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Denver Post Article


the big
Denver firm gets
Nasdaq listing
By Jennifer Beauprez
Denver Post Business Writer
InfoNow Corp. hopes to ditch a stigma of
being a high-risk investment when it starts         InfoNow's services help drive Web               began, concluding with an invitation to use
trading on the Nasdaq stock market Monday.          customers to do business with a company’s       the phone to call InfoNow for more
   The Denver company for the past five years       partners rather than directly with the          information.
has traded its shares on the ‘‘bulletin board’’     manufacturer.                                      The company scored its first client after
over-the-counter market, which often is                Despite a growing list of Fortune 1000       the investors who recruited Johnson bought
associated with high-risk penny stocks and is       customers, InfoNow has struggled to gain        two financially troubled companies and tried
snubbed by serious investors and most               credibility for the past five years, Johnson    to merge them into InfoNow.
analysts. The company learned Tuesday that          said.                                              One was an Englewood network-
the Nasdaq approved its application to start           The company originally started in 1990 as    engineering firm called Navigist and the
trading on the exchange’s national market.          a CD-ROM business. But after struggling         other was Cimarron International, a Denver
   ‘‘Being a bulletin board-listed company          financially, that business dissolved, and       multimedia agency.
prevented a fairly sizable investor base from       InfoNow re-emerged as a different business         Neither one of the companies fit into
looking at the company,’’ said Steven Lidberg,      in 1996.                                        InfoNow's business strategy, and InfoNow
an e-commerce analyst with Pacific Crest               Opus Capital in Boulder recruited Johnson    eventually sold both of them.
Securities in Portland, Ore.                        in 1996 from technology consulting firm            Cimarron, however, introduced InfoNow
                                                    McKinsey & Co. to run the new InfoNow.          to people at Visa International, which
‘Out of the Closet’                                    ‘‘Everything went away from the first        became a crucial first customer. From there,
                                                    company, and pretty much all that was left      other Fortune 1000 companies signed on
   Lidberg said that because bulletin-board         was a shell of a company that was public but    with InfoNow despite its small size and low
companies are smaller companies that are            had a little bit of capital,’’ Johnson said.    profile. The company now counts IBM,
considered riskier, large institutional investors      Starting out as a public company right off   Sony, Cisco Systems and Apple Computer
often aren’t allowed to invest in them.             the bat might seem ideal, but Johnson said it   among its clients.
   ‘‘Essentially, the Nasdaq listing will take us   proved to be a disadvantage. In addition to
out of the closet. It’s a seal of approval that     startup stresses, the company faced the         Hasn’t Turned a Profit
we're a legitimate company,’’ said InfoNow's        headache of providing public and financial
president, Michael Johnson.                         reports to investors. Competitors also used        ‘‘Once we had some major companies,
   InfoNow will trade on the Nasdaq under the       those financial documents against InfoNow.      more people were willing to take a bet on
symbol ‘‘INOW.’’ To get the listing, the                                                            us,’’ Johnson said.
company had to meet certain criteria, which         Prestigious Clientele                           ‘‘Now our greatest strength is we have some
include:                                                                                            of the most prestigious technology and
                                                       ‘‘Competitors would fax the documents to     financial companies in the world as
     !" A $75 million market capitalization         customers,’’ Johnson said. ‘‘And all these      customers.’’
         (shares multiplied by share price)         public documents say you're going to go out        Although the company has yet to turn a
     !" 400 shareholders                            of business, so you don't get sued. We          profit, its fundamentals were good enough to
        1.1 million shares outstanding              realized we had to sign up blue chip, world-    lift it to the 1999 top of The Denver Post
     !" An opening bid price of at least $5         class clients to get credibility, which is      100 ranking of Colorado public companies.
     !" Two-year operating history                  something pretty ambitious for a start-up.’’    Last year, the company lost $99,000 on
                                                       InfoNow used creative marketing              revenues of $5.8 million.
   The 75-member firm offers technology to          strategies to get those customers, such as
help companies overcome a growing obstacle          sending a suitcase containing a laptop
for manufacturers: how to sell online without       computer and a wireless phone to executives
destroying or alienating the middlemen or           of potential clients. When a person turned
existing distributors and resellers.                the computer on, an on-screen presentation

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