Transcript Investor Presentation Prepared for AOLTW July 2001 Strictly Confidential Agenda I. Executive Summary II. Management Introductions III. The Company IV. Organization & Ownership Structure V. Financial Overview Strictly Confidential.

Investor Presentation
Prepared for
AOLTW
July 2001
Strictly Confidential
Agenda
I.
Executive Summary
II.
Management Introductions
III.
The Company
IV.
Organization & Ownership Structure
V.
Financial Overview
Strictly Confidential
2
I-View-It…Visualizations for the Future
Imaging
Video
Two inventions discovered in the pursuit of helping children save the planet
were created using out-of-the-box thinking and have led to significant
advancements in imaging and video processes.
Strictly Confidential
3
I-View-It Processes
I-View-It is an innovator providing Patent Pending Intellectual Property
processes in video streaming and imaging, focusing currently on three
of its core IP assets:
Video streaming scaling processes that enable the delivery of rich media
to be provided distortion free, at full screen resolution with normal TV
equivalent frame rates of between 24-29 fps, at extremely low bandwidths
and at high bandwidth provide superior processing efficiencies.
Image scaling process for creating high definition user controlled “super”
zoom and pan capabilities levels without macro blocking and pixelation.
The image scaling process may be applicable to every known screen for
imaging.
Combinations of the two processes, creating a user controlled video or
television environment with super zoom and pan applications, (currently
in R&D).
Strictly Confidential
4
I-View-It Video Process
Mathematical Scaling Formula For Encoding & Playback of Video for
Streaming and/or Downloading
I-View-It’s revolutionary process for video compresses video at an incredible 75%
less data than previous technologies by utilizing a scaled encode for large screen
playback. This process yields:
Less processing power required for full screen data by 75%!
File size for full screen representation reduced by 75% making high impact full screen
video available for download at any bandwidth!
Full-screen, full-frame rate video (including high quality stereo) at 150-300 Kbps, a 90%
reduction over previous standards!
At modem bandwidths this process provides a markedly improved video quality over
prior Internet industry standards.
This process has applications that are being explored on the higher ends of the encoding
and bandwidth spectrums. As a result of the I-View-It processes on the encoding and
decoding systems these applications may yield efficiencies in High Definition markets.
Enables stereo audio with full lip synchronization of audio/video.
Strictly Confidential
5
I-View-It Imaging Process
Mathematical Scaling Formula For Encoding & Viewing Images with
Super Smooth Zoom & Pan Capabilities
The I-View-It proprietary imaging system is designed to provide clear, sharp images,
which can be zoomed into at great depth, and panned around at the discretion of the
viewer, or under program control. The resulting experience is one of immersion into
the image and an ability to view detail at a level heretofore not thought possible.
This process yields:
Yields user controlled zoom & pan for screen applications.
Resilient to pixel distortion when magnified over 200x.
The image scaling process may be applicable to every known screen for imaging.
Allows new user controlled zoom & pan for imaging and video appliances. Applications
include; Cameras, Televisions, Video Camera’s, DVD Players, Scanners, Printers &
Copiers.
Easily integrates into Hardware and Software Applications.
The user now has the ability to design an image with a zoom magnification factor in mind
and have the corresponding parameters to create the “zoom factor”.
Strictly Confidential
6
I-View-It Combination Video and Imaging Processes
Mathematical Scaling Formula For Encoding & Playback of Video with
Remote Control Camera\Video interface coupled with the Mathematical
Scaling Formula For Encoding & Viewing Images with Super Smooth
Zoom & Pan Capabilities
Combined I-View-It video and imaging processes create a user interface that allows
camera control and zoomable video streams. Allows user to take video feeds and
pan & zoom on individual frames or streams.
Ideal for the security market and sports events.
May apply to all video playback devices.
In R&D
Strictly Confidential
7
I-View-It Executive Summary
Focused intellectual property strategy
Five US Patent Pending Applications
Six Patent Cooperation Treaty (PCT International) Applications
Two US Provisional Patent Pending Applications
R&D to yield further Intellectual Property
Versatile technology applications and comprehensive revenue model
Platform agnostic imaging and video processes applying to a vast array of
products across software and hardware industries
License & Royalty revenue model
Validation through high visibility beta test customers
17 customers since May 2000 product launch
High profile customers with significant market presence
Validation of both video and imaging processes
Poised for rapid growth
Seeking $10 million of growth capital
Strictly Confidential
8
Management Introductions
click on name to see resume
Chief Executive Officer, (Identified)
Strong Media/Entertainment Background
Strong Computer Industry Background – Licensing Hardware & Software
Aidan Foley, Advisor to the Board
Clearview Networks – Chief Executive Officer
Eastman Kodak/Cinesite – President & CEO
Eastman Kodak – President and General Manager, Advanced
Technologies
Peter Lee, pro tem President & CTO
IBM - Global Development Executive, Broadcast & Advertisement
Solutions
GeoVideo Networks (a Lucent Technologies Company) – President & CEO
Hitplay Media, Inc. - CTO, VP of Engineering
Strictly Confidential
9
Management Introductions Con’t
Ross Miller, pro tem Chief Operating Officer & General Counsel
OutSource Partners, Inc. - Vice President and General Counsel
Moovies, Inc. - Senior Vice President and General Counsel
Rogers & Hardin - Corporate Counsel
Schwartz, Cooper Greenberger & Krauss – Partner
Katten, Muchin & Zavis – Partner
Maurice R. Buchsbaum, EVP - Business and Corporate Development
Drexel Burnham – Partner
Kidder Peabody – Partner
JW Genesis\First Union – Partner
Emerald Capital Partners - Partner
Kevin Lockwood, VP Sales and Business Development
Former EVP of Cylex Systems
National Sales Manager for Acer America
Managed launch of Fujitsu PC in the US
Strictly Confidential
10
Management Introductions Con’t
Click on name to see resume
Jack P. Scanlan, VP Advertising and Publicity
Columbia Pictures - The Burbank Studios Publicity/Promotion Manager
21ST Century Films – Vice President: Advertising, Publicity, Promotion
Cannon Films – National Promotion Director
Eliot Bernstein, Founder and Vice Chairman
I-View-It Technologies – Founder
President & CEO – SB Lexington Inc.
Strictly Confidential
11
Company Milestones
Month/Year
July 2001
June 2001
May 2001
March 2001
January 2001
December 2000
November 2000
October 2000
September 2000
Strictly Confidential
Milestone
 Warner Bros License & Sony agreements in negotiations
 Retained consultant in Advertising & Marketing
 Retained pro tem CTO
 Established a “core” licensing team
 Retained Special Advisor to the Board
 Retained Business & Corporate Development Specialist
 Retained pro tem COO & General Counsel
 Retained Senior Licensing & Sales Executive
 Shifted focus from a service validation model to a license
revenue model
 Relocated Corporate HQ to Los Angeles
 Raised 1.2 million from Crossbow/Alpine Ventures
 Completed technical review with Warner Brothers
 Began development of corporate license strategy
 Began collaborative discussions with 6 of the 7 global content
providers
12
Company Milestones Continued
July 2000
June 2000
June 2000
May 2000
March 2000
February 2000
October 1999
September 1999
August 1999
June 1999
May 1999
April 1999
March 1999
Strictly Confidential
 Raised $800,000 from Crossbow/Alpine Ventures
 Launched imaging and video processes in beta test
environments at ShowBiz Expo in Los Angeles
 Hired VP of Operations
 Secured first customer Hollywood.com
 Filed first Non-Provisional International patent
 Raised $1 million from Crossbow/Alpine Ventures
 Launched website
 Raised $500,000 from Huizenga Holdings
 Hired COO
 I-View-It Incorporated
 Raised seed capital from Private Investors
 Real 3D technology audit
 Confirmed feasibility of full-screen, full-frame rate video
 Filed first provisional patent
13
Intellectual Property Portfolio
Country (Type)
Filing Date
Application Title
U.S. (Provisional)
2000
Zoom and Pan Imaging Using a Digital Camera
U.S. (Provisional
2000
Zoom and Pan Imaging Design Tool
System and Method for Producing an Enhanced Digital Image
File
U.S. (Patent Pending)
8/2/2000
PCT (International)
6/7/2000
System and Method for Video Playback Over a Network
U.S. (Patent Pending)
6/5/2000
System and Method for Streaming an Enhanced Digital File
U.S. (Patent Pending)
6/5/2000
Apparatus and Method for Producing Enhanced Digital Images
System and Method for Providing an Enhanced Digital Video
File
System and Method for Streaming an Enhanced Digital Video
File
System and Method for Providing an Enhanced Digital Video
File
U.S. (Patent Pending)
PCT (International)
PCT (International)
6/5/2000
6/2/2000
6/2/2000
PCT (International)
6/2/2000
PCT (International)
3/23/2000 Apparatus and Method for Producing Enhanced Digital Images
U.S. (Patent Pending)
3/10/2000 Apparatus and Method for Producing Enhanced Digital Images
Strictly Confidential
System and Method for Playing a Digital Video File
14
Intellectual Property Strategy
Utilize nationally recognized IP & Licensing counsel to ensure
maximum protection
Irell & Manella LLP
Blakely, Sokoloff, Taylor & Zafman
Armstrong Hirsch Jackoway Tyerman & Wertheimer
Establish market precedence through licensing
Strong R&D effort to develop new applications
Acquire similar IP to enhance patent portfolio
Strictly Confidential
15
Markets for Imaging Intellectual Property
Process
Imaging
Strictly Confidential
End-user
Internet
Hardware
Patent Pools
Software
Patent Pools
Entertainment
Auctions
Retail
Security Systems
Healthcare
Education
Distance
Learning
Games
Advertising
Sporting
DVD
Camera
JPEG
JPEG
Corporate
Bundling
Appliances
Digital Camera’s
DVD’s
Wireless Devices
PDA’s
Scanners
Medical Imaging
E-Books
Copiers
Printers
Game Boxes
Simulators
16
OEM’s
Graphics
Animation
3-D
CAD
Scientific Visualization
Virtual Reality
Multimedia
Games
Image Restoration
Markets for Video Intellectual Property
Process
Video
End-user
Internet
Hardware
Patent Pools
Streaming
VOD
Downloading
MPEG
DVD
Corporate
Software
Patent Pools
MPEG
Corporate
Bundling
Broadcasters
Appliances
Security
Systems
Set Top Boxes
DVD’s
HDDVD’s
DVD Players
Encoders
Wireless Devices
PDA’s
Simulators
Camcorders
All Markets
Above
All Markets
Above
ISP’s
Combinations of
Imaging &
Video Processes
– Zoom TV, etc.
Strictly Confidential
17
Video Suites
Editing Suites
Encoding Suites
All Markets
Above
I-View-It’s Imaging Process
Mathematical Scaling Formula For Encoding & Viewing
Images with Super Smooth Zoom & Pan Capabilities
For 3,000 years man has sized art to fit the frame. Sounds logical?
For 30+ years screen images have been sized to fit the frame they were presented
in. When zoomed on they became “pixilated”.
Three years ago it was discovered that images for screens should be tremendously
larger than the picture frame, that’s if you want to create a “zoom factor”.
Three years later and the world is changing! Goodbye pixelization.
Strictly Confidential
18
Prior Zoom Imaging Demonstration
Strictly Confidential
19
I-View-It Imaging Process Demonstration
Strictly Confidential
20
I-View-It Video Process
Industry practice had been limited to 160 x 120 and 240 x 180 frame size in order
to achieve acceptable video quality.
I-View-It developed a process through which it has greatly expanded the industry
standard for video quality. This process:
is based upon a consistently applied frame size, for example 320 x 240 throughout
the digitizing and encoding processes and
delivers to the encoding step a pre-processed file which increases the efficiency of
the encoding step by maintaining the integrity of all source parameters.
playback of the scaled video to full-screen
As a result of this process, I-View-It is able to deliver consistently superior video
product in full-screen.
I-View-It is continuing to develop pre-processing techniques that will further
enhance video quality.
Strictly Confidential
21
Video Encoding Prior to the I-View-It Video Process
Summarizes applications of the compressed video by specifying current
standards used in various applications, the required bandwidth, and
typical frame rate and frame sizes.
Application
Analog Video
Low Bitrate Video
Conferencing
Basic Video Telephony
Video Conferencing
Interactive Conferencing
Digital TV - NTSC
High Definition TV
Bandwidth
Standard
Size
Frame Rate
5 - 10 Kbps
none
170x128
2-5
26 - 64 Kbps
H.263
128x96
64 - 128 Kbps
H.261
176x144
> = 384 Kbps
H.261
352x288
1 - 2 Mbps
MPEG-1
352x288
3 - 10 Mbps
MPEG-2
720x480
15 - 80 Mbps
MPEG-2
1200x800
Applications of the compressed video and current video compressions standards.
Source: ?????????????????
Strictly Confidential
Source = ??????
22
15 - 30
10 - 20
15 - 30
15 - 30
30 - 60
30 - 60
Video Encoding Prior to the I-View-It Video Process
Will Pentium III Live Up to its Hype
Intel gives a sneak preview of the features in its Pentium III processor
The holy grail of multimedia?
by: Tom Steinert-Threlkeld - Inter@ctive Week Online from February 1999
The Pentium III processor promises the ability of providing the holy grail of multimedia
on the Net: The ability to display on a full computer screen -- the "wished for 30 frames a
second," as In-Stat analyst Max Baron puts it, that provides the fluidity and crispness of
conventional motion pictures.
“But that is only if Internet users have high-speed connections that
transfer 1.5 million bits of data or more, Intel engineers say.
To the average PC user, a high-speed connection to the Web is still 56 thousand bits a
second or less. At those rates, Web pages will feature more and better stock tickers…”
Strictly Confidential
23
Prior Industry Specifications
Summarizes applications of the compressed video by specifying current
standards used in various applications, the required bandwidth, and typical
frame rate and frame sizes.
Application
Analog Video
Low Bitrate Video
Conferencing
Basic Video Telephony
Video Conferencing
Interactive Conferencing
Digital TV - NTSC
High Definition TV
Bandwidth
Standard
Size
Frame Rate
5 - 10 Kbps
none
170x128
2-5
26 - 64 Kbps
H.263
128x96
64 - 128 Kbps
H.261
176x144
> = 384 Kbps
H.261
352x288
1 - 2 Mbps
MPEG-1
352x288
3 - 10 Mbps
MPEG-2
720x480
15 - 80 Mbps
MPEG-2
1200x800
Applications of the compressed video and current video compressions standards.
Source: ?????????????????
Strictly Confidential
24
15 - 30
10 - 20
15 - 30
15 - 30
30 - 60
30 - 60
Prior Video Process Demonstration
Strictly Confidential
25
I-View-It’s Video Process Demonstration
Strictly Confidential
26
Impact of Encode Frame Size on Full Screen Viewing Quality
Based on studies performed by Dr. Christopher Taylor
of the Milwaukee School of Engineering
6
Best
5
4
Viewing 3
Quality
180 x 120 encode
2
360 x 240 encode
720 x 480 encode
1
Worst
0
28Kb
56Kb
100Kb
256Kb
512Kb
1Mb
3Mb
Encoded Bandwidth at 30 fps (Average of 5 Stress Videos)
Strictly Confidential
27
Impact of Encode Frame Size on 360 x 240
Viewing Window Quality
Based on studies performed by Dr. Christopher Taylor
of the Milwaukee School of Engineering
6
Best
5
4
Viewing 3
Quality
180 x 120 encode
2
360 x 240 encode
720 x 480 encode
1
Worst
0
28Kb
56Kb
100Kb
256Kb
512Kb
1Mb
3Mb
Encoded Bandwidth at 30 fps (Average of 5 Stress Videos)
Strictly Confidential
28
Business Strategy
Become a leading licensor of the technologies
Partner with selected customers and technology leaders
Build recurring licensing and service revenues
Provide superior products through R&D innovations
Expand IP base through R&D and/or acquisitions
Bring on strategic industry investors
Strictly Confidential
29
Customers & Prospects in Target Markets
Video
Process
End-user
Internet
Video
Warner Bros.
Online
Sony Pictures &
Columbia Tri-Star
Viacom/Paramount
MGM
20th Century Fox
Hollywood.com
Broadway.com
Gear Magazine
Atlas Entertainment
Ellen DeGeneres
Hardware
Software
Internet cont
Appliances
Bundling
Alanis Morisette
Kids’Camps
Golden Shadow
Pictures
Sony
Dell
Acer
Tera Nex
Adobe
Burst
Disk Mailer
MindArrow
AOLTW
Clearview
Networks
AOLTW
QVC
Academy of Motion
Pictures
COX
American
Enterprise
Boca Raton
Resort & Club
JM Lexus
Security
Clearview Networks
Combination of
Image & Video
Processes
AOLTW
Clearview Networks
*Customers in Bold
Strictly Confidential
30
Customers & Prospects in Target Markets
Imaging
Process
End-user
Internet
Hyatt Hotels
Imaging
AOLTW
Sony
Viacom/Paramount
MGM
Anschutz Digital Media
Picture Vision
Ron Jon Surf
Security
Clearview Networks
Hardware
Medical
Medical OnLine
BioSample
Retail
Greg Manning
Amazon
Target
Best Buy
Extreme Yachts
JM Lexus
Signature
Eyewear
*Customers in Bold
Strictly Confidential
31
Digital
Cameras
Software
Bundling
Adobe
Sony
Concord Camera
Versifi/REEF
BlueZone
Open Graphics
Appliances
Cyberworld
Picture Vision
3Com
Dell
Acer
Marketing Strategy
Target high profile content owners and distributors
Co-brand with Industry Leaders
National print media campaign targeting corporate decisionmakers
National B2B public relations campaign
Target market trade show presence
Strictly Confidential
32
Strategic Partners
BlueZone
Open Graphics
Medical OnLine
Atlas Entertainment
Brings I-View-It high profile branding; video-on-demand, and pay-for-view Internet
broadcast opportunities with the likes of Alanis Morissette, Ellen DeGeneres, etc.
Versifi/REEF
The two parties have a co-marketing, license, and production relationship as well as
inclusion of I-View-Its imaging processes and software with the Versifi content
management software for resale within the IBM e-commerce tool suite. Versifi Inc.
specializes in building easy-to-use, enterprise Java applications to enable the creation,
delivery and management of dynamic Web content. Versifi's Dynamic Information
Delivery (D.I.D.) system provides the underlying architecture for deploying high-change,
content-rich intranet, Web and e-commerce sites without the associated costs of
limiting scripting technologies.
Strictly Confidential
33
Target Milestones
3Q 2001
Secure growth capital
Hire CEO
Hire SVP of Sales/Marketing
Hire CTO and CFO
3Q - 4Q 2001
Close Technology Licenses in Target Markets
Launch branding campaign
1Q - 2002
Strictly Confidential
Introduce technology enhancements
34
Board of Directors
Donald Kane
Maurice Buchsbaum
Prior Managing Director at Goldman
Sachs
CEO of Emerald Capital Partners
President of GDI, holding company of 4
B2B companies
Kidder Peabody
Drexel Burnham
JW Genesis
Vice Chairman of Sagence Systems
Simon Bernstein (Chairman Emeritus)
Director of Versifi and Ergo Systems
President, S.T.P. Enterprises
Kellogg Graduate School of Mgmt.
President, S.B. Lexington
Bruce T. Prolow
Eliot Bernstein
Tiedemann Investment Group
I-View-It Founder & Vice Chairman
Ken Anderson
Gerald Lewin
MyCFO
CPA - Senior Partner of Goldstein
Lewin & Co.
Prior Partner, Arthur Andersen Private
Client Services
Director of Schaeffer Autosimulation
Strictly Confidential
35
Advisory Board
Alan Epstein
Partner - Armstrong Hirsch Jackoway Tyerman & Wertheimer
George deBidart
President & CEO - TSI Motorsports Marketing
President & CEO - The Source, Inc.
Stephen Verona – TBD
David J. Colter
Warner Bros. VP Advanced Technology
Strictly Confidential
36
Capitalization Table
Shareholder
Date
Paid $
Price
Per
Share
$
Authorized
200,000 400,000 100,000
Options/Warrants
Shares Issued
Class B
Class
Class A Class Class Convertible
NonA
Preferred
A
B
Debt
Voting
Alpine Venture Capital Partners LP
Eliot I. Bernstein
Simon L. Bernstein
Alpine Venture Capital Partners LP
Investech Holdings L.L.C.
Tiedemann / Prolow II LLC
12/13/00
$21,192
7,714 13,478
6/29/99
$9,410
$0.50 11,320
7,500
6/29/99
$5,175
$0.00 5,350
5,000
12/13/00 $1,200,000
10/29/99 $500,000 $166.28 3,007
3/21/01 $345,000 $155.00
Alpine Venture Capital Partners LP
Alpine Venture Capital Partners LP
Lisa Friedstein
The Jacob Bernstein 1999 Trust
The Joshua Bernstein 1999 Trust
Alpine Venture Capital Partners LP
Provision for Employee Options
Gerald R. Lewin & Barbara S. Lewin
Maurice Buchsbaum
James Armstrong
Brian G. Utley
2/2/00 $1,000,000 $387.59
7/19/00
$387.59
6/29/99
$1,250 $387.59
6/29/99
$1,208 $387.59
6/29/99
$1,208 $387.59
12/13/00 $823,241 $387.59
Strictly Confidential
6/29/99
8/15/00
6/29/99
8/3/99
3,096
1780
890
% of Total
Shares
Fully
Diluted
20.26%
17.99%
9.90%
$0
2.96%
2.88%
$413,850
2.55%
Warrant
Exercise
Cost
2,580
2,580
$999,982
2,500
2,415
2,415
2,124
$1,000
$36.22
$36.22
$875 $166.70
$857 $166.70
2,109
$0
1,930
$69,905
2,000
1,750
1,714
37
2.47%
2.47%
2.39%
2.31%
2.31%
2.03%
2.02%
1.91%
1.85%
1.67%
1.64%
Capitalization Table Continued
Shareholder
Date
Paid $
Donald G. Kane, II
Patricia Daniels
Donna Dietz
Andrew Dietz
Jill Iantoni
Guy Iantoni
James Osterling
Emerald Capital Partners, Inc.
6/29/99
6/29/99
6/29/99
6/29/99
6/29/99
6/29/99
6/29/99
12/20/99
Ross Miller
Emerald Capital Partners, Inc.
5/1/01
12/20/99
$193.80
$308.30
Loans by Stockholders & Friends
Alpine Venture Capital Partners LP
Raymond Hersh (9)
Jason Gregg
Alpine Venture Capital Partners LP
Alpine Venture Capital Partners LP
AHJTW
Michael Reale
Bettie Stanger
David Colter
2/23/00
5/14/01
10/1/00
3/29/00
7/9/01
6/8/01
10/18/00
4/18/00
6/29/99
2/8/01
$350,771 $387.59
$330,000 $387.59
$387.59
$250,000 $387.59
$220,000 $387.59
$220,000 $387.59
Strictly Confidential
$832
$625
$625
$625
$625
$625
$625
Price
Per
Share
$
$166.70
$166.70
$166.70
$166.70
$166.70
$166.70
$166.70
$166.70
Authorized
200,000 400,000 100,000
Options/Warrants
Shares Issued
Class B
Class
Class A Class Class Convertible
NonA
Preferred
A
B
Debt
Voting
1,250
% of Total
Shares
Fully
Diluted
1.59%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
$208,375
1.20%
1120
1,000
$217,056
$308,300
1.07%
0.96%
851
700
$350,769
$329,839
$271,313
568
568
568
522
$220,151
$220,151
$0
$202,322
384
$148,835
0.87%
0.81%
0.67%
0.62%
0.54%
0.54%
0.54%
0.50%
0.48%
0.37%
1,663
1,250
1,250
1,250
1,250
1,250
1,250
905
Warrant
Exercise
Cost
645
$387.59
$250 $387.59
$387.59
500
38
Capitalization Table Continued
Shareholder
Emerald Capital Partners, Inc.
Kevin Lockwood
Jennifer P. Lewin
Erika R. Lewin
Atlas Entertainment/Tidal 4
Alan Young
Steve Sklar
Interest on Loans
Ken Anderson
Atlas Entertainment/Tidal 4
Alanis Morissette
Mitchell Welsch
Happy Feet Living Trust
Andrew Dietz
Mitchell Welsch
Lauren Lloyd Living Trust
Strictly Confidential
Date
2/2/00
8/17/00
6/29/99
6/29/99
11/8/00
10/16/00
10/1/00
6/30/01
6/13/00
11/8/00
12/27/00
6/9/00
12/27/00
11/28/00
6/9/00
12/27/00
Paid $
Price
Per
Share
$
Authorized
200,000 400,000 100,000
Options/Warrants
Shares Issued
Class B
Class
Class A Class Class Convertible
NonA
Preferred
A
B
Debt
Voting
$387.59
$387.59
$125 $0.00
$125 $0.00
$387.59
$54,420 $387.59
$50,000 $387.59
$387.59
$29,844 $387.59
$155.00
$25,000 $387.59
$387.59 $387.59
$155.00
258
Warrant
Exercise
Cost
258
$99,998
$99,998
250
$0
250
206
$0
$79,844
$54,263
250
250
140
129
125
100
$0
$38,759
68
$10,540
$25,193
$20,542
$5,270
77
65
53
34
39
% of Total
Shares
Fully
Diluted
0.25%
0.25%
0.24%
0.24%
0.24%
0.24%
0.20%
0.13%
0.12%
0.12%
0.10%
0.07%
0.07%
0.06%
0.05%
0.03%
Capitalization Table Continued
Shareholder
Ellen DeGeneres/Heche Trust
Atlas Entertainment/Tidal 4
Scott Welch
Atlas Entertainment/Tidal 4
Ross Miller
Interest on Loan by Andrew Dietz
Date
12/27/00
12/27/00
12/27/00
12/27/00
5/11/01
6/30/01
Price
Per
Paid $
Share
$
$155.00
$155.00
$387.59
$387.59
$387.59
$1,226 $387.59
Authorized
200,000 400,000 100,000
Options/Warrants
Shares Issued
Class B
Class
Class A Class Class Convertible
NonA
Preferred
A
B
Debt
Voting
34
14
13
12
5
3
Warrant
Exercise
Cost
$5,270
$2,170
$5,039
$4,651
$1,938
$1,163
% of Total
Shares
Fully
Diluted
0.03%
0.01%
0.01%
0.01%
0.00%
0.00%
100.00%
Outstanding to Date
Strictly Confidential
$5,447,146
28,242
40
48,935
4,704
2,891 14,719
5,099
$4,415,485
104,590
Financing History
Investor
Amount
Alpine Venture Capital Partners
Huizenga Holdings
Tiedemann / Prolow II LLC
Individual Investors
Total Investment
Strictly Confidential
$3,814,433
$500,000
$345,000
$787,713
$5,447,146
41
Use of Proceeds
Expenses
Amount
Capital Expenditures
Licensing & Marketing
Restructure Expenditures
Research and Development
Patent Filings & Expansion
Working Capital
$1,500,000
$2,000,000
$1,000,000
$2,500,000
$1,700,000
$1,300,000
$10,000,000
*Assumes a 12-16 month period
Strictly Confidential
42
Video & Imaging Showcase
Strictly Confidential
43
The Sights and Sounds of the Internet
Income Statement (ending Dec. 31)
YEAR 1
REVENUE
$
3,639,248
YEAR 2
$
24,776,909
YEAR 3
$
63,830,946
COST OF GOODS SOLD
2,057,453
6,617,445
13,192,434
GROSS PROFIT
1,581,796
18,159,464
50,638,512
9,861,781
776,326
13,870,983
1,705,086
24,790,101
2,686,204
10,638,107
15,576,069
27,476,305
(9,056,311)
2,583,395
23,162,207
OPERATING EXPENSES:
SELLING, GENERAL, & ADMINISTRATIVE
RESEARCH AND DEVELOPMENT
TOTAL OPERATING EXPENSES
OPERATING PROFIT (LOSS)
NET INCOME (LOSS)
$
(9,157,644)
$
2,364,062
$
16,378,757
EARNINGS BEFORE INCOME TAXES, DEPRECIATION AND
AMORTIZATION
$
(8,860,499)
$
3,871,945
$
26,610,280
Strictly Confidential
45
2001 Video Revenues
$900,000
$800,000
$700,000
$600,000
Web Design & Consulting
Master Licensing
$500,000
Serving
$400,000
Hosting
Archival
$300,000
Encoding
$200,000
$100,000
$0
Q1
Strictly Confidential
Q2
Q3
46
Q4
2001 Imaging Revenues
$1,000,000
Web Design & Consulting
$900,000
Archival
$800,000
Hosting & Serving Revenue
for Hotels & Resorts
Serving Revenue
$700,000
$600,000
Hosting Revenue
$500,000
Master License Revenue
$400,000
Image Processing Revenue
$300,000
Hotel & Resort Packages
Revenue
Setup Fee Revenue
$200,000
Annual License Fee Revenue
$100,000
$0
Q1
Strictly Confidential
Q2
Q3
47
Q4
Imaging Revenues by Quarter
$6,000,000
Web Design & Consulting
$5,000,000
Archival
$4,000,000
Hosting & Serving Revenue
for Hotels & Resorts
Serving Revenue
Hosting Revenue
$3,000,000
Master License Revenue
Image Processing Revenue
$2,000,000
Hotel & Resort Packages
Revenue
Setup Fee Revenue
$1,000,000
Annual License Fee Revenue
Strictly Confidential
Q
9
Q
10
Q
11
Q
12
Q
8
Q
7
Q
6
Q
5
Q
4
Q
3
Q
2
Q
1
$0
48
Video Revenues by Quarter
$16,000,000
$14,000,000
$12,000,000
Web Design & Consulting
$10,000,000
Master Licensing
Serving
$8,000,000
Hosting
$6,000,000
Archival
Encoding
$4,000,000
$2,000,000
Strictly Confidential
Q
9
Q
10
Q
11
Q
12
Q
8
Q
7
Q
6
Q
5
Q
4
Q
3
Q
2
Q
1
$0
49
Revenues by Quarter
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
Imaging
Video
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
Q1
Strictly Confidential
Q2
Q3
Q4
Q5
Q6
Q7
50
Q8
Q9
Q10 Q11 Q12
Cash Flow Statement
YEAR 1
YEAR 2
YEAR 3
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS)
$
(9,157,644)
$
2,364,062
$
16,378,757
ADJUSTMENTS:
DEPRECIATION
297,146
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE, Net
(1,249,651)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE
185,734
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
1,507,883
3,841,406
(5,993,849)
(9,222,813)
500,024
1,797,736
(9,924,415)
(1,621,879)
12,795,087
PAYMENTS FOR FIXED ASSETS
(921,438)
(3,664,811)
(7,025,770)
CASH USED IN INVESTING ACTIVITIES
(921,438)
(3,664,811)
(7,025,770)
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM INVESTOR FINANCING
20,000,000
-
-
CASH PROVIDED BY FINANCING ACTIVITIES
20,000,000
-
-
INCREASE IN CASH
9,154,147
CASH - BEGINNING
-
CASH - ENDING
Strictly Confidential
$
51
9,154,147
$
(5,286,690)
5,769,317
9,154,147
3,867,457
3,867,457
$
9,636,774
Balance Sheet
ASSETS
YEAR 1
CASH
$
ACCOUNTS RECEIVABLE, Net
9,154,147
YEAR 2
$
1,249,651
PROPERTY, PLANT & EQUIPMENT
LESS: ACCUMULATED DEPRECIATION
921,438
(297,146)
$
11,028,090
3,867,457
YEAR 3
$
9,636,774
7,243,499
16,466,312
4,586,248
(1,805,029)
11,612,018
(5,646,435)
$
13,892,176
$
32,068,670
$
685,758
$
2,483,495
LIABILITIES AND STOCKHOLDERS' EQUITY
ACCOUNTS PAYABLE
$
COMMON STOCK
ADDITIONAL PAID-IN CAPITAL
RETAINED EARNINGS (DEFICIT)
$
Strictly Confidential
52
185,734
1,000
19,999,000
(9,157,644)
1,000
19,999,000
(6,793,583)
1,000
19,999,000
9,585,175
10,842,356
13,206,417
29,585,175
11,028,090
$
13,892,176
$
32,068,670
I-View-It Imaging Process
Source Image = si
Source
Image
sih
Aspect Ratio = siw / sih = sir
(width of the image divided by the height of the image, in inches)
siw
The Viewing Window is the window, defined in pixels, within which is to
be displayed the virtual image, scaled to fit.
Viewing
Window
vww
Strictly Confidential
vwh
Viewing Window = vw
Viewing Window Aspect Ratio = vww / vwh = vwr
Viewing Window width in pixels = vww
Viewing Window height in pixels = vwh
53
I-View-It Imaging Process
Viewing
Image
sir < vwr
To fit the Source Image to the Viewing Window :
vwh vih
if sir < vwr then
Viewing Image height (vih) = vwh
Viewing Image width (viw) = vih * sir
viw
vww
Viewing
Image
sir > vwr
Compare the Source Image Aspect Ratio to the Viewing
Window Aspect Ratio:
vih vwh
if sir >, = vwr then
Viewing Image width (viw) = vww
Viewing Image height (vih) = viw / sir
vww
viw
Strictly Confidential
54
I-View-It Imaging Process
Virtual Image
Viewing Image vih
vih virtih
viw
virtiw
The Maximum Magnification Factor is defined as the ratio of
the Virtual Image area to the Viewing Image area. This ratio
will determine the amount of zoom available without causing
the image to distort due to fewer pixels in the image being
displayed than available in the Viewing Window.
Maximum Magnification Factor = mmf
Viewing Image area = viw x vih = via
Virtual Image area = virtiw x virtih = via x mmf = virtia
To obtain the Virtual Image width and height:
virtiw = virtia * sir
virtih = virtiw / sir
Strictly Confidential
55
I-View-It Imaging Process
Virtual Image
Viewing
Window
vwh
virti
A zoom to the maximum level will be shown in the Viewing
Window as shown below. By panning the Viewing Window,
every portion of the Virtual Image may be viewed from each
level of zooming.
vww
virtiw
Strictly Confidential
56