Attached files
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| 8-K - FORM 8-K - PUBLIC MEDIA WORKS INC | d8k.htm |
 Public
Media Works, Inc. dab
SpotTM
The difference
Executive Summary
April 2011
Exhibit 99.1 |
 SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This Executive Summary contains statements that involve expectations,
plans or intentions (such as those relating to future business
or financial results, new features or services, or management
strategies). These statements are forward-looking and are
subject to risks and uncertainties, so actual results may vary
materially. You can identify these forward-looking
statements by words such as “may,” “should,” “expect,”
“anticipate,” “believe,” “estimate,”
“intend,” “plan” and other similar expressions. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors,
including but not limited to those set forth under “Risk
Factors” and elsewhere in the company’s Quarterly Reports on Form 10Q and
Annual Report on Form 10-K and other reports are filed with the SEC
and may be reviewed at www.sec.gov. The company cautions readers not to place undue reliance on
any such forward-looking statements, which speak only as of the
date made. The company disclaims any obligation subsequently to
revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated
events. |
 Current kiosk model
|
 Market –
U.S.
•Over 40,000 video kiosks in US
•Kiosk rentals approaching 50% market share
•Brick & Mortar (i.e. Blockbuster)
rapidly
closing = expanding kiosk market share
•Video kiosk saturation point approximately
80,000 |
 Market -
Canada
•
Underserved kiosk market
•
approximately 500 kiosks
•
No major player
•
Market is brick and mortar
•
Highly vulnerable as was U.S. market
•
Netflix is not available
•
Retail price points very high
•
Conclusion
•
Strong opportunity to rapidly grow to be
the “redbox”
of Canada |
 Competition
•
Main kiosk players:
•
redbox (Coinstar) 27,000 kiosks
•
Blockbuster Express (NCR) 11,000 kiosks
•
Focus: on large national chains (Walmart, CVS,
Walgreens)
•
Largely ignore middle/small markets
•
We believe a lot of AAA locations exist with smaller
chains and in smaller markets
•
Netflix –
different business model |
 Competitive
Advantage •
Rental and sale of movies at kiosks grows
while brick and mortar share shrinks
•
Competitors concentrate on mega-chains; we
concentrate on next tier high volume retailers
•
Large parts of U.S. still underserved
•
Initiative to enter Canada
•
95% of rentals still brick & mortar at high price
points.
•
We would enter the market with aggressively low
price points.
•
Targeting Vancouver, Calgary, Toronto, Montreal |
 Opportunity
Our kiosk is the “gold standard”
in the market
•
Faster rental and return times
•
Largest capacity in the industry
•
Two transaction points in kiosk vs. one at redbox and
Blockbuster Express
•
32 inch monitor for promotion and advertising
•
First 25 kiosks all outdoor
•
Planning 90% outdoor at scale
•
Outdoor kiosks significantly out perform indoor
•
Ability to change advertising and promotions remotely
•
Enabled for digital distribution |
 Marketing and sales
strategy •
Aggressively lower rental prices
•
Unlike competitors –
we release all DVD titles on
original street date
•
Higher capacity kiosks means more titles, greater
customer selection
•
First video membership program in
development
•
Focusing on high traffic outdoor locations at
convenience stores, groceries and pharmacies |
 Marketing and sales
strategy •
Proprietary
kiosk
design
–
Meets
American
Disability Act (ADA)
•
Opportunity for future advertising revenue using
32”
monitor
•
Introduction of DVD sales from kiosks by summer
2011 |
 Operations
Strategy Leveraging
•
Management focus (our skillsets):
•
Scientific model to find new sites
•
Rapid deployment of kiosks
•
Continue to negotiate favorable pricing for content
•
Managing financial reporting model
•
Sub-contract (outside skillsets):
•
Outside merchandiser for weekly placement of new
inventory and maintenance
•
Remote monitoring in real-time:
•
Sales, inventory, etc.
•
Third party call center
•
Third party installation services |
 Current operations
•
Began installation of kiosks March 2011
•
25 kiosks in Riverside CA area
•
Undergoing beta test on initial 25
•
Estimating first full month of operation, after beta test,
will exceed industry average
•
Targeting and negotiating site locations throughout
Western U.S. and Canada including:
•
Selective expansion in Riverside area
•
Northern California
•
Vancouver
•
Southern Nevada |
 Management team
Strong industry experience and Hollywood
connections:
•
Martin W. Greenwald, CEO –
Founder of Image
Entertainment
•
Greg Waring, President
and
COO
–
Canadian Co-
Founder and former CMO of redbox.
•
Ed Roffman, 25 years, early stage and public
companies
•
Several former redbox employees on
management team
•
Vancouver based experienced marketing team |
 Board of Directors
•
Martin W. Greenwald, CEO –
Founder of Image
Entertainment
•
Bryan Subotnick, attorney with strong industry focus
on digital distribution
•
Ed Frumkes, Former senior executive at Warner
•
Joe Merhi, 30+ years in movie production and
executive production
•
Special
advisor
–
Joe
Abrams-
serial
entrepreneur
(Software Toolworks, Myspace, etc.) |
 Financial forecast
Income Statement
Average revenue per kiosk
•
Test period -
$ 400
•
Month 1 -
$1,200
•
Month 2 -
$2,200
•
Month 3 -
$3,200
Three months ended
5-31-11
8-31-11
11-30-11
2-28-12
Full year
Kiosks Installed End of Period
25
105
330
630
Average # of Kiosks in Quarter
8
53
210
480
Revenue
$ 49,600
$ 372,600
$1,369,900
$3,687,400
$ 5,479,500
Operating costs (excl. product)
44,707
128,902
459,196
1,103,868
1,736,672
Gross profit (loss)
4,893
243,698
910,704
2,583,532
3,742,828
Overhead
353,548
378,099
480,716
585,714
1,798,077
EBITDA
(348,655)
(134,401)
429,988
1,997,818
1,944,751
Depreciation/amortization
59,398
157,443
607,385
1,457,141
2,281,366
Stock compensation
1,443,021
684,042
173,661
0
2,300,724
Interest expense
19,386
110,502
124,257
208,263
462,408
Net income (loss)
$(1,870,460)
$(1,086,388)
$(475,315)
$ 332,414
$(3,099,748)
Average monthly operating cost
$1,550
$1,560
$1,640
Gross Profit %
NA
65%
66%
70%
70%
Average monthly operating costs include software
license, technical support, internet, monitoring, credit
card fees and weekly loading of new content. |
 Financial forecast
Balance Sheet
5-31-11
8-31-11
11-30-11
2-28-12
Cash
$ 3,521,519
$ 2,143,993
$ 1,727,786
$ 774,644
Inventory (DVD’s)
131,553
262,500
799,871
1,597,200
Kiosk deposits
180,000
305,377
525,000
525,000
Prepaid expenses
156,728
30,063
30,063
30,063
Total current assets
3,989,800
2,741,933
3,082,720
2,926,907
Fixed assets (Kiosks)
614,032
2,228,080
5,935,611
11,332,226
Other assets
9,448
9,448
9,448
9,448
Total assets
$4,613,280
$4,979,461
$9,027,779
$14,268,581
Current liabilities
$ 318,353
$1,103,043
$1,976,258
$3,126,383
Long-term debt
4,874,571
4,985,074
8,109,331
11,817,594
Equity
(579,644)
(1,108,656)
(1,057,810)
(675,396)
Total liabilities & equity
$4,613,280
$4,979,461
$9,027,779
$14,268,581 |
 Note Regarding Use of Financial Projections:
The future operating and financial information contained in the company’s financial
projections above, and elsewhere in this Executive Summary (the “Projections”), are for
illustrative purposes only and are based upon hypothetical assumptions and events over
which the company has only partial or no control. The Projections were developed by the
company’s management and are based upon a variety of assumptions without benefit of a
significant operating history. The Projections are included solely to provide information
concerning the company’s estimates of future operating results based on these
assumptions and, although the company believes that these assumptions are reasonable,
they may be incomplete or incorrect, and unanticipated events and circumstances may
occur. Actual results will vary from the Projections, and these variations may be material
and adverse. The Projections should be read in conjunction with the assumptions upon
which the Projections are based. NO REPRESENTATION OR WARRANTY OF ANY KIND
IS OR CAN BE MADE WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF,
AND NO REPRESENTATION OR WARRANTY SHOULD BE INFERRED FROM OUR
PROJECTIONS OR THE ASSUMPTIONS UNDERLYING THEM. |
 For
more information Visit us at
Spotrentals.com
Public Media Works, Inc. |