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1. Proposal Title/Headline

Accessible ecommerce for all businesses

2. Business Summary

The Company’s products drive business effectiveness by reducing procurement and sales costs. The target market comprises larger corporations and other organisations especially those seeking cost effective links with Small and Medium Enterprises (SMEs) as trading partners.The products are well developed and have been revenue producing since June 2001. Clients include hospitality majors such as Hyatt International Hotels, 6 Continents Hotels, Starwoods Hotels, Mirvac and Voyages Hotels and Resorts and other enterprises such as St.George Bank and The Local Government Association of Queensland. The applications are built on a leading edge computing platform, giving them exceptional speed and performance characteristics. They can be applied on a stand-alone basis or be integrated to existing computer systems. Deployment is rapid requiring only a small (2mb), easily installed programme on a Client’s computer.The Company is targeting the large, untapped SME market in Australia. The technology has global potential.The value proposition offered Clients includes reduced operating costs, improved control, lower cost procurement and faster transaction flows. The investment payback is generally six months or less. Revenue streams include the sale of 3 year licences, transmission fees, data sales, consultancy and service and product promotion. Future revenue is anticipated from the commercial application of its unique centralised cataloguing system.The Company has established an extensive network of working relationships and strategic alliances with organisations such as Telstra and New Zealand Post. Further high profile public and private sector alliances are under negotiation.The strategic plan for the next 12 months will see the completion of a major R&D project (supported by an Federal Government R&D Start Grant) that will keep the applications faster and more functional than those of its potential competitors. The Company's competitive edge rests on its ease of use, rapid deployment and implementation time, low cost of entry , the characteristics of its “real time” pricing mechanism and other rich functionality, including wireless capability, its proven trading history, its cataloguing system, and the exceptional performance and scalability of the platform. In summary investors are offered: >An experienced and committed management team >A growing customer base of national and international clients > Market leading intellectual property >Significant revenue and growth potential >A transaction history unmatched by many competitors

Updates

September 02 Product up-grade doubles processing capability with no additional hardware cost December 02 Entered local government sector via product sale to Local Government Association of QLD for 125 regional councils December 02 Transactions double in July-Dec 2002 six months period January 03 Over 385 suppliers now in the Shared Supplier Base

3. Estimate of Market Size and Growth Potential

Jupiter Research recently forecast that companies will increase their spending on business-to-business trading technology from $US2.6 billion last year to approximately $US137.2 billion in 2005. A recent study by IDC forecast an increase electronic buying and selling of products and services in the Asia Pacific region from $US12.8 billion in 2000 to $US156 billion in 2005. In Australia IDC forecasts an increase in e commerce volumes from US$3 billion in 2000 to US$66 billion in 2005. Providing the capability to meet this demand is the Company’s product.

4. Market Demand

Demand for the Company’s products results from a business’s desire to reduce its costs. Online commerce especially related to buying and selling products and services is a tool for doing this and for more effectively controlling the enterprise. McKinsey, in the September 2002 edition of their Quarterly, forecast that the number of Fortune 2000 companies with their own online trading zones will increase from 15% to 43% by the end of 2003. For Australia, in terms of the general increase in the use of online purchasing, IDC has just published (September 2002) that there has been a 24% increase in the number of organisations participating. For this to happen organisations of all sizes must be able to connect to their trading partners via the Internet. The Company has one of the most cost effective and broad ranged Systems to enable this to happen. Our predominant advantages are: >workflow productivity improvements >purchase cost savings >cost effective access to new markets and/or new customers or suppliers >increased control of procurement and selling >fast implementation without disruption to activities In addition our technology represents the provision of a real alternative to the convenience of conventional ordering and selling methods ie the phone and the fax.

5. Competitive Advantage

Lower Sale Price
Lower Cost Price
Intellectual Property

Competitive advantage comes from the following features: >Rapid deployment and short implementation time >Existing supplier base (380+ suppliers)with centralised catalogue >Low cost of entry with no integration required >"Real time pricing" >Performance and efficiency – significant advantages including line speed, line dropout recovery, robustness and scalability >User focused design >Patent pending on core business process >Products are proven having been facilitating online business to business activity since December 1998

6. Market Distribution

The Company markets its product via its own business development team and a growing number of resellers and partners. Alliances with Telstra,iPlatinum & ECN are examples of the latter. Sectors such as local government and building and construction are being addressed by partners specialising in those areas. International expansion will be undertaken on a joint-venture reseller basis.

7. Management

Executive Chairman – has 40 years direct involvement in the IT industry. Past national president of the Australian Computer Society, past chairman of Software Engineering Australia and the Australian Centre for Advanced Computing and Communications. Is a recipient of the Pearcey Medal, the Australian IT industy’s highest accolade. Chief Operating Officer - has 20 years experience in general management, operations and business development with major corporations. He has formal qualifications in business (MBA) and Logistics. Product Strategy Director - draws on his 6 years experience in hospitality management specializing in procurement and cost control. He has spend the last 5 years assisting with product development and supporting the company. Business Development Director - raised in a family business he has spent much of his career working with SMEs. He has a Masters Degree in Management Information Systems, senior management experience and 8 years in corporate training & consulting he is an excellent innovator, influencer and agent of change. Chief Technology Officer - with over 24 years in the industry and a broad exposure to insurance, banking, government, and predominantly to the health and pharmaceutical sectors, he has a wealth of experience in product development and implementations. Client Solutions Manager - draws upon 12 years of Customer Support and Help Desk experience in the a range of companies. As Client Solutions Manager, she manages a team whose focus is on ensuring streamlined implementation of solutions and world class customer support.

8. Technology

The Company's core IP resides in it's online marketplace technology which centres around it's "Dynamic Trading Engine" (DTE). The DTE enables collaboration between purchasers and suppliers based on each organisation’s business rules. For the purchaser, those rules include authorisation levels for personnel, work flow for requisitions and orders, lowest cost based on selected suppliers, pre-configured purchase lists and contract pricing. Supplier rules include pricing for individual customers, volume breaks, delivery structures, product catalogues, and order receipt mechanism. The technology and data resides on a central server where a central catalogue is held and utilised by all users to maintain consistency between organisations. The technology is provided to the end users from the Company’s servers. This is possible due to the minimum bandwith and a thin client program on the users PC. The real time interaction is similar to that of a desk top application and significantly superior to web browser alternatives.

9. Product Development

The first licence sale of current product was made in June 2001. This version is now being used to support all the current marketplaces. Additional R&D is being conducted (part of an approved R&D Start Grant Project) to maintain the leading edge position and to further develop wireless capabilities. A series of up-grades have been implemented seamlessly due to the ASP model used by the Company.

10. Scalability

The products are easy to install (requiring the download of a small, free programme to a customer’s computer) and easy to use thus making widespread rapid adoption possible. This will be enhanced through the reseller program. Economies of scale are experienced as the network of markets grow.

11. Intellectual Property in SME's Business

Copyright
Patents
Trade secrets

The software has been developed (and will continue to be developed) in house with the source code always remaining within the Company’s immediate control. Standard software protection procedures are in place. There are confidentiality agreements with all employees. The core program and business process is subject to a patent application that is now pending.

12. Barriers to Entry

The product and related business processes have been developed over a number of years and are subject to IP protection. Incorporated into the product is unique facilitating software from a supplier with whom the Company has a preferential trading relationship that protects its market position. Alliances and partnerships already in place include Telstra, St.George Bank, New Zealand Post iPlatinum and ECN. Existing market penetration, especially coverage of the hospitality market, sees the company as the recognised leader. For our customers to adopt or transfer to alternate products would be disruptive and costly.

13. Milestones

Establish presence in health care sector June 2003 (cost included in business development budget)Increase concurrent user capacity to 500 (April 2003 $250K partly covered by R&D Start Grant) Secure business of additional major hotel group to consolidate leadership in the hospitality market (June 2003 –nil additional cost)

14. Risks

Market and Revenue Generation The company is in the early stage of establishing itself. The business model has compelling reasons for the adoption of the technology especially as an e-procurement solution. The alliance and reseller strategy has been established to mitigate the risk and to expedite use of the products. Management The management team’s blend of bricks and mortar and new economy experience is responding to the challenging task. Technology The platform is stable and poses little risk with good version release procedures and quality assurance in place. There is a demanding development program but the Company has the skills (management and developer) to handle it. Competition There is a growing realisation that the company is probably the only player to effectively address the needs of large corporates as well as SMEs and provide them with an e-commerce growth path. The perception of there being a range of alternatives does not match the reality. Intellectual Property The products now offered by the Company are complex and have a significant lead time to develop. In addition to the in-house software the Company’s partnership with the supplier of the unique assisting software will make copying time consuming and costly.

15. Company Valuation

No

16. Abridged Profit & Loss

 

Other expenditure includes the benefit of R&D Start Grant claims for the approved project currently being undertaken.

17. Balance Sheet

18. Accumulated Sales since business started

Sales
$1,900,000

Years Established
5

19. Is the business solvent

yes

Solvency History

20. No. of Employees

11 to 20

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

15

22. CAPstart Matching Product

  C1

23. Business Stage

Expansion

24. Role the investor would play

Non Executive Director

25. Main Location

NSW