ViGlazeTx™ – Transparent Visual Digital Media
Transparent Visual Digital Media, or “ViglazeÔ” as currently branded, is made up of a network of light emitting diodes (LEDs) in a similar way to digital outdoor video media screens, the only difference is that it’s virtually transparent. This 95% high level of transparency compared with 60% for competitors is achieved through patented compact micro circuitry placed on a glass motherboard.
The fastest growing media market sector is digital outdoor media that is growing at 10+% per annum worldwide and projected to be a U$30.4 billon market by 2010. Digital outdoor media screens are the next generation of printed bill boards, where transit traffic can be targeted and the viewers can’t switch off or change channels! The message, or video advertisement, can be changed every few seconds, screens networked along roads or across buildings to communicate for longer and even respond reactively to the target audience.
In a cityscape or roadside where the traditional billboard sizes are regulated because they can detract from the architecture or natural scenery, a transparent video screen can be used. Building facades, skylines, bridges, barriers and internal and external walls can now be turned from cost centres to profit centres. Architectural structures can now be transformed from static objects into digital life forms, or digital architecture, by giving architects and designers a new media to work with, ViGlazeTx.
Working with established outdoor advertising companies, property owners and developers Alchemie Group intends to leverage the ViGlazeTx intellectual property rights (IPR) to licence the sale of ViGlazeTxÔ systems and obtain an ongoing royalty from the advertising revenue generated from the ViGlazeTx systems. Typical average sales prices per square meter for digital outdoor media screen are U$D 7,000 per m2 with typical advertising rates of U$D30,000 per m2 in key locations in major cities. Advertising rates on ViGlazeTx systems should be in the premium market range as it offers an advertising opportunity in places that other digital media are unable to achieve.
It is planned that the production of the final glazing packs incorporating the ViGlazeTx system and their installation will be sub-licensed to local companies. Production of the ViGlazeTx electro-optic system and transparent motherboards will be done in house or using tightly controlled sub-contractor/licensee. Technical sales support and system servicing will be managed internally. This structure should prove to be the most economical whilst maintaining maximum control over the technology, especially in markets with low or non existent IPR protection legislation and enforcement.
Alchemie Group applies a Blueprinted business model that was developed by a team of McKinsey consultants to all it’s businesses. This process identifies 7 essentials that the 387 businesses on Nasdaq had in common to have achieved a million to a billion turnover. BlueprintÔ essentials are highlighted in blue in the text below. An experienced and highly motivated team is being recruited to administer, manage and operate the business, with a number of personnel and corporate services initially being provided by Alchemie Group.
Alchemie Group and its scientific partners have worked for five years to develop the intellectual property (IP) including patenting of Transparent Visual Digital Media Technology. The intellectual property rights have been secured in certain Eurasian markets already and other patents are being applied for to widen the market exclusivity into other areas including the European Union (EU) and North America as well as deepen the IPR protection in these markets. Alchemie RDL via its research, development and licensing corporate structure in the British Virgin Islands (BVI) has options to acquire the ViGlazeTx technology from its original inventors.
The sales projections show a large percentage of the revenue being derived from the (5%) royalty charges on the advertising revenue generated from the ViGlazeTx systems, with cumulative revenue streams for every m2 of installed ViGlazeTx being realised year on year. The production operation will be sub-contracted or run as a profit centre contributing 10% of the net sales margin. Set up costs will be kept minimal especially in year one by being able to use Alchemie Group infrastructure and personnel charged only on an “as when needed” basis. Operating costs will be minimised through sub-contracting of non-core production and installation functions. Minimal basic salaries will be achievable through the use of an excellent personnel performance incentivisation scheme. Investment in production capital equipment will be comparatively low as the component production can be sub-contracted and final motherboard assembly process requires machinery with a high throughput compared to the volumes required. Cash flow requirements will be kept low through the payment terms under which the business will contract. Annual EBIT is forecast to be high by the end of year two when the production process is fully underway and advertising revenue royalties per m2 start accumulating.
A U$5 million structured investment package is now sought that will facilitate the following: a 12mx12m ViGlazeTx demonstration board to be produced and installed at a key demonstration site, consolidation of the IP ownership into a tax efficient BVI structure subject to UK law, registering national intellectual property rights, establishing of an electro-optic assembly line for the ViGlazeTx system, and providing one years working capital for the business. In return for the investment Alchemie Group is prepared to sell a strategic shareholding of 51% of the shares in a new BVI company that will own the IPR and manage the business.
The return on investment should be excellent because of: the minimal requirement for expansion capital therefore minimal subsequent shareholder dilution, the high licence fees that may be charged due to the exclusive markets provided by the strong IPR position, the low tax jurisdiction the business operates from and the high profit to earnings ratio on the business profitability that may be achieved due to the long term ViGlazeTx system royalty payment contracts with financially stable companies.