Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained,
to
the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. ¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨
No
x
State
issuer’s revenues for its most recent fiscal year: $2,841,849.
As
of
June 30, 2008, 10,920,597 shares of the Company’s common stock, par value $0.01
per share, were held by non-affiliates, which had a market value of
approximately $10,920,597 based on available OTCBB quote of the average between
the high and low bid of $1.00 per share.
State
the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date: The number of shares of common stock of
the
registrant outstanding as of June 30, 2008 was 23,757,470.
Documents
Incorporated by Reference: None.
Transitional
Small Business Disclosure Format (Check one): Yes ¨
No
x
FORM
10-KSB
STATMON
TECHNOLOGIES CORP.
March
31, 2008
TABLE
OF CONTENTS
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Page
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PART
I
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ITEM
1. Description of Business.
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ITEM
2. Description of Properties.
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ITEM
3. Legal Proceedings.
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ITEM
4. Submission of Matters to a Vote of Security Holders.
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PART
II
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ITEM
5. Market for Common Equity and Related Stockholder Matters and Small
Business Issuer Purchases of Equity Securities.
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ITEM
6. Management’s Discussion and Analysis or Plan of
Operation.
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ITEM
7. Financial Statements.
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ITEM
8. Changes In and Disagreements With Accountants on Accounting
and Financial
Disclosure.
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ITEM
8A(T). Controls and Procedures.
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ITEM
8B. Other Information.
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PART
III
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ITEM
9. Directors, Executive Officers, Promoters, Control Persons and
Corporate
Governance; Compliance With Section 16(a) of the Exchange
Act.
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ITEM
10. Executive Compensation.
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ITEM
11. Security Ownership of Certain Beneficial Owners and
Management
and Related Stockholder Matters.
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ITEM
12. Certain Relationships and Related Transactions, and Director
Independence.
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ITEM
13. Exhibits.
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ITEM
14. Principal Accountant Fees and Services.
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Signature
Page
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This
report contains forward-looking statements within the meaning of Section 27A
of
the Securities Exchange Act of 1934. Some of such statements involve substantial
risks and uncertainties. In some cases, you can identify these statements by
forward-looking words such as "may," "might," "will," "should," "could," "plan,"
"project," "continue," "believe," "expect," "anticipate," "intend," "estimate"
and other variations of these words or comparable words. In addition, any
statements that refer to expectations, projections or other characterizations
of
events, circumstances or trends and that do not relate to historical matters
are
forward-looking statements. Such statements involve known and unknown risks,
uncertainties and situations that might cause our or our industry's actual
results, level of activity, performance or achievements to be materially
different from any future results, level of activity, performance or
achievements expressed or implied by these statements. Certain factors that
might cause such a difference are discussed in the section entitled "Cautionary
Factors that May Affect Future Results" in this Form 10-KSB, along with any
other cautionary language in this report, provide examples of risks,
uncertainties and events that may cause our actual results to differ from the
expectations described or implied in our forward-looking
statements.
Although
we believe the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this report. Except as required
by law, we do not undertake to update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
In
this
Report, “Statmon”, the “Company”, “we”, “us”, or “our” refer to Statmon
Technologies Corp. and its wholly-owned subsidiaries, STC Software Corp. and
Statmon-eBI Solutions, LLC.
ITEM
1. DESCRIPTION
OF BUSINESS.
Company
Overview
Statmon
Technologies Corp. is a wireless and fiber infrastructure network management
solution provider. “Axess”, our proprietary flagship software application, and
our supporting integration products are deployed in telecommunications, media
broadcast and navigation aid transmission networks to optimize operations and
ensure they remain healthy and on the air 24/7. A typical infrastructure network
comprises a network operations center (“NOC” or “Master Control”) plus a network
of remote transmission sites that incorporate a wide range of communications
devices, facilities management and environmental control systems.
The
Statmon Platform is designed to self heal or preempt transmission failure by
automating the integration of all the different devices and disparate
technologies under a single umbrella control system and permit manual corrective
action at the NOC or from any connected computer including a wireless device
such as a Blackberry. A tiered severity level alarm system at every site, down
to the device level, reports back to the NOC logging automated adjustments
or
permitting manual adjustment or corrective action without a field technician
having to physically travel to the remote site. Any authorized operator can
drill down through the Axess software screens to see exactly what is taking
place with an individual device or system at a remote site and make further
adjustments as required.
The
optimization of network performance plus the preemption of failure eliminates
or
minimizes network or individual site downtime. Transmission downtime typically
has a mission critical or direct financial impact on the customers’ top line
revenue generation, operating profit and customer satisfaction. Investment
payback periods relative to the purchase cost of the Statmon Platform compared
to the operators loss of revenue or costs of being “off the air” typically make
the return of investment (“ROI”) highly attractive. For example, advertisers do
not pay for commercials that do not go to air, or cell phone users cannot make
phone calls, email, text or download video content when a base station or cell
site is off the air. On a geographical basis, the Statmon Platform significantly
streamlines the network engineering, emergency remote site field trips and
routine maintenance process, reducing operating and outsourcing costs and
facilitating the reallocation of resources. For example: the ratio of the number
of cell sites being managed per field technician can be improved by a meaningful
amount. On the politically correct front, the Statmon Platform can dramatically
facilitate the “Go Green” policies being increasingly implemented by all levels
of corporate and government entities.
Architecturally
designed as a universal “Manager of Technologies” (“MOT”), application or
platform, wide scale network operations, regardless of disparate equipment
brands or incompatible technologies deployed at a NOC or remote site, can
automatically interact with each other while being managed from a single point
of control or “dashboard” style computer screen. In real time, a proactive alarm
system reports to a NOC or designated wireless device for appropriate attention
or action. Adjusting the HVAC, the health of the uninterrupted power supply
(“UPS”), the diesel generator and the level of the generator fuel tank, as well
as disaster recovery, emergency power management and redundancy are all
proactive management capabilities of the Statmon Platform. The Statmon Platform
will keep remote sites operating even when part or all of the entire network
are
down, automatically bringing the remote back on line when network operations
are
restored.
Telecommunications
infrastructure and high speed networks in both developed and developing
countries around the world are being aggressively upgraded to meet the growing
subscriber demand of services. In developing countries, wireless networks
provide an affordable alternative to the more expensive hardwire or landline
infrastructure. Notable are the third generation, or 3G, wireless and
infrastructure transmission networks which are being upgraded to handle the
rapid traffic increase, wireless broadband and convergence of media delivery
and
additional data services for the wireless and IPTV fiber markets. Cable systems
are offering telecommunication and broadband services to their customers and
upgrading their networks including deploying Statmon’s proprietary “Accurate”
Local People Meter monitoring platform which interfaces directly with Nielsen.
Statmon’s unique radio frequency (“RF”) background and know how in the
mainstream media broadcast industry places us in a strategic position to provide
high end solutions for the enhanced telecommunications networks offering video
and enriched multimedia content.
The
marketing and distribution of our products is primarily facilitated by third
party sales channel partners, value added resellers (“VAR”), black label and
original equipment manufacturer (“OEM”) collaborations (“Channel Partners” or
“Strategic Partners”). Channel Partners are developed and managed by an internal
business development team and supported by a direct sales and engineering
support force. We have a history as an innovative technology leader for remote
site facilities management, transmission remote control and monitoring in the
traditional television, radio, satellite and cable broadcast industries. The
traditional network television market is undergoing a resurgence of activity
and
reformatting as the high definition television (“HD TV”), cable and satellite
delivery systems realign their operating and business models including offering
additional digital channels that individually focus on HD programming,
continuous news coverage and weather reporting, sports and special interest
coverage. Leading network broadcast operations are being streamlined or
rationalized with central casting, regional hubs and unmanned stations and
remote site transmission operations. The traditional radio markets are
retrofitting to multi band digital transmission in order to remain competitive
with satellite radio, mobile TV, multimedia and music content direct to cell
phone or mobile device offerings for automobiles, trucks, public transport
and
the military.
We
successfully entered the telecom wireless infrastructure vertical market via
a
contract with the Qualcomm wholly owned subsidiary, MediaFLO USA (“MediaFLO”),
to deploy our Axess software and related integration products for the control
and monitoring of their national mobile TV network rollout. This is the largest
transmission network of its type, in the world, based on the Qualcomm developed
“FLO” encoding and compression technology for multiple channels of live TV and
multimedia content directly to cell phone and mobile wireless devices.
At
this
point, MediaFLO is providing the “FLO” mobile TV and multimedia platform (the
“FLO Platform”) directly to the Verizon and AT&T cellular subscriber base.
From the MediaFLO NOC in San Diego, the Statmon Platform controls and manages
all the remote sites throughout the USA to optimize the FLO Platform
transmission performance and Verizon’s and AT&T’s mobile TV customer
satisfaction. We anticipate that the MediaFLO mobile TV platform will be adopted
by additional wireless operators around the world, although we can offer no
assurance in this regard.
Under
our
agreement with MediaFLO, we are licensing our Axess software and supplying
interface components for the MediaFLO San Diego Network Operation Center and
the
national rollout of wireless transmission sites. Under such agreement, Qualcomm
and/or MediaFLO periodically issues purchase orders to us. From September 7,
2006 to March 31, 2008, Qualcomm and/or MediaFLO had jointly issued us purchase
orders totaling $4,133,430. Since March 31, 2008 to the date of this filing,
we
have received purchase orders for an additional $1,047,205, of which we have
delivered $578,360 of the products under these purchase orders. The MediaFLO
agreement is dated September 7, 2006 and specifies no minimum or maximum number
of purchase orders and is for a term of three years. The number of MediaFLO
sites is expected to increase as the network expands. We also provide support
and maintenance to MediaFLO renewable on an annual basis.
We
have
commenced penetrating and with adequate operating capital are poised to pursue
rapid expansion into additional vertical markets, including the wireless
telecommunications (cell phone), mobile TV, IPTV over fiber networks, microwave
telecommunications, multimedia, gaming, grid and emergency power management,
government infrastructure management, homeland security, military
communications, surveillance and other markets where centrally controlled
network management, embedded industrial systems and wide scale remote monitoring
and control solutions are being implemented.
We
believe our products have broad application in the wireless, landline and fiber
segments of the telecommunications industries providing network management,
alarm monitoring and remote site control, transmission and facilities management
solutions for many of the new planned networks, as well as the upgrades and
wide
scale infrastructure enhancements. In developing countries, wireless
infrastructure networks are being developed as viable alternatives to wired
networks. Economic remote site management is vital for viable carrier
operations.
We
expect
the wireless and infrastructure markets to experience sustained growth over
the
next ten to twenty years as the carriers and infrastructure service providers
compete to provide superior and additional wide-ranging services, including
enriched video and high quality content to mobile devices, wireless broadband
and other related mobile data delivery services customers expect. We believe
that our background in the mainstream broadcast transmission industry at the
highest TV and radio network levels plus our two year involvement with wireless
technology leader Qualcomm places us in a credible position to satisfy the
operational needs of the mainstream telecommunications, wireless and
infrastructure providers for RF and content delivery, as well as overall
communications network and remote site management and control.
Our
significant clients include Qualcomm - MediaFLO USA; General Electric - NBC
Universal & Telemundo Television Networks; CBS Corporation Television and
Radio Networks; The Walt Disney Company - ABC Television and Radio Networks;
Cox
Communications; Belo Corp. Television; Australian Government owned Air Services
of Australia (the Australian equivalent to the FAA); Tribune Company Television;
and Univision Communications Television and Radio Network. Some of our current
sales channel and integration partners include Technology Associates
International (“TAIC”), InfraCell, Harris Broadcast, Pixelmetrix, Nautel
Navigation, BTS Ireland and Sound Broadcast Services, Ltd.
Products
and Services
Our
technology is a sophisticated control panel, or "dashboard style" management
tool kit, linking digital and analog control, monitoring and information
generating elements on a wide scale or narrow channel basis. We believe that
pre-packaged, product-based solutions such as ours are replacing custom
“in-house” software and integration services. Our proprietary technology
products offer bi-directional telemetry for remote control, automation,
self-healing and monitoring of devices, systems and facilities in real time,
which result in improved operating efficiencies, top line revenue protection,
resource reallocation, headcount reductions and a greater ROI. We believe our
”value-add” includes the ability to process and disseminate vast amounts of
gathered information into real time management information, as well as
predictive trends analyses and statutory compliance reporting
packages.
Based
on
customer demand, we plan to launch monitoring services where we oversee a
client’s NOC and network, as well as a “central server model solution”, which
allows the data to reside at a Statmon facility. We believe that this offering
will be attractive to customers who prefer outsourcing and paying for services
as an ongoing operating expense rather than capital expenditure. We believe
services or out-sourcing models are gaining popularity in the market
place.
We
have
established a sound track record with dominant high tech corporations, including
Qualcomm, MediaFLO, NBC, CBS, ABC, Belo, Cox and Harris where our products
are
considered highly stable and reliable and we have a reputation for being highly
responsive to customers’ needs. Our products are scalable and are designed to
offer substantially “off-the-shelf” solutions to assist customers achieve
measurable improvements in their top line revenue generation, operating margins
and more efficient asset management. In the government sector, we believe that
our products can be applied to make time critical institutional, defense and
governmental infrastructure projects, such as first responder
telecommunications, power and water management, Homeland Security and other
civic projects achievable and affordable within capital budget and timeline
constraints.
Strict
asset management and infrastructure security have become an increasingly
important priority since September 11, 2001, facilitating a worldwide review
of
the needs for real-time infrastructure network monitoring, automation and remote
site management capabilities. We believe that the prevailing environment
presents a significant opportunity for us to incorporate appropriate features
and functionality into our proven application software. For example, the major
television networks are automating the FCC required Emergency Alert System
(EAS)
alarm system with our software, as well as monitoring their mission-critical
transmission, microwave links, studio and facilities management operations.
Localized EAS emergency broadcasting is expected to be integrated to the mobile
TV and wireless markets.
In
the
short term we are focused on expanding into both the wireless and fiber
communications infrastructure vertical markets. For the foreseeable future
we
will continue to adapt our proprietary software and integration technologies
to
provide real time monitoring and remote control capabilities across a wide
range
of network and infrastructure markets. We interface front-end custom screens,
protocols, embedded software and systems integration to industry specific analog
and digital devices, sensors and different types of disparate systems. We
are aligned with six strategic sales channel or distribution partners who have
pre-existing clients and worldwide install bases. Our products can also be
employed as middleware and/or be part of complete end-to-end solutions with
the
major infrastructure vendors such as Ericsson owned Tandberg, Motorola and
many
others.
Software
Axess
The
Axess
software application remotely monitors devices, networks and systems where
automatic control and response is required. With Axess, system operators and
engineers can remotely manage outlying operations from a NOC down to the
individual device level and rely on the system’s automation capabilities, as
well as alarm notification, root cause analysis and fault
descriptions, triggered when situations exceed a predetermined range or
parameter. Axess can take immediate pre-programmed action on its own, such
as
operating a standby generator, monitoring the generator fuel supply, switching
to a redundant system, segregating or resetting devices, running a
control program, or disabling fault-causing issues. Axess operates on a Windows
platform, is scalable and can simultaneously monitor large numbers
of remote sites, right down to the devices level of the
network.
rOVIng
Roving
is
the Company’s "thin client" used for remote access from anywhere on the globe.
With a customizable graphical user interface, Roving allows the user to monitor,
control and manage its network from anywhere. Via Roving, network operators
can
connect remotely through the primary Axess point and manage the entire
enterprise via this single portal. Multiple clients can access the network
simultaneously with no limitation. Display
alarms and logs, import custom backgrounds, shapes and Adobe® Flash® objects to
display and control your infrastructure with ease. Link multiple operator visual
interface (“OVI”) screens allowing levels of detail and granularity previously
unknown in technology management applications.
Accurate
Accurate
is the Company’s solution for monitoring Local People Meter (LPM) data as
deployed in the Nielsen Media Research LPM project across the U.S. Accurate
can
interface directly to both the Norpak® Universal Reader
(NUR), and/or Nielsen Media Research's NACAT application. Interpreting decoded
data from these sources Accurate can then alarm, notify, and log when
discrepancies in LPM data occur. Accurate monitors four key components in the
LPM data: final distributor system identification (“SID”), final distributor
date/time information, program SID, and program data/time information. Once
an
inaccuracy is detected, Accurate can activate audio and visual alarms, notify
operators and management via email, text, or voice, and log the discrepancy
from
onset to resolution, thus providing a verifiable document to assist in data
correction from Nielsen® Media Research.
Hardware
UIF-32
(Universal Interface Unit)
The
UIF-32 is a universal interface designed to allow Axess to collect 32 channels
of analog, logic type and control information. The UIF-32 translates the General
Purpose Input and Output (“GPI/GPO”) channels into serial or TCP/Ethernet data
streams for process by Axess. The UIF-32 is a “passive” device, which means it
simply relays information from devices, such as temperature sensors, door alarms
and light switches.
UVM-6
(Universal Voltage Monitor)
The
UVM-6
is a hardware interface that allows a host computer to accurately measure and
monitor six different A.C. line voltage (mains) sources on a remote
basis.
Key
Features of Our Products
We
have
designed our proprietary software and hardware products with a number of key
features to meet the needs of our customers in all markets,
including:
|
·
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Operator
friendly;
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·
|
Minimize
field engineering travel requirements;
|
|
·
|
Ease
of implementation, installation, maintenance, and
upgrade;
|
|
·
|
Scalable
and customizable;
|
|
·
|
Fully
secure, including highest government approved
encryption;
|
|
·
|
Ability
to integrate the monitoring and management of a wide range of protocols
and disparate systems and devices throughout a
network;
|
|
·
|
Low-cost,
off-the-shelf hardware and software, utilizing the Windows operating
system, used in conjunction with a standard personal computer, laptop,
PDA, or other handheld computerized
device;
|
|
·
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Real-time
remote access, self-healing, control and monitoring of diverse systems,
intelligent and passive devices across the
network;
|
|
·
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Real-time
digital data collection, aggregation and information management services;
|
|
·
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Automation,
time and motion efficiencies through remote-site monitoring, managing
and
remote control capabilities from any web-enabled
location;
|
|
·
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Network
and device automation, redundancy and "fail-safe" problem
solving;
|
|
·
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Top
line revenue protection and insurance against system down-time by
self-healing, preemption and prevention rather than cure;
and
|
|
·
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Preventative
maintenance opportunities based upon trend analysis of collected
data.
|
Customers
Our
significant clients for our software and hardware products include
Qualcomm/MediaFLO USA; General Electric - NBC Universal & Telemundo
Television Networks; CBS Corporation Television and Radio Networks; The Walt
Disney Company - ABC Television and Radio Networks; Belo Corp.; Cox
Communications; Australian Government owned “Air Services of Australia”; Tribune
Company Television; and Univision Communications Television and Radio Network.
Some of our sales channel and integration partners include Technology Associates
International (“TAIC”), InfraCell, Harris Broadcast, Pixelmetrix, Sound
Broadcast Services, Ltd., and Nautel Navigation. These customers use our
technology to manage their network and facilities to control, monitor, automate
and manage transmission, audio, video and data.
The
Company sold a substantial portion of its products and services to three
customers during the year ended March 31, 2008. Sales to these customers were
approximately $1,539,000 (54%), $219,000 (8%) and $135,000 (5%). The Company
sold a substantial portion of its products and services to two customers during
the year ended March 31, 2007. Sales to these customers were approximately
$2,545,000 (69%) and $217,000 (6%).
Fiscal
2009 Goals
Our
goals
for fiscal 2009, given sufficient capital, are to:
|
·
|
Continue
to develop the Qualcomm/MediaFLO relationship, including working
with
Telecom carriers, with emphasis on those adopting the MediaFLO Mobile
TV
platform, both domestically and through international partners, carrier
user groups and individual
operators;
|
|
·
|
Focus
directly on all operators of Telecom wireless networks and communications
infrastructure providers for sales of products and
services;
|
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Collaborate
aggressively with Nautel Navigation and develop our exposure in the
aviation navigation market including the FAA and all other air and
sea
navigational aid and beacon market opportunities;
|
|
·
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Aggressively
promote our software products, “Axess”, “rOVIng” and “Accurate” into the
existing and expanding sales and distribution channels, including
TAIC,
InfraCell, Harris Broadcast, Pixelmetrix, Eddystone - Sound Broadcast
Services, Ltd., and Nautel;
|
|
·
|
Focus
on high profile product positioning and increasing our public relations
exposure in the trade live television, magazine, internet and all
identified infrastructure and technology
markets;
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·
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Implement
an aggressive investor relations, internet and public market making
program to educate the financial markets about us and to generate
liquidity in our OTC Bulletin Board listed common
stock;
|
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·
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Expand
our in-house sales engineering and channel business development team
in
the domestic and foreign markets;
|
|
·
|
Focus
on the worldwide digital TV and radio transmitter retrofit cycle
working
with the transmitter, fiber and satellite hardware manufacturers
and
integrators;
|
|
·
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Identify
strategic vertical market collaboration opportunities in the aviation,
shipping, energy, power management, military, government and corporate
IT
infrastructure markets;
|
|
·
|
Identify
strategic infrastructure integrators and operators and complementary
technologies for end-to-end solutions in the power supply, data center,
wireless data delivery, embedded and sensor vertical
markets.
|
Infrastructure
and Network Management
In
the
rapidly evolving mass communications industry the major operators are deploying
and upgrading wide scale infrastructure and networks comprising command and
control network operation centers, remote sites, wide selections of incompatible
technologies, alarm systems, hardware and devices from different manufacturers
with disparate connectivity and operating systems. Management and control of
these complex infrastructures require network wide and local engineering systems
and platforms. In the event any element of a network or a remote site on the
network is not functioning as designed, the primary functions may stop
communicating or interacting per their intended purpose or per customer
expectations of service. In many cases, a failure on the network may also cause
a domino negative impact across the entire network.
The
communications infrastructure industry encompasses the traditional television
and radio broadcasters and all forms of telecommunications, including landline
telephone and data, fiber rings, satellite, internet, broadband, mobile phones,
wireless devices (lap tops or PDA’s), microwave data transmission, RF for first
responders, law enforcement, air and sea navigation and emergency services.
These networks typically have multiple remote sites, operations centers and
network element operational issues which can be consolidated up to a single
management system and central location.
When
a
commercial communications network is down (not on the air receiving or
transmitting) there is typically a direct impact on the operators’ revenue
generation, as well as on customer service and performance. Emergency
engineering or resource reallocations to solve mission critical problems have
a
high cost factor, which can be significant in cases involving difficult to
access or remote sites, such as on mountain tops, or locations in busy cities.
Many network or infrastructure operational failures are power or weather related
and can be proactively avoided or minimized.
For
example, a storm comes through an area where a site is located, a power line
goes down, the UPS (uninterrupted power supply) initially takes the full power
load for a short period, the standby generator is started provided the starter
motor battery is charged and there is enough fuel in the generator tank. This
change of events can happen without the NOC or monitoring entity knowing
anything or little more than the site is down and not transmitting (off the
air). Operations at the site may remain stable until the generator runs out
of
fuel or the power comes back up and the site can switch back to the grid power.
Typically, an engineer would be dispatched to the site to handle the restoration
of the site to a normal or healthy condition. In the world today, there is
a
need for all the network elements and the health of remote sites to be managed
and controlled all the way from the mission critical transmission technologies
down to the individual periphery device and sensor level for all of the
different technologies and equipment brands at the remote site and all layers
comprising the network. We strongly believe the Statmon Platform addresses
the
emerging need for a highly flexible and universal manager of technologies in
the
multi-billion dollar infrastructure network industry.
Radio
and Television Broadcasting Industry
Several
significant rules issued by the Federal Communications Commission (FCC) of
the
United States in the late 1990’s opened opportunities for our products in the
United States broadcast industry. These changes included (i) radio and other
broadcast stations are allowed to operate “unattended”, provided a reliable
remote control system is installed, (ii) station owners are permitted to own
multiple stations in a single marketplace and broadcast multiple call signals
from the same physical location, and (iii) stations are required to transmit
both HDTV and analog television signals until February 2009.
These
developments dramatically affected management and ownership structures in the
radio and television broadcast industry. This is an industry that has
traditionally been so competitive that radio and television station owners,
management and employees would not even communicate with the teams from rival
networks. The FCC rule changes have promoted rapid consolidation, making it
common to find network giants such as ABC, FOX, and even new market share
diluting competitors, operating out of a single building with common
infrastructure and staff. We believe that these evolving broadcast industry
circumstances will continue to provide on-going opportunities for us, including
the central server model and the outsourcing of monitoring, remote control
and
services.
Software
Industry
With
the
solid benefits offered by a web-enabled system, we believe the majority of
large
enterprises will now transition their software to this architecture over the
next decade. In fact, many software vendors are rushing to develop new
functionality that was previously cost-prohibitive under either client/server
or
mainframe systems.
As
the
software industry has evolved, so have the demands of enterprises purchasing
software and integration services. Enterprises have become more discriminating
and more influential in dictating their terms to the software industry.
Enterprises increasingly want to buy from vendors who provide highly functional
network based products within newer areas, such as remote asset and facilities
management, system and device control and monitoring, supply chain and
procurement, as well as in the bread-and-butter application areas, such as
Enterprise Resource Planning (ERP). Leading-edge, web-based architecture is
also
coming to be seen as an essential need for operations. Moreover, companies
are
beginning to expect software vendors to bear an increased portion of the
integration burden by developing out-of-the box connectors to common
applications and devices.
Business
Strategy - Potential New Vertical Markets
Given
sufficient capital, we plan to continue to launch our products into an expanding
range of vertical markets within the communications and infrastructure markets
for a range of industries including microwave networks, power management,
energy, municipal, Homeland Security, defense and governmental markets.
Any
number of remote sites and devices can be networked and fully integrated for
NOC
control, multiple site automation, alarmed monitoring, management, remote
control and/or the aggregation of real time information. Our products are
designed to be robust and economically adaptable to a multitude of vertical
markets. We are focused on the ongoing development of our products in
consultation with our major clients and sales channel partner relationships.
We
intend to increase the number of Channel Partners with the objective of
penetrating new markets where we do not have a presence and to enhance the
perception of our ability to perform on major contracts.
Statmon’s
validation by technology industry leader Qualcomm, as well as the major
broadcasters, has permitted us to demonstrate the powerful functions,
capabilities and stability of our core technology platforms. The current version
of our proprietary software is designed to provide a low cost, non-customized
solution to allow customers to monitor their networks in real time, in digital
or analog mode, many different varieties and numbers of sites, systems and
remote devices. Our goal in this regard is to market our software as a
cross-industry, cross-application, enterprise, end-to-end or middleware solution
that can demonstrate the same cost-saving efficiencies and fail-safe automation
in a wide range of applications and markets as we currently do in the
traditional broadcast, telecom - mobile TV, navigation aid industries.
Our
product strategy is to directly promote and license our proprietary products
to
all levels of communications infrastructure and media broadcasters, as well
as
VAR’s and OEM partners like TAIC, InfraCell, Pixelmetrix and Harris Broadcast.
We also intend to collaborate with equipment suppliers, infrastructure
contractors and systems integrators like Tandberg and Motorola for Joint
Venture, Strategic Alliance, and/or Private Label/OEM distribution across the
virtually unlimited range of vertical markets. We believe that collaboration
with powerful strategic partners will identify solution opportunities utilizing
our products for monitoring, self-healing, automated asset management and/or
remote control of technical operations, including the aggregation of data.
Our
objective is to be perceived in the market as a leading network, remote site
and
facilities management, remote control, monitoring and universal solution
provider with affordable economics. We give our new customers extensive training
in our technology and its functionalities and provide materials and customer
support for the on-going maintenance, monitoring and use of our products. We
also provide high levels of support through our Channel Partners, so that our
products and applications can achieve greater distribution and customer
satisfaction.
We
are
identifying domestic and foreign partners and proceeding with our evaluation
and
development of a number of additional vertical markets, including the
following:
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Wireless
and Fiber Infrastructure and
Communications;
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In
Building Radio Frequency and Security
Management;
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First
Responder, Emergency Services, Government and
Military;
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Energy
Industry;
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Wireless
and Microwave Tower Management;
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Homeland
Security - Remote Control, Monitoring and Surveillance;
and
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Infrastructure
- Remote Control, Monitoring and Data
Aggregation.
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Examples
of our capabilities within these potential new markets include network
operations centers and wireless multicasting transmission networks for mobile
TV, microwave telecommunications networks for first responders, infrastructure,
redundant power supply, remote site equipment and devices and other similar
proactive real time control and management applications.
Competition
The
management and control of sophisticated Network Operation Centers and the
individual monitoring and remote control of remote sites, individual devices
and
disparate software systems is becoming a more diverse and competitive market.
Companies such as IBM, Hewlet Packard, Nortel and Computer Associates offer
various remote site, telemetry and network element solutions. Major hardware
manufacturers offer a variety of network management, device management and
control systems primarily to control their proprietary hardware and control
systems. All the above mentioned companies have greater resources than Statmon.
Several
hardware-based vendors provide monitoring solutions to the radio and television
broadcast facility industry. Datapath is a direct software based competitor
as
is IBM, CA and Hewlett Packard. Burk-Gentner, Mosley and others represent a
significant portion of the traditional broadcast marketplace primarily focused
on transmitter monitoring. These products are quality offerings designed by
companies and individuals who have strong industry contacts. These products
are
typically marketed directly to the engineering department at radio and
television stations as a method of increased convenience. We believe that our
products provide diverse functionality and powerful capabilities while
delivering a more elegant, comprehensive, convenient and cost-effective solution
to monitor and manage all of our customers’ mission-critical business
operations.
For
a
number of years, many companies have targeted the manufacturing process and
data
center market with products similar in fit, form and function to us, including
Hewlett Packard, IBM, National Instruments Corp., P.R.I. Automation, Kingfisher
and Wonderware. These companies have achieved varying levels of success in
the
manufacturing and engineering design market space. Although it does not appear
that these companies are focused on expansion outside their core solutions,
they
do represent a peripheral competitive threat to us.
We
compete in markets primarily on the basis of the following factors:
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Breadth
of geographic presence;
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Ease
of integration;
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Reliability;
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Ability
to offer turnkey solutions;
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Customer
service;
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