Small Caps that make money for you
Thaon Communications (OTCBB:THAO)
Current Price: $2
Price Target $6
Company Website
Business Strategy
CastPro
Prime Time Sports
Conclusion
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Thaon Communications, traded under the symbol THAO, is a conglomerate designed for generating maximum profits in the new explosive worldwide communications industry. The corporate family is based on a hybrid business model that harnesses the strength of their proven revenue generating companies, while other corporate members are developing advanced technologies. The company has invested capital and manpower to establish a significant technological position for the emerging integration of the Internet and Television industries.
The company’s original business is CastPro.Com, a leader in multimedia streaming solutions. Its proprietary system, Remote Wireless Technology opens up a wide spectrum of live-on-location event broadcasting possibilities, such as sports, corporate and government announcements, cultural events and breaking news stories.
Thaon Communications has adopted an aggressive acquisition campaign to acquire revenues, technology and existing marketing channels in its bid for a global presence. The company recently acquired Prime Time Sports Television, a media planning and placement company specializing in direct response marketing. Its clients include Tae-Bo Aerobics, Sony Music, and Cleveland Golf and revenues are estimated to be in excess of $51 million in 2001.
We rate Thaon Communications as a strong buy, with a short term price target of $6. The company has a strong fundamental core of solid cash flow and earnings, superior technology, compelling content, identified acquisition candidates, and a global market that will lead to rapid growth in the near term.
Business Strategy
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The first phase of the company's business strategy was the establishment of CastPro.com and its proprietary Remote Webcast Technology as the principal company in terms of technology and market acceptance. In addition to the live streaming mobile units, Thaon Communications acquired a full service digital studio located in downtown Los Angeles. This provided additional revenue streams as well as a competitive edge for live webcast and recording events.
Since this has already been accomplished, the company can move on to the second phase, which is to initiate an aggressive acquisition campaign. The acquisition of Prime Time Sports combined the production capabilities and distribution network of CastPro with the marketing and media expertise of Prime Time Sports. The two companies are working together, using proven marketing techniques to create demand for advanced streaming technologies.
Thaon Communications is currently in active negotiations with companies located in the United States, Australia, and Asia. Acquisition targets are selected to increase revenues for the company and to further enhance the quality and scope of its own streaming events.
CastPro.Com
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CastPro is an internet production and broadcasting company operating out of live digital production studios and on location from mobile studios. The company was built on the development of Remote Webcast Technology (RWT), which permits the broadcast of live events from mobile production units using high speed wireless technology. This technology significantly reduces the cost of on-location live webcasts. Clients include Microsoft, iBeam, Viewcast, and Infinity Broadcasting.
The company's services include audio and video production, live event webcasting and streaming media encoding and delivery. The company can handle anything from simple webcasting to complex pay per view models. The company’s Remote Webcast Technology gives it several distinct advantages over its competition:
Spontaneity - Mobile production units allow faster response times for coverage of time sensitive events, such breaking news stories.
Landline Avoidance - Wireless technology can be set up in a few hours, while conventional webcasts require the installation of landlines for on-location events.
Lower Production Costs - Rapid response times and easier production setup makes wireless webcasting a far less expensive alternative than any other method.
Prime Time Sports Television
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Prime Time Sports is an industry leader in direct response marketing and access to CastPro’s streaming technology has expanded the revenue opportunities for Prime Time Sports by providing the marketing gateway to the internet. Current clients include Tae-Bo Aerobics, Cleveland Golf, Rossignol and Sony Music.
Prime Time Sports has close strategic alliances with major networks as well as regional networks and specifically regional sports networks dependant upon content. Access to the Internet through CastPro offers the capability to seamlessly mesh its past success by expanding to the Internet.
Conclusion
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The convergence of television and Internet is set to take place in the very near future and this will present an enormous opportunity for companies that are positioned to take advantage of the explosive market. Thaon Communications (THAO) possesses a solid fundamental core, breakthrough technology and a strong content base. This makes it a great investment opportunities.
The combination of content and technology, developed by CastPro, is destined to generate explosive revenues and earnings growth, while Prime Time Sports provides core revenues and earnings to maintain financial stability. The company's media exposure has been consistently positive and will contribute to its ability to attract sports and entertainment events. Success generates success.
The company’s sophisticated technology, production capability, distribution network and aggressive acquisition campaign, combined with Prime Time’s client base, marketing, and media expertise, should produce annual revenues in excess of $100 million.
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