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Company Overview. April 2003. Advanced Wireless Automation (“AWA”) was founded in February 2002 to develop and market a break-through surveillance platform for use in a $1 billion market for remote security and intelligence gathering applications.
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Company Overview April 2003
Advanced Wireless Automation (“AWA”) was founded in February 2002 to develop and market a break-through surveillance platform for use in a $1 billion market for remote security and intelligence gathering applications. Our unique surveillance platform includes wireless datatransmission combined with an ultra low power design and covert packaging that captures data based on local eventstimulus.
Team • Daniel C. Roy - VP Bus Dev, Co-founder • Over 10 years of experience in operations, strategic analysis and development VP Finance and Operations Amaroq Inc, Manager – Accenture, BS from Northeastern University, MBA from the University of Chicago. • Peter Faubert – VP Finance • Over 10 years of experience in financial reporting, venture financing, M&A, VP Finance and Corporate Controller – Burntsand, Primix Solutions, Ariba, Suppliermarket.com, PricewaterhouseCoopers, CPA, BS Northeastern • Gregory Perry – Network Engineer, Co-founder • Extensive experience in network, security and hardware engineering, Founder BroadIP, NETSEC • Consulting projects for FBI, FCC, Naval Research Labs • Mike Lyons – Director of Sales, Co-founder • Over 15 years experience in technology sales and business development, Co-founder AMNET, Schlumberger Industries • BS Northeastern • Steve Cannellos – CEO and President • Over 20 years experience as Chairman of Board, Sr. Vice President and General Manager, of start-up technology companies focused in security, optics, networking and telecommunication with Tyco, Sensormatic, General Electric, General Scanning, Voicetek and Apollo Computer. BSME and MBA from Clarkson University. • Andy Lowen – VP Marketing • Over 20 years in general management, product management and marketing in security, networking, optical and semiconductor industries with Tyco, Sensormatic, Zoom Telephonics, General Scanning and Shipley. BS from Brown University, MBA from Columbia. • Jason Riffel – Chief Architect • Over 15 years of software development and 8 years of hardware design experience in positions including Director of Research and Development, Senior Design Engineer and Independent Consultant for start-up and established companies including BroadIP Networks, Cadre Engineering, Bsquare and Microsoft
Market Opportunity Existing Technology Providers Current Market • Traditional Access Control Markets (Buildings and Protected Areas / Locations) • CCTV and IP-Based Video Surveillance and Monitoring Markets (Business Interior and exterior) • Growing demand for traditional access control and video surveillance products • Remote Video Surveillance Applications • Military Installations / Activity • Borders / Ports • Oil Wells / Pipelines / Land Mgmt. • Extended Perimeters • Defense Contractors: • Lockheed Martin • Raytheon • ITT Industries • Textron • Northrop Grumman • Major Security Companies: • GE Interlogix • Tyco International • Honeywell • Emerging Industry Players • Magal Security Systems • Axis AB • Market Problem • Extend / establish perimeters • Lack of communication and grid power infrastructure • Need for event triggered notification / reporting $4-5B Market $1B Market Under-Served Market Opportunity
Target Markets Military / Government Commercial / Industrial • Market Needs • Extend / establish perimeters • Lack of communication and grid power infrastructure • Need for event triggered notification / reporting • Protection of Military Installations / Bases • Monitoring Troop Activities • Protection of National Borders and Ports • Aiding State and Local Law Enforcement • Oil Well Monitoring • Nuclear Power Plants • Railroad Monitoring • Perimeter Security
Market Penetration Overall Market Projected Sales Military / Government Nuclear/Conventional Power Plants Border Patrol Port / Coastline Security Railroad Monitoring Remote Assets Perimeter Security Remote Land Management $300K $5.0M $12.0M $25.0M Over 500K Units $2.5 Billion Realizable Market $1B Cumulative Sales (2006) $42M Market Penetration 4%
Market Penetration - Successes to Date AWA engaged Lockheed Martin in June 2002 as a lead customer and has worked closely with Lockheed Martin and its customers to develop and ship version 1.0 remote surveillance platform in9 months Our remote surveillance platform is installed at the following customers:
Sales and Marketing Strategy Military / Government Segment • Expand Penetration by leveraging • relationships with Integrator partners • Leverage Existing Contacts in Government • Related Integrators • First order shipped Q1 2003 • Additional orders expected Q2 2003 Commercial / Industrial Segment • Leverage Commercial Security contacts • Establish Integration partnerships with • Leading Access Control and Video Companies. • Leverage Relationships in the security • Distribution Channels • Initial contacts Q1 2003 • Expected sales cycle X months
Sales and Marketing Progress [Include slide detailing sales activity – customer contacts.]
Target Customers Through Lockheed Martin we have access to customers that represent over 60% of our target market for remote surveillance applications. Military / Government Commercial / Industrial • Protection of military installations, monitoring enemy troop activities and national security • Department of Defense * • Department of Homeland Security * • Department of Justice (CIA *, FBI *) • Lockheed Martin * • Raytheon • Textron • Protection of National Borders and Ports • Coast Guard * • INS * • Aiding State and Local Law Enforcement • Homeland Security Committees in NJ and MA • State Police in NJ and MA • Puerto Rico Conservation Trust • Oil Well Monitoring • Bureau of Land Management * • BP * • Nuclear Power Plants • Entergy • Dominion * • Railroad Monitoring • Union Pacific • Burlington Northern • CSX Corporation • Norfolk Southern • Perimeter Security • Tyco International • Industry Distributors • System Integrators * Technology introduced to customer by Lockheed Martin
Technology Overview Wireless Sensor Platform Customer Network Operation Center (Data storage and access point) ))) Digital Signal Processor Wireless Modem Main Processing Board Supervisory Processor Digital Imager Motion Sensor Sensor Array Power Supply – Lithium Cells GPS Temp Other • Ultra-Low Powered Designand Integration • Expandable sensor ports (wind, biological agents, thermal imaging, etc) • Standard or covert packaging • Web-based Access (from PC, PDA, or other handheld device) • Email / Pager Alerts • Ability to Integrate Pattern/Behavior Recognition. • Proprietary Wavelet Image Compression Software • Highly Secure Encrypted Data Exchange
Competitive Technology Advantage Key Technology Features Points of Differentiation • Ultra Low Power System Architecture • Event Driven • Secure Wireless Transmission • Proprietary Wavelet Based Image Compression • High-Resolution Digital Imaging • Rapid and Mobile Deployment • Cost-effective • Innovative product integration effort • Proprietary software and hardware design features • 1-2 year technology development lead on competition • Patent pending – system architecture / wavelet compression
Competitive Landscape Residential Commercial /Industrial Government / Military Customer Segment Hughes Dedicated Satellite NRO AWA Other Wireless X10 Eagle Broadband Spy Gate Primary Competitors GE Interlogix Philips Magal Security Systems Napco Pelco Tyco CCTV CompuDyne (Quanta) Ultrak Honeywell Axis Premiere Wireless Imaging Security Technology
Competitor Analysis Competitor Assessment • Honeywell International • General Electric • Tyco International • AWA will win in remote surveillance due to our: • Innovative Solution to the Problem • Complex and Creative Technology • Greater Market Focus Collectively over $180B in revenue and represent over 30% of the $4-5B security electronics market in 2002 • $78M Revenue, 57% Gross Margin, valued at $150M • IP based digital video represents 45% of revenue • Video product launched 1999 • Axis AB • AWA will win in remote surveillance due to our: • Focus on remote applications • 1 to 2 year Lead in market segment • Unique aspects of hardware and software design Difficult to reproduce • $43M Revenue, 44% Gross Margin, valued at $37M • Focused on perimeter intrusion detection systems • Limited use of video surveillance • Magal Security • $25M Revenue, 25% Gross Margin, valued at $19M • Wireless security product pressed and not released • Focused primarily on telecommunications business • Eagle Broadband • Private Company • Focused on wireless transmission not video technology • Premier Wireless
[Include Analysis comparing cost of other security technologies] Cost Comparison
Organizational Structure CEO / President S. Cannellos VP Finance P. Faubert VP Engineering TBD VP Bus Dev. D. Roy VP Marketing A. Lowen VP Sales TBD Chief Architect J. Riffel Sales Director M. Lyons 4 Software Eng. TBD 3 Hardware Eng. TBD 2 Network / Systems Eng. G. Perry / TBD 2 Design Eng. TBD Key Short-Term Hires
Team • Daniel C. Roy - VP Bus Dev, Co-founder • Over 10 years of experience in operations, strategic analysis and development VP Finance and Operations Amaroq Inc, Manager – Accenture, BS from Northeastern University, MBA from the University of Chicago. • Peter Faubert – VP Finance • Over 10 years of experience in financial reporting, venture financing, M&A, VP Finance and Corporate Controller – Burntsand, Primix Solutions, Ariba, Suppliermarket.com, PricewaterhouseCoopers, CPA, BS Northeastern • Gregory Perry – Network Engineer, Co-founder • Extensive experience in network, security and hardware engineering, Founder BroadIP, NETSEC • Consulting projects for FBI, FCC, Naval Research Labs • Mike Lyons – Director of Sales, Co-founder • Over 15 years experience in technology sales and business development, Co-founder AMNET, Schlumberger Industries • BS Northeastern • Steve Cannellos – CEO and President • Over 20 years experience as Chairman of Board, Sr. Vice President and General Manager, of start-up technology companies focused in security, optics, networking and telecommunication with Tyco, Sensormatic, General Electric, General Scanning, Voicetek and Apollo Computer. BSME and MBA from Clarkson University. • Andy Lowen – VP Marketing • Over 20 years in general management, product management and marketing in security, networking, optical and semiconductor industries with Tyco, Sensormatic, Zoom Telephonics, General Scanning and Shipley. BS from Brown University, MBA from Columbia. • Jason Riffel – Chief Architect • Over 15 years of software development and 8 years of hardware design experience in positions including Director of Research and Development, Senior Design Engineer and Independent Consultant for start-up and established companies including BroadIP Networks, Cadre Engineering, Bsquare and Microsoft
Financial Projections • Cash flow positive: Q1 2005 • Liquidity Event (strategic sale): 2006
Cash Sources and Uses • Funding Requested: $3.5 Million • Additional Funding Required: $4M in Q3 2004
Corporate Development Objectives Based on our funding requirements of $3.5 million, AWA has established the following target milestones: • Complete Management Team • Product Development: • Release V1.1 by Q3-03 • Release V2.0 by Q1-04 • Build Business Development and Integration Partners • Achieve $6.4M Annual Revenue Run Rate by Q3-2004
Summary TechnologyUnique wireless imaging and sensor technology, positioned as a first-mover in an existing market for cost-effective, remote monitoring systems utilizing ultra low power architecture. Market Size $1 Billion Team Technical expertise in embedded system design, low- powered and wireless technology applications. Security industry expertise, broad financial, strategic and operational experience in startup, growth-stage, and mature companies FundingSeeking $3.5 million to fund operations through Q3 2004
Appendix B - Target Customers 2003 Market Opportunity • Military / Gov’t (DTRA) • Nuclear Power Plants (Entergy, Dominion) • Border Patrol (INS) • Ports / Coastlines (US Coast Guard) • Railroads ( • Oil Wells (BLM) • 150-250 units • $1.5M - $3.0M • 40 - 90 units • $400K - $1M 2003 Target Results
Appendix D - Competitive Technology Comparison Strengths Limitations • Expensive • Angle of view is fixed and may not be suitable for on-the-ground surveillance needs • Reach / Coverage • High Resolution / zoom capabilities Dedicated Satellites • Transmission is not secure and range is minimal • Battery life is measured in hours • Image quality is pretty low Other Wireless Imaging Technology • Inexpensive • Simple to deploy • Full-motion video • Proven and accepted security technology CCTV (Closed-circuit Television) • Reliant on wired communications link and grid power source