Stockprowler.com report on SFST this morning...
This week's pick, Starfest, Inc. (SFST) closed Friday at $2.25 up $.50 for the day on heavy volume (1,382,300 shares). Not bad for a company whose "sole asset is its status as a public company whose stock trades on the OTC Bulletin Board"? this according to the latest 8K SEC filing dated March 8, 2000. So, why the big interest? what's the deal here? The deal is that SFST, which is essentially a publicly traded "shell" company, has entered into an agreement to merge with Concierge, Inc., a private Los Angeles based corporation. The merger allows Concierge to take a fast track to becoming a publicly traded company? And Concierge just may have the hottest new product to come down the road in some time. Concierge founder and CEO, Allen Kahn, has invented and developed a product, Personal Communications Attendant (PCA). The product is so unique that Concierge has a provisional patent pending that covers 20 of the PCA's features and their interactions.
The PCA provides a means by which any user of Internet e-mail can have e-mail and fax messages spoken to him over any touch-tone phone or wireless phone anywhere in the world. The PCA responds to the user's voice commands to read, verbalize and manage e-mails stored on a personal computer. The PCA is "trained" to respond only to the voice commands and personal voice password of the individual user, thus guaranteeing that each user's personal messages cannot be accessed by anyone else. Responding to spoken instructions, the PCA can verbalize e-mail with fax and voice-mail capabilities over the phone, and save or delete those messages as directed by the user. In addition, the user, by voice command, over the telephone, can dictate e-mail messages to respond to the e-mail messages accessed by phone.
According to CEO Allen Kahn, Concierge has established a close collaborative working relationship with Fonix Corp. (FONX) and has signed a product licensing agreement to incorporate its Text-To-Speech (TTS) Engine into Concierge's PCA products. Fonix technology enables the PCA with TTS to read e-mail and faxes using a near human-quality voice with characteristics such as pauses, pronunciation, stress, and punctuation. The English-language PCA will be followed by PCAs for several other spoken languages including Spanish, French, German, Japanese, and Korean.
The company plans to introduce the basic e-mail software package running on Windows 95 or 98 for a purchase price of $39.95? with a $19.95 upgrade, the pro version monitors and collects fax, voice-mail and e-mail messages. There is no monthly service fee. Product release and initial customer shipments are scheduled to begin April 7. Concierge plans an aggressive, direct mail and Internet marketing campaign to introduce and promote the PCA. CEO Allen Kahn expects to ramp gross revenues up to $20 million the first year with a gross profit margin projected between 80% and 90% from direct sales. The potential market for this product is huge? recent reports predict that by 2003 there will be 200 million e-mail users in the U.S. market alone churning out a staggering 7 billion messages a day? worldwide it is anticipated that more than 1 billion mobile phones will be in use by 2003. The Gartner Group, a market research company, anticipates the general product area addressed by the PCA, will likely become a $6.6 billion market by 2001. The PCA is the right product, at the right time? PC World Online stated recently: "The PCA comes closer to the dream of the universal inbox than any off-the-shelf message solution we've seen to date." Concierge, Inc. is scheduled to premiere its new technology on a CNBC segment the first week in April to coincide with the PCA product release.
Under the terms of the agreement between Starfest, Inc. and Concierge, Inc., the shareholders of Concierge will receive 78 million shares of Starfest in exchange for all their capital stock of Concierge upon approval of the shareholders of both companies and upon completion of other regulatory steps customary for a transaction of this nature. An additional 9 million shares will be available to Concierge, Inc. for use in possible future stock offerings, options, and other purposes. Current shareholders of Starfest, Inc. stock hold 23 million shares. The current officers and directors of Concierge will become the officers and directors of Starfest, and the name of Starfest will be changed to Concierge Technologies, Inc.
Stockprowler.com views this as a high risk, high potential reward speculation. Although the PCA product offers a great deal of promise? there is always the possibility that the merger between Concierge and Starfest may not be concluded. That being a possibility, an investor in Starfest could lose all or part of their investment. Please do your own due diligence, and if you decide to invest, do so cautiously. The Stockprowler.com target on SFST is $5 - $10 over the next 12 months.
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