Shareholder Update 2018

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February 8, 2018  

Piksel Update February 2018

Dear Piksel Stockholder,

Following my appointment as interim CEO of Piksel in May of last year, we published an update on our progress and plans for 2017. Since then, the team at Piksel has been working hard to continue the transition of our portfolio formerly dominated by a transactional professional services revenue model, to a recurring revenue model driven by our innovation in our cloud native, micro-service-based video platform, developed and supported by our DevOps production organisation.

2017 was an important year for us as we underwent an important reorganization that allowed us to bring more focus and attention to the parts of our company that provide services to non-media customers. The creation of our industry solutions group consisting of six (6) new businesses organized to support different market verticals:

  1. Brainpower – Government and public sector
  2. Carelink – Health care services
  3. The Voyage Team – Transportation
  4. Piksel Retail – Retail industry
  5. Digital Sense – Telcos & Utilities
  6. Foundry – IT requirements for start-ups

This has allowed us to combine domain expertise with our experience and skills in IT services. We have branded the verticals separately while allowing the Piksel brand to stand, focused on the Media and Broadcast industry. If you haven’t already, I encourage you to visit the new Piksel Group website https://pikselgroup.com/ as well as the sites dedicated to each vertical.

In our Broadcast & Media vertical, 2017 brought significant developments in IP based workflows, via our cloud native, API based Piksel Palette™. We firmly believe that video-based entertainment is changing rapidly and will cause significant changes in how content is delivered and experienced by the consumer. Content selection can now be achieved on a personalized basis which many believe is the beginning of the end of linear television programming as we know it. Discovery of content and establishing an idea for clear consumer preferences will be at the heart of how video will be offered and consumed in an all IP based world. This potential will lead to connecting the content producer and the consumer directly without the need for a middle man. Content producers have historically relied on broadcasters to curate linear channels and use their content in the most attractive way possible by combining entertainment with news, sports and advertising content. However, the sole basis for this ‘Bundling” was based on the inability to interact with the consumer on a one-on-one basis.  IP workflows change all of this.  Piksel’s solution is integral to making this happen. Personalizing information seamlessly, creating and correlating both content and consumer metadata, creating, aggregating, managing and enhancing content metadata in support of optimal content discovery for the consumer and monetization for the provider.

As we look at our major Tier 1 wins in 2017, they include Liberty Global and Discovery Communications. Both of these companies are progressive in their pursuit of next generation video entertainment by pushing cloud-based playout as well as IP-only delivery. A major milestone for us was the launch of our Fuse Metadata Manager product for the first Liberty affiliate, Virgin Media, on December 7, 2017. At Discovery we have enjoyed a fruitful relationship that involved the launch of several specialized OTT services using the Piksel Palette™ micro-services over the course of 2017. Next on the list is the launch of Fuse Metadata Manager for Discovery world-wide in Q1 of 2018.

Based on these successes, we expect to add 2 more Tier 1 customers to this list in 2018.

In our Transportation vertical, we have renewed several large Managed Services contracts with large airports in Italy and the UK and added one new customer in the transportation business with our Voyage application.

Our Healthcare vertical – Carelink was hard at work to obtain certification with the NHS in the UK to become a certified partner for CN-SP in support of the new HSCN launch. At the beginning of December we completed the initial certification and have -just today- received final approval for stage 2 along with only 5 other companies. We expect significant growth from this process.

Our Retail Cloud Team was able to celebrate the first successful migration of an SAP Hybris instance to a public cloud with one of our major customers in this space. In parallel, we achieved partnership status with SAP and we hope that this will open up a new sales channel for us in 2018.

There are many more achievements, in fact too many to list them all here but I am absolutely certain that our decision to reorganize the business has introduced significant entrepreneurial spirit and energy which in turn will drive growth.

As it relates to the financial side of the organization, and as previously communicated, Piksel is no longer a publicly traded company and its securities are not traded on any exchange or OTC marketplace. Termination of the registration of Piksel’s securities under the Securities Exchange Act of 1934, as amended (the Securities Exchange Act) became effective on January 2, 2014. Subsequently, Piksel filed a Form 15 with the Securities Exchange Commission providing notice that the Company’s reporting obligations under Section 15(d) of the Securities Exchange Act had been suspended. As a result, Piksel no longer has any obligation to file reports with the SEC or provide financial and other information to its stockholders under the Securities Exchange Act, nor does Piksel currently intend to provide stockholders with financial statements (annual, quarterly or otherwise) or detailed business updates. As continues to be the case, interested parties (e.g., customers, suppliers, etc.) may contact Piksel to request a non-disclosure agreement (NDA).  Piksel management will then determine the appropriateness of entering into such an NDA and sharing of financial and other business information.

In closing, we will continue to strive for growth in 2018. We look to carefully add new customers and we look to leverage our skills and capabilities to create win-win situations for both our customers and Piksel.

Sincerely,

Ralf Tillmann

Interim CEO