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Business Plan for DVR with charts


									Business Plan for

Digital Video Recording and Surveillance Solutions

Michael Jang

Neugent Global
2621 W. Woodland Drive
Anaheim, CA 92801
Phone: 1 + 866-495-2288
Global ID:
Table of Contents

I.      Executive Summary .............................................................................................................. 3

II.     General Company Description ............................................Error! Bookmark not defined.4

III.    Products and Services .......................................................................................................... 4

IV.     Marketing Plan .................................................................................................................... 13

V.      Operational Plan.................................................................................................................. 25

VI.     Management and Organization ........................................................................................... 29

VII.    Personal Financial Statement ............................................................................................. 30

VIII.   Startup Expenses and Capitalization .................................................................................. 31

IX.     Financial Plan ...................................................................................................................... 32

X.      Appendices .......................................................................................................................... 33

XI.     Refining the Plan ...............................................................Error! Bookmark not defined.39

I.       Executive Summary

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Make it enthusiastic, professional, complete, and concise.

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    Neugent Global is a total security solutions provider that helps Original Equipment Manufacturers
    (OEMs) and other security solution providers from all over the world to complete the gaps in their product
    line-up, reduce development operating costs, and ultimately, increase end-user purchase revenues.
    Neugent Global, with headquarters in Irvine, California, began its mark in the security industry with the
    development of the Linux-based embedded DVR system and integrated application and network systems.
    Since its founding, Neugent Global has produced sales across the United States and the Asian region
    demonstrating its rapid acceptance in the marketplace. In addition, the company has continued to
    develop new and customized products in close conjunction with intended customers, which are expected
    to further accelerate revenue growth in 2006 and beyond. In particular, Neugent Global’s mobile DVR
    technology, is expected to be deployed by major distributors in the United States, Europe, and Asia. The
    company expects to generate over $20million of revenue with 45% gross margin.

    Neugent Technologies, Philippines, is the Research and Development Center of Neugent Global.
    Neugent Technologies develops and sells security systems and solutions that cater to the needs of
    customers worldwide. It is also the International Sales and Technical Service Center of the company.
    The company’s core technologies are video processing, network IP communication, and mobile
    technology. To date, Neugent Global has also opened two outsourcing offices in Korea and China for
    hardware production and technology.

    We are committed to being the top-of-mind security systems and solutions provider in the world by
    providing our customers with greater value than our competition through optimized and innovative
    technology and superior customer support.
    We will become the company that provides our customers the best quality security system and solutions
    at the most reasonable price.

    Our Industry

    The Security Industry is one of the world's fastest growing sectors creating both employment and
    economic growth at a rapid rate. In the United States, the industry generates revenues of approximately
    $18.75 billion per year with a growth rate of 11.1%. The industry has developed in its innovation, diversity
    and professionalism, often leading the way internationally. Today, it provides a wide range of security
    products and services designed to meet the needs of the worldwide community.

    The growth of the industry has partly been generated by the ongoing evolution of technology offering new
    products and services that are not only more effective, reliable and convenient, but also more affordable.
    In addition, the level of crime in the community and the random nature of crime, has encouraged many
    consumers to take proactive steps to ensure that their assets and property is protected.

    The services and products provided by the industry can be categorized into three broad areas:
            Electronic –CCTV and surveillance, access control, video and audio intercom systems,
    integrated security and fire systems, home automation, building management systems; biometrics, alarms
    and alarm monitoring
            Manpower- crowd control, airport security, guard services, mobile patrols, concierge duties,
    traffic management
            Physical & barrier security – locksmiths, perimeter fencing, security grilles, bollards and boom
    gates; safes / records protection
    Security systems are more than just alarms or simple barriers - they are a combination of technology and
    good human practices, ones that offers an efficient and effective method of keeping people and
    businesses secure, while also adding to the quality of ones life.

II. Products and Services

What is Hawkeye Security?
Hawkeye Security is a comprehensive line of surveillance and security solutions. Hawkeye Security is
built on open standards hardware, operates on a converged network infrastructure and integrates legacy
and advanced systems.

              High performance and reliability – Hawkeye Security is developed on the Linux
               platform to deliver optimized performance, reliability and stability. It comprises a line of
               Linux-embedded and PC-Based digital video surveillance systems, Linux-based central
               and mobile monitoring systems, Linux-based network solutions and complimentary
               security applications. These are: Hawkeye PC-Based, Hawkeye Embedded, Hawkeye
               Hybrid & Hawkeye Mobile digital video recorders, Hawkeye Video Servers, Hawkeye
               Central Monitoring System and Hawkeye Mobile Central Monitoring System. We also
               have powerful DVR cards that allow you to capture true color images and full motion
               videos, without the risk of system crashes, frame drops or virus attacks!
              Converged networking and integration – Hawkeye Security is readily expandable and
               compatible with a whole host of devices and systems. It allows a variety of security-
               related data streams, such as video, audio, alerts, command messages, and other digital
               data to share a common IP-based network infrastructure, thereby providing a centralized,
               cost-effective system administration. It also enables users to gather information from
               numerous dispersed systems and consolidate such information on a single view for
               decision-making. At the same time, it can provide decentralization and collaboration
               capabilities to enable many people to view similar activities concurrently so that they can
               take appropriate synchronized actions.
              Advanced core technologies – Hawkeye Security offers hardware MPEG4 (hardware
               H.264*) compression, robust video management functions that go beyond passive
               detection, efficient network IP communication, advanced mobile security solution and
               much more. (*Note: Future versions of Hawkeye Security will utilize hardware H.264.)

                                         Hawkeye Security Applications

A. PC-Based DVR Series
      1.  LX (Linux) DVR Series

                                         The LX DVR Series is a set of 8/16 channel
                                    digital video recorders, built on the Linux
                                    platform that integrates analog cameras in the
                                    DVR unit. Together with our powerful Hawkeye
                                    DVR cards, the LX DVR Series can work as a
                                    TRUE real-time digital video recording solution.
                                         This robust digital video recording solution
                                    features hardware MPEG4 compression,
                                    hardware audio recording using G.723 audio
                                    format, hardware motion detection, hardware
                                    watermark, triplex multifunctional operations,
                                    remote client (remote management flexibility
                                    with remote monitoring, playback, recording,
                                    back up and PTZ control) & web connection,
                                    PTZ functions, record schedule management,
                                    easy search & playback, sensor and alarm
                                    integration and much more. (See Appendix for
                                    complete details.)
                                         The LX DVR Series are cost-effective VCR
                                    replacement solutions that are ideal tools for
                                    loss prevention and business process efficiency
                                    strategies. The LX DVR Series is ideally suited
                                    for corporate applications, medium- to large-
                                    sized offices and buildings, hotels, airports &
                                    seaports, and some retail & commercial areas.

      2.   HX (Hybrid) DVR Series

                                         The HX DVR Series is a set of high-end
                                    16/32 channel digital video recorders that
                                    integrates IP cameras and analog cameras in
                                    the DVR unit. The HX DVR Series features
                                    hardware MPEG4 compression, hardware audio
                                    recording using G.723 audio format, hardware
                                    motion detection, hardware watermark, remote
                                    client (remote management flexibility with
                                    remote monitoring, playback, recording, back up
                                    and PTZ control) & web connection, PTZ
                                    functions, record schedule management, easy
                                    search & playback, sensor and alarm integration
                                    and more. (See Appendix for complete details.)
                                         The HX DVR Series is ideally suited for
                                    facilities or environments which are remotely
                                    dispersed, in order to leverage on existing
                                    network infrastructure and minimize cabling

B. Embedded DVR Series
     1.  SX (Standalone) DVR Series

                                                          The SX DVR Series is our mid-range
                                                     embedded digital video recorders that provide a
                                                     durable, heavy-duty surveillance solution
                                                     featuring 8 to 16 channel versions, access
                                                     control system and POS integration. It has an
                                                     embedded Linux platform to ensure system
                                                     reliability and stability of your surveillance
                                                          The SX DVR Series can provide integrated
                                                     solutions in order to strengthen perimeter
                                                     control, such as access control system
                                                     integration for a variety of industrial and
                                                     penitentiary environments. One other line of the
                                                     SX DVR Series integrates the POS system to
                                                     guarantee 99.9% shrinkage loss and increase
                                                     control of inventory in many retail and
                                                     commercial establishments.
                                                          The SX DVR Series targets small- to
                                                     medium-sized buildings, retail & franchise areas,
                                                     commercial spaces & convenient stores, gas
                                                     stations, warehouses, plants or factories,
                                                     resorts, hospitals, banks, government facilities,
                                                     museums and schools.

       2.   MX (Mobile) DVR Series
                    The MX DVR Series is specifically designed for in-the-vehicle video recording
            requirements. It’s perfect for recording events such as police footage or covert video
            surveillance footage. Its very compact size is suited for all kinds of vehicles, such as
            police patrol cards, private investigator surveillance vehicles, subways and railways,
            taxis, mini cabs, school buses and public transport. Our MX DVR Series, including our
            modern GPS solutions are protecting people in motion. Please see below for more

       3.   VS (Video Server) Series
                    The VS Series is a high-performance video server designed for professional
            surveillance applications, featuring 2 and 4 channel versions. It’s very easy to use and
            it’s the perfect single-box solution for transmitting digital video over intranet networks or
            the Internet. The VS Series connects to a wide range of Ethernet devices, such as
            Wireless Ethernet and Ethernet to ISDN, PSTN, xDSL or cable modem routers.
                    The VS Series is ideal for a lot of applications: remote monitoring, security
            systems, traffic surveillance, public transport monitoring, remote administration and
            management, parking facilities and some retail shops. Please see below for more

C. Network Security Solutions
      1.   MCMS – Mobile Central Monitoring System
                 The Mobile Central Monitoring System is a turnkey surveillance solution for
           business operators who want to centrally monitor and manage mobile assets, resources
           and people more efficiently.     The Mobile Central Monitoring System provides
           administrators and managers with unprecedented information on locations and status of

                 vehicles, powerful mapping capabilities and much more, thereby increasing profitability
                 and reducing operating costs.
                        The Mobile Central Monitoring System is ideally suited for banks, freight & cargo
                 companies, railway and transit stations, and police & military sectors.

            2.   CMS – Central Monitoring System
                 The Hawkeye Central Monitoring System provides an overall central monitoring solution
                 for many applications, such as commercial, industrial and residential. Several Hawkeye
                 digital video surveillance systems may be connected in one centralized monitoring
                 program with hundreds of cameras and integrated with sensors, alarms, and other
                 related systems (access control systems, POS, etc).

What are the competitive advantages of the Hawkeye Security?
Hawkeye Security offers:

       Optimized performance - Our Linux-based digital video surveillance and security applications
        are borne out of intensive planning & research, passionate development and numerous tests to
        ensure a high performance security solution. Hawkeye Security can be customized to provide
        only optimum performance.
       Scalability – Change is the only thing that is constant. Hawkeye Security can deliver reliable,
        durable and stable protection today and tomorrow, adapting to the growth of company security
        and safety needs. We provide innovative products that match what the customer needs.
       Value for your Money – A PC-based DVR, which costs from $1,000 to $4,000 has higher
        performance and larger capacity storage. Such are ideal for large offices. Standalone DVRs
        range from $400 to $1,000 and are perfect for small shops, like 7 Eleven and small offices. But
        how does an organization choose which one is right solution for them? We sit down with our
        clients in order to come up with the best solution and the right price for their security needs.

Take a look at some of the key advantages & benefits of Linux-based security solutions:

       Optimized system performance - Since Linux is an open-source, the DVR (for instance) system
        can be customized to include only functions and services which the customers need.
        Unnecessary applications such as e-mail and spreadsheet programs may be removed while
        some services may be fine-tuned to deliver optimized system performance. When you boot a
        Hawkeye DVR, the security application will auto-launch...and that is the only application inside
        the server.
       More reliable, stable and secure - Because Linux can be customized, it means that the
        operating system is not constantly carrying unnecessary application code. This increases the
        DVR's system reliability simply because there are fewer services running. Your surveillance
        system is also less susceptible to attacks since most of the active computer viruses today that
        have been designed to strike server & desktop applications cannot damage anything (because
        the applications are not running). Moreover, Linux provides the ability for security and
        surveillance equipment developers to go directly into the code to remedy performance
       High-speed viewing, recording & playback - Optimized Linux-based DVRs and surveillance
        applications require less memory or RAM. It also provides a bigger hard drive space.

Our Hawkeye Linux DVR solutions were built on the digital multimedia standard MPEG-4 codec. MPEG-4
delivers professional-quality audio and video streams over a broad range of bandwidths, from dial-up to
broadband, in several distribution channels, from wireless to satellite television. MPEG-4 delivers DVD-
quality video at low data rates and smaller file sizes and it can be viewed in most media players, such as
Windows Media Player, Quicktime and RealPlayer.
What are the advantages of MPEG4 over other codecs?

      Motion JPEG & wavelet compression tend to limit video resolution and frame rate. With MPEG-4,
       frame rates reach 30 frames per second, thereby delivering true real-time video.
      MPEG-4 has smaller file sizes, thus allowing fast distribution over low bandwidths and longer
       hours for storage
      MPEG-4 provides interoperability, such that videos are readable in most applications.

What are the features of the Hawkeye Security?
  A. PC-Based DVR Series
           1. LX (Linux) DVR Series

                   Linux O/S platform to provide optimized system performance
                   total display rate of 480 fps (NTSC) / 400 fps (PAL)
                   total recording rate of 480fps (480fps: 352X240 (NTSC) / 400fps: 352X288 (PAL))
                   up to 16 channels (camera input) ( NTSC / PAL )
                   up to 16 channels for audio
                   up to 16 sensor inputs
                   up to 16 relay outputs
                   hardware MPEG4 Encoder/Decoder*
                   hardware G.723 Encoder/Decoder*
                   hardware motion detection and watermarking*
                   excellent & independent TV-Out Function
                   PTZ support for RS-485
                   alert on event (sensor/relay/motion detection)
                   multi-tasking: simultaneous monitoring, recording, playback and remote monitoring
                   display mode 1, 3, 4, 7, 9, 10, 13, 16 screen division/split modes (H/W Display)
                   search recorded files by event type, via built-in calendar or by camera
                   schedule back-ups and restore old videos
                   alarm messages, i.e. e-mail and sms notification*
                   remote transmission via LAN and Internet
                   remote management: remote monitoring, back up, recording & playback
                   video recording modes: continuous or sequence, scheduled, sensor/alarm-
                    triggered, motion-detection with buffer
                   Watch Dog Function Support with auto rebooting & warning sound
                   OSD functions include Channel, Date, Time, Status OSD on TV
                   e-MAP with live camera display
                   multi-level access

                The LX-8000 DVR Series is a set of high-performance PC-based digital video recorders
                that utilize an on-chip MPEG4 encoder capable of delivering 30 frames per second at ½
                D1 resolution per camera. The LX-8000 DVR Series runs on top of a very reliable and
                secure operating system – Linux. The LX-8000 DVR Series are ideal for banks and
                companies that require some form of integration with existing systems.

Model Name      Description

LX-8800        16 Channel H/W MPEG4 encoding, 480fps/480fps display & capture rates

LX-8700        8 Channel H/W MPEG4 encoding, 480fps/240fps display & capture rates

LX-8700C       8 Channel DVR Card

               Target start of sale: February 2006

               The LX-E DVR Series is a more compact version of the LX-8000 DVR Series. At the
               heart of the LX-E DVR is an MPEG4 chip that can churn out 480 frames per second at
               ½ D1 resolution.

Model Name     Description

LX-E320        32 Channel H/W MPEG4 encoding, 960fps/960fps display & capture rates

LX-E160        16 Channel H/W MPEG4 encoding, 480fps/480fps display & capture rates

LX-E160C       16 Channel DVR Card

               Target start of sale: July 2006

               The LX-9000 DVR Series is a set of high performance digital video recorders that
               produce superb quality video. The LX-9000 DVR Series utilizes software MPEG4
               encoding at the rate of 480 frames per second.

Model Name     Description

LX-9800        16 Channel S/W MPEG4 encoding, 480fps/480fps display & capture rates

LX-9500        8 Channel S/W MPEG4 encoding, 480fps/240fps display & capture rates

               Products are currently on sale

           2. HX (Hybrid) DVR Series

                  Linux O/S platform to provide optimized system performance
                  total display rate of up to 480 fps (NTSC) / 400 fps (PAL) for analog cameras
                  total recording rate of up to 480fps (480fps: 352X240 (NTSC) / 400fps: 352X288
                   (PAL)) for analog cameras
                  up to 32 channels (camera input) ( NTSC / PAL ) (16 IP cameras; 16 analog)
                  32 (16)channels for audio
                  32 (16) sensor inputs
                  32 (16) relay outputs

                  hardware MPEG4 Encoder/Decoder*
                  hardware G.723 Encoder/Decoder*
                  hardware motion detection and watermarking*
                  excellent & independent TV-Out Function
                  PTZ support for RS-485
                  alert on event (sensor/relay/motion detection)
                  multi-tasking: simultaneous monitoring, recording, playback and remote monitoring
                  display mode 1, 3, 4, 7, 9, 10, 13, 16 screen division/split modes (H/W Display)
                  search recorded files by event type, via built-in calendar or by camera
                  schedule back-ups and restore old videos
                  alarm messages, i.e. e-mail and sms notification*
                  remote transmission via LAN and Internet
                  remote management: remote monitoring, back up, recording & playback
                  video recording modes: continuous or sequence, scheduled, sensor/alarm-
                   triggered, motion-detection with buffer
                  Watch Dog Function Support with auto rebooting & warning sound
                  OSD functions include Channel, Date, Time, Status OSD on TV
                  e-MAP with live camera display
                  multi-level access

             The HX DVR Series are hybrid digital video recorders – capable of capturing video from
             analog and network (or IP) cameras. The HX DVR Series are particularly useful for
             customers that have both remote offices and a central office.

Model Name       Description

HX-9032          16 Channel (analog) + 16 Channel (IP)

HX-9016          8 Channel (analog) + 8 Channel (IP)

             Target start of sale: March 2006

   B. Embedded DVR Series
        1.  SX (Standalone) DVR Series

             The SX DVR Series are standalone DVRs that are very easy to install and operate. The
             SX DVR Series are ideal for industrial environments and for end users that are looking
             for basic monitoring, recording, search & playback functions.

Model Name       Description

SX-2016          16 Channel H/W MPEG4 encoding, 480fps/240fps display & capture rates

SX-2008          8 Channel H/W MPEG4 encoding, 480fps/240fps display & capture rates

SX-3008         Wall-mount DVR

SX-4008         DVR integrated with Access Control System

SX-5008         DVR integrated with POS

               Target start of sale: March 2006

          2.   MX (Mobile) DVR Series

               The MX DVR Series are digital video recorders specifically designed for vehicles. One
               model comes with a GPS device that enables the vehicle to be tracked from a central
               monitoring office. At the same time, the wireless modem will allow the video be remotely
               viewed as well.

Model Name      Description

MX-1004         4 Channel Mobile DVR

MX-2004         4 Channel Mobile DVR with GPS and wireless modem

          3.   VS (Video Server) Series

               A video server is a small device that converts analog video signals to Internet Protocol.
               Our VS Series provides a simple and cost-effective solution for remote monitoring
               without the need for bulky equipment.

Model Name      Description

VS-1002         2 Channel with built-in camera (1 camera)

VS-1004         4 Channel

   C. Network Security Solutions
         1.   Mobile Central Monitoring System

               The Mobile Central Monitoring System works with mobile DVRs equipped with GPS and
               wireless modems. The MCMS provides a real-time visual vehicle tracking system. The
               MCMS is specifically useful for logistic companies like Fedex and DHL, and bus or taxi

          2.   Central Monitoring System

II.       Marketing Plan

What is market size, trends in growth and consumer preferences?

         From BCCResearch
             o 2001 - $11 billion market for electronic, optical, acoustic, security, detection, monitoring
                and surveillance and security systems
             o This is expected to reach $18.8 billion in 2006
             o The market is divided into Access Control Systems (ACS), Acoustic Monitoring (ACSM),
                Biometrics, Detection Systems, Electronic Article Surveillance, Law Enforcement, Video
                (Optical) Monitoring and Security Alarm Systems (Video).
             o Video Monitoring and Security Alarms have the largest market share at under $5 billion,
                followed by ACS segment with a share of about $2.2 billion.
             o 1996 - $4.27 billion total sales for Electronic Surveillance and Monitoring Systems
             o 1998 - $6.47 billion total sales
             o 2000 - $9.87 billion total sales
             o 2001 - $11.09 billion total sales
             o 2006 - $18.75 billion total sales
             o Annual Growth Rate of 11.1%
             o Reference:

         From ScanSource
             o Table: US CCTV Market Potential
Year                           $Billions                                  Growth (%)
2004                                 1.66                                 12.7
2005                                 1.87                                 12.7
2006                                 2.1                                  11.9
2007                                 2.35                                 11.9
2008                                 2.62                                 11.4
2009                                 2.92                                 11.5
2010                                 3.26                                 11.6
              o   Compound Annual Growth Rate (2004-2010): 11.9%

              o   Table: US CCTV DVR Market Potential
Year                              $Millions                               Growth (%)
2004                                 412.9                                35.3
2005                                 529.9                                28.4
2006                                 666.8                                25.8
2007                                 834.9                                25.2
2008                                 1,028                                23.1
2009                                 1,265                                23.1
2010                                 1,557                                23.1
              o   Compound Annual Growth Rate (2004-2010): 26.2%

              o   Table: Global IP-Based CCTV Market Forecasts
Year                                 $Millions                            Growth (%)

2004                              159                                  39.3
2005                              227                                  39.6
2006                              312                                  40.9
2007                              441                                  41.2
2008                              611                                  38.6
2009                              848                                  38.9
2010                              1,180                                39.1
           o   Compound Annual Growth Rate (2004-2010): 39.6%

      From Global Sources (December 2005)
          o Top value additions in digital video recording solutions would include motion detection,
              networking, remote and IP surveillance functions
          o Security products market (of which CCTV cameras are a key product) will be worth some
              $74 billion by 2008
          o Industry drivers include heightened security needs, enhanced attractiveness of higher-
              end electronic systems due to advancing technologies and moderating prices
          o A high degree of vertical integration will be taking place in China and the most advanced
              countries. China’s CCTV product supply industry is growing by 25-30% annually. About
              50% of makes are capable of manufacturing total CCTV solutions, 25% focus on single
              product type that they export directly or provide to other domestic makers who assemble
              total CCTV solutions, and at least 70% produce two or more product types.
          o More companies are exploring the market for standalone DVRs and some manufacturers
              have forecast double-digit growth rates in 2006
          o In China, there are about 20 professional DVR manufacturers. There are also 20 new
              entrants coming from other CCTV product lines. Hangzhou Hikvision Digital Technology
              Co. Ltd and Shenzen TMVideo Technology Co. Ltd lead the group of professional DVR
              makers in China.
          o In South Korea, the industry is estimated to grow by 12.8%R in 2006. 2005 seems to be
              the turning point for the line, which shifted from PC-based DVRs to standalone DVRs.
          o Demand for DVR products is not as high as that of consumer products, though it has its
              niche market such as banks, telecommunications, transportation, factories and
          o Major overseas markets include North America, Europe and Southeast Asia. The major
              China DVR manufacturers export 70% of their output to America, Europe, UK, Italy and
              Russia, while the remaining 30% goes to Singapore, Hong Kong, Taiwan and Australia.
              Shenzen Tongwei Tech Co. Ltd (China) will be exploring markets in South America,
              specifically Argentina and Brazil.
          o South Korean makers’ main markets include the European Union, USA and Japan.

      Miscellaneous Sources 2005
           o Rising instances of security breaches such as attacks on the WTC, bombings in the J.W.
               Marriot Hotels, attack on the Indian parliament and train bombings in Madrid have
               reinforced the need to invest in security devices including video surveillance equipment.
               CCTV systems have witnessed an increase in demand due to technological
               improvements and advanced features in terms of integration with ACS, biometrics and
               digital video software. Smart cameras that provide intelligent analysis of captured video
               images are also driving the market as the process of surveillance becomes more
               proactive and efficient.
           o Technological advancements have removed some of the barriers to purchase such as
               price, complexity of operating and installation.

o   While the US and European markets have reached maturity for conventional video
    surveillance technology, Asia Pacific is still in the late stages of growth and offers strong
    potential for video surveillance equipment both in terms of manufacturing and
o   The impending switchover from analog to IP systems, the constant demand for video
    networks, the rising influence of the IT executive, the oncoming trend in smart cameras,
    intelligent video and new storage systems are all part of the rising importance of video
    systems to corporate security executives who allocate a higher share of their budget to
    the technology every year.
o   In New Zealand (4M population), there is also a growing awareness and acceptance of
    safety and security equipment as a result of the world’s security conflicts and domestic
    society changes. Products from Japan attribute to almost 60% of market demand and
    dominate the supply of video equipment. China comes in second. US imports of building
    security equipment seems to be small, but there is a positive outlook for US security
    companies to offer surveillance equipment, new innovative technologies for building and
    car alarms. Key purchasing factors include product innovation, brand, reputation and
o   In Taiwan, an increase in the demand for safety and security products is expected from
    the private sector (ongoing commercial and residential building construction projects,
    expanding large wholesale and retail areas, high-tech manufacturing facilities and
    personnel protection supplies), as well as the public sector such as military, law
    enforcement, Coast Guard, Customs and energy supply facilities. Taiwan’s safety and
    security market increased by 27.28% from US $1.25 billion in 2001 to US $1.59 billion in
    2003. Safety and security market includes: information and communication security,
    system integration, general safety equipment (surveillance) and fire fighting and industrial
    safety equipment. General safety equipment total market size in 2001 was at US $403
    million and grew to US $551 million in 2003. Taiwan imports safety and security system
    equipment primarily from Japan, US, UK, South Korea and Germany. Competitive
    advantages for local and other Asian firms are lower prices, faster delivery schedules and
    prompt support. Competitive advantages of US and European firms are quality and
o   In Thailand, the safety and security market in 2004 was valued at $433 million. For the
    next few years, market is expected to expand steadily at 5-10% rate. Market includes
    locks, safes, security boxes and doors, surveillance cameras, CCTV, burglar/fire alarms,
    exit/entry screening systems, outdoor perimeter protection, sensors, wireless
    equipment/technology, installation tools, supplies & accessories, packaged software,
    magnetic strip cards, smart cards, proximity cards, x-ray equipment and accessories,
    anti-shop lifting devices, fire extinguishers and rescue devices. Estimated total market in
    2005 is $225 million. Commercial property, banks, residential high rises and upper-end
    hotels are major users of safety and security equipment. Retail sector (currently about
    117 discount stores, 230 department stores, 247 supermarkets, 3650 convenience stores
    and 650 specialty stores) is also one of the major markets. In the next 12-18 months,
    major purchases would come from maintenance and upgrade of international and
    regional airports, upgrade on security of government buildings and upgrade of ports.
o   Malaysian market size for safety and security equipment in 2004 was estimated at $170
    million. About 65% of that total market demand, valued at US $110 million, came from
    imports. US share of import was about 24% or US $26 million. Market remains strong
    and is expected to experience an annual growth of 5%. Market size for airport and
    seaport security equipment in Malaysia is 2004 was about $21 million. Demand from
    2005-2009 is estimated at $120 million. US companies presently dominate the market for
    this sub-sector. Commercial, public places, offices and banks also demand safety and
    security equipment. (There are about 8,000 banking ATMs in Malaysia.)

            o   Hong Kong is a growing market for safety and security equipment and services. In
                general, Hong Kong market leans towards more sophisticated, high-tech products, an
                area in which US firms enjoy prominent market share. In 2004, imports for security and
                safety equipment totaled approximately US $873 million. Please see the below table.
                (Values are in US $ million)

Year                       2003                        2004                        2005
Total Market Size          103                         126                         150
Total Imports              772                         873                         1000
Total Imports from US      39                          61                          100

            o   US companies should use Hong Kong as a base for outreaching end-users in China.
                Hong Kong is China’s major sourcing agent for safety and security equipment for the
                2008 Olympics in Beijing. Commercial and industrial users are major seekers of video
                surveillance systems in Hong Kong.
            o   Indian market for security and safety equipment was at $300 million in 2004. This is
                expected to grow to about $356 million in 2006. India imports 40% of safety and security
                equipment. Currently, the US is enjoying an approximately 40% import market share.
            o   The Singapore market leans towards more sophisticated, high-tech security products, an
                area in which US firms enjoy a prominent market share. Increased commercial, industrial
                and institutional construction/renovation continues to fuel the demand for security
                equipment in Singapore. While the most commonly used security hardware includes
                intruder alarm systems, ACS, CCTV, CMS and door-entry systems, there are also
                tremendous opportunities for US firms to develop new technologies to supply the growing
                demand for security, innovation in products such as frequency identification technologies,
                biometrics and identity technologies.
            o   In Australia, most of the technology and equipment needed for security is imported.
                Major suppliers originate in the US, EU and Israel. Among the markets in Australia
                include private enterprises, government-owned facilities, national landmarks,
                manufacturing industries, aviation and maritime sectors.
            o   In the Philippines, industry insiders note increasing demand for ACS, CCTV and DVRs
                and integrated building management systems. Property, buildings, commercial and retail
                establishments, and industrial sector are potential end-users.
            o   In Japan, the market for security products and systems in 2003 was $110 million. Video
                surveillance and monitoring systems are one the best prospects for the coming years.
            o   Aside from major corporations, transportation hubs, casinos, correctional facilities,
                hospitals and schools who have made the move to digital, there are literally hundreds of
                thousands of different enterprises around the world who want to use the DVR for
                improved security. Among these enterprises are small retail shops, gas stations,
                franchise and retail chain individual outlets, small workshop, warehouses, public utilities,
                dispatch and freight centers and cargo & luggage transportation depots.

What are trends in product development?

           o   By now, many are aware of the advantages of a digital video recorder over VCRs: better
               images; superior search capability; simultaneous recording, playback and live display;
               flexible network and remote management capabilities; and robust integration with
               systems, such as access control systems, POS, and storage systems.
           o   The DVR market is growing at a very strong rate, with approximately 27% of all recorder
               units sold in the US in 2000 were digital. By the end of 2002, the number had increased
               to 39%.
           o   The most significant technological advances are occurring at the higher end of the
               market. The DVR is moving from a recording box to a sophisticated system loaded with
               video management features. Some cool DVR enhancements are a combination of a
               DVD/multiplexer, video content analysis, and out-of-the-box modular software solutions.
               Other innovations include neural network processing, which allows security personnel to
               have the system automatically look for a specific object that was detected during
           o   Some DVRs can now analyze the color, shape and size of an object. It can also adjust
               its parameters to an existing situation and learn what counts as normal behavior in that
               environment. Then it can watch for anything that does not fit that model.
           o   Another feature concerns the frame rate. Some DVRs can auto-adjust frame rate of
               stored video based on preset conditions. Some solutions have multi-zone motion
           o   Another advancement in DVRs is integration with many systems such as access control
               systems and POS. DVR integrated with POS systems offers search by time and date,
               cashier, receipt number, transaction type, credit card or product. This integrated solution
               can also generate graphs of employee activity and other reports. There is also a big
               space-saving benefit users get from DVRs, because of advancing technologies in storage
           o   Being able to provide wireless video transmission is also an interesting development.
               These transmissions include viewing recorded video from cellphones, PDAs and wireless
           o   Some manufacturers are about to release network servers, hybrid DVRs, and server-type
               DVRs. In China, manufacturers are now focusing on standalone DVRs built on the Linux
               OS, customized industry application, network ability, optimized storage use and
               extension applications.

What features, benefits and advantages will our products and services have for the market?

Businesses demand profits and millions of people around the world want a safe and secure place to live,
work and play. Security drawbacks lead to loss of millions of money and deaths. Hawkeye Security aims

to provide a “safe and sound” environment for people around the world. It seeks to improve workplace
efficiency, prevent criminal offenses, and deliver safety and security.

The LX DVR Series product will offer the following:

       high performance and reliability* (no system crashes, no slow video speeds, no virus attacks!)

       first class video compression using a dual-speed full hardwired MPEG-4 encoder that can
        processes a 16 channel DVR 480 CIF video in real-time

       unrivaled audio bitrate of 5.3 - 6.3 kbps (G.723 format) to ensure clear and understandable

       crisp and high quality images, allowing full motion video for superior facial recognition

       smooth real-time playback, optimized bandwidth utilization (lower data rates) and more
        storage space

       multi-level access control for increased management flexibility

       unmatched stability to ensure continuous recording for hours or days

       integration with access control systems, energy conservation solutions, storage servers and
        much more

The HX DVR Series has the following benefits (on top of the LX DVR Series’ benefits):

       Easy, single and highly accessible Video Management - Users can monitor, record and
        manage IP video with any web browser-based device like a PC, PDA or a mobile phone. Internet
        connection is all that is needed. Multiple cameras and locations can be accessed and monitored
        from a single log-on.

       Value for your money – The HX DVR Series is the most expensive and high-end DVR solution,
        but when you think about the total cost of ownership over an analog CCTV/DVR system, the
        incremental cost of the cameras are not significant when compared to adding DVRs on site,
        additional cabling and installation.

       Complete integration - Both IP and analog cameras can be accessed and monitored on one

       Intelligent recording and intelligence at the camera level* - Video is recorded and or
        transmitted only when a specific event or alarm is triggered, which saves up on video storage as
        well as network bandwidth. Where else does action take place but in the DVR system itself? This
        makes it difficult to run intelligent video applications. However, the hybrid pushes intelligence out
        to the camera level, to allow functions such as built-in event handling, sensor input, relay output,
        video motion detection and other capabilities allow IP cameras to make decisions on when to
        send alarms and to whom, when to send video, and even at what frame rate or resolution to send
        the video.

       Scalability - Users can scale the system from one camera to thousands of cameras in individual
        increments. On the contrary, DVRs usually require users to increase in 8-channel or 16-channel
        jumps, even if only one additional camera is actually added to the network.

The SX DVR Series offers:

      Durability in order to stand the test of time and meet rigorous environments
      Reliability and stability via an embedded Linux platform
      Increased retail/commercial transaction management capabilities via integration of video
       and transaction data, report generation, power searches and much more

The MX DVR Series provides:

      Peace of mind, by providing high-quality products that guarantee safety for passengers and
      Cost-effectiveness and efficiency to meet a variety of mobile needs, such as being able to
       track the speed, zone, route, or locale of the vehicle or being able to track driver performance
      Easy-to-use digital video recording solutions that offer clear and crisp images and audio, alarm
       and GPS (Global Positioning Systems) integration and much more
      Faster recovery of stolen assets and reduction in insurance premiums

What after-sale services will we provide?

We will provide up to two (2) years of warranty for our products, phone and online live support, on-site
after-sales maintenance, and replacements.
Our warranty covers only those defects which arise as a result of normal use of the product, and do not
apply to any:
                    A. Improper or inadequate maintenance or modification;
                    B. Software, media, parts, or supplies not provided or supported by Neugent; or
                    C. Operation outside the product’s specifications

Maintenance is optional and will be billed on a case-to-case basis, while replacement products are
covered only for the original warranty period. Please see Appendix for our detailed Warranty and
Maintenance Terms.

Who are your customers?

Our target customers are OEMs, such as Fujitsu, D-Link, LG, Sony and the like and leading
hardware/electronic manufacturers and distributors, who plan to enter the safety and security market.
Some of these customers can be distributing safety and security products already, and would want to
have innovative or supplementary products or out-of-the-box solutions mixed with their surveillance

Who are our competitors?

         FACTOR         Hawkeye      Strength(s)                   GeoVision          to

                                     performance                    Windows-
         Products                                                                      1
                                    and optimized                     based
                                      solutions                    systems are
                                                                     prone to

FACTOR        Hawkeye    Strength(s)                    GeoVision           to
                                                        crashes and
                                                        virus attacks

Price                    competitive        Slightly      Slightly          2
                           pricing        higher than   higher than
                                           Hawkeye       Hawkeye

                          hardware                         Using
                            MPEG4                         Wavelet,
Quality                  compression       Almost         MPEG4             1
                        to deliver true   similar to    compression
                           real-time      Hawkeye           and
                             video                       proprietary
                        Intelligent and
Selection                hardworking                                        3
                          R&D team

Service                 24/7 Support          ?              ?              1

Reliability                                                                 1

Stability                                                                   1

Expertise                                     ?              ?              2


                         in USA with
                          R&D in the            US,
                         Philippines,     Germany,
Location                     plus           China,      Taiwan, US          3
                         outsourced        Japan,       and Japan
                        manufacturing     Spain, and      offices
                        in Korea and       Taiwan
                            China          branch

            FACTOR          Hawkeye     Strength(s)                     GeoVision          to

                                        Step by step
            Sales                       aggressive;
                                                               ?              ?            2
            Method                       customer-

(Note: In the final column, 1 = critical and 5 = not very important.)

        Very Satisfactory      Satisfactory       Fair

What are our marketing strategies?

Our major strategies would include:
      Continuous product enhancement and development, as well as constant R & D, adhering only to
       strategic market positioning standards as stated below:
Product                    Highlights
LX DVR Series                Optimized Linux-based digital video surveillance solution using hardware
                             MPEG4 compression technology
HX DVR Series                High performance Linux-based hybrid digital video surveillance solutions
                             integrating analog and IP cameras for corporations with a central head office
                             and many dispersed branches
SX DVR Series                Durable standalone surveillance systems integrating access control systems,
                             POS, alarm & sensor and other applications, such as license plate recognition
                             for rugged & industrial environments
MX DVR Series                Core digital video surveillance solution for vehicles, protecting people in
VS Series                    The single-box solution for transmitting digital video over intranet networks or
                             the Internet
MCMS                         A real-time feature-rich visual vehicle tracking system
CMS                          A powerful overall central monitoring solution

         Connection and strengthening business ties with potential partners, distributors and customers
         Expansion of market reach via aggressive product promotion
         Educating the market about the need for safety and security products

How are we promoting our products?

The Hawkeye Security products will be promoted via print, online, aggressive below-the-line marketing
tools and a variety of other advertising media. Please see details below:

         Print

            o Quarterly Broadsheet and Magazine Advertisements
            o Annual Direct Mail
            o Press Releases
       Word of Mouth
       Online
            o Website + E-commerce Websites
            o Search Engine Optimization, monthly Webmails, Newsletters, Paid Advertising and B2B
                Online Trading
            o Press Releases
                     Online marketing is a powerful way of getting our products out in the market.
                        (There are currently more than 700 million Internet users in the world.) A lot of
                        competitors are educating the market about safety and security through online
                        means. There’s also an essential percentage of B2B transactions taking place
                        online, which poses as a big opportunity for us.
       Trade Shows (at least 2 of the major safety and security trade shows)
                     Participation in trade shows is a very effective way to meet business clients and
                        consumers alike. It will provide us the opportunity to introduce our company and
                        our products and services.
       Dealer Promotions
            o Incentives
            o Discounts
                     Providing dealers with the right incentive will make them push our products to the
                        market. An example would be giving the dealer a free product sample if the
                        dealer is able to meet a specific quota for a given period of time.
                     We also have set up a different types of dealer membership, such as a Platinum
                        Membership, which in this case the dealer will receive the lowest dealer’s price,
                        on the condition that they sell this corresponding volume and amount of product.
                     Initially, we will be sourcing out many dealers. This will get our products out into
                        the security channel sector. We will maintain cooperative relations with these
                        dealers and we will make sure that we set reasonable performance standards.
                     We shall guarantee the dealers’ responsibility for promoting and marketing the
                        products. The dealers shall commit a launch plan with a budget to ensure
                        success. Dealers shall ensure that any marketing strategy or plan does not
                        deviate; harm or damage our marketing objectives for the product. The dealers
                        must at all times uphold the product and carry on an organized and effective
                        marketing plan for the product.
                     We will also provide full product and technical support
       Business Partnerships
                     Our aim to get to know the key players in the industry and learn the marketing
                        strategies that they deploy. There is a big opportunity to integrate certain
                        business applications with our products, such as POS, ATM, traffic systems, and
                        police & military systems.

On top of these promotional methods, we also plan to create new business cards, new product
presentations, case studies of safety and security requirements in vertical markets, and an online product

We want to be the top-of-the-mind digital video recorder provider. We believe that the mix of print, word
of mouth and online advertising will instill strong product recognition.

How do we set price policies?

Our prices are very competitive, providing value for the customer’s investment. We use standard
methods of setting the price via thorough evaluation of product demand, volume of demand, and
competitors’ prices.

Our 8ch DVR card’s selling retail price is from $800 to $850. Our OEM price for the 8ch DVR card ranges
from $400 to $450, depending on the volume of order. Based on our research, our price is 10%-15%
lower compared to other products in the market. In fact, there are some cards (16 channel input and
software MPEG4 compression) which offer dealer’s price equal at our OEM price. The same card’s SRP
ranges from $950-$1,000.

Our DVR system prices are also very competitive, with the LX-8000 Series SRP from $3,000 to $3,500.
Other DVR systems which have similar functions as our product, except for hardware MPEG4
compression technology, are priced from $3,500 to $4,500.

Price is one of the major factors when consumers purchase products. We do not wholly believe in
lowering the price, just so to sell our products, although it works sometimes. We value maintaining a
competitive price and we believe in other factors, such as quality, support and service.

To accommodate customers who have financial concerns, we have developed several methods of
payment such as leasing, installments, discounts, and demo-to-buy strategies.

What is the proposed business location?

Neugent is currently headquartered in the United States. Rising instances of security breaches and
acceptance of surveillance cameras in the public sector in the US have increased the demand for safety
and security products, thus making the USA one of the major markets for surveillance solutions. This is a
critical factor for our business’ success.

Instant and nearby access to customers will be beneficial because it would provide:
        solid immediate product and technical support and consultation
        faster transaction processing and product deliveries
        convenient and cost-effective business operations

Neugent Technologies, Inc., the R&D arm of Neugent Global, is currently situated in the Philippines for
the following reasons:
        inexpensive labor costs
        no-communication barrier, as English is a widely accepted second language
        strong business and workplace cooperation, teamwork and Filipino ingenuity

Neugent Korea and Neugent China offer inexpensive manufacturing costs.

What are our distribution channels?

Our distribution channels include OEM partners, wholesale distributors and leading security dealers. On
top of these, we have our own sales force and a few independent representatives.

What are our sales forecast?

Please see Appendix for more details.

III.        Operational Plan

At present, Neugent Global China is dedicated to outsourcing manufacturing companies for hardware
production. All products are shipped to the Neugent Technologies R&D Center Philippines for testing to
ensure that all products are designed and produced to meet or exceed customer requirements and

Quality Control
Failure Testing
All our products undergo failure testing in Neugent Technologies Philippines to expose any unanticipated
weaknesses. It is only after the engineering team has conducted the necessary improvements that they
are sent for production.

Total Quality Control
To avoid major problems which may lead to a decrease in sales, Neugent Global makes sure that the
specifications of all our products meet or even exceed customer requirements especially in terms of
reliability, maintainability, and safety.

We follow the following procedure:

       1. Marketing clearly defines the customer requirements..
       2. Specifications had to be defined to conform to these requirements.
       3. Conformance to specifications were introduced during development and manufacturing.
       4. Management had makes sure that the number of engineers is equal to the work imposed on them
          and holidays, celebrations and disputes did not affect any of the quality levels.
       5. Inspections and tests were carried out, and all components and materials bought in or otherwise,
          conformed to the specifications.
       6. Any complaints received from the customers were timorously and satisfactorily dealt with.
       7. Feedback from the user/customer is used to review designs.

If the original specification does not reflect the correct quality requirements, quality cannot be inspected or
manufactured into the product. Eventually, we also plan to achieve best-in-class operating practices and
leverage company-wide opportunities, utilizing six sigma measurements.

Customer Service
Neugent Global takes time to satisfy customers. We conduct constant research to find out what our
customer actually wants. We do calls and on-site visits to existing customers for maintenance of our
systems and products. Customers may also reach our technical support group who work round the clock
24/7 through our GID (Global ID) or front office.

The ideal location for the Neugent Technologies, Inc. R & D is to be in the PEZA (Philippine Economic
Zone Area). Business hours would be flexible from 8:00 am to 5:00am or 9:00 am to 6:00 am.

PEZA shall encourage and support investments of Information Technology (IT) Enterprises, as well as the
establishment and operation of IT Parks / Buildings to serve as readily available suitable locations for
their operations, in order to accelerate the growth and development of the Philippine IT sector.

In this connection, PEZA shall implement the following guidelines on the registration of IT Enterprises and
IT Parks and Buildings, for availment of incentives provided under Republic Act No. 7916 (The Special
Economic Zone Act of 1995), as amended by Republic Act No. 8748.

I.   Definition   of   Information   Technology,   IT   Enterprises   and   IT   Parks   and   Buildings

In connection with the PEZA registration of IT Enterprises and IT Parks and Buildings, for availment of
incentives provided under R.A. No. 7916, as amended by R. A. No. 8748, the following definitions shall
     "Information Technology" or "IT" is the collective term for the various technologies involved in
        processing     and   transmitting    information,    which   include    computing,    multimedia,
        telecommunications, microelectronics and their interdependencies. Also called "informatics" or
        "telematics", the term "IT" is now also often used to refer to the convergence of various
        information-based, broadcast and mass media communication technologies. (NITC 1997);
     "IT Service Activities" are activities which involve the use of any IT software and / or system for
        value addition;
     "IT Enterprises" are companies operating / offering IT services;
     "IT Park" is an area which has been developed into a complex capable of providing
        infrastructures and other support facilities required by IT Enter-prises, as well as amenities
        required by professionals and workers involved in IT Enterprises, or easy access to such
     "IT Building" is a building, the whole or part of which has been developed to provide
        infrastructures and other support facilities required by IT Enter-prises, and which may also
        provide amenities required by professionals and workers involved in IT Enterprises, or easy
        access to such amenities.
     "Facilities-Providers" are owners / operators of buildings and other facilities inside economic
        zones / IT Parks which are leased to PEZA-registered locator enterprises.

II. Information Technology Service Activities Registrable with PEZA for Enjoyment of Incentives

IT service activities registrable with PEZA for enjoyment of incentives shall include:
     Software development and application, including programming and adaptation of system software
         and middleware, for business, media, e-commerce, education, entertainment, etc.;
     IT-enabled services, encompassing call centers, data encoding, transcribing and processing;
         directories; etc.;
     Content development for multi-media or internet purposes;
     Knowledge-based and computer-enabled support services, including engineering and
         architectural design services, consultancies, etc.;
     Business process out-sourcing using e-commerce;
     IT research and development; and
     Other IT related service activities, as may be identified and approved by the PEZA Board.
An IT Enterprise operating any of the above-listed IT service activities may register with PEZA for
availment of incentives provided under R. A. No. 7916, as amended by Republic Act No. 8748, provided it
physically locates inside a PEZA-registered IT Park, Building or special economic zone, which is covered
by the required Presidential Proclamation.

Incentives for PEZA-Registered IT Enterprises

PEZA shall grant registered IT Enterprises the following incentives
    Income Tax Holiday for four (4) years for Non-Pioneer IT Enterprises, or six (6) years for Pioneer
      IT Enterprises;
    After the ITH period, the option to pay a special 5% tax on gross income earned, in lieu of all
      national and local taxes, except real property taxes on land owned by developers;
    Exemption from payment of import duties and taxes on imported machinery and equipment and
      raw materials;

        Additional deduction equivalent to 50% of training expenses, chargeable against the 3% share of
         the national government in the special 5% tax on gross income;
        Permanent resident status for foreign investors with initial investments of US$ 150,000.00 or
        Employment of non-resident aliens required in the operation of IT Enterprises; and
        Other incentives, as may be determined by the PEZA Board.


We are proud to have engineers who strive for excellence. Our R&D team is composed of self-driven and
dedicated individuals with experience and knowledge in software development, database system
architecture & design, web development, systems analysis, information systems administration and
network & security. Their expertise includes the following:

Operating Systems: Windows, Linux and Unix
System Architecture: Intranet/Internet and Client-Server
Hardware: x86, IBM PPC, Sun Sparc, DEC Alpha, Zilog 80, Motorola 68k, Firewall, Router,
Languages: C/C++, Java, Pascal, Python, VB, VB.NET, Perl, ASP
Web-based Language: PHP, HTML, CGI, Javascript, DHTML
Databases: MySQL, Oracle, MS Access, MS SQL, PostgreSQL, XML
Server Applications: Microsoft IIS 4.0/5.0, Microsoft Message Queue, Tomcat, Apache
Network: Extensive experience in TCP/IP, VOIP and VPN

At the same time, we have passionate sales and marketing people who envision Neugent Global to
become a global leader in providing digital multimedia communication.

We keep an inventory of components as well as finished products. Product parts that have to be sourced
out from China have to be ordered two weeks in advance.

                     Annual Cost of Good             Inventory           Annual Inventory
                            Sold                    Investment               Turns
 LX-8800                  270,000.00                273,600.00                  0.99
 LX-8700C                1,760,000.00               1,760,400.00                  1
 LX-8700                  507,000.00                509,600.00                  0.99
 LX-E320                  180,000.00                186,000.00                  0.97
 LX-E160C                1,450,000.00               1,450,500.00                  1
 LX-E160                  500,000.00                504,000.00                  0.99
 HX-9032                  342,000.00                348,000.00                  0.98
 HX-9016                  260,000.00                264,000.00                  0.98
 SX-2016                 1,610,000.00               1,611,400.00                  1
 SX-2008                 1,800,000.00               1,800,800.00                  1
 SX-3008                  800,000.00                801,000.00                    1
 SX-4008                  400,000.00                401,000.00                    1
 SX-5008                  400,000.00                401,000.00                    1
 MX-104                   420,000.00                420,600.00                    1
 MX-204                   350,000.00                351,000.00                    1

 VS-102                    60,000.00                     60,200.00                 1
 VS-104                    90,000.00                     90,300.00                 1
 MCMS                     300,000.00                     320,000.00               0.94


Neugent Technologies’ suppliers are accredited and established in the industry.

Hardware Components
PC Express, Philippines
Acumax, Philippines
TQM, Philippines
Biostar, China

Cables and Connectors
Deeco, Philippines

Managing Your Accounts Receivable

For payment policies, please see Appendix. For slow-paying customers, here are some of our policies:

       Make phone calls within two (2) days before the due date

       Send letter sixty (60) days after the due date

       Demand letter from attorney 90 days after the due date

Managing Your Accounts Payable

IV.       Management and Organization

         Board of Directors
              David J. Cruz Jr.
              David R. Cruz III
              Su Kwan Jang
              Su Jaung Park
              Joselito V. Banaag
         Management Advisory Board
              David J. Cruz Jr.
         Attorney
         Accountant
              Leoncio Y. Fuertes
         Insurance agent
         Banker
         Consultant or consultants
         Mentors and key advisors

V.     Personal Financial Statement

Please see Appendix.

VI.      Startup Expenses and Capitalization

      A. Monthly Personnel Salaries in Philippine Peso

         See Appendix.

      B. Depreciation and Repair and Maintenance

         Depreciation expense was computed based on a straight-line method. Repair and Maintenance
         cost is estimated at 15% of depreciation cost annually.

      C. Rental

         Space and office rental is computed at Php 70,000.00 per month, with an incremental increase of
         20% per annum.

      D. Taxes and Licenses

         Income tax is computed at 35% per annum. There is also Value Added Tax (VAT) of 12% on all
         Philippine-based sales.

VII.   Financial Plan

See Appendix.

VIII.   Appendices


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