I found this in my e-mail,
V
Dear Subscribers:
************************************************************************
The Stock Genie's July profile-of-the-month (OCOM)
(http://www.stockgenie.com) July 17, 1998 (to coincide with the
opening of trading on July 20, 1998.) Questions: If you would like to
be removed from our database, or have questions, E-mail
contact@stockgenie.com
************************************************************************
Stock Genie has NOT been compensated in cash or stock or any other
manner for the dissemination of this report. This report is being
issued solely on the merits of the company.
THE STOCK GENIE'S TRACK RECORD
In July of 1997 we profiled our first, Chromatics Color Sciences
(CCSI). Adjusted for a 3 for 2 split on 2/13/98, CCSI was $4.66 at the
time that we profiled it and has traded as high as $17.50 for a gain
of 276%. In August we profile Ortec International (ORTC) at $9.25
which has traded as high as $20.50 for a gain of 122%. Micorgrafx
(MGXI) profiled in September at $6.50 has traded as high as $14.00 for
a gain of 115%, Oxford Health (OXHP) profiled in December of last year
at $15.50 has traded as high as
$20.87 for a gain of 35%. Our February profile, Continental
Investment corporation (CICG) was profiled at $12.37 and has since
traded as high as $17.25 for a gain of 40%. Our March profile, Pro Net
Link (PNLK), was profiled at $2, and traded to $8.09 for
a gain of 304%. In April we profiled Voxcom Holdings, Inc. (VXCH) at
$4.81 which has traded as high as $6.12 for a gain of 27% . In June we
profiled CYFS at $2 per share and the stock traded as high as $3 per
share for a 50% gain.
STOCK GENIE'S JULY PROFILE-OF-THE-MONTH: OBJECTIVE COMMUNICATIONS,
INC. (NASDAQ NATIONAL MARKET) SYMBOL: OCOM
INDUSTRY OVERVIEW
According to a 1996 report by Frost & Sullivan, the U.S.
videoconferencing market had sales of $3.0 billion in 1995, and is
forecasted to reach $35.0 billion by the year 2002. This would
represent a compound annual growth rate of 42.3%. The market current
ly consists of two segments: services and systems. Videoconference
services include transport services, which provide ISDN line service
for teleconference parties; multi-point bridging services, which
coordinate calls among various parties at multiple locations; and
public room services, which provide videoconferencing services and
equipment to the public for a per-hour or per-day charge. The
videoconferencing systems currently available include permanently
installed and portable boardroom systems and desktop systems.
According to a November 1996 article in PC Week, the desktop segment
of the videoconferencing market, which the Company serves, is expected
to grow from 300,000 units shipped in 1996, to 6.2 million units
shipped by the year 2000.
A single videoconferencing system generally includes a video camera,
monitor, microphone one or more speakers and associated circuit boards
and software, either in a stand-alone system, or partially
incorporated in a desktop computer. The videoconferencing g unit also
requires a coder-decoder ("CODEC") to transform analog video and audio
signals into digital form, compressing the signals for transmission to
the receiving station. Due to the high cost of quality hardware
CODECs, some desktop systems economize e by using a software CODEC,
which generally produce lower-quality images.
Until recently, video communications systems were boardroom video
conferencing systems. These systems typically used a proprietary
protocol rather than an international standard and, as a result, could
not interface with systems using other protocols. In addition, these
systems were prohibitively expensive for most businesses. Even today,
most boardroom video conferencing systems require substantial capital
expenditures for new infrastructure, and require trained personnel for
set up and maintenance during the video conference call. Most
boardroom systems also do not provide video quality adequate for video
broadcast and retrieval and are limited by distracting latency -
transmission delays that result in unsynchronized audio and video.
Over the past decade, video conferencing systems have begun to evolve
from high cost, low quality, stand-alone boardroom systems to desktop
systems. However, desktop systems have not been widely adopted. This
is primarily due to the fact that currently available systems produce
inadequate video quality for virtually all business purposes.
Nevertheless, a January 1996 special report in Video Technology News
estimated that desktop sales comprised approximately 8% of the video
communications market in 1995.
Most desktop video conferencing systems use either dedicated telephone
line or the LAN to transmit video data. Some desktop video
conferencing systems use dedicated ISDN lines to achieve acceptable
video quality for business purposes. However, to achieve this quality,
three dedicated lines with six associated telephone numbers must be
provided to each desktop. The installation costs of these additional
lines and line use charges render this approach impractical on any
significant scale. In addition, these
systems require the installation of either expensive and complex
hardware coder-decoders ("CODECs") in each PC or software CODECs that
render the PC unavailable for other applications during video
conferences.
Some video conferencing systems attempt to use the LAN rather than
dedicated telephone lines. LAN-based systems also require the
installation of hardware or software CODECs. LANs were designed to be
shared by individuals using the transmission medium for short periods
of time and do not have the bandwidth to accommodate the volume of
data inherent in full-motion video applications. Consequently, even a
single video conference would significantly diminish the capacity of
most LANs to support other users. IT managers resist LAN-based video
applications because of the additional infrastructure and associated
maintenance required to support them. Although high speed Ethernet and
gigabit routing switches may alleviate some of the bandwidth problems
resulting from the transmission of video on the LAN, the Company
believes that these new technologies do not go far enough to address
the latency problems plaguing such systems. The Company believes that,
in the future,
synchronous fiber optic networks ("SONET") and Asynchronous Transfer
Mode ("ATM") switching will dominate in the Wide Area Network ("WAN").
There is growing demand for business video applications at the
desktop. However, business users require a cost-effective video
network capable of providing high quality, non-latency-impaired video
and CD-quality stereo audio before they will adopt desktop
video applications on a significant scale. The Company believes that
a video network must leverage an organization's existing
infrastructure, without sacrificing the functionality of the desktop
computers, in order to be an acceptable video network solution ion.
THE COMPANY
Founded in 1992 by Steven Rogers and incorporated in 1993, Objective
Communications, Inc., is a leading developer and manufacturer of
advanced video networking products. The revolutionary products from
Objective provide the world's first cost-effective, S -VHS quality,
full-motion video communications, bringing bandwidth to the desktop or
conference room for television broadcasting, access and retrieval of
stored video and real-time multi-party video conferencing
capabilities.
Bringing video to the desktop is not new - but the methods used to
date have been increasingly problematic. In order to have video to the
desktop, existing technologies require a rewiring of every desktop
within the organization. This results in a major interruption to the
workplace and extremely high installation costs. Many video solutions
attempt to make use of the wiring associated with the local area
network, thereby interrupting and degrading LAN performance.
Objective is the first to deliver the three video services to a
desktop or conference room - multi-party video conferencing, one-way
network broadcasting, and access and retrieval of stored video
materials-simultaneously-using the existing telephone system wiring -
not the wiring associated with the LAN, but the actual twisted pair
the telephone uses.
VIDMODEM TM TECHNOLOGY Objective Communications Inc., has developed a
patented technology, the VidModem TM , that for the first time,
distributes two-way broadcast quality video, CD stereo audio and high
speed data to the desktop or conference room over the single
unshielded twisted pair telephone wire (CAT 3 or better) already
available in the enterprise. Not the wiring associated with the LAN,
but the actual twisted pair wiring used by the telephone. The VidModem
enables the delivery of all three video services - multi-party
conferencing, television broadcasting, and access and retrieval of
stored materials. Users can simultaneously conduct:
* Two-way, multi-party S-VHS quality video conferencing * Internal or
external video broadcasts to multiple locations * Access and retrieval
of stored video information
Compatibility VidModem is an enterprise and wide area solution capable
of interfacing with any WAN connection including ATM, ISDN, and T1/E1.
VidModem is compatible with any ISDN, analog or digital telephone
system.
Connectivity The VidModem runs on any PC (286, 386, 486, Pentium)
workstation or multimedia package. This technology is compatible with
a variety of platforms including:
* Windows 95 * NT * Macintosh * Sun * UNIX
EVS-50 TM
The EVS is the first product developed around the patented VidModem
technology. The EVS is a broadband switch and is easily installed near
the internal telephone system. The EVS-50 performs a function
analogous to a PBX and is designed to operate much like a standard
telephone system. From a desktop or conference room, a user "places a
call" to the EVS which then makes a connection within the enterprise,
or with the wide area (ATM, ISDN, T1, etc.). Within the enterprise,
users access full-motion, uncompressed video at 30 frames per second.
The EVS is scalable and can accommodate a 20-user configuration up to
a 50-user configuration, depending upon customer requirements. EVS
systems can be "piggy-backed" to accommodate additional users.
HERE'S HOW THE TECHNOLOGY WORKS
Here is how they do it: The VidModem transmits voice, video and data
via an FM signal rather than the AM signals used to distribute most TV
programming through cable or over the airwaves. FM is not as
susceptible as AM to interference and distortion but needs 24
megahertz of bandwidth, while copper can only carry 20 MHz. The
VidModem compresses the FM signal using a modulation system similar to
that used in AM broadcasts. Whether or not you understand exactly how
the technology works, you need to know that it does work.
STRATEGY
OCOM's strategy is to establish a leading market share position in the
desktop video applications industry by marketing the VidPhone system
through large business telephone system providers that sell, install
and support PBX systems. These companies include the Regional Bell
Operating Companies (RBOCs), long distance carriers (IXCs) and PBX
manufacturers and resellers. In our opinion, this is the optimal
distribution strategy for the Company since it best leverages the
installed base of these potential re sellers and minimizes the direct
sales and marketing expenses that OCOM will incur. Moreover, the
RBOCs, IXCs and PBX manufacturers can easily sell the VidPhone system
as an upgrade to their existing customer base, not dissimilar to voice
mail and other advanced call features. Upgrades represent an
extremely profitable sale for these companies, and offers the quickest
deployment strategy for OCOM.
OCOM currently has reseller arrangements with Spring and Bell Atlantic
and intends to establish reseller relationships with other telephone
product and service providers.
MANAGEMENT TEAM
James F. Bunker - President and Chief Executive Officer - Mr. Bunker,
an experienced industry executive who has driven successful corporate
turnarounds at several technology companies including General
Instrument and M/A-COM. Prior to joining Objective, Bunker ran a
management consulting firm which provided counsel to both emerging
technology companies and businesses in transition. In this capacity,
Bunker counseled several start-up firms, including Assured Digital,
Inc. Previously, Bunker served as President of General Instrument's
VideoCipher Division from 1991 - 1994, where supervised the
development of a new digital compression technology, known as
DigiCipher for the cable industry and helped establish the new HDTV
standard for the U.S. Bunker held a variety of senior management
positions at M/A-COM, Inc., a leading provider of microwave
components, satellite and terrestrial transmission systems. At
MA/-COM, Bunker was responsible for several major acquisitions and
divestitures.
Steven Rogers - Mr. Rogers founded the company in 1993 and has served
as President and Chief Executive Officer since the recent appointment
of Mr. Bunker. In 1986, Steven Rogers founded Cryptek Inc., a company
that invented the encrypted facsimile machine
that can be found in NATO headquarters, Queen Elizabeth's Palace and
on U.S. Air Force One. He holds four Patents on technologies that he
created and was nominee for KPMG Peat Marwick's "1990 Entrepreneur of
the Year."
Mary Murphy - Ms. Murphy was recently hired as Vice President,
Marketing. For the past five years she was the General manager of the
telco and ISP (Internet Service Provider) division of Lotus/IBM, where
she was responsible for bringing Lotus into the telephone companies,
ISPs and cable television operators. Prior to this, Ms. Murphy
directed the marketing of Lotus products to customers in Europe,
Africa and the Middle East.
Robert Emery - Mr. Emery has served as Vice President, Administration
and Finance since December 1996 and previously served as Vice
President, Administration from May 1995. He previously served as Vice
President of Airies Systems International Inc., an in formation
services company, and as the ADP Security Officer for the military's
largest secure computer network. He as a B.S. from the U.S. Naval
Academy and an M.S. in information systems from the Naval Postgraduate
School. He is a CPA and a certified financial planner.
Frank Gore - Mr. Gore has served as Vice President, Sales since July
1994. He previously served as Director of Sales for International
Financial Communications Inc., a distributor of video conferencing
equipment, as National Sales Manager for British Telecom plc, and as
Marketing Program Manager for Boeing Computer Services Inc., a
division of the Boeing Company, where he managed the development and
distribution of hardware and software products related to computer
communications.
Roger Booker - Mr. Booker has served as Vice President, manufacturing
since February 1996. Prior to joining the Company he served as Vice
President, Manufacturing Operations, at General Kinetics Inc., and as
Director of Operations for Magnavox Government and Industrial
electronics Company where he managed the start-up of a 200,000 square
foot manufacturing facility. He received a B.S. and an M.A. in
manufacturing technology and management from East Tennessee State
University.
RISK FACTORS
The risk factors for a development stage company are usually quite
obvious, especially in the field of technology. In the short run,
OCOMs success will weigh heavily on their ability to complete
resellers agreements currently under negotiation and their a ability to
deliver a product in a timely fashion. Long-term, OCOMs success in
predicted on their ability to win mindshare and marketshare well
before currently emerging technologies are perfected and gain
acceptance in the marketplace. Currently evolving t technologies may
eventually pose a competitive threat for OCOM in the next 3 to 5
years. Additional risk factors include possible manufacturing or
production difficulties in the near-term, as OCOM ramps up for large
scale assembly. We consider this to be p perhaps one of the biggest
risks in the near term but we also acknowledge that this is a common
risk factor associated with all companies involved in manufacturing
and assembly.
THE INVESTMENT OPPORTUNITY
OCOM went public in April of 1997 by selling 1.8 million shares and
raising $10 million in the process. Several months after the public
offering, the company announced reseller agreements with Sprint
(NYSE:FON) and Bell Atlantic (NYSE:BEL). When the announcement was
made with Sprint in July of 1997 OCOM more than doubled in one week.
In September of 1997 OCOM announced their agreement with Bell Atlantic
and the upward momentum on the stock continued and OCOMs stock peaked
at around $38 per share by the en d of September. Shortly thereafter
the company announced that they were going to sell new shares in a
secondary offering that would be lead managed by NationsBanc
Montgomery Securities, Inc. Upon the announcement OCOMs stock started
to slide and on 10-31- 97 the company sold one million share at 23
1/8. Now that the company was well capitalized, they started to beef
up their staff and started receiving orders for their product. The
company was telling Wall Street that sales in their second quarter,
ending June 30, 1998 would be approximately $5 million. In fact, in
December of 1997 NationBanc Montgomery Securities wrote a glowing
research report with a 12 month price target of $ 29 to $33 per share
by the end of this December 1998. Another research report written in
January of this year by Barington Capital Group, L.P., the Brokerage
firm that originally brought OCOM public pegged a target price of $32
per share by January of 1999 on the basis of 5.0x multiple of 1999
revenues.
Like most development stage companies, OCOM has experienced growing
pains and made projections to Wall Street that they did not live up
to. As a result, OCOMs stock has suffered. Today, a company by the
name of Broadcast.com (NMS:BCST) went public at $18 per share. They
are a live Internet Broadcaster. The demand for stock on their IPO was
so high that the stock opened for trading at $68 and traded as high as
$74 per share. In their prospectus, the company states that one of the
industries that they want to enter is the same industry that OCOM is
looking to sell to, primarily the business sector.
Certainly, investors still have a healthy appetite for Internet
stocks, no less a company that can broadcast live over the Internet
with television-like quality.
If OCOM can deliver the revenues in the third quarter, which began
July 1, 1998 that they promised in the second quarter and did not
deliver. The perception for OCOM could possibly change for the better.
OCOM announced this week, that they closed a 3.125 million dollar
financing, whereby, members of the Board of Directors as well as the
new and existing management invested their own money into the company,
which shows a vote of confidence on the future prospects of the
company.
Today, OCOM closed on the NASDAQ National Market at 6.1875. Over the
next 6 months if OCOM were to trade in the marketplace at 1/2 of the
average target prices that were pegged by NationsBanc Montgomery
Securities and Barington Capital, L.P., it would equal $15 per
share. From today's closing price that would be again of 142% on a
cash basis, and on a margin basis that would be again of 385%, less
margin expenses.
SUMMARY
Objective Communications Inc., appears to be on the road to delivering
a product that works and a market that wants it. With their strong
management team, strategic alliances in place and a backlog of orders,
Objective Communications Inc. could potentially become the leader in
their industry. For these reasons, and those stated above, the Stock
Genie is proud to profile Objective Communications Inc. (OCOM) as its
July profile of the month.
For more information, please visit the company's web site,
objectivecom.com
---------------------------------------------------------------------
The Stock Genie is an independent electronic publication providing
information on selected public companies. Most companies profiled by
Stock Genie pay consideration in cash and/or stock to Stock Genie for
the electronic dissemination of company information and, in some
cases, web site development. Objective Communications Inc. ("OCOM")
has not paid any consideration of any kind whatsoever for this
profile. Stock Genie makes no representations, warranties or
guarantees as to the accuracy or completeness of the disclosure of the
profiled companies. Stock Genie is not a registered investment
advisor or a broker dealer. Stock Genie has been advised that the
investments in companies profiled are considered to be high risk and
use of the information provided is at the investor's sole risk. Stock
Genie has also been advised that the purchase of such high risk
securities may result in the loss of some or all of the investment.
The information provided on the profiled companies may include
information from outside sources and interviews conducted by Stock
Genie. Investors should not rely solely on the information presented.
Rather, investors should use the information provided by the profiled
companies as a starting point for doing additional independent
research on the profiled companies in order to allow the investor to
form his or her own opinion regarding investing in the profiled
companies. Statements made on the profiled companies are made as of
the date made and are subject to change without notice. The receipt
of this information shall not create, under any circumstances, any
implication that there has been no change in the affairs of the
company profiled since the date of review. Investing in micro-cap
securities is highly speculative and carries an extremely high degree
of risk. It is possible that an investor's entire investment may be
lost or impaired due to the speculative nature of the companies
profiled. Stock Genie makes no recommendation that the securities of
the companies profiled should be purchased, sold or held by
individuals or entities that learn of the profiled companies through
Stock Genie. At the time of this profile, no stockholders, officers,
employees, agents and/or affiliates of Stock Genie hold any securities
of OCOM. Moreover, no stockholders, officers, employees, agents
and/or affiliates of Stock Genie can purchase any securities of OCOM
for a period of forty eight (48) hours from the date of the profile.
Investing in micro-cap securities is highly speculative and carries an
extremely high degree of risk. It is possible that an investor's
investment may be lost or impaired due to the speculative nature of
the companies profiled.
-- To unsubscribe from stockgenie.com mailing list, reply to this
message with "remove" in the body of the message. |
