Sample Business Plan FastChain

_(m mm (m ,-- C_ m m m m n m m m m m m m m m m n m n m I I I I I _;i;_ i | II i II | If any distributor harbors the notion that the Intemet is a discretionary thing, he's ignoring reality, eCommerce is here and now. For good or something else, it will impact the business practices and relationships of every business and profession in the country, including industrial distributors." Dirk Van Dongen, President of the National Association Wholesaler-Distributors. of I I i I I I I ! I I I I I I I I i I I I I I i For additional information please contact: Cary J. Siegel 1010 Huntcliff, Suite FastChain Corporation 1350 Atlanta, GA 30350 Mobile: 404-580-9156 Office: 770-587-6313 Email: csiegel@fastchain.com i I I I I OFaBtOhain,. I 1 I I. B2B Realization II. Executive I Table of Contents ....................................................................................................... ............................................................................................. 2 4 4 5 5 6 7 8 10 10 11 12 12 12 13 13 15 15 16 16 16 17 17 18 19 20 22 23 Summary FastChain Highlights Financial Outlook ............................................................................................................ Investment Schedule ....................................................................................................... III. IV. Market Size and Scope ...................................................................................... Solution Overview ............................................................................................... I i XML Transaction Module. ............................................................................................. eCommerce Module ........................................................................................................ V. Technology ............................................................................................................. I eCommerce Web Application ....................................................................................... XML Transaction Module ............................................................................................ VI. Sales and Marketing Strategy ....................................................................... I Market Strategy Positioning & Segmentation ......................................................................................... Brand Development ...................................................................................................... Sales and Implementation VII. Financials ............................................................................................................ Revenues ....................................................................................................................... Research & Development ............................................................................................. Marketing ...................................................................................................................... Equipment ..................................................................................................................... VIII. Management and Organization ................................................................ Management Team ........................................................................................................ Board of Team ............................................................................................................. Technical Directors ......................................................................................................... Board of Advisors ......................................................................................................... IX. Schedule X. Appendix of Milestones .................................................................................... ................................................................................................................ I I i I I ! ! ! i Proprietary & Confidential Page 1 9/28/00 I _FastOhain" I I I I. B2B Realization THE SITUATION Consumer driven markets mandate efficient relationships between ultimate suppliers and I eventual customers. The advent of the Internet promised more efficient sharing of information and mitigation of the "bull whip" effect on the supply chain. Examples: * New business models (eMarketplaces) promised to remove the links in the chain and deliver unprecedented value. processes and enhance real-time collaboration among partners. New eProcurement and eSupply Chain products promised to remove paper-based I I • i THE PROBLEM These promises to leverage the Internet for cost effective collaboration ignore the largest wholesaleparticipants in B2B commerce; the wholesale distributor. Technologically, group of distributors arc still analog nodes in an increasingly digital world. Sophisticated technology solutions are cost prohibitive and difficult to integrate for all but the largest distributors. Sophisticated B2B technology is being offered by a group of tier-one providers (eg. Ariba, CommerceOne, i2, and Manugistics). These companies to the mid-market. the top solution providers, and their products are largely unaffordable are positioned as The sales and product organizations are geared toward large customers, thereby making it ineffective and cost prohibitive for tier-one B2B solution providers to penetrate wholesale distribution. i • i I I Historically, software technology for wholesale distribution has been delivered by a fragmented group of tier-two ERP software providers. These tier-two providers have developed deep reach and mature relationships with wholesale distributors. However, new productalong with limited due to high from their recurring support and maintenance slowdown, sales are insufficient funds market penetration, post Y2K business agreements. Most tier-two providers lack the focus and financial resources to develop robust and scaleable eCommerce technology. I I ! i Proprietary & Confidential Page 2 9/28/00 I I I I OFastChain" THE SOLUTION FastChain helps realize thc potential of efficient markets by delivering eBusiness technology to wholesale distribution. and the tier-two ERP software already existent in offerings of tier-one B2B companies FastChain bridges the gap between the expensive our target market. In doing so, FastChain compliments the tier-one B2B companies by enabling their customers to collaborate with their own small and mid-size trading partners. Additionally, FastChain provides a cost effective sales channel into the mid market. FastChain compliments the tier-two ERP software companies by extending the value of I I I their products to the Internet using FastChain technology. Additionally, selling FastChain technology to their existing customer base affords these companies a new income stream. I I I I I I I I I I I i Proprietary & Confidential Page 3 9/28/00 I _FastOhain'" I I I II. Executive Summary FastChain Corporation defining eBusiness markethas the vision and leadership to become a global, category-States leader for the wholesale distribution trade. In the United alone there are over 500,000 wholesale distributors. These companies have been in business for an average of 32 years,will fulfill this market demand. of eBusiness solutions. FastChain arc profitable, and are demanding a cost-effective set I I FastChain Highlights • Turn-key, secure, and scalcable technology for companies who cannot even receive an electronic order today. • Technology provides both point-to-point and many-to-many eCommerce capabilities. • FastChain gives small and mid-size distributors the ability to plug-in to vertical marketplaces and exchanges. trading partners' eProcurcmcnt and Advance Planning System (APS) large Transaction engine enables wholesale distributors to collaborate with solutions. Anytime, anywhere technology enables wireless sales force automation. I I I i • I • I • FastChain has agreements with established channel partners base. and activate FastChain's technology for their existing customer to sell I • FastChain has received $1.2 mm in angel funding. ! i Proprietary & Confidential Page 4 9/28/00 I __- FastOhain" I i Financial Outlook We expect EBITDA profitability by the first quarter 2002. ! I Quarterly Revenue, EBITDA, and Cumulative Profit (Loss) I $20,000,000 ................ $15,000,000 l.................... $25,000,000] $10,000,000 $5,000,000 .............. 5......... /_.'. ' ] _ i.i_ . /..,;.."...... Quarterly EBITDA Cumulative - Profit/Loss Revenue $0 .L I -$5,000,000 -$10,000,000 I -r -' " "_._ >."i • '7"..... .._.;:..J../ _ .............. I -_I_,UUO,OUO _ i'_ _ l,.,+ _ tJ _ t,-.) _ t---) _ I'_ _ I_ _ t'-_ _ tO _ t_ _ I'_ I'_ I Investment I Schedule rcquire the capital investment Our busincss strategy and cash flow projections reflected in the schedule below. I March 2000 I August 2000 December 2000 III $600,000 II1,200,000 $ (Closed) (In Progress) 1 I I$10,500,000 I I i Proprietary & Confidential Page 5 9/28/00 I __. FastOhaiW I I I III. Market Size and Scope FastChain has identified an underserved yet distribution. marketplace distribution is a customers known collectively as wholesale ubiquitous Wholesale of potential global activity that includes over 500,000 companies in the United States alone. Wholesale distribution will and ultimate play an integral rolethe the supply chain. It is the link between manufacturer continue to user that performs in critical roll of aggregating similar and dissimilar products together, breaks the bulk into sellable quantities, finances the inventories, and finally delivers the products to the point of use. Ifa vehicle represents the global economy and manufacturing is the engine that drives the vehicle, wholesale distributors are the gears that propel the vehicle. According to the U.S. 1997 Census Bureau's report, wholesale distributors accounted for annual revenues in excess of $4.2 trillion while manufacturing revenues accounted for $3.9 trillion. Distributors with annual revenues greater than $10 million represent a total revenue value of over $2.6 trillion. Yet very few of these firms have revenues that exceed $1 billion annually. The sweet spot of the market is squarely in the mid-tier I I I category. This is FastChain's target. I I I I I I ! I I i Proprietary & Confidential Page 6 9/28/00 I _FastOhain" I I I IV. Solution Overview FastChain technology enables electronic transaction and collaboration capability for wholesale distributors using an ASP based, remote managed, turn-key solution. FastChain offers everything that small to mid-size companies need to collaborate effectively with partners and customers in an increasingly electronic market. I i Figure 2 illustrates the FastChain Technology Model. Figure 2 I I -- FastChain Tcchno.:ognyModel Transaction Module XML Engine i Collaborati,m I Gateway XChange I FastChain offers distributors all of the lnternet basics, which include: I I o o o , o Internet connectivity (DSL, T-l) Securc firewall Domain name registration and hosting Basic web presence (mycompany.com) Content editing tools to update their site I i i Proprietary & Confidential Page 7 9/28/00 i FastOhain" I i eCommerce Module The eCommcrcc Module provides a distributor extranet that includes a robust storefront point-to-point business The eCommerce eCommerce module is accessible via weband CRM applications. relationships. Themodule streamlines inefficiencies inherent in based and wireless interfaces. The distributors' employees and customers have the ability to: • Shop catalogs • • • • • • • Place orders Blanket order/Systems contracts Check order status Establish specialized pricing Track commissions Review account history Trouble ticketing i i I i i i module was in greatest demand by wholesale requirements of wholesale eCommerce is capability designed specifically to meet the distribution. The FastChain distributors. Each of the distributors' employees and customers have a personalized autonomous content management capabilities. For example, distributor can customize extranet whereby they can access information relevant to their arole. The distributor has a viewable product list for a customer with that customer's specific pricing. It also set of the distributor to set up master Return materials authorization allows manage a allowsspecific contracts or agreements. agreements with customers to track and the distributor and their customers to more accurately and quickly manage product returns. Sales, customer service, and management all have quote feature is access to pertinent that customer information and history. The request for quick and easy a prospecting tool affords new selling opportunities at existing accounts and opens new sales channels. Through the use of wireless devices, customer force Salespeople are unencumbered from them more efficient and effective at the sales sites. has information on demand, making the paper and administrative processes that have historically inhibited their ability to develop new accounts. i i I I i i XML Transaction Module The Transaction Module provides the distributor collaborative and many-to-many i transactional capabilities. • Integration into tier-two ERP and other back office legacy systems Participation in eMarketplaces and online exchanges Collaboration with large customers APS and eProcurement systems i • • i i Proprietary & Confidential Page 8 9/28/00 I FastOhain" ! I Collaboration Engine The Collaboration Engine aggregates and extends the value of data that resides in the schemas, collaboration with trading partners' Advance data into standardized distributor's ERP system. By extracting and formatting Planning systems and XML eProcurement systems is possible. This is especially significant for a small supplier to a large trading partner whoEngine, the distributor in sophisticated supply chaintrading Using the Collaboration has already invested directly interfaces with the technology. partner's solution, collaborating on resource and materials planning without paper or manual intervention. Similarly, a trading partner using an eProcurement system gains efficiency by having FastChain 'electronify' his supplier. FastChain replaces unidirectional fax and email communication from a trading partner's eProcurement system with bi-directional a portion. Additionally, a trading partner can now "see" into a transaction rather than just collaborative data flow, thereby automating the entire distributor's inventory levels that reside on the ERP system to determine availability of product. XChange Gateway I I eMarketplaces and online exchanges realize their full potential by fully integrating participation of all members, not just the large ones. The XChange Gateway makes it easy for small to medium size distributors to integrate with eMarketplaces and online exchanges. Leveraging the content from the Collaboration engine, the XChange Gateway is a sell-side solution that translates information into appropriate XML schemas to be up used across multiple trading partners, and down the supply chain, and with other distributors. I I I I I I ! ! i Proprietary & Confidential Page 9 9/28/00 I _FastOhain" ! I I V. Technology The two primary enables distributors FastChain technology are the eCommerce Web Application that components of the to port their businesses to the web and the XML Transaction Module that enables the universal exchange of data through standardized XML schemas. The Transaction Module also provides the distributors an on-ramp to collaborative business models within eCommerce marketplaces and connectivity to customer eProcurement and Advanced Planning systems. Figure 3 illustrates the FastChain Architecture. I I I Figure 3 FastChain Technology Architecture I_1 i Web Browser _ ..... .. • _ " _ II • -_ -_ _. _ -] - _ Web _ Business Processes I ._ BackOffice XML _1/ _" -,, FastChain _= •_ .... \ Era, FastChain Servers I ,e'_._ r I_-T._/_ _ Customer _-:-::-_, . J'# L _"',J I Wireless /'_--'_ /]_1 11" L _ _ r L _ _" DocumentSnterchange XML Schemas EDI Custom & Flat File _ / / ] / l_Jk_Jl' Ariba, Systems _-'-L.__ (e.g. Clarus) _ I I - l[_I eCommerce I 1,,.!_..t.; Wireless PDA " ' _m -" ! ....... I 't?2l UniversaICono.o*o* .ar_etP,.ce "/'"'" I-'II '..... : ! I i i I i_" J'_'l,.C uSt°dmv:c e d Planning rn (e.g. i2, Manugistics) Sy,,em, eCommerce Web Application The eCommerce web application is built on a Microsoft platform using Windows 2000 Server and [IS 5 for the web servers and design 2000 tiered architecture using HTML clustered database solution. The application SQL is a Server for a high availability, and JavaScript for the front-end, Active Server Pages and XML for the data layer and components and database The web applicationfor the business objects. eCommerce based for 128-bit SSL encryption. stored procedures generates a templated Security is sites on each distributor that allows for fast integration and bring new distributors on-line quickly. I I i Proprietary & Confidential Page l 0 9/28/00 I FaBtChain I I A data warehousing solution is providedThis data can then be used toaggregatinguserto the distributors by present a the distributor's data in the FastChain database. friendly view of the business that gives managers the information they need to make fast, well-informed, and effective decisions. XML Transaction Module The FastChain XML Transaction Module is built on Microsoft Biztalk Server. Business processes are defined for the wholesale distributors that identify the dataflow between distributors' eCommerce marketplaces and web application, between distributors' ERP systems and ERP systems and FastChain's between distributors' ERP systems and their customers' eProcurement systems. XML schemas are designed that allow the capture and exchange of information required by these business processes. The FastChain transaction engine provides a complete set up standardized XML schemas I for communication and integration with distributor ERP systems as well as the ability to exchange data via EDI or fiat file formats. FastChain is developing standard connectors into tier-two ERP solutions. The current connector under development will give systems. FastChain the capability to be integrated into over 6,000 distributors' ERP The hosting environment for the FastChain web application and FastChain transaction at a top-tier as or engine will be located lnternet Hosting Provider such Exodus UUNet prior to commercial release. The hosting center provides dedicated [nternet connectivity and bandwidth. The hosting center provides managed firewall services to ensure the total servers servcrs. security hosting center of the web and database The also provides loadbalancers to enable multiple wcb servers to be used in a fully redundant, high availability web farm. Users can access the FastChain web application via the Internet with a standard IE 4+ or distributors to use the or with a Palm VII wireless device. The only requirement for Netscape 4+ browser FastChain Technology will be to have Internet or wireless connectivity. Using the built-in security of Windows 2000 Server, the FastChain partners with full allows industry-standard security protocols and between trading transaction engine support for secure communications over the Internet encryption, including public key infrastructure (PKI), secure sockets layer (SSL), and CryptoAPI. This ensures the integrity of data communicated across all types of networks. I I I I I I l i i i i ! I Proprietary & Confidential Page 11 9/28/00 _FastOhain'" I I I VI. Sales and Marketing Strategy Market Strategy We have a four-phase strategy to penetrate the market. It is as follows; I I I Partner: FastChain will partner with distributor centric tier-two ERP software providers to gain quick penetration into the market. As previously stated, these software vendors pressures face increasing to remain viable players in the software market. FastChain affords the tier-two software providers the opportunity to sell a cutting edge high value solution to their existing customers. The technology that FastChain offers compliments their product line, provides the tier-two providers with product to sell that they cannot afford to build themselves, and a provides a recurring revenue stream. our to Extend: FastChain will leverage market reach deliver third party technology and enhanced functionality to our customers. Examples include supply chain management, sophisticated customer relationship management, and ERP capabilities. FastChain will take a best of breed approach in offering these solutions. I I I industry Our technology can be common trading partners, into a virtual marketplace Leverage:vertical, across a group ofused to build collaborative eBusiness capability for an or exchange, or as a capability for a group of companies to deliver integrated supply. New Markets: FastChain will be extended into new markets. Over 85% of businesses in the United States are considered small to medium in size. Businesses such as light found in our have similar needs and a leadership position eBusiness in wholesale manufacturinginitial target market. Oncedemands for advanced is achieved tools that are distribution, FastChain will extend the offering to other members of the supply chain. Positioning & Segmentation I i I I FastChain's top priority is to deliver technology and services as a fully integrated choice" for our target market. FastChain will be initially positioned perceived as "first eBusiness technology company, designed for the specific needs of wholesale distributors and their trading partners. As a company and on earn a comprehensive technical solution on time we will budget.reputation for delivering a I I ! i Proprietary & Confidential Page 12 9/28/00 I _FastChain" I Brand Development Advertising in industry specific trade periodicals, newsletters and web sites will generate I initial brand efforts with among target partners (tier-two ERP will participate in co-will be advertising awareness our strategic customers. FastChain software providers) undertaken. FastChain will actively participate in industry trade shows and within trade organizations to build trust and recognition. Further brand development efforts will target relationships with distributor alliances and consortium groups. Sales and Implementation Sales FastChain will cost product strategy primarily through established, of customers. This is a highly drive effective to market to quickly reach a large number indirect channels. Figure 6 illustrates customer take-up according to quarter. FastChain is engaging distributor centric software providers to sell FastChain technology. FastChain gains quick customer take-up by leveraging these providers' established sales channels. The providers gain a new income stream by selling FastChain technology into established relationships. FastChain will pass off to the software providers a monthly revenue stream based on 15% of the monthly cost of the solution to the distributor. The USC software providers will their expertise to implement the FastChain technology. They will keep the majority of the implementation fees. an agreement our to currently We have with first software provider sell FastChain technology. This partner has deployed over 6,000 ERP packages to established customers that are the demanding technology that FastChain will deliver. Typical of the tier-two this market, software provider cannot afford the resources necessary to develop a comprehensive eBusiness solution on its own. Figure 6 Customer I 800 700 Take-Up and Total Customers I I I I I I I I I I 500 600 400 '"0"- New Customers [+Total Customers i 200 300 100 0 I" r I i Proprietary & Confidential Page 13 9/28/00 I @FastChain" ! I to sell developing a FastChain program to We areand implement certification technology. ensure that only qualified partners are able I Pricing Modelusing FastChain significantly reduces the cost per transaction. The more A distributor customers they have on FastChain, the lower their processing costs. Therefore, we have based pricing on a risk-reward share model. It is a combination of fixed and variable fees. The fixed fee is based on the cost of connectivity, domain hosting, and email. The variable fee is based onper ID as greater numbers of IDs IDs are bundied into packages with a decreasing cost the total number of users. User are purchased. An example customer service be as follows. If management) andtotal of 12 internal users (sales force, of pricing would representatives, a customer has a 500 customers (each customer as a whole is counted as a user, not individual persons within the customer) the distributor would have a total on 512 possible users. If only distributoruser IDs (12 internal the top 15% of his customers of FastChain, he would the need 87 opts to have only users plus 75 extemal users). His total cost would be $2,014 per month based on $514 (fixed costs) plus $1500 for a bundle of 100 user IDs. The greater the value the distributor gains from FastChain, the more revenue FastChain generates. I I I I I ! ! i Proprietary & Confidential Page 14 9/28/00 I OFastChain" I i i VII. Financials A detailed pro-forma is provided in the appendix. The detailed pro-forma. provide rationale behind the assumptions found in the purpose of this section is to i FastChain acceptance in plans to investhands-on distributor brand and technology toisfoster customer Corporation a notoriously significantly in our environment. Our goal to achieve profitability by the first quarter of 2002. Figure 4 illustrates operating cash needs verses total expenditures and costs. Figure 4 FastChain Investment i ! I i S20,000 $15,000 $10,000 I---'lCost of Goods Sold i $5,000 $0 -_, !I---"1 Research and Development I--"1 Sales General and Admin I_ Operating Cash i ($5,000) (.S10,000) (S 15,000) ...... ! i Revenues Our plan is to manage short-term losses in order to return profitable results to our investors within 15 months from the start of our company ramp-up. Total investment in FastChain is in the range of $10.5 million. Figure 5 on the next page illustrates expected total revenues and EBITDA. l i ! i Proprietary & Confidential Page 15 9/28/00 I I I Figure 5 I S25,(K)0,000 OFastChain'" FastChain Income i $20,000,000 $15,000,000 -- - I I I $ I0,000,000 [ __ _ _ _ __ _ _ $ _ _ _ ._ _ -..ll-- Quarterly Revenue I EBITDA ' $5,000,000 $0 -$5,000,000 I Research & Development I A significant portion of ourSince budget will be concept is toward ongoing development of FastChain technology. total the FastChain allocated built around scalability, management predicts team scaling to be minimal with each release of our solution. Marketing I I FastChain will invest we plan to participate and advertise in major quarter trade journals. On average, heavily in trade shows in three trade shows perindustry at an average cost of $18,000 per show. Average annual collateral and advertising costs will run $944,000. Equipment I I Our estimates for infrastructure capital expenditures are slated mainly for computers and hardware to enable technology, sales, implementation, and administration. Trade show equipment is also included into our figures. ! I Proprietary & Confidential Page 16 9/28/00 I OFastChain" I VIII. Management and Organization I FastChain is securing senior management talent toleadership, Board of for launch and growth. Senior Management and Technical team provide leadership Directors, and Board of Advisors bios are included below. Figure 7 Cary J. Siegel Chief Executive Officer President and I I I I Chief Financial Officer (Acting) Administration I i Executive VP Sales and Marketing I I Chief Operating Officer Operations ] IChief Technology O_cer (Acting) J Ma,k..,r.er I Product DSevaer,%l_ Jmaeinnt ""----'--hi pen o I I Direclor of Sales & Markeling T,or.as.a. I I I I Manager i Management Team Cary J. Siegel, President & CEO Foreseeing the potential tectonic effect of the Intemet on commerce and communications, Siegel co-founded lnternet consulting firm InterLogie Studios (ILS) in 1995. As president and CEO, he led ILS on a 3-year path of profitability and exponential growth. Recognizing the strategic advantages of a national firm, Siegel negotiated ILS' merger into publicly traded USWeb Corporation in ! 998. After the merger, he assumed the role of Managing Partner over the Atlanta, Memphis, and Miami offices of USWcb, one rcvenue years where for two he engineered and managed of the fastest rates of growth in the company. He integrated three acquisitions and grew his division to more than 300 professionals and $50 million run-rate revenue before leaving the company in January 2000 to start FastChain Corporation. Siegel attended the School of Business at the University of Texas at Austin and holds a B.A. in History from the University of Georgia. Irvin J. Grossman (Irv), Chief Operating Officer I Grossman has delivered strategy and solutions to more than 50 manufacturing and distribution companies, most recently as a senior member of the Supply Chain Strategy PageNet, Pfizer, Novartis, Consulting. Electronics. lrv's clients include AT&T, Practice for Andersen and Avnet Some of Sprint, I I I i i I i Proprietary & Confidential Page 17 9/28/00 I FastOhain" I I and to Andersen, Irv Inc. PriorAmerican Honda, performed front-line logistics leadership roles for Kraft Foods, Inc. I web-based the name "FastChain" as a method to quickly provide B2B solutions to the Irv coined value chain. I Irv received with a B.S. the Kellogg Logistics from Penn State. graduate business studies atin Business School of Business. Irv performed his I Thomas W. Ray, Director of Sales and Marketing Ray spent the previous 14 years with industry leader National Starch & Chemical. While at National, Tom rose through a series of assignments to Corporate Accounts Manager working with many leading companies such as International Paper, Brown & Williamson Tobacco, Coca-Cola Enterprises, La-Z-Boy, and Riverwood International. Ray attended Loyola College in Baltimore where he received his B.A. He then went on to receive his MBA in International Business from Kenncsaw State University. Technical Team Mark Turner systems Turner is currently a senior consultant with IntelliNet Corporation, responsible for managing Internet application development and infrastructure projects. Most recently he managed the application development of successful Internet startup Virtual Premise, Inc. other Mr. Turner and Among numerous projects designed, implemented supported the large web infrastructure for Cox Communications. Prior to IntelliNet Turner worked for Andersen Consulting as a senior consultant in their Advanced Technology Group. Turner received his B.S. in Computer Engineering from the University of Michigan. Jain has a Product background ranging from international business to marketing to Sarah Jain, broad Development Manager information technology. Prior to joining FastChain, Sarah Jain worked with for the transaction engine, order developing the product definition / functionalities OneChem.com and was in charge ofprocessing, online marketplace, and distribution modules. Before OneChem, Sarah worked as the director of marketing & strategy for an with internal systems and clients such as Victoria's Secret, Hallmark, and Jostens. Jain international apparel manufacturer - Equality Specialties. In this capacity, she worked also worked in London for Samai Consulting as strategy consultant providing technology solutions to the healthcare market. Jain has an MBA and a Masters of Science in Computer information I I I I I I i i l i systems and I telecommunications from the University of Miami. She received her B.A in International Business and Marketing. I i Proprietary & Confidential Page 18 9/28/00 I OFastChain" ! I Board of Directors Murray 19. Friedman During hisrolesyears with the Coca-Cola Company, Mr. FriedmanFinancial in a number the served Officer of of executive 28 including the Senior Vice President and Chief company's North American Group, the Vice President and Treasurer of The Coca-Cola Company and the Vice President and of financial positions within the company. He is 1967 through 1981 he held a series Audit Director of The Coca-Cola Company. From currently an Atlanta based philanthropist and a business consultant. Mr. Friedman attended the University of Pennsylvania, Wharton School of Finance and graduated in 1962 with a BS in Economics. He later attended Georgia State University where in 1970 he received an MBA in International Business. Warren M. Zindler I In 1975, Mr. Zindler founded Computer Software Inc (CSI), a software development company which provides on-line multi-user computer systems for small to medium-size businesses in the southeastern United States. CSI also markets its TopForm Software Products both nationally and in the UK. In 1997, Zindler sold CSI to Corporate Express, a four billion dollar public company that has since been acquired by Buhrmann, a Dutch public company. In 1981, Zindler also co-founded State of the Art, Inc. (SOTA). SOTA provides business solutions for Apple and IBM personal computers with more than 70,000 people using SOTA's MAS90 Software. In SOTA popular Accounting 1991, went public and was acquired in 1998 by Sage Software, Inc.(a publicly traded U.K.-based company on the London Stock Exchange). Prior to 1975, Zindler held Branch Systems Manager positions with Basic Four Corporation and Nixdorf Computer Inc. Since his two-year employment agreement with CSI expired in 1999, Zindler is currently a consultant to the computer industry. In 1971, Zindler earned a M.S. degree with honors in Mathematics from the University of a National Science Foundation graduate fellowship. Houston. During his studies, he was awarded both a National Defense Education Act and I i I I I ! I I i i i Mr. Duncan joined Adjoined Technologies, Inc. as the Chief Operating Officer in August Andrew Duncan 2000. Prior to Adjoined, Duncan served as a Partner in A.T. Kearney's Global E-Services Practice. His main area of to many of beenlargest traditional and Internet brand companies. in this field has consulted focus has the Distribution, Logistics and Transportation, and Duncan is an active participant in the international marketplace; he regularly speaks at many of Duncan was alogistics and transportation conferences. where he joining A.T. Kearney, distribution, Practice Director for Coopers & Lybrand Before managed the Distribution and Manufacturing Practice in the Southeast United States. i I I i Proprietary & Confidential Page 19 9/28/00 I FastOhain" I I College has a Bachelor of He is a member of the American Production the Imperial Andrew in London, England. Engineering in Electrical Engineering from and Inventory Control Society, and the Institute of Electrical and Electronic Engineers. Cary J. Siegel Refer to bio in management section Irv J. Grossman Refer to bio in management section I I Board of Advisors I I Mark Lichtenstein, Owner and President - Industrial Packaging Corporation Industrial Packaging Corporation, (IPC) is one of the leading independent distributors of packaging materials and equipment in the Southeast. Its core product categories are corrugated cartons, interior cushioning, tapes, films, facility supplies and the equipment systems and service technicians to support each of the major product lines. [PC is year. celebrating its 50th anniversary this Mr. Lichtenstein I attended Tulane University and received a BA in 1964. He also I received his MBA from Georgia State University in 1966. Giddy Hollander, CEO - Jacada Hollander co-founder of Jacada LTD infrastructure was a (NASDAQ: JCDA), an Internet company specialized in web enablement of legacy applications. Hollander founded Jacada in 1990 and has served as Chief Executive Officer since then. From 1988 to 1990, Hollander worked in the area of research and development at Comverse Technology (NASDAQ: CMVT). From 1982 to 1987, Hollander served in various technology and in expert systems and in an elite unit of the Two Defense Forces, where he specialized management positions user interface design. Israeli of the projects that Hollander managed won the most prominent Israeli award for technological innovations. Dean Benamy, President- Benamy International Benamy International is the world's largest retail dealer of dollhouses and miniature I i i International'sSpearheading plansinto developbrand for miniatures, Benamy Benamy miniatures.corn to world an eCommerce program for grew the collectibles. Houseworks division from $120K to $4mm in annual sales. In 1995, Benamy started a across the country. new division, Houseworks Design, to develop and source products for major retailers i ! i Proprietary & Confidential Page 20 9/28/00 I _FastChain" I I Mitchell Kopelman, Partner - high growth companies in these three industry groups. His Kopelman works closely with Habif, Arogeti and Wynne, LLP specialty is working with companies merging, acquiring, and raising capital. Since $450 million. December 1998 he has been involved with merger and acquisition transactions exceeding I I Kopelman earned a BBA in accounting from the School of Accountancy at Georgia State University in Atlanta. I Paul Arne, Partner - technology companies and large end users, with a particular Arne represents high Morris, Manning and Martin emphasis on domestic and international licensing and distribution of technology and intellectual property protection. Arne is athe formerspeaker and Editor of The law affecting technology companies. Arne is frequent Managing writer on the Computer Law Association Bulletin and has authored 2 legal publications and has co-authored another. Arne received his B.S. from the University of North Carolina in 1978. received his J.D. from Duke University. In 1981, he I I I I I I ! I I I .; I i Proprietary & Confidential Page 21 9/28/00 I _FastChain" I I I IX. Schedule of Milestones Milestone -" Ill ..... Timing ]I Completed Secured $600K in Angel Funding Assembled Business Planning Team Formed Advisory Board -............... I:1 ]] April 2000 [[i i ril 2000 A ......... ]l[...... 1[[ ][[ ¢" "/ '/ I Completed Market Assessment Assembled Board of Directors Completed Competitive Analysis Defined Business Model " II April 2000 [[[April 2000 April 2000 III Ill ]jr III III .... --_ ...... " I1[April 2000 I | I Completed Pro-forma-and Business Plan Secured Functional and Technical Teams Identified Beta Customers - Began Website Ill 2000 ]i-b_a-_200-0 ...... " 1[I 2_0.0_0 May . ]]1 May 2000 May _ Ill ........... ;'----.I III " 111 4" 4" Development ..... ngaged Potential Technology Partners Define Target ISV Partners l!fM--;y 2000 [[IJune 2000 Ill June 2000 IIIJune 2000 IIIJuly 200(I 111uly 2000 J --_[[ .... July l![ [[1 [l[ III Ill Ill.......... ¢" Begin Functional Customer of Beta Solution Document Beta Design Business Processes Finance 2"_An_,el Round Secure Technology Team for Beta and Release 1.0 Build Engage Target File Provisional Tier-Two ERP Partners Patents Design of Beta Release _ .... " " ¢ " [ff ugusth00b A 2000 I[I I1[ III Complete Functional I ][[ August 2000 ][[ August 2000 September 2000 ]i September 2000 Define Customer Support Organization ............. Secure Agreements with Tech Partners for Release 1.0 Develop FastChain Tier-Two ERP performance standards "-- lil lI(Ill- Ill [t I Develop Product Demo of of Release Begin Product Development Beta Beta and Release 1.0 Secure Partnership Agreement with Target tier-two ERP SoRware Provider Complete Beta Product Development S 11¢ eptember 2000 September 2000 -][[October 2000 [l[ October 20002000 II( I1[ ]11 1I... . " " I Activate Beta Customers Develop Marketing Collateral and Trade Show Exhibit Materials Create Functional Requirements for Wireless capabilit)' IllNovembe-_ [INovember 2000 ]illNovember 2000 ]1 December 2000 [11 December 2000 [I December 2000 [i... . II [_ III 1_............ 1 Capture Beta Feedback and Analysis Apply Beta Feedback to Release 1.0 Design Recruit Tier-Two ERP Software Provider Support and Marketing Teams .... I[I]1II [i ]1 [i ll[_]I ]A I Begin Development Build Customer Careof Vl.5 Release Team Hire EVP of Sales and Marketing Relocate to Permanent Facility -- Ill January 2(1(11 IIIDecember 2000 [I January 2001 ]i January 2001 I Launch Version 1.0 for Industrial Distributors Launch wireless capabili v _-Begin Development-0? Release V2.0 ........ ........................... ]i Januar,¢, 2001 ][[ Janua_ 2001 Ill_Vlarch 2001 ..... IIIj_uly 2001 ......... --__l I Launch Release V2.0 i Proprietary & Confidential Page 22 9/28/00 I OFastChain'" I I X. FASTCHAIB Appendix CORPORATION Income Statement Summary I Revenues: Setup fees I Pass thru costs (Hosting/con nectivity) Subscription fees-VAR Total Revenue 229 688 5,220 6,137 687 2.753 20,880 24,319 1,145 6.193 46,980 54,318 Projected Jan '01 Projected Feb '01 Projected Mar '01 Projected Apr '01 Projected May '01 I Setup costs Cost of sales: Cost of Subscriptions-VAR/ISV Pass thru costs (Hosting/Connectivity) FastChain Employee Costs 17,500 61,876 5,500 61,876 1,145 1 182 6,126 71,596 3,434 4 727 7,377 88,471 5,723 10.635 8,629 119,409 I Total Cost of Sales Gross Profit before R&D costs Gross Margin before R&D costs 79,376 (79,376) 67,376 (67,376) 80,048 (73,911) (12.04) 104,008 (79,689) (3.28) 144,395 (90,077) (1.66) I R&D costs Gross Profit after R&D costs Gross Margin after R&D costs 142,189 (221,565) 170,315 (237,691) 212,504 (286,414) (46.67) 240,630 (320,319) (13.17) 240,630 (330,707) (6.09) I General & Administrative Salaries & Wages Travel & Entertainment Office Expense Rent Lease Expense Legal,Accounting, 120,938 15,696 2,700 6,067 9,217 25,000 3.540 958 500 2,375 186,991 120,938 15,696 2,900 7,000 9,729 25,000 3.540 958 500 2,625 188,886 129,375 15,696 3,800 10,267 11,777 25,000 3.540 958 569 3,625 204,607 129,375 15,696 4,600 12,133 13,569 25,000 3.540 958 569 4,500 209,941 129,375 15,696 5,400 12,600 14,337 25,000 3.540 958 569 4,875 212,351 I & Consulting Fees i Hosting Services Insurance (D&0, Property & Casualty, Key Man) Depreciation Expense Misc. (postage, printing, etc.) Total General & Adminlstratlve Expenses I Selling & & Wages Salaries Marketing Expenses Marketing/Advertising Trade Shows Total Selllng & Marketlng Travel/Entertainment Total SG&A Expenses 88,594 78.684 18,000 213,626 28,348 400,616 88,594 78 684 18,000 213,626 28,348 402,512 109,688 78 684 18,000 243,764 37,392 448,371 161,719 78 684 18,000 302,635 44,232 512,576 161,719 78.684 18,000 311,679 53,276 524,030 I I Tax Incoms-Prstax Net Net income Cumulative galn/(Ioss) (622,181) (622,181) (622,181) (640,202) (640,202) (1,262,383) (734,785) (734,785) (1,997,169) (832,894) (832,894) (2,830,063) (854,736) (854,736) (3,684,799) I Beginning Operating Cash Additional Cash Expected from Investors EBITDA (operating cash flow) Accounts Receivable (60 day turn) Capital Costs Accounts Payable (30 day turn) Period Cash Flow Ending Operating Cash 11,500,000 (621,681) 10,979,884 (639,702) 10.356,307 (734,216) (6,137) 2,500 54,861 (682,992) 9,673,315 9,673,315 (832,325) (24,319) 8,868,757 (854,167) (48,181 ) I 101,565 (520,116) 10,979,884 16,126 (623,576) 10,356,307 52,086 (804,558) 8,868,757 40,387 (861,961) 8,006,797 I I i Proprietary & Confidential Page 23 9/28/00 I FastOhain'" FASTCHAIN CORPORATION ! Income Statement Summary l Revenues: Subscription fees-VAR Pass thrucosts(Hostingconnectivity) Setupfees Total Revenue 88,740 11.699 1,831 102,270 146,160 19.268 2,518 167,946 214,020 28,214 2,976 245,210 292,320 38 536 3,434 334,290 375,840 49.547 3,662 429,049 Projected June '01 Projected July '01 Projected Aug '01 Projected Sept '01 Projected Oct '01 i I Setupcosts Costof Subscriptions-VAPJISV Cost of sales: Passthrucosts(Hosting/Connectivity) Total Cost of Sales 9,156 20,086 10,506 173,222 133,472 (70,952) (0.69) 12,590 33.086 12,384 198,011 139,952 (30,065) (0.18) 14,879 48,447 13,636 216,913 139,952 28,297 0.12 17,168 66,171 14,887 252,241 154,015 82,049 0.25 18,312 85.077 15,513 296,272 177,370 132,777 0.31 i FastChainEmployee Costs Gross Profit before R&D costs Gross Margin before R&D costs I R&D costs Gross Profit after R&D costs 240,630 (311,582) 240,630 (270,694) 240,630 (212,332) 240,630 (158,580) 240,630 (107,852) i Gross Margin after R&D costs General & Administrative Salaries& Wages Rent Travel& Entertainment OfficeExpense Lease Expense Legal,Accounting, Consulting & Fees (3.05) 129,375 13,067 15,696 5,600 14,593 25,000 3.540 639 958 5,000 (1.61) 137,813 14,933 15,696 6,000 15,617 25,000 3.540 639 958 5,500 (0.87) 137,813 14,933 15,696 6,000 15,617 25,000 3.540 639 958 5,500 (0.47) 137,813 15,400 15,696 6,200 15,873 25,000 3 540 708 958 5,625 (0.25) 137,813 16,333 15,696 6,800 16,897 25,000 3.540 708 958 6,125 I I HostingServices DepreciationExpense Insurance(D&0, Properly& Casualty,Key Man) Misc.(postage,printing, tc.) e I Total General & Administrative Expenses Selling& MarketingExpenses Salaries& Wages Marketing/Advertising Travel/Entertainment Trade Shows Total Selling & Marketing Expenses 213,468 161,719 78.684 53,276 18,000 311,679 225,696 177,188 78 684 56,696 18,000 330,568 225,696 177,188 78.684 56,696 18,000 330,568 226,813 177,188 78 684 56,696 18,000 330,568 229,871 177,188 78,684 56,696 18,000 330,568 I i Total SG&A Net income-Pretax Tax Net income 525,147 (836,728) (836,728) (4,521,528) 8,006,797 556,264 (826,958) (826,958) (5,348,485) 7,[24,084 556,264 (768,596) (768,596) (6,117,081) 6,208,925 557,381 (715,961) (715,961) (6,833,042) 5,316.930 560,438 (668,290) (668,290) (7,501,333) 4,473,162 I Cumulativegain/(Ioss) Begin ningOperating Cash Additional Cash Expected from Investors Accounts Receivable (60 day turn) Accounts (operating cash flow) EBITDA Payable (30 day turn) Capital Costs Period Cash Flow EndingOperatingCash i (77,950) (836,090) 28,827 2,500 (882,713) 7,124,084 (113,628) (826,319) 24,789 (915,158) 6,208,925 (142,940) (767,957) 18,902 (891,995) 5,316,930 (166,344) (715,253) 35,328 2,500 (843,768) 4,473,162 (183,839) (667,582) 44,031 (807,390) 3,665,771 I i Proprietary & Confidential Page 24 9/28/00 I I FASTCHAIN CORPORATION ,FastChain" Income Statement Summary l Revenues: Setup fees Pass thru costs(Hosting/connectivity) Total Revenue Subscription fees-VAn Costof sales: Costof Subscriptions-VAR/ISV Setupcosts Pass thrucosts(Hosting/Connectivity) FastChainEmployeeCosts Nov '01 Projected 4,120 61.933 535,854 469,800 Dec '01 Projected 4,578 75 696 654,474 574,200 FY 2001 Jan '02 Projected 8,335 Feb '02 Projected 5,929 137.716 1,395,186 1,251,540 i 294.528 2,528,688 2,234,160 117,014 t,188,749 1,063,400 I 106 347 20,601 16,765 177,370 129,979 22,890 18,016 191,433 505.738 125,895 146,839 1,516,790 236,083 41,675 43,066 232,331 277.851 29,647 24,325 239,135 i Gross Profit of Sales Total Cost before R&D costs Gross Margin before R&D costs 214,772 321,082 0.40 292,156 362,318 0.45 258,605 2,295,261 0.10 635,594 553,154 0.53 824,227 570,959 0.59 I R&D costs after R&D costs Gross Profit Gross Margin after R&D costs 240,630 (25,858) (0.05) 240,630 51,527 0.08 2,690,673 (2,457,240) (0.9"/ 252,661 382,933 0.32 252,661 571,566 0.41 I General & Administrative Salaries&Wages Travel & Entertainment Offlce Expense Rent Expense Lease Legal,Accounting, Consulting & Fees DepreciationExpense 137,813 15,696 6,800 16,333 16,897 25,000 708 958 3,540 6,125 229,871 137,813 15,696 7,100 16,800 17,153 25,000 778 958 3,540 6,250 231,088 1,586,25C 188,352 63,900 155,867 171,276 300,000 7,528 11,500 42,480 58,125 2,585,277 144,703 15,696 7,900 18,667 18,689 25,000 778 1,125 3,540 7,000 243,098 144,703 15,696 8,100 19,600 19,201 25,000 778 1,125 3.540 7,250 244,993 I I Insurance(D&0, Property& Casualty,Key Man) HostingServices Misc. (postage,printing, tc.) e Total General & Administrative Expenses & Selling MarketingExpenses Salaries&Wages Marketing/Advertising Trade Shows Total Selling & Marketing Expenses Travel/Entertainment Total SG&A Net income-Pretax Tax Net income Cumulative gain/(Ioss) I 177,188 78,684 18,000 330,568 56,696 560,438 177,188 78,684 18,000 330,568 56,696 561,655 1,835,156 944,208 216,000 3,580,412 585,048 6,165,690 177,188 78,684 18,000 330,568 56,696 573,665 186,047 78,684 18,000 339,427 56,696 584,420 I I (586,296) (586,296) (8,087,629) 3,665,771 (585,588) 24,810 (201,564) (762,341) 2,903,430 (510,128) (510,128) (8,597,757) 2,903,430 (509,351) 41,236 2,500 (225,425) (691,040) 2,212,390 (8,622,936 (8,622,936 (8,597,757 (190,732) (190.732) (8,788,489) 2,212,390 (12,854) (12,854) (8,801,343) 1,572,409 (12,076) 17,804 (740,711) (734,983) 837,426 I BeginningOperating Cash Additional Cash Expected from investors EBITDA (operating cash flow) AccountsPayable(30 day turn) CapitalCosts AccountsReceivable(60 day turn) PeriodCash Flow EndingOperatingCash (8,590,229 482,948 10,000 (1,190,328 (9,287,610 (189,954) 202,868 (652,895) (639,981) 1,572,409 I I I I Proprietary & Confidential Page 25 9/28/00 I OFastChain" FASTCHAIN CORPORATION ! I I Income Statement Summary Mar '02 Projected Revenues: Setupfees Passthrucosts (Hosting/connectivity) Subscription fees-VAR Total Revenue Costof sales: Cost of Subscdptions-VAR/ISV Setup costs Pass thru costs (Hosting/Connectivity) FastChain Employee Costs I Total Cost before R&D costs Gross Profit of Sales Gross Margin before R&D costs 317.804 28,358 23,507 242,537 612,206 982,464 0.62 359,572 29,647 24,325 275,022 688,567 1,115,224 0.62 403,157 30,936 25,144 278,424 737,661 1,284,310 0.64 435,845 23,202 20,233 278,424 757,704 1,426,162 0.65 477,614 29,647 24,325 292,741 824,327 1,569,670 0.66 5,672 157 518 1,431,500 1,594,690 5,929 178.221 1,619,640 1,803,790 6,187 199.823 1,815,960 2,021,971 4,640 _ 1,963,200 2,183,866 5,929 236,728 2,151,340 2,393,997 Apr '02 Projected May '02 Projected June '02 Projected July '02 Projected I R&D costs Gross Profit after R&D costs Gross Margin after R&D costs 252,661 729,823 0.46 252,661 862,563 0.46 252,661 1,031,649 0.51 252,661 1,173,501 0.54 252,661 1,317,009 0.55 I General & Administrative Salaries & Wages Travel & Entertainment Office Expense Rent Lease Expense Legal,Accounting, & Consulting Fees Hosting Services Depreciation Expense Insurance (D&0, Property & Casualty, Key Man) Misc. (postage, printing, etc.) Total General & Administrative Expenses Selling & MarketingExpenses Salaries & Wages Marketing/Advertising Travel/Entertainment Trade Selling & Marketing Expenses Total Shows Total SG&A 144,703 15,696 8,200 20,067 19,457 25,000 3,540 847 1,125 7,375 246,010 144,703 15,696 8,800 20,533 20,225 25,000 3.540 847 1,125 7,750 248,220 144,703 15,696 8,900 21,000 20,481 25,000 3,540 847 1,125 7,875 249,167 144,703 15,696 8,900 21,000 20,481 25,000 3.540 917 1,125 7,875 249,237 153,563 15,696 9,200 21,000 20,993 30,000 3,540 917 1,125 8,125 264,158 I I I 186,047 78,684 56,696 18,000 339,427 585,437 144,386 144,386 186,047 78.684 56,696 18,000 339,427 587,647 274,916 274,916 186,047 78.684 56,696 18,000 339,427 588,594 443,055 443,055 186,047 78,664 56,696 18,000 339,427 588,664 584,837 564,837 186,947 78.684 56,696 18,000 339,427 603,585 713,424 713,424 I I Net income-Pretax Tax Net income I Beginning Operating Cash Cumulative gain/(Ioss) Additional Cash Expected from Investors EBITDA (operating cash flow) Accounts Payable (30 day turn) Accounts Receivable (60 day turn) Capital Costs Period Cash Flow (8,656,956) 837,426 145,234 41,247 (405,941) 2,500 (216,961) (8,382,040) 620,465 275,763 76,361 (408,605) (56,481) (7,938,985) 563,985 443,902 49,094 (427,281) 65,716 (7,354,148) 629,700 585,754 20,043 (380,075) 2,500 228,222 (6,640,724) 857,922 714,341 66,623 (372,027) 408,937 I i Ending Operating Cash 620,465 563,985 629,700 857,922 1,266,859 I i Proprietary & Confidential Page 26 9/28/00 I OFastChain" FASTCHAIN CORPORATION ! I I Income Statement Revenues: Setupfees Summary Projected Aug '02 6,187 258,330 2,347,660 2,612,177 Projected Sept '02 6,187 279 933 2,543,980 2,830,100 Projected Oct '02 6,187 301 535 2,740,300 3,048,022 Projected Nov '02 6,187 323,138 2,936,620 3,265,945 Projected Dec '02 6,187 344,740 3,132,940 3,483,868 Passthru costs(Hosting/connectivity) Subscription fees-VAR Total Revenue I Setupcosts Costof sales: Subscriptions-VAPJISV Pass thru costs(Hosting/Connectivity) FastChainEmployee Costs Total Cost of Sales Gross Profit before R&D costs Gross Margin before R&D costs 30,936 521,198 25,144 307,507 884,785 1,727,393 0.66 30,936 564,783 25,144 325,226 946,088 1,884,012 0.67 30,936 608,367 25,144 325,226 989,673 2,058,350 0.68 30,936 651,952 25,144 339,992 1,048,023 2,217,922 0.68 30,936 695,536 25,144 339,992 1,091,608 2,392,260 0.69 I I R&D costs Gross Profit after R&D costs Gross Margin after R&D costs 252,661 1,474,732 0.56 252,661 1,631,351 0.58 252,661 1,805,689 0.59 252,661 1,965,261 0.60 252,661 2,139,599 0.61 ! I I General & Administrative Salaries & Wages Rent Travel & Entertainment Office Expense Lease Expense Legal,Accounting, & Consulting Fees Hosting Services Depreciation Expense Insurance (D&0, Property & Casualty, Key Man) Misc. (postage, printing, etc.) 153,563 21,467 15,696 9,400 21,249 30,000 3,540 917 1,125 8,250 153,563 21,467 15,696 9,800 21,761 30,000 3,540 986 1,125 8,500 153,563 21,467 15,696 9,900 21,761 30,000 3,640 986 1,125 8,500 153,563 21,933 15,696 10,100 22,017 30,000 3 540 986 1,125 8,625 153,563 21,933 15,696 10,100 22,905 30,000 3,540 1,056 1,125 8,625 I Total General & Administrative Expenses Selling & Marketing Expenses Salaries & Wages Marketing/Advertising Travel/Entertainment Trade Shows Total Selling & Marketing Expenses 265,206 186,047 78,684 56,696 18,000 339,427 266,437 186,047 78,664 56,696 18,000 339,427 266,537 186,047 78,684 56,696 18,000 339,427 267,585 186,047 78,684 56,696 18,000 339,427 268,542 186,047 78,684 56,696 18,000 339,427 I I Total SG&A Net income-Pretax Tax Net income Cumulative gain/(Ioss) Beginning Operating Cash Additional Cash Expected from Investors AccountsReceivable(60 day turn) EBITDA (operating cashflow) AccountsPayable(30 day turn) CapitalCosts EndingOperatingCash PeriodCash Flow 604,633 870,099 870,099 (5,770,625) 1,266,859 605,864 1,025,487 1,025,487 (4,745,138) 1,770,021 605,964 1,199,725 1,199,725 (3,545,413) 2.424,195 607,012 1,358,249 1,358,249 (2,187,164) 3,232,645 607,969 1,531,630 1,531,630 (655,535) 4,214,386 I I (428,312) 871,016 60,458 (436,103) 1,026,473 61,303 2,500 2,424,195 654,173 (435,645) 1,200,711 43,585 (435,845) 1,359,235 58,351 (435,845) 1,532,685 43,585 2,500 5,357,310 1,142,925 i 1,770,021 503,162 3,232,645 808,450 4,214,386 981,741 I I Proprietary & Confidential Page 27 9/28/00 I OFastChain" FASTCHAIN CORPORATION ! I I Income statement Summary FY 2002 Revenues: Setup fees Passthrucosts (Hostingconnectivity) Subscription fees-VAR Total Revenue 73,558 2,750,722 24,998,080 27,822,360 12,068 397 169 3,638,580 4,047,817 6,806 421 565 3,862,080 4,290,451 6,806 445,961 4,085,580 4,538,347 6,806 470 357 4,309,080 4,786,243 Projected Jan '03 Projected Feb '03 Projected Mar '03 Projected Apr '03 I Setupcosts Costof sales: Subscriptions-VARJISV Passthrucosts (Hosting/Connectivity) FastChainEmployeeCosts Total Cost of Sales Gross Profit before R&D costs Gross Margin before R&D costs R&D 367,792 5,549,760 310,645 3,311,005 9,539,202 18,117,607 0.65 60,342 807,150 53,167 375,596 1,296,255 2,751,562 0.68 34,031 856 729 27,684 394,201 1,312,645 2,977,806 0.69 34,031 906,308 27,684 394,201 1,362,224 3,176,123 0.70 34,031 955,887 27,684 412,805 1,430,408 3,355,836 0.70 I I I I I costs Gross Profit after R&D costs Gross Margin after R&D costs 3,031,932 15,251,226 0.55 265,294 2,486,268 0.61 265,294 2,712,512 0.63 265,294 2,910,829 0.64 265,294 3,090,542 0.65 General & Administrative Salaries& Wages Rent Travel Expense Office & Entertainment Lease Expense Legal,Accounting, ConsultingFees & HostingServices DepreciationExpense Insurance(D&0, Property& Casualty,Key Man) Misc.(postage, printing, tc.) e 1,789,594 250,133 188,352 109,300 249,220 330,000 42,480 10,861 13,500 95,750 161,241 21,933 15,696 10,500 23,417 35,000 4 540 1,056 1,208 8,875 161,241 21,933 15,696 10,900 23,929 35,000 5 540 1,056 1,208 9,125 161,241 21,933 15,696 10,900 23,929 35,000 6,540 1,125 1,208 9,125 161,241 21,933 15,696 11,300 24,441 35,000 7,540 1,125 1,208 9,375 i Total General & Administrative Expenses Selling& MarketingExpenses Salaries & Wages Marketing/Advertising Travel/Entertainment Trade Shows Total Selling & Marketing Expenses 3,079,190 2,223,703 944,208 680,352 216,000 4,064,263 283,466 195,349 78,684 56,696 18,000 348,729 285,628 195,349 78 684 56,696 18,000 348,729 286,697 195,349 78,684 56,696 18,000 348,729 288,859 195,349 78,684 56,696 18,000 348,729 I Total SG&A Net income-Pretax Tax Net income I Cumulativegain/(Ioss) BeginningOperating Cash Additional Cash Expected from Investors AccountsReceivable(60 day turn) EBITDA (operatingcash flow) AccountsPayable(30 day turn) Capital Costs PeriodCash Flow EndingOperatingCash 7,143,453 8,107,773 8,107,773 (655,53_= 632,195 1,864,073 648,926 1,205,148 549,613 5,357,310 634,357 2,078,155 727,354 1,350,801 1,900,414 6,647,847 635,427 2,275,403 796,391 1,479,012 3,379,426 7,936,864 637,589 2,452,953 858,534 1,594,419 4,973,645 9,774,941 I (5,559,484) 7,953,08_ 741,321 10,000 3,144,920 (781,872) 1,855,129 217,280 1,290,537 6,647,847 (806,584) 2,079,211 16,390 1,289,017 7,936,864 (490,530) 2,276,528 49,579 2,500 1,838,077 9,774,941 (495,792) 2,454,078 68,184 2,026,470 11,801,411 I I i Proprietary & Confidential Page 28 9/28/00 I I FASTCHAIN CORPORATION FastOhain'" Income Statement Summary I Revenues: Setupfees Pass thru costs (Hosting/connectivity) Total Revenue Subscriptionfees-VAR Costof sales: Costof Subscriptions-VAPJISV Setupcosts Pass thrucosts(Hosting/Connectivity) FastChainEmployeeCosts 1,007,450 35,393 28,571 412,805 1,059,012 35,393 28,571 431,410 1.110.575 35,392 28,571 431,410 1.164.120 36,754 29,458 450,015 1,217,666 36,754 29,458 450,015 May '03 Projected 7,079 495 729 5,044,327 4,541,520 June '03 Projected 7,079 521 101 5,302,139 4,773,960 July '03 Projected 7,078 546 473 5,559,951 5,006,400 Aug '03 Projected 7,351 572 821 5,827,951 5,247,780 Sept '03 Projected 7,351 599 168 6,095,679 5,489,160 i I i Gross Profit of Sales Total Cost before R&D costs Gross Margin before R&D costs 3,560,109 1,484,219 0.71 3,747,754 1,554,386 0.71 3,954,003 1,605,948 0.71 4,147,604 1,680,347 0.71 4,361,787 1,733,893 0.72 I R&D costs after R&D costs Gross Profit Gross Margin after R&D costs 265,294 3,294,815 0.65 265,294 3,482,460 0.66 265,294 3,688,709 0.66 265,294 3,882,310 0.67 265,294 4,096,493 0.67 I General & Administrative Salaries & Wages Travel & Entertainment Office Expense Rent Expense Lease Legal,Accounting,& Consulting Fees Depreciation Expense Insurance (D&0, Hosting ServicesProperty & Casualty, Key Man) Misc. (postage, printing, etc.) Total General & Administrative Expenses 161,241 15,696 11,300 21,933 24,441 35,000 1,125 1,208 8,540 9,375 289,859 161,241 15,696 11,700 21,933 24,953 35,000 1,194 1,208 9,540 9,625 292,091 161,241 15,696 11,700 21,933 24,953 35,000 1,194 1,208 10,540 9,625 293,091 161,241 15,696 12,200 21,933 25,465 35,000 1,194 1,208 11,540 9,875 295,353 161,241 15,696 12,200 21,933 25,465 35,000 1,264 1,208 12,540 9,875 296,422 I I I Selling && W ages Expenses Salaries Marketing Marketing/Advertising Trade Shows Total Selling & Marketing Expenses Travel/Entertainment Total SG&A Net income-Pretax Tax Net income Cumulative gain/(Ioss) BeginningOperatingCash Additional Cash Expected from Investors EBtTDA (operating cash flow) Accounts Payable (30 day turn) Accounts Receivable (60 day turn) Capital Costs Period Cash Flow Ending Operating Cash 195,349 78.684 18,000 348,729 56,696 638,589 2,656,226 929,679 1,726,547 6,700,392 1t,801,4/1 2,657,351 53,811 (505,980) 2,205,182 14,006,593 195,349 78.684 18,000 348,729 56,696 640,820 195,349 78.684 18,000 348,729 56,696 641,820 195,349 78.684 18,000 348,729 56,696 644,082 195,349 78,684 18,000 348,729 56,696 645,151 I I 2,841,640 994,574 1,847,066 8,547,458 14,006,593 2,842,834 70,167 (515,896) 2,500 2,399,605 16,406,198 3,046,889 1,066,411 1,980,478 10,527,936 16,406,t98 3,048,084 51,562 (515,624) 2,584,022 18,990,220 3,238,228 1,133,380 2,104,848 12,632,784 18,990,220 3,239,423 74,399 (525,812) 2,788,010 21,778,230 3,451,341 1,207,969 2,243,372 14,876,156 21,778,230 3,452,605 53,546 (535,728) 2,500 2,972,923 24,751,153 I i ! I i Proprietary & Confidential Page 29 9/28/00 I @FastChain" FASTCHAIN CORPORATION ! Income Statement I Revenues: Subscription fees-VAR Pass fees Setupthru costs (Hosting/connectivity) Total Revenue 5,730,540 625 516 7,351 6,363,407 5,971,920 651 864 7,351 6,631,135 6,213,300 678 212 7,351 6,898,863 58,869,900 6,425,935 90,476 65,386,312 Summary Projected Oct '03 Projected Nov '03 Projected Dec '03 FY 2003 i I Setup costs Costof sales: Cost of Subscriptions-VAR/ISV Pass thru costs (Hosting/Connectivity) Total Cost of Sales FastChain Employee Costs Gross Profit before R&D costs Gross Margin before R&D costs 36,754 1,271,211 29,458 1,787,438 450,015 4,575,969 0.72 36,754 1.324.757 29,458 1,859,588 468,619 4,771,546 0.72 36,754 1.378.302 29,458 1,913,134 468,619 4,985,729 0.72 452,382 13.059.167 369,225 19,020,483 5,139,710 46,365,828 0.71 i I R&D costs Gross Profit after R&D costs Gross Margin after R&D costs 265,294 4,310,675 0.68 265,294 4,506,252 0.68 265,294 4,720,435 0.68 3,183,528 43,182,300 0.66 ! I I General & Administrative Salaries& Wages Rent Travel & Entertainment Office Expense LeaseExpense Legal,Accounting, Consulting & Fees Hosting Services DepreciationExpense Insurance (D&0, Property & Casualty, Key Man) Misc. (postage, printing, etc.) 161,241 21,933 15,696 12,200 25,465 35,000 13 540 1,264 1,208 9,875 161,241 21,933 15,696 12,600 25,977 35,000 14,540 1,264 1,208 10,125 161,241 21,933 15,696 12,600 25,977 35,000 15.540 1,333 1,208 10,125 1,934,888 263,200 188,352 140,100 298,412 420,000 120,480 14,194 14,500 115,000 I Total General & Administrative Expenses Selling& MarketingExpenses Salaries& Wages Marketing/Advertising Travel/Entertainment Trade Shows Total Selling & Marketing Expenses 297,422 195,349 78.684 56,696 18,000 348,729 299,584 195,349 78,684 56,696 18,000 348,729 300,654 195,349 78.684 56,696 18,000 348,729 3,509,126 2,344,191 944.208 680,352 216,000 4,184,751 I I Net income-Pretax Total SG&A Tax Net income Cumulative gain/(Ioss) Beginning OperatingCash Additional Cash Expected from Investors Accounts Receivable (60 day turn) Accounts (operating cashflow) EBITDA Payable (30 day turn) Capital Costs Period Cash Flow 3,664,523 646,151 1,282,583 2,381,940 17,258,096 24,751,153 3,857,939 648,313 1,350,279 2,507,660 19,765,757 27,935,030 4,071,052 649,383 1,424,868 2,646,184 22,411,940 31,330,927 35,488,423 7,693,877 12,420,948 23,067,475 22,411,940 I i (535,456) 3,665,787 53,546 3,183,877 (535,456) 3,859,203 72,150 3,395,898 (535,456) 4,072,385 53,546 2,500 3,592,975 (6,780,185) 35,502,618 834,159 10,000 29,566,592 I Ending Operating Cash 27,935,030 31,330,927 34,923,902 I i Proprietary & Confidential Page 30 9/28/00