matrix organization with people in teams by
function and cross functionally for projects. Who leads
those teams? The person who assumes the leadership
position. I have studied communication for many years, I am
devoted to business effectiveness and I have a BS in
Organizational Management. I've also always been in
leadership positions in business since I was 21.
Will I stay with E-data? I have a contract through
12/31/2000. As long as I do my job in growing the company
and creating shareholder value, I assume that people will
want me to stay until then. After that, who knows?
We are working on systems to keep investors as advised as
possible. It has been difficult to this point with our
non-reporting status. We'll improve them from here.
Traci from Bloomberg -
She interviewed me about 2 weeks ago. I think that the
focus of her story was originally about stocks that are
followed on the Web. It seems that she has spoken to
everyone extensively on both sides. Is she impartial? I
really don't know.
There are other reporters around who are definitely not
impartial. Take Greg Aharonian of the Internet Patent News
Service for instance. Some weeks ago, I sent him an e-mail
asking him questions about some of his statements. He told
me that he couldn't comment because he was involved in the
litigation. How impartial can he be? Is a hired expert
ever impartial? Our own experts disagree with his opinion.
The difference is that we don't pay them to attempt to sway
public opinions. Do we all remember the OJ trial?
Arnold F
PRODIGY(R) interactive personal service 05/27 09:25 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: LVQV78A Mel Spivak Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 12:47PM ET
Hi Mel,
Why do lawyers always ask questions that they know aren't
going to be answered?
Let's try to take these all together?
How many responses from large-medium-small?
How many licenses with large-medium small?
How many serious inquiries from large-medium-small?
How many co's in serious neg with large-medium-small?
We mailed out the first 25,000 Amnesty packages within the
last 10 days. People are still getting them. The Amnesty
period begins tomorrow 6/1. We have an ad in Information
Week about Amnesty in 6/3 edition. I'd like to give the
program a couple of weeks before we try to analyze anything.
We're currently talking to about 50 companies of all sizes.
We'll announce licenses as they are signed.
So I'm a leach on the on-line world. Frankly, I've been
called worse on occasion. You know, sometimes I think that
this world is really crazy. Everyone that we claim is
infringing is making money by commerciallizing intellectual
properties. When they do it, it's OK, but when we do it,
we're leaches. I think that a more important guage is what
the infringers think of us. Generally, since they
understand that we're all really doing the same thing,
there's no problem. Of course, there are the exceptions
though.
Arnold F
PRODIGY(R) interactive personal service 05/27 09:26 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: RGTL08A William Mccarthy Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 1:13PM ET
Hi Bill,
1. We will use the revenues from the patent to fund
subsidiaries formed to operate businesses based upon digital
commerce applications. I believe that it is possible that
one or more of these operating businesses could generate
more revenues than patent licensing in 1997. However,
because of the low cost factors associated with licensing
revenues, the patent will likely generate higher profits
than any other area. Clarification as to applications and
operating subsidiaries will be made as soon as possible.
2. Please understand that I am more concerned with building
a company than I am with the stock price. I believe that if
you take care of the fundamentals, everything else gets
taken care of also.
As to "selling pressure," there are 2 million shares in the
float. Since the stock started selling in a tight range
between 9 and 11, I think it is virtually impossible for the
volume to have been sustained unless there is a large short
position. We are a bulletin board company so short position
goes unreported. Investors can not short the stock because
it is not marginable, but traders can. I might be wrong but
my line of thinking would explain why the bid goes down
sometimes while every trade takes place at the ask. Up to
this point, the buyers have been there to stop the downward
pressure every time it happens. Therefore, I don't think
that there is really any selling pressure.
Arnold F
PRODIGY(R) interactive personal service 05/27 09:26 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: LVQV78A Mel Spivak Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 1:22PM ET
Mel, I'm sorry, but I don't believe it would be wise to talk
publicly about our applications yet. When we speak to
anyone about working towards realization, we so do with a
non-disclosure agreement. They are based upon existing
technology so we can not protect them by patent. Let's just
say that he who makes it happen first will likely gain a
tremendous competitive advantage.
Arnold F
PRODIGY(R) interactive personal service 05/27 09:26 AM
Board: MONEY TALK
Topic: THE MICROCAPITALISTS
Subject: SPEAKOUT! GIFT
To: JTHP74A Debra Watson Date: 5/31/96
From: ZRAU57A Arnold Freilich Time: 1:32PM ET
Debra,
How much is the patent worth?
I've seen many posts here, on SI & on AOL that have tried to
address this question. Unfortunately, I probably can not
give a better answer than anyone else.
Today, information from the print media is available through
on-demand electronic distribution. Fonts are being
distributed throughout the publishing industry on-demand.
Digital images have begun to be distributed and that market
is sure to grow. Remember Corbis' purchase of the Bettman
Archives. The software channel has already begun and recent
developments and additional bandwidth will make it grow
faster. With bandwidth comes the ability to download large
music and video files to recordable CD-Rom. Will those last
2 applications infringe on the patent? I don't know, but
I'm willing to wait and see.
In light of all that, as Gary has said "I can't get my arms
around it yet." We could pay for a study to be done, but
what would that prove? Nobody really knows the full extent
of this exponential growth market, but as everyone said at
the ESD conference - it's a big number!
Arnold F
***I know that your eyes are probably popping now!!! Courtesy of Mel's son, Todd!***
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