Sample Business Plan swocc

O e e • \ \ / e O 0 0 0 ! ts_p BY SLI_¢C.CC_ fa_a_E _ W_$t _ 5WOt'GCOM 1-_0-333.3_t33 OR f._, y.._... . . : Dennis Ciccone ." • .. _.., ".: : 0 • e • e • • • e • e • Confidential Business Opportunity Presented to: Dennis Ciccone Managing Director Lycos Ventures July 11, 2000 Please Contact: Merritt L. Friedman 682 Marrett Road Lexington, MA 02420 Voice: 617.886.0452 Fax: 501.423.5929 e-maih mfriedman@swocc.com All information contained herein is the proprietary and confidentiai properly of skrnbb.com Inc. (D.B.A swocc.com). It is being submitted to you solely in connection with your consideration of doing business with swocc.com. This document may not be reproduced in whole or part without the written consent of swocc.com's managemenL This information has been prepared by the management of swocc.com and reflects the subjective views and opinions of the management team. e • • • • • e 0 0 0 0 0 e e _occ us our onl,ne :: O • O e 9) Table of Contents Executive Summary Market Segments Teens __p_pi ng indepe_en_/ Page _ 1-4 1-2 2 2 e • Intemational Other e e e e e O swocc.com Account Funding Process Exchange Merchants Overview swocc.com e-Shopping Overview Affiliate Merchant Overview Utilization of Universal Shopping Cart Application Security and Fraud Related Issues Competitive Advantages Appendices 4-5 5-6 6 7 7 e e O 8 9 e e • e e e e e e e e Company Profile Management Team and Board of Advisors All Corporate Logos are the Property of their Respective Companies. e e 0 0 9) 9) "swocc.com is a revolutionary technology enabled service and infrastructure company that can provide networks and portals with a value-added e-commerce solutJon that serves as a "bricks and clicks" digital bridge by allowing cash to be instantaneously funded to on-line purchasing accounts for those without access to credit and debit cards or those who do not wish to use a credit card for ecommerce transactions." Executive Summary e _) _) 9) swocc.com is a revolutionarytechnologyenabled serviceand infrastructurecompany that can provide networks and portals with a value-added e-commerce solution. swocc.com'spatent-pendingElectronic Prepaid Purchasing Unit Account Funding Network (EPUNET TM serves as a fundingand paymentenginefor all e-commerceand ) e-media aspects of an existingnetworkor portal. Integrationof the swocc.comEPUNET enablesportals and networksto make e-commercecash transactionspossiblefor those without access to credit cards or debit cards. The following business opportunity focuseson the teen market,howeverswocc.com has identifiedseveralmarketsegments that, once EPUNET is integrated,will increase the network'srevenueopportunities, s a EPUNET serves as a funding and payment engine for those without other viable altematives. swocc.comalso recognizesthat EPUNETcan be deployed exclusively a swocc.com on brandedportal. Teen Market Segment Teens lack of access to payment methodscombinedwiththeirdemographicand cultural trends makes them a potentiallyvery profitablemarket segmentfor existingnetworks Today's teens are lookingfor purchasingindependenceand would prefer e-commerce modelsthat mirrortheir traditionalbrickand mortar mallvisits. A quotefrom the Spring 2000 Teenage Research Unlimited (TRU) Teenage Marketing & Lifestyle Study validatesthe swocc.comconceptby statingthat: "Teens interest in easing transactions over the Intemet is worth exploring. Most teens now have to get permission to use parents' credit cards in order to make purchases online. Teens also voice concems about the security of using credit cards over the Net. A secure and independent payment method for goods bought online would be welcomed by many teens." Integration of swocc.com's patent-pendingElectronic Prepaid Purchasing Unit Account Funding Network (EPUNET_ intothe Lycosportalwill open the floodgates to teen onlinespendingat Lycosby providingan easy and effective closed-loop methodologyfor teens to fund onlineaccountsand shop independently withoutthe use of credit,charge,debit, stored-valueor pre-paidcards. Hence the acronymswocc"Shopping With Out Credit Cards." Teens comprise a demographic group that is 31.5 million members strong, have considerable spending power and are considered the most wired generation ever. Teens representenormouspotentialfor online spending,yet very few have access to • 9) _) 9) 9) e 0 9) Q 9) 9) e _) _) e _) O ProprietaryndConfidential a 1 ..-.P._ e e e e e 9) the method of payment most widely accepted by online merchants - a credit card. Please see the Teenage Research Unlimited (TRU) Teenage Marketing & Lifestyle Spring 2000 Study Excerpts in the Market Research Reports, which serves to validate the swocc.com concept. Of the total $153 billion spent by teens in 1999, lack of effective online payment methodologiesled onlineteen spendingto amount to only $250 million,only .16% of totalteen spending. An analysisof teen spendingrevealedthat 67% of the $153 billion in purchases could have been transacted online. Experts predict that total teen spending will reach $166 billion by the end of 2000, resultingin an online potential opportunity $111.0 billion, swocc.com of willgreatlyincreasethe abilityof teens to shop online and, rather than compete against current funding methodologies,is wellpositionedto aid portalsin extending this marketto itsfull potential. 9) International Market Segments The EPUNET has worldwideapplicationwherever a POS terminalcan be located and access to the Intemet is available. A swocccan be denominatedin any currencyor tied to the US Dollar. In SouthAmerica, the infrastructurerequiredto embracethe Internetis being builtat a rapid pace. Abundantfears relatedto fraud and creditcardsecurityhave limitedSouth Americansuse of creditcards, therebyindicatingsignificantopportunityfor deployment of EPUNET. 9) European e-commerce is beginning to show signs of mirrodng the rapid growth experienced in the United States. The familiadty that Europeans have with pre-paid cards,whichgained acceptancemore rapidlyand more widespreadthan they did in the UnitedStates, suggestsEuropeanswouldeasily embracethe EPUNET concept. The swocc.comEPUNET is idealfor facilitating e-commercein Japan. As demographic, legislative,and technical trends have contributedto a recent boom in Japanese ecommerce, cultural issues have prevented Japanese consumers from taking full advantageof the e-commercemedium. Currentmodels,wherebyJapaneseconsumers have merchandise delivered to retail locations, such as 7-11, would perfectly complementthe swocc.commodel. Fears of credit card fraud and settlementissues abound, and the average Japanese consumercharges less than $2000 per year on credit cards. The swocc.comprocess would mitigate these fears and provide the Japanese consumerwithabundante-commerceopportunities. e e e e Other Market Segments EPUNET can be utilizedby adults who eitherdo not have a creditcard or who do not feel secure in the use of creditcardsfor paymentfor E-commercetransactions. Jupiter Communications reported in August of 1999 that consumersidentifysecudtyof credit card informationas their primaryconcern in conductinge-commerce. A recent Louis Harris survey confirmedthat more than six millionpeople have been victimsof online creditcard fraud to date and thatfraudulenttransactions constituteup to 10% of a Web merchant's total sales. e 0 ProprietaryndConfidential a 2 '+;_,' e e e 0 0 0 0 swocc.com Overview _) 9) 9) 9) 9) O _) As depicted in Figure 1, swocc.com'sinnovativefundingmethodologyutilizesPoint-ofSale terminalslocatedat ExchangeMerchantlocations, uch as musicand video stores. s The brandede-pass is nota stored-value cardand the teen does not need to purchasea new card each time they would liketo fund their account,but ratherthe e-Pass serves as an online accountidentifierwhich serves to fund the teen's accountat the point-offunding. Figure 1. swocc.com AccountFundingProcess swoccsinsta_meously fundedto teen's account,swocc.com'sEPUNETservesas the digital bridgebetweenthe ExchangeMerchantandtile Q • _) _) :4t,., _ e.Pass TM . ;li:.. ::,,,,,,,IClt , Merchants (f.e.vidoo Existing stores,music stores, Point-of-Sale pharmaciestc.) e Terminal Teen Account InstantlyUpdated Online. ]!32'IiPIC___ Affiliate Merchants "r,.'7 °- Hewlett-Packardand VeriFone, our technologypartners in creating our e-commerce enablingtechnology,have workedwith us in orderto configureboththe front and backend systemrequirements.Hewlett-PackardConsulting, hroughtheir E-Service Solution t Engineering Group, has validated the architecture and confirmed that it can be 9) 9) 9) integratedwith minimaltechnologicalrisk. EPUNET, based on VedFone's Integrated PaymentSolutionserves as the digitalbridgebetweenthe ExchangeMerchantand the teen's swocc.comaccount. The flexibilityof EPUNET is such that it can be integrated intoexistingterminalsor deployedintonew terminals.The swocc.comEPUNET enables teens to fund onlineaccountsindependently and easily. 9) integrationof the swocc.comEPUNET providesan extremelycapital-efficientprocess for a networkor portalpartner, thereby increasingits attractivenessfrom an investment perspective. As accountsare pre-funded,moneyisreceivedpriorto purchaseindicating a negativeoperating cycle and the network or portalwill receive intereston the float for the lengthof time priorto a purchasebeingmade. Integration of the swocc.com EPUNET intoa portal or networkwillallow the networkto provide a service and generate additionalrevenue from its merchant partners and providersof streamingand downloadableBroadbandand e-media services, in that the swocc.comEPUNETwill serve as the paymenttechnologythat can extendtheir market to the teen population.The swocc.com EPUNET will create greater demand for the Company'sonlineservices as the networkcan nowdeliver a viable paymentoptionfor the lucrative teen marketto its onlinemerchantpartners. _) e 9) 9) 9) _) Q e _I Proprietary andConfidential 3 Q.__, Q O O e e O 9) swocc.com,the EPUNET and the unique Exchange Merchant distributionstrategy, representthe mosteffective, accessible,secureand desirablemethodfor teens to shop online, swocc.comis well-positioned becomethe premierfundingmechanismfor the to new millennium. swocc.com Account Funding Process 9) The swocc.com patent-pending Electronic Prepaid Purchasing Unit Account Funding Network (EPUNET_ willsubstantially increasethe rate of spendingby teens online,by providing teens withfundingindependenceand allowingthemto use swocc(s) to make online purchasesand payfor Broadbandand e-media services. A swoccis a dollar denominated ElectronicPrepaid PurchasingUnit (EPU) TM, whereby $1.00 = 1 swocc, and is created instantlyand electronically teens at Point-Of-Sale terminals, for located at Selected Exchange Merchant's (EM) retail locationsthat cater to the teen market. Once a teen has becomea registeredmemberof Lycos,a Lycos-branded e-PassTM (an 9) embossedplasticmembershipcard) will be mailedto the teen. e _) e e Powered _by: & e 9) O 9) _) _) The e-Pass has an encryptedmagneticstripeon the back,which,when swipedthrough the Point-of-Sale (POS) terminal, instantlyfunds the teen's onlinepurchasingaccount withswoccsat the momentthe teen makesa cashexchange at the ExchangeMerchant location. The e-Pass is not a stored value card, but ratherserves ONLY as an online account identifierthat when swipedthrough the POS terminal immediatelyfunds the teen's ownOnlinePre-paidPurchasingAccount(OPPA) TM undertheirsolecontrolat the Lycos site. The teen is then able to use their swoccsto purchasemerchandiseonline from Lycos' rosterof teen-orientedAffiliateMerchants(AM) or payfor the downloadof Broadbandand e-media services. Figure1. swocc,comFundingProcess-Shopping fromAffiliateMerchants swoccsim,_ant_neousiy fundedto teen's account,swocc.com'sEFiJNETservesasthe digita! bridgebetwc.e_ account. Merchant_mdthe the teen's Exch_ge e e Merchants (i.e.video stores,music stores, pharmacies, etc.) . •-/:,-_r li_ _' "'_ ....._ . ,,_ TeenAccount InstantlyUpdated Online. Affiii=te Merchants .............. e'Pass_ Existing Point-of..Sa!e Termina! e Proprietary and Confidential 4 _;_;_.. e e e 0 e 0 0 O Figure2. swocc.comFundingProcess-Downloading-media e swoccsinstantaneously funded ]mMG to teen'saccount. v_==____ __Ei _ Exchange _ MerchantsmmBdl_ videostores) (i.e.musicand '_ _/_ ' '/f Existing Point-of.Sale Termina! • "1_ ,. , m L_ Movie,game, software,book,etcor downloaded PC to TVand paidfor from Teen'saccount e @ The above figuresdemonstratesthat, in contrastto parent-fundedcreditcard accounts or storedvalue cards, the swocc.com EPUNET processprovidesteenswithquick,easy, secureand independentfundingand purchasing power. The unique EPUNET electronicdelivery and funding system will also facilitate the purchase of swoccs by non-members, purchases of swoccs as gifts, or funding by members who have not yet receivedtheirswocce-Pass. Exchange Merchants (EM) Overview _) The use of existingP0S terminalsat Selected ExchangeMerchant(EM) retaillocations will enable the establishmentof a uniqueand proprietaryelectronicfundingnetworkfor ElectronicPre-paidUnitsto the teen market. EPUNET serves as a modularframework that forms the digital bridge between the Exchange Merchant locationand the teen's online account. A terminaladapter componentprogram routes the transactionto the switchingcomponentand serves to identifya networkor portalmember, swocc.com's patent-pending EPUNET can be easily implemented into the Exchange Merchant's existingPoint-of-Saleterminals.This feature eliminatesany inventoryhostingas well as avoids the costs associated with the deploymentof additionalequipment, employee trainingand anyconcernsan ExchangeMerchantmighthave regardingcounterspace. In identifying potential Exchange Merchants, swocc.com evaluated four criteria: geographic reach, teen relevance, desire to increase teen foot traffic and desire to increase =bdckand click" brand presence among teens, swocc.com will enter into agreements with Exchange Merchantsin variouscategories, includingentertainment retailers,fast food chains,specialtyfood chainsand pharmaciesto establishgeographic reach of its proprietary network, swocc.com has identified 100 nationaland regional retail chains that are suitable as EMs, representing over 170,000 potential POS locations, swocc.comintendsto limit P0S deploymentin order to ensure exclusivity, and is currentlyin negotiationsto reach Exchange Merchantagreements with several well-knownnationalretailers. _) 9) _) Q @ O O Q Proprietary and Confidential 5 _ O O O When an agreementis reachedwith Lycos,swocc.comenvisionsBames& Noble, one of Lycos' premiere affiliate merchant partners, as a perfect Exchange Merchant Location. swocc.com believes that the EPUNET offers a compelling propositionfor potential ExchangeMerchantsincluding: • The potential to build foot traffic and loyalty from the lucrative teen market. Competitivebenchmarking has led to expectationsof approximately millionusers six by our fifth year of operations. Assuming teens fund their accounts in $20 increments,and spend$330 througha networkportal,16 extravisitsto an Exchange Merchant retaillocationare requiredby each teen. The end-resultisa potential100 millionteen visitsto swocc.comExchangeMerchantretaillocations. • the EPUNET process can be implemented into existing terminals at the retail locationsof the ExchangeMerchant, and therebyeliminatesany concernsregarding counterspace at the point-of-saleand trainingof employees, the potentialto increaserevenuesand market share, the potential to increase brand presence in the physical and virtual worlds as significantmarketingand advertisingopportunities exists between swocc.comand ExchangeMerchants.In the physicalworld,co-brandingopportunities existon the ePass and in media advertising.In the virtualworld,the potentialexistsfor Exchange Merchantsto become an exclusiveon-lineAffiliate Merchant within their category and O • • O O O • the potentialintegrationof ExchangeMerchants'and the networks loyaltyprograms. swocc.com e-Shopping Overview As Lycosalreadyutilizesthe AffiliateMerchantmodel,memberswill navigateto the mall, where links are provided to the Affiliate Merchants.Once a teen selects an item to purchase from an Affiliate Merchant's Web site, the Affiliate Merchant or Universal ShoppingCart (USC) providerwill requestthe paymentinformationfrom swocc.comin the same manner that they would request informationon a credit/chargecard sale (Private Label Credit). swocc.com supplies the Affiliate Merchant with the generic swocc.comcredit/debit/charge/ACH account which to charge either the purchase of merchandiseor e-mediadownloads, swocc.comsuppliesthe AffiliateMerchantwiththe shippingaddressand other information that is requiredto completethe orderand assure proper delivery. The teen memberdoes not provideany buyerprofileinformation the to AffiliateMerchant. Once the transactionis complete,the funds are deducted from the O O O O O teen's Online Prepaid PurchasingAccountand the member'sonline account balance immediatelyreflectsthe new balance. • 0 0 0 ProprietaryandConfidential 6 _:; ", e e 9) Affiliate Merchant (AM) Overview EPUNET providesteens the purchasing powerto independentlyand securelycomplete purchasing transactions from an AffiliateMerchant'ssite. Integration of the swocc.com EPUNET offers several benefits for Lycos' Affiliate Merchants(AM) including: • Members representa no-costmethodto increaseeyeballsto the AM site. Opportunity provideteens withthe abilityto spendtheir ownmoneyat the AM site. to Opportunityto provideteens with a securemethodfor shoppingon the AM site. Opportunity buildbrand in the virtualwoddthroughplacementin the mall and the to potentialto sponsorcontentto push purchases. Creationof a flawlessshoppingexperienceservesto increaselook-to-buyratio. e 9) 0 l 0 • • • 0 • Integrationof the swocc.comEPUNET alsouniquelyrespondsto the needs of potential Affiliate Merchantsin the games, video, and movie download and streamingarenas. The swocc.comprocess providesa methodologyfor teens, the largestconsumers of entertainment,to participatein the rapidlyemergingcategory of BroadbandInteractive _1_ Services and e-Media. Utilization of Universal Shopping Cart (USC) Application e swocc.com is seeking to implement a cost-effective USC application with a portal/network partner to enhance the shopping experience of the teen members, whereby a user can place merchandisefrom more than one Affiliate Merchant into a shoppingcart yet the user is only requiredto checkoutonce. In additionto streamlined checkout,implementing universalshoppingcart has many benef'_sincluding: a • surfingand shoppingacrossall AffiliateMerchants, • • • • • automaticIoginand registration AffiliateMerchantsduringthe buyingprocess, at onlineshoppingrecordsacrossallAffiliateMerchants, abilityfor swocc.commembersto buildwish liststhat can be accessedby familyand friendsso that merchandisecan be purchasedon the swocc.commember'sbehalf, a comparisonshoppingengine, and reverse merchandiseauctions where Affiliate Merchants can bid competitive pricesto convert latentdemandlisted in user's cartsto completedpurchases. e e 0 e e e _I swocc.com currently has an agreement with RedCart.com of San Francisco to implement their USC technologywithinthe swocc.comsite. A network or portalpartner can leverage the USC with its existingAffiliate Merchantsas utilizationof the USC serves to increasethe conversionrate of browsersto buyers. ProprietaryndConfidential a 7 ,-i , e e e e e 9) Security and Fraud Related Issues We will strictly protect the personal and accountinformationof all members.Individual memberinformationwill not be disclosedor sold under any circumstances,swocc.com will work to attain the TRUSTe trustmarkas it pertains to swocc.com'sprivate policy concerningmembers. Memberaccountswill be monitoredto detectabusiveor potentialfraudulentuse. swocc.com is working closely with VeriFone to identify and eliminate any potential loopholesthat may allowfor the swocc.comprocessto be used in a fraudulentmanner. The swocc.commethodologyprovidesthe added benefitthat memberscan onlyspend what they have funded, and thereby avoid the risksassociatedwiththe abusiveuse of credit. Competitive Advantages 9) 9) O 9) 9) 9) 9) 9) • 9) 9) _) 9) • swocc.com'suniquepatent-pendingprocessis significantly differentthan otherfunding and payment mechanismsavailable to teens, swocc.com is the only funding and paymentenginethat allowsteens to shopin a way that mirrorstheirtraditionalbrickand mortar experience. Integrationof the swocc.comEPUNETwill allow Lycosto compete on the teen appeal and geographicreach of its distribution strategy that requiresno creditcards or parental involvementto open onlineaccounts,fund onlineaccountsand shoponline. Consequently,EPUNETcreates the following competitiveadvantagesover otherteen e-commercefacilitators: • Customer retention costs associated with On-line Affiliate Merchant malls have typicallybeen extremely high as shoppers learn to bypass the On-line mall and proceed directlyto the AffiliateMerchant sites.The swocc.comEPUNET is closed loop and preventsthe teen from bypassingthe Lycos site as swoccscan only be utilizedthroughthese sites. The onlinefundingmethodsof swocc.com's competitors causesthem to losetheir exclusiverelationship withcustomersonce a purchasehas been made, as the online merchantnow has direct influenceand marketingpower over the online shopper. In contrast, integrationof swocc.comEPUNET enables Lycos to capture both the teen and the affiliatefee revenues associatedwith the teens' purchases,as well as retainsmarketinginfluenceover the teen, as swoccs can onlybe used on the swocc.comsite; Memberscanopen and fund onlineaccountswithoutthe useof credit,charge,debit or storedvalue cards; Members'onlinepurchasingaccountsare instantaneously funded; Members have immediate use of funds in their online purchasing accounts; Fundingprocesseliminatesthe incidenceof creditcard fraud. A recent LouisHarris surveyconfirmedthat more than six millionpeoplehave been victimsof onlinecredit card fraud to date and that fraudulenttransactionsconstituteup to 10% of a Web merchant'stotal sales. Fraudulent use of credit cards has caused e-commerce e O _) O 9) D O O 9) O • • • 9) e e e e e _)O Proprietary andConfidential 8 __._._. ', e e 9) • _) vendorsto experiencechargebackratesbetween15% and 30%, as comparedto 1% by brick-and-mortar usinesses; b • • Teens can openand fund onlineaccountswithoutparentalinvolvement; Geographic reach and teen relevance of selected Exchange Merchants ensures convenience and accessibility in funding accounts; and The extremelylowpercentageof holdersof debitcards and checkingaccountsespeciallyin the 12-15 (2% have debitcards and 6% have checkingaccounts)and 16-17 (7% have debitcards and 15% have checkingaccounts)age brackets indicatesthe difficulties that competitors that seek to tie accountsto teen's personal accountswill have in establishingcriticalmass. Diminishing threatof competitors the that seek to tie onlineaccountto a parent'saccountis thisdirect quotefrom the study:"Teens interest in easing transactions over the Intemet is worth exploring Most teens now have to get permission to use parents' credit cards in order to make purchases online. Teens also voice concerns about the security of using credit cards over the Net. A secure and independent payment method for goods bought online would be welcomed by many teens." O e • 9) 9) 9) e 9) swocc.com, the EPUNET and the unique Exchange Merchant distributionstrategy, representthe mosteffective, accessible,secureand desirablemethodfor teens to shop online. As the competitive advantages describe, the swocc.com EPUNET is well positioned becomethe premierfundingmechanismand paymentengine for the new to millennium. e e e 0 e e e e 0 e e e e 0 e e e e _ Proprietary andConfidential 9 _' e e e 0 0 0 0 • Company Profile skrubb.com inc. (d.b.a. swocc.com)is a Delaware corporation (The Company), incorporatedSeptember2, 1999 and is registeredto do businessin Massachusetts. Board of Directors LuisAndresPerez - Chairman JamesZucco, Jr. Merritt LaurelFriedman Trisha Perez Kennealy JohnWilliamVancura 0 Officers LuisAndresPerez President& CEO StephenM. Andress Secretary JohnWilliamVancura ActingCFO JohnAkins Vice President& CTO Merritt LaurelFriedman Directorof Marketing KeithCampionMaddock Directorof InternetEnterprise Development Derek Dowd Directorof ExchangeMerchant Relations e • O Q Q O O O Q O Q Q O Q Q O O Q O O Q O O O e e Proprietary andConfidential (,,..._._,_, e e e e 0 • Management Team and Board of Directors Luis Andres Perez, Co-Founder,Chairman,CEO and Presidentof the Company. Mr. Perez is a CertifiedPublicAccountant.He earned his BBAfrom Pace Universityand his MBA from the Harvard BusinessSchool. He started his publicaccountingcareer with Price Waterhouse Coopers. He was a cofounder of an accountingand consulting practice, whichwas sold to Arthur Andersen& Co. and where he became a principal. He has been involvedin the operationsof construction, istribution d and manufacturing enterprises,which were co-founded,developedor acquiredby him and subsequently sold. His currentbusinessinterestsare primarilyfocusedon the e-commerceaspects of the Intemet. James Zucco Jr., Memberof the Boardof Directorsof the Company. Mr. Zucco is CEO of Spike Technologies,a pioneer in broadbandwireless access. Spike'stechnologyenables such digitalservices as voice over IP, highspeed Internet access, high-speed data transmission,video streaming, video on demand, data warehousingand remoteWAN/I_ANmanagement. Mr. Zucco is drivingSpike'sstrategic direction, business development, and daily operations. Mr. Zucco also serves as Chairman of the Board of LockStar Inc., a venture-backed company focused on integratedsecuritysolutionsfor the eBusinessmarket. Mr. Zucco joined Spike from venture capitalfirm, Kleiner Perkins Caufield and Byers, where he was CEO in Residence. Priorto joiningKleinerPerkins, Mr. Zucco served as Chairman,Presidentand CEO of ShivaCorporation,where he restoredthe companyto profitabilityand negotiateda successfulmergerwith Intel Corporation. Prior to joining Shiva, Mr. Zucco was a key executive in the AT&T divestiturethat created LucentTechnologies.As vice presidentand general manager, he led Lucent's most profitableproductbusiness,North America NetworkSystems. He also served as the first president and successfully launched Lucent's CommunicationsSoftware businessunit. During his tenure at AT&T, Mr. Zucco was vice presidentand general manager of Advanced Network Applications at AT&T Business Communications Services. He launchedthe first set of commercial Internetbusinessesat AT&T for ecommerce, web hostingand Internetaccess services and streamlinedthe company's customerservices. Mr. Zucco also serves as Chairman of the Board of LockStar Inc., a venture-backed companyfocusedon integratedsecurity solutions forthe eBusinessmarket. John Akine, Vice Presidentand Chief TechnologyOfficer. Mr.Akins previously served as the ManagingConsultantof Pre-Sales TechnicalSupport at 2Roam, Inc., a supplier of wireless handhelddevices for access to the Intemet. Before joining 2Roam, Mr. Akinswas at VeriFone International,a divisionof Hewlett-Packardand was responsible for pre-sales communication and systemdesign of three-tierclient server transaction e e e • Q Q 0 e e e e Proprietaryand Confidential _ .._,_' 0 e 0 0 0 0 • processingsystemssuch as IPS, Omnihost,vPOS, vGate in the physicaland virtual space. Prior to VeriFone, Mr. Akins was responsiblefor Developmentof a POS protocolfor use with Data-Over-Voice and Integrated-Services-Digital-Network (ISDN) equipmentat Applied Digital Design Inc. The protocolhas been adopted by Bellcore and is nowavailablenationally.In addition,Mr. Akinsthirtyyears of experienceincludes seniorpositionsat Ricoh, InformationSolutionsInc.ArtelonicsCorporationand Sandia NationalLaboratories. swocc.comwill be able to leverageJohn'sextensiveexperience and knowledgeof IPS and POS systems. Stephen M. Andress, Secretary of the Company. Mr. Andress graduated from Georgetown UniversitySchool of Foreign Services, earned an MA in International Relationsfrom the University of Arkansasand a JD from the University of California (Berkeley) School of Law. He is a Senior Partner in the firm of Nutter, McClennen& Fish. His practiceinvolvescorporatemergersand acquisitions, inance,joint ventures, f technology licensing and distributionand export controls. His varied list of clients includes General Electric, United Technologies Corporation, and AirNet Communications. O O John William Vancura, Member of the Board of Directors and Acting CFO. Mr. Vancura is a Certified PublicAccountant. He earned his BSBAfrom BryantCollegeand his MBAfrom F.W. Olin Graduate Schoolof Businessat BabsonCollege. He beganhis career withArthurAndersen & Co. and has heldvarioushigh levelfinancialpositionsin multi-state telecommunications and restaurant companies. He has extensive experience with SEC compliance,Federal and multi-statetaxation,401K compliance, Federal Communicationsand State Public Utility Commissiontelecommunications registrationand compliance. He is currentlyVice President of Finance and CFO of ServiSense.com. He has experiencein workingwith start-upsand developingoperating controlsand procedures. Mr. Vancura is Mr. Perez'son-in-law. Trisha Perez Kennealy, Member of the Board of Directors of the Company. Ms. Kennealyearned her AB in Government from Harvard Universityand her MBAfromthe Harvard BusinessSchool. She is currentlya Vice Presidentspecializingin IPOs of communications infrastructurecompaniesat RobertsonStephens. Ms. Kennealyis the daughterof Mr. Perez. Merritt Laurel Friedman, Co-Founder, Member of the Board of Directors and Director of Marketing. Ms. Friedmanearned her BA in International ffairsand Economics(Cum A Laude) from Lafayette College and her MBA from F.W. Olin Graduate School of Businessat BabsonCollege (Cum Laude). Ms. Friedmanhas priorexperienceworking with the teen market as a coordinatorand marketer of travel programsfor junior high and high school students. Her post-MBA experience includes developing marketing strategies and new products for the Global Marketing Group at State Street Global Advisors, a division of State Street Bank. Ms. Friedman will be responsiblefor marketingto the teen marketsegmentand for managementof the Web site content. O • O O O Propdetan/and Confidential _.,_.._,,. O O 0 0 0 0 0 • • • • • • O O • Keith Campion Maddock, Co-Founder and Director of Internet Enterprise Development. Mr. Maddock earned his BS in Economicsfrom San Diego State. University. He spent five years at Charles Schwab and Fidelity Investmentsin sales capacityto highnetworthclients. In May 1998, he receivedhis MBAfromthe F.W. Olin Graduate Schoolof Businessat BabsonCollege. His postMBA experiencebefore CoFounding swocc.com included Equity Research at ABN AMRO and research and marketingat UAM InvestmentManagement. Mr. Maddockis responsiblefor all aspects of our relationship withthe AffiliateMerchantsand businessdevelopment. Derek Dowd, Co-Founder and Director of Exchange Merchant Relationships. He earned his BA in Historyat the Universityof California,Berkeleyand his MBA fromthe F.W. Olin Graduate Schoolof Businessat BabsonCollege. He has workedin several industriesincludingproperty management and foreign exchange. Most recently he worked for an educational division of the Washington Post Company, where he managededucationalcentersfor childrenaged 4-14. Mr. Dowdwill be responsiblefor the commercialand operatingaspects of the EPUNET as they relate to the Exchange Merchant. John R. Wilder, Director of TechnologyManagement. Mr. Wilder is a graduate of Bryant College where he earned a BBA in Computer InformationSystems. He was previously employedby Open Market,where he was responsible the implementation for of comprehensive QualityAssuranceprogramsforthe developmentand maintenanceof his company'sleading Internetsoftwareproduct. The QA programencompassedthe processof productassurance,configuration management,and processimprovement f o products running on Windows NT and Solaris UNIX platformsusing Java, XML and Object Design, Inc. object-oriented database technology. Mr. Wilder will be primarily responsiblefor managementof the ApplicationService Providerrelationship well as as QualityAssuranceSystemsand Controls. • • O • • • O Q O O O O O Q Q Q Q O Q O Proprietaryand Confidential , =__:_:_,, Q Q 0 0 0 0 Board of Advisors 9) Todd L. Davis, Presidentand founderof Nobel Emectronic Transfer, LLC. Nobel ElectronicTransfer, LLC is a switch for and processorof electronic financial transactions. Nobel currentlyprocesses credit card settlementfor 25,000 merchants. Currently,sixty banks rely on Nobel'scard issuing/processing facilities.Nobel added a completeinternationalswitching/authorization capabilityto itsproductmixin early 1999. Nobel's suite of products provides its clients with a truly integrated e-commerce paymentplatformincludingXML based ElectronicFundsTransferfacilities. Mr. Davis worked out of the Middle East and Europe for over twenty years leading companiesand institutions throughthe transitionfrom traditionalfamily run operations to modern internationalcorporations. Mr. Davis worked with dozens of companies, agencies and institutions,ncludingUniversityof Tehran, University of Kuwait,Najeeb i AI-Mutawa & Sons, InternationalContractors Group, The Public Authority for Civil Informationin Kuwait, The National Bank of Kuwait. His work included: corporate marketing strategy planning and implementation;systems design and development; policies, methods, standards and procedures development and implementation; systemsand accountingaudit controlsdesign and lobbyingfor improvedinternational trade regulations. Since returningto the US, Davisworkedwiththe Bushadministration and congresson mattersdealing with the Middle East, helped found ElectronicExchangeand Transfer Corporation, consulted on two new bank start-ups, and founded Nobel Electronic Transfer, LLC. Mr. Davis is very active in civic affairs especially those related to inter-cityeconomicdevelopment,youthand international elations. r George Naddaff, retail operations advisor to the Company. Mr. Naddaff currently servesas Chairmanand directorof BusinessExpansionCapitalCorporation(=BECC"), which he founded in 1986. BECC invests in developing enterprises capable of expansionthrough replicationof a successfulprototypeoperation. Mr. Naddaff also serves as Vice Chairmanof Mortgage.com,whichwent publicon August11, 1999 and raised approximately$57 milliondollars. Mr. Naddaff was a Founder, Chairmanand CEO of BostonChicken. In additionto formulating overallstrategicdirection,he was in chargeof BostonChicken'sfranchiseexpansionprogram. Mr. Naddaffsold his companyto a groupof Blockbuster executivesin 1992, whotook it publicin 1993. Other companiesthat Mr. NaddafffoundedincludeInternationalFoods, Mulberry Learning Centers, Living and Learning Schools, which was later sold to KinderCare and VR Businessa businessbrokerage franchise which sold over 350 franchisesthroughoutthe United States,Canada and Puerto Rico. Ronald E. Cahill, intellectualpropertyadvisorto the Company. Mr. Cahill graduated from Cornell University with a BS in Mechanical Engineering and a Masters of O Q • O Q • O O O Propdetaryand Confidential _.. • _-_ Q Q 0 0 0 0 • Engineering. He receivedhisJD fromthe Universityof Pennsylvania.He is a partnerin the firm of Nutter, McClennen & Fish where his practice includes patent and trade secret litigationin federal courts, patent prosecutionand the related counseling. His practice covers a broad range of technologiesincludingmicroprocessors and software processand inventions. Michael John Kennealy, financial advisorto the Company. Mr. Kennealyearned his BA in Governmentfrom Dartmouth College and his MBA from the Harvard Business School. He is a partner in a leading Boston venture capital firm specializing in telecommunications companies. Mr. Kennealyis marriedto Trisha Perez Kennealy,a memberof the Boardof Directors,and is Mr. Perez' son-in-law. Joseph Dikdan, direct marketingadvisorto the Company. Mr. Dikdanisthe founderof and principalin a consultingfirm which advises clients on direct marketingand the Intemet. He was formallya vice presidentof Metromail,Inc. a leadingproviderof direct mailservicesto Fortune500 companies. Phyllis Jackson, ACH and cash managementadvisorto the Company. Ms. Jackson isVice PresidentCash ManagementGlobalServices Divisionof Fleet Bank.She serves as an advisor to swocc.com on matters related to the coordination of EPUNET and the ACH system. O O O O O O O O O O O O O O O O O O O O O O O 0 0 O Proprietary and Confidential 0 0 0 0 0 • • • • • • Market Research Report Excerpts Teenage Research Unlimited (TRU)'s Teenage Marketing & Lifestyle Spring 2000 Study Excerpts Teenage ResearchUnlimitedis the nation'sforemostmarketresearcherspecializingin the youthmarketand boaststhe mostsubscribed-to studyon teens. Basedon the TRU study,it certainlyappearsthat, once launched,the swocc.com modelhas all the elementsin place to capturethe teen'smind-shareand wallet-shareand becomethe categorykillerin facilitating teen e-commerce. Banking Products Question: Which of the following are true for you? (Check all that apply) Total I have a credit card (in my name) Male Female 12-15 16-17 18-19 9) e O O I want a credit card I have access to parents' card 10% 9% 12% ;_:i,!. _>'_.," 31% "_" ";'""" _ " ..... "'""_' ...... " >-..' z,,. ['_./..,'2,:3 ....'' Q ...... '_ '_.,_:.; :. _,." ..... ".../"..k::. <"" ...." ,.-, z,..... . "% " f,-_._• .. _,-,, 0 I • I have a debit card I have a savings account I have a checking account 11% 66% 10% 66% 12% 66% ,_'-'_:_ ::% 64% 65% 33% 71% O • e 21% 19% 23% <,,,,, _::_ <"-" ._,_: " 57% e • • Source: eenage T Research Unlimited TRU reports that bankingproductsof all kindsremainsfairlyflat from last year, indicatingthat the there is no upwardtrends in teens use or accessto creditcards, checkingaccounts,debit cards, etc... e e o Proprietary andConfidential 0 0 e e e e e O • • • e Weekly Spending Question: Approximately how much of your own money and other people's money did you spend in the last seven days (i.e. shopping, entertainment, etc..) Which of the following are true for you? (Check all that apply) Total Own Money Parent's Money $58 $31 Male $60 $27 Female $55 $36 12-15 $29 $33 16-17 $65 $36 18-19 $105 $24 e 9) O e e e O Total $89 $87 $91 $62 $101 $129 Source:Teenage ResearchUnlimited Supportingswocc.com's contentionthat teens need an independentmethodfor conductingon-linecommerceisTRU's statementthatteen spendingof their own moneycontinuesits steadyyear-after-yearupwardtrend. Teen spendingof family money,however,isflat fromone year ago. • O O O Q Q e e e e e e e e e O e e • Proprietary andConfidential 0 0 @'