BBNC Executive summary


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BBNC - Broadband Networks Corp. Exec Summary

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BBNC Executive summary

  1. 1. DVD Quality Television Over Your Telephone Network Executive Summary BroadBand Networks Ralph P. Manfredo President & CEO BroadBand Networks 990 Richard Avenue Suite 112 Santa Clara, CA 95050 408-988-2060, Ext. 101 408-988-2188 rmanfredo@bbnc.comPROPRIETARY & CONFIDENTIAL: Do Not Distribute Page 1 Page 1
  2. 2. www.bbnc.comPROPRIETARY & CONFIDENTIAL: Do Not Distribute Page 2 Page 2
  3. 3. BroadBand Networks Corporation EXECUTIVE SUMMARY BroadBand Networks Corporation (BBNC) is dedicated to helping its customers in the telecommunications industry provide full broadband services to their customers. This enabling technology allows the incumbent local exchange carriers (ILECs) and international telephone companies to be competitive with cable television companies’ thereby increasing market share. BBNC has VIDEO encoders and decoders along with a patented ATM multiplexer for use in the central office/ head-end. BBNC has developed a functional specification for the next generation of codecs and an intelligent multimedia gateway that will be used to distribute these new services within the residence. In order to develop these new products, BBNC is seeking $20 million to execute this plan and bring these products market. Financial estimates reflect profitability by 4th quarter 2001 with BBNC being cumulatively profitable in 2nd quarter of 2002. BBNC’s profits in the 4th calendar quarter of 2002 will be in excess of $25 million. By the end of the second year, BBNC will be an excellent target for either an acquisition or IPO with a market capitalization of $1.2 billion based on projected earnings of $59.3 million at an assumed valuation of 20 times earnings. The People: its founder, Ralph P. Manfredo has over 25 successful years of product planning and marketing, strategic planning and product line management of high tech products heads the BBNC team. His experience includes the development of numerous products for worldwide markets that were industry firsts. Mr. Manfredo’s was the founder of SPECTRUM NETWORKS CORPORATION, San Jose, CA, developer of a wireless metropolitan area network product. Jeffrey Kraft - Vice President, Chief Operating Officer was President of Artificial, Inc., a company specializing in advanced e- Commerce website development. Prior to those activities, Mr. Kraft was a Vice President of DiagSoft, Inc., which was acquired by Sykes Enterprises, Inc. Ed De Benedetti – Vice President, Research & Development. Mr. Manfredo has known Mr. De Benedetti for over 30 years. Mr. De Benedetti has been involved in research and development of innovative television systems since the introduction of the first Vidicon sensor in the mid 1950s. Mr. De Benedetti was the founder Scanco, Inc. a developer of imaging systems used in X-ray inspection equipment. He also developed an extremely low light level imaging system used for Telescope guiding in astronomy worldwide. Doyle Sturms – Vice President, Sales has over 35 years experience in the telecommunications industry. As Regional V.P. at NUKO Information Systems, Mr. Sturms sold digital video products to the RBOCs and Independent Telcos. He worked for Alcatel Network Systems for thirty years where he was Manager Video Products Marketing. Along with video, he worked extensively with the Alcatel ATM group during the development of Cinema of the Future, which used the ATM network to transport movies and live entertainment. He has worked extensively with PacBell, Bell South, SBC Communications, MCI and Ameritech. Lynn Wubbels – CFO has a broad background in public accounting practice including tax and A&A. He has significant experience with start-up companies and has been a key team member of several successful companies that were either acquired by strategic investors or went public through an IPO. The Market: The convergence of television, high-speed Internet access (DSL), and standard telephony has created a new consumer driven opportunity to bring simultaneous voice phone service, Internet access, and television to the home over the copper pair. This new and exciting market represents a $20B per year market opportunity in the USA alone, according to Frost and Sullivan. According to J.P. Morgan Securities Inc., (“Competitive Telecom Services” – January 21, 2000) the telephony market is $250B and will grow to $560B by 2007. The report states; “this market is a massive opportunity not exploited by industry first movers.” BBNC plans to be a major player in this massive market. BBNC believes there will be significant market to transmit broadcast quality video over xDSL phone networks serving both intranets and the Internet. BBNC expects to be in a position to capture a significant share of this multi-billion dollar infrastructure equipment supplier market. Our Technical Approach: BBNC’s technical approach covers VIDEO encoders, decoders, and ATM multiplexers for use at the central office/head-end, Intelligent Residential gateways with subscriber access to interactive services, video streaming to the subscriber. BBNC is the only company that offers an end-to-end solution using it’s own products. Digital Video Networking – BBNC currently has VIDEO encoders, decoders and ATM multiplexers that are used to digitize, compress and multiplex normal television signals onto the broadband telephone network. These products are built to the stringent criteria required by the carriers relating to redundant systems, automatic switching to redundant components in the event of failure and hot-swap capability in the event of a failure. BBNC’s ATM products are covered under patent number 6,088,360 titled “Dynamic Rate Control Technique For Video Multiplexer”. In addition, there are two more patents pending on BBNC’s ATM technology. ThisPROPRIETARY & CONFIDENTIAL: Do Not Distribute Page 3 Page 3
  4. 4. intellectual property makes BBNC’s ATM technology superior to its competitors. BBNC’s products have a demonstrated MBTF of over 24 months. Intelligent Residential Gateway - BBNCs solution for the distribution of these new services is to develop an intelligent residential gateway function that will allow the distribution of television, Internet, and telephony at the residence or within the enterprise using existing POTS copper wire or new fiber. We will accomplish this solution by creating an open architecture product that receives high-speed input from the xDSL DSLAM and split out the functions for video, Internet, and phone service. Subscriber Access - BBNC’s solution for how the subscribers access these new services is to develop software that will allow an interactive set top box to operate for both a streaming video and video on demand application. With the requirement for encrypted programming to be sent over the network, BBNC’s products will provide seamless access to programming that is encrypted. Video Streaming – BBNC’s solution to streaming high quality real time video over copper via IP protocol is a new MPEG-4 encoder. Such encoding will allow the transmission of high quality, full screen, and full motion video at data rates as low as 384 Kbps. Financial Considerations – The financial outlook of the xDSL market is known to be in a high growth mode as shown in the market section above. BBNC is in a unique position because it either has or will have an end-to-end solution for its customers. These customers will be incumbent local exchange carriers (ILECs) and competitive local exchange carriers (CLECs). Current BBNC customers like Marconi Communications are actively pursuing business on a worldwide scale using their ATM switches and DSLAMs in conjunction with BBNC video encoders and ATM networking products. BBNC plans to use the funds for staffing and outfit them with equipment to meet our goals. In addition, the money will be used for facilities to house the additional employees and for laboratory/manufacturing space. The financial projections below are in $000’s. BBNC’s fiscal year runs from July 1 through June 30. Item FYE 2001 FYE 2002 FYE 2003 FYE 2004 FYE 2005 Sales 606 59,329 238,792 348,379 505,387 Expenses 6,102 49,336 130,565 176,677 245,305 Profit Before Taxes (6,708) 9,993 108,227 171,702 260,082PROPRIETARY & CONFIDENTIAL: Do Not Distribute Page 4 Page 4