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Microcap & Penny Stocks : Tech Squared (TSQD)- Internet Commerce -- Ignore unavailable to you. Want to Upgrade?

To: M. Frank Greiffenstein who wrote (413)	6/17/1998 8:00:00 PM
From: M. Frank Greiffenstein	Read Replies (1) \| Respond to of 2752

Prospectus Raw Notes... Underwriters and Auditor NationsBancMontgomery, Bear Stearns, And Alex Brown. The auditor is Arthur Anderson Capital Structure There are 20.570 million common shares outstanding with 117 shareholders 2.27 million options convertible to the common with strike price of $1.37 1.204 million warrantsnwith strike price of $1.70. 1.3 million options under stock option plans for officers with different strike prices. Overalotment of 750K shares if appropriate. 1.5 million shares of Preferred A stock Board has the authority to issue up to 5 million PREFERRED shares without a shareholder vote IN THE EVENT OF A HOSTILE TAKEOVER ATTEMPT. 20 million shares will be locked out for indetemronate time period (I am confused by the 20 million figure) There is no mention how many (if any) new shares will be printed. So fully diluted, DR will have an awful lot of shares, up to 26 million if overalotment is granted and all other instruments converted into the Common. Here is the interesting part: There is a planned REVERSE STOCK SPLIT TO BE EFFECTED PRIOR TO THE OFFERRING DATE. The exact terms of the reverse split are left blank. The principal shareholders are: Ronning: 4.905 million common (includes the 4.8 million lsited below) Tech Squared: 4.8 million common Chris Sharples 2.002 million Perry Stiner: 225,000 Wasserstein & Adelson: 225,000 DR Customers and Products DR has contracts with 1,089 software vendors and on-line retailers. But sales are concentrated with three of the software stores accounting for 29% of sales in 1997 and 38% in the first quarter of 98. Their main customers are Corel, Cyberian Outpost, Lotus, Symantec, Network Associates. Only 5% of sales were through stores set up for on-line retailers (as opposed to direct sales of software publishers products). Their server stores 105,000 software products of which 17,000 are programs and 88,000 images and/or fonts. In the 3 years DR has been oeprating, there have been 136,000 sales transacitons with 105,000 unique customers, meaning there is some repeat business. The core product is DR's propiretary Commerce Network Server (CNS). A propritary software appliction links together many network servers that are scaleable. DR offers the following services: 1) An electornic sales platform that includes both a delivery mechanism and scalable sales/ customer databses 2) Data maining, end-user database maintanence 3) Value added marketing and sales programs 4) Web Hosting Market Size Estimates Based on Jupiter Inc. estimates, ESD software sales were only 67 million in 1997, but it is expected to grow to 2.3 billion in 4 years. As bandwidth increases, ESD sales are expcted to jump because longer programs can be downloaded more quickly. Software publishers will shift focus from physical to electronic retailing because of savings, reduced need for inventory, reduced marketing costs. Competitors CyberSource, TechWave, Preview Software, Release Software, IngrahamMicro, Lycos, Yahoo, Excite, etc. Also AOL, Netscape. Risks Failure to grow relations with more on-line retailers Advances in technology that DR fails to keep up with ESD competition steals market share y2k failures on part of credit card companies (DR certifies its software as y2k compliant) Personell Structure From 11 t0 75 staff members from 1/1/98 through end of May. 27 were in sales and marketing. 21 staffers are in Product Management. Staff divided into three groups: Strategic Sales, Product Management, Account Development Director Chris Sharples and another investor (The Sharples Team) will open a DR office in London, England. The first years budget is one million. Charples will be offerred 150,000 warrants exercisable at $2.00. Operational Data 72% of sales were electronic, 28% of sales was physical software delivered via mail.International sales were 32% of total sales last quarter. Profit margins have run from 17.9 tp 16.5%. Cost of sales includes the 80% kicked back to the vendor, so direct cost of sales to DR is anywhere from 3.5 to 2.1 %. Unoffcial SI-TSQD Secretary DocStone