SaleSeeker

SALEseeker.com Business Plan 11/15/99 14 South Church Street West Chester, PA 19382 610-344-3600 http://www.SALEseeker.com Contact: Wayne Bullock wbuilock@SALEseeker.com NOTE. This business plan is confidential and contains proprietary information. Neither the plan nor any of the information may be reproduced or disclosed to any person or business entity without the express written permission of SALEseeker. com. These materials are not intended to constitute an offer of solicitation for investment. These materials are for information purposes only regarding the existing business and the business plan of SALEseeker. Confidential Page 1 SALEseeker.com Table of Contents 1. Executive Summary 2. Business Description Industry The Company Positioning Pricing 3. The Market Consumers Market Size / Trends Competition 4. Development Development Process 5. Sales, Distribution & Marketing Ad Sales & Sales Plan Distribution Marketing 6. Management Team Management Ownership 7. Funding / Exit Plan 8. Financials Profit & Loss Projections Pages 3-4 Pages 5-7 Page 7-8 Pages 9-10 Pages 11-15 Page 16-17 Page 18 Page 19-20 Confidential Page 2 1. Executive Summary SALEseeker.com (http://www.SALEseeker.com) is an online direct marketing company that publishes and e-mails merchant sales and specials to shoppers. Shoppers can easily find sales & specials by searching online and, also be automatically notified every week by e-mail. Over 50,000 shoppers have registered to receive Sales Alert e-mails, each personalized to a shopper's favorite categories and geographic area. SALEseeker benefits shoppers, merchants and affiliates: • Shoppers ...... receive the latest offers from local merchants, online stores and catalogs for free. • Merchants...receive free promotion and advertising options to drive shoppers to their stores. • Affiliates ..... can private-label SALEseeker without cost, gaining ad revenues & appealing content Wayne Bullock, SALEseeker's founder and CEO, has extensive cable TV advertising and promotion experience. In the 80's, he was the start-up CEO for Cable AdNet, a regional cable TV advertising company that operated in Philadelphia, San Francisco, St. Louis, Pittsburgh, Charlotte, and other markets, primarily selling cable TV advertising (ESPN, CNN, USA, MTV, etc.) to small and regional merchants. After Cable AdNet, he was the start-up CEO for StarNet, a satellite-delivered programming promotion service for cable TV networks. A large revenue opportunity exists ............. SALEseeker has the potential to generate e-mail advertising revenues exceeding $100 million annually for each 5 million shoppers that opt to receive Sales Alert e-mails. Gross profit margins of 40% are projected. Internet portals, media sites, web publishers and affiliates can generate new ad revenues by offering their own private label version of SALEseeker and Sales Alert e-mail to their shoppers and merchants. Affiliates have the option to sell advertising in-house and retain 70% of the revenue, or have SALEseeker sell it for them and receive 40% of the revenue. Launched in March 1999, the company currently has over 1800 registered merchants and over 100 active advertisers as it seeks to be the #1 Internet Source for Sales and Specials. SALEseeker contains... • 26 shopping categories, 500 product selections and more than 60,000 store locations. • Leading retailers include Nordstrom, Circuit City, CDNOW, Bluefly, Outpost, Furniture.corn, Jeweler.com, Gap, Sears, JC Penney, RadioShack, Etoys, CarParts.com, Rubbermaid, KB Toys, Hanover Direct, Kmart, Service Merchandise, Eddie Bauer, J. Crew, Amazon, PetsMart, etc. SALEseeker empowers all merchants, by offering a promotional platform where merchants, large and small, online and brick & mortar, can register and list their sales & specials for free via the Internet. Merchants can also efficiently target and reach interested shoppers with weekly e-mail ad packages as low as $ 99 and $ 5 cost per thousand. SALEseeker's e-mail advertising has proven to be very effective delivering click-through percentages of up to 7%. Confidential Page 3 Market: eMarketer predicts that web ad spending in the U.S. will reach $8 billion by 2002 with vast numbers of small and medium-sized businesses advertising on the internet, using the web as a highly targeted branding, marketing and direct response tool. Co-brand / Private Label Affiliate Status: • Lycos Shopping -- co-brand site agreement executed and launched - 1 portal • MyCoupons.com -- private label agreement executed and launched - 1 site • Knight-Ridder Real Cities -- co-brand affiliate agreement executed - 30 sites • CitySearch interest- city guides being discussed- 77 sites • ShopNow.com interest - review and decision in 1st quarter - 1 shopping portal • 9,000 media sites (newspapers, radio, TV, city guides) are online Competition: • SALEseeker has competitors, but none that offer a comprehensive source for sales and specials across all shopping venues; local, online & catalogs. • ShoppingList.com, focusing on sales at local stores only, has received venture funding from Brentwood Ventures. Unique Selling Proposition: • Affiliate web sites can private-label SALEseeker without cost and generate new ad revenues, while enhancing their local shopping content for their shoppers and merchants. Barrier to Entry: • SALEseeker will seek exclusive agreements as the only outside provider of sales content. Investment Rationale: • Proliferation of web sites raises the value of e-commerce companies that can drive traffic to sites. Funding / Exit: • Wayne Bullock, 100% owner of Bullock Comm. Group, has provided seed and startup funding. • The company is seeking $2 million in first round funding to expand and grow SALEseeker.com. • Within 2 years, the company will either file for a public offering or be a strong takeover candidate. Confidential Page4 2. Business Description Industry IDC predicts Internet usage and e-commerce sales to explode. By the end of the year, IDC expects Internet users to grow 28% to 147 million people with over 1 billion online by 2005. Two out of every three users will be online for the first time in 2002. According to a recent CommerceNet survey, 60 percent of Internet users, or 55 million people, regularly shop online, although "shopping" often meant "'window shopping," with actual purchases made offiine. Average Internet Usage for October, 1999 Nielsen//NetRatings Average Time Spent per Month 7:04 Average Time Spent per Session 0:26 Active Internet Universe 55 million Total Internet Universe Estimate 114 million The Online Direct Marketing Opportunity According to the Direct Marketing Association, advertising expenditures in the United States totaled approximately $285.2 billion in 1998, of which approximately $162.7 billion or 57% was spent on direct marketing and 43% on brand advertising. Traditional advertisers and direct marketers face numerous challenges, primarily the inability to accurately target consumers, resulting in low return on advertising investments. While the Internet offers advertisers a number of advantages over traditional media, there remain significant challenges to realizing the full potential of online advertising. Response rates, or click through rates, for the top banner advertisements averaged just under 0.6% during the month of September 1999, as reported by The Nielsen//NetRatings Reporter. As a result of the limitations in both online advertising and direct marketing, businesses continue to seek more effective approaches to deliver highly-targeted advertisements in a more personalized and content-rich editorial environment from which advertisers receive real-time feedback. Early Year Advertising Comparison Third-Year Y/Y Revenue Growth %: • • • Internet advertising Broadcast TV advertising Cable TV advertising 240% 188% 120% Internet Advertising Bureau Page5 Sources: PriceWaterhouseCoopers, Confidential According to a Web Advertising Report, June 1999, Mary Meeker of Morgan Stanley Dean Witter Technology states: The Internet May Be The Ultimate One-To-One Marketing Tool The Internet has the potential to be the most efficient direct-marketing tool yet seen. Companies can target and deliver directed messages to an audience with specific demographics and interests. They can also collect, track, analyze, and market to consumer behavior/buying patterns. First medium where advertising may be converted to transactions in band with direct access to the point of sale. All in, the cost of online advertising/marketing is roughly comparable to, if not better than, the cost of direct mail. • • • • • The Company SALEseeker.com is an online direct marketing company that publishes and e-mails merchant sales and specials to shoppers. Shoppers can easily find sales & specials by searching online and, also be automatically notified every week by e-mail. Over 50,000 shoppers have registered to receive Sales Alert e-mails, each personalized to a shopper's favorite categories and geographic area. SALEseeker benefits shoppers, merchants and affiliates: • Shoppers ...... receive the latest offers from local merchants, online stores and catalogs for free. • Merchants...receive free promotion and advertising options to drive shoppers to their stores. • Affiliates ..... can private-label SALEseeker without cost, gaining ad revenues & appealing content SALEseeker's mission is to provide consumers and merchants with the most convenient single source of sales, specials and money saving offers from local merchants, online stores and catalogs. SALEseeker's goal is to attract and direct millions of consumers who look for savings before they buy. SALEseeker was conceived in May 1998, the URL domain name was registered on June 12, 1998 and a service and trademark application was submitted July 1, 1998. SALEseeker's revenue will be generated from advertising sales and e-commerce commissions: • • • • • Email ad revenue from SALEseeker site Banner ad revenue from SALEseeker site Banner ad revenue sharing from affiliates Email ad revenue sharing from affiliates E-commerce commissions Confidential Page6 Positioning SALEseeker is positioned as a free shopping resource that helps shoppers find great sales & specials. SALEseeker lists sales and specials in a convenient and organized format, across all shopping venues; local stores, online stores and catalogs. By entering a zip code and selecting a merchandise category, shoppers can locate sales & specials being offered in their area. In addition, shoppers can register to receive Sale Alert emails, conveniently notifying shoppers of sales and specials in their favorite shopping categories. Pricing SALEseeker.com is a free online service for consumers and merchants. The business model is based on the Internet's culture of providing free access to participants. This approach enables the company to secure the best content by building an open and unbiased source for Sales & Specials. The company believes that advertising revenue opportunities greatly exceed potential revenues from consumer usage fees or merchant listing fees. 3. The Market Consumers SALEseeker attracts and targets price-conscious shoppers, primarily women, who want to save money when shopping by not paying full price for merchandise and services. Women are the primary consumer in about 85 percent of U.S. households, make up about 50 percent of the people on the Internet today and are the fastest-growing category of Internet users. "Just to let you know - the information that you provide on local sales has kept me busy and well stocked! Eventually, on the next "slow sale week" in this area, I'll seriously shop online. Don't you dare stop sending all of this? Barb Vann-4/19/99 email" Market Size / Trends • Active Internet Universe • Internet Universe Estimate • Total online shoppers • Total online buyers • Women online shoppers 61 million 114 million 55 million 28 million 46% Nielsen/NetRatings May 99 Nielsen/NetRatings Oct 99 CommerceNet/Nielsen June 99 CommerceNet/Nielsen June 99 CommerceNet/NielsenJune99 eMarketer projects that global web ad spending will reach $16 billion by 2002 and $8 billion in the U.S, 3.4% of the total. In 1998, U.S. ad spending online more than doubled to $1.5 billion, with $2.6 billion projected for 1999. Confidential Page7 Competition SALEseeker.com has competitors, but none that offer a broad, central source for sales and specials across all store types. An organized and convenient source for sales and specials across all store types does not exist. Many sites offer categorized bargains and promotional offers, however they are mainly restricted to online merchants, ignoring the shopper's need to research unbiased sources that incorporates all shopping venues. Promotional sale advertising is delivered on a "catch them if you can" basis via radio, television and direct mail. Newspapers, circulars and inserts are today's primary source for sales and specials, however they are not conveniently organized for time-pressed consumers. Review and comparison: • SalesCireular.eomSales at local stores only Allows you to choose your state to compare prices and features for all weekly sales. Not very localized and only has large chains like Kmart. Emphasizes that shoppers should compare products and prices; its more like BottomDollar (price comparison) for big chains. • ShoppingList.com Sales at local stores only They emphasize that they list SALES, however stores like Home Depot, Wal-Mart, etc. do not have sales, they only advertise EVERYDAY pricing. Also does not allow local merchants (Morn and Pop) to be included with the listing. ShoppingList.com has received $ 6 million in venture funding from Brentwood VC. NeverMissaSale.com Sales at localstoresplus Main focus is car rental companies, includes a few airlines, and a couple national chains. Not broad based- Does not even have Kmart. Realmalls.com Sales at malls only Focuses on 30 Markets and only lists Sales for stores that are within a Mall. CoolSavings.com Coupons & specials Requires registration-Coupon based on their technology-All advertisers StyleShop.com Fashion & major city focus Focus on Cities-Not great local info - StyleShop Cities are localized City Guides with shopping tips, fashion features, store guides, and then some sales events It seems that their main focus is Fashion. BargainDog.com Online Specials by categoryNo sales emphasis; Promotes products for affiliates or advertising relationships • • • • • Confidential Page8 4. Development Development Status A beta test web site for SALEseeker.com (http://www.SALEseeker.com) launched October 15, 1998 and accepted shopper email registration and merchant registration for the initial 9 merchandise categories: Children's Fashions & Accessories, Children's Shoes, Home Furnishings & Furniture, Housewares, Jewelry, Men's Fashions & Accessories, Men's Shoes, Women's Fashions & Accessories, and Women's Shoes. The redesigned web site including a searchable database launched February 10th, 1999. The site design and development was outsourced to Next Solutions of McLean, Virginia and hosted by Next Hosting. Beginning in April, the company began positioning towards the internal capability to develop, program and maintain systems with company personnel in order to increase control and reduce costs, and to only outsource hosting of co-located servers. Categories were expanded to 26 in mid-May. As of October, registration exceeds 50,000 shoppers and 1,800 merchants including Nordstrom, The Company Store, Bugle Boy, Krups, Rubbermaid, Service Merchandise and Hanover Direct. Currently, SALEseeker editorially covers sales and specials being offered by leading national and regional retailers, covering over 60,000 stores in total. Process-Shoppers SALEseeker's search process allows shoppers to easily find sales and specials. It works like this: 1) Shoppers select a shopping category from a list of 26 (see below), enter their Zip Code and press Go. 2) Shoppers then find the specific category they are interested in (pants, shirts) and click on the type of store they prefer to shop (Local, Catalog, Online) 3) SALEseeker then displays a summary of stores with specific descriptions of current sales and specials, based on the shopper's preferences. Local stores are within a 20-mile radius. 4) Shoppers can click on stores of interest for an entire category listing of sales and specials. 5) Shoppers have the option to list area store locations, order catalog or to link immediately to the stores web site. Planned improvements include: • Merchant site link to be available next to the sale description. • Enable shoppers to search by store, brand and sales events • Develop My SALEseeker displaying only sales & specials at favorite stores Confidential Page9 Process-Merchants Merchants register at no cost and list each of their sales and specials by date range with a 30 word description of the brands and the styles, the specific savings and the store locationslocal, online or catalog the sales or specials are being offered. Merchant listings are displayed on the start date and continue through the end date, a maximum of 30 days. Each sale entry must be approved before posting; unsatisfactory descriptions are rejected and the merchant is notified to improve and modify as necessary. After entering a sale, the merchant is emailed a confirmation and the option to advertise. Just prior to the expiration, the merchant is notified by email to remind them to enter more sales & specials. Unlike other mediums, the capability exists for merchant to control and flexibly change sales and specials by store, as they prefer, without the usual production delays. SALEseeker empowers merchants by offering a promotion platform where they can register and list their sales & specials for free via the Internet. Merchants can efficiently target and reach interested consumers at reasonable rates with weekly e-mail ad packages as low as $ 99 and $ 5 cost per thousand, providing a low-cost advertising solution for all merchants that need to drive traffic to their stores. Merchant Benefits • Merchants can reach internet shoppers who are looking for sales... • Merchants have the opportunity to drive internet shoppers into their stores... • Merchants list their sales events and specials for FREE... • Merchants can offer shoppers exclusive sales & specials as further incentive... • Merchants can target those shoppers located within driving distance of their stores. Content SALEseeker.com gathers its content from two different sources. 1. From participating stores and merchants, who list their sales and specials for free by submitting their information directly into SALEseeker online, or in the future, by fax. 2. From our in-house team, who edit & enter sales and specials for 200 regional and national chains, and catalogs, published on the internet, in regional newspapers and catalogs Shopping Categories (26): Appliances-Large Appliances-Small Automotive Books Clothing & Access.-Baby Clothing & Access.-Children's Clothing & Access.-Men's Clothing & Access.-Women's Computers Electronics Food & Drink Furniture Gifts, Flowers & Collectibles Health & Beauty Home & Garden Home Furnishings Housewares Jewelry Music Shoes/Footwear-Children's Shoes/Footwear-Men's Shoes/Footwear-Women's Sports & Fitness Toys, Games & Hobbies Travel Video Confidential Page 10 5. Sales, Distribution, and Marketing Advertising Sales Potential SALEseeker's email ad revenue will eventually surpass $100 million annually, based on the following assumptions: • 5 million shoppers register for weekly e-mail • shoppers select an average of 10 shopping categories • 50 million category e-mails weekly • 5 ads per category are sold weekly at $10 cpm average • generates revenues of $.05 per email X 50 million weekly • each shopper represents $26 in ad revenues per annum • 5 million shoppers potentially generates $130 million annually • gross profit margins are expected to average 40%. Direct e-mail advertising is a low-cost method to reach interested shoppers and can be packaged geographically to fit the merchant need. SALEseeker's e-mail cost ranges from $.005 - $.04 per shopper with ad programs costing as low as $ 99 per week, $5 cost per thousand and $ .25 on a cost-per-click performance basis. Shoppers can link immediately from the email to the advertisers web site or sale page. SALEseeker's e-mail advertising has generated click-through response of up to 7 %. Upside for Internet Advertising 1998 U.S. Spending per Household for Various Media Medium 1998E Advertising Spending ($MM) $44,270 $39,480 $14,704 $ 8,619 $ 1,900 $109,023 $ 21,805 # of Household Users (MM) 60 100 99 65 50 374 75 Advertising Spending/Household $738 $395 $149 $133 $ 38 $1,453 $ 291 Newspapers Broadcast TV Radio Cable Internet/Online Total Average Sources: Morgan Stanley Dean Witter, McCann-Erickson, Newspaper Association, Wilkofsky Gruen Associates, Jupiter Communications Confidential Page 11 Web Advertising is Growing More Rapidly Than Other Media U.S. Media Advertising and Direct Marketing Revenue ($B) 1998E Media Advertising Television Newspapers Radio Yellow Pages Magazines Outdoor Business Publications Ilnternet Farm Publications Direct Marketing Direct Telephone Direct Mail Total Source: Morgan Stanley Dean Witter $141 B 48 44 15 12 10 4 5 2 0.3 102 63 40 $243 B Y/Y Growth 8% 8 6 9 5 6 8 11 102[ 6 8 8 8 8% E-mail: E-mail will be SALEseeker's primary ad revenue source. Here's why email will work so well: • Better targeting Individual shoppers have registered to receive the email (opt-in) and are targeted by geography and shopping interests. • Better communication Email provides the space to tell your story, and HTML email allows even greater communication quality, including graphics, unique fonts, and hyperlinks. • Undivided attention Email requires the consumer's full attention and, if received from a welcome source, occurs in a positive context, capturing greater mindshare and generating higher conversion rates. • Low cost Direct mail costs range from $ .25 - $1.00 per consumer. Direct coupon mailers (Val-Pak) cost local merchants $.06 per household, $600 per 10,000 mailed, versus SALEseeker's $.005 to $.04 cost per interested shopper. Confidential Page 12 Sales Plan SALEseeker.com offers an ideal advertising environment where the ads match the content. Advertising on SALEseeker will be offered to merchants by shopping category. Email ad rates range from as low as $ 5 cost per thousand (cpm), up to $ 40 cost per thousand (cpm) depending on ad position. Direct email advertising will be packaged for small web merchants in $ 99 weekly packages, distributing a total of 10,000 emails at $10 cpm, and to local merchants distributing a total of 5,000 emails at $20 cpm. Offered on a rotational basis, this ad package strategy enables small merchants to continuously drive traffic to their stores at very affordable rates. Regional and local ad programs will offer category targeting by market in the 205 Nielsen regional DMA markets and as SALEseeker grows, by smaller Area Zones in large markets, similar to the advertising programs offered by Yellow Pages, cable TV and coupon mailers. SALEseeker's ad sales strategy is based on conducting email, fax and telephone sales efforts via one sales center employing computer automation to speed the sales process wherever feasible. Sales to small merchants depend on affordable programs utilizing credit card billing. Large merchants, after establishing credit worthiness, will be invoiced net 30. Account managers will be compensated with a base salary plus sales commission. Merchant lead generation will be accomplished by continually offering free listing of sales and specials on the growing affiliate network. Advertising will automatically be offered to participating merchants when they list their Sales & Specials each month via an automated e-mail reply confirmation. Distribution Strategy Internet portals, media sites and web publishers can generate new ad revenues by offering their own private label version of SALEseeker and Sales Alert to their shoppers. SALEseeker will offer customized versions to accommodate individual publishers' needs. Business development and affiliation efforts: • Build affiliate network of web sites offering SALEseeker on a private label basis. • Web site agrees to promote shopper email sign-up and merchant participation. • Deliver private label shopper e-mail containing local sales • Share ad revenue with web site depending on who sells the ad Rationale: • • • • Internet's growing need for interesting local content Enable portals, city guides, media and other web publishers to increase advertising revenues Enhance a site's usefulness and utility while improving stickiness Email drives users back to a publisher's site, increasing their page views As the affiliate network grows, merchant sale listings and response will increase due to the resulting growth in shopper reach. Confidential Page 13 Affiliate Revenue Share: • Affiliate retains 70% of net revenues and SALEseeker receives 30%, when affiliate sells the ads. • Affiliate receives 40°/'0of net revenues and SALEseeker retains 60%, when SALEseeker sells the ads Co-brand / Private Label Affiliate Status: • • • • • • Lycos Shopping -- co-brand site agreement executed and launched- 1 portal MyCoupons.com -- private label agreement executed and launched - 1 site Knight-Ridder Real Cities -- co-brand affiliate agreement executed - 30 sites CitySearch interest - city guides being discussed - 77 sites ShopNow.com interest - review and decision in 1st quarter - shopping portal 9,000 media sites (newspapers, radio, TV, city guides) are online SALEseeker offers appealing content for Internet portals, media publishers and regional and local web sites looking to enhance their content offering for their members or visitors, while incurring no expense and gaining new revenue opportunities. Affiliation efforts will initially focus on portals and their need for local ad sales to increase their total ad revenues. The first affiliate agreement was executed in April 99 with Lycos Networks. SALEseeker provides co-branded content to be displayed as Sales & Specials on LYCOShop, launched June 29th,in exchange for distribution and a 30% share of incremental banner revenues that Lycos sells. The current # of media web sites are: • Radio 2042 • • • • Newspapers Television Magazines City Guides 2237 1311 3809 301 9700 media sites online Total Future Plans: SALEseeker will explore distribution via other media such as mobile wireless access, interactive television, and commercials on demand plus emerging digital services. • Upgrade site to include product photos, eventually commercials via streaming media. • Upgrade site to include direct links to online stores' sale page to provide immediate access. • Enhance personalization via MySALEseeker.com; • Launch SALESandSPECIALS.com Confidential Page 14 1999 Advertising & Marketing Public Relations Internet Affiliate Retail / Consumer 19,000 75,000 10,000 23,000 $127,000 2000 36,000 1,200,000 240,000 60,000 $1,536,000 2001 90,000 2,100,000 1,680,000 1,130,000 5,000,000 Makela Public Relations has been retained to create a press kit and to implement press releases. These will include mainly Internet and retail trade releases in order to build publisher and merchant participation. The plan is to market to primarily female shoppers and build e-mail registration. Recent e-mail marketing to coupon shoppers produced excellent results, achieving 4% click-through with 70% of those registering. Shopper email registration is generally projected to achieve 50% conversion of click-throughs on various shopping sites including Free Forum/Venture Direct, Lifeminders, FreeShop, plus others. The plan anticipates incurring marketing expenses averaging $1.00 for each shopper e-mail registration. Marketing and agency consultants will be engaged to strategize, create, and implement all marketing efforts. Confidential Page 15 6. Management Team Wayne Bullock- President/CEO Wayne Bullock has an extensive background as an entrepreneur in the cable television and in-store media fields in developing and implementing electronic solutions for advertising and promotion needs. • He is the former president of ShelfSpot, which in 1993 pioneered audio advertising at the shelf, positioning it as a new in-store medium for delivering product information to shoppers at the point-of-purchase. • He is the former president and chief executive officer of StarNet, the satellite-delivered cable promotion service owned by Lenfest Communications, Inc. In 1988, the StarNet team developed a solution for providing the cable television industry with tune-in promotion that was automatically inserted and tagged with system-specific identification. StarNet reached positive cash flow in 3 years by selling tune-in promotion to cable networks, including HBO, Disney, USA and ESPN, reaching a network of 20 million cable television households. • He is the former president and chief executive officer of Cable AdNet, a cable TV regional advertising company, owned by Lenfest Communications, Inc. In 1982, Mr. Bullock co-founded and developed one of the first cable advertising interconnects based on systemspecific insertion of local commercials. Cable AdNet operated in Philadelphia, San Francisco, St. Louis, Pittsburgh, Charlotte, and other markets, primarily selling cable TV advertising (ESPN, CNN, USA, MTV, etc.) to small and regional merchants. Annual billings exceeded $50 million in 1990. • In 1990, he sold his interests in both Cable AdNet and StarNet to Lenfest Communications, Inc., which eventually sold Cable AdNet to TCIAdvertising. Wayne graduated from Pennsylvania State University in 1971 and resides in Berwyn, PA with his wife, Peggy. They have two children, Kimberly and Wayne, II (Jay). Robert F. Bower- Vice-President and Chief Technology Officer Mr. Bower joined the Company in October 1999 as Vice President and Chief Technology Officer. In 1983, after six years as a data processing manager at George Washington University, he joined Mr. Bullock in establishing Cable AdNet, Inc., a cable advertising turnkey company. As Executive Vice President, his responsibilities encompassed all technical and operational areas including commercial insertion equipment design and deployment, application software development, and computer system installation and support. From 1992 to 1998, Mr. Bower was Executive Vice President and Chief Technology Officer for StarNet, Inc., a marketing services provider to the cable television industry. In that capacity, he was responsible for the design, development, and deployment of PC based commercial insertion and multimedia, digital, MPEG2 playback systems. In addition, he had operational responsibility for StarNet's Ku-Band satellite uplink. Mr. Bower holds BS degrees in Biology and Computer Science from The Pennsylvania State University and resides in Newtown Square, PA with his wife, MaryBeth, and their three children. Confidential Page 16 Jay Bullock- Vice-President Business Development Jay has been with Bullock Communications for the past 7 years. His responsibilities included operations and sales management for the ShelfSpot product line. From 1996 to 1998 Jay sold directly to Fortune 500 companies implementing in-store advertising programs in Kmart, Wal-Mart, Computer City and other national retail chains. In 1998 Jay co-developed the SALEseeker concept handling all facets of its start-up. This role included engineering direction, site design, site layout, ad sales and affiliate sales. Jay has successfully sold and launched several co-brand sites, including Lycos, MyCoupons, and Knight Ridder/Real Cities. As V.P. Business Development, he will be focusing on developing ad sales, affiliate sales and product development, and expanding portal and various site alliances. Jay attended Misericordia University in Wilkes-Barre, PA and resides in West Chester with his wife, Kristi, and Oliver, their yellow lab. Todd DeSimone - Vice-President Operations Todd started working for the company in April 1999 as a part-time consultant and as V. P. of Operations in September 1999. Todd has successfully developed co-brand sites including Lycos and MyCoupons and implemented various reports to increase the productivity of the Sales team. He is currently managing the development of the Knight Ridder/Real Cities co-brand sites, the local shopper email system and enhancements to in-house programs and reports. His current team consists of two web developers/programmers primarily utilizing Cold Fusion and Microsoft Sequel. Todd's prior role was as a Lead Programmer Analyst for Decision One where he was responsible for managing the web development and data analysis teams. The teams were charged with the development and maintenance of intranet and client internet web applications, in addition to the analysis of strategic company data. Applications included summarized/detail data intranet web pages to assist managers in the daily operation of their region and an internet system to allow clients to bid on contracts allowing for a more informed client selection process. Todd has also developed and maintained web sites for an on-line catalog company and a hard-copy magazine. Todd has a B.S. degree in Engineering along with accredited courses in project management, computer programming and web design. Todd resides with his wife, Maria, in Malvern, PA. As of September, the SALEseeker team consists of a total of 12 personnel operating in various capacities. A concerted effort to expand the management team is underway. Ownership SALEseeker.com is currently an operating division of Bullock Communications Group, Inc., with offices in West Chester, PA, a western suburb of Philadelphia. Bullock Communications Group, Inc. was incorporated in 1997 in Pennsylvania as a sub-chapter S corporation and is 100% privately held by Wayne Bullock. Confidential Page17 7. Funding / Exit Plan Unique Selling Proposition Affiliate web sites can private-label SALEseeker without cost and generate new ad revenues, while enhancing their local shopping content for their shoppers and merchants. Barrier to Entry SALEseeker will seek exclusive agreements as the only outside provider of sales content. Investment Rationale Proliferation of web sites raises the value of e-commerce companies that can drive traffic to sites. Current Investors Wayne Bullock has provided all seed and startup funding. Funding The company is seeking first round funding of $ 2 million for continued development and expansion. Exit Within 2 years, the company will either file for a public offering or be a strong takeover candidate. Confidential Page 18 8. Financials Monthly ending Dec -31 1999 2000 301,902 53,245 750,000 1,026,467 290,924 2,250,000 1,020,000 10,200,000 150 900,000 4,800 2001 483,355 85,246 1,500,000 1,643,407 465,779 4,500,000 2,220,000 22,200,000 300 3,300,000 7,200 User Sessions-SALEseeker User Sessions-Lycos User Sessions-Affiliates Page Views-SALEseeker Page Views-Lycos Page Views-Affiliates Email Shoppers-SALEseeker Email Distribution Affiliates Email Shoppers-Affiliates Merchants 96,195 16,965 25,000 327,064 92,697 75,000 60,000 600,000 5 0 1,800 Gross Revenues Affiliate Revenue Sharing Net Revenues Email-SALEseeker site Banners-SALEseeker site Banner Rev Share-Affiliates Email Rev Share-Affiliates E-commerce Commissions Expenses EBITDA Cumulative Cash-Year End Highest Cash Requirement # of Employees $37,013 0 $37,013 35,000 0 513 0 1,500 $822,972 -$786,846 -$205,510 -205,510 12 $4,323,519 1,209,600 $3,081,519 2,223,380 149,105 56,534 540,000 112,500 $4,486,435 -$1,485,328 -$1,690,838 - 1,864,503 30 $26,916,175 14,192,640 $12,343,375 5,281,750 256,647 178,977 6,336,000 290,000 $10,331,265 $1,790,574 $99,736 -$1,969,511 60 Confidential Page 19 Expenses Advertising & Marketing Public Relations Internet Affiliate Retail/Consumer General & Administrative Staff / Benefits Auto Lease Travel & Entertainment Conventions/Meetings Dues & Subscriptions Utilities Insurance Legal & Accounting Rent Repairs & Maint Office Expense Postage Telephone Supplies Letter/Stationery Hosting Software Development/Support Computer Hardware Office Equipment Debt Repayment Total Expenses 19,000 75,000 10,000 23,000 $127,000 36,000 1,000,000 440,000 60,000 $1,536,000 90,000 2,100,000 1,680,000 1,130,000 $5,000,000 210,772 5,400 6,250 3,000 2,700 4,200 10,400 13,500 32,000 1,200 1,950 3,000 4,200 3,600 3,400 13,650 140,250 139,500 73,000 24,000 $822,972 1,771,035 5,400 60,000 18,000 12,000 12,000 18,000 60,000 120,000 12,000 12,000 18,000 48,000 12,000 12,000 60,000 240,000 290,000 110,000 60,000 $4,486,435 3,181,865 5,400 90,000 30,000 14,400 14,400 21,600 96,000 120,000 14,400 14,400 120,000 120,000 14,400 14,400 120,000 550,000 550,000 180,000 60,000 $10,331,265 Confidential Page 20