Special Situation Report: July 10, 1999
HotStockNews.Com
Dear Subscriber,
The following report (http://www.hotstocknews.com/intq.html) covers an
exciting company in the computer market; Intelliquis International, Inc.
(INTQ). With the looming and fast approaching Y2K bug, Intelliquis
International, Inc. offers personal and business computer users a product
that tracks down and eliminates Y2K problems in both hardware and software.
INTQ is one of the leading companies addressing this issue; supplying the
computer world with a solution. The following report was written by
Research Investment Group and was approved for release by Intelliquis
International, Inc. ("the Company"). The Research Investment Group
conducted due diligence on INTQ and provided its findings in this report.
HotStockNews.Com acts as a distributor of this information to their
subscriber database and is featuring the report on its web site to provide
extra marketing exposure for the Company for a disclosed fee as provided in
the disclaimer of this report. HotStockNews.Com presents to you the
following report:
THE NEXT Y2K SUPER STOCK!
Intelliquis International, Inc.
(OTC BB: INTQ)
Bid - Ask: $3 5/8 - $3 3/4 (July 9, 1999)
Introduction
* Y2K problems may occur in 95% of all PC's on January 1, 2000.
"IntelliFIX 2000" is the leading solution available that tracks down and
eliminates Y2K problems in both hardware and software!
* America OnLine Will Begin Marketing IntelliFIX 2000 To Its 17.3 Million
Users, Beginning in July 1999!
* A profitable operating company, INTQ is significantly undervalued!
Company Profile
Intelliquis International, Inc. (OTC BB: INTQ) of Draper, Utah is a premier
publisher and developer of software products for the personal and business
computer markets. Incorporated in 1997, Intelliquis has grown rapidly. The
Company currently has a staff of 30, two sales offices in the United
States, a European sales and distribution center in Ireland and an Asian
sales and
manufacturing center in Malaysia.
INTQ is best-known for its IntelliFIX 2000 program, a software product
designed to combat year 2000 (Y2K) conflicts on personal computers by
automatically identifying, diagnosing and repairing PC hardware, software,
operating systems and data. INTQ's software addresses and resolves each key
level of Y2K impact in a computer: hardware (BIOS, CMOS and real-time
clock), operating systems, software and data-file conflicts.
Currently, INTQ has about a 35% share of this market. Interestingly, its
major competitors, Norton 2000 & Toolbox 2000 (collectively, 50% of the
market), cannot repair Y2K problems in software applications, data files,
or non-Windows operating systems such as DOS, UNIX, Novell or OS/2 without
sending users to the Internet for a patch.
Recently, INTQ has entered into two major sales/marketing agreements for
its IntelliFIX 2000 technology.
1. On June 17th, INTQ announced a distribution agreement with
Millennium 2K Solutions, Inc. to provide M2K (the Company) with
1,000,000 M3 ISA cards (Intelliquis' premier card-based product
that provides a permanent fix for potential Y2K bugs in PC computer
hardware). This agreement with M2K is estimated to generate US$14 million
gross and US$3.5 million net to Intelliquis.
2. Secondly, INTQ has entered into a sales/marketing agreement with America
OnLine (AOL) under which AOL will feature the IntelliFIX 2000 software in
banner ads on its home page for direct sale to its 17.3 million registered
subscribers. INTQ estimates that it will net US$9 on each sale through AOL.
INTQ also has major sales/marketing agreements with the following
companies: OfficeMax, CompUSA, Staples, Ingram Micro, Digital River and
EggHead Software.
Capital Structure & Trading Range
Shares Issued & Outstanding
(fully-diluted) ~ 34.6 million
Estimated Float ~ 5.6 million
Restricted Stock ~ 29.0 million
52-week Low - High $1.92 - $6.75
Current Price $3 5/8 (bid) - $3 3/4 (offer)
INTQ went public in January 1999 @ US$2 per share (adjusted for a 3-for-1
forward stock split executed on April 30th). Officers and directors of the
Company hold approximately 80% of the issued and outstanding shares of INTQ.
IntelliFIX 2000
On January 1, 2000, many people believe that the Y2K Bug will strike tens
of millions of personal and business computers around the world, causing
them to freeze, making programs fail, and losing important data forever.
INTQ is the leading company in the world with a product (IntelliFIX 2000)
that tracks down and eliminates Y2K problems in both hardware and software.
We believe that as New Year's Eve draws closer and closer, more and more
people will view owning IntelliFIX 2000 as Y2K insurance - you hope you
won't need it, but you'd hate to be stuck without it. Even though Windows
98 & Office 2000 are supposed to be Y2K compliant, we suspect that most (if
not all) of us will buy some Y2K programs at Staples or Office Max just to
be sure.
How does IntelliFIX 2000 work?
intelliquis.com
IntelliFIX 2000 performs an 18-point test of your computer's hardware,
checking each component for Y2K-compliance. IntelliFIX 2000 diagnoses and
repairs all of your computer's BIOS date problems - regardless of BIOS
manufacturer. The program then corrects your computer's CMOS real-time
clock, changing the clock from a two-digit format to a four-digit format,
ensuring your computer is permanently free from future date conflicts.
Finally, IntelliFIX 2000 performs a scan of your software applications and
operating system - treating the millennium bug as a virus - to pinpoint and
repair Y2K conflicts in your computer's operating system and application
files. When a problem is detected, IntelliFIX 2000 saves the information to
a list, letting you see the exact affected file and prompting you to repair
it.
INTQ is offering a free trial version of IntelliFIX 2000 so that you can
test for potential Y2K problems. Click here to download a trial version of
IntelliFIX 2000 and find out today if your computer's hardware, software,
or operating system is affected by Y2K bugs:
intelliquis.com
AOL to Feature & Sell INTQ's IntelliFIX 2000 Software!
We understand that Intelliquis has entered into an agreement with America
OnLine for the advertisement and direct sale of the IntelliFIX 2000
software products. Beginning in July, INTQ's products will be featured in
banner ads on AOL's home page!
AOL has already purchased 50,000 units of IntelliFIX 2000. INTQ
management says that they will net about US$9 on each unit of the software
sold through AOL.
This deal has huge implications for INTQ. AOL currently has 17.3 million
users, and you can be sure that AOL wants each and every one of these folks
to be Y2K compliant, so that AOL's revenue stream continues uninterrupted.
If just 10% of AOL subscribers purchase IntelliFIX 2000, that's 1.73
million copies of the software, and net earnings to INTQ of nearly US$15.6
million (45 cents per share).
As January 1, 2000 draws nearer, we expect to see some big, big sales
numbers form the AOL deal!
Intelliquis' Other Software Products
In addition to IntelliFIX 2000, INTQ's other software products include:
Speed 98 (a system and program accelerator product for Windows 95/98),
Total Fax (a powerful fax, data and voice communication suite), Credit
Builder (a complete debt management application and budget management
system) and Web Site Traffic Builder.
On June 22nd, INTQ announced that its Web Site Traffic Builder software
product would be bundled with Microsoft Office 2000 in a nationwide
promotion at more than 850 Staples superstores throughout the United States.
Traffic Builder is the industry's best-selling Web-site registration
program designed to automatically generate all site information needed to
meet each Internet search engine's submission guidelines. Traffic Builder
helps website managers register their sites quickly, easily and accurately.
With Web Site Traffic Builder, users can submit single or multiple sites to
more than 900 search engines, directories and news groups; checks current
positions on major search engines; maintains database and profile of
submissions; and, submits unlimited URLs. Web Site Traffic Builder also
enables users to submit their Web sites to Yahoo! and Snap.com search
engines, both of which have very stringent submission guidelines.
This Company is Much, Much More than a Y2K Software Firm!
While INTQ's management intends to make some serious money out of selling
IntelliFIX 2000 this year, the Company is looking to grow beyond Y2K with
some very significant acquisitions.
One deal that is very close to being signed involves web broadcasting
technology that would allow consumers to select and download full video and
sound from a vast library of offerings. The potential is huge - both for
e-commerce as well as general business offerings. INTQ believes that this
deal could generate US$40 million in sales during the coming year.
A joint venture deal is also reportedly being negotiated with TVMedia, the
largest home shopping network and direct sales company in the world. The
deal would involve using INTQ's web broadcasting technology to offer
on-demand infomercials on the web, and selling these products to consumers
around the world through a new e-commerce site that INTQ would own 50% of.
INTQ believes that the TVMedia e-commerce deal could potentially generate
US$100 to US$140 million in sales for its accounts. We
also understand that INTQ also hopes to introduce two new Internet-related
software products prior to years-end.
INTQ is a Profitable (and undervalued) Operating Company
Founded in 1997, INTQ reported total revenues of US$1.5 million (and a
modest net income) in 1998, its first full year of operations. With its
software products beginning to appear in major retail outlets (Staples,
Office Max, CompUSA, etc.), Intelliquis reported total revenues of US$1.22
million and
net income of US$0.2 million in the first quarter of 1999.
We understand that second quarter retail sales were on the order of US$3
million; estimates for OEM sales of its Y2K products are not yet available,
but are thought to be on the order of several million dollars.
Excluding new products and acquisitions/joint ventures under negotiation,
INTQ's management projects US$22 million in sales during 1999 - a figure
that we believe is easily achievable. If sales of IntelliFIX 2000 through
AOL really take off, INTQ might do US$50 or US$60 million in sales this year!
Net Income?
No estimates available, but if we use a conservative 15% net profit margin,
INTQ might generate US$3.3 in post-tax earnings on the US$22 million sales
figure - or, about ten cents per share, based on INTQ's 34.6 million shares
currently outstanding.
Now, if we add in the potential sales from the AOL agreement, INTQ might
add as much as US$15.6 million (45 cents/share) more in net earnings this
year.
Together, that's 55 cents per share, and at a 15x to 20x multiple, that
suggests a potential equity market valuation on the order of US$8.25 to
US$11 per share, compared to the 7x multiple that INTQ is presently valued
at.
Why you should consider adding INTQ to your Portfolio!
INTQ is an emerging software company with a great future, and, we believe,
strong potential for significant capital gains over the next six to twelve
months.
Our enthusiasm for INTQ is based on several factors, including:
During the first half of 1999, INTQ has successfully placed its software
products in major national retail chains (Staples, OfficeMax, CompUSA) and
is doing about US$1 million a month in retail sales. Major sales and
distribution contracts have been signed for the IntelliFIX 2000 Y2K product
line, and, with the growing concerns over Y2K, INTQ's estimated US$22
million in revenues for 1999 may prove to be conservative.
For the balance of 1999, the recently announced deal with AOL offers the
potential for a doubling or tripling of INTQ's projected revenues. Just
think - if only 10% of AOL's 17.3 million registered users purchase
IntelliFIX 2000, INTQ could earn as much as US$15.6 million (net), and the
company's total
net earnings for 1999 could be over 55 cents per share. At a 15x to 20x
multiple, that would suggest an equity market valuation of between US$8 and
US$11 per share, far above INTQ's current trading range.
Keep in mind that IntelliFIX currently has a 35% market share, and that
consumers are only just beginning to realize that it is the only product on
the market that can completely fix Y2K problems in software, hardware,
operating systems and data files. Y2K is going to be where the action is
going to be this summer and fall, and, with the best product, INTQ should
perform very well.
Intelliquis also has a range of other innovative software products that
have been well-received in the marketplace, with at least two new Internet
programs scheduled to be brought to market this fall. The quality, utility
and value of INTQ's products has not gone unnoticed by the industry's major
players - as shown by the recently-announced decision to bundle INTQ's
Website Traffic Builder with Microsoft Office 2000 in a national promotion
at more than 850 Staples superstores nationwide.
INTQ is a growth-oriented company, and offers much more than a Y2K play,
and there are more deals in the works. In the near future, INTQ plans to
move into web broadcasting and direct marketing / e-commerce; two deals
under negotiation could increase FY 2000 sales by US$140 to US$190 million.
To support their aggressive acquisition and growth plans, Intelliquis has
Bankers Trust firmly in their corner, and a US$10 million equity financing
(the first tranche in a US$40 million package) is set to close in July.
Contacts:
Intelliquis International, Inc. Investor Relations
352 West 12300 South Tel: (801) 990-2600
Draper, Utah 84020 Fax: (801) 990-2612
Web Site: intelliquis.com kjenson@intellquis.com
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Disclaimer of Research Investment Group
Research Investment Group is not a Registered Investment Advisor or a
Broker / Dealer.
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upon a range of public news and information sources. Subsequently, Research
Investment Group has entered into agreements with reputable, independent,
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the international investment community.
This electronic communication reflects opinions from Intelliquis
International, Inc. (the "Company"). Readers are advised that
this publication is issued solely for information purposes and is not to be
construed as an offer to sell or the solicitation of an offer to buy. The
opinions and analysis included herein are based on sources believed to be
reliable and in good faith but no representation or warranty, expressed or
implied, is made as to their accuracy, completeness or correctness. This
information is not intended to be used as the sole basis of any investment
decisions, nor should it be construed as advice designed to meet the
investment needs of any particular investor. The foregoing discussion
contains forward-looking statements that are based on current expectations
and differences can be expected.
The information contained herein has been provided by the
Company to Research Investment Group for information purposes only; in
addition, the information contained in this report is not intended to be a
complete discussion of information regarding some of the current and/or
intended business activities of the Company. Readers are urged to consult
with independent financial advisors with respect to an investment in the
shares mentioned herein. Investors should review a complete information
package on the Company, which should include, but not be limited to, the
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expressed in this report are statements of judgment as of the date of
publication and are subject to change without further notice, and may not
necessarily be reprinted in future publications or elsewhere. Neither
Research Investment Group nor its officers, directors, partners or
employees / consultants accept no liability whatsoever for any direct or
consequential loss arising from any use of this report or its contents.
In order to be in full compliance with the Securities Act of
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Research Investment Group, its officers, directors, partners and employees
/ consultants may profit in the event the shares of the Company increase in
value. These positions may be liquidated from time to time even after
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/ consultants have made positive comments on the Company.
THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE
INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS
SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK.
We encourage U.S. readers to review the investing information
available with the Securities and Exchange Commission ("SEC") at
sec.gov and/or the National Association of Securities Dealers
("NASD") at nasd.com. The NASD has published information on how
to invest carefully at its website.
Intelliquis is a fully-reporting company with the SEC. Readers
can review all public filings (including financial information) the
SEC's EDGAR page freeedgar.com.
****************************************************************
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