NEW YORK, Feb. 3, 2021 /PRNewswire/ -- Recently,
Luke Lu, CEO of Color Star
Technology Co., Ltd. (Nasdaq: CSCW) (hereinafter referred to as
"CSCW"), accepted an interview with the HK Finet Group. Mr. Lu
provided the following responses regarding CSCW's corporate
breakthroughs and development in response to the COVID-19
pandemic:
Journalist: Thank you Mr. Lu for your precious time.
I know you are a busy man and on behalf of my audience, I've
prepared the following list of questions that everyone is
interested in. First of all, I congratulate you on successfully
completing the business' transformation and converting it to its
current name in June of last year: Color Star Technology Co., Ltd.
(Nasdaq: CSCW).
CEO: Thank you and your audience for your interest in us.
I will do my best to answer your questions.
Journalist: After the company's successful business
transformation, CSCW is unfortunately facing the difficulties of
the Covid-19 pandemic, with the Nasdaq market suffering as much
casualty as other stock markets in the world. The global economy
was shrinking at an unprecedented rate when the pandemic began and
the entertainment sector has been one of the most adversely
affected.
CEO: Yes. For most companies, obtaining a listing in the
NASDAQ market is already full of challenges. The companies are
under tremendous pressure, especially their management teams, and
are tested beyond their normal capabilities. Throughout CSCW's
transformation, I established a strong collaboration with the
company's management team, which is the reason for our success
today. This is not just my personal praise of the company and
management team, but also the collective comments of American
investment companies and professionals. Any company that is listed
on a major U.S. stock exchange must go through painful processes to
test that company's overall strength, competitiveness, value,
growth prospects, and high standards of return on investment. We
have passed the tests conducted by professional institutions,
successfully transformed our business in the Nasdaq market, and
survived amid the pandemic and severe global economic
contraction.
Journalist: Mr. Lu, you explained the intrinsic power of
CSCW, and I have no doubt about it. Every company on Nasdaq must be
a quality company. It is common for listed companies to have good
sales performance and a strong management team. But for a company
to achieve sustained success, intrinsic reasons alone are not
enough. It still needs a favorable external environment,
right?
CEO: 2020 is the most challenging year for us and
our situation is not unique. Many large Nasdaq companies have
suffered greatly due to the pandemic, and the situation is still
ongoing. Therefore, what you said was correct, that the external
environment is very important to the survival and development of
the enterprise.
Journalist: It is understood that many companies
have almost no net income, and paid a lot of fees and consumed
substantial amounts of cash due to the impact of the pandemic.
While large companies may have money to burn, I can't imagine how
small companies can survive in such a hostile environment. Did you
do the same?
CEO: I think the current risks from the pandemic have
provided opportunities to us. What we are doing is establishing a
sustainable platform of celebrity traffic, artists, online
education and peripheral merchandising. Therefore, we consider our
online education and video streaming services to represent
substantial business opportunities. Our star teachers on the
platform have their own fans and traffic, which is a very good
opportunity for us to gain enormous market traction.
Journalist: For most small businesses, 2020 was an
unforgettable memory, and the pain is not over yet. I want to know
how CSCW is doing, how it has survived during the pandemic, and
what the plans are for the company's future? You said that your
company must find other means of survival. Can you explain
that?
CEO: Regardless of the pandemic, we have been
constantly making breakthroughs to find paths that suit us. I am
very happy now that we have found a good sector in breakthrough
development. We are expanding our scale, copying recent
achievements and have great expectations for our future success.
Let me explain in detail – Before the pandemic, our business model
was for us to organize events, live performances and concerts.
After much brainstorming and debate, the company decided to start
an online platform to develop a new business model. Although it was
a brand-new attempt, we were very confident in our efforts. The
team built an online system and platform in record time with the
most efficient execution, and premiered the first online concert in
September 2020. The concert was an
instant success and made $2.2 million
USD in sales during the online premiere event. The
overwhelming response from fans exceeded our expectations, and we
immediately realized that we did it right and found a way to
survive. I thank our fans for their strong endorsement and making
us feel both humility and gratitude, which I cherish. From that
moment, I knew we would be okay. The $2.2
million in sales revenue, plus some online membership
income, has reduced financial pressure on us during the fiscal year
from July 2020 to December 2020. More importantly, I knew what to
do in the second half of the year and found ways to make a
profit.
Journalist: Wow, that's really good news.
I hear every day about companies facing bankruptcy and
layoffs. Hearing your story and such positive news about your
company is indeed refreshing. CSCW has found a way to survive. Have
you carried out more online activities since the first online
concert?
CEO: The success of our first online
concert dispelled our doubts about the platform, convincing us
that this is the correct decision for our business and that our
fans have a strong desire for online entertainment. We are thus
reinvesting resources to improve the online system and make it more
powerful. Initially, there were some doubts about the first online
system, since at that time, it was completed with fewer funds and
executed as a small trial. But it ultimately proved successful and
now, to meet the expectations of our fans, we are willing to invest
money to improve the online business and platform. Our company also
needs this online business. Though we succeeded in the first online
concert, we also identified shortcomings and problems in the system
platform that need to be resolved. If not for the minor problems in
the system, we could have generated even more sales revenue.
Therefore, we are spending time and expanding efforts to solve
these problems and improve the system. From now until the end of
the fiscal year in June 2021, we will
be busy executing an expansive business plan. Equally as important,
we hope to provide fans with good experiences though our content
during the pandemic to help them relieve their daily stress.
Journalist: Mr. Lu, let me see if I understand your
meaning correctly. Before the COVID-19 pandemic, the company was
operating a physical business and was doing well as a NASDAQ-listed
company. After the pandemic began, however, the company's physical
operations ceased (at least temporarily) and the company then
created an online business, hosting a successful first virtual
event. Currently, CSCW has two businesses – the physical business
you still intend to conduct after the COVID-19 pandemic is over and
a new online virtual business. This online business seems to be
growing and is welcomed by targeted consumers. Am I right?
CEO: Right. I know it's hard to believe that when many
companies are on the verge of collapse, not only have we survived,
but we have benefited from the pandemic. Our breakthroughs and
innovations have opened up a new world and our online business will
carry on after the pandemic, due to consumer demand. For
these reasons, you are right. We have developed a new online
business, expanded sales channels and will have two business
divisions after the pandemic. If some consider CSCW's value to have
now doubled, I wouldn't object to that view, though I dare not say
exactly how much CSCW's value has increased by.
Journalist: The stock market has not yet realized
that CSCW's overall business has grown and that the company's value
has increased. I once read a report about CSCW written by an
analyst from a Wall Street company which valued CSCW's price at
$1.6. Given that CSCW is better than
its peers and is still developing, is now a good time to buy the
company's stock?
CEO: My background is in running companies and
developing business, and everything I do is tangible. I admit that
capital markets are foreign to me, and that I am still learning and
have a long way to go. Some people have advised me to communicate
more with the markets and maybe they are right. But the reality is
that I have almost no time to complete the things I need to do
every day, manage the business, and run the company. Since I don't
have enough knowledge about capital markets, I don't comment on the
value of the company, whether it is growing, what the stock price
should be, etc. I leave that to the professionals. My time should
be spent on running the company and solving the daily matters. I
treat company management equally, whether it is a listed company or
a non-listed company. My productivity and time are placed on
business, sales, and cash flow. I must have a profit to maintain
the steady development of the company, which is very important to
me. As far as the capital markets are concerned, I trust in and
defer to others. Maybe I am too passive on this, but I would rather
spend my time and energy in the field I am proficient in, namely
business, rather than the capital markets.
Company background: CSCW runs an entertainment
business and offers educational services to its members who desire
to learn from stars and celebrities. The company has traditionally
operated as a brick-and-mortar company, organizing events, shows
and concerts for known stars. In 2020, when the COVID-19
pandemic broke out, CSCW built a new online platform and
broadcasted its first online concert there – "Color World Online
Concert" – featuring many popular stars, including
Grammy-award-winning jazz guitarist Larry
Carlton and R&B singer and songwriter Ashanti. The event
attracted over half a million viewers from all over the world and,
according to reports, CSCW is quoted to have made over $2 million in sales from the event. CSCW's online
membership has grown at an astonishing speed, now totaling 1
million members, and serves as a new income source for CSCW in the
form of subscription fees.
Since the "Color World Online Concert", CSCW has been busy
upgrading its online system, enriching its functionality and
expanding its online business. In addition to broadcasting online
concerts and shows, the platform now offers online services such as
celebrity teaching courses, merchandise sales and opportunities for
celebrities and fans to directly interact. CSCW claims to have
contracts in place with many popular stars/artists and through its
online system, members can obtain copyrighted content directly from
their selected stars/artists. This move seems to have greatly
benefited CSCW, evidenced by the rapid growth in its online
membership (which continues to increase).
This new online business may prove to be much more valuable than
CSCW's original brick-and-mortar business if the company decides to
pursue a full-scale e-commerce and APP model. But whether that is
what the company is ultimately pursuing and if it will be
successful remains to be seen. There is no doubt that there will be
many hurdles to clear in CSCW's pursuit for success, but with
CSCW's current story of transforming its business and entering the
internet entertainment arena, who knows what surprises the future
will bring.
Forward-Looking Statement
This press release contains forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements that are other than
statements of historical facts. When the Company uses words such as
"may," "will," "intend," "should," "believe," "expect,"
"anticipate," "project," "estimate" or similar expressions that do
not relate solely to historical matters, it is making
forward-looking statements. Forward-looking statements are
not guarantee of future performance and involve risks and
uncertainties that may cause the actual results to differ
materially from the Company's expectations discussed in the
forward-looking statements. These statements are subject to
uncertainties and risks including, but not limited to, the
following: the Company's goals and strategies; the Company's
future business development; product and service demand and
acceptance; changes in technology; economic conditions; the growth
of the educational and training services market
in China and other countries where CSCW conducts its
business; reputation and brand; the impact of competition and
pricing; government regulations; fluctuations in general economic
and business conditions and assumptions underlying or related to
any of the foregoing and other risks contained in reports filed by
the Company with the Securities and Exchange Commission. For
these reasons, among others, investors are cautioned not to place
undue reliance upon any forward-looking statements in this press
release. Additional factors are discussed in the Company's filings
with the U.S. Securities and Exchange Commission, which are
available for review at www.sec.gov. The Company
undertakes no obligation to publicly revise these forward–looking
statements to reflect events or circumstances that arise after the
date hereof unless required by applicable laws, regulations or
rules.
For more information, please contact:
William Tu
Skyline Corporate Communications Group, LLC
One Rockefeller Plaza, 11th Floor
New York, NY 10020
Office: (646) 893-5835
Email: william@skylineccg.com
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SOURCE Color Star Technology Co., Ltd.