Arasor files IPO, faces litigation

MOUNTAIN VIEW, CA-The laser projection television market is beginning to heat up in some very interesting ways.

Nov 1st, 2006

MOUNTAIN VIEW, CA-The laser projection television market is beginning to heat up in some very interesting ways. With a number of major electronics vendors planning on demonstrating prototypes at the Consumer Electronics Show (CES) in Las Vegas in January (and several others making it very clear that they are not pursuing the technology at this time), and analysts beginning to proclaim that the laser TV has the potential to “kill” plasma and LCD TVs, it is not surprising that the attention being paid to the next generation of television technology is prompting some heated debates.

For the past two years, one of the highest-profile companies in the laser TV business has been Novalux (Sunnyvale, CA). The company demonstrated a prototype NECSEL-based laser TV at the 2006 CES and has since been in the headlines regularly with additional technology and partnering announcements (see OER, March 15, 2006). Most recently the company was again in the news with a demonstration of the same TV “down under”, in conjunction with partner Arasor, which supplies optoelectronic chips to Novalux. The demo was timed to coincide with Arasor’s Australian IPO, according to Larry Marshall, former founder and CEO of Lightbit, which merged with Arasor in 2003.

“We’ve been supplying Novalux for a long time, since the Lightbit days,” Marshall said. “Our core technology is an integrated optoelectronic chip that converts the infrared light from the Novalux laser into the three visible colors and does some optical processing as well.”

Arasor decided to file its IPO in Australia for practical reasons, Marshall added. Foremost among these reasons is the fact that there is no Sarbanes/Oxley compliance in Australia, which adds about $5 million to the initial listing costs and $3 million a year after that, according to Marshall.

“This pushes the whole cost of listing into the $100 million range, so unless you are in the $150 million range as a company, it’s not worth it,” he said.

In addition, the bulk of Arasor’s business-which is currently focused on wireless and broadband communications-is based in Asia and India, so the company already has some recognition in that part of the world. Thus going public in Australia made more sense than in the United States, Marshall added.

“Our customers are very big government-backed companies in Asia and India, which represent the biggest communications markets in the world,” he said. “India will spend about $5 billion in wireless in the next five years, and China about $10 billion. The really unique apect is that we don’t treat China and India as cheap labor pools but as significant markets. As a result, we expect $45 million in orders for this calendar year and $118 million for the next calendar year.”

Despite Marshall’s optimism, however, the company is already facing some legal troubles. Following the IPO, which was officially launched on October 25 at AU$1.60/share, Arasor, Marshall, and co-director Simon Cao received notice from Nomad Networks, Photon Engineering, Southern Cross Lasers, and Adam Weingold claiming that they intend to sue the Arasor Group for breach of contract and breaches of Section 52 of the Trade Practices Act. The amount claimed is AUS$17.9 million (US$13.9 million), and the bulk of it relates to alleged loss of future profits. Arasor refutes the accusations, saying that they have a deed of release from all parties (except Nomad Networks) from any future legal claims.

-Kathy Kincade


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