_(m mm(m ,--C_ m m m m n m m m m m m m m m m n m n mIIIII _;i;_If any distributor harbors the i notion that the Intemet is a | discretionary thing, he's ignoring II reality, eCommerce is here and now. For good or something else, it i will impact the business practices II and relationships of every business and profession in the country, | including industrial distributors." II Dirk Van Dongen, President of i the National Association of Wholesaler-Distributors. IIII!IIIIIIIIiIIIIIi For additional information please contact: Cary J. Siegel i FastChain Corporation 1010 Huntcliff, Suite 1350 Atlanta, GA 30350 I Office: 770-587-6313 Mobile: 404-580-9156 Email: csiegel@fastchain.com III OFaBtOhain,. I1 Table of Contents I I. B2B Realization ....................................................................................................... 2 II. Executive Summary ............................................................................................. 4 I FastChain Highlights 4 Financial Outlook ............................................................................................................ 5 Investment Schedule ....................................................................................................... 5 I III. Market Size and Scope ...................................................................................... 6 IV. Solution Overview ............................................................................................... 7 i eCommerce Module ........................................................................................................ 8 XML Transaction Module. ............................................................................................. 8 V. Technology ............................................................................................................. 10 I eCommerce Web Application ....................................................................................... 10 XML Transaction Module ............................................................................................ 11 VI. Sales and Marketing Strategy ....................................................................... 12 I Market Strategy 12 Positioning & Segmentation ......................................................................................... 12 Brand Development ...................................................................................................... 13 I Sales and Implementation 13 VII. Financials ............................................................................................................ 15 Revenues ....................................................................................................................... 15 I Research & Development ............................................................................................. 16 Marketing ...................................................................................................................... 16 i Equipment ..................................................................................................................... 16 VIII. Management and Organization ................................................................ 17 Management Team ........................................................................................................ 17 I Technical Team ............................................................................................................. 18 Board of Directors ......................................................................................................... 19 Board of Advisors ......................................................................................................... 20 I IX. Schedule of Milestones .................................................................................... 22 X. Appendix ................................................................................................................ 23 !!!i Proprietary & Confidential Page 1 9/28/00I _FastOhain" II I. B2B Realization I 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: I * New business models (eMarketplaces) promised to remove the links in the chain and deliver unprecedented value. I • New eProcurement and eSupply Chain products promised to remove paper-based processes and enhance real-time collaboration among partners. i THE PROBLEM These promises to leverage the Internet for cost effective collaboration ignore the largest i group of participants in B2B commerce; the wholesale distributor. Technologically, • wholesale distributors arc still analog nodes in an increasingly digital world. Sophisticated technology solutions are cost prohibitive and difficult to integrate for all i but the largest distributors. Sophisticated B2B technology is being offered by a group of tier-one providers (eg. I Ariba, CommerceOne, i2, and Manugistics). These companies are positioned as the top solution providers, and their products are largely unaffordable to the mid-market. 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 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, I new product sales are limited due to high market penetration, post Y2K business slowdown, along with insufficient funds from their recurring support and maintenance agreements. Most tier-two providers lack the focus and financial resources to develop I robust and scaleable eCommerce technology. !i Proprietary & Confidential Page 2 9/28/00I OFastChain" II THE SOLUTION FastChain helps realize thc potential of efficient markets by delivering eBusiness I technology to wholesale distribution. FastChain bridges the gap between the expensive offerings of tier-one B2B companies and the tier-two ERP software already existent in our target market. I 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. I 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 their products to the Internet using FastChain technology. Additionally, selling FastChain technology to their existing customer base affords these companies a new income stream. IIIIIIIIIIIi Proprietary & Confidential Page 3 9/28/00I _FastOhain'" II II. Executive Summary I FastChain Corporation has the vision and leadership to become a global, category-defining eBusiness market leader for the wholesale distribution trade. In the United States alone there are over 500,000 wholesale distributors. These companies have been in I business for an average of 32 years, arc profitable, and are demanding a cost-effective set of eBusiness solutions. FastChain will fulfill this market demand. I FastChain Highlights • Turn-key, secure, and scalcable technology for companies who cannot I even receive an electronic order today. • Technology provides both point-to-point and many-to-many eCommerce I capabilities. • FastChain gives small and mid-size distributors the ability to plug-in to I vertical marketplaces and exchanges. i • Transaction engine enables wholesale distributors to collaborate with large trading partners' eProcurcmcnt and Advance Planning System (APS) solutions. I • Anytime, anywhere technology enables wireless sales force automation. I • FastChain has agreements with established channel partners to sell and activate FastChain's technology for their existing customer base. I • FastChain has received $1.2 mm in angel funding. !i Proprietary & Confidential Page 4 9/28/00I __-FastOhain" Ii Financial Outlook We expect EBITDA profitability by the first quarter 2002. !I Quarterly Revenue, EBITDA, and Cumulative Profit (Loss) $25,000,000] ] I $20,000,000 ................ ' $15,000,000 l.................... $10,000,000 .............. _ Quarterly Revenue $5,000,000 5......... i.i_ EBITDA /_.'. $0 .L . /..,;.."-...... Cumulative Profit/Loss I I /"_._ • -$5,000,000 -r >. .._.;:..J.. _ --"i '7"..... -$10,000,000 -' " .............. I -_I_,UUO,OUO _ _ _ _ _ _ _ _ _ _ _ i'_ l,.,+ tJ t,-.) t---) I'_ I_ t'-_ tO t_ I'_ I'_ I Investment Schedule I Our busincss strategy and cash flow projections rcquire the capital investment reflected in the schedule below. I March 2000 III $600,000 (Closed) 1 I August 2000 II$1,200,000 (In Progress) December 2000 I$10,500,000 I IIi Proprietary & Confidential Page 5 9/28/00I __. FastOhaiW II III. Market Size and Scope I FastChain has identified an underserved yet ubiquitous marketplace of potential customers known collectively as wholesale distribution. Wholesale distribution is a global activity that includes over 500,000 companies in the United States alone. I Wholesale distribution will continue to play an integral role in the supply chain. It is the link between manufacturer and ultimate user that performs the critical roll of aggregating similar and dissimilar products together, breaks the bulk into sellable quantities, finances I 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 category. This is FastChain's target. IIIIII!IIi Proprietary & Confidential Page 6 9/28/00I _FastOhain" II IV. Solution Overview I 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 I effectively with partners and customers in an increasingly electronic market. i Figure 2 illustrates the FastChain Technology Model. Figure 2 I FastChain Tcchno.:ognyModel I --Transaction Module XML i Collaborati,m Engine I XChange Gateway I FastChain offers distributors all of the lnternet basics, which include: I o Internet connectivity (DSL, T-l) o Securc firewall I o Domain name registration and hosting , Basic web presence (mycompany.com) o Content editing tools to update their site Iii Proprietary & Confidential Page 7 9/28/00i FastOhain" Ii eCommerce Module The eCommcrcc Module provides a distributor extranet that includes a robust storefront i and CRM applications. The eCommerce module streamlines inefficiencies inherent in point-to-point business relationships. The eCommerce module is accessible via webbaase and wireless interfaces. The distributors' employees and customers have the i ability to: • Shop catalogs I • Place orders • Blanket order/Systems contracts • Check order status i • Establish specialized pricing • Track commissions i • Trouble ticketing • Review account history i is capability in greatest demand by wholesale distribution. The FastChain eCommerce module was designed specifically to meet the requirements of wholesale distributors. Each of the distributors' employees and customers have a personalized i extranet whereby they can access information relevant to their role. The distributor has autonomous content management capabilities. For example, a distributor can customize a viewable product list for a customer with that customer's specific pricing. It also i allows the distributor to set up master agreements with customers to track and manage a set of specific contracts or agreements. Return materials authorization allows the distributor and their customers to more accurately and quickly manage product returns. I Sales, customer service, and management all have quick and easy access to pertinent customer information and history. The request for quote feature is a prospecting tool that affords new selling opportunities at existing accounts and opens new sales channels. I Through the use of wireless devices, the sales force has information on demand, making them more efficient and effective at customer sites. Salespeople are unencumbered from the paper and administrative processes that have historically inhibited their ability to i develop new accounts. 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 i • Participation in eMarketplaces and online exchanges • Collaboration with large customers APS and eProcurement systems ii Proprietary & Confidential Page 8 9/28/00I FastOhain" !I Collaboration Engine The Collaboration Engine aggregates and extends the value of data that resides in the I distributor's ERP system. By extracting and formatting data into standardized XML schemas, collaboration with trading partners' Advance Planning systems and eProcurement systems is possible. This is especially significant for a small supplier to a I large trading partner who has already invested in sophisticated supply chain technology. Using the Collaboration Engine, the distributor directly interfaces with the trading partner's solution, collaborating on resource and materials planning without paper or I 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 I system with bi-directional collaborative data flow, thereby automating the entire transaction rather than just a portion. Additionally, a trading partner can now "see" into a distributor's inventory levels that reside on the ERP system to determine availability of I product. XChange Gateway 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 I 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 I used across multiple trading partners, and down the supply chain, and with other up distributors. !!i Proprietary & Confidential Page 9 9/28/00I _FastOhain" !I V. Technology I The two primary components of the FastChain technology are the eCommerce Web Application that enables distributors to port their businesses to the web and the XML Transaction Module that enables the universal exchange of data through standardized I 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 I FastChain Architecture. I Figure 3 FastChain Technology Architecture I_1 _ _. I ._ BackOffice i _1/..... .. _ -,, _ Era, Web Browser • II • " -_ -] -_ FastChain XML = _ -_ FastChain Web •_ .... I ,e'_._ r " _ -_ Servers _ Business Processes \ I_-T._/_ _ Customer _-:-::-_, L . J'# 11" _" DocumentSnterchange _ l_Jk_Jl' Systems _"',J L XML Schemas /_-'-L.__ (e.g. Ariba, Clarus) I Wireless r EDI //'_--'_ " _m L Custom & Flat File ] _ I /]_1 ' -" _ /I -l[_I eCommerce 1,,.!_..t.; ! _ UniversaICono.o*o* "/'"'" I-'II .ar_etP,.ce I ....... I 't?2l '.....: Wireless PDA _ ! I i_" J'_'l,.C uSt°dmv: rnc ed Planning Sy,,em, (e.g. i2, Manugistics) ii eCommerce Web Application The eCommerce web application is built on a Microsoft platform using Windows 2000 I Server and [IS 5 for the web servers and SQL 2000 Server for a high availability, clustered database solution. The application design is a tiered architecture using HTML and JavaScript for the front-end, Active Server Pages and XML for the data layer and I components and database stored procedures for the business objects. Security is based on 128-bit SSL encryption. The web application generates a templated eCommerce sites for each distributor that allows for fast integration and bring new distributors on-line quickly. Ii Proprietary & Confidential Page l 0 9/28/00I FaBtChain II A data warehousing solution is provided to the distributors by aggregating the distributor's data in the FastChain database. This data can then be used to present a userfrieendl view of the business that gives managers the information they need to make I fast, well-informed, and effective decisions. XML Transaction Module I The FastChain XML Transaction Module is built on Microsoft Biztalk Server. Business processes are defined for the wholesale distributors that identify the dataflow between I distributors' ERP systems and FastChain's web application, between distributors' ERP systems and eCommerce marketplaces and between distributors' ERP systems and their customers' eProcurement systems. XML schemas are designed that allow the capture I 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 I FastChain the capability to be integrated into over 6,000 distributors' ERP systems. The hosting environment for the FastChain web application and FastChain transaction I will be located lnternet Provider such Exodus UUNet engine at a top-tier Hosting as or prior to commercial release. The hosting center provides dedicated [nternet connectivity and bandwidth. The hosting center provides managed firewall services to ensure the total l of the web and database The also load-security servers servcrs. hosting center provides balancers to enable multiple wcb servers to be used in a fully redundant, high availability i web farm. Users can access the FastChain web application via the Internet with a standard IE 4+ or i Netscape 4+ browser or with a Palm VII wireless device. The only requirement for distributors to use the FastChain Technology will be to have Internet or wireless connectivity. Using the built-in security of Windows 2000 Server, the FastChain i transaction engine allows for secure communications over the Internet between trading partners with full support for industry-standard security protocols and encryption, including public key infrastructure (PKI), secure sockets layer (SSL), and CryptoAPI. i This ensures the integrity of data communicated across all types of networks. !I Proprietary& Confidential Page 11 9/28/00_FastOhain'" II VI. Sales and Marketing Strategy I Market Strategy We have a four-phase strategy to penetrate the market. It is as follows; 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 I face increasing to remain viable players in the software market. FastChain pressures 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 I their product line, provides the tier-two with to sell that cannot providers product they afford to build themselves, and a provides a recurring revenue stream. I Extend: FastChain will market reach deliver third and leverage our to party technology enhanced functionality to our customers. Examples include supply chain management, sophisticated customer relationship management, and ERP capabilities. FastChain will I a best of breed approach in offering these solutions. take I Leverage: Our technology can be used to build collaborative eBusiness capability for an industry vertical, across a group of common trading partners, into a virtual marketplace or exchange, or as a capability for a group of companies to deliver integrated supply. I 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 i manufacturing have similar needs and demands for advanced eBusiness tools that are found in our initial target market. Once a leadership position is achieved in wholesale distribution, FastChain will extend the offering to other members of the supply chain. I Positioning & Segmentation I FastChain's top priority is to deliver technology and services perceived as "first choice" for our target market. FastChain will be initially positioned as a fully integrated eBusiness technology company, designed for the specific needs of wholesale distributors I and their trading partners. As a company we will earn a reputation for delivering a comprehensive technical solution on time and on budget. I!i Proprietary & Confidential Page 12 9/28/00I _FastChain" I Brand Development Advertising in industry specific trade periodicals, newsletters and web sites will generate I initial brand awareness among target customers. FastChain will participate in co-advertising efforts with our strategic partners (tier-two ERP software providers) will be undertaken. FastChain will actively participate in industry trade shows and within trade I organizations to build trust and recognition. Further brand development efforts will target relationships with distributor alliances and consortium groups. I Sales and Implementation Sales I FastChain will drive product to market primarily through established, indirect channels. This is a highly cost effective strategy to quickly reach a large number of customers. Figure 6 illustrates customer take-up according to quarter. I FastChain is engaging distributor centric software providers to sell FastChain technology. FastChain gains quick customer take-up by leveraging these providers' established sales I 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 I software providers will their expertise to implement the FastChain They USC technology. will keep the majority of the implementation fees. I We have with first software sell FastChain currently an agreement our provider to 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 I market, software provider cannot afford the resources necessary to develop a this comprehensive eBusiness solution on its own. I Figure 6 Customer Take-Up and Total Customers I 800 700 I 600 500 '"0"-New Customers 400 [+Total Customers i 300 200 1000 r I" Ii Proprietary & Confidential Page 13 9/28/00I @FastChain" !I We are developing a certification program to ensure that only qualified partners are able to sell and implement FastChain technology. I Pricing Model A distributor using FastChain significantly reduces the cost per transaction. The more customers they have on FastChain, the lower their processing costs. Therefore, we have I 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 I variable fee is based on the total number of users. User IDs are bundied into packages with a decreasing cost per ID as greater numbers of IDs are purchased. I An example of pricing would be as follows. If a customer has a total of 12 internal users (sales force, customer service representatives, management) and 500 customers (each customer as a whole is counted as a user, not individual persons within the customer) the I distributor would have a total of 512 possible users. If the distributor opts to have only the top 15% of his customers on FastChain, he would only need 87 user IDs (12 internal users plus 75 extemal users). His total cost would be $2,014 per month based on $514 I (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 Proprietary & Confidential Page 14 9/28/00I OFastChain" Ii VII. Financials i A detailed pro-forma is provided in the appendix. The purpose of this section is to provide rationale behind the assumptions found in the detailed pro-forma. i FastChain Corporation plans to invest significantly in our brand and technology to foster customer acceptance in a notoriously hands-on distributor environment. Our goal is to achieve profitability by the first quarter of 2002. Figure 4 illustrates operating cash needs i verses total expenditures and costs. Figure 4 ! FastChain Investment I S20,000 i $15,000 $10,000 I---'lCost of Goods Sold i $5,000 I--"1 Research and Development $0 -_, ! 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 returnprofitable results to our l 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 i illustrates expected total revenues and EBITDA. !i Proprietary & Confidential Page 15 9/28/00I OFastChain'" II Figure 5 I FastChain Income S25,(K)0,000 i $20,000,000 ----$15,000,000 I [ ' _ Quarterly Revenue I $ I0,000,000 -..ll--EBITDA I $5,000,000 $0 I -$5,000,000 __ _ _ _ __ _ _ $ _ _ _ ._ I Research & Development I A significant portion of our total budget will be allocated toward ongoing development of FastChain technology. Since the FastChain concept is built around scalability, management predicts team scaling to be minimal with each release of our solution. I Marketing I FastChain will invest heavily in trade shows and advertise in major industry trade journals. On average, we plan to participate in three trade shows per quarter at an average cost of $18,000 per show. Average annual collateral and advertising costs will run $944,000. Equipment I Our estimates for infrastructure capital expenditures are slated mainly for computers and hardware to enable technology, sales, implementation, and administration. Trade show I equipment is also included into our figures. !I Proprietary & Confidential Page 16 9/28/00I OFastChain" I VIII. Management and Organization I FastChain is securing senior management talent to provide leadership for launch and growth. Senior Management and Technical team leadership, Board of Directors, and Board of Advisors bios are included below. I Figure 7 Cary J. Siegel I President and I Chief Executive Officer I I i I ""----'--hiopenI Chief Operating Officer Chief Financial Officer (Acting) Executive VP Operations Administration Sales and Marketing ] I I I Ma,k..,r.er J T,or.as.a. I Chief Technology O_cer (Acting) Direclor of Sales & Markeling I I Product DSevaer,%l_ Jmaeinnt Manager i I Management Team Cary J. Siegel, President & CEO I 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 I 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, I where for two he engineered and managed of the fastest rates of years one rcvenue 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 I 2000 to start FastChain January Corporation. Siegel attended the School of Business at the University of Texas at Austin and holds a i B.A. in from the History 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 i Practice for Andersen Consulting. Some of lrv's clients include AT&T, Sprint, PageNet, Pfizer, Novartis, and Avnet Electronics. Ii Proprietary & Confidential Page 17 9/28/00I FastOhain" II Prior to Andersen, Irv performed front-line logistics leadership roles for Kraft Foods, Inc. and American Honda, Inc. I Irv coined the name "FastChain" as a method to quickly provide B2B solutions to the web-based value chain. I Irv received with a B.S. in Business Logistics from Penn State. Irv performed his graduate business studies at the Kellogg School of Business. 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 CorporateAccounts Manager I working with many leading companies such as International Paper, Brown & Williamson Tobacco, Coca-Cola Enterprises, La-Z-Boy, and Riverwood International. I 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. I Technical Team Mark Turner I Turner is currently a senior consultant with IntelliNet Corporation, responsible systems for managing Internet application development and infrastructure projects. Most recently he managed the application development of successful Internet startup Virtual Premise, I Among numerous projects designed, implemented supported Inc. other Mr. Turner and the large web infrastructure for Cox Communications. Prior to IntelliNet Turner worked for Andersen Consulting as a senior consultant in their Advanced Technology Group. I Turner received his B.S. in Computer Engineering from the University of Michigan. i Sarah Jain, Product Development Manager Jain has a broad background ranging from international business to marketing to information technology. Prior to joining FastChain, Sarah Jain worked with i OneChem.com and was in charge of developing the product definition /functionalities for the transaction engine, order processing, online marketplace, and distribution modules. Before OneChem, Sarah worked as the director of marketing & strategy for an l international apparel manufacturer -Equality Specialties. In this capacity, she worked with internal systems and clients such as Victoria's Secret, Hallmark, and Jostens. Jain also worked in London for Samai Consulting as strategy consultant providing technology i solutions to the healthcare market. Jain has an MBA and a Masters of Science in Computer information systems and I telecommunications from the University of Miami. She received her B.A in International Business and Marketing. Ii Proprietary & Confidential Page 18 9/28/00I OFastChain" !I Board of Directors Murray 19.Friedman I During his 28 years with the Coca-Cola Company, Mr. Friedman served in a number of executive roles including the Senior Vice President and Chief Financial Officer of the company's North American Group, the Vice President and Treasurer of The Coca-Cola i Company and the Vice President and Audit Director of The Coca-Cola Company. From 1967 through 1981 he held a series of financial positions within the company. He is currently an Atlanta based philanthropist and a business consultant. I 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 I 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 I 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 I popular Accounting 1991, went public and was SOTA's MAS90 Software. In SOTA 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 I Four Corporation and Nixdorf Computer Inc. Since his two-year employment with Basic agreement with CSI expired in 1999, Zindler is currently a consultant to the computer i industry. In 1971, Zindler earned a M.S. degree with honors in Mathematics from the University of i Houston. During his studies, he was awarded both a National Defense Education Act and a National Science Foundation graduate fellowship. i Andrew Duncan Mr. Duncan joined Adjoined Technologies, Inc. as the Chief Operating Officer in August 2000. Prior to Adjoined, Duncan served as a Partner in A.T. Kearney's Global E-Services i Practice. His main area of focus has been Distribution, Logistics and Transportation, and in this field has consulted to many of the largest traditional and Internet brand companies. Duncan is an active participant in the international marketplace; he regularly speaks at I many of distribution, logistics and transportation conferences. Before joining A.T. Kearney, Duncan was a Practice Director for Coopers & Lybrand where he managed the Distribution and Manufacturing Practice in the Southeast United States. Ii Proprietary & Confidential Page 19 9/28/00I FastOhain" II Andrew has a Bachelor of Engineering in Electrical Engineering from the Imperial College in London, England. He is a member of the American Production and Inventory Control Society, and the Institute of Electrical and Electronic Engineers. I Cary J. Siegel Refer to bio in management section Irv J. Grossman Refer to bio in management section I Board of Advisors I Mark Lichtenstein, Owner and President -Industrial Packaging Corporation Industrial Packaging Corporation, (IPC) is one of the leading independent distributors of I 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 I celebrating its 50th anniversary this year. Mr. Lichtenstein 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 was a (NASDAQ: JCDA), an Internet Hollander co-founder of Jacada LTD infrastructure 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, I area of research and development at Comverse Technology Hollander worked in the (NASDAQ: CMVT). From 1982 to 1987, Hollander served in various technology and i management positions in an elite unit of the Israeli Defense Forces, where he specialized in expert systems and user interface design. Two 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 collectibles. Spearheading plans to develop an eCommerce program for Benamy International's miniatures.corn into world brand for miniatures, Benamy grew the Houseworks division from $120K to $4mm in annual sales. In 1995, Benamy started a i new division, Houseworks Design, to develop and source products for major retailers across the country. !i Proprietary & Confidential Page 20 9/28/00I _FastChain" II Mitchell Kopelman, Partner -Habif, Arogeti and Wynne, LLP Kopelman works closely with high growth companies in these three industry groups. His specialty is working with companies merging, acquiring, and raising capital. Since I December 1998 he has been involved with merger and acquisition transactions exceeding $450 million. I Kopelman earned a BBA in accounting from the School of Accountancy at Georgia State University in Atlanta. I Paul Arne, Partner -Morris, Manning and Martin Arne represents high technology companies and large end users, with a particular emphasis on domestic and international licensing and distribution of technology and I intellectual property protection. Arne is a frequent speaker and writer on the law affecting technology companies. Arne is the former Managing Editor of The Computer Law Association Bulletin and has authored 2 legal publications and has co-authored I another. Arne received his B.S. from the University of North Carolina in 1978. In 1981, he received his J.D. from Duke University. IIII!III .; Ii Proprietary & Confidential Page 21 9/28/00I _FastChain" II IX. Schedule of Milestones Milestone --Ill ..... Timing ]I Completed I Assembled Business Planning Team " --I:1 April 2000 ......... 1[[ ...... "/Secured $600K in Angel Funding ]] ]l[ ¢" Formed Advisory Board [[iAi ril 2000 ][[ '/I Assembled Board of Directors ............... [[[April 2000 ]jr .... --_ ...... Completed Market Assessment " II April 2000 Ill Completed Competitive Analysis III April 2000 III Defined Business Model I1[April 2000 III " I Pro-forma-and Business Plan Ill 2000 Ill ........... ;'-----Completed May Secured Functional and Technical Teams -]i-b_a-_200-0 ...... _ .I Identified Beta Customers " 1[I May 2_0.0_0 . III " | -Began Website Development ..... ]]1May 2000 111 4" ngaged Potential Technology Partners l!fM--;y 2000 l![ Define Target ISV Partners [[IJune 2000 [[1 4" I Document Beta Customer Business Processes IIIJune 2000 III Begin Functional Design of Beta Solution IllJune 2000 [l[ ¢" Finance 2"_An_,el Round IIIJuly 200(I Ill Secure Technology Team for Beta and Release 1.0 Build 111July 2000 Ill.......... _ .... Tier-Two ERP Partners --_[[ 2000 I[I " Engage Target July File Provisional Patents .... [ffAugusth00b I1[ Complete Functional Design of Beta Release ][[ August 2000 III " I Define Customer Support Organization ............. ][[ August 2000 Ill-¢ Secure Agreements with Tech Partners for Release 1.0 "--lilSeptember 2000 lI(-" Develop FastChain Tier-Two ERP performance standards ]i September 2000 Ill I Begin Product Development of Beta and Release 1.0 11¢September 2000 ]11 " Develop Product Demo of Beta Release II(September 2000 I1[ " Secure Partnership Agreement with Target tier-two ERP SoRware Provider -][[October 2000 [t Complete Beta Product Development [l[ October 2000-1I.... I Activate Beta Customers IllNovembe-_ [i.... 2000 Develop Marketing Collateral and Trade Show Exhibit Materials [INovember 2000 1_-............ Create Functional Requirements for Wireless capabilit)' ]illNovember 2000 II 1 Capture Beta Feedback and Analysis ]1 December 2000 [_ .... Apply Beta Feedback to Release 1.0 Design [11December 2000 III Recruit Tier-Two ERP Software Provider Support and Marketing Teams [I December 2000 I[I- Build Customer Care Team IIIDecember 2000 II Begin Development of Vl.5 Release --Ill January 2(1(11 ]1-Hire EVP of Sales and Marketing [I January 2001 [i Relocate to Permanent Facility ]i January 2001 ]1 I Launch Version 1.0 for Industrial Distributors ........ ]i Januar,¢, 2001 [i Launch wireless capabili v ][[ Janua_ 2001 ll[_-......... --__l _-Begin Development-0? Release V2.0 ........................... Ill_Vlarch 2001 ..... ]I I Launch Release V2.0 IIIj_uly 2001 ]A i Proprietary & Confidential Page 22 9/28/00I OFastChain'" II X. Appendix FASTCHAIB CORPORATION I Projected Projected Projected Projected Projected Income Statement Summary Jan '01 Feb '01 Mar '01 Apr '01 May '01 Revenues: Setup fees 229 687 1,145 I Subscription fees-VAR 5,220 20,880 46,980 Pass thru costs (Hosting/con nectivity) 688 2.753 6.193 Total Revenue 6,137 24,319 54,318 I Cost of sales: Setup costs 1,145 3,434 5,723 Cost of Subscriptions-VAR/ISV 1 182 4 727 10.635 Pass thru costs (Hosting/Connectivity) 17,500 5,500 6,126 7,377 8,629 FastChain Employee Costs 61,876 61,876 71,596 88,471 119,409 I Total Cost of Sales 79,376 67,376 80,048 104,008 144,395 Gross Profit before R&D costs (79,376) (67,376) (73,911) (79,689) (90,077) Gross Margin before R&D costs (12.04) (3.28) (1.66) I R&D costs 142,189 170,315 212,504 240,630 240,630 Gross Profit after R&D costs (221,565) (237,691) (286,414) (320,319) (330,707) Gross Margin after R&D costs (46.67) (13.17) (6.09) I General & Administrative Salaries & Wages 120,938 120,938 129,375 129,375 129,375 Travel & Entertainment 15,696 15,696 15,696 15,696 15,696 I Rent 6,067 7,000 10,267 12,133 12,600 Office Expense 2,700 2,900 3,800 4,600 5,400 Lease Expense 9,217 9,729 11,777 13,569 14,337 Legal,Accounting, & Consulting Fees 25,000 25,000 25,000 25,000 25,000 i Depreciation Expense 500 500 569 569 569 Hosting Services 3.540 3.540 3.540 3.540 3.540 Insurance (D&0, Property & Casualty, Key Man) 958 958 958 958 958 Misc. (postage, printing, etc.) 2,375 2,625 3,625 4,500 4,875 Total General & Adminlstratlve Expenses 186,991 188,886 204,607 209,941 212,351 I Selling & Marketing Expenses Salaries & Wages 88,594 88,594 109,688 161,719 161,719 Marketing/Advertising 78.684 78 684 78 684 78 684 78.684 Trade Shows 18,000 18,000 18,000 18,000 18,000 I Travel/Entertainment 28,348 28,348 37,392 44,232 53,276 Total Selllng & Marketlng Expenses 213,626 213,626 243,764 302,635 311,679 Total SG&A 400,616 402,512 448,371 512,576 524,030 I Net Incoms-Prstax (622,181) (640,202) (734,785) (832,894) (854,736) Tax Net income (622,181) (640,202) (734,785) (832,894) (854,736) Cumulative galn/(Ioss) (622,181) (1,262,383) (1,997,169) (2,830,063) (3,684,799) I Beginning Operating Cash 11,500,000 10,979,884 10.356,307 9,673,315 8,868,757 Additional Cash Expected from Investors EBITDA (operating cash flow) (621,681) (639,702) (734,216) (832,325) (854,167) Accounts Receivable (60 day turn) (6,137) (24,319) (48,181 ) I Accounts Payable (30 day turn) 101,565 16,126 54,861 52,086 40,387 Capital Costs 2,500 Period Cash Flow (520,116) (623,576) (682,992) (804,558) (861,961) Ending Operating Cash 10,979,884 10,356,307 9,673,315 8,868,757 8,006,797 IIi Proprietary & Confidential Page 23 9/28/00I FastOhain'" ! FASTCHAIN CORPORATION l Projected Projected Projected Projected Projected Income Statement Summary June '01 July '01 Aug '01 Sept '01 Oct '01 Revenues: i Setupfees 1,831 2,518 2,976 3,434 3,662 Subscriptionfees-VAR 88,740 146,160 214,020 292,320 375,840 Pass thrucosts(Hosting connectivity) 11.699 19.268 28,214 38 536 49.547 Total Revenue 102,270 167,946 245,210 334,290 429,049 I Costof sales: Setupcosts 9,156 12,590 14,879 17,168 18,312 Cost of Subscriptions-VAPJISV 20,086 33.086 48,447 66,171 85.077 Passthrucosts(Hosting/Connectivity) 10,506 12,384 13,636 14,887 15,513 i FastChainEmployeeCosts 133,472 139,952 139,952 154,015 177,370 Total Cost of Sales 173,222 198,011 216,913 252,241 296,272 Gross Profit before R&D costs (70,952) (30,065) 28,297 82,049 132,777 Gross Margin before R&Dcosts (0.69) (0.18) 0.12 0.25 0.31 I R&D costs 240,630 240,630 240,630 240,630 240,630 Gross Profit after R&Dcosts (311,582) (270,694) (212,332) (158,580) (107,852) i Gross Margin after R&D costs (3.05) (1.61) (0.87) (0.47) (0.25) General&Administrative Salaries& Wages 129,375 137,813 137,813 137,813 137,813 I Travel& Entertainment 15,696 15,696 15,696 15,696 15,696 Rent 13,067 14,933 14,933 15,400 16,333 OfficeExpense 5,600 6,000 6,000 6,200 6,800 Lease Expense 14,593 15,617 15,617 15,873 16,897 Legal,Accounting, &ConsultingFees 25,000 25,000 25,000 25,000 25,000 I DepreciationExpense 639 639 639 708 708 HostingServices 3.540 3.540 3.540 3 540 3.540 Insurance(D&0, Properly&Casualty,Key Man) 958 958 958 958 958 Misc.(postage,printing,etc.) 5,000 5,500 5,500 5,625 6,125 I Total General & Administrative Expenses 213,468 225,696 225,696 226,813 229,871 Selling& MarketingExpenses Salaries& Wages 161,719 177,188 177,188 177,188 177,188 Marketing/Advertising 78.684 78 684 78.684 78 684 78,684 I Trade Shows 18,000 18,000 18,000 18,000 18,000 Travel/Entertainment 53,276 56,696 56,696 56,696 56,696 Total Selling & Marketing Expenses 311,679 330,568 330,568 330,568 330,568 i Total SG&A 525,147 556,264 556,264 557,381 560,438 Net income-Pretax (836,728) (826,958) (768,596) (715,961) (668,290) Tax Net income (836,728) (826,958) (768,596) (715,961) (668,290) I Cumulativegain/(Ioss) (4,521,528) (5,348,485) (6,117,081) (6,833,042) (7,501,333) BeginningOperatingCash 8,006,797 7,[24,084 6,208,925 5,316.930 4,473,162 Additional Cash Expected from Investors i EBITDA (operating cash flow) (836,090) (826,319) (767,957) (715,253) (667,582) Accounts Receivable (60 day turn) (77,950) (113,628) (142,940) (166,344) (183,839) Accounts Payable (30day turn) 28,827 24,789 18,902 35,328 44,031 Capital Costs 2,500 2,500 Period Cash Flow (882,713) (915,158) (891,995) (843,768) (807,390) EndingOperatingCash 7,124,084 6,208,925 5,316,930 4,473,162 3,665,771 Ii Proprietary & Confidential Page 24 9/28/00I ,FastChain" I FASTCHAIN CORPORATION Income Statement Summary l Projected Projected Projected Projected Nov '01 Dec '01 FY 2001 Jan '02 Feb '02 Revenues: Setupfees 4,120 4,578 8,335 5,929 i Subscriptionfees-VAn 469,800 574,200 2,234,160 1,063,400 1,251,540 Pass thrucosts(Hosting/connectivity) 61.933 75 696 294.528 117,014 137.716 Total Revenue 535,854 654,474 2,528,688 t,188,749 1,395,186 Costof sales: I Setupcosts 20,601 22,890 125,895 41,675 29,647 Costof Subscriptions-VAR/ISV 106 347 129,979 505.738 236,083 277.851 Pass thrucosts(Hosting/Connectivity) 16,765 18,016 146,839 43,066 24,325 FastChainEmployeeCosts 177,370 191,433 1,516,790 232,331 239,135 i Total Cost of Sales 321,082 362,318 2,295,261 553,154 570,959 Gross Profit before R&D costs 214,772 292,156 258,605 635,594 824,227 Gross Margin before R&D costs 0.40 0.45 0.10 0.53 0.59 I R&D costs 240,630 240,630 2,690,673 252,661 252,661 Gross Profit after R&D costs (25,858) 51,527 (2,457,240) 382,933 571,566 Gross Margin after R&D costs (0.05) 0.08 (0.9"/0.32 0.41 I General &Administrative Salaries&Wages 137,813 137,813 1,586,25C 144,703 144,703 Travel & Entertainment 15,696 15,696 188,352 15,696 15,696 I Rent 16,333 16,800 155,867 18,667 19,600 Offlce Expense 6,800 7,100 63,900 7,900 8,100 Lease Expense 16,897 17,153 171,276 18,689 19,201 Legal,Accounting, &ConsultingFees 25,000 25,000 300,000 25,000 25,000 DepreciationExpense 708 778 7,528 778 778 I HostingServices 3,540 3,540 42,480 3,540 3.540 Insurance(D&0, Property&Casualty,Key Man) 958 958 11,500 1,125 1,125 Misc. (postage,printing,etc.) 6,125 6,250 58,125 7,000 7,250 Total General & Administrative Expenses 229,871 231,088 2,585,277 243,098 244,993 I Selling MarketingExpenses & Salaries&Wages 177,188 177,188 1,835,156 177,188 186,047 Marketing/Advertising 78,684 78,684 944,208 78,684 78,684 Trade Shows 18,000 18,000 216,000 18,000 18,000 I Travel/Entertainment 56,696 56,696 585,048 56,696 56,696 Total Selling & Marketing Expenses 330,568 330,568 3,580,412 330,568 339,427 Total SG&A 560,438 561,655 6,165,690 573,665 584,420 I (586,296) (510,128) (8,622,936 (190,732) (12,854) Net income-Pretax Tax Netincome (586,296) (510,128) (8,622,936 (190.732) (12,854) Cumulative gain/(Ioss) (8,087,629) (8,597,757) (8,597,757 (8,788,489) (8,801,343) I BeginningOperatingCash 3,665,771 2,903,430 2,212,390 1,572,409 Additional Cash Expected from investors EBITDA (operating cash flow) (585,588) (509,351) (8,590,229 (189,954) (12,076) I AccountsReceivable(60 day turn) (201,564) (225,425) (1,190,328 (652,895) (740,711) AccountsPayable(30 dayturn) 24,810 41,236 482,948 202,868 17,804 CapitalCosts 2,500 10,000 PeriodCashFlow (762,341) (691,040) (9,287,610 (639,981) (734,983) EndingOperatingCash 2,903,430 2,212,390 1,572,409 837,426 III Proprietary & Confidential Page 25 9/28/00I OFastChain" ! FASTCHAIN CORPORATION Income Statement Summary I Projected Projected Projected Projected Projected Mar '02 Apr '02 May '02 June '02 July '02 Revenues: Setupfees 5,672 5,929 6,187 4,640 5,929 I Subscriptionfees-VAR 1,431,500 1,619,640 1,815,960 1,963,200 2,151,340 Passthrucosts(Hosting/connectivity) 157 518 178.221 199.823 _ 236,728 Total Revenue 1,594,690 1,803,790 2,021,971 2,183,866 2,393,997 Costof sales: Setupcosts 28,358 29,647 30,936 23,202 29,647 Cost of Subscdptions-VAR/ISV 317.804 359,572 403,157 435,845 477,614 Pass thru costs (Hosting/Connectivity) 23,507 24,325 25,144 20,233 24,325 FastChain Employee Costs 242,537 275,022 278,424 278,424 292,741 I Total Cost of Sales 612,206 688,567 737,661 757,704 824,327 Gross Profit before R&D costs 982,464 1,115,224 1,284,310 1,426,162 1,569,670 Gross Margin before R&D costs 0.62 0.62 0.64 0.65 0.66 I R&D costs 252,661 252,661 252,661 252,661 252,661 Gross Profit after R&D costs 729,823 862,563 1,031,649 1,173,501 1,317,009 Gross Margin after R&D costs 0.46 0.46 0.51 0.54 0.55 I General &Administrative Salaries & Wages 144,703 144,703 144,703 144,703 153,563 Travel & Entertainment 15,696 15,696 15,696 15,696 15,696 I Rent 20,067 20,533 21,000 21,000 21,000 Office Expense 8,200 8,800 8,900 8,900 9,200 LeaseExpense 19,457 20,225 20,481 20,481 20,993 Legal,Accounting, & Consulting Fees 25,000 25,000 25,000 25,000 30,000 I Depreciation Expense 847 847 847 917 917 Hosting Services 3,540 3.540 3,540 3.540 3,540 Insurance (D&0, Property& Casualty, Key Man) 1,125 1,125 1,125 1,125 1,125 Misc. (postage, printing,etc.) 7,375 7,750 7,875 7,875 8,125 Total General & Administrative Expenses 246,010 248,220 249,167 249,237 264,158 I Selling& MarketingExpenses Salaries & Wages 186,047 186,047 186,047 186,047 186,947 Marketing/Advertising 78,684 78.684 78.684 78,664 78.684 I Trade Shows 18,000 18,000 18,000 18,000 18,000 Travel/Entertainment 56,696 56,696 56,696 56,696 56,696 Total Selling & Marketing Expenses 339,427 339,427 339,427 339,427 339,427 Total SG&A 585,437 587,647 588,594 588,664 603,585 I Net income-Pretax 144,386 274,916 443,055 584,837 713,424 Tax Netincome 144,386 274,916 443,055 564,837 713,424 I Cumulative gain/(Ioss) (8,656,956) (8,382,040) (7,938,985) (7,354,148) (6,640,724) BeginningOperating Cash 837,426 620,465 563,985 629,700 857,922 Additional Cash Expected from Investors EBITDA (operating cash flow) 145,234 275,763 443,902 585,754 714,341 I Accounts Receivable (60 day turn) (405,941) (408,605) (427,281) (380,075) (372,027) Accounts Payable(30 day turn) 41,247 76,361 49,094 20,043 66,623 Capital Costs 2,500 2,500 Period CashFlow (216,961) (56,481) 65,716 228,222 408,937 i Ending OperatingCash 620,465 563,985 629,700 857,922 1,266,859 Ii Proprietary & Confidential Page 26 9/28/00I OFastChain" ! FASTCHAIN CORPORATION Income Statement Summary I Projected Projected Projected Projected Projected Aug '02 Sept '02 Oct '02 Nov '02 Dec '02 Revenues: Setupfees 6,187 6,187 6,187 6,187 6,187 I Subscriptionfees-VAR 2,347,660 2,543,980 2,740,300 2,936,620 3,132,940 Passthru costs(Hosting/connectivity) 258,330 279 933 301 535 323,138 344,740 Total Revenue 2,612,177 2,830,100 3,048,022 3,265,945 3,483,868 I Costof sales: Setupcosts 30,936 30,936 30,936 30,936 30,936 Subscriptions-VAPJISV 521,198 564,783 608,367 651,952 695,536 Pass thrucosts(Hosting/Connectivity) 25,144 25,144 25,144 25,144 25,144 FastChainEmployeeCosts 307,507 325,226 325,226 339,992 339,992 I Total Cost of Sales 884,785 946,088 989,673 1,048,023 1,091,608 Gross Profit before R&D costs 1,727,393 1,884,012 2,058,350 2,217,922 2,392,260 Gross Margin before R&D costs 0.66 0.67 0.68 0.68 0.69 I R&D costs 252,661 252,661 252,661 252,661 252,661 Gross Profit after R&D costs 1,474,732 1,631,351 1,805,689 1,965,261 2,139,599 Gross Margin after R&D costs 0.56 0.58 0.59 0.60 0.61 ! General &Administrative Salaries & Wages 153,563 153,563 153,563 153,563 153,563 I Travel & Entertainment 15,696 15,696 15,696 15,696 15,696 Rent 21,467 21,467 21,467 21,933 21,933 Office Expense 9,400 9,800 9,900 10,100 10,100 Lease Expense 21,249 21,761 21,761 22,017 22,905 Legal,Accounting, & Consulting Fees 30,000 30,000 30,000 30,000 30,000 I Depreciation Expense 917 986 986 986 1,056 Hosting Services 3,540 3,540 3,640 3 540 3,540 Insurance (D&0, Property & Casualty, Key Man) 1,125 1,125 1,125 1,125 1,125 Misc. (postage, printing, etc.) 8,250 8,500 8,500 8,625 8,625 I Total General & Administrative Expenses 265,206 266,437 266,537 267,585 268,542 Selling & Marketing Expenses Salaries &Wages 186,047 186,047 186,047 186,047 186,047 Marketing/Advertising 78,684 78,664 78,684 78,684 78,684 I Trade Shows 18,000 18,000 18,000 18,000 18,000 Travel/Entertainment 56,696 56,696 56,696 56,696 56,696 Total Selling & Marketing Expenses 339,427 339,427 339,427 339,427 339,427 I Total SG&A 604,633 605,864 605,964 607,012 607,969 Net income-Pretax 870,099 1,025,487 1,199,725 1,358,249 1,531,630 Tax Net income 870,099 1,025,487 1,199,725 1,358,249 1,531,630 I Cumulative gain/(Ioss) (5,770,625) (4,745,138) (3,545,413) (2,187,164) (655,535) BeginningOperatingCash 1,266,859 1,770,021 2.424,195 3,232,645 4,214,386 Additional Cash Expected from Investors I EBITDA (operatingcashflow) 871,016 1,026,473 1,200,711 1,359,235 1,532,685 AccountsReceivable(60 dayturn) (428,312) (436,103) (435,645) (435,845) (435,845) AccountsPayable(30 day turn) 60,458 61,303 43,585 58,351 43,585 CapitalCosts 2,500 2,500 i PeriodCash Flow 503,162 654,173 808,450 981,741 1,142,925 EndingOperatingCash 1,770,021 2,424,195 3,232,645 4,214,386 5,357,310 II Proprietary & Confidential Page 27 9/28/00I OFastChain" ! FASTCHAIN CORPORATION Income statement Summary I Projected Projected Projected Projected FY 2002 Jan '03 Feb '03 Mar '03 Apr '03 Revenues: Setup fees 73,558 12,068 6,806 6,806 6,806 I Subscriptionfees-VAR 24,998,080 3,638,580 3,862,080 4,085,580 4,309,080 Passthrucosts (Hosting connectivity) 2,750,722 397 169 421 565 445,961 470 357 Total Revenue 27,822,360 4,047,817 4,290,451 4,538,347 4,786,243 I Costof sales: Setupcosts 367,792 60,342 34,031 34,031 34,031 Costof Subscriptions-VARJISV 5,549,760 807,150 856 729 906,308 955,887 Passthrucosts(Hosting/Connectivity) 310,645 53,167 27,684 27,684 27,684 FastChainEmployeeCosts 3,311,005 375,596 394,201 394,201 412,805 I Total Cost of Sales 9,539,202 1,296,255 1,312,645 1,362,224 1,430,408 Gross Profit before R&D costs 18,117,607 2,751,562 2,977,806 3,176,123 3,355,836 Gross Margin before R&D costs 0.65 0.68 0.69 0.70 0.70 I costs 3,031,932 265,294 265,294 265,294 265,294 R&D Gross Profit after R&D costs 15,251,226 2,486,268 2,712,512 2,910,829 3,090,542 Gross Margin after R&D costs 0.55 0.61 0.63 0.64 0.65 I General&Administrative Salaries& Wages 1,789,594 161,241 161,241 161,241 161,241 I Travel & Entertainment 188,352 15,696 15,696 15,696 15,696 Rent 250,133 21,933 21,933 21,933 21,933 Office Expense 109,300 10,500 10,900 10,900 11,300 Lease Expense 249,220 23,417 23,929 23,929 24,441 Legal,Accounting,&ConsultingFees 330,000 35,000 35,000 35,000 35,000 I DepreciationExpense 10,861 1,056 1,056 1,125 1,125 HostingServices 42,480 4 540 5 540 6,540 7,540 Insurance(D&0, Property& Casualty,Key Man) 13,500 1,208 1,208 1,208 1,208 Misc.(postage,printing,etc.) 95,750 8,875 9,125 9,125 9,375 i Total General & Administrative Expenses 3,079,190 283,466 285,628 286,697 288,859 Selling&MarketingExpenses Salaries & Wages 2,223,703 195,349 195,349 195,349 195,349 Marketing/Advertising 944,208 78,684 78 684 78,684 78,684 I TradeShows 216,000 18,000 18,000 18,000 18,000 Travel/Entertainment 680,352 56,696 56,696 56,696 56,696 Total Selling & Marketing Expenses 4,064,263 348,729 348,729 348,729 348,729 Total SG&A 7,143,453 632,195 634,357 635,427 637,589 Net income-Pretax 8,107,773 1,864,073 2,078,155 2,275,403 2,452,953 Tax 648,926 727,354 796,391 858,534 Net income 8,107,773 1,205,148 1,350,801 1,479,012 1,594,419 I Cumulativegain/(Ioss) (655,53_= 549,613 1,900,414 3,379,426 4,973,645 BeginningOperating Cash 5,357,310 6,647,847 7,936,864 9,774,941 Additional Cash Expected from Investors I EBITDA (operatingcash flow) 7,953,08_ 1,855,129 2,079,211 2,276,528 2,454,078 AccountsReceivable(60day turn) (5,559,484) (781,872) (806,584) (490,530) (495,792) AccountsPayable(30 dayturn) 741,321 217,280 16,390 49,579 68,184 Capital Costs 10,000 2,500 PeriodCash Flow 3,144,920 1,290,537 1,289,017 1,838,077 2,026,470 I EndingOperatingCash 6,647,847 7,936,864 9,774,941 11,801,411 Ii Proprietary & Confidential Page 28 9/28/00I FastOhain'" I FASTCHAIN CORPORATION Income Statement Summary I Projected Projected Projected Projected Projected May '03 June '03 July '03 Aug '03 Sept '03 Revenues: Setupfees 7,079 7,079 7,078 7,351 7,351 i Subscriptionfees-VAR 4,541,520 4,773,960 5,006,400 5,247,780 5,489,160 Pass thru costs (Hosting/connectivity) 495 729 521 101 546 473 572 821 599 168 Total Revenue 5,044,327 5,302,139 5,559,951 5,827,951 6,095,679 Costof sales: I Setupcosts 35,393 35,393 35,392 36,754 36,754 Costof Subscriptions-VAPJISV 1,007,450 1,059,012 1.110.575 1.164.120 1,217,666 Pass thrucosts(Hosting/Connectivity) 28,571 28,571 28,571 29,458 29,458 FastChainEmployeeCosts 412,805 431,410 431,410 450,015 450,015 i Total Cost of Sales 1,484,219 1,554,386 1,605,948 1,680,347 1,733,893 Gross Profit before R&D costs 3,560,109 3,747,754 3,954,003 4,147,604 4,361,787 Gross Margin before R&D costs 0.71 0.71 0.71 0.71 0.72 I R&D costs 265,294 265,294 265,294 265,294 265,294 Gross Profit after R&D costs 3,294,815 3,482,460 3,688,709 3,882,310 4,096,493 Gross Margin after R&D costs 0.65 0.66 0.66 0.67 0.67 I General & Administrative Salaries & Wages 161,241 161,241 161,241 161,241 161,241 Travel & Entertainment 15,696 15,696 15,696 15,696 15,696 I Rent 21,933 21,933 21,933 21,933 21,933 Office Expense 11,300 11,700 11,700 12,200 12,200 LeaseExpense 24,441 24,953 24,953 25,465 25,465 Legal,Accounting,& Consulting Fees 35,000 35,000 35,000 35,000 35,000 Depreciation Expense 1,125 1,194 1,194 1,194 1,264 I Hosting Services 8,540 9,540 10,540 11,540 12,540 Insurance (D&0, Property & Casualty, Key Man) 1,208 1,208 1,208 1,208 1,208 Misc. (postage, printing, etc.) 9,375 9,625 9,625 9,875 9,875 Total General& Administrative Expenses 289,859 292,091 293,091 295,353 296,422 I Selling &Marketing Expenses Salaries &Wages 195,349 195,349 195,349 195,349 195,349 Marketing/Advertising 78.684 78.684 78.684 78.684 78,684 Trade Shows 18,000 18,000 18,000 18,000 18,000 I Travel/Entertainment 56,696 56,696 56,696 56,696 56,696 Total Selling & Marketing Expenses 348,729 348,729 348,729 348,729 348,729 Total SG&A 638,589 640,820 641,820 644,082 645,151 I 2,841,640 3,046,889 3,238,228 3,451,341 Net income-Pretax 2,656,226 Tax 929,679 994,574 1,066,411 1,133,380 1,207,969 Net income 1,726,547 1,847,066 1,980,478 2,104,848 2,243,372 Cumulative gain/(Ioss) 6,700,392 8,547,458 10,527,936 12,632,784 14,876,156 I BeginningOperatingCash 1t,801,4/1 14,006,593 16,406,t98 18,990,220 21,778,230 Additional Cash Expected from Investors EBtTDA (operating cash flow) 2,657,351 2,842,834 3,048,084 3,239,423 3,452,605 i Accounts Receivable (60 day turn) (505,980) (515,896) (515,624) (525,812) (535,728) Accounts Payable(30 day turn) 53,811 70,167 51,562 74,399 53,546 Capital Costs 2,500 2,500 Period Cash Flow 2,205,182 2,399,605 2,584,022 2,788,010 2,972,923 EndingOperating Cash 14,006,593 16,406,198 18,990,220 21,778,230 24,751,153 !Ii Proprietary & Confidential Page 29 9/28/00I @FastChain" ! FASTCHAIN CORPORATION I Projected Projected Projected Income Statement Summary Oct '03 Nov '03 Dec '03 FY 2003 Revenues: i Setupfees 7,351 7,351 7,351 90,476 Subscription fees-VAR 5,730,540 5,971,920 6,213,300 58,869,900 Pass thru costs (Hosting/connectivity) 625 516 651 864 678 212 6,425,935 Total Revenue 6,363,407 6,631,135 6,898,863 65,386,312 I Costof sales: Setup costs 36,754 36,754 36,754 452,382 Cost of Subscriptions-VAR/ISV 1,271,211 1.324.757 1.378.302 13.059.167 Pass thru costs (Hosting/Connectivity) 29,458 29,458 29,458 369,225 i FastChain Employee Costs 450,015 468,619 468,619 5,139,710 Total Cost of Sales 1,787,438 1,859,588 1,913,134 19,020,483 Gross Profit before R&D costs 4,575,969 4,771,546 4,985,729 46,365,828 Gross Margin before R&D costs 0.72 0.72 0.72 0.71 I R&D costs 265,294 265,294 265,294 3,183,528 Gross Profit after R&D costs 4,310,675 4,506,252 4,720,435 43,182,300 Gross Margin after R&D costs 0.68 0.68 0.68 0.66 ! General & Administrative Salaries& Wages 161,241 161,241 161,241 1,934,888 I Travel& Entertainment 15,696 15,696 15,696 188,352 Rent 21,933 21,933 21,933 263,200 Office Expense 12,200 12,600 12,600 140,100 LeaseExpense 25,465 25,977 25,977 298,412 Legal,Accounting, & ConsultingFees 35,000 35,000 35,000 420,000 I DepreciationExpense 1,264 1,264 1,333 14,194 Hosting Services 13 540 14,540 15.540 120,480 Insurance (D&0, Property & Casualty, Key Man) 1,208 1,208 1,208 14,500 Misc. (postage, printing, etc.) 9,875 10,125 10,125 115,000 I Total General & Administrative Expenses 297,422 299,584 300,654 3,509,126 Selling&MarketingExpenses Salaries& Wages 195,349 195,349 195,349 2,344,191 Marketing/Advertising 78.684 78,684 78.684 944.208 I TradeShows 18,000 18,000 18,000 216,000 Travel/Entertainment 56,696 56,696 56,696 680,352 Total Selling & Marketing Expenses 348,729 348,729 348,729 4,184,751 I Total SG&A 646,151 648,313 649,383 7,693,877 Net income-Pretax 3,664,523 3,857,939 4,071,052 35,488,423 Tax 1,282,583 1,350,279 1,424,868 12,420,948 Net income 2,381,940 2,507,660 2,646,184 23,067,475 I Cumulative gain/(Ioss) 17,258,096 19,765,757 22,411,940 22,411,940 BeginningOperatingCash 24,751,153 27,935,030 31,330,927 Additional Cash Expected from Investors i EBITDA (operating cashflow) 3,665,787 3,859,203 4,072,385 35,502,618 Accounts Receivable (60 day turn) (535,456) (535,456) (535,456) (6,780,185) Accounts Payable (30day turn) 53,546 72,150 53,546 834,159 Capital Costs 2,500 10,000 Period Cash Flow 3,183,877 3,395,898 3,592,975 29,566,592 I Ending OperatingCash 27,935,030 31,330,927 34,923,902 Ii Proprietary & Confidential Page 30 9/28/00