Stock watcher: Take a look at ABYT. IMO, this is a solid company with great potential. The company has been profitable for years. The company are developing an internet product, called H-NET. The company said it expects to begin marketing the H-NET® system in the first calendar quarter of 1999.
I was told that the company would release some important news next week. Here is the detailed review (copied from ABYT thread):
To: Americo Burgos III (50 )
From: Yongzhi Yang Wednesday, Mar 3 1999 11:59PM ET
Reply # of 52
To all: I have been researching this company for about a month now. I truly believe this is a solid company with great potential. I hope you will see why after reading the attached research note.
Good luck,
yongzhi
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ALPHA BYTES, INC. (OTC BB: ABYT)
An Internet Based Electronic Transaction Service Provider Company.
Contact:
Anton Stephens, President & CEO
Alpha Bytes, Inc.,
Niagara Falls, NY,
905-475-3249;
antons@h-net.net
Frank Hawkins
Hawk Associates, Inc.
Tavernier, FL
305-852-2383
fhawk@hawkassociates.com
Stock Information:
Symbol: OTC BB: ABYT
52-week Range: $5/16 - 4 7/8
Earnings per share (For the year ended January 31, 1998): $0.067
Number of Shares authorized: 30M
Number of Shares outstanding: 7,468,002
Float: 1,968,002
Shares tightly held: (Per May 4, 1998 10-K )
Pinewood Resources : 5,500,000 shares (72%)
Pinewood Resources
c/o Merrill Lynch
1850 K Street, N.W
Suite 700, Washington D.C. 20006
Additional Information:
Company Web Site: alphabytesusa.com
SEC Filings: edgar-online.com
Recent News: quote.yahoo.com
Company Overview:
Alpha Bytes INC., a publicly held Colorado Corporation which owns the following two companies:
Alpha Bytes Computer Corporation (AB New York), which is engaged in marketing and supporting software products developed by Alphabytes Computer Corporation its Canadian affiliate.
Alphabytes Computer Corporation (AB Canada), which is a software applications development company to the health care industry in North America, the United Kingdom and European Community.
With the introduction of H-NET, Alpha Bytes is transforming itself into an Internet based Electronic Transaction Service Provider company.
Business Summary:
Alpha Bytes INC. is a leading provider of specialized software for vision care market with an installed base of 5750 sites, including such chains as Wal-Mart's Sam's Stores, LensCrafters, Pearle Vision, Cole Vision, Macy's Group, Eye Care Centers of America , Family Vision, Bensons , Standard Optical (Canada), the Bay Group (Canada); Optica Lee Borinquen (Puerto Rico); Scrivens Optical (Great Britain) and many independent optical centers. Moreover, contracts are in place for installations at 1500 additional U.S.A. sites (equivalent to more than 37,500 users).
Alpha Bytes has also expanded into the hearing aid segment of the healthcare industry with the recent signing of a contract with a large hearing aid retail chain.
Alpha Bytes has generated operating profits during fourteen of the last fifteen years (with the exception of the year the company went public and absorbed the costs associated with the process).
The company's products include:
POS2 for Windows: The Point-of-Sales software allows for ease of administration and functionality with regards to patient management and Rx, electronic RX transmission, automatic pricing, financial controls and inventory management.
HO2 for Windows: The Home Office solution provides vision care professionals a way to collate information from multiple sites to ensure that accurate and complete information is on hand for management's review by store, region and for the entire organization on a daily basis.
LAB2 for Windows: The laboratory software system starts with a simple and accurate calculation package, but also allows for patient/customer communication, inventory control and electronic communication with the POS2 system.
New Product: H-NET -- The Healthcare "Information Superhighway"
The administration and processing of claims in a hard copy environment is costly, time consuming and expensive. Electronic processing of claims significantly reduces healthcare provider costs, as well as costly errors that burden the healthcare system at a rate of billions of dollars annually.
Alpha bytes and its strategic partners (Merrill Lynch, National Data Corporation, Bell Wordlinks, National Prescription Administrators and National Vision Administrators) have created the H-NET healthcare network. H-NET, which is a virtual private network runs through the Internet, allows users to electronically process claims, and order goods and services. The system will electronically link vision care providers with vision care suppliers, laboratories, third-party insurance companies, and appropriate government claims agencies. H-NET customers will be able to select from a wide array of services available on the network. The system will also provide for EDI financial services.
Alpha Bytes will start to market H-NET to North American and European vision care markets in 1999.
The company is not aware of any competitors offering single-source, comprehensive vision care claims and product order process service. Competitors in the third-party medical processing industry offer similar services, but at higher prices, and without the ability to transmit orders directly to suppliers. On the other hand, since H-NET is a virtual private network, the company can provide a wide range of on-line services to its customer base and most importantly, take this same transaction driven concept to other industries, such as medical processing industry.
H-NET Revenue Projection:
We know that the company has been profitable for 14 of the last 15 years with its current business. It's future revenue from the current business can be estimated by examining their 10K and then factor in the 1500 new sites (a 26% increase from the current 5750 sites) they are going to install. The main focus here will be the revenue projection on the company's new product: H-NET.
(1) The Market for H-NET
In 1997, there were approximately 75,000,000 eyewear unit sales in North America. These eyewear sales generated approximately 300,000,000 transactions (in 1997) between various participants in the Vision Care Industry. (Each eyewear sale generates multiple transactions: Eligibility checking, Order frame, Order lens, Frame trace submission, Billing for lab service, Insurance claim submission, Factoring of claim receivable, etc.) Because there is no H-NET or any similar product, the vast majority of these 300,000,000 transactions were handled manually. The estimated savings that would be attributable to processing these transactions electronically vs. manually exceeds $2.1B per year (excluding cost savings due to the elimination or errors). In addition to these savings, providers would enjoy approximately 60 days reduction in collection of insurance receivables and, the elimination of manual eligibility checking would save providers and payers an estimated minimum of $ 1.2 billion per year and would improve patient satisfaction due to precise and instantaneous verification of patients' share of the cost of products/services purchased. Besides these obvious reasons for vision to switch to electronic transaction, governments at all levels are also requiring electronic claims processing as exclusive methods for payment.
(2) Revenue Projection
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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