To all, I recieved the following from the Stockpage,
Any thought out there?
Interactive Objects
Symbol: OBJX
Exchange: NASDAQ - OTC BB
Price at March 25/98: $3.37
Shares Outstanding: 12,944,917 (7,783,522 million shares are restricted
by rule 144)
Public Float: 2,000,000 (approximate)
Investor Relations: Steven Wollach 425-869-6338 or by e-mail at
stevew@iobjects.com
Internet: iobjects.com
Interactive Objects takes the Internet to the next level!
Two years ago, the introduction of Java was heralded by the computer
industry as an exciting advance in technology that would provide World
Wide Web pages with a huge range of functionality. Before Java,
developers had to rely on small Unix programs called from Web browsers
by a CGI (Common Gateway Interface). These programs or "scripts" allowed
for only a limited degree of inter-activity. Java was supposed to allow
fully functional programs to exist over the Internet. However, Java's
slowness has been disappointing and it has failed to deliver on its
promise of "Write once, run anywhere". Java relies on "Virtual Machines"
running on the user's PC; these Java VMs have proven to be slow, and
suffer from the lack of a consistent standard. Interactive Objects now
provides a better solution. It allows fully functional programs that are
written in popular languages such as Visual Basic or C++ to operate on
fast servers, while sending information back to Web users through its
Visual Gateway Interface (VGI).
Since the introduction of Java, there have been two great shifts that
give VGI an advantage. Since its recent introduction, Windows NT 4.0 has
become the standard operating system for businesses all over the world.
VGI runs natively on Windows NT, so it's an ideal tool for this market.
VGI is also compatible with a variety of other Web servers, including
Netscape Server. The rising popularity of Windows NT has led to the
explosion of the so-called "Intranet" market, corporate networks that
are built using Web tools. As most corporate intranets are built using
Windows NT, it has effectively doubled the market potential for VGI.
Development tools are one of the most profitable sectors of the software
market. Developers need to keep up to date with the latest tools that
allow them to build programs for popular platforms so they tend to be
repeat customers. As such, they provide a steady revenue stream over a
series of years, by not only buying the product, but also paying yearly
for technical support and updates. VGI is attractive to developers
because, in addition to helping them create new web enabled
applications, it also lets them add web capabilities to their existing
programs with new commands that they can use in their native programming
language. VGI reduces development time and allows companies to retain
their usual mix of C++ and Visual Basic programmers rather than having
to hire specialized Java or Perl developers.
Interactive Objects products or components will be sold separately for
$99. Currently when a developer writes a new application, they will buy
a software package bundled with other different components that can cost
up to $500. In most cases the developer will only need one of the
components. In time the developer may need to use another component but
it may be out of date. Thus an upgrade would be needed. By selling each
component individually, Interactive Objects allows developers to choose
only the components they need at that time.
Interactive Objects plans to have eight products for sale by the end of
1998. Before the markets opened March 25, 1998, Interactive Objects put
out a press release announcing their second product. The second product
is VGI for ISAPI. This product addresses Web development on Microsoft
platforms which make up 52% of the Web development tools market,
according to International Data Corp.
Fundamentals
Interactive Objects has projected revenues of $7.4 million for the
current year. This is split about 70% software sales and 30% consulting
revenue for 1998. As Interactive Objects adds new components to the
product family, consulting revenues as a percentage of sales will be
reduced. The projections call for revenue to rise to $23 million in
1999 and $34 million in 2000. The company is projecting a loss for 1998
due to startup costs. However in 1999 the projections call for a profit
of $0.39 per share rising to $0.57 per share in 2000. As the first
quarter draws to a close, management is confident they will meet their
first quarter projections for 1998. With P/E ratios ranging from 30 to
55 in the software industry, Interactive Objects could conservatively
trade as high as $11 in 1999 and $17 in 2000 based on their projected
net income.
The Company has decided to use their web site as the main tool for sales
and marketing. Selling the software on the internet allows Interactive
Objects to reduce product distribution costs and reach its target
market, software developers who tend to spend significant time
researching new products via the internet. To attract world class
developers, Interactive Objects has developed an incentive plan used in
other industries but not widely used in the software industry.
Interactive Objects pays employees a base salary plus a royalty from the
sale of products they work on. This will allow the developers and
engineers to reap the rewards when sales of the product they worked on
are successful. In a competitive labor market this should allow
Interactive Objects to recruit and retain quality staff.
Interactive Objects' competition is a mix of public and private
companies. Two of Interactive Objects competitors in the component
development market are Progress Software (Crescent division) and
Sheridan Software. These two companies were evaluated by a third party
organization, NicheWare. The following are NicheWare's comments about
the two companies.
Progress Software, Crescent Division
n Strengths - Early entry into the market; established product base;
Name recognition
n Weaknesses - "Buggy" software components, poor documentation
Sheridan Software
n Strengths - Early entry into the market; evolved product base with
multiple versions of components for versions of development software
n Weaknesses - Many offerings are bundled products(the cost per
component is high)
Interactive Objects intends to position its products in such a way as to
exploit the weaknesses of the its leading market competition and gain
competitive advantage in the market place. To ensure quality control
Interactive Objects has their products tested by an independent third
party laboratory. Interactive Objects will sell its products
individually so programmers and developers will be able to buy only what
they need as opposed to Sheridan Software which bundles their products.
By bundling software users are forced to buy an entire package when they
may not need more than a single component.
Consulting Services
An important part of the company's business is consulting services. In
1998, the company estimates it will generate at least 30% of its revenue
from consulting engagements. Interactive Objects serves as a solution
provider to a number of corporations in the Seattle area such as SAFECO
Insurance. The company provides state-of-the-art Internet or Intranet
development for their clients. In serving the needs of clients, the
company is able to gain ongoing insight into the needs of the
information services market -- insight that informs the development of
Interactive Objects' software products.
Consulting services will offer the following benefits to Interactive
Objects;
Market Research - By working with companies Interactive Objects is able
to see first hand what problems these companies need help solving.
Development - The customized tools created to solve business problems on
consulting engagements today become products from Interactive Objects
tomorrow.
Product Exposure - The solutions to business problems on the consulting
engagement may require the use of existing Interactive Objects' products
giving the products major exposure and reference in the marketplace.
Industry
The component market is a rapidly growing market. The Giga Information
Group estimates that demand for third-party components is $410 million
and will grow to approximately $3 billion by the year 2001. There are
three major events occurring simultaneously across multiple industries
that impact the software industry and greatly support the use of
components. These events are characterized by the following: 1) the
increasing robustness of the Internet as a communication solution, 2)
the increasing reliance that industry maintains on computer applications
as a competitive advantage, 3) the pressure is on corporations to
quickly create new applications or upgrade current systems to take
advantage of the internet. Interactive Objects' component-programming
model addresses these three events by enabling businesses to develop
applications at a lower cost, a faster rate and with internet
technology.
The component industry is filled with a number of small players and is
not controlled by any one dominant company. According to International
Data Corporation, no vendor has over 8% of the market. This leaves room
for Interactive Objects to position itself in the marketplace.
Interactive Objects has carefully researched the marketplace and feels
by exploiting their competitors weaknesses and improving on these areas
the company will be very successful.
Background
Interactive Objects founders were aware early on that the sudden advance
of Internet technology heralded a revolution in the way information
would be transmitted and used. They foresaw the explosive growth and
demand for information services as individuals, libraries, corporations,
government institutions, and other entities discovered how to exchange
unprecedented amounts of data electronically on a global basis.
In 1995, Ryan Smith, Jay Paulson and John Guarino formed a company
called Neoteric Media whose purpose was to create a World Wide Web
presence for small businesses. It soon became apparent that the
market for Web publishers, especially in the Seattle area, was saturated
with competitors offering similar products. Neoteric Media needed to
look in a new direction if it was to expand its profit margins and play
a distinctive role in the industry.
The solution began to emerge in September 1996, when the company
purchased a product then called Web Extender. The product's developer,
Steve Jackson, had his own company named Interactive Objects LLC, and in
the course of the transaction, the two companies became one, retaining
the name of Jackson's company. Jackson subsequently became Chief
Technology Officer of the newly incorporated Interactive Objects. The
core product, Web Extender, was renamed Visual Gateway Interface, or
VGI.
Through a merger with Asia Pacific Chemical Engineering in September
1997, Interactive Objects obtained a listing on the NASDAQ Bulletin
Board. Rapid growth followed, as Interactive Objects brought on board a
group of highly talented developers, managers, testers, marketers, and
documentation specialists. With staffing in place, Interactive Objects'
initial product Visual Gateway Interface (VGI) was launched in the
first quarter of 1998.
Management
Interactive Objects has a seasoned management team who collectively
posses over 45 years experience in all phases of software development,
including project management, design, coding, documentation, marketing,
sales and user support. Half the management team and many of the
employees, gained their experience from Microsoft Corporation.
Ryan Smith, Chairman/CEO
Ryan's extensive background in software application development
includes the formation of Software Office Solutions (a consulting
services company) and eight years at Microsoft. His strategic plan for
Interactive Objects calls for the company to leverage its client
relationships by creating an innovative product line.
Steve Jackson, Chief Technology Officer
Steve brings more than 10 years of diverse computer technology, systems
engineering and consulting expertise to Interactive Objects. At
Microsoft, Jackson managed several product development teams and was a
lead member of the company's Desktop Management Task Force (DMTF) and
Licensing Services Application Programming Interface (LSAPI) industry
standards groups.
Stuart Eastman, Chief Operating Officer
Stuart has an impressive track record of expanding corporate operations.
Before coming to Interactive Objects, as a regional general manager for
Fiber Optics Technology, he was directly responsible for a five-fold
revenue increase in his first year. And at Leviton Manufacturing, his
management and strategic planning took an eight-person, $4-million
division and turned it into a 160-employee, $19-million revenue
generator.
Steve Wollach
Steve Wollach has more than 20 years experience in finance accounting,
and sales and venture capital. His industry experience includes
responsibility for public and secondary financing, capital equipment and
software in the healthcare industry, as well as more than eiqht years
with major CPA firms.
John Guarino, Executive Vice President
John has 15 years experience in the computer software industry,
including more than eight years at Microsoft, where he held numerous
project leadership and management positions within the Applications
Development Division's user education department.
Kelly Wood, Vice President of Sales
Kelly has worked for 19 years in the information technology industry. He
resume includes service for IBM, Triad Systems and, most recently,
Microsoft, for whom he managed OEM business relationships with PC
manufacturers and distributors throughout Southeast Asia. He brings a
seasoned perspective of the business dynamics between hardware and
software in the IT industry.
Daren Kloes, Vice President of Marketing
Daren has more than 10 years expertise in marketing. Before joining
Interactive Objects, he was with FourGen Software, where he was
responsible for branding and marketing that company's Enact Internet
Commerce product line. He brings a thorough knowledge of advertising,
public relations, direct mail and trade show techniques to Interactive
Objects.
For further information call Steve Wollach, Investor Relations at
425-869-6338 or visit the Interactive Objects website at
iobjects.com
e-mail: stevew@iobjects.com |
