Remember that the information below is not meant to be in any way a complete analysis of the opportunity, but to give potential Investors an overview of some of the issues that may be important. Interested investors should examine further information. Also please refer to the terms and conditions in your subscription agreement.

1. Proposal Title/Headline

A New data transfer system saving equipment service companies 40-50% of costs

2. Business Summary

Most equipment that is built today, to perform an important function, invariably includes diagnostic software that will identify and if able, report fault conditions. Often this equipment also requires updated or revised versions of software to be downloaded during its lifespan. Our unique data transfer system acts as a low cost, universal communications gateway facilitating real time, information flow between the equipment / machinery and the central service organisation. Service companies that will benefit from our system maintain equipment in industries such as office equipment, lifts, commercial and domestic security systems, Illuminated advertising signs, industrial dipensing units, commercial and fleet vehicles, traffic lights and commercial refrigeration units etc. The need for our system is being driven by a desire to reduce the number of service staff in vans and the need to minimise downtime of the equipment that is being maintained. Additionally the service company can use our device as a gateway to send updated software to the remote devices they maintain, resulting in huge savings over the present methods of "new release of software" dispatch. Our revenue is generated at point of sale and through ongoing network usage charges. We have been working with one of the largest copier companys in the world to develop the system. They have informed us that they will be placing an order for an initial 1000 units by the end of November 2003.They have informed us that their requirement for follow up orders, mainly for the European Market and US markets, will exceed 14,000 units per month. Our 3 year forecasts are based upon a very conservative projected uptake of 2330 units per month from this major company. We are also in advanced stages of discussions with other potential users including a major, global security company. The management team have over 75 years experience at a senior level in the Information Technology and Telecommunications industries.

Updates

3. Estimate of Market Size and Growth Potential

Market Size: In Australia we believe there are conservatively 10,000,000 pieces of equipment where it would be economical and beneficial for the owners or service maintanence companies to use our system to monitor / control equipment under contract. Examples are office equipment, lifts, commercial and domestic security systems, Illuminated advertising signs, industrial dispensing units, commercial and fleet vehicles, traffic lights, commercial refrigeration units etc. Sales Our revenue is generated at point of sale and through ongoing network usage charges. For the first 3 years sales, we have assumed just one customer, where we will supply to its Australian and overseas operations. This company wishes to monitor photocopiers and have stated that they wish to order 14,000 units per month to meet their global requirement. We have however based our above projections on monthly sales of only 2,330 units. We have had trial units with the company for 3 years on a paid basis. Testing and evaluation of the product has been approved. In order to assist global sales we have developed multi-language capability. The company's operations in Germany are currently testing the multi-language capability. This approval is expected by mid November 2003. The company has informed us that their first order for 1000 units, for global distribution, will be placed at the end of November 2003.

4. Market Demand

The market is being driven by two factors: Firstly, the need for service companies to minimise downtime of the the equipment that they maintain and in many cases meet minimum downtime guarantees. Secondly, by the need to control the ongoing operational expenses of the service organisation. If the service company knows that a piece of remote equipment is about to fail it can either remotely fix it or proactivley organise a service call. This allows the company to couple it with other service work in the area, optimising the serviceman's time. It also allows companies to distribute new versions of software, simultaeneously, across the installed base, without having to send out servicemen to do this.

5. Competitive Advantage

Lower Sale Price
Volume of Scale
Secure Distribution
Intellectual Property

Our system is able to offer the ability to monitor and transmit data between a central service centre and remote equipment, in a way that is currently not economically available. This enables service companies to be proactive in preventive maintance, saving them large staff costs and penalites in not meeting service level agreements. Our "first to market" advantage will give us about 18 months lead over any new large competitor company and 3 years over any smaller one. Our low cost is as a result of our design from bottom up rather than taking a mobile phone and engineering it to become a data device. Our IP allows us to easily customise our product for each client and has resulted in a device and service specifically built to monitor intelligent devices as opposed to being a product that addresses only some of the requirements of the customer. We are currently looking at patent protection to give us additional competitive advantages.

6. Market Distribution

Our initial sale will result in a delivery of approx 1,000 units for global distribution. The company has indicated it will have follow up orders of 14,000 units per month for the US and Euopean markets. The units will be distributed to our clients' manufacturing facilities or their pre-delivery "run up" locations allowing the units to be installed by their technicians prior to installation of the device to be monitored. We have commenced discussions with other industry users who are testing our system for video surveillance applications, they believe our system will enable them to transfer data much more efficiently and cheaper, thus lowering greatly their surveillance costs.

7. Management

The joint CEO has had 25 years of account management and senior management in IT. He is a founder and Director of Wireless ISP Xone. He founded and was CEO of MUANet, an Australian Frame Relay company which he sold to Optus. It is now known as Source Integrated Networks. The other CEO has been involved in sales and marketing management in financial services, IT and broadcasting over the past 25 years. He developed and was responsible for "Total Recovery Service" a Mayne Nickless Computer Services independent business group that provided disaster recovery services. It grew to became one of the most profitable business units in the company. He had previously developed the IT Storage Services unit for TNT Security. Its growth required expansion of its premises by 2000 percent. The R & D Director is an electronics design specialist with over 19 years professional experience including 16 years in product development. He has held senior and executive roles in design and R&D management with leading Australian technology companies including Rand Walker, Hypertec and Keycorp. More recently he has focused on consulting and holds collaborative patents in spread spectrum communications and smart card technology.

8. Technology

Our unit is a single card device based upon international cellular phone technology. It resides within the device that is to be monitored and takes its power supply from it. Included on the circuit board is a micro-computer that allows the storage of information at the remote site and provides access to and from the device via the internet and the cellular network. The unit has several features included that allow it to comply with the security requirements of large corporates.It has been designed to allow easy modification for specific client applications.

9. Product Development

We have produced fully functional units that have been tested and accepted by a major client. Although the company is happy with our current 2 board design, to meet our target cost price and to be able to use newer chip sets that are required for the US market, we need to impliment a modified single board design. As part of the process we will also do a "streamline" of the source code. Our next stage is to build two of the new single board production units for final type approval and then commence full production of the single board units. We have detailed cost and time frames for this.

10. Scalability

Although sophisticated in design, the manufacture could be handled by many appropiate board assembers (3 or 4 in NSW). This allows us to have multiple sources of supply and scale easily.

11. Intellectual Property in SME's Business

Registered design
Trade secrets

We intend to seek advice on the most relevant type of protection and intend to utilise some of the funding to pursue this protection. All discussions to date with potential customers have been done under NDAs.

12. Barriers to Entry

We have spent 48 months developing and testing the remote gateway. Our target clients are all very careful about the selection of this type of product and insist on long trials. A small company entering the market will face the same problem. A large company would not face the same problem but we believe their development and production time to market would be longer and costs higher. We believe it would be difficult for anyone to copy and produce a competitive product in less than eighteen months.

13. Milestones

-Completion of single board unit $105,000 6 weeks -Streamlining of source code $25,000 4 weeks -Stocking for components and assisting contractor to set up manufacture process $250,000 (30% to be funded by customer in advance) 2 weeks -Development work to be undertaken for future product enhancement $150,000 3Mths NOTES 1..Working capital including wages for 6 months $155,000 2..European and American offices will be established after sufficient orders are received from each territory

14. Risks

If the major company fails to proceed... we have identified several other large oportunities including a trial with a large security firm. We expect to commence negotiations with 2 or 3 global customers as a result of trade shows (including CeBIT) and Austrade contacts. Companies trying to replace our system after the initial contract has expired. - We have technology that makes this very difficult.

15. Company Valuation

no

16. Abridged Profit & Loss

 

It is assumed we raise our first invoice in march 2004 Our revenue is derived in two ways; sale of units and monthly service charge ( based upon three year contracts). The above sales revenue is based upon the assumptions as outlined in 4 above.

17. Balance Sheet

18. Accumulated Sales since business started

Sales
$100,000

Years Established
4

19. Is the business solvent

yes

Solvency History

No

20. No. of Employees

2 to 5

21. Shareholding % to be issued to new investor for investing.

Neg

22. CAPstart Matching Product

  C1

23. Business Stage

Startup of business

24. Role the investor would play

Non Executive Director
Part Time Executive

25. Main Location

NSW