Vecast plans for initial public offering. (Company was originally a private shell that became a non-public operating entity via a reverse merger with a PRC company).
Company Snapshot:
- The development of value-added services based on cable television network, now known as Triple-Play service.
- In the past 7 years, step by step, we developed more than 50 customers, including some cable TV companies in China's provinces, cities, or regions, China Telecom, China Mobile, China Unicom, etc., majority of them are cable or telecom operators. We selected 15 market potential customers for reference. We also listed our customers who participated in cable broadband Internet market development.
- We are committed to the development of high-definition interactive set-top box (HD-STB) and Triple-Play set-top box products. We consider these products represent the future direction of mainstream set-top box. As for our business model, Beijing Haidian cable operators have completed the development of HD-STB. In addition, we make majority of our previous CM customers as HD-STB or Triple-Play set-top box target customers.
- We are Baoding Cable Company’s sole supplier for set-top box and CM since 2004, we provided Baoding Cable Company front-end system, which also identified the relevant standards, functions, applications, and upgrades. By now, we have provided 200 thousand units of set-top box in total, all new user terminals also must follow these standards and ensure compatibility to support existing applications and functions. We have an inventory warehouse, tech support, STB/CM repair and maintenance center in Baoding. All of these determine our sole supplier position in Baoding. Vecast and Baoding customer will sign supplementary agreement or new supply agreement if there is any price or set-top box model changes. All contracts follow automatically renewal, there is no expiration date on the set-top boxes contracts.
Industry Snapshot:
Because of limitations set on development of cable value added services by Chinese government years before 2010, business expansion was difficult and the scope of this market has stayed fairly small. Starting in 2010, China government started to actively support Triple-Play services, and open up the value added service market by nomination of 12 pilot cities to complete in 2010 and enter full promotion in 2011. According the government’s schedule of Triple-Play business, China will have to complete CATV digital conversion in the coming 3 to 5 years and make Triple-Play an integrated service. It means CATV operators across cities in China will provide bi-directional based value added services to more then one hundred million household. That is the market will need more than one hundred million user-end devices that support Triple-Play. Therefore, it provides us with good market opportunity.
Use Of proceeds:
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If 100% sold and $6,600,000 raised |
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If 50% sold and $3,300,000 raised |
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Gross Proceeds |
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$ |
6,600,000 |
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$ |
3,300,000 |
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Less: Offering Expenses |
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$ |
141,471 |
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$ |
141,471 |
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Net Proceeds |
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$ |
6,458,529 |
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$ |
3,158,529 |
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The net proceeds will be used as follows: |
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New Facility |
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$ |
2,260,485 |
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$ |
1,105,485 |
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Equipments |
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$ |
1,614,632 |
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$ |
789,632 |
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Inventory |
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$ |
1,291,706 |
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$ |
631,706 |
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Marketing and Management Fees |
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$ |
775,024 |
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$ |
379,024 |
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Furniture and Fixtures |
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$ |
516,682 |
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$ |
252,682 |
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Underwriter: Self-underwritten
Proposed offering price: $6.60
Post IPO Share Calculation:
- 35,916,400: Pre IPO outstanding shares
- 1,000,000: Newly registered shares of Common Stock.
GeoTeam® best effort calculation of total post IPO shares assuming full conversions: 36,916,400
Financial Snapshot: December Year End. Company is losing money.
