Color Star Technology Company Overview
Color Star Technology Co., Ltd.(Nasdaq: $Huitao科技(HHT)$ HHT, the “Company”) is a holding company with primary business engaged in offering innovative education services in China, both online and offline. The Company’s business operations are conducted through its wholly-owned subsidiaries Color China Entertainment Ltd. and CACM Group NY, Inc. And through its joint venture entity Baytao LLC, the Company also plans to provide the after-school tutoring program in New York, as well as online music education via the branded "Color World" platform.
Aligned with its long term growth strategy, the Company acquired “Color China”, and changed its name from Huitao to Color Star Technology posted the completion of acquisition on June 3, 2020. Prior to the name change, the Company was also engaged in the businesses of producing advanced ready-mix concrete materials, whose disposition was completed on May 4, 2020, with the proceeds to be used for strategic business development in education services and technologies.
Post the acquisition, HHT is expected to be able to utilize all of Color China's assets in the entertainment industry to offer more features and benefits for its students. Given Color China's industry resources and expertise, this acquisition has proved critical to the Company’s initial development of proprietary online education platform - Color Star. More importantly, Color China's unique and abundant entertainment industry assets, as well as its network of renowned artists and professionals are expected to go a long way in planning the Company's future initiatives and long term strategy.
The Company entered into a securities purchase agreement with certain accredited investors to purchase approximately $1.5 million and $1.43 million worth of its ordinary shares in a registered direct offering and warrants in a concurrent private placement on March 31 and May 11, 2020, respectively.
2020H2 Business Outlook
The Company announced the plans for its online education platform - "Color Star" shortly following the acquisition of Color China. Concurrent with Color Star’s ongoing progress in developing proprietary online education platform, the Company plans to introduce professional music instructors onto this platform by hosting an online concert in the second half of 2020, when artists onboarding is expected to launch and student registration is also expected to open. The "Color Star" platform will feature proprietary classes by professional artists across the globe, as well as other related content generated by the celebrities. These lessons will contain both theoretical and practical components, aiming to provide students with solid fundamental skills and job opportunities in the entertainment industry. In addition to classes offering, the online platform will also serve as an e-commerce channel for commercialized celebrity IP products.
With the acquisition of Color China, the Company is confident in its long-term strategy and future success. Accordingly, the Company will announce onboarding artists and specific lessons offered, upon reaching cooperation agreements.
Highlights of Recently Announced Company and Business Developments
Key talent acquisitions to further its commitment to online music education services expansion
As the Company continues to accelerate its educational products and service offerings in online education towards the entertainment sector, its wholly owned subsidiary Color “Color China" announced on June 11, 2020 the additions of three talented to its management team, including the following:
Mr. Chu-hsin (Frank) Peng joined Color China as the Chief Artist Officer - Frank is a producer, songwriter, guitarist and agent. He is referred to as the "The Pioneer of Mandarin Boy Groups" in the entertainment industry, and was involved in the production of approximately 60% of the boy groups in Taiwan since 2000. Frank has also produced and supervised more than 30 albums and 500 singles. He is experienced in working with various record companies and famous singers, including EMI, SONY, UM, Warner, and Rock. Mr. Frank Peng will manage Color China's artist channels and marketing in Hong Kong and Taiwan.
Ms. Man Zhang joined Color China as the Executive Vice President - Man is known for her expertise in TV program planning, show hosting and producing, as well as talent management. She has produced numerous popular music TV shows since 2000 and was one of the top 10 pop music hostesses. Ms. Man Zhang will manage Color China's acquisition of artists and marketing in Mainland China.
Xiaoqiao Liu joined Color China as the Entertainment Advisor - Xiaoqiao is a bilingual entertainment professional specialized in areas including U.S.-China collaborated film productions, TV productions, live streaming and music productions. Xiaoqiao has a successful track record in representing Chinese studios and celebrities, as well as American talents, song writers, producers, composers and musicians.
With a talented team covering the Company’s important geographic markets, Management is excited to rollout online learning services that are unique and relevant in addressing the market needs.
Empowering the "Color World" platform by strategic partnership with Bole Information Technology to
“Color China” announced on June 17, 2020, that it entered into a strategic partnership agreement with Shenzhen Bole Information Technology Co., Ltd. ("Shenzhen Bole") to provide advanced technologies for Color World - the Company's online education platform currently under development.
Shenzhen Bole is believed to be one of the leading augmented reality, virtual reality and mixed reality (AR/VR/MR) multi-scene content operation service provider in China, with clients including Agricultural Bank of China, NBA Playzone, Costa Cruises, Hershey's, and other large enterprises. Shenzhen Bole owns a large content library in the field of AR large-screen interactive subdivision, and has created "X-Mirror (Gravitational Lens)," an innovative multiplayer AR interactive all-in-one machine, by integrating facial recognition, bone recognition and other cutting-edge technologies, as well as leveraging rich AR interactive contents.
The partnership with Shenzhen Bole will add AR and Artificial Intelligence technologies to the Company’s Color World platform, enabling better interactions and learning experiences for the students. More specifically, Shenzhen Bole will implement AR technology into the Company’s video lessons, allowing for multi-lingual live interactions between the students and their chosen artists on the virtual platform.
Due to the ongoing epidemic, online education has become the dominant way of learning. and the Company has quickly shifted its focus to develop new areas of online service. The Company plans on deploying proprietary research and development with support from professional software development teams, targeting to break through the traditional education model and offer innovative education services, under the "artists + online education" model that covers the full spectrum of entertainment industry. Management expects its Color World platform to attract hundreds of millions of registered users and offer its users with truly unique learning experience. The platform’s initial development phase has completed, and will be open for registration in the second half of 2020 globally.
Setting up its first offline site in New York City through strategic agreement with Mixx Lifestyle in establishing its offline entertainment and education global network
“Color China" has signed a strategic agreement with Mixx Lifestyle Inc., USA on June 24, 2020, in a collaboration to set up the Company's first offline learning site and live music venue in New York.
Aligned with the Company’s strategy pertaining music education, this agreement allows both parties to collaborate in building a first-tier live music venue in New York City, which will also serve as an offline training base.
Company plans to invite many renowned artists and celebrities to teach lessons live at the Company’s New York learning site post-lockdown, offering students the opportunities to come into the learning site to enjoy face to face interactions with renowned artist teachers. Lessons will also be recorded for online education platform.
Additionally the Company also plans to launch several offline learning sites gradually starting from the second half of 2020, including locations in Europe, Southeast Asia and China, and has already been in contact with many local companies in discussion of setting up respective local learning sites. Currently the New York site is under full construction and is planned to be opened around the end of 2020 as New York City’s gradually reopening.
Color Star is targeted to become a pioneer in providing celebrity-taught education services with customized content and enjoyable learning experiences, accessible both online and offline.
Signing on Bobby Roth - famous American director, Masa - Asia's "Guitar Guru”, and renowned musician Larry Carlton joining as “Star Teachers” on “Color World” education platform
“Color China" has signed a Broadcast and Educational Licensing Agreement with the famous American director Bobby Roth on July 1, 2020.
Bobby Roth is a famous Hollywood director, having directed over 100 episodes of TV shows, 25 movies, and 13 cinema films. Mr. Roth has also won honors at more than 100 film festivals, including the Cannes Film Festival, Berlin Film Festival and Sundance Film Festival, and won the "Lifetime Achievement Award" at the Miami Internet TV Festival in 2017. He is a founding member of the Independent Film Federation, and the first Co-Chair of the Independent Film Committee of the Directors' Union.
Bobby Roth will serve as a Star Teacher on the online education platform "Color World," to provide those interested in film production with his vast experiences working with actors, producers, dancers, costume designers and in post-production, from the perspective of a director.
Management expects to continue onboarding the world's stars and entertainment professionals as teachers on its "Color World" platform, giving students new online learning experience superior to other traditional online education platforms.
Also on July 2, 2020, “Color China" signed an cooperation agreement with a renowned guitarist, Zhengyan You (a.k.a. Masa). Masa will take on the role as a Star Teacher on the "Color World" online education platform. The addition of Masa enables the Company’s students to learn from the best. The signing of this contract with Masa also marked the beginning of Color World's development in Asian markets outreach.
Masa, widely regarded as a "Guitar Guru" in Asian pop music, has participated in the production of thousands of albums since his entry into the entertainment industry in 1974. His albums include top pop music stars in Chinese music, and multiple record labels and fellow artists have also been known to reach out to Masa for cooperation. His music has influenced musicians across all demographics, affirming Masa as a representative of guitar performance in Asian pop music and other genres.
Additionally on July 7, 2020, "Color China" signed another cooperation agreement with Larry Carlton, a renowned American musician,. Larry Carlton will also take on the role of a Star Teacher on the "Color World" online education platform.
Larry Carlton is a guitar master in the music industry, and has participated in more than 500 music albums, winning the Grammy Award 4 times. He is widely acclaimed as one of the most outstanding guitarists in the jazz scene in the second half of the 20th century. Overall, Larry Carlton's voracious appetite for music has earned him 19 Grammy nominations and 4 Grammy Awards, a Star of the Rock Hall of Fame in Hollywood, the Titan of Tone award and many others, as well as widespread recognition amongst fellow world class entertainers. His influence can be found in a plethora of genres in today's music scene, with jazz, blues, pop and rock all bearing the mark of Larry Carlton.
Going forward, Color Star plans to continue growing its list of Star Teachers on its Color World platform, and will regularly update its list of star teachers from a multitude of entertainment industries. The Company is committed to cooperation with and the signing of more top artists and producers across Asia and other parts of the work in all major entertainment industries. Management believes that Color World has the potential to bring richer content to the Company’s student, and believes that the additions of star teachers will greatly improve Color World's competitiveness in the Asian market of over 2 billion potential consumers.
Entering into Framework Agreement with Moremoon Cartoon Cultural
On July 9, 2020, Color China signed a Framework Agreement with Moremoon Cartoon Cultural Diffusion (Shenzhen) Co., Ltd. ("Moremoon"). This agreement has set forth the strategic direction for collaboration between the two entities, which shall be further defined in a definitive agreement, and marked the prelude to the Company's future plan to offer multiple variety of Moremoon products on its "Color World" Platform.
Moremoon is an experienced service provider for corporate image design, integrated brand planning, graphic design, space design, card design, commercial photography, multimedia design, and resource integration. Centered on the operation and promotion of an independent animation brand image, Moremoon constantly enriches its brand "Zombies Cat," and continues to expand into other related fields. Advocating the value of creativity-driven innovation," Moremoon is committed to building China's top original animation brand, and revitalizing China's cultural and creative industries.
Moremoon has participated in in-depth cooperation with platforms such as Tencent QQ, Sougou Mobile Chinese Input Method, China Mobile Fetion, WeChat emoticons, Emoticons ABC Daquan, Baidu Hi, Love Wallpaper APP. It won the Comprehensive Group of the 2nd Northeast Asia International Animation Works Competition in 2014, also appeared in China International Animation and Video Game Festival in October 2014.
Management is positioning the Color World platform to become a diversified platform, standing out from the traditional online education offerings. The platform will not only feature online classes by the Star Teachers, but will also sell relevant peripheral and brand-collaboration products of the Star Teachers.
Beside the educational programs, the Company is also aiming to bring unique shopping experience to its platform users. Color China is currently negotiating with many well-known brands around the world, and plans to include top brands and customized products on its Color World platform, allowing its subscribers to experience a creative way of shopping, while at the same time expanding the Company’s service scope and product offering to generate higher revenue. The goal is to enrich the Color World platform with joyful learning experience interacting with their idols on a virtual social platform.
DISCLOSURES AND DISCLAIMERS
Stone Street Group LLC (“Stone Street”) publishes research reports on publicly-traded companies. Stone Street has been retained by the company discussed in this report (the “Company”) to provide ongoing digital investor relations services, including the creation and dissemination of this report. All research published by Stone Street is based on public information, or on information from the Company that the Company is required to promptly make public.
Stone Street is not a broker-dealer or a “covered person” under SEC Regulation AC, and does not distribute its research through a registered broker-dealer or any associated person of a registered broker-dealer. Accordingly, Stone Street is exempt from the provisions of Regulation AC. Nevertheless, Stone Street makes the following voluntary disclosures and disclaimers in connection with its research reports:
NO GUARANTEE: This research report is not a substitute for the exercise of an investor’s independent due diligence and independent investment determinations. Information contained herein is based on sources we believe to be reliable but we do not guarantee their accuracy. It should be presumed that the analyst who authored this report has had discussions with the Company to endeavor to ensure factual accuracy prior to publication, however, no independent due diligence or verification has been undertaken by the analyst. No endorsements are made in respect of information provided or published by the subject Company and relied upon by the analyst for purposes of this research report. Recipients of this report should consider this report as only one factor in making any investment decision. This report is for information purposes only and is not intended as an offer to sell or a solicitation to buy securities. Any and all information provided by the Company which has been publicly disclosed as “forward looking information” remains subject to all uncertainties in such regard and Stone Street makes no assurances or guaranties of actual outcomes.
NO CONFLICTS OF INTEREST: Stone Street does NOT own securities of the issuers described herein, and Stone Street does not make a market in any securities. Stone Street does not engage in, or receive compensation from, any investment banking or corporate finance-related activities with the company discussed in the report. Stone Street’s contracts with issuers protect Stone Street’s full editorial control of all research, timing of release of reports, and release from liability for negative reports.
ANALYST INDEPENDENCE: Each Stone Street analyst has full discretion on the analysis and revenue targets contained in the report, based on his or her own due diligence. Analysts are paid in part based on overall profitability of Stone Street. No part of analyst compensation was, or will be, directly or indirectly, related to the specific recommendations or views expressed in any report or article. Stone Street policy does not allow an analyst or a member of their household (i) to own, trade, or have any beneficial interest in any securities of any company that analyst covers, or (ii) serve as an officer or director of a covered company.
RISK FACTORS: Earnings targets and opinions concerning the composition of market sectors included in this report reflect analyst judgments as of this date and are subject to change without notice. A risk to our earnings targets is that the analyst’s estimates or forecasts may not be met. This report contains forward-looking statements, which involve risks and uncertainties. Actual results may differ significantly from such forward-looking statements. Factors that may cause such differences include, but are not limited to, those discussed in the “Risk Factors” section in the issuer’s SEC filings available in electronic format through SEC Edgar filings at 网页链接
COMPENSATION: Stone Street received a flat fee from or on behalf of the Company for the creation and dissemination of the report. Stone Street has not received investment banking income from the Company in the past 12 months, and does not expect to receive investment banking income from the Company in the next 12 months.
ANALYST CERTIFICATION: The research analyst certifies that this report accurately reflects his/her personal views about the Company’s securities that none of the research analyst's compensation was, is or will be, directly or indirectly, related to the analyst's specific recommendations or views contained in this research report.