CLIENT Angel Network CONFIDENTIAL TOPIC Angel Watch List Vinio Inc

CLIENT > Angel Network CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. January 2008 Changing the way the world looks at wine Final CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Legal Confidentiality Page 2 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. By accepting this Memorandum, the recipient agrees to keep confidential the information contained herein or made available in connection with any future investigation of the companies described herein or any of their subsidiaries or affiliates. No part of this document may be reproduced, distributed, transmitted or disclosed without the written authorization of the author and the companies described herein. Non-solicitation This confidential memorandum (“Memorandum”) has been prepared for discussion purposes only. It is not an offer to sell, nor the solicitation of an offer to buy, any security or any interest in the companies discussed herein. Such an offer will be made only by the companies at their sole discretion. The author of this document has relied on the representations of the management team of the companies described within as to the truth, accuracy and completeness of statements made herein, and disclaims all liability for any misrepresentations or omissions of material fact, which may be contained herein. Parties who after an initial review are interested in having further discussions with any of the companies described herein will be given the opportunity to perform due diligence prior to entering into an agreement containing such representations and warranties from the companies described herein concerning any investment, as agreed to by the parties. “Safe Harbor Statement” This memorandum may contain financial projections and valuations (forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934) including the statements regarding the expectation of increased revenues and profits. Except for historical information, the matters discussed herein are forwardlooking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause actual results to differ materially include but are not limited to: general economic conditions and conditions specific to the industry, including technology changes, fluctuations in customer demand, competitive factors including pricing pressures and the regulatory and market acceptance of existing and new products; the entry of new competitors with greater resources; the ability to manufacture products in a timely manner, and the timely development and of new products and processes. CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Welcome CONTENTS Page 3 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Introduction Thank you for your interest in our summary review of Angel Round Watch List companies. The summary presented herein is for Vinio Inc., a unique on-premise/online platform for enhancing the understanding, purchase and enjoyment of wine targeting the 500,000+ retailers and 78 million consumers of wine. Vinio, like all of our Watch List candidates, was reviewed against our growth criteria. Our Process………….……………………4 Company Review………..….………..….7 Contact Us……………………………….17 CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Our Process Page 4 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Focused on Growth Based on collected research and years of experience, our selection and execution support processes ensure that all our reviewed companies maximize their potential to become a high growth company. Great product or service is no longer enough. The creation and optimization of these building blocks raises enterprise value, increases the probability of business success and drives exponential growth. THE BUILDING BLOCKS OF GROWTH 1. 2. 3. 4. 5. 6. 7. 8. Ris % Success k CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com Time Revenue Va lue Breakthrough value proposition High growth target market Marquee customer relationships Accelerating alliances High ROIC business model High performing management team Value adding board Viable capital strategy CLIENT > Angel Network Our Process “THE BIG 30” - ELEMENTS OF GROWTH Page 5 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Assessment Criteria Our assessment process provides companies and angel investors with a rapid diagnostic evaluation and planning roadmap that creates alignment, defines priorities and develops the metrics necessary for rapid execution and value creation. In addition to a product and/or service review, all early stage ventures are vetted against the multiple elements making up each of the building blocks to highlight critical success factors, identify gaps, and prioritize initiatives. J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com Value Proposition  Type  Market Relevance  Benefits  Risk Mitigation Target Market  Size  Maturity  Accessibility  Expandability  Supplier Structure  Cross Industry Opportunities Viable Capital Strategy  Capital Structure  Financing Strategy  Investor Relations Customer Relationships  Key Customers  Relationship Level  Customer Development Alliances  Opportunity  Process  Structure Business Model  Revenue Growth  Gross Margins  Expenses  Cost of Capital  Exponential Potential  Communication Management  Leadership Dimensions  Key Roles  Key Capabilities Board  Value Adding  Composition CONTACT > CLIENT > Angel Network Our Process Page 6 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Data Driven Analysis The outcome of the assessment process is an evaluation of a company’s potential for success laid across the eight building blocks of growth as well as a scorecard highlighting areas needing attention across the 30 elements that make up these building blocks. The evaluation is a synthesis of the information from: – Company provided data across all areas of focus – Interviews with key company management – Publicly available data – The experience and expertise of the IMMP Principals. DATA COLLECTED INCLUDES • • • • • • • • • • • • • • • • • • • • • Customer presentations Product/Service specifications Industry data Trade magazines Analysts reports Competitor review Past customer list Order/revenue history Reference list Contracts or relationship definitions List of suppliers Alliance documentation Financials Revenue per unit New product schedule Compensation plans Management meetings Organization chart Job descriptions Capitalization table Board Structure CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Company Review COMPANIES ASSESSED Page 7 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Introduction The IMMP assessment process is designed to provide a clear, fact-based evaluation of the current state of the building blocks essential to creating exponential growth. Based on the stage and the resources of the company, it is not uncommon for building blocks to be non-existent or sub-optimized. As an entrepreneur striving to create an exponentially growing company, understanding where your are is an essential first step in developing a plan for getting to where you want to be. As an investor, understanding the potential in each of these areas can assist in determining potential for returns. A summary of the assessments conducted by IMMP on the following company is included herein.  Vinio Inc. CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Company Review COMPANY SNAPSHOT Page 8 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Industry: Launched: Located: Employees: Technology 2006 Wilmington, Delaware / Los Angeles, California 8 Summary: Vinio, Inc provides a dynamic platform for wineries, retailers and consumers to grow and share their love of wine. Through the company’s flagship product, a webenabled, tablet-based wine list and reference guide, restaurants are able to increase wine sales and more effectively project, manage and control wine inventories all while providing an uniquely informative dining experience. Through the upcoming consumer-focused website, wine fans will be able to learn about wine, track their selections and share their wine experiences with others. CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Page 9 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Summary Value proposition - “Niche Shaper” value proposition targeted to wine drinkers, retailers and restaurants with potential for higher order benefits - Large and growing market with three target segments - Product developed in conjunction with customers; Initial customer relationships formed - Scalable, high gross-margin business model with recurring revenue streams - Need to develop alliances, process and structure - Key capabilities in place; Need to create inside / outside management team and develop board - Somewhat complex capital structure should not impede growth OUR VIEW Target market Customer relationships Vinio’s multi platform offering targets multiple market segments that all share the goal of increasing the understanding and enjoyment of wine. This platform was created with significant customer input which led to initial customers. Vinio’s strong pipeline, current customer references and early adopter data are all indicative of strong sales growth. Vinio’s attractive margins and recurring revenue should drive near-term profitability. A projected funding round in Q1 2008 should provide enough capital to allow this experienced management team to shape an attractive new business niche. Business Model Alliances Management / Board Capital Strategy CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Page 10 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Value Proposition Assessment: Vinio has a compelling niche shaper value proposition regarding the understanding, purchasing and enjoyment of wine. The offering is targeted to the needs of wine consumers, wine retailers and restaurants that serve wine. The platform and planned extensions drive higher order benefits. The current market structure is diversified, mature and stable. These factors combined with the company’s intellectual property protection strategy indicate a low risk for the typical value proposition pitfalls. Recommendations: Company should develop the value proposition concepts and embed them into sales materials and processes as well as operations. BLOCK ELEMENTS  ✔  ✔  ✔  ✔ Type: Niche Shaper Market Relevance Higher Benefits Risk Mitigation CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Page 11 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Market Assessment: Vinio’s product and service offerings target three large market segments: • On-Premise and Off-Premise Retail • 500,000 dining establishments in the US BLOCK ELEMENTS  ✔  ✔  ✔  ✔   Size Maturity Accessibility Expandability Supplier Structure Cross Industry Opportunities • Wine Producers • 2400 wineries in the US • Domestic Wine Consumers • 78 million wine consumers The domestic wine market is growing and is projected to be the worlds largest by 2008. Recommendations: Vinio needs to expand the role and number of marquee customers. It could also benefit from a broad evaluation of cross industry opportunities. CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Page 12 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Customers Assessment: Vinio developed its iVinio offering over a three-year period in conjunction with its beta customer group. Vinio has contracts signed with three hotel and restaurant groups and is in the process of implementing iVinio 5.2 with those groups. The Vinio platform provides multiple opportunities for deepening the customer relationship level and developing cross-platform opportunities. Recommendation: The company is currently focusing on broadening its customer base. It should also focus on “lighthouse” customers that will serve as a reference to sell to peers. Customer and relationship development initiatives will increase in importance over the course of 2008. BLOCK ELEMENTS  ✔   Key Customers Relationship Level Customer Development CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Page 13 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Business Model Assessment: The Vinio platform has been designed to scale rapidly and provides high (46% in year 1) and increasing (92% in year 3) gross margins. The business model includes strong recurring revenue streams that account for between 25% and 50% of total revenue. Current forecasts project controlled expenses and a cash flow break even during the 3rd quarter of year 1. Recommendation: Recurring revenue streams and strong cash flow should be used to reduce the cost of growth capital. A financial resource is needed to ensure effective monitoring and communication. Financial scorecard/dashboard development would assist management in providing visibility of key metrics and operating levers. BLOCK ELEMENTS  ✔  ✔  ✔   ✔  Revenue Growth Gross Margins Expenses Cost of Capital Exponential Potential Communication CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Page 14 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Alliances Assessment: Vinio will likely have significant alliance opportunities with increased platform adoption. Current focus has not been on building alliances. Recommendation: Alliance initiatives should be defined early in 2008. Documented process for evaluating and structuring alliance programs needs development. BLOCK ELEMENTS    Opportunity Process Structure CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Page 15 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Management Assessment: Vinio has the core capabilities needed within its current management team including broad and deep technical experience as well as sales and marketing experience . Recommendation: As the business evolves from product development into a growth company, management will need to define the key roles in an inside / outside management structure. Creation of a value adding board should be a 2008 initiative. BLOCK ELEMENTS Management  ✔   ✔ Leadership Dimensions Key Roles Key Capabilities Board   Value Adding Composition CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Page 16 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. Capital Strategy Assessment: Vinio has some complexity in its current Capital Structure as a result of “friends and family” funding. With cash flow break-even projected for Q3 2008, an institutional round will likely not be necessary and this should not be a significant barrier to growth. Recommendation: The current financial model should be adapted into a dynamic operating model in order to reforecast cash flows on a regular basis and ensure liquidity. Vinio will need to formalize a process and assign responsibility for investor relations. BLOCK ELEMENTS  ✔  ✔  Capital Structure Financing Strategy Investor Relations CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com CLIENT > Angel Network Contact Us Page 17 of 17 CONFIDENTIAL TOPIC > Angel Watch List: Vinio Inc. About IMMP IMMP is a next generation business advisor. Through our proven process, experienced principals and incentive-oriented fee structure, IMMP works with angel investors and emerging companies to achieve exponential business results and deliver outsized returns to investors. Our approach raises enterprise value, raises the probability of business success and delivers what early stage companies need to turn vision into value. CONTACT INFORMATION For more information on our report, our company or to be put in direct contact with the company please contact: J. Anthony Miguez Director, IMMP 302.584.7346 J.Anthony@IMMPartners.com CONTACT > J. Anthony Miguez 302.584.7346 J.Anthony@IMMPartners.com