NEW YORK, May 12, 2003 (PRIMEZONE) -- An institutional research report has been issued on InstaPay Systems, Inc. (OTCBB:IPYS) but the rating has been withheld due to a concurrent suspension of coverage.
Investrend Research independent analyst Gary Vassalotti said that InstaPay "currently has no sales and its product has yet to be introduced to the market place, and because the company has reorganized its business activities several times in vastly different business activities, it is impossible to project any sales or earning trends."
Vassalotti stated that the company agreed to acquire Kryptosima in January, 2003, for cash and stock, and that part of the agreement requires InstaPay Systems to provide capital to market the Kryptosima system. "Part of this capital was obtained in the form of a note for $110,000, due and payable in December 2003 and secured by the rights and patents of the Kryptosima system," Vassalotti noted.
With Kryptosima, a customer's account number is not stored on the merchant's system, and is purged from Kryptosima's gateway computers after the transaction is complete. There is no account number for hackers to steal in this method.
The "marketing sizzle" of the payENKRYPT system is its unique and patented capability to enable ATM card transactions, said Vassalotti. "However, the system also supports traditional credit card transactions. Therefore it can be marketed to Internet merchants as a complete payment solution. It is expected that the system will generate significant revenue from enabling both ATM card and credit card transactions."
He stated that another ripe market is for payments to brokers. "The percentage of people who would utilize this instant transfer should rise considerable if InstaPay can get customers to raise their limits. Management has stipulated that they are currently negotiating with some brokers to make their system available to their clients."
Despite these strengths, once the company's marketing gets underway, Vassalotti noted that as of December 2002, according the company's 10KSB, InstaPay had a total cash account of $646. "This causes me to pause when reading in the 10K that IPYS has agreed to borrow the $110,000 needed to purchase Kryptosima from one its counselors. This in and of itself is not bad, however, the 10% note stipulates that it is due in December of 2003, and all the rights and patents of the acquired company provide security to the note.
"Given the startup costs involved, and the fact that there is no revenue at the present time, I am quite concerned about how IPYS plans to repay the note and retain the rights to the acquired technology," concluded Vassalotti.
For more information, visit http://www.instapaysystems.com/ and http://www.Kryptosima.com.
Mr. Vassalotti has his own equity analysis and portfolio management practice. He previously worked with First American Bank, NA, First Union National Bank (now Wachovia Bank), and Montag Management, and has an overall interest in global markets. Mr. Vassalotti is a member the AIMR and a former member and board member of the North Carolina Investment Advisors Association. Mr. Vassalotti has a B.S. in Finance with an emphasis in Economics from The Pennsylvania State University. He has completed Level I of the Chartered Financial Analyst (CFA) program.
Investrend Research's unique and pioneering professional analyst program facilitates independent analysts to provide financial coverage for shareholders and investors in companies that otherwise would have little or no analyst following. The program is the largest in the world and includes a number of safeguards to reduce or eliminate conflict. Investrend Research has been a leading independent equity research publishing and distribution program since 1996, with over 68 AIMR-qualified professional analysts posting more than 550 reports to date. Analysts are paid in advance for their initial reports by Investrend to insure independence, and no one associated with Investrend may own or trade in the equities of companies under coverage. Full details of the company's policies and guidelines, along with media coverage, links and endorsements, are posted on the website at http://www.investrendresearch.com
The enrollment fee for institutional coverage is $2,150 per month. The initial monthly fees were paid by Osatron Holdings Corp., of Nocosea, Cyprus, which represented that its relationship to the issuer is as a shareholder. The company's coverage has been suspended concurrent with the issuance of the report due to the company's failure to meet minimal issuer standards proposed by the Association for Investment Management and Research.
According to the New York Times, a survey by Charles Schwab & Co. reveals an astonishing 78 percent of active stockholders now "value research from independent firms over analysis by Wall Street firms with financial ties to the companies they are rating." A survey at Investopedia reveals that 74.7% of investors say that "legitimate fee-based research is objective and useful," and 70.9% say that a company that enrolls for "legitimate fee-based research is making a positive statement about its investment potential."
An InvestorPower(tm) page containing links to additional disclosures and disclaimers, has been created at http://www.investrend.com/company/list.asp?sPathParam=yes.
Anyone interested in receiving alerts regarding InstaPay Systems research should e-mail info@investrend.com with "IPYS" in the subject line, or click on http://www.investrend.com/contact.asp.