| Objective Communications, Inc. | |||
| (www.objectivecom.com) | |||
| Ticker: | OCOM | 14100 Park Meadow Drive | |
| Exchange: | NASDAQ-Small Cap Market | Chantilly, VA 20151 | |
| Industry: | High-Tech (SIC Code 7372) | (703) 227-3000 | |
| Type of Shares: | Common Shares | Filing Date: | 1/29/97 | |
| U.S. Shares: | 1,800,000 | Offer Date: | 4/3/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $5.00 - $6.00 | |
| Primary Shares: | 1,800,000 | Offer Price: | $5.50 | |
| Secondary Shares: | 0 | Gross Spread: | $0.53 | |
| Offering Amount: | $9,900,000 | Selling: | ||
| Expenses: | $1,797,350 | Reallowance: | ||
| Shares Out After: | 4,361,844 |
| Manager | Tier | Phone |
| Barington Capital Group, L.P. | Lead Manager | (212) 974-5700 |
| Issuer's Law Firm: | Shaw, Pittman, Potts & Trowbridge |
| Bank's Law Firm: | Kramer, Levin, Naftalis, Nessen, Kamin & Frankel |
| Auditor: | Coopers & Lybrand |
| Registrar/Transfer Agent: | Continental Stock Transfer & Trust Co |
Dollar amounts in U.S. millions except for per share data | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 12/31/96 | ||||
| Revenue: | $0.08 | Assets: | $1.68 | ||
| Net Income: | -$3.28 | Curr Assets: | |||
| EPS: | -$0.87 | Liabilities: | $4.04 | ||
| Prior EPS: | -$0.57 | Curr Liabilities: | |||
| Cash Flow/Oper: | -$0.12 | Equity: | -$2.36 | ||
| Cash Flow/Fin: | Cash: | ||||
| Cash Flow/Inv: | |||||
| Business Description |
| The company has developed a proprietary video communications system, the VidPhone (r) system, which is an integrated hardware and software system that provides video distributed and stereo audio transmission using the existing telephone wiring. The VidPhone (r) enables video conferencing, data and file sharing, full-motion broadcasting and retrieval of stored data directly to or from a desktop personal computer or conference room system. The company believes that the VidPhone (r) system offers greater functionality and compatibility with existing infrastructure at a lower price than most high-quality video conferencing equipment on the market today. The company believes that it offers the only video distribution system that combines all three major video applications, video conferencing, video broadcast and video retrieval, in a single cost-effective, turn-key solution. |
| Competition |
| The market for video conferencing systems is highly competitive, subject to rapid technological change and emerging industry standards. The company believes that the principal competitive factors in the markets in which it intends to compete are product performance, price and product support and services. The company's principal competition to date has been from video conferencing systems companies, particularly PictureTel, CLI and VTEL. According to a June 1995 article in U.S. News & World Report, PictureTel and CLI had approximately 71% market share in the video conferencing systems market. The company also expects substantial additional competition from new market entrants, such as Intel Corp., which recently entered the video conferencing market with "proShare," a document sharing software for a desktop system with an optional video capability that includes a camera, a communications board, CODEC and software. However, the company believes that this system provides low resultion, unrealisic images. In addition, at least one competing "desktop" system manufactured by C-Phone Corporation is designed to operate on a LAN within a building, if the LAN uses shielded or co-axial cable. Virtually all of the companies with which the company expects to compete have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical and marketin resources than does the company. The company believes that it will be able to compete effectively against larger companies with substantially greater resources on the basis of its products' capabilities, including broadcast and retrieval applications, the high quality image resolution and stereo audio in the VidPhone system, and price. However, there can be no assurance the company will be able to compete successfully. |
| Business Plan |
| The company believes that the VidPhone system offers users a cost-effective video conferencing product without sacrificing image resolution. The company is presented with a strategic opportunity to market the VidPhone and its related software applications to customers in the desktop video market. To achieve its objective, the company intends to implement the following strategies. (I) Penetrate the Video Conferencing Market, (ii) Develop and Expand VidPhone as the Compatible Industry Standard, (iii) Introduce Flexible Video Broadcast and Retrieval Applications and (iv) Expand the Market of Video Applications End Users |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to fund product development efforts, to repay debt, to fund sales and marketing efforts, for capital expenditures, for facilities expansion and for working capital and for general corporate purposes. |