Sample Business Plan Web Ally

CONFIDENTIAL TO SCHERRER RESOURCES, INC. • BUSINESS-TO-BUS|NESS VERTICAL WEB COMMUNITIES ...Your partner for e-Commeree! FOR CUSTOMER MANAGEMENT PROFESSIONALS WebAlly.com, Inc. This business plan describes how WebAlly.com uses the Internet platform, organized in vertical job-title-centric sites, to expedite the sale of products and services to customers who demand them, by increasing the speed and accuracy with which customer relationship management (CRM) professionals handle these e-commerce transactions. BUSINESS PLAN CONTROL COPY NUMBER 2001ISSUED TO: This Scherrer Resources, Inc. Business Plan is confidential and contains proprietary information including trade secrets of Scherrer Resources, Inc. Neither the Business Plan nor any of the •information contained in the Plan may be reproduced or disclosed under any circumstances without express prior written permission. Confidential WebAlly, Inc. & Scherrer Resources, Inc. 275 Commerce Drive Fort•Washington, PA 19034 215-542-5700 WebAIly.com ...vertical B2B communities for CRM Professionals THISDOCUMENT THEPROPERTY SCHERRER IS OF RESOURCES, INC. NO COPYING NORFURTHER TRANMISSION OROTHERDISTRIBUTION AUTHORIZED IS WITHOUT PRIORWRITTENPERMISSION. CONFIDENTIAL TO SCHERRER RESOURCES, INC. WebAlly.com, Inc. Business Plan TABLE OF CONTENTS Executive Summary Company History Objectives Description of Product/Service Market Revenue Streams Marketing and Selling the Site Retention of Users Competition and Comparables Management and Board Operations Launch Plan Financial and Projections 3 6 7 8 11 13 14 16 17 19 23 24 25 Appendices: Example Site Home Page Layout Current Client List Industy Commentator Verification Financial Footnotes I II III IV CONFIDENTIAL OSCHERRER T RESOURCES, INC. Executive Summary Problem and Opportunity. Over the course of a year, customer relationship management personnel lose approximately $50,000 to $150,000 in time wasted trying to find, look up, bookmark and utilize various information on the Intemet. This activity, combined with their handling of routine duties such as tracking prospect calls and customer follow-ups, fills their day with ceaseless, o_en unproductive, activity. However, while the Intemet offers sales professionals a variety of support tools in unprecedented number, quality, value and availability, many of these sales-support sites and tools are disparately located, uncategorized, provided by limitless number of vendors with limited brand recognition, and have various and unqualified levels of value. Solution. WebAlly.com, the emerging family of web communities organized by vertical market community, seeks to solve this problem and capture this opportunity. The currently targeted 15 www.WebAlly.com sites, such as BrokersAlly.com for retail investment sales people, are well organized, provide valuable vertical content, foster community amongst visitors, and deliver revenue to their site owner. Market. Based on our 15 years of research by market sector, we have identified that there are over 10 million "customer relationship management" professionals, who now, as a result of the expanded capability of the Intemet, seek to leverage their time by utilizing tools and technologies on the world wide web. The goal of WebAlly.com is to capture an ever increasing share of these professionals as members of its community of web sites. Based on our extensive experience in managing databases for sales professionals, we have determined that each of these professionals, in tum, manages on average 100 times as many clients, who are on the other end of business transactions measured in billions of dollars annually. WebAlly.com sites seek to influence and obtain revenue from this leveraged position of end user buying-power through its support of customer relationship management intermeidary personnel. Competition. The Company's "Ally" Websites are comparable with several other business Websites that offer various combinations of e-commerce and business content and online community building. They vary in size and in the scope and breadth of the services they offer. Examples include VerticalNet (a family of vertical trading communities for all participants in certain vertical industries), PurchasePro.com (a Web meeting place for product sellers and purchasers across industries), and OnVia.com (a diagonal Web marketplace for small businesses). VerticalNet is industry-centric, while WebAlly.com is professional community-centric. PurchasePro is exchange oriented, while WebAlly.com is facilitator oriented. OnVia is designed for small business support, while WebAlly.com is not business-size dependent. WebAlly.com is distinctive in offering products, services, content and community to a specific populous, big-budget professional community which already has strong collegial identification by function, but which extends across--- and is functionally critical to--- all industries--- because all industries must sell. This preexisting professional community self-identification will be a strong driver of WebAlly Web community growth. These sites focus on locus points where significant capital moves within the U.S. Gross National Product; real estate, health care, securities and investments, insurance, business supplies and materials, information technology products and CONFIDENTIAL SCHERRER TO RESOURCES, INC. services, and other professional services such as attorneys, physicians, and human resources recruiting professionals. Competitive Advantage. The Company believes that strong, readily targetable diagonal markets like this one will be the next wave of target markets for e-commerce, and that the sales/CRM (customer relationship management) market, with its size, importance to business entities worldwide and annual aggregate spend, may be the most attractive These WebAlly distinctions constitute advantages which the comparables don't have, but the business model comparability remains sufficiently close to facilitate development of a reasonably confident valuation for WebAlly.com as it moves toward an initial public offering. WebAlly uniquely offers the following: • The only web sites that include powerful database management tools for customer relationship management utilizing its Ally family of software products. • The only sales customer management system that is customized by industry and vertical market. • A complete "family" approach to profession-based sites, to establish first-to-market brand positioning. • Only family of vertical sites organized by job-title, where revenue per person has been considered as a key strategy. • A site structure that offers content and value throughout the life span of professional growth path of an emPloyee, from new hire to seasoned pro. Revenue Streams. The WebAlly.com revenue model includes six (6) revenue categories as follows: 1) Private Labeled Sites: to corporate enterprise customers who wish to brand our vertical sites to their specific corporate formats and templates through the use of a corporate Intra-net. 2) Affiliate Revenue: revenue from companies whose presence on the xAlly.com sites drives "click through" streams to their sites and subsequent orders of their products or services. 3) Product Sales Revenue: to purchase a downloadable version of our classic client/server Ally software products, in addition to other software products useful to their profession. 4) Subscription Revenue: while the Free section is designed to provide basic value in free content available to the visitor and to bring'the visitor back for more, the Premium section is designed to provide content of higher value, at an annual subscription fee whose price for is based on the value of content purchased between $95 to $295 per year. 5) Application Service Provider (ASP): provide its Web versions of Ally software, e.g. Web Broker's Ally TM, on a "pay as you use" basis. This enables nomadic sales representatives, and sales and marketing firms wishing to expand rapidly, an online application at a rate of $25-50 per month. 6) Advertising Revenue: site advertising being focused on specific products and services of most interest to visitors, and to advertisers most interested in reaching the site's visitor community. Management. President and CEO James S. Scherrer, 46, founded an Information Technology company specializing in sales force automation in 1985 and has a national and international reputation for his accomplishments in the sales and marketing application software industry. He will manage this new enterprise of WebAlly.com, Inc. and bring on specialized talent to complement his current staff. 4 CONFIDENTIAL O SCHERRER T RESOURCES, INC. WebAlly.com, Inc. will be managed by current employees and future hires based on several factors such as rate of capital raised, ability to secure high priced contractors, market for employees and contractors, and growth of the enterprise. Employees will be compensated based on setting moderate, yet competitive salaries while utilizing generous stock options and other forms of performance-based incentive compensation plans. Scherrer has a supportive industry Advisory Board with formal guidelines comprised of over eight professionals selected from disciplines such as law, finance, operations, technology, and management. Through their assistance the Company has been able to seize opportunities, dodge threats, and continue creation of innovative solutions and penetration of its primary markets better than most companies its size. Capital Needs. The initial working capital needed to fund 18 months of work is approximately $8,000,000 as presented in the detailed finance section of this business plan. Capital infusion will occur in a staged, quarter by quarter, time frame, and quarterly burn rates will be managed based on speed of funding. The first 18 months of efforts will provide a validation of the model for personnel needs, and the resulting burn rate and timing for a second round of funding for site expansion. Exit Strategy. WebAlly's exit strategy is to either go public in 18 to 36 months or sell each vertical to a strategic partner over a 18-24 month period to provide liquidity to our investors. Product Description Introduction WebAlly.com is a collection of vertical Web portal (vortal) and "diagonal" (rather than vertical or horizontal) profession-based commercial marketplace web communities. WebAlly_.com TM, Inc. is the new breed of business-to-business (B2B) Web portal that combines relevant horizontal (sales, and customer relationship management or CRM) and vertical (industry by industry) characteristics. WebAlly.com owns and operates sales-profession-specific Web sites designed as online businessto-business communities, known as vertical and diagonal trade and customer relationship management marketplaces. These vertical sales profession communities act as comprehensive sources of information, interaction and electronic commerce --the buying and selling of goods and services over the Internet. Each of the company's communities is individually branded, focuses on one type of professional sector and caters to individuals with similar professional interests. Thus, the key focal point is "profession-specific", or "job-title-specific" communities for e-commerce. All web users have the same pain; the need to efficiently locate, identify and manage material stored on the Internet. WebAlly sites help sales-oriented professionals save time and money, increase their efficiency, and speed up the rate at which they match products and services to hungry buyers worldwide. In short, WebAlly sites improve the speed of e-commerce by helping business-users do their jobs faster and better. WebAlly.com provides intrastructure for e-commerce using its job-title-centric approach. WebAlly sites contain infrastructure tools and communication channels to expedite the sale of products and services. Through WebAlly.com, visitors will access sites supporting B2B sales and customer relationship management professionals on the Internet. To provide perspective and structure, the WebAlly.com parent site describes and is linked to each descendant site which offers sales and customer relationship management support for particular vertical industries with significant populations of highly paid professionals. It is important to note that persons with sales5 CONFIDENTIAL TO SCHERRER RESOURCES, INC. denominated positions are not the only targeted visitors; the term "customer relationship management professionals" adds those professionals, such as senior and middle-management executives in the target vertical markets, who have important sales responsibilities. Examples of CRM professionals include CEOs, marketing and advertising executives, insurance industry executives, property managers, and business law firm department managers. Table Depicting WebAlly Family Business Model Business Marketplace Examples of other Online Marketplace Intermediaries Business-to-Consumer (B-to-C) Business-to-Business (B-to-B) CDNow Amazon.com Etoys Travelocity Half.com WebAlly i2Technologies VerticalNet Dell Computers Cisco The WebAlly linked descendant sites will include the existing B2B vertical community served by BrokersAllya_.com TM and the existing B2B diagonal community served by SalesAlly_.com TM, and other business-to-business vertical/diagonal communities where sales and customer relationship management information and proprietary application tools provide significant value added--- simply put, to help these communities sell better. The 15 Internet URLs already acquired for WebAlly.com are listed on page 6. Members of these communities will increasingly recognize that using the Ally site helps to grow their own revenue and will build visitation, loyalty and e-commerce consumption for others who have an economic interest in these marketplaces. WebAlly thus will be a highly focused vortal for a large population of professional visitors, with high-level spending authority, in a large number of markets who and which are presently underserved and for which no diagonal competitor presently exists. Company History WebAlly.com, Inc. is a company in formation by Scherrer Resources, Inc., Fort Washington, Pennsylvania (Scherrer or the Company), a leader in proprietary sales force automation (SFA) software application tools. Scherrer's principal present business is making and marketing its proprietary Ally line of sales management software. Their flagship product, Broker's Ally TM software, is the sales software application tool with the largest user base in the retail investment and securities sales industry. Corporate licensees of Broker's Ally include banks, broker-dealers and investment professionals worldwide, such as J. P. Morgan & Co., First Union Brokerage, Merrill Lynch & Co., Thomson Financial, Pershing Division of Donaldson Lufkin Jenrette Inc., Fiserv Securities, Banc of America, Crowell Weedon & Co., Crestar, Conseco-BankMark, MellonDreyfus, and J.B. Hanauer. Scherrer also makes and markets other proprietary software applications under the Ally TM trademark. Scherrer is the dominant marketer of application software products and related services under this trademark in the world. The Company's Ally line of sales automation software has won awards from PC Magazine, PC Computing Magazine, Computer Reseller News, and Mobile Office Computing Magazine. 6 CONFIDENTIAL O SCHERRER T RESOURCES, NC. I As a result of its previous sales efforts, Scherrer has accumulated a large community of investment firms, representative examples of which are listed on an Appendix to this Business Plan, and individual investment professionals at many other financial industry organizations as customers of products, services and information from Scherrer. The existing BrokersAlly.com site is an established presence among investment industry executives on the Web and is already conducting its own e-commerce, attracting major investment industry advertisers, and driving visitors to other e-commerce sites. Currently, the company employs 20 people and has four main divisions: sales and support, client services and software program development, product manufacturing and the administrative team. The executive and administrative staff exists to support anticipated enhanced levels of business activity. Scherrer retains key management consultants, sales agents, and information technology consultants to expand its business and on whom it can rely for future growth. Scherrer Resources operates from a Philadelphia professional business location, renting 3500 square feet in the Commerce Building, Fort Washington, PA. Its facilities include a customer and dealer Training Center, conference area, manufacturing and shipping center and offices for administrative staff and sales personnel. It utilizes a broad range of state-of-the-art development equipment, CD and diskette copying apparatus, and office machines purchased, leased, or provided free from its industry co-marketing partners such as Tektronix, Hewlett Packard, and Canon USA. From this background, and using the nucleus of its current staff team, Scherrer intends to rapidly expand its web development implimentation team, quality control techniques, and content aggregation capability to support this initiative. The leadership skills of its original founder, supported by the sales and operations experience of its current staff will result in an effective execution of this business plan. Objectives of WebAlly The objective of creating and operating the WebAlly.com family of vertical sites is to generate revenue to the corporation from the sites' users and advertisers and to capture a majority share of the marketplace for job-title-centric sites while generating a significant return on invested capital to investors. We believe upfront investment capital will make the enterprise cash-flow-postive in year 2 when revenue exceeds on-going development costs. We will launch 8 sites in the first year, and follow them with 22 more sites in the subsequent 3-year duration. Our goal is to have per-site annual revenue increase to over $5 million each by their 2nd year of operation. WebAlly's objectives are broken down into two segments-Years 1-2 and Years 3-5. Our objectives for each segment are as follows: Targets for Years 1-2: Total number of users- 10,000 subscribers per site, or 10% of target market size. Percentage of new users- Adding 1,000 subscribers per month. Percentage of existing users- Retaining 80% of existing users on a year-to-year basis. 7 i, CONFIDENTIAL SCHERRER TO RESOURCES, NC. I Per Site Revenue: $5 million per year. Gross sales- $10,000,000 per year. Year company is cash flow positive- End of Year 2. Targets for Years 3-5: Total number of users- One million subscribers across all sites. 10% of target market size. Percentage of new users- Adding 2,000 subscribers per month per site. Percentage of existing users- Retaining 80% of existing users on year-to-year basis. Gross Sales- $120 million per year at end of 5th year of operation. Per site Revenue- $10 million per year. Year company is profitable- End of Year 3. WebAlly.eom Strategy A key corporate strategy is that WebAlly will partner with significant entities in each of the vertical markets. These corporate partners will collaborate with WebAlly.com to foster the sales of each of their respective products and servics, while also fostering the objectives of the xAlly.com site and also not dominate the site enough to erode user confidence in its objectivity. Extrapolating on the observable increase in advertising and viewers currently being taken by BrokersAlly.com indicate that WebAlly.com can grow rapidly and not only occupy but preempt a highly desirable Web intersection of multiple vertical markets and a major horizontal professional market. Description of Sites The WebAlly.com family of sites, while each having unique differences among themselves, are organized in similar fashion. The main menu provides site navigation along the left side of the page, while the masthead will remain the same, and the fight-side body of the page will change based on selection of content. A complete list of main menu items for BrokersAlly.com is attached in the Appendix I. Site URLs Acquired. To further the WebAlly.com strategy, Scherrer has acquired the following Internet URLs as sites for present and planned vertical Web communities (including the horizontal URLs and the more vertical URLs in alpha order): Ally Site URL's WebAlly.eom -Alphabetically listedAgentsAlly.eom AttorneysAlly.eom BrokersAlly.eom BuyerAlly.eom ComputerProAlly.eom CRMAIIy.eom LegalAlly.eom PhysieiansAlly.eom RealtyAlly.eom ReeruitersAlly.eom RepAlly.eom ...Professional Community Served by this CRM site ...the parent B2B customer management vortal site and marketplace ...insurance agents and brokers for property/casualty and life. ...legal managers (cross-linked to "LegalAlly.com", below) ...investment professionals in finance and broker/dealers. ...corporate purchasing professionals and buyers. ...information technology industry professionals. ...customer relationship managers ...products and services industry managers serving the legal market ...physician and non-physician medical managers. ...residential and commercial real estate professionals. ...human resources recruiting professionals. ...manufacturers' sales representatives. 8 CONFIDENTIAL SCHERRER TO RESOURCES, INC. SalesAlly.com SupportAlly.com TeleSalesAlly.eom ...sales professionals cross-industry. ...Internet-based product and service support service professionals. ...telephone and e-commerce sales and CRM professionals. Additional sites will be added, as sufficient levels of marketing analysis have been completed, for a total estimated number of 50 sites over a 4 year duration. Site Layout Plan. The Company's detailed BrokerAlly.com website layout plan is the functional model of the other WebAlly.com sites, and will be replicated to form the other xAlly.com sites. This plan includes specific subsites for visitor downloading of (among others) research newsletters (approximately 25 already available), proprietary independent software vendor (ISV) technical tools (software) already licensed or to be licensed for distribution, chart analyses and research reports (approximately 20 already available), institutional research (presently available from approximately 30 sources), business practices improvement guidance (two internationally-recognized consultants have already agreed to make existing content available and to create new content for WebAlly.com), plus "real estate" on the BrokersAlly.com Website for product and service offerings by investment banks, independent broker/dealers, clearing firms, insurance product companies, market impact news sites, and proprietary Scherrer 30-stock market indexes in emerging industries such as optical networking, new media, and broadband data communication, employment opportunities, and professional networking and shared problem-solving. The BrokersAlly.com Website will also link to investment industry product and service company Websites and ecommerce sites. A listing of the Website headings from the BrokersAlly.com Website Plan is attached to this Business Plan. The complete BrokersAlly.com Website plan is available from the Company under confidentiality agreement. CLIENT Broker'sAlly AND PORTFOL|Q MANAGEMENT Example Site Graphics Each site will contain trademarked and copyrighted graphics, designs and logotyps to secure a brand identity. These graphics will be shared with joint marketing partners to add to their sites, to bring traffic to the xAlly.com family of sites. SALIS Sale.Ally S ,, CONTACT MANAGEMENT 9 CONFIDENTIAL TO SCHERRER RESOURCES, INC. Each site "sits" between the user and the universe of other sites that handle certain tasks of interest to the viewer. This relationship is depicted below. Table Depicting xAlly.com Site Support for Traditional Corporate Job Titles XYZ Company: Personnel by Job Title Ally Site Intermediary Outside World of Products, Expertise and Services Sales Reps Support Team Recruiters _l/ Legal _ Buyers Property Manager IT Manager SalesAlly.com SupportAlly.com /1 Sales Tools and Motivation Support Infrastructure Job Postings, Services Contract Networks, Aggregation Vendor Attorneys, Services Realtors, property listings, sites IT consultants, PC's, vendors RecrnitersAlly.com > LegalAlly.com _N_ BuyerAlly.com RealtyAlly.com ComputerProAlly.com Non-CRM Personnel Marketing Product Development Manufacturing Phase II Ally Sites MarketingAlly.com DevelopmentAlly.com Manu facturingAlly.com Locus of Expertise Marketing Experts Software Developer Example Manufacturing/Production Broker's Ally.com Model Template BrokersAlly.com is the proving-in-practice model, or template, for the other WebAlly.com vortal communities, including those in which Scherrer has already established foundations with existing software application products, and serves as an illustrative case for replication to all Ally sites. The momentum of the BrokersAlly site is growing and hit rates are increasing with increasing content, features and community. As a testimony to its increasing level of value, BrokersAlly was recently a featured "site-of-the-day" by the Internet site manager at Kemper Funds, while, in a separate action, Morningstar agreed to provide advertising dollars to the BrokersAlly.com site to market its line of professional mutual fund analysis products. These success stories and other lessons learned will form the basis for rapid replication of commercially viable x.Ally.com sites. Site Content Description We have constructed our current sites, and plan similar structures for the family of all WebAlly sites, in such a way as to put them in the top region of traditional web site search engines such as Lycos and Excite. We rely on such things as: Title tags, Meta tags, Human editors, and Links to our site. Each website includes the following sections: Company: Here we present background information on our company and names and contact information for editorial, sales, and customer service. 10 CONFIDENTIAL TO SCHERRER RESOURCES, INC. Membership: Here we collect a one-page description of the member including such things as: Name, Address, Telephone, Fax, E-mail address, Website address, business focus, and potential revenue size. Sales Opportunities: The site will be able to post vendor needs and use software tools to facilitate matching products with vendors through the appropriate intermediary channel. For example, if an investment sales broker is interested in identifying a suitable investment product for their customer, research tools will be provided to help in the search and identification of such investments. The product vendors, in this example, a mutual fund wholesaler, is highly motivated to be part of the site due to its vertical market focus and concentration of candidate sales reps interested in distributing his products. Online Training: We will partner with major vertical marketing training organizations, such as BrokerTraining.com to offer online courses in the vertical markets we serve. Company Store: A collection of products and services available by category. Dominantly, this is a collection of application software that can be downloaded and purchased from your desktop PC. Books: Books, like other vertical products, will be selected for the viewing audience based on vertical professional category and job title. We currently have affiliate partnerships with Amazon.com and BusinessBooks.com to offer books specifically targeted to businesses and will select books focused on best-practices methodologies for our vertical markets. Business Loans: We will provided a group of banks and credit organizations interested and willing to make loans of appropriate quantity and terms for our subscribers to support their business needs. Employment Opportunities: We will partner with an online recruiting finns in each vertical market. Business News: We will provide multiple news sources on each of the vertical sites, organized and categorized in ways that meet their business needs. Events: We will post special vertical market event calendars as a composite of those we find in the industry. For BrokersAlly.eom we partner with FinaneialSource.com. There are regional, national, and vertical market-focused business events. We will help coordinate event planners and list events and make referrals where appropriate. Best Practice Expertise: Each site will host and showcase a number of best-practice experts and best-practice methods in order to provide value to the site, and increase repeat traffic. Forum/Chat: Each xAlly.com site will have several chat sessions running, with relevant heads by professional topic. The goal is to provide a forum for professional discussions and relevant communication between like-minded professionals. Cooperative Partner Forum: A location where the cooperative partner presents their current investor releations or public relations message. 11 CONFIDENTIAL O SCHERRER T RESOURCES, NC. I Market Target Market The Company's ongoing market research into these diagonal and vertical markets, which will be completed in the third quarter of 2000, yields the following market size information: Estimated Estimated Annual Estimated Annual Annual Spending on Sales Spending on All Diagonal/Vertical Est. Population Compensation CRM Prods./Svcs** Products/Services*** Insurance agents 300,000 $80k $720 million $7.2 billion Lawyer managers 350,000 $110k $1155 million $11.5 billion Investment professionals 500,000 $90k $1355 million $13.5 billion Real estate brokers 750,000 $55k $1237 million $12.3 billion All other sales/CRM* 4,000,000 $50k $6000 million $60 billion Total 5,900,000 $10.5 bil:lion $104.5 billion * excluding Ally sites for support, corporate purchasing and other verticals in preceding table not yet estimated ** 3% of annual compensation is invested in personal productivity tools for customer sales _tnd marketing *** 30% of compensation is representative based on income statement data studied for professional services finns. Market. There are over 40,000 individual Broker's Ally sales and investment management application software users. They provide investing advice to:iover 4 million clients, perform over 120,000 investment transactions daily, and collectively • manffge over $240 billion in assets I worldwide. These and thousands of other professional investment executives constitute the visitorship and subscriber base of the BrokersAlly.com Web _ommunity. BrokersAlly.com is a B2B investment professional Website designed to improve CRM Ond e-commerce specifically for the investment industry. The BrokersAlly.com team includes experienced software application and Web developers, financial journalists, business practice experts, and over two dozen outside contributors. By providing valuable business sales and investment management practice improvement tools (especially including high-margin offerings, for example state-of-the-art Web streaming audio and video for distance education and training that are attuned to the learning and functional styles of sales and CRM professionals learned by the Company through its 15 years building subject matter expertise), networked financial community support, and training enhancement, the BrokersAlly.com web site can help its visitors improve portfolio performance, retain satisfied clients, and maximize their business success. Demographics. The demographics of the BrokersAlly.com Community are illustrative of the attractiveness of sales and CRM professional markets on the!Web. Based on an extrapolation of demographic information from the current user base of Broker's Ally software and the readership of significant industry trade magazines, investment industry sales professionals' average income is $75,000, the average number of investments they make on behalf of their clients is 3 per day, the average portfolio value under their care and management is $60,000, and each broker manages on average 100 accounts, which translates into $6 million of assets under management per professional. They have high discretionary income and are major influencers of their clients and peers in investment opinion and the directions their investment portfolios take over time. It is estimated that the total BrokersAlly.com market is the approximately 500,000 investment professionals licensed by the National Association of Securities Dealers (NASD). The site also serves other investment professionals who are licensed by individual states and within other countries, thus yielding approximate total potential Web community size of over 1 million. 12 t CONFIDENTIAL TO SCHERRER RESOURCES, INC. Additional Markets. In addition, over its 15-year history, the Company has also innovated and commercially distributed its proprietary software applicationtools Sales Ally TM, Agents Ally TM, and Realty Ally TM, products similarly aimed at sales and CRM professionals in the general sales function and in the insurance and real estate brokerage industries, respectively. This history gives Scherrer substantial depth of subject matter expertise in sales and CRM that few existing businesses have. Additional detailed business information on Scherrer is available under confidentiality agreement. Revenue Streams Revenue Model. The WebAlly.com revenue model includes six (6) primary revenue categories, each with its own purpose and design. The site itself is being enhanced in such a way that the sources of revenue are paired with relevant content. These five sources are: 1. Private-Labeled Sites Revenue. The company will provide the xAlly.com sites on a "private-labeled" basis to corporate enterprise customers who wish to brand our vertical sites to their specific corporate formats and templates through the use of their corporate Intra-net. The cost and revenue for these private label relationships will be handled on a case-by-case basis. 2. Affiliate Revenue. Affiliate revenue comes from companies whose presence on the xAlly.com sites drives "click through" streams to their sites, and subsequent orders of their products or services. For example, for the BrokersAlly.com site, Scherrer has signed up AmericaOnline, Amazon.corn, AmericanExpress.com, Zacks Investment Research, Edgar-Online, and others as joint marketing partner affiliates who in turn will generate business from the BrokersAlly.com site. A recent study by Fort'esterResearch concludes that the future of online advertising revenue belongs to vertical portals and well-linked sites: they will capture 57% online ad spending by 2004. Vertical portals, unlike most current general portal sites, provide a broad set of services tailored to a target opportunity. Charlene Li, senior analyst in Media & Entertainment Research at Forrester, notes, "retailers are demanding pay-for-performance deals that only vertical portals and affiliates can deliver." S_ of _ Ad Dollars vert_l po_ls 3. Product Sales Revenue. Each xAlly.com web site will present the user with an opportunity to purchase a downloadable version of the client/server Ally software product, in addition to other software products useful to their profession. For example, the BrokersAlly.com Website will have sections offering the Broker's Ally software product line as downloadable 13 CONFIDENTIAL SCHERRER TO RESOURCES, INC. products. The user will click on the "Broker's Ally Store" section and be presented with a menu of Scherrer and others' distribution-licensed proprietary software products to download onto the user's own personal computer. This will include not only the popular line of Broker's Ally software and its distribution-licensed proprietary Financial Planner® and Bond Calculator® software application tools, but also appropriate selections of proprietary software developed and licensed by other firms for Scherrer's distribution that the Company is making available as a convenience to the community of BrokersAlly.com viewers. 4. Subscription Revenue. Each xAlly.com Website is divided into Free and Premium sections. The Free section is designed to provide basic value in free content available to the visitor and to bring the visitor back for more. The Premium section is designed to provide content of higher value, at an annual subscription fee whose price for is scaled based on the value of content purchased. The specific annual price for the Premium section depends on the level of content provided and the willingness of the subscriber to pay that price. General, the Premium subscription fees will range between $95 to $295 per year. 5. Application Service Provider (ASP) Revenue. As an additional service, Scherrer will provide its Web version of Broker's Ally software--- Web Broker's Ally TM---on a "pay as you use" basis. This enables nomadic sales representatives, and sales and marketing firms wishing to expand rapidly, an online application that can serve their needs for Client database management, scheduling, and portfolio review. The fee for subscribing to Web Broker's Ally is based on the size of the database the customer wishes the Company to maintain on Web Broker's Ally server, and the customer's duration of use of the database, generally $25-50 per month. 6. Advertising Revenue. Site advertising is being focused on specific products and services of most interest to visitors, and to advertisers most interested in reaching the site's visitor community. Because each site is vertical and focused, advertisers will want to be a part of these respective vertical sites because the return on their invested dollar in advertising is positive. For the BrokersAlly.com site, the Company is targeting companies that are currently advertising in other magazines within the investment industry and are known to want to be in front of the site's visitors. Dominant examples are the nation's most prominent mutual ifund companies, such as Janus, Strong, Dreyfus, and Fidelity funds. Further, the Company is identifying investment product companies that are interested in presenting a high profile to investment professionals, such as upcoming IP0 candidates, current public companies, and their investment bankers. In addition, the site will host job openings for industry specialists. Recently, Morningstar!has signed up to advertise on the BrokersAlly.com site in order to bring in more revenue for its products and services. Marketing and Selling the Site The Enhanced BrokersAlly.com Business Model Sales Methods. The BrokersAlly.com Web vortal uses a combination of push and pull marketing to achieve its objectives. It pushes visitors to the site using the known value that Scherrer provides to the investment industry community: its proprietary software and services. The Company's installed base of Broker's Ally software users represents an instant visitor community at no marginal cost to Scherrer. Pull marketing is accomplished by the Company's joint marketing partners, search engine cross referencing and affiliate partners. Joint marketing partners have agreed 14 I CONFIDENTIAL O SCHERRER T RESOURCES, NC. I to place the Broker's Ally "Banner" on their Websites, with links to the BrokersAIly.com Website. This is bringing a subset of their traffic to the BrokersAlly.com site. Affiliate partners each have Web traffic that can, when links are created, bring traffic to the BrokersAlly.com site. And search engine cross-referencing assures that the BrokersAlly.com name and its top-page terminology find their way into search results obtained on popular search sites such as Yahoo, Excite, AmericaOnline and other universal Web portals. Our priorities in terms of how we use our marketing dollars are as follows: 1. Building brand awareness through advertising. 2. Hiring sales people to introduce the Internet site to key sphere professionals in each vertical and then training them on the organization of the site. Customer Acquisition: There is a multi-step process to attracting users. Direct mail: We will make three mailings to our targeted audience. • First Mailing- We will send to the top 10,000 professionals in each vertical market a post card with a picture of the home page on the front and an offer for a free gift if they go to our site and register. • Second Mailing- We will send a letter with a picture!of the home page in the letter. The letter will remind them to come and claim their gift. • Third Mailing- We will send a letter listing the companies or people who avail themselves of our service. Broadcast E-mail: We will purchase e-mail mailing list from e-mail list vendors and trade publications and send an e-mail that briefly explains our program and a link from the e-mail to our site. Print Advertisements: We will run quarter-page advertisements in trade magazines to which our viewers subscribe. Telephone Calls: We will follow up the e-mails with telephone calls to get key "spheres of influence" people to come and visit. Our sales people will demonstrate our system real time for the users on the Internet. Trade Shows: We will have booths at relevant vertical trade shows. Follow up e-Mail for Advertisers: We will send interested prospects a sample page that shows their logo on top of our page, which will provide them with a private-label look for their advertising. We have begun targeting joint marketing and collaborative partners for each of the xAlly vertical web communities. These cooperative partners will lend support and their own marketing dollars to the xAlly sites and also assist in bolstering content, community, and the overall value of each site. ,, 15 CONFIDENTIAL SCHERRER TO RESOURCES, NC. I Joint Collaborative Parnters Examples of candidate partners are presented below. Ally Site WebAlly.eom AgentsAlly.eom AttorneysAny.eom BrokersAlly.eom BuyerAlly.eom ComputerProAlly.eom CRMAlly.eom LegalAlly.eom PhysieiansAlly.com RealtyAlly.eom ReeruitersAny.eom RepAlly.eom SalesAlly.eom SupportAlly.eom TeleSalesAlly.com Example Joint Marketing Partner PriceWaterhouseCoopers, Microsoft, AOL Nationwide, Alexander & Alexander, Marsh McLennon Assigned Counsel, Inc. Reuters, The Street.corn, Morningstar, Fiserv, etc. Staples, Inc., Grainger, Thomas Registers NetworkSolutions, Register.corn, Dell, Compaq, Cisco, Ingrain Siebel Systems, Other SFA, CRM vendors. Nations Top Law firms, Drinker Healtheon/WebMD, Intemet health care conduits Re/Max, Coldwell Banker, residential and commercial real estate Drake Beam Morin, outplacement consulting, Resumex software Manufactures Agents National Association Incentive Product Marketers, trade publications, SalesForce.com Support software vendors, ComputerAssociates, etc. National telemarketing firms, eGain, Rockwell, Bell Atlantic Retention of Users The "chum" of customers from vendor to vendor, and site to site is one of the industries most challenging initiatives as Intemet companies vie to lock in allegiance and dollars of their viewing audience for the longest duration possible. WebAlly offers a combination of content, community and application software to increase retention and reliance on its x.Ally sites. In addition, these sites are useful to a professional regardless of the company they work for, thus minimizing the drop off rate which might normally occur with a job change. These sites will follow their users throughout their professional growth path, from entry level, through intermediate level, and on to senior level professionals in each industry. The x.Ally.com sites plan to serve and retain users by providing the following: 1. Site Benefits: Best Practice Content- Each month we will post new content from respected professionals regarding best practices utilized by successful professionals in their job title: on such issues as best hiring practices, best ways of retaining employees, best ways of attracting prospective customers, and best ways of retaining current clients. Product Pre-Selection- Books, magazines, and other products will be pre-selected for the visitor by virtue of their vertical market and job description. The pre-selection process will provide them with a natural affinity to the site, and a need to come back for more information and recommendations at a future date. 16 i CONFIDENTIAL TO SCHERRER RESOURCES, INC. Research- Each year a report will be given to site visitors managers who subscribe to our premium services outlining the best practice habits of the most successful professionals in their industry. Reward- Registered Users will receive bonus points toward the purchase of gifts and trips for each dollar or visit spent with the x.Ally site or its affiliate vendors. Management will outsource this function to a company like Net Incentives. Awards - We will work in conjunction with each trade association to create awards that recognize individual merit and success and for their professional growth as measured by industry agreed metrics. Infomediary- Each x.Ally.com site is a business-to-business infomediary, which offers specialized information on services and manufacturers for its visitors. 2. Management and User Interaction Editor's e-mail- The Editor will create a preferred list and visitors list of e-mail addresses and direct e-mail broadcasts to appropriate visitors based on their level of interest and the nature of their interest. Relevant Chat- Each site will have numerous chat sessions with headings relevant to the profession, allowing the viewer to participate in professional dialog with other like-minded professionals. This will help to provide answers and benefits to users who are in need of quick guidance, interaction, and support in their day-to-day activities. 3. Management Software Contact Management Software- Each site will provide a downloadable version of the Ally contact management software specifically tailored to their business practice. Examples are Broker's Ally, Sales Ally, Realty Ally, and Agents Ally software. The software will have on its "main menu" a hot link to the relevant x.Ally.com site for quick access and affirmation of the interrelationship between the application software and the site. This point-and-click tie in process will help retain user allegiance and foster reliance on the site. Application Service Provider Software, Browser Based Applications- The site will provide an alternative to its client/server desktop applications in the browser based versions of each of its applications served-up by the ASP. These browser-based versions will likewise have hot links to their respective xAlly.com sites for quick access and affimation of the interrelationship between the application software and the site. This point-and-click tie in process will help retain user allegiance and foster reliance on the site. Competition and Comparables WebAlly.com. The company's "Ally" websites are comparable with several other business websites that offer various combinations of e-commerce and business content and online community building. They vary in size and in the scope and breadth of the services they offer. 17 CONFIDENTIAL O SCHERRER T RESOURCES, NC. I Examples include VerticalNet (a family of vertical trading communities for all participants in certain vertical industries), PurchasePro.com (a Web meetingplace for product sellers and purchasers across industries), OnVia.com (a diagonal Web marketplace for small businesses), SalesForce.com (a specialized web site for a browser based application for sales contact management). WebAlly.com is distinctive in offering products, services, content and community to a specific populous, big-budget professional community which already has strong collegial identification by function, but which extends across--- and is functionally critical to--- all industries--- because all industries must sell. This preexisting professional community self-identification will be a strong driver of WebAlly Web community growth. The Company believes that strong, readily targetable diagonal markets like this one will be the next wave of target markets for e-commerce, and that the sales/CRM market, with its size, importance to business entities worldwide and annual aggregate spend, may be the most attractive. For comparison, VerticalNet is industry-centric, while WebAlly.com is professional communitycentric. PurchasePro.com is a Web meetingplace for product sellers and purchasers across industries and does not contain the job-title-centric approach to customer relationship management of WebAlly.com. OnVia.com is a diagonal Web marketplace for small businesses and is not oriented to customer handling nor job-title-centric approach in the manner of WebAlly.com. And, while SalesForce.com offers a specialized web site for a browser-based application for sales contact management it is not vertical industry focused as are the family of WebAlly.com sites. These WebAUy distinctions constitute advantages which the comparables don't have, but the business model comparability remains sufficiently close to facilitate development of a reasonably confident valuation for WebAlly.com as it moves toward an initial public offering. Vertical Net Purchase Pro OnVia SalesForce.com TheStreet.com WebAlly.com Good branding, vertical approach Good marketplace Diagonal to small business Great browser-based CRM app. Great brand, good following Great brand, vertical approach Not title centric, not CRM Not vertical, too horizontal Not vertical enough Not vertical, too horizontal Single market Ahead of market timing BrokersAlly.com. With reference to the WebAlly.com model website- www.BrokersAlly.com, there currently are comparable, yet different, web site communities that provide investment information such as TheStreet.com, DowJones.com, RedHerring.com, Wall Street Journal online, etc., there is currently no diagonal community of investment professionals. The Company believes that the highly successful TheStreet.com Web e-commerce community for investors and underwriters, which has fostered a number of strategic partnerships and distribution alliances, is a valuable comparable not only to BrokersAlly.com but to WebAlly.com both for operational and valuation purposes. 18 CONFIDENTIALO SCHERRER T RESOURCES, INC. Industry Confirmation Numerous commentators, industry specialists, and market research organizations have validated the Internet community model, and have helped to illuminate new industry direction for both CRM products and web communities. The WebAlly community concept is a short step ahead of the industry, such that, as the sites come on line, they will be in line with market trends, and as such, be highly sought after and obtain a significant number of subscribers. The web offers new capability, and Scherrer intends to be a leader in that "new capability" movement within large professional layers across industries. Appendix III elaborates on these statements by industry specialists. The Scherrer Resources' 15 years of company experience in the sales and CRM professional markets affirm that business sales and CRM professionals are motivated to embrace the tools provided on its WebAlly.com sites, while seeking both autonomy and community in the purchasing and use of productivity products and services. Intellectual Property Strengths In comparison to other sites, Scherrer Resources, and WebAlly, benefit from strengths not availbale to other vendors, which will enable first-to-market positioning and strong brand development. Ally Trademarks. The Company's software application tools mentioned in this Business Plan, or their foundation applications, were developed by the Company through its employees and with regard to certain minor portions, consultants under written agreements providing for assignments of rights. The Company has copyright and trade secret protection for its propriety applications and customer and other confidential data and trademark protection for its trademarks indicated in this Business Plan, and the Company has not experienced any material challenge to or infringement of any of these. The Company xAlly product trademark represents a substantial asset. In addition, because the Company began developing, promoting (including through a number of trade magazine awards) and commercially licensing the Ally software applications ancestral to its present proprietary software product line as early as 1985, it has the capability to invalidate patents which may be allowed to others in the area of database software tools for sales and marketing applications. URL's Secured. Scherrer Resources, Inc. has secured over 20 URL registrations under its xAlly.com brand to provide for immediate launch and for future growth of the enterprise. Management and Board WebAlly.com, Inc. will be managed by current employees and future hires based on several factors such as rate of capital raised, ability to secure high priced contractors, market for employees and contractors, and growth of the enterprise. Employees will be compensated based on setting moderate, yet competitive salaries while utilizing generous stock options and other forms of performance-based incentive compensation plans. As WebAlly.com grows, Scherrer intends to promote existing middle managers whose accomplishments, performance and capability for personal growth equip them for larger roles, and to aggressively recruit additional top managers having subject matter and general management expertise going into the early phase of each successive major growth stage. The Company envisions a target management structure by the end of 2002 that will include an executive vice president and chief operating officer and senior vice presidents for sales, finance and administration (the chief financial officer), and technology, all reporting to the President and Chief Executive 19 CONFIDENTIAL O SCHERRER T RESOURCES, NC. I Officer. Reporting to the executive vice president and CO0 will be a vice president for marketing, business development and advertising, and vice president - product/service managers for each diagonal/vertical market served. Reporting to the senior vice president for sales will be vice presidents of sales for four U.S. regions (East, Midwest, South (located in Texas), and West), Europe and Asia. Vice presidents for technology development, support and MIS will report to the senior vice president for technology, and a Treasurer, a Controller (who will be the chief accounting officer) and a Vice President of Human Resources will report to the senior vice president for finance and administration. A General Counsel will report to the President and Chief Executive Officer. Management Chief Executive Officer. James S. Scherrer, 46, has been the President and Chief Executive Officer of the Company since its founding in 1985 and has a national and international reputation for his accomplishments in the sales and marketing application software industry. He will manage the enterprise and bring on specialized talent to complement his current staff. His background includes both technical engineering and non-technical matters as they relate to the design, development, production, marketing and sales of information technology products and services in the CRM and SFA spaces. With a BS degree (State University of New York), MS (University of Pennsylvania) and MBAFinance (Drexel University) as background, he has evolved in various technical and non-technical roles and provided engineering and consulting services to government agencies, public utilities, corporations, and sales and marketing professionals. He is a lecturer on sales and marketing computerization and has authored and been quoted in numerous articles on technical and sales topics for newspapers and magazines, such as Bank Investment Marketing, Registered Representative and Manufacturers Representative magazines. His recent book, Portable Selling, The Key to Successful Sales Management with a Portable Computer (Prentice Hall Brady Books), describes the effective use of laptop and notebook computers in a selling environment. Jim is the past president of the Sales & Marketing Executives of Philadelphia Association and a member of international, national, and other regional sales and marketing organizations. Jim has been listed in Who's Who in Science and Technology and Who's Who in the Computer Industry, and was a recipient of an Entrepreneur of the Year nomination by the Price Waterhouse/Merrill Lynch Entrepreneur of the Year Committee. He is a board member of the Information Technology Business Center at University City Science Center, Philadelphia, the regions' top information technology incubator and support group for emerging IT and e-commerce enterprises. Vice President and Chief Technology Officer. Gregory S. Walters' experience includes PC application software and Internet applications. For the past 6 years Greg has expanded the software offerings of Scherrer's Client Services Group to include fee-based _helpdesk services, and field, web-based, and telephone customer service, as well as a technical newsletter service and dispatching of Company trainers and installers to customer sites. Chief Financial Officer. Scot Somers will lead the finance function. His his experience includes several previous banking and finance industries, including at Manufacturers Hanover Trust Company where he maintained a securities sales license. After joining Scherrer he has held positions with increasing levels of responsibility including sales, customer service, product management, accounting control and finance. Scot holds a BA and MBA degree, and licenses in investements and securities sales. 2O CONFIDENTIAL O SCHERRER T RESOURCES, NC. I Vice President, Sales. Doug Gelber will lead sales intitiatives. His previous experience includes securities sales as a licensed registered representative, and general management. He has held Series 7 and 63 licenses since 1985 and sold equities, bonds, insurance, UIT's and other investment products for First Investors Corp. As Scherrer's sales manager, he supports the CEO in sales to national accounts and supervises the Company's national account managers and sales representatives. Manager, CustomerSupport. William Kinney is the manager of our customer help desk services and whose staff support licensees worldwide through the application of e-mail, Internet technologies, facsimile, and voice telephone support for software installations on licensee WANs, LANs, and PCs. The Company's deep subject matter expertise in the investment industry is provided primarily by its senior employees, most of whom have prior professional experience in that industry, and by Scherrer's corporate Advisory Board (see below), which the Company organized in 1990 and which has comprised a group of highly experienced investment industry professionals and successful information technology entrepreneurs. Advisory Board Scherrer's Advisory Board has formal guidelines, and steps are taken going into each quarter's meeting to ensure a quorum. The Advisory Board presently comprises the following individuals (in alpha order): Steven Christiansen Securities industry strategic IT (information technology) consultant and adviser to several companies. Former founder, CEO and creator of Broker's Notebook, a PC-based proprietary securities portfolio management software application subsequently sold to Quotron, Inc., now a division of Reuters, Inc., at both of which Steve had top divisional management careers and from which became Vice President of National Account Sales for the Brokerage Information Systems Division of leading securities industry information processor ADP, Inc. ADP recently sold Steve's Division to Bridge Information Systems, from which Steve will shortly retire. Michael DiPuppo Principal in charge of sales at Devon Financial Group, Ltd., King of Prussia, PA and a regional retail securities broker and investment manager. 20 years licensed investment industry experience in investment sales and sales management. Mary T. Evans Manager, Institutional Portfolio Administration, The Glenmede Trust Company, Philadelphia, PA, private IT-based trust administration services firm. Past and present responsibilities have included areas of international joint ventures, trade entry and settlement, securities law compliance, client reporting, research, mutual fund development and administration, IT-related business process design and management for accounting and trading. Marc Kramer President of Kramer Communications, providing business, operating, marketing, and sales plan development for Internet information technology companies. Professional speaker and writer on topics such as Internet marketing, entrepreneurship, sales networking, and turning around distressed companies. Former partner at USWeb, the world's largest Internet consulting firm, prior to that was president of Mixed Media Works, and an interactive company that produced web sites for international firms and banks. Founder of Eastern Technology Council, the 21 CONFIDENTIAL TO SCHERRER RESOURCES, INC. 2nalargest business technology council in the U.S., and also launched Technology Times, the 2na largest business technology newspaper in the U.S.. Marc has received the Inc. Magazine Entrepreneur of the Year and also published the books entitled "Power Networking" and "Corporate Tumaround". SamuelA. Frederick, Esq. Founder and President, General Counsel Group, P.C., King of Prussia, PA, nationally reported boutique law finn serving primarily as general legal counsel to emerging IT companies which frequently assists clients in strategic transactions with large private and public companies. His background also includes 8 years Wall Street corporate finance law practice, and 8 years as second-chair in-house counsel in 3 public companies, of which 2 were in the IT industry, with responsibilities in areas of securities, finance and marketing, distribution and strategic alliance transactions and IT transactions. Frequently published on legal and strategic business topics. Cofounder-owner and principal for marketing of world's largest pure-play and Inc. 500 temporary professional services company in the lawyer vertical, and of an e-commerce software and data services business recently independently valued at $50-100 million. Wrote first strategic plan for $100 million National Museum of the American Revolution, Valley Forge, PA, which subsequently received seven-figure seed funding from Philadelphia region's leading venture capitalist, favorable Federal legislation and partnering agreement with National Park Service. Jeffrey T. Harbison Retired Director of Corporate Development of ADVANTA Corp., Horsham, PA, rapidly growing national consumer financial services company recently sold to Fleet Financial, national bank holding company. ADVANTA responsibilities included areas of mergers and acquisitions, strategic investments, and joint ventures. Previously Director of Corporate Development of AdvaCare Inc., Horsham, PA, with mergers and acquisitions responsibility and mergers and acquisitions attorney of Pennwalt Corporation, Philadelphia, PA, later sold to international chemical company ELF Atochem. John E. Koonz, CFP Vice President - Private Client Group and Senior Financial Planner, Merrill Lynch & Co., Philadelphia, PA, a top Merrill Lynch producer who has practiced securities broker and investment management for 20 years. Early and continuing Broker's Ally customer, provides perspective on the internally developed Merrill Lynch Trusted Global Adviser computerized financial management system. Myrna Shinbaum Vice President - Sales & Marketing, Plaza Communications, Inc., New York, NY. Two decades' experience in securities industry advertising and promotion, including as manager of sales and marketing for Registered Representative magazine, the nation's leading monthly publication for retail securities brokers, whose annual advertising revenues more than doubled under her leadership. The Company's success in the investment industry it attributes significantly to Myrna's assistance in helping Scherrer plan and execute the Broker's Ally print media campaign. She is an active member of Advertising Women of New York, the National Investor Relations Institute, The Financial Communications Society and the National Association of Female Executives. William T. Spane Principal, W. R. Hambrecht & Co., a California/Pennsylvania venture capital firm founded by Bill Hambrecht, cofounder of California IT company investment banking firm Hambrecht & Quist. Also retired founder, Chairman & CEO of BHC Securities, Inc., a formerly publicly-owned Philadelphia securities trading and broker-dealer service bureau which in its career acquired several other investment industry IT-based service firms. BHC was recently sold to 22 CONFIDENTIAL O SCHERRER T RESOURCES, NC. I publicly-owned Fiserv, Inc., Milwaukee, WI, a national securities industry services firm. Member of the Board of Directors of CyberFinancial.net.inc. Samuel M. V. Tatnall Retired cofounder and chief developer of Company's Ally software. 20 years computer hardware and software development experience with significant software design and product strategy experience and continuing computer software industry emerging technologies overview. Products developed have won numerous awards, including PC Magazine Editor's Choice, PC Computing Magazine's Best Product, Mobile Office Magazine's High Honors, Teleprofessional Magazine's Publisher's Pick. After receiving from Scherrer from time to time during each Company fiscal quarter a flow of Company and business-environmental information in electronic and printed form (including, for example, new product/alliance/service/customer announcements and descriptions) and detailed minutes of the Company's periodic senior staff meetings describing, among other things, the results of the meeting's strengths-weaknesses-opportunities-threats (SWOT) analysis, the Advisory Board meets quarterly for approximately two hours to discuss strategic and major operational matters. Following this Michael Porter-validated methodology, the Company has been able to seize opportunities, dodge threats, and continue creation of innovative solutions and penetration of its primary markets better than most companies its size. With regard to the subject matter expertise that WebAlly.com will use in extending its reach into the additional diagonal and vertical markets identified above, the Company will use at first a combination of recognized industry commentators and other experts and consultants under contract and additional Advisory Board members to validate and target its product and service direction, followed by the hiring of appropriate new staff. Such commentators, experts, consultants and Advisory Board members have already been identified and are in various stages of approach for a number of the additional vertical and diagonal markets identified in this Business Plan. Operations Management. The Chief Technology Officer for all the x.Ally sites will work in conjunction with the Chief Marketing manager to fulfill the goals of each x.Ally vertical site. The Chief Technology Officer will manage a technology team comprised of developers and designers, who are in turn, provided content, research and best-practice infomediary information by their peer marketing counterpart. Development Platform & Tools. The Internet development technologies used by the development and design team will include Visual Basic and Visual C++ applications, and for web code, HTML, XML, ActiveX controls to produce multimedia effects and interactive objects, Java (and other platform neutral tools) for applet creation, and other component tools such as databases, spreadsheets and presentation graphics. Included will be multicast technology to transmit data to a select recipient list, as well as broadcast technology to send data or a message to the entire membership. Each site will have meta tags- HTML instructions that provide content information about that page- which will provide important key words that will allow the page to be capturedby given searches on a search engine. 23 CONFIDENTIAL O SCHERRER T RESOURCES, INC. Content pages will be populated with tags embedded in the document which associate particular words and images in the document with other URL's, so that users can quickly move to other sites and conduct their business more efficiently. MPEG and MP3 audio layer files which have powerfully compressed digital audio information will be utilized. These audio files will support such activities as on-line training, advertising support, and welcome messages. Conversion of Ally software to each Vertical Market Each xAlly.com site will offer for sale a special version of the Ally software product customized specifically for that vertical market. The core C++ code of the Broker's Ally software application has been designed in such a way that other Ally's can be easily generated from them. For example, the cost to create Sales Ally from Broker's Ally was approximately $20,000 in costs, the dominant amount of time being allocated to creating a custom build for the vertical application and populating it with relevant data, letters and templates. Hence, each custom Ally application will require approximately 200 hours of work by a combination of a programmer and market manager to modify the product for its intended end user. Application Service Provider (ASP). Scherrer Resources, Inc. will act as an application service provider for the browser based versions of its contact management applications. It may also private label other 3rdparty providers browser based applications rather than using its own when specialty feature set is needed. These applications will be provided to users on a fee-per-month basis, and will provide software and server technology conducive to connecting field sales personnel to the central enterprise database. The current plan is to use outsourced, 3rdparty Internet service providers (ISP's) for web server hosting. Web server software using HTTP (hypertext transfer protocol) will serve up HTML documents and any associated files when requested by the visitor using their web browser. Security and Firewall- A security system intended to protect the network against external threats will be provided. All communications will be routed through a proxy server outside the ISPs network. These services are part of the suite offered by the ISP contractor. Internet Service Provider Costs $3,000/year/site Internet Service Providers (ISP) provide the following hosting services on a per site basis: 750MB hard drive storage, 50GB monthly transfer rates, e-mail accounts, toll free 7/24 technical support, multiple T3 connections, Cisco touters, UPS and generator backup, daily tape backup, Level 1 secure network center, MS Visual InterDev Support, CGI- Bin directory, unlimited e-mail forwarding, active server pages, access to raw logs, unlimited FTP updates, SSL encryption, site statistics, ASP Qmail, SQL support, MS Access support, and 99.99% uptime guarantees. Launch Plan Core Site Replication. As previously described, the Ally site URL's have been secured, and the first initial sites have been created. This business plan describes the efficient replication of these 24 i CONFIDENTIAL O SCHERRER T RESOURCES, INC. earlier sites to a total of 15 operable sites over the next 18 months, including the funding requirements needed to accomplish this goal. The core BrokersAlly.com site will be engineered to handle larger volumes of hit rates. A subscription billing and maintenance system will be added. Additional database and community management tools will be added to the site, then other tools, appropriate to the site will be built. Upon completion and relaunch of the BrokersAlly.com site, the other sites will be readied based on a copying or replication of the first site. Job Responsibilities for Site Teams Each Ally site will be directed by a site manager who is responsible for guiding many actions including overall site strategy, focus, editorial content, and revenue sources. Content developers will gather information and organize it in meaningful and useful ways. Designers will create graphics, form, style and color and set cost-effective replication standards and templates for each site. Developers will render page content into VB/HTML/Java code and create tools such as databases, spreadsheets, plug-ins, downloadable components, and other more technical elements of each site. Personnel placed in these job functions will be shared across others sites as needed based on their competence. For example, the site designer services will be spread across all sites. A master site design will be replicated across all xAlly.com sites and then will be modified to suit the specific needs of its individual marketplace needs. Many technical elements of sites, such as chat-box technology and e-mail broadcast technology, will be shared across sites. Site Management Crew The sites are to be managed by teams comprised of a group of personnel from each discipline. During the first year, the front page and key components of each the 15 x.Ally sites will be constructed, with greater emphasis placed on the more lucrative sites first. The team will consist of 4 site managers (1 supervisor and 3 managers) spread over all the 15 sites. The management, marketing and advertising sales personnel will be grouped by teams; 3 teams of 5 sites each; the first team are the parent site WebAlly.com and the financial verticals of BrokersAlly.com, AgentsAlly.com, RealtyAlly.com, RepAlly.com. The 2"t team covers the professional sites of AttorneysAlly.com, LegalAlly.com, PhysiciansAlly.com, RecruitersAlly.com and BuyerAlly.com, while the 3 r_lteam covers the diagonal sites of ComputerProAlly.com, CRMAlly.com, SalesAlly.com, SupportAlly.com and TeleSalesAlly.com. Team Makeup Three (3) teams consisting of the following personnel will bring to life these 15 sites: 1 vertical site manager, 1 senior marketing manager, and one sales representative. They are supported by the technical team of a matched pair of in-house employee and out-of-house contractor teams consisting of 1each of senior level, intermediate level and 2 entry level developers, as well as one senior level designer. The cost estimates of these teams are provided in the table above entitled "Site Management and Construction Costs on a Monthly Basis". As engineering procedes, the sales and marketing teams will begin activities to sell advertising, alliances, joint ventures and other site enhancement services. The traditional magazines and vertical trade press will be notified and groomed for obtaining no cost/low cost press and high visibility. Activities identified within the above section, Marketing and Selling the Site, will commence. 25 CONFIDENTIAL O SCHERRER T RESOURCES, NC. I Financial and Projections Basis for Cash Flow Forecast- Timing of Revenue and Expenses The step-by-step cash flow model shown below is based on a recognition of the timing delay between the initial expenses incurred to build the sites and the delayed revenue received from actions taken by the marketing and sales team. It is estimated that 6 months will pass from the start of building the site and promoting its value to the marketplace before revenue will be realized from the sites 5 revenue sources. As an example, it took 6 months, from the time of the creation of the BrokersAlly.com portal site until receipt of the first advertisement insertion-order from Morningstar, Inc. Hence, as we bring each site on line in its first incarnation, we expect revenue to flow approximately 6 months there after. The staging of expenses incurred to design and create a site will begin upon receipt of each tranch of funding received. Invested capital will be applied to the first group of sites first; the investment product verticals of BrokersAlly.com, AgentsAlly.com, RealtyAlly.com, RepAlly.com, and the master site WebAlly.com. Revenue per site is forecast to grow from year-to-year based on the model depicted earlier. Matching these quantities of revenue against the expenses for building these sites creates the cash flow projection. 26 CONFIDENTIAL TO SCHERRER RESOURCES, INC. Cash Flow BasisVertical Sites BrokersAlly.com AgentsAlly.com RealtyAlly.com RepAlly.com WebAlly.com AttorneysAlly.com LegalAlly.com PhysiciansAlly.com RecruitersAlly.com BuyerAlly.com ComputerProAlly.com CRMAlly.com SalesAlly.com SupportAlly.com TeleSalesAlly.com Total Sites Producing $'s 1 Sites Consuming Ally Site/year BrokersAlly.com AgentsAlly.com RealtyAlly.com RepAlly.com WebAlly.com AttorneysAlly.com LegalAlly.com PhysiciansAlly.com RecruitersAlly.com BuyerAlly.com ComputerProAlly.com CRMAUy.com SalesAUy.com SupportAlly.com TeleSalesAlly.com NewAllyl.com NewAlly2.com NewAlly3.com NewAlly4.com NewAlly5.com NewAlly6-10.com NewAlly. 11-15.corn Total Sites Consuming Cash $'s 1 Cash Year 1 X X X X X X X X X X X X X X X X X X X X 5X 5 10 15 20 25 5X 30 5X 35 5X 40 Year 2 Year 3 Year 4 Year 5 5 Sites "On X X X X X X X X X X X X X X X 10 15 Line" for Revenue Generation at Substantial Income Year I Year 2 Year 3 Year 4 Levels Year 5 Financial Projections based on Maximal revenue; Viewer Growth Revenue is derived from the following five The more viewers, the more it's that simple. (5) revenue-producing sources as described to be substantial as a result of a cumulative Ally Website diagonal and vertical earlier. Revenue growth from year-to-year is expected awareness of the expanding family of profession-based communities. 27 CONFIDENTIAL SCHERRER TO RESOURCES, NC. I Revenue Per Ally Site/year Year 1 FreeViewers/Subscribers/yr 100k/10k 1. Private Label Version Sales* ? 2. Affiliate Revenue** $30k 3. Product Sales Revenue*** $340k 4. SubscriptionRevenue**** $243k 5. ASP Revenue***** $36k 6. Advertising Revenue****** $180k Revenue from each Site $829k Number of"Ally sites" active 8 TotalRevenue $6,632,000 Year 2 200k/25k ? $360k $1390k $780k $90k $720k $3340k 15 $50,100,000 Year 3 400k/50k ? $900k $2780k $1560k $180k $1440k $6860k 25 $171,500,000 Year 4 800k/110k ? $2300k $5560k $3120k $396k $2888k $14264k 30 $427,920,000 Assumptions- On per site basis l * Private Label Versions- Estimates underway based on actual experiences with BrokersAlly.com 2. ** Affiliate-Capturing a greater percentage of the $104 billion market for product/services sold to CRM-centric professionals. 10% commissions. 3. *** Product Sales-Based on current actual experience of 1% of viewers purchasing Broker's Ally software products at $695 average price. 4. ** ** Subscription- Based on industry direction of 2% of viewers becoming long-term subscribers. $195/year annual subscription fee. 5. ***** ASP Revenue- Based on 1% of subscribers paying for Web versions of Ally application software products at $30 per month, $360/year. 6. ******Adv.-Cost per thousand of $120 per thousand viewers. Assume 30 advertisers per site. (l s_year is ramp-up year, assume half-year activity) Cash Flow Projection Revenue Sites Producing Revenue Revenue Per Average Site (Per site Revenue increases each year) Year 1 Year 2 Year 3 Year 4 1 5 10 15 $200k*(lS'Y0 $829k(2ndyr) $3340k(3rdY $6860k(4thyr) 0 I x200 I x829+4x200 I x3340+4x829+5x200 etc. Year 5 20 $14264k etc. Revenue from all on line Expenses Sites Consuming Cash $'s Consumption Rate/site (Assume fiat consumption rate per site) $200,000 $1,629,000 $7,656,000 $25,365,000 $63,549,000 6 $200,000 $1,200,000 ($1,000,000) 15 $200,000 $3,000,000 ($1,371,000) 25 $200,000 $5,000,000 $2,656,000 35 $200,000 45> etc. $200,000 Exp. from consuming sites Gain (Loss) $7,000,000 9,000,000 $18,365,000 $54,549,000 • Firstyearisexpectedohaveonesiteactive t foronehalfyearand4others underconstruction. Funding Sought, Capital Needs, Use of Proceeds Scherrcr intends WebAlly to use the net proceeds of venture capital and its initial public offering: (a) for sales and marketing, including brand promotion; (b) to fund the development of its vertical web URLs already acquired and those to be added consistently with its strategy of targeting attractive vertical professional communities; (c) for hiring and compensation of management and staff; and (d) for working capital and other general corporate purposes. 7unding Sought a) Sales & Marketing b) Development/Design c) Mgmt Compensation d) Repay Debt Financing e) Working Capital Total Year 1 $2,500,000 $1,300,000 $150,000 $900,000 $1,500,000 $6,350,000 Year 2 $2,000,000 $1,000,000 $250,000 0 1,000,000 $4,250,000 Year 3 $1,500,000 $1,000,000 $250,000 0 1,000,000 $3,750,000 28 CONFIDENTIAL TO SCHERRER RESOURCES, INC. A total 3-year capital demand is estimated to be approximately $15,000,000. Costs decrease over time as a result of economies of scale and with the completion of first-time site engineering and construction. While it is anticipated that sites in addition to the 15 now envisioned will be created over the span of 3 years, no cost estimates are provided. A second round of funding will be needed to construct and maintain this next generation of vertical sites. Timing of Funds The initial working capital needed to fund 18 months of work is approximately $8,000,000. Capital infusion should occur in a staged, quarter by quarter, time frame, and quarterly burn rates will be managed based on speed of funding. The first 18 months of efforts will provide a validation of the model for personnel needs, and the resulting burn rate and timing for a second round of funding for site expansion. Financing of the WebAlly, Inc. Corporate Creation Scherrer plans to finance WebAlly, Inc. either within the Scherrer Resources, Inc. entity, or as a new enterprise created in part based on discussion with potential venture capital investors and its chosen investment banker, through equity-oriented venture capital in return for a large minority position, followed as soon as practicable by an initial public offering of stock. Return to Investors Scherrer believes that, adequately financed in the near term through Venture capital and subsequently through an initial public offering, either traditionally or via the Intemet, WebAlly.com and its family of Web community sites could generate within two years a market capitalization in excess of $1 billion and returns to investors in the range of existing early-to-market Internet trading community stocks. 29 CONFIDENTIAL TO SCHERRER RESOURCES, INC. Appendix I- BrokersAlly.com Site Layout Headings- Replication Template for WebAlly family of sites. FREE SECTIONS- BrokersAlly.com Free Ask Broker's Ally!- Quick answers to your investment and finance questions. Markets- Whats happening in the markets today. Finance- IPOs and other financing actions. Financial Terms Glossaries- Answers to your questions. Community- Join the chat of brokers and investment professionals worldwide. Newsletters from the experts- Learn about and subscribe to the industries top newsletters. Business Practice Improvement- Who's doing what and why. Broker's Ally Store- Quick access to information and tools to build your business. PREMIUM SECTIONS- Subscription-based Services Latest Stories- News from reliable sources. Stock News- Equity markets Tech Stocks- Special focus on technology equities. Commentary- Moving news. International- Special news from international markets. Software Tools for your Desktop- Financial Planning, Bond Calculators, etc. Quote Streams- Market Data at your finger tips. Web Broker's Ally- Browser Access to your client information. Web Portfolio Tracker- Browser access to your client data. Clearing Services- Clearing support services from the best vendors. Tech Center- Computers, phones, and systems for your business. Customer Services- Backing up your business. SPONSORED AREAS Clearing Services- Trading and clearing. Research Center- Reliable research on the web. Tech Center- Technology to help your business. Travel Center- Quick access travel support for business or vacation. Gift Center- Ever-ready suppliers for the perfect gift for clients or family. Newsletters OnlineInformation about your profession from other professionals. Insurance Center- Products and performance. Business Resources- Reaching oat to help. Lending Center- Financing your dreams. ABOUT US Welcome to BrokersAlly.com Site Map Who's Who Reader Feedback Jobs at Scherrer Resources, Inc. Conflicts Policy, Privacy Policy Advertise Investor Relations COMMUNITY SECTIONFREE Join the Discussion Groups. for electronic technology. for lnternet companies. for .com companies. Message Boards- Post your thoughts and see what comes back. Chat Discussion Groups- By category for ease of use. The BrokersAlly.com 30 e-IndexTM- Specialty index The BrokersAlly.com 30 i-IndexTM- Specialty index The BrokersAlly.com 30 .com Index- Specialty index Spotlight Stocks- Fast moving or special situations. Technology Talk- Information from the longtime tech watchers. Wall Street Chatter- Whats the news on business mergers. IPOs- Talk of the town- Whats coming up. THIS DOCUMENT IS THE PROPERTY OF SCHERRER RESOURCES, INC. NO COPYING NOR FURTHER TRANMISSION OR OTHER DISTRIBUTION IS AUTHORIZED WITHOUT PRIOR WRITTEN PERMISSION. CONFIDENTIAL TO SCHERRER RESOURCES, INC. Appendix II- Our Clients & PartnersBroker's Ally TM Fiserv Our Securities, Inc. Partners Conseco/BankMark CheckFree Investment Services Beta Systems, Pershing, Inc./Thomson Financial Systems Our Clients Wilmington Trust Investments Hilliard Lyons Securities Crowell, Weedon & Co. Everen Securities, Inc. JP Morgan Investments SunTrust Securities, Inc. JB Hanauer & Company Waterhouse Securities Stifel Nicolaus Pershing, DLJ Division Beta Systems, Inc./Thomson Financial First Union Securities, Inc. BankMark/Conseco Chase Manhattan Investment Services NationsBanc:NationsSecurities, Inc. CompuLife Investor Services M&I Bank-Marshall & Ilsley Brokerage D.A. Davidson & Company Wheat First Union Financial ServiceCorporation(FSC) Mellon Dreyfus Investment Services Kirkpatrick Pettis, Smith, Polan, Inc. First MontaukSecurities Invest Financial Corporation Boatmen's Investment Services First Bank, U.S. Bancorp Investments Norwest Investment Services, Inc. Crestar Securities, Division Crestar Bank United Missouri Bank, UMB, N.A. Jefferson National Bank Mark Twain Brokerage Brenton Brokerage Mechanics Investment Services National Penn Bank First of America Bank BancOne Capital Corporation Hibernia Bank Davenport Merrill Lynch SunGard Brokerage Systems Interactive Data Corporation- IDC Hibernia Bank Corporate Securities Group U.S. Clearing Corporation u.s. Bancorp Investments Union Planters Bank Chatfield Dean Commercial Federal Uvest CompuLife Investor Services DLJ Division SunGard Brokerage Systems U.S. Clearing Corporation ADP Brokerage Information Interactive Data Corporation Financial Database Solutions IBM, Computer Systems Systems (IDC) Division Tektronic Printer Division, Xerox Overview: The above installations include firmwide roll-outs, to national, regional, branch offices for brokers, sales assistants and sales managers. This includes portfolio loading from backoffice service bureaus of market data, transactions holdings and portfolio information. Additional references available for different topologies. Additional installations of branch and single. According to Registered Representative Magazine, Broker's Ally is the most popular software application for retail brokerage worldwide. Broker's Ally: The Number for brokers, sales assistants ONE software and sales Magazine [ [ survey managers. Registered Representative .... ------ - -- IV RDfi_[D'Ki AI unvnLn ./t-lLLt. 1 f _, ...... i i c "__ _:_ ,, I • _'_1 _"" " _ J _e..,.... Seherrer Resources, Inc. Information Technology for Customer Management 275 Commerce Drive, Fort Washington, PA 19034 215-542-5700 www.BrokersAlly.com THIS DOCUMENT IS THE PROPERTY OF SCHERRER RESOURCES, INC. NO COPYING NOR FURTHER TRANMISSION OR OTHER DISTRIBUTION IS AUTHORIZED WITHOUT PRIOR WRITTEN PERMISSION. .1_ 'm CONFIDENTIAL TO SCHERRER RESOURCES, INC. Appendix III- Industry Commentator Verification PriceWaterhouseCoopers has published a variety of detailed analyses of Web e-commerce community opportunities and economic drivers. For example, the firm's E-Business--- The Latest Knowledge, "E-businesses in the U.S. Investment Management Industry: Current Practices and Immediate Opportunities," March 17, 2000 (available at pwcglobal.com) while it does not point the world to the opportunity now being exploited by Scherrer, offers strong indirect corroboration of the Company's WebAlly model BrokersAlly.com strategy. To begin with, the WebAlly.com strategic plan addresses most of the business opportunities listed in the PriceWaterhouseCoopers report's table of contents. And consider the following excerpts: "... [F]irms in the investment management industry today do not have to wait for the final resolution of [Web marketing] questions to take e-business action that (1) provides immediate benefits and (2) positions the firm to move quickly to pursue promising strategies," 3. "PROVIDINGFORTHE SELF-SERVEDCLIENT---The Internet empowers that quicklygrowing segment of U. S. clients who prefer universal access to self-service functions. These clients in the investment management market demand to get information ..., and to conduct the full range of transactions online, at their convenience. Investment management firms will have to cater to these clients, not only through company-specific websites [sic], but also via portals, aggregators and other intermediary websites [sic] [emphasis added]. A firm unable to provide these capabilities will lose access to a growing segment of the investor base. For investment management firms, supporting client self-service helps to contain cost. The marginal cost of conducting a transaction online is almost always less than that of conducting it manually. The increasing tendency of customers to choose selfservice, combined with the evolution of software tools, should make the fixed cost of providing these capabilities easier to justify." Arnold Pouw and Dorothy Yu of Netherlands-based Robeco Group, one of Europe's oldest fund managers, are leading the charge to e-commerce communities in Europe's investment industry. They say: "A new high-performance model is being created, today, as leading firms large and small scramble to find new ways to add value in a world of shrinking margins, accelerating consolidation and relentless competition ... at the junction where a knowledge management strategy meets Internet technology ... [but] the real payoff comes from what Robeco learns about its customers ... [so that we can] turn [customer] profiles into individually-tailored products and programs to be marketed through targeted online offers..." "Today success [in the investment industry] demands a focus on customer relationship management ... the result is a new give-and-take partnership, letting firms use what they learn from the ongoing interaction to modify products faster and customize them to a more targeted demographic group .... " ---from "The Knowledge-Driven Future of Investment Management," appearing on the Web at pwcglobal.corn/tools/knowledge/latest_knowledge. THIS DOCUMENT IS THE PROPERTY OF SCHERRER RESOURCES, INC. NO COPYING NOR FURTHER TRANMISSION OR OTHER DISTRIBUTION IS AUTHORIZED WITHOUT PRIOR WRITTEN PERMISSION. J CONFIDENTIAL TO SCHERRER RESOURCES, INC. Appendix IV- Financial Footnotes The following tables provide financial information of the family of WebAlly sites. for the creation, launch, and management Table ficting Site Mana r.com $5000 $2000 $2000 $2000 $2000 $2000 $2000 $2000 $2000 $2000 $2000 $2000 $2000 $2000 $2000 $33,000 and Construction $1000 $3000 $3000 $3000 $3000 $3000 $3000 $3000 $3000 $3000 $3000 $3000 $3000 $3000 $3000 $43,000 $25000 $10000 $10000 $10000 $10000 $10000 $10000 $10000 $10000 $10000 $10000 $10000 $10000 $10000 $10000 $165,000 Costs on a Monthly $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $7,500 Basis $2000 $4000 $4000 $4000 $4000 $4000 $4000 $4000 $4000 $4000 $4000 $4000 $4000 $4000 $4000 $58,000 $306,500/m $3,678,000/yr AgentsAlly AttomeysAlly BrokersAlly BuyerAlly ComputerPro CrmAlly LegalAlly PhysiciansAlly RealtyAlly RecruitersAlly RepAlly SalesAlly SupportAlly TeleSalesAlly Total per month Grand Total/mo. GrandTotal/year Yearly/Monthly Site Manager Marketing Sales ._ment and Marketing/Sales Vertical Market Manager Senior Level Marketing Manager Intermediate Level Sales Rep. Staffing Rate Estimates 100k $70k $60k $8.3k 5.8k 5.0k THIS DOCUMENT IS THE PROPERTY OF SCHERRER RESOURCES, INC. NO COPYING NOR FURTHER TRANMISSION OR OTHER DISTRIBUTION IS AUTHORIZED WITHOUT PRIOR WRITTEN PERMISSION. p, V CONFIDENTIAL TO SCHERRER RESOURCES, INC. Cost of Teams on a Per Site Basis For budgeting purposes, we have broken down the personnel expenses on a per site basis on an annualized basis to depict cash flow. Because personnel are broken into teams, and each team handles 5 sites, the per site costs are divided over these 5 sites as follows: Yearly Personnel Estimates Site Manager Marketing Sales Developers Vertical Market Manager Senior Level Marketing Mgr Intermediate Level Sales Rep. Senior Level In-house/Contract Intermediate In-house/Contract Entry Level In-house/Contact Senior Level In-house/Contract Entry Level In-house/Contract 100k $70k $60k $90k-yr/140k-yr $75k-yr/110k-yr $50k-yr/75k-yr $60k-yr/90k-yr $40k-yr/60k-yr '= $20k 1/5th= $14k 1/5 th= $12k t/5 th= $18+$28=$46 1/5th= $15+$22=$37 2/5th= $20+$30=$50 1/5th= $12 0 $191,000 $200,000 Estimated Designers TotalAnnualPer Site Staffing Costs Technical Staffing Cost Basis Yearly/Monthly Technical Staffing Rate Estimates Staff Category Staff Level Em )loyee Developers Senior Level $90k-yr/7.5k-mo Intermediate Level $75k-yr/6.3k-mo Entry Level $50k-yr/4.2k-mo Designers Senior Level $60k-yr/5.0k-mo Entry Level $40k-yr/3.3k-mo Contractor $140k-yr/11.7k-me $110k-yr/9.2k-mo $75k-yr/6.3-mo $90k-yr/7.5-mo $60k-yr/5-mo 34