Chris Forte: I think so. H-net will produce huge revenue for ABYT. Here is revenue Projection from H-net:
In 1997, Alpha Bytes's existing and contracted 6960 client generated a total of
147,700,000 transactions. (Optical chains: 5,385 sites, 132,000,000 transactions;
Independent optometrists: 800 sites, 7,400,000 transactions; Independent opticians:
400 sites, 3,800,000 transactions; Mass merchandising: 375 sites, 4,500,000
transactions.) We will use the 1977 figure as the basis for our estimation.
Assume that the company will eventually convince its existing clients to have 30% of
their transaction done over the H-NET. (Giving the following facts: A. These are Alpha
Byte's existing clients; B. Electronic transaction brings great savings to the clients;
C. The government "HIPPA" legislation starting in year 2000 where there will be a
surcharge for manual claims; D. There is no competition. The 30% estimation is very
conservative.) There would be 44,310,000 transactions going through H-NET per year.
Alpha Bytes will receive $0.5 per transaction. (The price per transaction is $0.75. Sales
agents get $0.25.) The total H-NET revenue per year would be 44,310,000 x $0.5 =
$22,155,000. This does not include revenue from initial software sales. (Clients need to
buy a software from Alpha Bytes for performing electronic transaction.) The profit
margin should be very high. (Development has been done and the $0.25 per transaction
sales cost has already been taken away.) Using a very conservative margin of 50%, the
H-NET earning should be $11,077,500, or $1.48 per share.
Note that the company is already expending to other areas such as dental care industry.
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