1
July 2001
Strictly Confidential
Investor Presentation
Prepared forAOLTW
Strictly Confidential 2
Agenda
I. Executive Summary
II. Management Introductions
III. The Company
IV. Organization & Ownership Structure
V. Financial Overview
Strictly Confidential 3
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 4
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 5
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 6
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 7
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 8
I-View-It Executive Summary
Focused intellectual property strategyFive US Patent Pending ApplicationsSix Patent Cooperation Treaty (PCT International) ApplicationsTwo US Provisional Patent Pending ApplicationsR&D to yield further Intellectual Property
Versatile technology applications and comprehensive revenue modelPlatform agnostic imaging and video processes applying to a vast array of products across software and hardware industriesLicense & Royalty revenue model
Validation through high visibility beta test customers17 customers since May 2000 product launchHigh profile customers with significant market presenceValidation of both video and imaging processes
Poised for rapid growthSeeking $10 million of growth capital
Strictly Confidential 9
Management Introductions
Chief Executive Officer, (Identified)Strong Media/Entertainment BackgroundStrong Computer Industry Background – Licensing Hardware & Software
Aidan Foley, Advisor to the BoardClearview Networks – Chief Executive OfficerEastman Kodak/Cinesite – President & CEOEastman Kodak – President and General Manager, Advanced Technologies
Peter Lee, pro tem President & CTOIBM - Global Development Executive, Broadcast & Advertisement Solutions GeoVideo Networks (a Lucent Technologies Company) – President & CEOHitplay Media, Inc. - CTO, VP of Engineering
click on name to see resume
Strictly Confidential 10
Management Introductions Con’t
Ross Miller, pro tem Chief Operating Officer & General CounselOutSource Partners, Inc. - Vice President and General Counsel Moovies, Inc. - Senior Vice President and General CounselRogers & Hardin - Corporate Counsel Schwartz, Cooper Greenberger & Krauss – PartnerKatten, Muchin & Zavis – Partner
Maurice R. Buchsbaum, EVP - Business and Corporate Development
Drexel Burnham – PartnerKidder Peabody – PartnerJW Genesis\First Union – PartnerEmerald Capital Partners - Partner
Kevin Lockwood, VP Sales and Business DevelopmentFormer EVP of Cylex SystemsNational Sales Manager for Acer AmericaManaged launch of Fujitsu PC in the US
Strictly Confidential 11
Management Introductions Con’tClick on name to see resume
Jack P. Scanlan, VP Advertising and PublicityColumbia Pictures - The Burbank Studios Publicity/Promotion Manager21ST Century Films – Vice President: Advertising, Publicity, PromotionCannon Films – National Promotion Director
Eliot Bernstein, Founder and Vice ChairmanI-View-It Technologies – FounderPresident & CEO – SB Lexington Inc.
Strictly Confidential 12
Company Milestones
Month/Year Milestone July 2001 Warner Bros License & Sony agreements in negotiations
Retained consultant in Advertising & Marketing Retained pro tem CTO
June 2001 Established a “core” licensing team
May 2001 Retained Special Advisor to the Board Retained Business & Corporate Development Specialist Retained pro tem COO & General Counsel Retained Senior Licensing & Sales Executive
March 2001 Shifted focus from a service validation model to a license revenue model
January 2001 Relocated Corporate HQ to Los Angeles December 2000 Raised 1.2 million from Crossbow/Alpine Ventures November 2000 Completed technical review with Warner Brothers October 2000 Began development of corporate license strategy September 2000 Began collaborative discussions with 6 of the 7 global content
providers
Strictly Confidential 13
Company Milestones Continued
July 2000 Raised $800,000 from Crossbow/Alpine Ventures June 2000 Launched imaging and video processes in beta test
environments at ShowBiz Expo in Los Angeles June 2000 Hired VP of Operations May 2000 Secured first customer Hollywood.com March 2000 Filed first Non-Provisional International patent February 2000 Raised $1 million from Crossbow/Alpine Ventures October 1999 Launched website September 1999 Raised $500,000 from Huizenga Holdings August 1999 Hired COO June 1999 I-View-It Incorporated
Raised seed capital from Private Investors May 1999 Real 3D technology audit April 1999 Confirmed feasibility of full-screen, full-frame rate video March 1999 Filed first provisional patent
Strictly Confidential 14
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
U.S. (Patent Pending) 8/2/2000
System and Method for Producing an Enhanced Digital Image File
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
U.S. (Patent Pending) 6/5/2000
System and Method for Providing an Enhanced Digital Video File
PCT (International) 6/2/2000
System and Method for Streaming an Enhanced Digital Video File
PCT (International) 6/2/2000
System and Method for Providing an Enhanced Digital Video File
PCT (International) 6/2/2000 System and Method for Playing a Digital Video File
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 15
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
Intellectual Property Strategy
Strictly Confidential 16
Markets for Imaging Intellectual Property
Process End-user Hardware Software
Imaging
Internet Entertainment
Auctions Retail
Security Systems Healthcare Education Distance Learning Games
Advertising Sporting
Patent Pools DVD
Camera JPEG
Appliances
Digital Camera’s DVD’s
Wireless Devices PDA’s
Scanners Medical Imaging
E-Books Copiers Printers
Game Boxes Simulators
Patent Pools JPEG
Corporate
Bundling OEM’s
Graphics Animation
3-D CAD
Scientific Visualization Virtual Reality
Multimedia Games
Image Restoration
Strictly Confidential 17
Markets for Video Intellectual Property
Video Internet Streaming
VOD Downloading
Broadcasters
ISP’s
Security Systems
Patent Pools MPEG DVD
Corporate
Appliances Set Top Boxes
DVD’s HDDVD’s
DVD Players Encoders
Wireless Devices PDA’s
Simulators Camcorders
Patent Pools MPEG
Corporate
Bundling Video Suites Editing Suites
Encoding Suites
Combinations of Imaging &
Video Processes – Zoom TV, etc.
All Markets Above
All Markets Above
All Markets Above
Process End-user Hardware Software
Strictly Confidential 18
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 19
Prior Zoom Imaging Demonstration
Strictly Confidential 20
I-View-It Imaging Process Demonstration
Strictly Confidential 21
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 anddelivers 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 22
Video Encoding Prior to the I-View-It Video Process
Source = ??????
Application Bandwidth Standard Size Frame Rate
Analog Video 5 - 10 Kbps none 170x128 2 - 5Low Bitrate Video Conferencing 26 - 64 Kbps H.263 128x96 15 - 30Basic Video Telephony 64 - 128 Kbps H.261 176x144 10 - 20Video Conferencing > = 384 Kbps H.261 352x288 15 - 30Interactive Conferencing 1 - 2 Mbps MPEG-1 352x288 15 - 30Digital TV - NTSC 3 - 10 Mbps MPEG-2 720x480 30 - 60High Definition TV 15 - 80 Mbps MPEG-2 1200x800 30 - 60
Summarizes applications of the compressed video by specifying current standards used in various applications, the required bandwidth, and typical frame rate and frame sizes.
Applications of the compressed video and current video compressions standards.Source: ?????????????????
Strictly Confidential 23
Video Encoding Prior to the I-View-It Video Process
Will Pentium III Live Up to its HypeIntel 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 24
Prior Industry Specifications
Application Bandwidth Standard Size Frame RateAnalog Video 5 - 10 Kbps none 170x128 2 - 5Low Bitrate Video Conferencing 26 - 64 Kbps H.263 128x96 15 - 30Basic Video Telephony 64 - 128 Kbps H.261 176x144 10 - 20Video Conferencing > = 384 Kbps H.261 352x288 15 - 30Interactive Conferencing 1 - 2 Mbps MPEG-1 352x288 15 - 30Digital TV - NTSC 3 - 10 Mbps MPEG-2 720x480 30 - 60High Definition TV 15 - 80 Mbps MPEG-2 1200x800 30 - 60
Summarizes applications of the compressed video by specifying current standards used in various applications, the required bandwidth, and typical frame rate and frame sizes.
Applications of the compressed video and current video compressions standards.Source: ?????????????????
Strictly Confidential 25
Prior Video Process Demonstration
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I-View-It’s Video Process Demonstration
Strictly Confidential 27
Impact of Encode Frame Size on Full Screen Viewing Quality
0
1
2
3
4
5
6
28Kb 56Kb 100Kb 256Kb 512Kb 1Mb 3Mb
Encoded Bandwidth at 30 fps (Average of 5 Stress Videos)
180 x 120 encode
360 x 240 encode
720 x 480 encode
Best
Worst
Viewing Quality
Based on studies performed by Dr. Christopher Taylor of the Milwaukee School of Engineering
Strictly Confidential 28
Impact of Encode Frame Size on 360 x 240 Viewing Window Quality
0
1
2
3
4
5
6
28Kb 56Kb 100Kb 256Kb 512Kb 1Mb 3Mb
Encoded Bandwidth at 30 fps (Average of 5 Stress Videos)
180 x 120 encode
360 x 240 encode
720 x 480 encode
Best
Worst
Viewing Quality
Based on studies performed by Dr. Christopher Taylor of the Milwaukee School of Engineering
Strictly Confidential 29
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 30
Customers & Prospects in Target MarketsVideo
Video
Internet
Warner Bros. Online
Sony Pictures & Columbia Tri-Star Viacom/Paramount
MGM 20th Century Fox Hollywood.com Broadway.com Gear Magazine
Atlas Entertainment Ellen DeGeneres
Internet cont
Alanis Morisette Kids’Camps
Golden Shadow Pictures
QVC Academy of Motion
Pictures COX
American Enterprise Boca Raton
Resort & Club JM Lexus
Security
Clearview Networks
Appliances
Sony Dell Acer
Tera Nex
Bundling
Adobe Burst
Disk Mailer MindArrow
Combination of Image & Video
Processes
AOLTW
Clearview Networks
AOLTW Clearview Networks
AOLTW
Process End-user Hardware Software
*Customers in Bold
Strictly Confidential 31
Customers & Prospects in Target MarketsImaging
Process End-user Hardware Software
Imaging
Internet
Hyatt Hotels AOLTW
Sony Viacom/Paramount
MGM Anschutz Digital Media
Picture Vision Ron Jon Surf
Security
Clearview Networks
Medical
Medical OnLine BioSample
Retail
Greg Manning Amazon Target
Best Buy Extreme Yachts
JM Lexus Signature Eyewear
Digital Cameras
Sony Concord Camera
Appliances
3Com Dell Acer
Bundling Adobe
Versifi/REEF BlueZone
Open Graphics Cyberworld
Picture Vision
*Customers in Bold
Strictly Confidential 32
Marketing Strategy
Target high profile content owners and distributors
Co-brand with Industry Leaders
National print media campaign targeting corporate decision-makers
National B2B public relations campaign
Target market trade show presence
Strictly Confidential 33
Strategic Partners
BlueZone
Open Graphics
Medical OnLine
Atlas EntertainmentBrings 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/REEFThe 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 34
Target Milestones
3Q 2001
3Q - 4Q 2001
1Q - 2002
Secure growth capital
Hire CEO
Hire SVP of Sales/Marketing
Hire CTO and CFO
Close Technology Licenses in Target Markets
Launch branding campaign
Introduce technology enhancements
Strictly Confidential 35
Board of Directors
Maurice BuchsbaumCEO of Emerald Capital Partners
Drexel Burnham
Kidder Peabody
JW Genesis
Simon Bernstein (Chairman Emeritus)
President, S.T.P. Enterprises
President, S.B. Lexington
Eliot BernsteinI-View-It Founder & Vice Chairman
Gerald LewinCPA - Senior Partner of Goldstein Lewin & Co.
Donald KanePrior Managing Director at Goldman Sachs
President of GDI, holding company of 4 B2B companies
Vice Chairman of Sagence Systems
Director of Versifi and Ergo Systems
Kellogg Graduate School of Mgmt.
Bruce T. Prolow Tiedemann Investment Group
Ken AndersonMyCFO
Prior Partner, Arthur Andersen Private Client Services
Director of Schaeffer Autosimulation
Strictly Confidential 36
Advisory Board
Alan EpsteinPartner - Armstrong Hirsch Jackoway Tyerman & Wertheimer
George deBidartPresident & CEO - TSI Motorsports Marketing
President & CEO - The Source, Inc.
Stephen Verona – TBD
David J. ColterWarner Bros. VP Advanced Technology
Strictly Confidential 37
Capitalization Table
Shareholder Date Paid $
Price Per
Share $
Class A
Class B Non-
Voting
Class A Preferred
Class A
Class B
Convertible Debt
Warrant Exercise
Cost
% of Total Shares Fully
DilutedAlpine Venture Capital Partners LP 12/13/00 $21,192 7,714 13,478 20.26%Eliot I. Bernstein 6/29/99 $9,410 $0.50 11,320 7,500 17.99%Simon L. Bernstein 6/29/99 $5,175 $0.00 5,350 5,000 9.90%Alpine Venture Capital Partners LP 12/13/00 $1,200,000 3,096 $0 2.96%Investech Holdings L.L.C. 10/29/99 $500,000 $166.28 3,007 2.88%Tiedemann / Prolow II LLC 3/21/01 $345,000 $155.00 1780 890 $413,850 2.55%
Alpine Venture Capital Partners LP 2/2/00 $1,000,000 $387.59 2,580 2.47%Alpine Venture Capital Partners LP 7/19/00 $387.59 2,580 $999,982 2.47%Lisa Friedstein 6/29/99 $1,250 $387.59 2,500 2.39%The Jacob Bernstein 1999 Trust 6/29/99 $1,208 $387.59 2,415 2.31%The Joshua Bernstein 1999 Trust 6/29/99 $1,208 $387.59 2,415 2.31%Alpine Venture Capital Partners LP 12/13/00 $823,241 $387.59 2,124 2.03%Provision for Employee Options 2,109 $0 2.02%
Gerald R. Lewin & Barbara S. Lewin 6/29/99 $1,000 $36.22 2,000 1.91%
Maurice Buchsbaum 8/15/00 $36.22 1,930 $69,905 1.85%James Armstrong 6/29/99 $875 $166.70 1,750 1.67%Brian G. Utley 8/3/99 $857 $166.70 1,714 1.64%
Options/Warrants
Authorized200,000 400,000 100,000
Shares Issued
Strictly Confidential 38
Capitalization Table Continued
Donald G. Kane, II 6/29/99 $832 $166.70 1,663 1.59%Patricia Daniels 6/29/99 $625 $166.70 1,250 1.20%Donna Dietz 6/29/99 $625 $166.70 1,250 1.20%Andrew Dietz 6/29/99 $625 $166.70 1,250 1.20%
Jill Iantoni 6/29/99 $625 $166.70 1,250 1.20%
Guy Iantoni 6/29/99 $625 $166.70 1,250 1.20%James Osterling 6/29/99 $625 $166.70 1,250 1.20%Emerald Capital Partners, Inc. 12/20/99 $166.70 1,250 $208,375 1.20%
Ross Miller 5/1/01 $193.80 1120 $217,056 1.07%Emerald Capital Partners, Inc. 12/20/99 $308.30 1,000 $308,300 0.96%
Loans by Stockholders & Friends 2/23/00 $350,771 $387.59 905 $350,769 0.87%Alpine Venture Capital Partners LP 5/14/01 $330,000 $387.59 851 $329,839 0.81%
Raymond Hersh (9) 10/1/00 $387.59 700 $271,313 0.67%Jason Gregg 3/29/00 $250,000 $387.59 645 0.62%Alpine Venture Capital Partners LP 7/9/01 $220,000 $387.59 568 $220,151 0.54%
Alpine Venture Capital Partners LP 6/8/01 $220,000 $387.59 568 $220,151 0.54%AHJTW 10/18/00 568 $0 0.54%Michael Reale 4/18/00 $387.59 522 $202,322 0.50%Bettie Stanger 6/29/99 $250 $387.59 500 0.48%David Colter 2/8/01 $387.59 384 $148,835 0.37%
Shareholder Date Paid $
Price Per
Share $
Class A
Class B Non-
Voting
Class A Preferred
Class A
Class B
Convertible Debt
Warrant Exercise
Cost
% of Total Shares Fully
Diluted
Options/Warrants
Authorized200,000 400,000 100,000
Shares Issued
Strictly Confidential 39
Capitalization Table Continued
Shareholder Date Paid $
Price Per
Share $
Class A
Class B Non-
Voting
Class A Preferred
Class A
Class B
Convertible Debt
Warrant Exercise
Cost
% of Total Shares Fully
Diluted
Options/Warrants
Authorized200,000 400,000 100,000
Shares Issued
Emerald Capital Partners, Inc. 2/2/00 $387.59 258 $99,998 0.25%Kevin Lockwood 8/17/00 $387.59 258 $99,998 0.25%Jennifer P. Lewin 6/29/99 $125 $0.00 250 0.24%Erika R. Lewin 6/29/99 $125 $0.00 250 0.24%Atlas Entertainment/Tidal 4 11/8/00 250 $0 0.24%
Alan Young 10/16/00 250 $0 0.24%Steve Sklar 10/1/00 $387.59 206 $79,844 0.20%Interest on Loans 6/30/01 $54,420 $387.59 140 $54,263 0.13%Ken Anderson 6/13/00 $50,000 $387.59 129 0.12%Atlas Entertainment/Tidal 4 11/8/00 125 $0 0.12%
Alanis Morissette 12/27/00 $387.59 100 $38,759 0.10%Mitchell Welsch 6/9/00 $29,844 $387.59 77 0.07%Happy Feet Living Trust 12/27/00 $155.00 68 $10,540 0.07%Andrew Dietz 11/28/00 $25,000 $387.59 65 $25,193 0.06%Mitchell Welsch 6/9/00 $387.59 $387.59 53 $20,542 0.05%Lauren Lloyd Living Trust 12/27/00 $155.00 34 $5,270 0.03%
Strictly Confidential 40
Capitalization Table Continued
Shareholder Date Paid $
Price Per
Share $
Class A
Class B Non-
Voting
Class A Preferred
Class A
Class B
Convertible Debt
Warrant Exercise
Cost
% of Total Shares Fully
Diluted
Options/Warrants
Authorized200,000 400,000 100,000
Shares Issued
Ellen DeGeneres/Heche Trust 12/27/00 $155.00 34 $5,270 0.03%Atlas Entertainment/Tidal 4 12/27/00 $155.00 14 $2,170 0.01%Scott Welch 12/27/00 $387.59 13 $5,039 0.01%Atlas Entertainment/Tidal 4 12/27/00 $387.59 12 $4,651 0.01%Ross Miller 5/11/01 $387.59 5 $1,938 0.00%
Interest on Loan by Andrew Dietz 6/30/01 $1,226 $387.59 3 $1,163 0.00%
100.00%Outstanding to Date $5,447,146 28,242 48,935 4,704 2,891 14,719 5,099 $4,415,485 104,590
Strictly Confidential 41
Financing History
Investor AmountAlpine Venture Capital Partners $3,814,433Huizenga Holdings $500,000Tiedemann / Prolow II LLC $345,000Individual Investors $787,713
Total Investment $5,447,146
Strictly Confidential 42
Use of Proceeds
*Assumes a 12-16 month period
Expenses AmountCapital Expenditures $1,500,000Licensing & Marketing $2,000,000Restructure Expenditures $1,000,000Research and Development $2,500,000Patent Filings & Expansion $1,700,000Working Capital $1,300,000
$10,000,000
Strictly Confidential 43
Video & Imaging Showcase
The Sights and Sounds of the Internet
Strictly Confidential 45
Income Statement (ending Dec. 31)
YEAR 1 YEAR 2 YEAR 3
REVENUE 3,639,248$ 24,776,909$ 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
OPERATING EXPENSES:
SELLING, GENERAL, & ADMINISTRATIVE 9,861,781 13,870,983 24,790,101 RESEARCH AND DEVELOPMENT 776,326 1,705,086 2,686,204
TOTAL OPERATING EXPENSES 10,638,107 15,576,069 27,476,305
OPERATING PROFIT (LOSS) (9,056,311) 2,583,395 23,162,207
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 46
2001 Video Revenues
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
Q1 Q2 Q3 Q4
Web Design & Consulting
Master Licensing
Serving
Hosting
Archival
Encoding
Strictly Confidential 47
2001 Imaging Revenues
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
Q1 Q2 Q3 Q4
Web Design & Consulting
Archival
Hosting & Serving Revenue for Hotels & ResortsServing Revenue
Hosting Revenue
Master License Revenue
Image Processing Revenue
Hotel & Resort PackagesRevenueSetup Fee Revenue
Annual License Fee Revenue
Strictly Confidential 48
Imaging Revenues by Quarter
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9Q10 Q11 Q12
Web Design & Consulting
Archival
Hosting & Serving Revenue for Hotels & ResortsServing Revenue
Hosting Revenue
Master License Revenue
Image Processing Revenue
Hotel & Resort PackagesRevenueSetup Fee Revenue
Annual License Fee Revenue
Strictly Confidential 49
Video Revenues by Quarter
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9Q10 Q11 Q12
Web Design & Consulting
Master Licensing
Serving
Hosting
Archival
Encoding
Strictly Confidential 50
Revenues by Quarter
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
ImagingVideo
Strictly Confidential 51
Cash Flow StatementYEAR 1 YEAR 2 YEAR 3
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) (9,157,644)$ 2,364,062$ 16,378,757$
ADJUSTMENTS:
DEPRECIATION 297,146 1,507,883 3,841,406
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE, Net (1,249,651) (5,993,849) (9,222,813)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE 185,734 500,024 1,797,736
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (9,924,415) (1,621,879) 12,795,087
CASH FLOWS FROM INVESTING ACTIVITIES:
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 FINANCING ACTIVITIES:
PROCEEDS FROM INVESTOR FINANCING 20,000,000 - -
CASH PROVIDED BY FINANCING ACTIVITIES 20,000,000 - -
INCREASE IN CASH 9,154,147 (5,286,690) 5,769,317
CASH - BEGINNING - 9,154,147 3,867,457
CASH - ENDING 9,154,147$ 3,867,457$ 9,636,774$
Strictly Confidential 52
Balance Sheet
YEAR 1 YEAR 2 YEAR 3
CASH 9,154,147$ 3,867,457$ 9,636,774$
ACCOUNTS RECEIVABLE, Net 1,249,651 7,243,499 16,466,312
PROPERTY, PLANT & EQUIPMENT 921,438 4,586,248 11,612,018 LESS: ACCUMULATED DEPRECIATION (297,146) (1,805,029) (5,646,435)
11,028,090$ 13,892,176$ 32,068,670$
ACCOUNTS PAYABLE 185,734$ 685,758$ 2,483,495$
COMMON STOCK 1,000 1,000 1,000 ADDITIONAL PAID-IN CAPITAL 19,999,000 19,999,000 19,999,000 RETAINED EARNINGS (DEFICIT) (9,157,644) (6,793,583) 9,585,175
10,842,356 13,206,417 29,585,175
11,028,090$ 13,892,176$ 32,068,670$
ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY
Strictly Confidential 53
I-View-It Imaging Process
sih
siw
Source Image
ViewingWindow
vwh
vww
Source Image = si
Aspect Ratio = siw / sih = sir(width of the image divided by the height of the image, in inches)
The Viewing Window is the window, defined in pixels, within which is to be displayed the virtual image, scaled to fit.
Viewing Window = vwViewing Window Aspect Ratio = vww / vwh = vwr
Viewing Window width in pixels = vww Viewing Window height in pixels = vwh
Strictly Confidential 54
I-View-It Imaging Process
vihvwh
vwwviw
Viewing Image
sir < vwr
Viewing Image
sir > vwr
viw
vwh
vww
vih
To fit the Source Image to the Viewing Window :
Compare the Source Image Aspect Ratio to the Viewing Window Aspect Ratio:
if sir < vwr thenViewing Image height (vih) = vwh
Viewing Image width (viw) = vih * sir
if sir >, = vwr thenViewing Image width (viw) = vwwViewing Image height (vih) = viw / sir
Strictly Confidential 55
I-View-It Imaging Process
vih
Virtual Image
Viewing Image
viw
vih virtih
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 = mmfViewing Image area = viw x vih = viaVirtual Image area = virtiw x virtih = via x mmf = virtia
To obtain the Virtual Image width and height:
virtiw = virtia * sirvirtih = virtiw / sir
Strictly Confidential 56
I-View-It Imaging Process
Virtual Image
virtiw
ViewingWindow
vwh
vww
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.