I just received an investors packet from SoundWorks. Included were news releases, a catalog, and the following prospectus (I scanned this in and used OCR software so I apologize for format and spelling errors).
James
SoundWorks International, Inc.
"JERDEN Records" & "SpeechWorks"
--A Multi-Media Content Provider--
Executive Summary
SoundWorks International, Inc., a Nevada corporation, formed on March 19, 1997, acquired SoundWorks USA, Inc., effective September l, 1997. SoundWorks International, Inc. had 1,012,531 shares outstanding and issued 4,000,000 shares to the shareholders of SoundWorks USA, Inc. in exchange for 100% of the issued and outstanding stock of SoundWorks USA, Inc. SoundWorks International, Inc. is in the process of raising up to approximately $1,000,000 through a 504 Reg D financing and plans to go public on the over-the-counter market by applying for a listing on NASD's Electronic Bulletin Board.
SoundWorks USA, Inc. (hereafter "The Company" or "SoundWorks"), a Washington corporation produces and markets spoken word and music products on audio compact discs and cassette tapes for targeted niche markets. These products are marketed under the brand names "Jerden", "SpeechWorks" and "The Nostalgia Company", respectively. The Company is poised for rapid growth.
The Company
SoundWorks is an established player in the growing field of nostalgia recordings. SoundWorks' mission is to create and market nostalgia entertainment products - both audio and visual - for targeted niche markets.
To fulfill its mission, SoundWorks' managers focus on product development, marketing, and sales, - areas in which Management has extensive and relevant expertise. The Company's products are designed for specific niche markets using copyrighted materials and other materials to which the Company has access. Manufacturing is outsourced, enabling the Company to maintain its emphasis on product innovation.
Current Status
The Company was founded in December 1992 by Mr. Jerry Dennon - a prolific recording -industry executive and producer - for the purpose of realizing the inherent value of his proprietary library of master recordings, which originally cost $20,000,000 to produce and contains copyrighted recordings of more than 200 name artists of the 40's, 50's, 60's, and 70's.
Since 1994 the Company has produced 21 highly marketable spoken word titles, including "JFK: The Kennedy Tapes", "FDR: Nothing to Fear", "Harry S. Truman: Give'Em Hell Harry", "Martin Luther King: The MLK Tapes", and "Ronald Reagan: The Great Speeches, Vol. I". The Company has also produced 8 nostalgia music titles, including The Kingsmen, Don & The Goodtimes, and The Sonics. Early market exposure has proven demand and the Company is now ready to initiate a full-scale marketing effort. Despite a limited marketing budget of under
$ 10,000, two of the spoken word releases - JFK and MLK - have sold, at retail, in excess of $450,000.
In late 1997, the Company produced its first Video product, "Victor Borge: The Radio and TV Years'; designed to be sold on television via direct marketing. Scheduled for manufacture and marketing in 1998 are new nostalgia videos titled, "Frank Sinatra: OI Blue Eyes In Black and White " and "The Greatest Speeches of A11-Time ".
1 The Products
The Company has significant opportunity in three areas: Spoken Word Audio, Nostalgia Music, and Nostalgia Video.
The Company is currently focused on exploiting the opportunity which exists in the direct marketing on television of both audio recordings and videos.
SoundWorks' music titles are developed from its proprietary library of master recordings from the period 1940-1980 such as The Kingsmen, Jimmy Dorsey, Enoch Light, Martin Denny, The Duprees, Duke Ellington, Woody Herman, Hank Locklin, George Jones, Ian Whitcomb, Wes Montgomery, Pete Fountain, and many others - most of which are previously unreleased on compact disc. Marketed under the brand name Jerden Records, these titles are targeted at the nostalgia music buyer 40-years-old and over.
Beginning in 1998, the Company will design and produce products to be sold via Direct TV marketing. This selling method is ideal for reaching the typical buyer of the Company's
products. This target group (over 50 years of age) is currently the fastest growing buying market. Mr. Dennon's extensive, award-winning television experience is exceptionally relevant to the Company's needs in this arena. Additionally, the Company will exploit key strategic alliances and joint venture partners who have a successful track record in TV direct marketing.
The attraction of marketing Company products via Direct TV is easy to demonstrate. Test marketing is relatively easy and accurate. The number of units that will be sold are predictable and sales volume can be very high if the marketing is executed correctly.
For example, in the music compilation category, USA Today reports that Roger Whitaker's Best Loved 8allads sold approximately 800,000 units through Direct TV at $24.95 each, translating to sales revenues of $20 million. Gross profits on such sales would be in excess of $ 10 per unit, or $8 million. Albums by the Flute artist Zamfir, Master of the Pan Flute, have sold more than 1 million copies. According to USA Today, Heartland Music sold over 600,000 copies of Stage Door Canteen - an album of hits from the 1940's. Jerden is ready to manufacture a sequel to this album of World War II hits from the period 1940-1945 called Juke Box Saturday Night.
Expected results from Direct TV marketing are reported in the following projections.
The Company has penetrated less than 1% of the market for both the music and spoken word audio products. The effort has been severely constrained because of the Company's lack of financial resources. Nonetheless this effort has resulted in a demonstration of market demand for the products which allows it to confidently project increases in future sales based on increases in marketing, promotion, and improvements in sales manpower and materials.
/ Required Investment
The projected growth in sales will require a minimum of $250,000 to increase marketing, build inventory, add new titles, hire personnel for marketing and production activity, produce selling materials, increase the Company's presence at trade shows, publish a catalog, and fund the production of TV commercials and media advertising. The Company expects to raise this through the Reg D offering currently underway.
~ Comnanv Officers & management Team
~ GERALD (JERRY) DENNON, President, CEO, and Director
~ ROBERT WIKSTROM, Secretary/Treasurer, General Manager, and Director
~ DIANE BOTEFUHR, Product & Administration Manager
~ SCOTT SCHMIDT, Media Coordinator
Advisorv Board (partial listing)
BOB FLICK, music producer and founding member of the singing group, The Brothers Four. CLIFFORD JOHNSTON, 25 year background in corporate administration, planning, and business consulting.
JIM NEWHOUSE, veteran music industry executive who has held senior management positions with major record companies.
GARY TAYLOR, broadcasting executive consultant and former president/CEO of the Broadcast Marketing Executives Association.
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