Laser-focused leads powered by AI & Big Data€¦ · Examples include information concerning the Company ’s future marketing and sales plans, growth opportunities and forecasted

AIQOO Business Plan, June 2019

Laser-focused leadspowered by AI & Big Data


Important InformationThis document has been prepared solely for information purposes and is being furnished to, and solely for use by, recipients in connection with their consideration of an investment in Tustus Media Ltd. (“AIQOO” or the “Company”). Capital Canada does not assume any responsibility for the independent verification of any of the information set forth herein, including any financial forecasts or statements about the prospects of the Company contained herein. All dollar amounts in this document refer to U.S. dollars, unless otherwise noted.

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The information contained herein has been prepared to assist interested parties in making their own evaluation of the Company and does not purport to contain all the information that a recipient may desire in its decision to pursue a transaction with the Company. Neither the receipt of this document by any person nor any information contained herein or supplied herewith or subsequently communicated to any person in connection with a transaction with the Company is, or is to be taken as, constituting the giving of investment advice by Capital Canada to any such person. Interested parties should make an independent assessment of the merits of pursuing a transaction with the Company and consider the advice of their financial, legal, accounting, tax and other advisors and such other factors that they consider appropriate in determining whether to pursue a transaction with the Company.

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Capital Canada and the Company disclaim any intention or obligation to update or revise any of its statements containing forward-looking information, whether as a result of new information, future events or otherwise, except to the extent required under applicable securities laws.


ContentsIntroduction ………..………………………………...Vision .……………………………………………………Formula for success .………………………………Team …………………………………………………….Technology …………………………………………..Sales & Growth strategy ….……………………..Financial summary ……..….……………………..Market & Competition …………………………..Google case studies ……………………………….Appendix A – Three year financial forecast

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AIQOO Business Plan, June 2019AIQOO Business Plan, June 2019

Introduction

1


What is AIQOO?AIQOO is an innovative digital marketing technology company that generates sales leads for small- and medium-sized businesses (“SMBs”) by leveraging AI and Big Data capabilities.

AIQOO's innovative technology allows it to produce the highest quality leads at the lowest price in any vertical or market, and matches those leads to SMBs with the best chance to convert them into new customers.

AIQOO highlights

• Based in Israel with a focus on the North American market

• Initially focusing on generating leads for the home improvement vertical as a proof of concept

• Currently generating revenue from 5 initial clients; near-term pipeline of 40-50 additional clients

• Sales contracts totaling $5 million currently; expected to exceed $25 million by Q4 2019

• AIQOO is raising $3 million to complete development of its platform and launch full-scale operations in the North American market


Introduction

2


Lead generation overview

A lead is a potential customer who has expressed an interest in a specific product or service and has a high purchase intent.

What is a sales lead?

The very existence of SMBs hinges upon a steady flow of relevant, qualified leads that can be converted into new customers.

60% of SMB owners and leaders have stated that finding qualified leads is a major challenge in winning new business.

Why are leads important for SMBs?

To get the leads they need to exist, SMBs must fight not only each other, but against larger companies equipped with skilled sales, marketing and client management talent paired with huge media and advertising budgets.

In the race for leads, SMBs have always been at a disadvantage.

The challenge for SMBs

Create webpages with content on a specific topic that is useful to users who are searching for information on that topic (i.e. “cost of a new roof”)

Digital lead generation process

Implement Search Engine Optimization (SEO) campaigns to appear near the top of consumers’ search results on Google, increasing the quality and quantity of website traffic

Offer website visitors additional information or services (i.e. a free roofing quote) if they complete a form and provide personal contact information

Valuable sales lead created Possess the name, postal code, contact info, and other details of a consumer with a specific potential purchase intent (i.e. homeowners who need a new roof)

Lead is sold to multiple businesses that offer the product/service (i.e. roofing companies), which then contact the consumer direct to attempt to convert the lead into an actual customer

3


Large companies’ digital superiority

• Larger companies have leveraged their existing advantages over small businesses

• Superior digital and marketing resources

• Better IT infrastructure and talents

• Stronger brand recognition

• Access to Big Data analytics

Large companies have diversified and evolved their media strategy, established a robust digital presence and IT infrastructure, redirected talent, and harnessed technologies to expand their market reach and cut costs.

In the digital age, qualified leads are getting harder to find

Changing consumer habits

• Consumers are increasingly reliant on digital channels in their decision-making process and expect a strong digital presence and an Amazon-like, mobile-friendly user experience

• 61% of consumers go online to search for products and services

• Face-to-face transactions have decreased, representing only 39% of sales, while 61% of sales are conducted online

• Email has overtaken the phone as the leading medium for customer enquiries, now representing 29% of interactions, while phones represent only 20%www.hubspot.com/marketing-statistics

4


Lead databases In-house lead generation Digital campaign agenciesEstablish a digital presence and manage lead-generation campaigns

• Lack of digital marketing skills• Preoccupied with running their business• Limited media buying power• Irrelevant leads due to poor targeting• High ongoing costs

Hire an agency to establish a digital presence and manage lead-generation campaigns

Buy leads lists from databases

• Low quality resources• Non-exclusive• Redundant or irrelevant leads• Outdated data• Time consuming

• Expensive, retainer-based fee structure• No technological advantage• Lack of industry expertise• High initial marketing asset costs• Steep learning curve

Whatever option they choose, SMBs only convert an average of 1-2% of their leads, funding a multibillion dollar industry in the process

In their struggle to get leads, SMBs have only bad and worse options

5


VisionTo become the digital bridge that links SMBs with their potential market – everywhere


AIQOO's vision & solution

Solution AIQOO's superior targeting technology, AI algorithm and integrative user platform provide SMBs with laser-focused leads that drastically increase conversion rates and overall growth

6


AIQOO's formula for success

In its first year of operations, AIQOO has generated over $5M in sales contracts in three U.S. states and the Canadian market. AIQOO's customers have shown significant sales growth of over 40% due to AIQOO's laser-focused leads.

Revenue from day one

AIQOO's AI-powered solution is successfully generating superior leads. The advanced technology is dramatically lowering lead costs and increasing conversion rates.

Proven technology

An international team of technology, media, creative, analytics, and operations specialists. A passionate group of experts with a proven track record in marketing, lead generation and growth strategies for SMBs on a global scale.

AIQOO's technology enables rapid growth across multiple industries and markets worldwide. Pent-up demand coupled with AIQOO's agile business model will enable it to reach $228M in annual sales by year three.

Exponential scalability

Versatile team

7


The AIQOO team


Amir TalFounder & CMOAIQOO's marketing mastermind. A digital marketing expert with over 20 years of experience in online marketing. Former founder of I.F.P., a leading media company that pioneered real-time stock quotes for mobile users. The company's successes were highlighted by its exit in 2007.

Moshe HabasCTOLeading technology officer of an elite military unit. Over 10 years of experience successfully overseeing the completion of hundreds of unique projects as co-founder and CTO of Appgate, a leading software development company. Technology consultant to a variety of tech companies.

Adir DayanFounder & CEOCreator of the AIQOO concept with over 13 years of experience as a master of sales and marketing. Partner and former CEO of The Insurance Experts Center a leading, technologically innovative company in the insurance industry. Consultant to telecom companies in the world of sales & telemarketing.

Gabor KoltaiVP Investor RelationsOver 20 years of experience in business development. Successfully unlocking potential for multi-national corporations and helping them exceed their goals. Leveraging contacts to forge strategic relationships. Raising capital in the private equity and pre-IPO cannabis and technology sectors.

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AIQOO’s TechnologyThree interconnected systems synchronized

and managed by a central Omni AI

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AIQOO's Quantum Management System (QMS) creates and manages a myriad of content and campaigns anywhere in the world, simultaneously

Automatic content creation Rapidly and accurately creates and customizes articles and ads according to locations, interests and opportunities - with a single click.

Automatic campaign launcher Generates multiple campaigns on all digital platforms including Google, Taboola, Outbrain and Facebook.

Dynamic funnels and landing pages These are groundbreaking AI-driven interactions with users that show and offer them exactly what they need when they need it.

System 1: AIQOO's QMS

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System 2: AIQOO’s Campaign Optimizer


The Campaign Optimizer automatically increases campaign efficiency to a previously unattainable level

Extraordinary conversion ratesAIQOO's optimizer automatically adjusts hundreds of variables including bids, landing pages, ads, keywords, headings and images, creating the highest conversion rates while drastically lowering marketing costs.

Laser-focused leadsThe optimizer’s algorithm adjusts campaigns to create the perfect lead for each SMB in order to vastly increase their deal closing rates and revenue.

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AIQOO's launchpad platform for rapid market penetration

Marketplace AIQOO's low-touch lead acquisition platform that allows SMBs to purchase leads according to individual needs, demand and budget.

The CRMProvides SMBs with a powerful CRM that offers functions such as lead management processes, agent management, scheduling, notifications, lead assignment, reports, statistics and analytics.

Data loopThe LeadMart plays a pivotal role by collecting and analyzing lead data from the SMBs which it then transfers to AIQOO’s Omni AI to continually improve lead quality and the SMBs’ ROI.

System 3: LeadMart

Direct lead allocation to “best fit” scenario

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AIQOO's Omni AI

The AI algorithm is the vital axis around which AIQOO's ecosystem revolves

Seamless synchronizationThis crucial element seamlessly connects, manages and synchronizes all three of AIQOO's systems while constantly learning and optimizing.

Processing powerAIQOO's AI collects and computes millions of distinct data points in real time, which allows AIQOO to manage millions of key processes that even with tremendous manpower would be unattainable.

Big DataAIQOO utilizes the enormous amounts of data it collects from its leads, the SMBs and the multitude of interactions to precisely analyze verticals and sub-verticals. The insights gained from this data are used to create laser-focused leads for the benefit of both AIQOO and the SMBs.

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Sales & Growth Strategy

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Business model summary


Lead quality, costs and profits by ad platform

Per lead Profit per lead example (Google leads)

Cost to Generate $95

Sold to SMBs $90 $90

Total Revenue $180

Gross Profit $85

• AIQOO will sell each lead generated to 2-3 different SMBs, giving each consumer a choice and variety of contracts

• Competitors such as HomeAdvisor typically sell each lead to up to 6 SMBs which dilutes the value of each lead

• Google leads are considered the highest quality as users actively search based on existing needs

• The leads generated by other ad-platforms are opportunity-based and are therefore considered less qualified

• At peak operations, AIQOO expects to generate up to 12,500 leads per month in the roofing sub-vertical, translating to more than $1 million revenue/month @ an average of $90 per lead

• Cost of lead generation will decreasedramatically with further implementation of technology

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AIQOO’s technology is scalable across many industry verticals

Home improvement

Wellness Real estate Education Loans Insurance Finance LifestyleVerticals

• AIQOO is following a vertical-based strategy targeting specific industry verticals and dominating each sub-vertical one at a time

• AIQOO is initially focused on the roofing sub-vertical within the home improvement vertical to prove its concept and technology

• Expansion into additional home improvement sub-verticals (kitchens/bathrooms) will occur in the near term new sub-verticals can be implemented every three months

• AIQOO will expand into other verticals in the long-term

• Market size: High demand for leads among SMBs• Scalability: Potential to grow rapidly within the vertical• Geo-expansion: Easy to replicate into any region• Competitive advantage: Leveraging AI/Big Data

capabilities• Market share: 80:20 ratio in favor of SMBs• High lifetime value: Per sale of product or service

Prioritizing our target verticalsRoofing Kitchens BathroomsSub-

verticals Basements 25 more

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Geography

ScaleVertical & Geographic Expansion

Geography

Vertical

Year 1

• Home improvement

Expand operations from Israel to selected U.S. states

Expand operations to U.S. and Canada nationwide

• Insurance• Loans and financing

Verticals

Year 2-3

Expand to Europe, Australia, Latin America and Asia

• Wellness• Finance• Real estate • Lifestyle• Education

Verticals

Year 4-5

Geography

Growth strategy: Geo-Vertical

IgniteU.S. Market Penetration

LeverageVertical & Geographic Expansion

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Sales strategy: Geography

Premium Clients:California 22Texas 15Illinois 6Florida 6New York 6Pennsylvania 3Nevada 3Arizona 3Canada 6

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The clients in AIQOO’s first vertical, home improvement, are divided into two categories

Sales objectives: Clients

AIQOO’s anchor client base • Dedicated account manager• Large home-improvement

companies• Purchase 250+ leads per month• Average price per lead - $90• Annual revenue - $270,000• Client acquisition - Personal

sales• Client acquisition cost - $10,000• Initial value - $810,000 (3 years)

Premium clients

AIQOO’s self-service lead acquisition platform • Online support• Home improvement service

providers• Purchase 50+ leads per month• Average price per lead - $90• Annual revenue - $54,000• Client acquisition - Online

marketing• Client acquisition cost - $1,500• Initial value - $54,000 (1 year)

LeadMart clients

• AIQOO will open two offices - a head office in Los Angeles and an additional sales office in New York

• In July 2019, AIQOO’s CEO, Adir Dayan, will relocate to the U.S. to manage the U.S. operations

Premium clients• Three regional sales managers to develop long-term

agreements with large home-improvement companies in selected states

• Target Q4 2019 70 Premium clients

LeadMart clients• AIQOO will acquire home service providers through targeted

online campaigns who will independently purchase and manage their leads on the self-service LeadMart platform

• Target Q4 2019 100 LeadMart clients

Client acquisition strategy

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Current clientsCurrent client case studyClient: HK ContractorsAIQOO premium client since March 2019

Location: FloridaYears in business: 7Employees: 7Sub-vertical: Roofing Lead type: HomeownerPrice: $70 per leadLeads purchased: 305

Conclusion• HK Contractors’ investment of $21,350 resulted in revenue of

$492,266, and an ROI of 23x• HK's revenue has grown by 40%. HK has added 2 sales

agents and increased its lead acquisition budget

• California, Texas, Florida, Toronto

• Premium clients5Current Clients

• Clients enter agreements committing to buy a certain number of leads over time

• Current clients have committed to buy $5+ million worth of leads combined

$5MSales Contracts

• AIQOO has already developed a pipeline of 40-50 SMBs to potentially become new clients once it has fully launched its platform and senior management has relocated to North America

40+New Client Pipeline

Total lead cost: $21,350Deals closed: 19Conversion/closing rate: 6.2%Revenue: $492,266Average deal size: $25,908Lead cost per deal: $1,120ROI: 23x

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Customer acquisition ROI

The following table shows the ROI AIQOO receives on every $1 it invests in acquiring a client

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• Premium - The acquisition cost for a premium client is $10,000. Over the client’s initial 3 years, AIQOO’s ROI is 32.4x

• LeadMart - The acquisition cost for a LeadMart client is $1,500. Over the client’s first year, AIQOO’S ROI is 21.6x


Sales strategy: Roadmap

22


Use of funds


- Consulting- Legal- Accounting

- LeadMart – 150k- Premium clients – 750k


Financial summary

• Estimated three-year forecast• See Appendix A for full forecast

24


Market & Competition

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• Digital ad spending 2019 - $129 billion• Approximately 29 million SMBs are currently

operating in the U.S.• 54% of all sales in the U.S. are made by SMBs• 5.6 million are potential AIQOO clients

The U.S. market

• 70% of SMBs don't have a CRM system• 77% of SMBs state a digital presence is vital for new

user acquisitions• 60% of SMBs say finding qualified leads is a major

challenge• SMBs convert just 1-2% of their leads• SMBs pay an average of $100 per lead• SMBs purchase an average of 250 leads per month

SMBs' online reality

Market validation

Sales force, Small & Medium Business Trends Report Research insights from nearly 500 business owners and leaders

Digital advertising spending in the U.S.

202

188

172

151129

108

2019 2020 2021 2022 20232018

Digital advertising spending in the United States from 2018 to 2023 (in billions of U.S. dollars)

www.emarketer.com/content/global-digital-ad-spending-2019

Billi

ons

of U

.S. d

olla

rs

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Main competitors

HomeAdvisorA digital marketplace that connects homeowners with prescreened, local service professionals to complete home improvement and remodeling projects

Angies ListAn American home services website with over 8 million visits a month. It allows users to read and publish crowd-sourced reviews of local businesses and contractors

Houzz A platform that connects homeowners, home design enthusiasts, and home improvement professionals in the U.S.

PorchAn online home-improvement network with more than 300,000 active professionals across the U.S. that connects homeowners with qualified professionals

ThumbtackAn online marketplace with over 7 million monthly visits, geared to hiring workers for small tasks in a variety of fields

YelpAn industry giant. A review-driven platform that connects consumers with local businesses in various fields

Yellow PagesAn online search directory that provides information in order to connect businesses with users

The competitive landscape is dominated by brand-based companies, most of which are locked into a single vertical

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Competitive map

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Competitive breakdown

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* Google site score – Google’s tool for determining mobile friendliness, device compatibility and page speed

AIQOO in relation to its main competitors


Market differentiation

AIQOO's use of innovative technology and unique approach is its competitive advantage:

Lead volumeThe website structure and technology of AIQOO’s competitors limits them when it comes to producing leads on a local level at high volumes. AIQOO's revolutionary QMS technology is designed to produce a high volume of leads in any location.

Lead overhead costsAIQOO’s competitors incur large overhead expenses such as manpower and office space. AIQOO's AI technology dramatically lowers these expenses, thereby minimizing lead cost.

Lead quality Lead quality is crucial when it comes to closing deals. For example, low-quality leads convert into sales at a rate of approximately 1%, while high quality leads reach a 6-8% closing rate. AIQOO's leads are consistently at the top of the market.

Lead production price Production price is of key importance when it comes to lead cost. Thanks to its high conversion rate, AIQOO produces leads at a competitive cost.

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Google Case Study

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Parameters:

• Time period: April 15 to May 15, 2019• Platform: Google• Vertical: Home improvement• Sub-vertical: Roofing• Location: California • Number of keywords: 281• Keyword examples: “New roof cost” / “How

much for a new roof” / “Roof replacement” / “Roofing Contractors”

Conversion rate

AIQOO’s roofing campaign in California shows that even in the most competitive market, AIQOO achieved a conversion rate of 11.74% and an outstanding average cost per qualified lead of $79.27.

Google case study

32


Google case study

Search ranking:

• AIQOO dominates Google search ranking results in the roofing category in comparison to its main competitors

• Out of 10,368 relevant keyword searches, AIQOO achieved a 72% top appearance rate as opposed to its next competitor, HomeAdvisor, that came in at 30%

• AIQOO is first amongst its competitors when it comes to search ranking position

• Some competitors don’t appear in Google’s search auction due to various reasons such as low ranking, performance and/or site score

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Laser-focused leads powered by AI & Big Data€¦ · Examples include information concerning the Company ’s future marketing and sales plans, growth opportunities and forecasted