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Microcap & Penny Stocks : HeartSoft Incorporated (HTSF) -- Ignore unavailable to you. Want to Upgrade?

To: Wes Self who wrote (501)	1/15/1998 10:54:00 PM
From: Benjamin Shell	Respond to of 1781

Wes, Thank you for your frank and forward comments on the progress of Heartsoft. I watch at times, with much respect to what the owners of FTEL are accomplishing with their resources. It seems that every week or so they release news that they have landed another $2 million contract or have received an additional multi-million financing package (which has a high potential of diluting current shareholder's unless the application of the funds generates LARGE ROIs.) My response to your comments, in general, is that while HTSF's stock price has been very, very low of late, we have not had the resources (highly paid or HIGHLY experienced individuals) to simply introduce our product to schools and just wait for the big orders -- As a young company with new personnel getting on the job training constantly, we have had to scrap and fight for every inch of forward momentum -- both financial and experiential. However, with the release of Thinkology, Heartsoft will be defining, over the next few months, its differentiating competitive nature - that which will allow our shareholders to own part of a UNIQUE education technology solution for students world-wide -- literally a product solution which is needed badly, and unavailable from ANYWHERE else. Thinkology has recorded strong short-term and individual school sales. We are not going to release the percentage of Thinkology sales vs. existing product sales until the release of our 10K since most people don't understand the time it takes to penetrate the education market. What I can tell you is that due to this "encouraging response", as I have refereed to it previously, has cause a highly conservative management team to abandon our "old" sale models and methodologies of selling $300-$400 package sales to schools and we have added additional personnel and a HIGHLY experienced National Sales Manager from one of our competitors to LEVERAGE the 40+ school districts who have asked for pricing proposals for district-wide adoptions of the Thinkology Trilogy. These pricing proposals range from under $10,000 to over $100,000 each. These larger orders ARE far, far more profitable for the company than the previous methods of selling. So, what we have been doing is trading short-term gains for long term potential. Let me remind you that on a comparative basis, for the quarter ending 9/30/97, existing product sales were up over 20%, with NO increase in marketing resources. Once we announce the FIRST DISTRICT sale of the Thinkology Trilogy, the financial world will begin to understand fully what we have developed in this new product. With an aggressive sales organization, working the most lucrative portion of the school year (3/1->8/15), interest in Heartsoft will begin to increase significantly. See next posting (continued ->)

To: Wes Self who wrote (501)	1/15/1998 11:38:00 PM
From: Benjamin Shell	Read Replies (3) \| Respond to of 1781

To Wes (part 2): Let me give you a "bankable" example of what THE largest and fastest growing educational software publishing company in our markets history, Jostens Learning experienced in their first 24 months or so: (Now of course this story is third-hand, but in general it exemplifies our strategy) Jostens Learning spent millions developing the FIRST integrated learning solution (a lab full of computers in the school with several thousand reading and math lessons covering every subject roughly for K-5) The first year out, Jostens could barely give the product away - schools knew they needed the technology and the score improvements which resulted. However, the pressure on Jostens (which was originally a small private company) by its shareholder's was immense, and rumor was that then company president nearly fired certain top sales individuals who several quarters later were producing record sales for the company. The problem which Jostens faced, the "penetration" curve as I refer to it, is similar to the difficulties HTSF faces short-term. Although the schools wanted the product, they had to jump through state and federal funding program hoops to "release" funding or the "new" technology solution. Sales the first full year out are purported to be in the low 7 digits and a little more than 12 months later, were in the 8 digits. Once Jostens had "filled the pipe with sales (large school sales average about 6 months), their revenues climbed over 8 years to about $180 million. So, finally, while my personal balance sheet would far prefer seeing the stock price much higher -- we have elected to spend the money which would be needed to move price up by temporarily increasing share volume on TANGIBLE product and market resources which will generate more stable long-term results for our shareholders. My personal opinion is that Thinkology has created such an opportunity that Heartsoft is literally a NEW company - we are going to market with a brand new product which offers a solution unavailable for competitors. With the strong push (soft word for the efforts), we will begin to see Thinkology adopted in districts and schools all over the nation over the new few months. I hope that our goals continue to fit your portfolio's mix. (One last story, in 1992, after researching a small local book publisher who was introducing a SIGNIFICANTLY new marketing concept for an existing product line, I purchased 2000 shares of their stock at $1.60 - a bargain I felt. 3 and 1/2 years later, after huge, huge success (which started slow but grew constantly) I sold my 2000 shares at $22.5 --> the stock hit $26 bid a few weeks later. (I know of no other opportunities which have afforded the financial return of a small company staying focused and making it work.) I write to you from the office of my 2 year old home, twice the size of my previous home, nearly 40% paid for because of one stock that I trusted and believed in. I hope only the same and the best for all of our shareholders. I hope this helps a little Wes. Next week I will begin a semi-weekly email letter to shareholders which will discuss the small progresses our team is making week to week. Benjamin P.S. These comments reflect much of my personal opinion as an investor and not as CEO or shareholder in HTSF. I know our SEC attorney (after his coronary) would want me to state this fact succinctly. I or Heartsoft am not responsible for any investment in Heartsoft based upon my personal comments!! BPS