| Celerity Systems, Inc. | |||
| Ticker: | CLRT | 9051 Executive Park Drive, Suite 302 | |
| Exchange: | NASDAQ-National Market | Knoxville, TN 37923 | |
| Industry: | Wholesale (SIC Code 5045) | (423) 539-5300 | |
| # of Employees: | 62 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/13/97 | |
| U.S. Shares: | 2,000,000 | Offer Date: | 11/3/97 | |
| Non-U.S. Shares: | 0 | Filing Price: | $7.50 | |
| Primary Shares: | 2,000,000 | Offer Price: | $7.50 | |
| Secondary Shares: | 0 | Gross Spread: | $0.58 | |
| Offering Amount: | $15,000,000 | Selling: | $0.30 | |
| Expenses: | - | Reallowance: | $0.10 | |
| Shares Out After: | 4,082,239 |
| Manager | Tier | Phone |
| Hampshire Securities Corporation | Co-manager | (212) 641-3624 |
| Issuer's Law Firm: | Squadron, Ellenoff, Plesent, Sheinfeld & Sorkin |
| Bank's Law Firm: | Fulbright & Jaworski |
| Auditor: | Coopers & Lybrand |
| Registrar/Transfer Agent: | American Stock Transfer & Trust Co |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $2.53 | $1.25 | $1.30 | Assets: | $4.53 |
| Net Income: | -$5.51 | -$3.83 | -$1.78 | Curr Assets: | $3.46 |
| EPS: | -$2.75 | -$1.61 | -$1.01 | Liabilities: | $2.41 |
| Prior EPS: | $0.01 | -$1.68 | $0.06 | Curr Liabilities: | $3.63 |
| Cash Flow/Oper: | -$2.93 | $0.00 | $1.01 | Equity: | $2.12 |
| Cash Flow/Fin: | $5.09 | -$1.68 | $0.06 | Cash: | $0.46 |
| Cash Flow/Inv: | -$2.93 | -$1.68 | Working Cap: | -$0.17 | |
| Business Description |
| The company designs, develops, integrates, installs, operates and supports interactive video service hardware and software. The company also designs, develops, installs, and supports CD-ROM software products for business applications. In the interactive video services area, the Company seeks to provide scalable solutions, including products and services developed by the Company and by strategic partners, that enable interactive video programming and applications to be provided to a wide variety of market niches. The Company has installed 11 digital video servers in four countries (China, Korea, Israel, and Taiwan), on each of the four major types of networks accommodating interactive video services. The Company believes that its demonstrated ability to deploy and operate interactive video systems over each of these four major network types is a significant competitive advantage. In the CD-ROM area, the Company provides several products for the storage and rapid retrieval of large amounts of information. The Company believes such products are faster, easier to use, provide more features, and are operational on more diverse network architectures than similar products and services. The Company's CD-ROM customers include the U.S. Navy, Sprint Corp., Unisys Corp., Toronto Dominion Bank, and Herzog, Heine & Geduld, Inc. In December 1995, the Company's VCD MANAGER and VCD WRITER products were each chosen as IMAGING MAGAZINE'S Product of the Year in their respective product groups for CD-ROM software. IMAGING MAGAZINE is a leading industry publication for CD-ROM business software. |
| Competition |
| The interactive video and CD-ROM industries are highly competitive. Many of the companies with which the Company currently competes or may compete in the future have greater financial, technical, marketing, sales and customer support resources, as well as greater name recognition and better access to customers, than the Company. There can be no assurance that the Company will be able to compete successfully with existing or future competitors. Certain of such competitors have entered into strategic alliances which may provide them with certain competitive advantages. |
| Business Plan |
| The Company's marketing strategy is to seek customers in each of the potential emerging markets, to encourage leading companies and organizations to adopt its technology, and to position itself as a leading provider of interactive video services within niche markets. The Company believes that it is important to achieve market penetration at an early stage in the development of particular niche markets in order to compete successfully in those markets. The Company is marketing itself based on its demonstrated ability to install digital video systems on each of the major network types and its potential to provide end-to-end interactive video solutions. In addition, the scalability of the Company's servers provides flexibility in deploying interactive video services systems varying in size from systems designed to serve five simultaneous users to those capable of serving many thousands of users in a variety of markets on a cost-effective basis. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to repay indebtedness plus accrued interest thereon, including debt incurred in the company's 1996 and 1997 private placements; to pay a former officers; and for working capital and for general corporate purposes including sales and marketing and the hiring of additional personnel. |
| Name of Shareholder | % Owned Before | % Owned After |
| Glenn West | 18.40% | 9.40% |
| Kenneth D. Van Meter | 17.20% | 9.50% |
| Dr. Fenton Scruggs | 16.20% | 8.30% |
| Special Situations Fund | 9.30% | 4.80% |
| Mahmoud Youssefi | 7.70% | 3.90% |
| Officer Name | Title | Age |
| Glenn West | Executive Vice President, Director of Technology, and Director | 38 |
| Kenneth D. Van Meter | President, Chief Executive Officer and Chairman of the Board | 50 |
| Doyal H. Hodge | Vice-President and Chief Financial Officer | 43 |
| Mark Cromwell | Vice-President of Engineering | 43 |
| William R. Chambers | Vice-President of of Business Development | 45 |
| Additional Underwriter Compensation |
| Warrant to purchase 200,000 shares/units at a nominal price. |
| Exercise price of $9.00 |