CMC business plan 5.2

Chalk Media Corp. Corporate Profile Private & Confidential November 2002 Version 5.2 Chalk Media Corp. Disclaimer While the information contained herein is believed to be accurate and reliable, Chalk Media Corp. and its subsidiaries and / or affiliates, and their respective agents, advisors, directors, officers, employees and shareholders (“Chalk Media”) make no representations or warranties, expressed or implied, as to the accuracy or completeness of such information, and Chalk Media expressly disclaims any and all liability that may be based on such information, or errors or omissions thereof. The forward-looking statements contained herein (such as statements relating to the future anticipated direction of the high technology industry, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth and potential contracts) involve important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of Chalk Media. These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financial activities, domestic and global economic conditions, changes in federal or state income tax laws, and market competition factors. Accordingly, Chalk Media relies on the “safe harbour” provisions for forward-looking statements prescribed by the Private Securities Litigation Reform Act of 1995. Chalk Media reserves the right to amend or replace the information contained herein, in part or entirely, at any time and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. Private & Confidential  2002 Chalk Media Service Corp. -i- Chalk Media Corp. “making learning a part of everyday business” Companies that invest in learning outperform the market by more than 45%. Companies that don't invest in learning, underperform by 22%. American Society for Training and Development, 2000 Private & Confidential  2002 Chalk Media Service Corp. -ii- Chalk Media Corp. Table of Contents 1. Introduction ...................................................................................................................... 1 1.1 Overview of Chalk Media Corp. ...................................................................................... 1 1.2 Investment Highlights...................................................................................................... 1 1.3 Market Opportunity ......................................................................................................... 3 2. Industry Overview ............................................................................................................ 5 2.1 Corporate Learning Market ............................................................................................. 5 2.2 Use of Rich Media in Online Learning............................................................................. 5 2.3 Online Learning’s Return-on-Investment ........................................................................ 6 2.4 Competitive Environment................................................................................................ 7 3. Business Description....................................................................................................... 8 3.1 Business Strategy ........................................................................................................... 8 3.2 Chalk Media’s Solutions................................................................................................ 10 3.3 Client Development and Marketing Strategy................................................................. 12 3.4 Clients & Partners ......................................................................................................... 16 4. 5. 6. Management Team ......................................................................................................... 17 Customer Testimonials.................................................................................................. 19 Contact Information ....................................................................................................... 20 Private & Confidential  2002 Chalk Media Service Corp. -iii- Chalk Media Corp. 1. Introduction 1.1 Overview of Chalk Media Corp. Chalk Media Corp. (“Chalk Media” or the “Company”) specializes in producing custom content to help organizations leverage learning and marketing opportunities to meet their business objectives. Chalk Media combines its experience in video production with expertise in web development and instructional design to produce highly engaging and compelling solutions that use learning as a value proposition. The Company’s solutions are delivered using both traditional and digital media that are flexible and scalable to ensure significant impact and return-on-investment for our clients. Chalk Media’s core competency is in creating content that is easy-to-understand, targeted and engaging. The Company has established an excellent reputation for explaining complicated issues in a simple manner, principally through its television show, “Dave Chalk Computer Life”. Chalk Media combines this expertise with the ability to intimately understand the communication challenges faced by organizations and provides a unique set of learning solutions that are completely customizable and measurable. Businesses face the complex task of determining viable methods to educate consumers and sales channels on the differentiation and unique value propositions of their products and services. The standard of using specification sheets with technical descriptions, coupled with static product images, is an inadequate marketing and education format for promoting both simple and complex products and is proven to provide only low levels of information retention. This can often lead to confusion and lack of knowledge for the average sales person and consumers who are frequently unable make educated decisions. Chalk Media utilizes a consultative approach providing a collaborative, completely customizable, easy-to-implement solution. In creating these solutions with various traditional and new rich media technologies, the Company can increase the efficiency of information flow required for demand creation, distribution and sales. By delivering timely, relevant and efficient information, Chalk Media’s offering addresses a business’s entire sales process from start to finish and, with the use of online learning, is able to acquire a significantly larger audience at anytime from anywhere while drastically reducing education and training costs. 1.2 Investment Highlights Strong Brand Name Recognition: The “Chalk” brand has a well-known and growing reputation as a trusted source of content that is simple, concise and easy-to-understand. This brand recognition has grown, particularly in Canada, due to the Company’s popular television show, “Dave Chalk Computer Life”, and has continued to gain respect in the last two years from the high quality of the Chalk Media’s solutions. Dave Chalk, the founder of Chalk Media, is known across Canada and in parts of the U.S. as a technology expert and consumer advocate, solidifying the Company’s brand promise at all levels. -1- Private & Confidential  2002 Chalk Media Service Corp. Chalk Media Corp. Excellent Market Opportunity: In 1999, approximately 92% of large corporations implemented Web-based learning pilots or programs. WRHambrecht & Co. In 1999, about 20 percent of all corporate training was spent on e-learning as opposed to traditional classrooms. However, this figure is expected to shift to 40 percent for online learning by the year 2003. Corporate University Xchange In the year 2000, an estimated US$19.5 billion was spent directly on corporate training and that figure is expected to reach US$29.3 billion by the year 2003. International Data Corporation (“IDC”) By 2003, 40% of all corporate training will be spent on e-learning as opposed to traditional classrooms. IDC By 2004, non-IT related content will account for 54 percent of worldwide demand, up from 28 percent in 2000. IDC The worldwide corporate e-Learning market will exceed US$50 billion by 2005. IDC By the end of 2001 more than 75 percent of companies were using their intranets for training. Computeruser.com Half of all training will be done through e-learning by the end of 2002. Computeruser.com 56 percent of training executives say that content is their No.1 consideration when deciding to purchase e-learning technology, according to a recent survey. elearningmag.com Almost half of the companies surveyed by Training Magazine expected a flat budget for 2001, however, about 38% reported expected increases for 2002. Training Magazine Blue Chip Customer Base: The majority of Chalk Media’s customers are well known and respected global organizations. These customers are well recognized in both business and consumer markets and have large budgets targeted at offerings such as those offered by the Company’s portfolio of solutions. This blue chip customer base has validated Chalk Media’s solutions, provided an opportunity for cross selling of services and allowed opportunities to sell deeper into these accounts. Some examples of the Company’s customers are: Microsoft, TELUS Mobility, Royal Bank, Sony, Verizon, D-Link, Playground (a division of Intrawest) and Intel. Private & Confidential  2002 Chalk Media Service Corp. -2- Chalk Media Corp. High Return-on-Investment Solutions: Chalk Media’s solutions have high return-on-investments for its customers. This is achieved by spending time upfront to understand an organization’s challenges, focusing clients’ budgets on content versus technology and including a reporting mechanisms to track solutions’ results. The Company believes that it is essential to continually show value to its customers. Collaborative, Result-driven Solutions Approach: Customers are often searching for solutions that can be created, produced and delivered with as few internal resources and as little effort as is possible. By working collaboratively with the customer, Chalk Media is able to provide custom solutions, act as project managers, provide necessary technologies and infrastructure and also offer hosting services. The Company produces custom solutions that suit the specific messaging needs of its client base, while many of Chalk Media’s competitors mostly offer only pre-existing “boxed” solutions. 1.3 Market Opportunity Chalk Media believes that the key drivers in the custom learning content market are as follows: Online learning allows for the management and delivery of education material at anytime from anywhere. Shortened product life cycles created by a need to stay competitive and maintain stable revenue generation have led businesses to realize that it is crucial to educate the sales channel and the end consumer on an ongoing and frequent basis. In order to educate a sales force it is extremely, often prohibitively, expensive for corporate trainers to travel to the many locations necessary to train an entire sales channel. Online learning allows for a business to fully track and measure training efforts. Online learning provides a scalable and relatively inexpensive source of providing information and education. Traditional methods of providing information to the sales channel and end consumer provide only low retention rates. The introduction of rich media through online learning solves this problem. Once an online learning infrastructure is created it is relatively easy, quick and efficient to add new offerings and modules of information for fast deployment to the targeted audiences. Online learning content can be repurposed into marketing and communications activities, saving time and resources. Private & Confidential  2002 Chalk Media Service Corp. -3- Chalk Media Corp. The use of PCs, networks and the Internet are ideal and common delivery systems to the sales channel and end consumer for delivery of information in many different forms using varying technologies that create a high level of retention. Online learning strategies are now expanding into other business areas that are vital for an organization’s long-term competitiveness: Automated customer service; Change management; Sales force readiness (channel); Direct marketing; and Educational advertising and promotion. Private & Confidential  2002 Chalk Media Service Corp. -4- Chalk Media Corp. 2. Industry Overview 2.1 Corporate Learning Market The learning market has experienced significant growth and transition in the last ten years. Traditional means of educating sales channels and consumers via mediums such as magazines, pamphlets and television will continue to be popular vehicles for dispersing information; however, with the growth and acceptance of the Internet, PCs and networks, online learning has become a very viable method of disseminating information. The growth of the Internet and adoption of high-speed and rich media is bringing online education to people in corporations, institutes of higher learning, consumers, the government and all business sectors. Dollars spent on corporate learning continue to grow. In the year 2000, an estimated US$19.5 billion was spent directly on corporate training and IDC predicts that figure is expected to reach US$29.3 billion by the year 2003. In 1999, about 20 percent of all corporate training was spent on online learning as opposed to traditional classrooms. However, according to the Corporate University Xchange, this figure is expected to shift to 40 percent for online learning by the year 2003. In 2000, companies that provided web-based corporate training generated an estimated US$2.2 billion in revenue in the U.S. alone, which is double the 1999 figure and about four times larger than 1998. In 2003, IDC has projected that this figure will increase to about US$11 billion. According to IDC, the portion of the online learning market devoted to IT content will increase from US$1.7 billion in 2000 to US$5.3 billion in 2003. The MASIE Center, a New York-based think tank, reports that 92 percent of large organizations implemented some form of online learning for 2001 and a survey of 410 U.S. companies by Watson Wyatt found that the percentage of employers offering skills training as an incentive for top-performing employees to stay increased from 62 percent in 1999 to 68 percent in 2000. Businesses in many varying verticals are realizing the need to save money and reduce expenditures while at the same time are facing the reality of the necessity of providing up-todate and relevant information and education. This provides a unique challenge in that businesses are also looking to provide this information in a method that has the ability to realize a high level of information retention. 2.2 Use of Rich Media in Online Learning With the increased adoption rates of broadband, the use of rich media is becoming more prevalent. Forrester Research (2000) predicts that in the next five years, 50% of all communications will come in the form of rich media. Furthermore, META Group forecasts that by the end of 2002, over 66% of the Global 2000 web sites will be rich media-enabled. By 2003, it suggests that more than 75% of Global 2000 firms will have consistent rich media branding involving sight, sound, and interaction. Private & Confidential  2002 Chalk Media Service Corp. -5- Chalk Media Corp. Online learning meets organizations’ learning requirements by providing effective and compelling content in the form of a combination of technologies such as video, audio animation and pictures that incorporate various levels of interactivity. The use of different media has been proven to increase retention rates and thus the effectiveness of learning solutions. Forrester Research 2.3 Online Learning’s Return-on-Investment Traditionally, corporate learning has required large budgets and has relied heavily on travel for corporate trainers. With two-thirds of corporate training budgets comprised of travel expenses alone, managers are turning to online learning to reduce costs and increase the scope and potential of their training programs. According to Training Magazine, corporations save 50% to 70% when they replace instructor-led training with alternative electronic delivery. Housing and travel costs account for the majority of the savings. Lost productivity and revenue can actually be higher if you consider that classroom days include not only travel time, but also total time away from the office. Also, a new trend is emerging from the post dot-com era. Businesses are realizing that relying on technology as a complete solution is not producing the expected returns on investment. Large-scale infrastructure projects such as Learning Management Systems, which are proprietary in nature, are not only costly, but difficult to implement as well. Instead of being tied to a large enterprise-wide technology, businesses are turning towards more strategic, value-driven learning engagements that are based on specific business goals. Time-to-market is also a major driver of online learning for corporations. Businesses are realizing that when product-launch information needs to reach thousands of sales, support and management professionals who are decentralized and spread across many regions or -6- Private & Confidential  2002 Chalk Media Service Corp. Chalk Media Corp. countries, instructor-led training is not able to provide the speed necessary to maximize return on investment. When products become available for sale, it is critical for sales people to be made aware of relevant information. If the information is not dispersed quickly and efficiently there is lost opportunity. According to Forbes.com, technology companies experience a tremendous amount of pressure to keep up with the constant barrage of information. Resolving any enterprise-wide issues via online learning strategies and tools will quite often provide the greatest visibility and the most substantial rewards. This is particularly relevant in the technology sector where reduced time for development cycles is common. With product and service information readily available via the Internet, consumers are rapidly becoming more educated, savvy and demanding in their purchases. Educating them before and after sales is becoming a necessity in elevating customer service and satisfaction levels. This also has the result of creating a stronger long-term relationship and loyalty to businesses that offer such learning activities for their customers. A 1999 benchmarking study of 501 U.S. companies conducted by the American Society of Training and Development shows not only a year-over-year increase in spending on online learning, but also a direct relationship between company performance and spending on training. Companies that reported improvements in business performance also reported a higher level of spending on training measured as a percentage of payrolls. Higher-performing companies also provided training to a greater percentage of their employees. 2.4 Competitive Environment Chalk Media creates compelling custom content that is tailored to a business’s targeted audience, while many of the Company’s competitors offer “out-of-the-box” solutions. Chalk Media’s brand recognition and expertise in explaining complicated issues in a simple, easy-tounderstand manner, contribute to the Company’s uniqueness. Furthermore, Chalk Media’s one-stop-shop approach also differs from many of its competitors. There are numerous companies that compete with Chalk Media in various aspects of the Company’s business. They include the following companies: eLearning Companies • SmartForce • Digital Think • Skillsoft • Element K • NETg Consulting Companies • PriceWaterhouseCoopers • IBM - Mindspan • Accenture Advertising Agencies • Palmer Jarvis DDB • Satchi and Satchi • Avenue A • The Media • NineDots Web Development • Onyx • Blast Radius • Burntsand • The Agency Private & Confidential  2002 Chalk Media Service Corp. -7- Chalk Media Corp. 3. Business Description 3.1 Business Strategy Chalk Media’s objective is to become the leading provider of innovative solutions that use education to leverage organization’s learning and marketing objectives. The key elements of the Company’s strategy are: Focus on Creating Effective Content: As the learning industry matures and moves beyond the focus on technology, the need for quality content has become more apparent. Chalk Media is focused on creating high quality and effective content. The Company works with its clients to understand the most pressing business needs and address them using an innovative approach to create engaging, compelling and relevant learning experiences. Once Chalk Media has determined the business needs and the content that addresses those needs, the Company uses the most effective medium and technology to deliver and measure the results. Minimize the Amount of Required Technology: Chalk Media believes that over the past several years, most large organizations have made significant investment in new technologies, ranging from desktop applications to Enterprise Resource Planning and Customer Relationship Management applications. Where possible, Chalk Media utilizes existing applications to deliver its solutions to minimize the amount of new technology its customers require. The end result is that a larger proportion of a company’s learning budget is spent on content versus technology, providing customers with more value for their dollar. Translate Business Needs: Chalk Media’s team of Client Development Managers work with the Company’s clients to identify business needs. Once the need has been determined, an expert team of Business Strategists, Project Managers, Content Strategists and Instruction Designers work with the customer to set the objectives, project plan and measurements. The main areas of our focus are in: • • • Employee Solutions: Employee orientation, products training, customer service training, change management; Channel Solutions: Reseller and partner training, product training, lead generation and management, marketing campaign management; and Customer Solutions: Product and service tutorials, video e-mail campaigns, airline in-flight marketing, television commercials. Leverage the “Chalk” Brand: The reputation of the “Chalk” brand has grown significantly in Canada to the point where Chalk is a household name. The Company plans to continue efforts to syndicate the television show “Dave Chalk Computer Life” in additional national and international markets by directly selling syndication rights and by utilizing outside distribution companies. The “Chalk” brand is a trusted source of simple and easy-tounderstand information on technology and this recognition has helped the Company obtain Private & Confidential  2002 Chalk Media Service Corp. -8- Chalk Media Corp. contracts not only within the technology sector but also in other verticals in which businesses are looking for targeted messaging solutions. Geographic Focus: Chalk Media’s ability to provide excellent service requires a focus on the concentration of clients, key verticals and ability service them effectively. For these reasons, the Company primarily focuses on conducting business along the west coast of Canada and the U.S., as well as in central Canada and northeastern U.S. To service these markets, Chalk Media has offices in Vancouver, B.C. and Toronto, Ontario. Going forward, Chalk Media plans to concentrate more of its efforts on procuring business from the U.S. market, due to the higher profitability from that country. To achieve this, the Company plans to leverage its Canadian relationships with multi-national companies to get introductions to those companies’ U.S. headquarters. Target Key Verticals: Chalk Media originally focused primarily on the Technology vertical. However, the Company’s services and approach to creating, producing and delivering content lends itself seamlessly into working with other business verticals. In addition to the Technology vertical, Chalk Media focuses on Financial Services, Telecommunications and Real-Estate & Recreation. The Company plans to enter other verticals such as Automotive and Pharmaceuticals, both of which contain large budgets aimed at education and have services and products that require clarity and simplicity to be effective. Maintain and Grow Current Marquee Customer Base: Chalk Media has been successful in procuring and fulfilling contracts with numerous well-known and respected marquee accounts. These names include renowned and prominent entities such as: Microsoft, Royal Bank, Intrawest, TELUS, Verizon, Sony, Canon, Sega, Symantec, Hewlett Packard, Toshiba, D-Link, Microtek and many others. These customers have significantly increased the type and scale of projects with us over the last year. Re-Usable Intellectual Property: Chalk Media develops custom platforms and tools to deliver and measure the effectiveness of the content we create for our customers. One of the key strategies is to build these technologies and tools in a way that they can be re-used for other customers. In turn, Chalk Media maintains a robust internal library of components that can be deployed in creating a custom solution. This reduces the cost and time of development, improving margins and shortening the fulfillment cycle of our projects. Private & Confidential  2002 Chalk Media Service Corp. -9- Chalk Media Corp. 3.2 Chalk Media’s Solutions Chalk Media uses its expertise in making technical topics entertaining and easy-tounderstand to create content that helps the sales and consumer audience better understand the products that they are buying or selling. Without understandable information, customers are unable to make educated decisions and are likely to pass on purchasing products and services that may have been beneficial to their personal or business lives. Chalk Media uses its expertise to create messaging that reaches any audience, and explains products in a way that makes purchasing and using them a natural choice. These products can drive sales, generate additional up-sell opportunities and improve customer retention in ways that are completely measurable and cost-effective. The end result is higher sales and greater profitability all along a product’s sales cycle. In addition to Chalk Media’s corporate solutions, the Company also produces a television show, “Dave Chalk Computer Life”, aimed at educating consumers about new technologies. The show is a major branding initiative for the Company and has opened the door to several large accounts. 3.2.1 Learning Solutions Offering Chalk Media’s learning solutions offering includes: Online Learning Systems: Chalk Media’s streaming video tutorials and interactive demonstrations train and test sales representatives, merchandisers and channel partners about product features and functions. The solution enables maximum viewer retention, while ensuring that companies achieve faster time to market. Extensive reporting and tracking is available. Clients include: TELUS Mobility, Verizon and Playground (a division of Intrawest). Interactive Tutorials: Chalk Media creates engaging Flash animated presentations to assist companies to interact with customers on product and service information. By empowering customers with information that they want, when they want it, Chalk Media’s tutorials provide businesses with an engaging automated learning tool to lower customer service costs and increase online brand loyalty. Clients include: Royal Bank of Canada, Intel, Symantec and Intuit. Direct Marketing – Video Email: Chalk Media video email delivers video or Flash content to the inbox of consumers or sales representatives. Video email enables companies to establish and develop one-toone relationships with audiences on massive scale. Content is streamed from a javabased player that does not require plug-ins (i.e., Real Player, Windows Media). Rich Private & Confidential  2002 Chalk Media Service Corp. -10- Chalk Media Corp. media increases retention, click-throughs, conversion rates, and provides a way to track return-on-investment. Clients include: Sony of Canada, InFocus and Multiactive. In-Flight Television Promotion: Through its affiliation with Air Canada, Canada’s flagship carrier, Chalk Media is able to offer businesses the ability to have their products or services featured during its in-flight television programming. Frequent flyers are a powerful and captive audience that is made up of early adopters with above average education and income levels - an ideal audience for marketers to expose their messages to. Chalk Media’s custom in-flight program reaches 1.9 million passengers on a monthly basis. Clients include: Sony of Canada, Samsung Electronics and InFocus. Presentation Solutions: Chalk Media provides production services for in-store video presentations, client testimonials, and television commercials to enhance a company’s promotional efforts. Chalk Media’s expertise in creating high-quality video production and post-production provides companies with high-impact educational content that generates demand and awareness in a timely manner. Chalk Media creates presentations using HighDefinition video to enhance the learning experience, thus enabling businesses to differentiate themselves from their competitors. All video presentations are also offered on CD ROM and DVD format to allow flexible delivery and increased take-away value. Clients Include: Microsoft, D-Link, Crystal Decisions and Sony of Canada. Commercial Production: A growing number of leading technology manufacturers have engaged Chalk Media to develop the creative concept and production of commercials intended for television. Manufacturers understand that the Company can bridge the gap between the need for branding and the need to sell products in a simple manner. Clients also realize cost savings by bypassing their tradition ad agency model and going directly to Chalk Media or by dictating to their agencies that Chalk is the production provider. This is a new area of business for the Company, leveraging its current expertise in video and television production. Clients Include: Sony of Canada and D-Link. 3.2.2 Television and In-Flight Shows Chalk Media’s television presence, including the Air Canada in-flight programming, drives the Company’s brand. Chalk Media’s television shows, which have been produced since 1997, have positioned the Company as a trusted source of information on computers and technology. The current form of the television show, “Dave Chalk Computer Life”, helps position the Company as a unique entity with a growing brand with proven abilities in teaching people about technology. The show’s hallmark is the lifestyle approach it brings to technology. The hosts address themes like technology for the business traveller and educational tools for children. Private & Confidential  2002 Chalk Media Service Corp. -11- Chalk Media Corp. “Dave Chalk Computer Life” was ranked by TV Guide as one of the “50 Best Shows on TV” and the Globe and Mail newspaper has compared it to “Martha Stewart Living”. This association helps Chalk Media bring a human touch to technology. This is valuable for companies that struggle to teach their consumers or employees about their products, or are seeking brand differentiation. Chalk Media is developing new markets and demographics to ensure that the leverage the Company gets from its television audience in maintained and strengthened. For the 2003 season, Chalk Media has redesigned its show to be more technology and lifestyle focused. The show will be renamed “Dave Chalk: Connected.” Chalk Media is planning to deliver the new show in Canada and the U.S. The Company hopes that the Canadian show will be broadcast through one of the major national broadcasters, while the U.S. show will be launched in the third quarter of 2003 through the Public Broadcasting System. In addition, Chalk is actively developing a show targeted at children and women with the speciality program broadcasters. 3.2.3 Print Media Chalk Media is involved in various print media relationships that expand the Company’s brand to additional audiences. CanWest Interactive and Costco Canada provide vehicles for Chalk Media to further solidify its expert credibility to both end consumer and small and medium sized business owners. At the moment, Chalk Media’s media team is working to extend the reach of the Company’s print content. Publications, both on and offline, that target mobile professionals, women and children all fall within Chalk Media’s editorial strategy and is able to converge with the television operations. 3.3 Client Development and Marketing Strategy Chalk Media’s client development and marketing strategy includes the following elements: Direct Sales Approach: Chalk Media has an aggressive direct Client Development and Marketing Team focused on engaging our services to solve business challenges faced by its clients. Each Client Development Manager is focused on a industry and has developed expertise which allows them to understand and translate needs effectively. The Client Development Managers target an existing client base that can generate repeat business by leveraging existing relationships within specific departments to target various business spending pools. These relationships will also be leveraged to build relationships with other regional offices, such as those in the U.S. and Europe. A strong value proposition associated with the “Chalk” brand gives Chalk Media Client Development Managers instant credibility when meeting and building relationships with new accounts. The Marketing Team works closely with each Client Development Manager to ensure an integrated approach that supports Chalk Media’s revenue generation efforts and lead generation activities. Private & Confidential  2002 Chalk Media Service Corp. -12- Chalk Media Corp. Public Relations Activities: Chalk Media’s public relations strategy focuses around generating awareness about the Company’s successes in each of its target verticals and solutions set. Media coverage, interviews and speaking opportunities are integrated into a lead generation strategy. Industry Partners: Chalk Media’s marketing activities revolve around its strong relationships with leading industry and professional associations. The Company leverages its partnerships as a method to generate awareness for both Chalk Media and its key people to establish expert credibility and market leadership to strategic, targeted audiences (e.g., OSTD, ASTD, NewMediaBC, IAB Canada, AIMS and eLearning Alliance). Branding Partners: Chalk Media has built relationships with several strategic partners to grow company awareness and to showcase the Company’s brand. These partners provide credibility to Chalk Media’s expert status and provide excellent venues to showcase the Chalk brand (e.g., CanWest Interactive and Costco Canada). Technology Partners: Chalk Media keeps current on the latest rich media delivery and creation technologies used in the market and will work to partner with the creators of such technologies (e.g., Speedera, Macromedia and Microsoft). Business Partners: Chalk Media plans to build relationships with learning industry leaders in order to complete their product offerings and facilitate future sales (e.g., Polar Bear, ,Sun Micro, Porter Novelli and Outstart ). Reseller & Affiliate Partners: Chalk Media’s reseller initiatives are aimed at developing relationships with key partners such as advertising agencies, distributors and retailers who currently have access to businesses and niches beyond the reach of the Company’s internal sales force. Affiliates will market, promote and solicit orders for Chalk Media’s solutions and earn fees for their efforts (e.g., Hale! Marketing, Yes Interactive). 3.3.1 Client Development Manager Deployment Chalk has developed a Client Development Manger deployment strategy in order to maximize its sales revenue. This deployment is based on several key target verticals within specific regions. Key Industry Verticals: Technology – Chalk Media has traditionally worked in the technology space and the majority of the Company’s contracts are within this vertical. Financial Services – the Financial Services Industry is a high priority market sector for Chalk Media because it has a proven need for the Company’s offerings. These institutions have large budgets and the need to build product awareness with their employees and customers. This industry consists of chartered banks, trust companies, credit unions, investment firms, and general insurance companies. Private & Confidential  2002 Chalk Media Service Corp. -13- Chalk Media Corp. Telecommunications – the Telecommunications industry is a high priority market sector for Chalk Media because it is an early adopter of enabling technologies, like online learning, in general. It has well-established budgets for both training and marketing, and the need to provide product and technology training to a large and distributed sales force. This industry consists of national and regional providers of telephone, data, wireless services and telecommunications equipment. Real Estate & Recreation – the Real Estate & Recreation industry is evolving from transaction based selling to that of trusted advisors. There is an emotional appeal to the end customers that are looking for a lifestyle choice or to make a decision on where they will spend their vacation dollars. Chalk Media’s content is very compelling for these organizations that want to create new markets and to segment markets to get the most return on the relationships. This marketplace consists of Destination Management Organizations, resort developers and resort operators. As Chalk Media continues to grow and refine its strategy, the Company is researching and developing plans to target other verticals such as Automotive and Pharmaceuticals. Geographic Regions: In order to maximize the efficient deployment of the sales team, Client Development Managers have been allocated specific regions and cities. These areas have been specified on the basis of containing high densities of businesses within Chalk Media’s three main target verticals. Toronto and Central Canada California Western Canada and Pacific North West (U.S.) Eastern U.S. Currently Chalk Media’s sales offices are located in Toronto and Vancouver. 3.3.2 Value Proposition Chalk Media believes that its long-term success depends on the Company’s ability to have customers recognize the effectiveness of Chalk Media’s proven approach to achieving business goals. Building on the Company’s core competency of creating timely, relevant custom content that engages audiences to learn, Chalk Media’s collaborative approach maximizes the impact and return-on-investment for its clients. Chalk Media’s approach also provides businesses with a team of dedicated professionals that are responsive and proactive in building long-term relationships with clients. Add this to the Company’s intimate understanding of the sales process, from distributors down to end-consumers, Chalk Media’s offering provides businesses with proven strategies to generate revenue, increasing efficiencies and strengthening their relationships. This value proposition has been proven in Chalk Media’ client base of blue chip companies. Private & Confidential  2002 Chalk Media Service Corp. -14- Chalk Media Corp. Chalk Media believes there are a number of factors why organizations choose the Company over its competitors. These factors include: Working with the Chalk brand; Ability to provide easy-to-understand, simple and targeted messaging and content; Effective, proven approach to solutions; Dedicated team of experts that work collaboratively with clients to ensure business results are achieved; Easily measurable return-on-investment; Project delivery that is fast, efficient and easy to implement; Solutions are custom created for each client and project; and Proven record with large marquee accounts provides comfort for new customers. Private & Confidential  2002 Chalk Media Service Corp. -15- Chalk Media Corp. 3.4 Clients & Partners Chalk Media currently works with leading global organizations to make learning a part of everyday business. Although the Company is deeply rooted in the technology sector, Chalk Media’s solutions easily lend themselves to be used in various business verticals and this has led to contracts in the Financial Services Industry, Telecommunications and Real Estate & Recreation sectors. Private & Confidential  2002 Chalk Media Service Corp. -16- Chalk Media Corp. 4. Management Team W. Grant Sutherland, Director, Chairman: Mr. Sutherland has been in his role at Chalk since September 2001. Mr. Sutherland has been a director and chairman of several public companies. Mr. Sutherland is a licensed lawyer in the Province of British Columbia, and has been engaged in the private practice of corporate law for 26 years. Mr. Sutherland is a partner in the law firm Sutherland Johnston, but currently devotes the majority of his time to Chalk Media’s affairs. David Chalk, Founder and Director: Mr. Chalk has over 15 years of experience in the computer industry. He was the founder and CEO of Doppler Computer Superstores, a computer retail business. In 1995, Mr. Chalk created “Dave Chalk's Computer Show”, which became one of the first television programs to be regularly broadcast on the Internet. Mr. Chalk is involved in the strategic management of the Company and is the key creative force and leading performer behind the Company's video productions. The Retail Council of Canada honoured Mr. Chalk as the outstanding retailer of the year in 1996. Christopher Chong, Chief Executive Officer: Mr. Chong has more than 18 years of experience in the information technology industry. He brings to Chalk Media an extensive background in complex sales management and market development at companies such as Ingram Micro and Stormix Technologies. Some of Mr. Chong’s past accomplishments include introducing a Linux operating system into three key markets - North America, Europe, and Asia - as well as launching one of Canada's first content portals. Mr. Chong comes to Chalk Media from Blast Radius, a leading Internet solutions provider for Fortune 500 companies, where he served as Director, Business Development. During his tenure at Blast Radius, he was responsible for developing strategic relationships with a number of leading global organizations. Mike Agerbo, Director, Co-Founder and Chief Creative Officer: Mr. Agerbo has been with the Chalk Group since 1997. From 1992 to 1996, he worked at Doppler Computer Superstores as Director of Marketing. In 1996, Axion Internet, a Vancouver-based ISP recruited Mr. Agerbo to be their Vice President of Business Development. During late 1996, he played a key role in developing a spin-off company, IGN, a company focused on Internet gaming. In 1997, Mr. Agerbo joined Chalk Media. In addition to his role as a Director and co-host of the television series, he is responsible for the creative direction of both traditional and new media. Mr. Agerbo also spearheads television distribution initiatives. Private & Confidential  2002 Chalk Media Service Corp. -17- Chalk Media Corp. Stewart Walchli, CA, Director and Chief Financial Officer: Mr. Walchli joined Chalk Media in November 2001. Prior to joining Chalk, Mr. Walchli was the CFO of Sideware Systems Inc., a Toronto Stock Exchange and OTC Bulletin Board listed company that sold electronic-customer relationship management software. Prior to joining Sideware, Mr. Walchli was an investment banker for CIBC World Markets, focusing on technology companies, particularly in the Internet and e-commerce space. Prior to CIBC World Markets, Mr. Walchli worked in the Corporate Finance and Financial Assurance Groups at KPMG where he earned his Chartered Accountant’s designation. Dana Johl, Director of Production: Dana Johl is the Producer and Director of the syndicated television show, “Dave Chalk Computer Life.” Ms. Johl has over seven years in production working for high profile production companies, such as Alliance Atlantis. She has produced video segments and commercials for many high profiled clients including Microsoft, Sony and Intel, as well as multimedia and on-line projects for TELUS, The Royal Bank and Verizon. Mario Angers, Director of Applications Development: Mr. Angers has over twelve years of experience in the technology industry including the design, development, implementation, delivery and support of many enterprise class solutions. As Director of Application Development, he is leading the Company's development efforts, managing the technology organization and playing a critical role in building the strategic vision for developing and implementing initiatives that create and maintain leadership within a constantly changing and intensely competitive marketplace. Mr. Angers has a demonstrated ability to translate industry foresight into technical and solution reality. Steve Kim, Director of Marketing: Steve Kim first joined Chalk Media in March 2000 as a Business Development Manager for the Company’s in-flight television division, where he played an integral role in developing the Company’s airline partnerships. In November 2001, Mr. Kim moved into the role of Director of Marketing and currently overseas the marketing and communication functions for the organization. Prior to joining Chalk Media, Mr. Kim was the Overseas Marketing Manager for INDI Systems, a Korea-based Internet solutions company, where he helped establish the company’s entry into the U.S. marketplace. In 1997, he co-founded Stratton Ventures, one of Korea’s first venture capital intermediaries, which specialized in bringing foreign private investment to domestic high-tech companies. Private & Confidential  2002 Chalk Media Service Corp. -18- Chalk Media Corp. 5. Customer Testimonials “These results were threefold greater than what we expected. Email continues to be people’s favourite online activity, and Chalk Media’s combination of video, sound and animation provided an engaging experience for this online audience. In a time when people’s inboxes are flooded, it says something when you can entice people to watch more than once. Chalk Media’s product demonstrations provided something of value to these people.” Andrew Dorcas Product Manager, Sony Canada "In striving to become one of the greatest sales organization stories of our generation Playground relies heavily on Chalk Media to translate innovative ideas and approaches into practical tools and educational content that help deepen the value of our Branded Way of Selling. With Chalk Media’s help we are able to engage our entire sales force in an ongoing and engaging sales improvement dialogue. They are capable partners with disciplined project management and they have a knack for extracting our needs and delivering what we expect!" W. Scott Brown Vice President, Sales and Marketing Innovation, Playground Real Estate, a Division of Intrawest “Chalk Media’s vignettes will allow consumers to preview the new operating system in a way that is entertaining and easy to understand. Consumers have an opportunity to familiarize themselves with the technology before they buy.” Susan Sharp, Senior Communications Manager, Microsoft Canada “Our relationship with Chalk Media has served to enhance the Intel brand and provide added value to our Intel Home Computing readers.” Doug Cooper, Country Manager, Intel Canada “Distribution partners and resellers receive a tremendous amount of email, so we were interested in utilizing a new, compelling vehicle to communicate our product information. By incorporating video into this campaign, Chalk Media’s direct marketing solution allowed us to showcase our LP130 and LP350 projectors in an engaging message that truly reinforced the most important selling points. Having worked with Chalk Media in the past, we know that their content works well to educate an audience about products, so it was a natural decision to utilize their video email solution to deliver this promotional campaign.” Mike Shiiki, Manager of Channel Programs, PC Distribution and Mobile Products for InFocus Private & Confidential  2002 Chalk Media Service Corp. -19- Chalk Media Corp. 6. Contact Information Chalk Media Offices: Chalk Media Corporate Head Office 4400 Dominion Street, Suite 280 Burnaby, British Columbia Canada V5G 4G3 Telephone: (604) 684-9399 Fax: (604) 684-0326 Chalk Media Toronto Office 489 King Street West, Suite 300 Toronto, Ontario Canada M5V 1K4 Telephone: (416) 260-1770 Fax: (416) 260-2501 Chalk Media Investor Contacts: Stewart Walchli, CA, Chief Financial Officer Telephone: (416) 260-0644 email: stewart@chalk.com Grant Sutherland, Chairman & President Telephone: (604) 688-0047 email: grant@chalk.com Private & Confidential  2002 Chalk Media Service Corp. -20-