Press Release

“. . . the cost of a bad hire or promotion is approximately 150 percent of the employee’s annual salary...”

Max-Ventures’ Investment Fund Acquires Majority 72 Percent Interest in PsiBase, Inc., a Human Resources Testing and Assessment Firm that will Focus on the Retail Industry and Other High Turnover Businesses

PsiBase Name to be changed to PsyMax Solutions, which will be a platform for acquiring other complementary businesses in a roll-up strategy

Cleveland, June 14, 2004: Max-Ventures, LLC today announced that it has acquired, through a newly created investment fund, a majority stake of 72 percent in PsiBase, Inc., a Cleveland-headquartered company that delivers human resource solutions enabling employers to reduce directly the cost and complexity of selecting, developing, coaching and managing the careers of its employees. 

PsiBase, founded two years ago by practicing industrial psychologists, will be headed by co-founder, Dr. Wayne Nemeroff, a Cleveland psychologist with over 25 years of experience.  Dr. Nemeroff will be CEO and hold a 28 percent stake in the Company. 

PsiBase has developed proprietary employee assessment, selection, development and coaching programs that deliver cost effective business solutions through Internet-based tools.  The Company will change its name to PsyMax Solutions and focus primarily on middle management-level personnel in high turnover industries, such as retailing, fast food, hospitality and the service fields, including insurance.

This marks the first portfolio company for Max-Ventures, launched earlier this year by Michael Feuer, co-founder and former CEO of the Cleveland-based national retail chain OfficeMax, Inc., and Ralph Della Ratta, previously head of investment banking for KeyCorp’s McDonald Investments.  OfficeMax was sold to Boise Cascade Corporation (NYSE: BCC) in December 2003. 

Michael Feuer said that he has known Dr. Nemeroff for over 15 years and, when introduced to the Company’s testing and assessment tools late last year, recognized the opportunity to focus PsiBase/PsyMax Solutions on the retail industry, which currently experiences employee turnover of over 30 percent. 

Mr. Feuer added that during his 16 years of building OfficeMax from a single store in 1988 to approximately 1,000 locations, one of the most costly and perplexing problems was selecting the right person for the right job.  “Historically, the cost of a bad hire or promotion is approximately 150 percent of the employee’s annual salary, not to mention the negative effects on a retail store’s customer service and general reputation.”

In researching the concept further, Messrs. Feuer and Della Ratta determined that unlike most assessment firms that focus on senior management, the real opportunity to create a true market niche would be to target middle-level and store management in retailing as well as other high turnover business segments. 

In structuring its business plan, PsiBase/PsyMax Solutions has created a strategy to strengthen significantly its product offerings.  The company plans to add a staff of industrial psychologists and support personnel to develop new products from its corporate headquarters in the Cleveland suburb of Mayfield Heights where it will be housed in an office suite directly next to Max-Ventures’ corporate headquarters. 

“We see a great number of similarities between PsiBase/PsyMax and the early stage development of OfficeMax in the late 1980’s when the office supply segment of the retail industry was not dominated by any one single player and was extremely fragmented,” Mr. Feuer said.  “This allowed OfficeMax to enter the industry quickly and build a leadership position initially in the Midwest.”

Mr. Feuer stated that Max-Ventures’ new portfolio company will follow a similar strategy as it positions itself as the leader in the vertical markets it has identified.  “We also think there is an ancillary opportunity to acquire other complementary businesses that serve these same industry segments, including human resource services for recruiting, payroll outsourcing and the like.” 

The new company has already recruited a core management team, including a vice president of sales and development and another licensed psychologist who will be a company vice president in charge of new product research and development.

The Max-Ventures partners Feuer and Della Ratta said that the firm has completed funding its PsiBase/PsyMax transaction raising an undisclosed amount from institutional and private investors in New York City, Los Angeles and Cleveland.  All of the new capital will be used primarily for staffing, further product development and sales and marketing.

PsiBase/PsyMax’s proprietary and assessment, testing and development tools have been developed and validated over the past two years.  The nucleus of its product is a Work Style Inventory test, which measures an individual’s strengths and weaknesses on a broad variety of work style characteristics, such as being goal oriented, organization, analytical reasoning and creativity.  The company’s clients include a number of major retailers and service-oriented firms. 

When Max-Ventures was launched, the founders asserted that they would work with emerging growth companies and new retail concepts, as well as mid-sized retailers and businesses providing services to retail chains.  Investments would be made in companies that may require infusion of new capital and, equally important, need a strategic and operational expertise to move to the next growth stage.  PsiBase/PsyMax Solutions perfectly fits the investment criteria of Max-Ventures, according to its founders. 

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