Wiz Technology acquires worldwide marketing rights to a 'leading edge' Intranet technology; company also announces acquisition of Q&A, a software publisher, and election to its board of CEO of leading Defense Department contractor.

SAN JUAN CAPISTRANO, Calif.--(BUSINESS WIRE)--March 12, 1996--Software publisher Wiz Technology Inc. (ASE:WIZ) Tuesday said it has acquired exclusive worldwide marketing rights to the public at large of "leading edge" Internet-Intranet applications employing new technology developed by a leading Department of Defense contractor.

It also said it has acquired from the same source a software publisher of similar size to itself.

The Intranet technology that Wiz will market features virtual network applications for mass market audiences and the capability of producing customized information in response to a user's demands rather than "static pages" of information as is now the norm on the World Wide Web.

Wiz also said it has entered into an alliance with the developer of the technology under which the developer will be responsible for system design, implementation and post-deployment maintenance.

Acquisition of marketing rights to the technology and of 100% of the net assets of Q&A Software Publishing Inc. of Irvine, Calif., were part of a transaction with Digital Systems Research Inc. (DSR) of Arlington, Va., developer of the technology and a leading provider of networking and information systems to the United States government and to commercial clients.

Q&A, managed by three of the software industry's most successful executives, was a DSR subsidiary created to market value-priced software programs for home use. The net assets of Q&A acquired by Wiz total approximately $1,087,000.

Also as part of the transaction, Willie Woods, chairman, president and chief executive of DSR, will join the Wiz board of directors; Brian Barry, a DSR partner and senior vice president, also will assume the additional responsibility of Wiz's director of Internet operations.

Terms of the total transaction call for the immediate issuance of 300,000 Wiz Technology common shares, 450,000 Series B preferred shares convertible into common shares over a two year period and an additional 750,000 Series B preferred shares convertible after two years.

Mar-Jeanne Tendler, Wiz chairman and chief executive officer, said she expects that development of Intranet private virtual networks will become a significant source of growth for Wiz in the coming years and that Wiz will "become a major player in this rapidly emerging, multi-billion dollar market."

A DSR spokesman said that over the past year, DSR has investigated methods by which the Internet could be used to provide secure, virtual networking capabilities. He said that systems based on this development already have been deployed, and others are in advanced stages of development. He said "the Wiz-DSR team has been formed to exploit this new capability with a wide variety of new and innovative application concepts."

"Simply put," Tendler said, "the technology makes it possible for individuals to receive reports customized especially for them instead of the currently available static pages." She said Wiz's target markets for which the Wiz-DSR team will design, install and maintain systems range from large retailers and regional shopping malls to major corporations and entire industries on a regional, national and worldwide basis.

She said "the Wiz-DSR technology is distinctly leading edge. It permits Wiz to address corporate and retail problems that could not be solved at reasonable prices as recently as last year. This technology opens a huge and brand new marketplace for application development that is capable of accommodating many companies at very successful levels for many years in the future."

Tendler said the acquisition of Q&A Software will immediately put Wiz products on the shelves of major software "superstores," mall-based chains, warehouse stores and many other large retailers such as office supply stores and software specialty stores where Q&A products already are sold.

Presently, with the exception of one major computer superstore in the United States, Wiz products are sold primarily through secondary retail markets including supermarkets, bookstores, drugstores, airport gift shops and in Kmart Canada.

Wiz products are distributed and marketed in 23 nations. Tendler said Q&A software products are not currently sold in these markets, and Wiz will move immediately to introduce Q&A products to its existing clients. "Thus," she said, "the merger has the effect of opening a new customer base for both the Q&A and Wiz product lines."

Up till now, Wiz has said it is "on track" to produce between $8 million and $10 million in sales for the fiscal year ending July 31, 1996, up from approximately $3.7 million in fiscal 1995. Tendler said Q&A had similar expectations. Its sales in 1995 were approximately $3.8 million.

"At this point, however," she said, "since we will be able only to consolidate Q&A sales going forward as of yesterday, and we are in the process of integrating the two sales and marketing staffs, it is not possible to forecast revenues at this time. We will update our original forecast as soon as possible. Because of the stature and experience of the management staff that is joining us, however, and the high quality of Q&A products, our expectations in terms of software sales are obviously high. Intranet sales, of course, would be over and above software sales."

Q&A publishes and markets titles on CD-ROM and 3 1/2" floppy discs that average approximately $10 per product at retail. Wiz publishes and markets titles, also on CD-ROM and 3 1/2" discs, at prices ranging from about $5 to about $29.95.

Tendler said "there is virtually no overlap in these two product lines and that the merger, therefore, has the effect of dramatically increasing the number of products that Wiz will offer to its clients. This factor, together with the minimal overlap in the company's existing customer base, were the driving factors behind the merger."

In addition to enlarging its core business as a software publisher, Tendler said the acquisition of Q&A adds considerable strength and depth to Wiz management.

She said Gary Wolfe, Q&A chief executive, will join Wiz as executive vice president of sales and marketing; Gary Sousa, Q&A marketing vice president, will become Wiz's vice president of Intranet sales and assist Wolfe in software sales, and Walt Dreschler, Q&A vice president of marketing and product development, will become a senior assistant to Wiz's chief operating officer, Gil Gilgen.

Tendler said that Wolfe has been involved with retail sales of computer software since the inception of the industry as an independent and, before founding Q&A, as director of sales for Spinnaker Software and vice president of sales for Cosmi Software.

Tendler said "there are few people in the country with as deep an understanding of the details of retail sales or the dynamics of large-scale transactions in the software industry," noting that "for each of the past several years, he has been personally responsible for the sale of more than three million packages of computer software."

After more than a decade in retail sales, including extensive experience with computer software, Sousa in 1988 became merchandise manager for Software, Etc., responsible for more than 40% of the sales of the then largest software retailer in the United States.

In 1993, he joined Best Buy Co. as senior buyer for computer software and books and in two years increased sales of computer software tenfold, from $30 million a year to $300 million a year. In 1995, he was named by Computer Retail Week, a large trade publication, to its "Dream Team of Computer Retail."

Dreschler has had more than 10 years experience in computer software sales. As vice president of Cosmi Software, he supervised the development of new software products, and, said Tendler, "significantly improved the marketability and quality of Cosmi's rapidly growing software line."

In 1993, prior to joining Q&A, Dreschler became senior buyer for the Handleman Co. (NYSE:HDL), which merchandises, replenishes, determines the product mix and manages the inventory for more than 4,000 mass merchant retailers including Kmart, Wal-Mart, Sears, Target, Montgomery Ward and many regional chains.

Barry, a graduate of the U.S. Naval Academy and a former member of its Board of Admissions, has extensive management experience in technically oriented organizations, both in the military and commercial worlds.

Trained in the Navy as a nuclear engineer, he served as the main propulsion assistant aboard a nuclear-powered aircraft carrier, executive officer of a nuclear-powered cruiser and the commanding officer of a destroyer. He left the Navy in 1989 to become a partner in DSR and, together with Wolfe, created the software and business structure that later evolved into Q&A Software.

CONTACT: Wiz Technology

Mar-Jeanne Tendler, 714/443-3000

OR

ACC Communications

Paul Keil/Andy Malone, 714/366-5803