ALERT-X Business Plan 2011 by Anton Tomazic

Business Plan for AlertX project

Contacts

For further information please contact:

Pozor 360 d.o.o. (Attention 360 Ltd.)

Kidriceva cesta 97

4220 Skofja Loka, Slovenia, EU

Tel: +386 (0)82 051832

Fax: +386 (0)82 051833

Email: info@pozor360.si

Anton Tomazic, Inventor Owner

Mobile: +386 (0)40 671761

Email: tone.tomazic@siol.net

M.Sc. Rok Kokalj

Anton P Gombac, US Rep. Mobile: +386 (0)41 601190

Email: rok.kokalj@pozor360.si

Mobile: 1.954.651.0128

Email: AmerSunGroup@gmail.com

All rights reserved. The information contained in this document is confidential and may also be considered proprietary and a trade secret. Without prior written approval from Attention 360 Ltd. no part of this document may be reproduced or transmitted in any form or by any means, including but not limited to electronic, mechanical, photocopying or recording or stored in any retrieval system of whatever nature. Use of any copyright notice does not imply unrestricted public access to any part of this document. Attention 360 Ltd. trade names used in this document are trademarks of Attention 360 Ltd. Other trademarks are acknowledged as the property of their rightful owners.

LIST OF TABLES, CHARTS, PICTURES

Business Plan for AlertX project

EXECUTIVE SUMMARY

Pozor 360 d.o.o. Vision (otherwise known as Attention 360 Ltd), aims to become the leading provider of "Electronic Alerting Devices to Improve the Safety of People on the Move" niche segment on the global market.

This company was founded as part of the AlertX project mission, which aim is to improve bicyclist safety on the road by capitalizing on the capability of the most state of the art hi-tech technology available.

The multi-dimensionally attractive AlertX product, its niche market without any presently established competition, a series of well-developed internet sales channels, a highly experienced management team, a unique selling proposition, a well-oiled chain of business partners, industry professionals and other Pozor/Attention 360 elements point to an expected outcome of 13€ Million ($17.6 million) profit within the next five years.

In order to actualize the Pozor/Attention 360 business plan, an initial investment in amount of 700.000 € ($10,000) will be required for a share within the 30% of Pozor/Attention 360 ownership still available. Most of this funding will be applied towards AlertX developmentphase activities, a first production series realization, and front-place market establishment. The initial prototypes are planned to be available within first 6 months after investment funds acquisition, while the first devices from a mass production run should be available within a year.

At this time the value of Pozor/Attention 360 is estimated at 500.000€ ($676,750), which also includes the worth of its pending patents. Within five years the company’s value is projected to rise to at least 50 mio € ($67.7 million).

AlertX Unique Selling Proposition

AlertX is being introduced as a product with many USP (Unique Selling Proposition) points: Sport eyeglasses with micro LED and audio-video processing systems; video software recognition technology for object detection, including object detection on the move ; an aesthetically attractive, singular device for the dramatic improvement of personal safety; and indications towards a much broader utility beyond its initial “sports” application.

For example, many of the innovations bundled in the development of this product are also making possible the prospective development of several other devices, and either these new patents or the products themselves will also be sold. In either event, a receptive and fruitful market is waiting to be claimed, and industry dominance for one ultimate party will follow. The prospects for such a positioning are huge and still have to be evaluated.

Business Plan for AlertX project

Exit Strategy

The existing company vision is to sell the majority share to the best-qualified prospective buyer, at the stage most beneficial to the company’s next phase of growth and profitability. This point is expected to take place within the coming five years, when the Pozor/Alert 360 market share will become large and attractive enough to draw the certain acquisition interest of some of the larger, international sports-electronics companies, then to be at least one of the most fortunate and successful.

PRESENT STATUS

Basic Corporate Data

Company name: Attention 360

Status: Ltd

Capital:

7.500€ in initial investment and 500.000€ in pending patents ID number: 3737608000

VAT number: SI34536728

Head office: Kidriceva cesta 97, 4220 Skofja Loka, Slovenia

Present Status

Pozor 360 Ltd. was established in May 2010 by the entrepreneur Anton Tomazic and a team of business and cycling industry professionals, together responsible for the successful startup of the company. The project began following the acceptance of the original business proposal of Anton Tomazic, as is outlined on the web page at: http://www.tomazic.info/AlertXintroduction.htm

Anton Tomazic has already proven himself as owner of the highly successful company, IUS SOFTWARE. With its greater than 20 year history, IUS Software has been a pioneer of legal software, developing and supplying a standard-setting application that has earned the company strong notice, and dual-industry recognition as a revolutionary, “breakthrough force” on the scene.

Anton Tomazic has most particularly been focusing on the launch of this new, consumer-based product, with innovations made possible by the latest achievements in modern technology. Named “AlertX,” it is a-state of-the-art electronic alerting device, which to begin with, takes the safety of the world’s bicyclists and bicycling commuters to the next level. For the AlertX concept, Anton Tomazic has also earned nomination and a place among the TOP TEN finalists in the “ Best Entrepreneurial Idea in Slovenia 2010 ” ( http://www.financeakademija.si/npi/index.php?go=503)!

Business Plan for AlertX project

A legal partnership of seven entities represents the ownership of the Pozor/Attention 360. These entities are each represented by Anton Tomazic, and he has been granted full authority on matters or decisions regarding future partners and investors.

Applying the proven model to the AlertX, several more rounds of financial investment are planned. The first one is already soon to be completed (within a few months), by which up to 700.000€ is expected to be raised. Along with those who have already come on board with their approval and investment, even more have expressed their interest, among them some of the largest investors in Slovenia, along with a number of partners throughout the European Union.

Before Pozor/Attention 360 was established, careful and thorough research had been ongoing for more than six months. Investigations and experiments were conducted in order to define the attractiveness of the product, to certify the possibility of manufacturing such a product, and also to examine the competition on the global market. All inquiries, initial prototype developments and other background research have confirmed the present time as offering the ideal circumstances and stepping points to realize this ripe business opportunity.

Pozor 360, Ltd. has already filed 2 (two) patents to protect its innovative and primary offerings thus far.

Technical plans for the development of the AlertX device have already been outlaid and reviewed. These plans adequately demonstrate the feasibility of the construction and mass manufacture for this type of product. Tandem research has also been conducted and has defined the exact specifications by which the manufactured device may be sold, and the price range that will demonstrate earnest buyer interest in the marketplace and yield a sound profit.

Product Description – AlertX

The AlertX brand name represents a device that dramatically improves the safety of the bicyclist on the move. It allows not just bicyclists, but also bikers, runners and all those who participate in athletic and other activities, wherever there is traffic, to see and become aware of any approaching dangers from behind. AlertX is protected under a patent, owned by Pozor/Attention 360.

Business Plan for AlertX project

1: AlertX glasses (general illustration).

The idea for this product originally took shape over the course of several Anton Tomazic's bicycle tours along a treacherous route that offered quite literally no opportunity or space to look back over his shoulder to become aware of traffic approaching from behind.

Heavy traffic, noises all around, uneven terrain and other random circumstances demand of the most attentive bicyclist concentration to follow such a narrow path and avoid unexpected hazards on the road.

Surprise threats from behind constitute the greatest point of vulnerability for today’s bicyclists. Most of the time cyclists are unaware of traffic and cannot see approaching dangers. There is often not much space nor sometimes a moment’s opportunity, neither is it always safe to turn one’s head backward while riding. Mirrors offer limited prevention, and traditionally, good listening has been the only other way of becoming aware of what might be trailing the rider; but today even this method is thwarted by music and audio track listening devices, courtesy of the hundreds of available digital music / Mp3 players currently on the market.

Following these simple facts and ideas, working them out and later documenting them, the conception for a device AlertX was realized; no previous product has been based on such a concept of device utility, and neither has a patent ever before been registered for one.

Figure

Business Plan for AlertX project

AlertX - Technical Overview

The AlertX product is composed of different hardware and software components. A digitally embedded LED eyeglass lens signal array, and an intelligent monitoring camera (“IMC”) system with computer processor and wireless access point are the main two components, which could also be additionally supplemented with a digital video display.

The IMC mounted under the bicyclist seat monitors the traffic behind. After detecting an approaching object, which is then processed by the recognition video software, a wireless impulse is sent electronically to receptors in the eyeglasses, flashing a corresponding light signal, clearly visible to the bicyclist. Each light flash has a special alert meaning for the bicyclist in order to accurately relay the events behind, and each will also in due time have a unique audio counterpart.

An optional digital video display could be placed on the bicyclist’s handle bar for the purpose of tracking by video road behind. Video-based retro viewing doubly complements the main alerting function with “true rear view”.

Intelligent Monitoring Camera - IMC

The AlertX camera system’s main functions are 1) surveillance of rear view traffic, and 2) the transmission of alerts to the eyeglasses, with optional audio-video broadcast and display. A most interesting component of the IMC is also its so-called "mini black box" which constantly records and stores the final, most recent minutes of events captured on video, which could even ultimately be used for example, as evidence in the case of a traffic accident.

The camera’s hardware semi-components include a precision computer processor, media for data storage, wireless access interface, compartment with battery, and secure mount. Firmware and specialized software for object recognition via video represent the main software semicomponents.

New object recognition video software and technology will be developed exclusively for the AlertX product, and will also offer continued updatability and upgradeability. The complete technology involves unique algorithms for detecting objects on the move—this special attention and programming must take into consideration that both the objects and the video “viewer” will be in motion. And such technology, as previously indicated, has great potential to be used in many other applications far beyond the few presented here.

Digital Eyeglasses

AlertX will feature fashionable, sport eyeglasses with highly sophisticated electronics. The first line of AlertX will be equipped with LED lights for different signal alert purposes. Additional electronic components will include a fine circuit board, processor, wireless transmitter, LED lights, and several mode buttons; the battery and other electronic components will also be worked into the frames and lenses, and covered with material consistent with traditional eyeglass wear.

Business Plan for AlertX project

Within a few years LED lights in AlertX will be replaced with a see-through video display, a technology which is now already in use for military and medical purposes, but is still too great in bulk to manage, and remains cost prohibitive. Though the initial idea for AlertX was to incorporate such technology, the basic “LED lights” version of AlertX will still register a favourable response and realize a profitable return; meanwhile within a few years AlertX will have become an established, recognized trademark on the world market. The launch at that time of a new line of AlertX products making use of the above mentioned technologies will have excellent chances to be accepted among providers of see-through glasses based products, as well as users.

Eyeglass Case Battery Charger

The AlertX case will not only be for the storage and protection of the eyeglasses, but will be also constructed as a charger for the two AlertX batteries. These batteries will simply be charged by proper placement of the eyeglasses into the case. Likewise, the battery of the IMC (camera) will be taken out and inserted into special sliding compartment, which the case also will provide. In this way only one power adaptor will be needed.

Figure 2: AlertX components.

Business Plan for AlertX project

Digital Video Display

Beside its main function of offering alerts to approaching dangers, AlertX will also support wifi wireless video transmissions to any supported digital display, which could be mounted on a biker's steering wheel. This optional functionality allows a view of all that occurs from behind the biker, and allows recorded viewing of “the whole ride.” Initially AlertX will also support digital video display on so called smart phones, running on iPhone or Android platforms; special user applications will be developed for each.

Related Products

With the development of AlertX, a tremendous amount of know-how and capability will be amassed under Pozor/Attention 360. This vibrant, fertile company is poised to become the de facto owner-corporation of newly emerging, innovative technologies; and these will very readily be directed towards other, new applications and the development of many other products across a variety of industries. This of course can only serve to leverage exponentially the maximum potential of all initial investments into Pozor/Attention 360.

Glimpses of such “offshoot” offerings include devices offering expanded awareness and safety not only for cycling, but for other sports and athletic activities as well such as jogging, skiing, roller blading, boating, wave-running, etc. Other applications and products will also offer for example, excellent utility towards increased safety and visibility (as well as audibility) for professional security and various situational monitoring contexts. And perhaps the most exciting prospective “by product” enterprise, is that one surrounding the development of a device that is meant to help blind persons to better orient to, and/or navigate through and within their environments; to “read” text, and recognize people, objects, and environmental circumstances or conditions. This device has already had its patent filed, and promises to dramatically impact and alter millions of lives. And all this, from riding a bicycle!!

More about BlinX, which idea has already been articulated and defined, could be found on web page: http://www.tomazic.info/BlinX-Description.htm

Business Plan for AlertX project Document no. BP-2010-V01

MARKET ANALYSIS

Bicycle Industry

Bicycling and everything related to this recreation branch is a huge industry. Despite the fact that only 1% of all trips in USA are made by bicycle (http://www.worldwatch.org/node/5462) the United States represents an enormous bicyclist market, where more than 57 million Americans ride a bike (http://www.bikeleague.org/media/facts/). A similar percentage is found in the United Kingdom and Australia.

Much higher rates of cycling have been determined for Netherlands, Denmark and Germany, where 10-27% of all trips are done by bicycle. But these countries, traditionally known as the greatest bicyclist nations, are far behind China, where in some cities half of all trips are counted as performed by bicycles. ( http://www.worldwatch.org/node/5462 ). By another source, (http://www.solutions-site.org/artman/publish/article_395.shtml ) in the Netherlands (the bike capital of the world), 40% of all traffic movement takes place on bicycle.

If the world’s bicycle industry growth is examined with the world’s automobile industry production over the last 50 years, the growth of both can be compared. Until 1972 these rates remain roughly parallel, but since the mid- 70’s and thereafter bicycle production has well more than doubly outstripped that of automobiles (http://www.worldwatch.org/node/5462).

Source: http://chartsbin.com/view/zl9

Figure 3: World Bicycle and Automobile Production, 1950-2007

Business Plan for AlertX project

As far as bicycle production according to country is concerned, China leads by far. With 52.2 million bicycles manufactured in the year 2000, this represents four times the number of the next largest country output (India) - and nearly 50 times greater than that of the US market.

Bicycle Production of Selected Countries, 1990-2000

indicates data not available.

Source: Bicycle Retailer & Industry News Directory, from Cycle Press, European Bicycle Manufacturers Association, Japan Bicycle Promotion Institute, Bike Europe, and Bicycle Retailer & Industry. http://www.ibike.org/library/statistics-data.htm

Figure 4: Bicycle production of selected countries, 1990-2000, Source:

The U.S. bicycle industry was a $5.6 billion industry in 2009, including the retail value of bicycles, related parts, and accessories through all channels of distribution, according to research funded by the National Sporting Goods Association. Bicycles and related products appeal primarily to a recreation market in the United States. NBDA research conducted by the Bicycle Market Research Institute in 2006 reported that 73% of adult cyclists rode for recreation, 53% for fitness, 10% for commuting, 8% racing and 6% sport. (http://nbda.com/articles/industry-overview-2009-pg34.htm).

Bicycle Safety Industry

Placing importance on cycling in transportation leads to an increase in cycling safety. Bicycle injuries per kilometer traveled are about 30 times higher in the United States than in the Netherlands, and cycling deaths are eight times higher there. (http://www.worldwatch.org/node/5462 ). In a report by CBN, it was estimated that more than 90 percent of the bicycle accidents in America are caused by collisions with cars or trucks (http://www.solutions-site.org/artman/publish/article_395.shtml).

Business Plan for AlertX project Document

That makes both markets ideal for selling product with features such as AlertX—in the United States where safety products are clearly a necessity, and the Netherlands where safety awareness is on such high level. Also helpful, both governments invest heavily in the promotion of biking and walking.

According to our research there exist several types of products on the market that are meant to support the biker's safety, but none that offer any kind of alert that can be shown to increase a biker’s safety by a significant margin.

We tried to identify most important groups of existing safety products for bicyclists:

1. Helmets, for the prevention of head injuries.

2. Body armour (gloves, elbow and knee pads for young children protection), that protects the skin on the palms of hands for example, in case of a fall on pavement.

3. Mirrors (to be set up on bike steering wheel, on helmet or glasses).

4. Reflective equipment (like flags, wheel reflectors, decals and vests) increases visibility on the road.

5. (Flashing) lights.

6. Sunglasses and other products.

It can be noticed that first two safety products (helmets and body armour) are meant to apply their usefulness after the accident has already occurred. The helmet and the body armour can prevent more serious body injuries and are necessary (and in some places even required by law) to wear, but AlertX is designed for a higher purpose, which is the prevention against accidents even to happen.

Using mirrors and lights serve the similar purpose of "preventing accidents" as AlertX. But lights only offer a limited approach to the problem, and while mirrors have nearly the same function as AlertX, they are comparatively uni-dimensional, they have a silently ugly, serious flaw, and can reach only a fraction of the level of safety that the AlertX can provide. In addition, the AlertX is also an alerting device, which intelligently warns the bicyclist beforehand of approaching and potential danger—in four words, “No More Blind Spots.”

Competitors

According to our investigation there exists no such product on the market like AlertX. While comparison with direct competition is not possible, some potential competitors have been identified.

Within a few years, especially when so called "see-through eyeglasses" will become widely available, very strong competition is expected. Along with many startups, some of the biggest

Business Plan for AlertX project Document no.

international players will probably enter the segment, especially if just one item and business case model will prove itself as a successful project.

There are numerous potential competitors from the sport and electronics industries. Most potential competitors are those with a range of electronic products for outdoor sports, and also particularly bike consoles. These include Garmin, TomTom, Polar, Suunto or Cateye, which are offering computerized items and products such as GPS navigation, sport watches, heart rate monitors, speedometers other data detectors and similar devices.

Until now none of these devices includes in its scope any functionality for safety improvement, which again puts "sport electronic safety devices" as a totally un-exploited niche segment.

In 2009 Garmin for instance, introduced "The Edge 500", a bicyclist console that can do quite a lot more than its average counterpart. Not only can it track the user's GPS position, but it also gives the user readouts for velocity, distance, time, elevation, speed, as well as climb and descent. It can also detect temperature, and will even change time zones automatically. When connected to the Garmin heart rate monitor, the Edge 500 can detect changes in the user’s heart rate. This information can be used to detect the calories burned on the ride (http://www.coolestgadgets.com/20090901/garmin-edge-500-gps-bicycle/#more-29979 ). At this time its price is ranging from 250$-350$ on Amazon.com.

Garmin Edge 500 belongs to so called Outdoor/Fitness segment by Garmin, which revenue increased from $428 million in 2008 to $469 million in 2009 (Garmin Annual report 2009, http://www8.garmin.com/aboutGarmin/invRelations/reports/2010_Shareholder_Mtg_Presentati on.pdf).

Figure 5: Garmin Edge 2009

Business Plan for AlertX project

On the other hand a smaller company with a specialized product line like Recon Instruments Inc. from Canada (http://www.reconinstruments.com/contact.htm ) could somehow came out with new line of products or safety based functionality for existing products. Nevertheless such a company represents a much lesser threat as Garmin; but still Pozor 360 will always have to keep monitoring future growth trends and remain sure to react fast in order to secure its market share.

Recon Instrument’s patent-pending technologies integrate head-mounted display systems with state-of-the-art sensors, optics and GPS technology. They provide real-time access to live navigation, communication, and performance-based information.

Competitive, Marketplace Advantages

First High Tech Safety Alerting Device on Worldwide Market

According to our researches and interviews AlertX is the first hi-tech device, which main purpose is to make the bicyclist safer on the road. It is also the first product of its kind, which takes advantage of all the benefits of today‘s state of the art technology that can significantly improve bicyclist safety standards.

Patents, Ownership

Pozor/Attention 360 has already filed two (2) patent applications in order to protect its innovations. Legally valid patents will slow down potential competitors, even the biggest ones such as Garmin or Polar, which already have a presence in bicyclist industry with their considerable range of products, and could potentially also bring out new products for the improvement of bicyclist safety.

Innovative "In-Motion" Video Object-Recognition Technology

One of the vital AlertX components and innovations is its software for video object recognition. There already exists quite an amount of video recognition software programs on the market; but our investigations found not a single one that can approach satisfying the performance goals of AlertX. Special algorithms have to be written for detecting movement when both subject and object are in motion, and these algorithms will be written especially for Pozor 360 and will represent one of its key technological advantages against future competitors.

Open Market and Strategic Marketing Channels

Securing a respectful market share with a product based on the newest available technologies and electronic components will bring significant advantages against future competitors, whose nearest offerings are also expected to be most probably based on eyeglasses with relatively basic, so called “see-through” functionality. These are expected to enter the market around late 2012 / early 2013. Pozor/Attention 360 has already obtained positions with some strategic

Business Plan for AlertX project

marketing channels, like "TV Shop" advertising from one of the world’s most successful companies for direct TV advertisement.

Experienced Management and Partner Members

Pozor 360 has been established and is run by a group of experienced entrepreneurs and veterans in a variety of fields. Anton Tomazic (innovator, entrepreneur and investor), Rok Kokalj (CEO, entrepreneur for more than 10 years), A.C. (most experienced technical engineer, head of development), Anton Gombac (media marketing professional from USA), Mira Puc (lawyer, investor) and others. Pozor 360 is first priority for all team members, and as such has exceptional prospects for success.

Sponsorship Outreach, Partnering With the Cycling Community

Sponsorship of amateur and professional bicyclist clubs and teams is a vital step in the company mission and business plan for a few reasons. First, it is indispensable for establishing a recognizable profile and helping to brand a trademark within the cycling industry and the consciousness of its consumer public. Secondly, it functions as a dynamic networking platform, helping to attract the attention of other industry experts and professionals whose help and assistance can be expected to help propel the company towards the fulfillment of its objectives. For these reasons Pozor 360 is actively seeking out clubs, teams and organization for the most promising and mutually beneficial sponsorship opportunities available.

Business Plan for AlertX project

STRATEGY AND PLANS

Objectives

1. To secure at least 30% of the global market share for AlertX type of products.

2. Establish a chain of at least 5 branches around the globe.

3. To realize straight profiting position at the end of year 2 (break even point).

4. To generate a 5 year turnover value of more than 70 mio €

5. To generate at least 50% of income through internet based sales.

6. Become a sponsor of at least 10 prominent bicycling teams in regions throughout the globe.

Strategy

To enter the market with this highly attractive, hi-tech consumer product and secure a respectful market share for AlertX before the appearance of widely available “see-through” based eyeglasses, projected to be within at most three years.

The availability of such eyeglasses on the market within the next two to three years will probably result in a flood of other devices and solutions leveraging eyeglass usage. Entering the market at that time will be much harder, less profitable and riskier than it is today. Our strategy is to capitalize right now on the advantages of extending eyeglass functionality with today’s available hi-tech technology in order to secure the market share, which then grow to be one of the most attractive and dominant within two or three years.

All operational activities within the first two years will serve the goal of securing the market share before the imminent market arrival of see through eyeglasses. Establishing branches around the globe, sponsoring bicycling teams and internationally famous cycling athletes, investing heavily in internet marketing and sales efforts, continued research, product development and promotional activities all serve this goal, which will also foster the rapid and lasting growth of AlertX as a leading player on the international market.

Research & Development

Most of the ongoing development will be coordinated with and outsourced to advanced and specialized partners; this will at the same time enable the swiftest possible AlertX introduction to, and lead placement in the market. Direct management and monitoring of operations will be kept in house. Each partner will be responsible for no more than one AlertX component or perhaps even subcomponent; and so in this way control and protection of proprietary company knowledge and/or trade secrets will be assured.

Business Plan for AlertX project

Production

All prototypes and test models will be manufactured by production companies most respected in their respective regions. And again, each production company will be hired not for more than one product component, or semi-component.

Larger production series most probably will have to be outsourced to China or another lower manufacturing cost country. Pozor/Attention 360 already has established contacts with several ideal production company candidates.

Pozor/Attention 360 management also already has considerable experience with production in China, which also is a great benefit; our team will avoid many of the typical mistakes that can happen particularly in outsourcing production to Chinese companies.

Distribution

While the majority of revenue is planned to result via global web marketing, careful distribution and handling drafts are still being finalized. All orders will be processed within 24 hours. As much as possible, distribution operations will be automated and as such supported by IT systems.

At this initial stage the main distribution centre will be based in Slovenia. After the successful start of sales a distribution centre in England or USA will be also established, which should further promote visibility and trust among potential buyers in both of these countries, and likely beyond.

Additional Operations

Most of the non-core business activities will be outsourced. These activities include accountant services, legal support, office leasing and other necessary operational services such as telecommunications, industrial power maintenance, and shipment.

Human Resources

The management is highly aware of the importance of human resources for the company’s success. Much emphasis will be laid on choosing the ideal additional manpower and, later, to ensure ongoing training and education in order to keep a viable, innovative edge. Their contributions will have to be measured by two perspectives: work place dynamics, and the individually respective final product innovations.

Business Plan for AlertX project

All steps will be taken to provide employees with the latest industry knowledge at the point of highest relevance, and to establish effective communication and shared exchange between them.

We have already identified additional personnel of the finest quality to complement our teams, who are waiting for the opportunity to be employed in Pozor/Attention 360.

To attract the most qualified experts and inspire them to stay and work for our mutual success, a special employee benefits program will be implemented. The goal is to follow the idea of a "family friendly company", which means special benefits for employees in order to allow them to have the richest quality personal or family life as possible. Some of these benefits include allowing opportunities for working from home, health, relaxation and recreation programs and events, special counseling programs, profit sharing and similar special incentives. It is understood that good salaries are no longer the only motivation for keeping best working force available in a company.

Management Team

Rok Kokalj

Rok Kokalj, M.Sc. has been appointed as Pozor 360 startup CEO. He has worked at the Centre of Electronic Commerce beginning even as a student, before he was later fully employed as a researcher. At the Centre he was to become continually informed about the latest advancements in the field of information technology, especially in the area of e-learning and other interactive solutions. In year 2003 he received Master's degree in Management of Information Systems.

With his colleague Simon Bergant in 2000, he established his first company, Nevron d.o.o. Nevron’s core business is the development and sale of its own family of IPTV products, which are sold throughout the world. The development of some IPTV technologies in the Nevron portfolio was also co-sponsored with the underwriting of EU development funds, along with the partnership of some of the largest Slovenian companies such as Iskratel. The establishment of such fruitful professional relationships requires great facility with business negotiation and profound knowledge in the area of corporate partnering, in addition to his vast technical expertise.

As a founder, employee and owner of an internationally successful company, Mr. Kokalj has gained great expertise in high-level entrepreneurship, along with invaluable experience in company management, teamwork, project work, company administration, the coordinating of development, international marketing and sales, and other leadership assignments. Finally, he has successfully led Nevron through the challenges brought by the recent economic climate as he had years earlier through the internet boom at the beginning of the millennium, which principal activity could be gently understated as risk management.

Business Plan for AlertX project

Document no. BP-2010-V01

More about Rok Kokalj may be found at the following web address: http://si.linkedin.com/in/rokkokalj

Anton Tomazic

Entrepreneur, inventor and veteran lawyer Anton Tomazic is the leading force behind the AlertX project, and the original idea for this innovative product line belongs to him. He has had key roles in launching a number of successful enterprises during his career, including one of the most accomplished and respected Slovenian-European Law and IT companies, the critically acclaimed IUS Software, Ltd. He has profitably capitalized on his post-graduate education and high-powered business experience to be become an expert on international investment, and has also been appointed by the court as an expert on software and intellectual property.

More about Tone may be found at the following web address: http://www.tomazic.info/Anton_TOMAZIC.htm.

A.C.

As associate contributor and the chief technical engineer for AlertX, our technical operations superstar has a degree in electrical engineering science and he has exhaustive experience from his work in the development of embedded information hardware systems for over fifteen years.

Over this period he was directly involved with developing embedded systems based on usage of 8-bit family microcontrollers from former Motorola, Microchip PIC12, PIC16, PIC18 family, Atmel AVR 8-bit family, and ARM and MIPS based systems, more or less operating with Linux based operating systems. His many years of experience include an expertise in the development of related system platforms, and in the implementation of system drivers.

Since then he has amassed more than 10 years of experience in the management of development teams responsible for the initialization of embedded systems, for one of the largest IT companies in Slovenia.

Anton Gombac

Anton Gombac is an American-European citizen living and working in Florida, and also in Washington, the Great American Northwest. He is one of the vital management voices for sales positioning and placement of the AlertX product.

Anton will be coordinating the sales advertising and marketing of the Alert X product line in the United States. With his background in audio-visual media and digital graphics, as well as in writing and even musical scoring work, he stands out among even his own industry peers as a multi-talented professional.

His own flagship internet enterprise Digital Contact Media, besides helping to usher in some revolutionary and highly useful email-marketing and web communications tools, has brought him to a place alongside a few very well established business figures in the Real Estate and Internet Technology industries, as well as in the Entrepreneurial Business Services, and Web

Business Plan for AlertX project

Marketing fields. With such resources, contacts and expertise, Tony is well prepared to solidify the investor base and develop and guide in real time the marketing platform that we expect will help expand our market share in the USA, and that will help to establish a dominant presence for AlertX over the course of the next years.

Matej Kovac

Matej Kovac is handling Marketing and Sales Development for the AlertX product line. Currently he is the Managing Director for Foreign Markets at IUS SOFTWARE d.o.o. Ljubljana, and is responsible for the development of company operations in foreign markets. For ten years prior to joining IUS SOFTWARE, he was the CEO of the Slovenian Trade and Investment Promotion Agency, and for year and a half worked as an investment promotion consultant in Belgrade, Serbia, for the World Bank.

Mr. Kovac has impressive knowledge of the administrative, business and political environments in his regions of operation. His main areas of expertise are in business development, international exports, and marketing. He is also highly experienced in building and managing teams of professionals across various fields and backgrounds. Mr. Kovac graduated with a BSc in Physics from Ljubljana University and has MBA degree from IEDC School of Management Bled.

Dr. Drago Rudel

Dr. Drago Rudel is the CEO of a research company MKS Electronic Systems Ltd., Ljubljana (1994-), and is a senior research associate for the University of Ljubljana, Faculty of Medicine, Institute of Biomedical Informatics. He was a researcher and an Assistant to Professor at the University of Ljubljana, Faculty of Electrical Engineering (1977-1989). His expertise is in the development of biomedical instrumentation and biomedical research, which translates into experience with ergonomics / user design and data systems implementation. For the last 20 years he has been intensively involved in several European and national projects in the field of Medical Informatics, telecare and telehealth. His company provides new ICT based health and social care solutions for the elderly population in Slovenia.

Peter Janetic

Peter Janetic is a general manager of the Slovenian UCI Continental Cycling Team 2011, which business interest is managed by the company Rotasport, d.o.o., which he also happens to own. His role in Pozor 360 is as lead consultant in the area of bicyclist sciences, and he brings with him considerable industry expertise.

Peter Janetic also enjoys an admirable banking career as a member of the senior management team for the largest banking institution in Slovenia. He has been an international level sportsman for sixteen years. His company Rotasport specializes in the area of Pro Cycling team management, which main objective is the development of professional cycling teams at the foremost international level for years to come. Currently he is also founding Slovenia’s first privately owned, professional cycling team. Finally, under his direction, Rotasport is

instituting an exciting new cycling academy. This academy will run with the cooperation of Adria Mobil, distinguishing itself especially in the field by providing a platform for the sharing among coaches of their experiences and finest training resources.

Business Plan for AlertX project

Marketing Plan

The price, size, functionality, and the fundamental appeal of the product itself are attributes that are ideal for capitalizing on the rich opportunities for marketing and sales on the Internet. Of course traditional advertising activity and usage of existing reseller/retail channels will also be pursued.

Pozor/Attention360 Internet Store

By the end of the second quarter of its first year a dedicated web store for AlertX line of products will be initialized. At its first stages this store will be used for the online promotion and pre-sales of AlertX product. The Pozor/Attention 360 web store represents the foundational base for all future internet marketing and sales activity, and will be an indispensable part of total company sales efforts and overall revenue.

In its later, ongoing operational stages the Pozor/Attention 360 portal will be coupled with BPP, “Business Partnership Program extranet”, which will improve the automation of resellers' operations and processing.

Web Advertising & Marketing, Internet Sales

Internet and video marketing, advertisement and sales represent a key component of the AlertX marketing strategy. Around 50% of all sales are planned to be achieved with usage of different web promotional and sales tools.

E-marketplaces such as Alibaba.com, stores like Amazon and even Ebay, social networks as Facebook.com, promotional campaign tools like Google Adwords, special iPhone and Android catalogues, dedicated sport store outlets and portals are just some of the web resources which will be explored as part of the AlertX online marketing operation.

Trade Shows and Fairs

Trade shows and fairs are vital for the initial introduction of products to potential resellers. It is estimated that a company and its product need to appear on average from three to four times at the same established industry showcases in order to become trustworthy and to consummate productive partnerships with respected resellers. In addition to web promotion, it is expected that most of our family of resellers will be developed and expanded through our participation at these international trade show venues.

Video Advertising and Sales

TV shops and other TV advertising/sales channels will also be used to generate immediate purchase interest and sales revenue. Such marketing campaigns historically represent the most effective possible return on marketing investment. They also represent one of the most costly marketing outlays, but special business relationships with owners of TV promotional channels can be cultivated to maximize profitable return.

Business Plan for AlertX project

Sponsorship Opportunities

Sponsorship of several bicyclist teams and their most prominent individual cyclists will significantly improve the consumer and industry recognition of the AlertX company and trademark. Sponsorship of bicyclist teams will also contribute towards establishing a trusted presence, and piquing interest among potential buyers and resellers. The first such sponsored club will be "Slovenian UCI Continental Cycling Team 2011.

Reseller Chains

Partnership with existing distribution chains for cycling products will put AlertX on the shelves of sport stores. In contrast to internet sales, it’s usually a much longer process to establish trusted partnerships with enough successful and reliable resellers. Attendance at trade shows and sponsorship activities are some of the vital tools for attracting these preferred resellers.

Marketing Materials

Marketing material pieces and compositions will be offered in the English language and distributed to resellers for local printing and usage. For the purpose of attendance at fairs and for direct sales, some materials will be printed in-house.

Public Relations

Strong effort will be directed towards preparing articles for publishing in relevant magazines, and making special use of the opportunities offered for gratis promotion. Pozor 360 has already secured serial publication of its news and articles in one of the most successful business newspapers, “Finance,” and within the special local sport magazine and web portal (www.bicikel.com).

Other Approaches

Pozor 360 will also participate in acquiring local government investment and EU fund programs , especially for R&D activities in the field of traffic, safety improvement technologies, and for assertive expansion into new international markets.

Business Plan for AlertX project

Sales Forecasts

As of today, tens of thousands of enthusiastic amateur bicyclists in Slovenia and tens of millions around the world are potential buyers of the AlertX product. For each developed country there exists a market of hundreds of thousands of consumers, while worldwide of course, the total market number is in the millions.

Our market surveys, which consist mostly from interviews among bicycling shops around local and USA market, have indicated a great interest for AlertX. The warm and enthusiastic reception we’ve encountered almost universally among retail owners, we are learning is partly due not only to the historically reliable “safety element” appeal, but also the special uniqueness of the AlertX product, and the corresponding complete lack of anything similar being currently offered on the market—and they are waiting to stock their inventories!

Our expectations follow the established estimates for the general purchasing rate of new hightech products, also called “gadgets”. Gadgets, usually under sale for higher prices, are usually bought by so-called “early adopters”, which want “to have all the best stuff as soon as it’s available” on the market, are willing to try it first, and have enough money to purchase it. In general there are 10% of such buyers among each target group.

Figure 6: Sales forecasts for 5 years.

According to cycling industry estimates, there are at least 5% of bicyclists, which own better equipment then professional bicyclists. And all these cyclists are very high-potential buyers of the AlertX gadget, especially if it is to be promoted by professional cycling stars and clubs.

Business Plan for AlertX project

FINANCIAL ANALYSIS

Existing company status

Pozor 360 d.o.o. (ang.: Attention 360 Ltd) was established in May 2010. Under the direction of its current leadership, general technical plans have been completed and brief product marketing surveys have already been executed. Our first goal is to secure further investment capital which will enable the execution of the ideas presented in this business plan. Investment capital is needed for AlertX initial development activities, including first production series realization and market establishment.

Valuation

To realize the projected return of +/- 13 mio € by the end of year five (5), an investment of 700,000 € ($947,450) is required in seed capital. According to expected performance estimates, the company value will rise to 50 mil € ($67.7 million) within next five years. Another round of investment, roughly in the amount of 1 mio € ($1.35 million) is planned to cover the next, continuing phase of production costs. However, instead of seeking an additional round of venture capital, the instruments of bank loans will be used to cover the needs of third stage production costs. In that phase a three year loan in up to 2 mio € ($2.7million) will be acquired. Note: [As of this additional writing, financing for this third phase is slated to be obtained instead from the revenues derived for 150,000 piece order marked for market arrival in early 2012.]

Break-even point

Pozor/Attention 360 passes the breakeven point by the beginning of year 3.

Business Plan for AlertX project Document no.

Figure 7: Breakeven point, 5-year perspective. Cash flow statements

Figure 8: Cost and profit margins over five years.

Business Plan for AlertX project

Figure 9: Cash flow and number of employees, over five years.

Business Plan for AlertX project

Capital spending

[see Figure 10]

Labor costs

A significant portion of requested capital will be spent on salaries, especially for sales representatives, administration and distribution operations. More in-house developers will be introduced in later stages of the project, while initial development phases will be in most cases undertaken by local outsourced partners.

Production costs

Initial production costs per item are expected to be high while electronic components for this hi-tech product remain expensive. With quantity production, costs will drop slightly, but realistically not more than by 30%. These assumptions and figures are used and already calculated in the business plan.

Research & Development costs

The first LED-based AlertX prototype is expected to be available within 6 months. Following the projected timeline, by year three (3) the "see-through" AlertX generation product line will be introduced. The existing line of LED-based products will still be kept in production until the newer version is proven to be successful and the drop of LED-based AlertX from the market is indicated.

Operational costs

To minimize capital spending, all non-vital operations will be outsourced.

Marketing costs

Coordinated advertising and marketing campaigns are vital for the achievement of projected revenues. By far the largest portion of marketing costs is planned to be assigned toward internet and TV advertisement, promotions and sales.

Patent claims

While the costs for patenting are expensive, it is understood they are essential and will greatly help in establishing and preserving market share dominance, and corresponding long-term company value.

Equipment costs

All necessary equipment (furniture, office and operational devices, electronic parts for prototyping and manufacture, etc) will be purchased rather than leased; long term savings will be substantial.

Contingencies

Unexpected additional costs represent 10% of all yearly expenditures. We are aware that some costs can rise above projections because of unexpected events and contingencies. A reserve for such events is vital.

Figure 10: Profit and loss over five years.

Figure 11: Balance sheet for five years.

Business Plan for AlertX project

RISK ANALYSIS

Weaknesses

- We are a new, upstart player on an international bicycling market with already existing, strong and successful players;

- AlertX company and the product brand is still not yet established in the market;

- Substantial financial resources are required for the presentation, promotion and the establishment of customer awareness with regard to the new technology and functionality brought to the market by AlertX.

- Regardless of the number, results and expectations of relied-upon researches and surveys, the market might not respond with the projected retail success of a product such as AlertX.

Strengths - Advantages and Core Competencies

- Pozor/Alert/Attention 360 is a lean and concentrated, innovative and resource-rich company, with quick and effective ability to respond and adapt to any product or market needs, changes and opportunities;

- An experienced, multinational management team with many years’ profitable entrepreneurship, successful product development and vital technical knowledge—and Vision—is serving as the leadership.

- Partnerships and tracks towards specialized resources and valuable outsourcing companies, including veteran retail, direct sales and newly forming marketing channels, are already established.

- Technical plans have already been designed and a working model created, for swift execution through development and production phases;

- AlertX is riding atop the wave of an emerging new technology - Augmented Reality (AR), a term for a live direct or indirect viewing of a physical real-world environment whose elements are augmented by virtual computer-generated imagery.

- Major appeal of the product and its safety and preventative elements, along with all of its ripe technologies on many levels: the athletic, the popular, the humanistic, the creative and inspirational, the practical, the aesthetic, and the uniquely functional.

Threats

- No currently existing products on the market similar to AlertX, which could mean a possible lack of interest in such a product;

- No currently existing direct fellow competition on the market;

- A possibility of the fast and assaulting emergence of a competitive product from a large, already established player on the market;

Business Plan for AlertX project

- Exposure to risk while handling over production to potentialy unreliable outsourced companies;

Opportunities

- First product of its kind on the global market;

- 100% free market share;

- AlertX is protected under legal patent;

- Robust yield on investment is projected;

- Product type is perfectly suited to additionally leverage the full potential of internet sales and marketing tools, and delivery to consumers through the world wide web market.

- Developed technologies for Alertx could be used for many other applications and additional products (please refer to Summary or Technical Overview);

- The product and the technologies driving its creation and value, have the potential to make some of the activities of daily life and the world much safer;

- The company and our mission can help to save a life.

CONCLUSION

AlertX is a product through which many ambitious goals can be attained. Its appealing features, attractive functionality and high contribution value perfectly position the company to realize one of the most successful of international business stories.

The product, the technologies and the projected performance are soundly based on consumer and industry marketing research. Technical plans for prototypes and product development continue to evolve, and offer a variety of highly promising future commercial avenues. An already proven, successfully tried management team and business plan is also in place.

We at Pozor 360 / Attention 360 thank you for your diligent review, we welcome your thoughts, questions and/or proposals, along ultimately with your wisest investment decision.

-- “Safety All Around Me, Seeing the World Around Us!”

AlertX