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Strathmore Takes US$1 Million Stake in Genie

Strathmore Takes US$1 Million Stake in Genie Systems
Turn-key Solution For Business-To-Business E-Commerce Markets

Auckland – Friday 11 February, 2000 – Internet and technology investment company, Strathmore Group Limited (NZSE: SMR) today announced it has acquired a 10.0% interest in businesses-to-business e-commerce software company, Genie Systems, for consideration of $US 1.0 million.

US$500,000 will be paid on settlement and US$500,000 on 31 March 2000. Each payment will be accompanied by a pro-rata issuance of shares. Strathmore has an option to subscribe to an additional 6.0% of equity in consideration of a further US$600,000 on 30 June 2000.

Genie provides a turn-key solution that enables the creation of businesses-to-business e-commerce markets. Called Orderware, it is an ASP-ready application, written in Java and Delphi for Windows NT and SQL Server 7.0. It handles multi-vendor catalogues, supply chain management and procurement. The revenue model shows streams from transaction processing, application hosting, software licensing, embedded software licensing and ongoing maintenance.

Orderware has already enabled three Internet marketplaces in New Zealand  medical supplies, building supplies and corporate computers and peripherals  and is in the process of enabling another four  office consumables, wholesale food, leisure travel and home entertainment.

“Genie Systems has, at entry, clear category leadership potential in a rapidly growing business-to-business segment,” says Strathmore Chairman, Phil Norman. “Its ready acceptance in New Zealand and early-entry results in the US market, where companies are racing to develop metamediaries, make it a compelling investment proposition.

“Genie already has customers in the US and will use the funding provided by Strathmore to grow rapidly in this market. The company expects to record positive cashflows by the end of 2001.”

About Metamediaries
A growing number of e-commerce initiatives bring businesses-to-business buyers and sellers together in central Internet-based marketplaces where they can communicate, exchange ideas, advertise, bid in auctions, conduct transactions and co-ordinate inventory. Over 200 of these already exist  including CommerceOne, Ariba, PurchasePro and VerticalNet  in 150 industry segments from aeroplane parts to transport and logistics.

The companies that create these marketplaces are called metamediaries. As well as creating business-to-business e-commerce marketplaces, they automate transactions, aggregate information, improve market reach, helping reduce both product and process costs. In addition they provide services such as procurement management, financial settlements and quality assurance. According to US analysts Bear Stearns and Goldman Sachs metamediaries will be responsible for the sale of US$438 billion in 2003.

Key Genie Systems Executives
Chief Executive Officer, Mike Hendry, has held international sales, marketing, and product management positions for IBM including that of Global Marketing Manager for IBM’s telecommunications customer care and billing unit. Prior to joining IBM he worked for Telecom New Zealand. Mr Hendry holds an MBA from Otago University.

Chief Technical Officer and Genie Architect, Peter Garden, developed a multi-user small business accounting software package, Cashlink, founding Cashlink Software (UK) Ltd, (3000 sites) and CashLink New Zealand (2500 sites). Mr Garden holds a BSc (Hons) from Victoria University of Wellington and has undertaken postgraduate work on genomics and automated gene sequencing.

About Strathmore Group Limited
Strathmore Group Limited is a technology investment company. It targets Internet, e-commerce and information technology companies with potential to deliver accelerated growth in shareholder value by competing in global markets. It provides finance, strategic advice and a network of relationships to assist technology companies to migrate internationally. It also manages a high-tech incubator fund that enables smaller companies to grow to the point where they are ready for such a migration.

ENDS

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