Conﬁdenal and Proprietary Page 1 Corporate and Transacon Overview May 2013 Securies oﬀered through Merriman Capital, Inc. member FINRA & SIPC
Conﬁdenal and Proprietary Page 2 Safe Harbor Certain statements in this document cons0tute “forward-‐looking statements” within the meaning of Sec0on 27A of the Securi0es Act of 1933, as amended, and Sec0on 21E of the Securi0es Exchange Act of 1934, as amended. All statements that address expecta0ons or projec0ons about the future, including statements about technology and other product development, market posi0on, expected expenditures and ﬁnancial results, are forward-‐looking statements. This document contains forward-‐looking statements within the meaning of the Private Securi0es Li0ga0on Reform Act of 1995. Some of the forward-‐looking statements may be iden0ﬁed by words like “expects,” “an0cipates,” “plans,” “intends,” “projects,” “indicates,” and similar expressions. Any statements contained herein that are not statements of historical fact may be deemed to be forward-‐looking statements. These statements are not guarantees of future performance and involve a number of risks, uncertain0es and assump0ons. Accordingly, actual results or performance of SearchCore, Inc. may diﬀer signiﬁcantly, posi0vely or nega0vely, from forward-‐looking statements made herein. Unan0cipated events and other factors are likely to occur. Those factors include, but are not limited to, risks that our products and services may not receive the level of market acceptance an0cipated; an0cipated funding may prove to be unavailable; intense compe00on in our market may result in lower than an0cipated revenues or higher than an0cipated costs, and general economic condi0ons, such as the rate of employment, inﬂa0on, interest rates and the condi0on of the capital markets may change in a way that is not favorable to us. This list of factors is not exclusive. We undertake no obliga0on to update any forward-‐looking statements.
Conﬁdenal and Proprietary Page 3 “Each day, millions of consumers increasingly u0lize the internet to research products and services. Our passion is connec0ng those consumers with the right brands.” -‐ Jim Pakulis, SearchCore President and CEO
Conﬁdenal and Proprietary Page 4 Introducon } SearchCore is a technology-‐based internet markeAng and services organizaAon (MSO) that connects consumers with brands, products and services. } SearchCore operates high value domains in fragmented verAcals to build engaging “ﬁnder” sites that aggregate traﬃc for a given topic/industry, matching the consumer traﬃc with locally relevant businesses and adverAsers } Current internet properAes either owned or under management agreement: • TaOoo.com* • ManufacturedHomes.com • ModularHomes.com • SporAfy.com • Karate.com • Rodeo.com } Raising up to $1.5 million in growth capital to develop addional vercals and add technical and human infrastructure * Provide all markeAng, adverAsing, promoAon and administraAon to the site. SearchCore receives approximately $.70 of every gross dollar and, subject to reaching thresholds, will receive up to 50% ownership equity in the URL.
Conﬁdenal and Proprietary Page 5 Proven Team } Experienced management team with proven success in idenAfying, developing and moneAzing ﬁnder sites } Jim Pakulis, Founder and CEO • Led execuAon of highly successful alternaAve medicine ﬁnders site, WeedMaps • Three decades of experience with entrepreneurial companies in high growth sectors } Brad Nelms, Chief Strategy Oﬃcer • Developed all markeAng and product strategy along with implementaAon for WeedMaps • Previous execuAve experience in pre-‐fab housing industry } Munjit Johal, Chief Financial Oﬃcer • 28 years experience in banking, accounAng, ﬁnance, management • Prior CFO roles at Secured Diversiﬁed Investment, and Davi Skin
Conﬁdenal and Proprietary Page 6 Company Highlights } Plaeorm creates engaging and value-‐add experience for users, while providing marketers (small business owners) the ability to reach their niche target markets eﬀecAvely } Team previously grew and sold a ﬁnder site in the medical cannabis space for $12M • Monthly sales grew from $200k to $1.5M in 24 months • Total page visits went from 500k to 4M and page views from 2M to 16M per month • Owned 80% of the online alternaAve medicine market } Aggressively building poreolio of diversiﬁed verAcal ﬁnder sites with same technology, process and management team } Technology plaeorm is opAmized to work on web, mobile web and tablet format browsers – solving the moneAzaAon issue of mobile screens } In-‐house sales staﬀ, to culAvate and grow direct relaAonships with business owners (customers) providing a signiﬁcant barrier to entry
Conﬁdenal and Proprietary Page 7 Industry } Online markeAng is a $43B industry today, expected to grow to over $77B by 2016 comprising 35% of all ad spending • Paid search (Google ad words) accounts for $14.7B in 2011 • Display ads (Banner ads) account for $11B in 2011 } In ﬁnal ﬁgures for 2012, online ad spending is expected to overtake print ad spending for the ﬁrst Ame } Finder sites have emerged as a measurable soluAon for smaller and local adverAsers to gain top posiAoning within their categories • Saves Ame, enabling business owners to focus on their core business – not keeping up with Google search algorithm changes
Conﬁdenal and Proprietary Page 8 What Are Vercal Finder Sites? Large group of consumers, looking for informaAon on manufactured housing. Fragmented search results. Showing home builders, modular homes, real estate brokers….not relevant and overwhelming to consumers. However, a ﬁnder site shows up #1 in search that aggregates the informaAon they need. All the right informaAon: } Map of local dealers } Floor plans } Pictures of homes } Reviews } Financing opAons } Social sharing tools Business get access to the exact right customer. They don’t need to worry about SEM/SEO and managing their digital markeAng or search results ranking to be found.
Conﬁdenal and Proprietary Page 9 The SearchCore Engine } Proven model in evaluaAng, opAmizing, operaAng and moneAzing verAcal ﬁnder sites } Methodology developed based on successful prior property recently sold Iden%fy(New(Markets(Adapt(the(Pla6orm(Collect(Performance(Data(Sell(Proposi%on(to(Customers(Op%mize(CrossAsell/Upsell(Learn(and(Apply(• DataAled(sales(process(• Based(on(actual(site(data,(sell(value(to(industry(clients(• OnAgoing(reﬁnement(of(pla6orm((content,(SEO,(SEM,(other(analy%cs)(• Op%mize(based(on(traﬃc(&(trends(for(clients(• Drive(traﬃc(• Collect(data(• New(client(oﬀerings(based(on(analy%cs(• Reﬁne(industry(target(model(• Do(it(again(• Using(core(pla6orm,(build(site(for(newly(entered(industry(• Fragmented,(disjointed(market(• Market(size(>$250M(• We(can(become(#1(or(#2(• We(can(gross(>$200k/mo(
Conﬁdenal and Proprietary Page 10 Diﬀerenal Advantages } Relaonships • SearchCore culAvates relaAonships with ﬁgures, and execuAves who control and inﬂuence their respecAve industries } Management, speed, ﬂexibility • SearchCore has built a high quality management team; having experience in technology, and related industries of the verAcals it builds } First/early mover advantage • SearchCore idenAﬁes verAcals where it will be one of the ﬁrst sites to achieve a high degree of brand awareness through a combinaAon of integrated adverAsing, content/product oﬀerings, public relaAons, and strategic relaAonships } First mover in technology • SearchCore uAlizes cuqng edge technology to present its programming and provide a high level of personalized service to its customers, opAmized across screens } Maximize operang eﬃciencies • SearchCore uAlizes its investment in technology to realize cost savings and eﬃciencies in markeAng, infrastructure, and management resources } High switching costs • Consumers are able to customize their experience, as such, once users become comfortable using its sites, it is likely that they will conAnue using its services
Conﬁdenal and Proprietary Page 11 Revenue Model } “Freemium” to start • SearchCore allows its business customers to try the service before subscribing, proving the value on a no-‐cost basis } Subscripon-‐based • As beneﬁts are realized from the plaeorm, businesses sign-‐up on a monthly recurring cycle } Add-‐on opons • As Ame goes on, SearchCore oﬀers opportuniAes for preferred placement or incremental traﬃc which are add-‐on services/opAons for clients } Adjacent monezaon opportunies • Depending on the verAcal, SearchCore looks for addiAonal ways to moneAze the audience • For example, oﬀering inventory ﬁnancing opAons for manufacturedhomes.com clients } In-‐house sales and account management • SearchCore prides itself on providing superior client service for each small business owner through an in-‐house sales staﬀ
Conﬁdenal and Proprietary Page 12 Vercal: Tacoos OPPORTUNITY } 21%, or 45 million, of Americans have taOoos } $2.3 billion/year is spent on taOoos, 6th fastest growing industry in USA. } 16.6 million monthly searches are conducted in America for info on tacoos } There are 20,000-‐30,000 taOoo shops in the U.S. } The average cost per hour for a new taOoo can range from $150 to $350, especially in metropolitan locaAons, such as New York City. } 20%, or nine million, of those with taOoos will consider taOoo removal. This group can expect to spend an average of $800 to $1,200 for the process over the course of six months. MONETIZATION } Featured lisAngs and proﬁles for taOoo shops and arAsts } Video tours of shops } ArAst proﬁles } AdverAsing slots for companies targeAng this demographic FEATURES } Ease of navigaAon } A photo gallery of taOoo designs generated by users and arAsts } Social media integraAon } Engaging blogs and frequent newsleOers } A community of users providing comments, reviews, and feedback
Conﬁdenal and Proprietary Page 13 Vercal: Manufactured Homes OPPORTUNITY } 1.2 million monthly searches for manufactured homes in America. } There is a great need for quality, aﬀordable housing. } Today’s manufactured homes deliver outstanding quality and performance at prices ranging from 10 to 35 percent less per square foot than convenAonal site-‐built homes. } Manufactured homes now include many new features such as mulAple stories, vaulted ceilings, modern design and brand name appliances. MONETIZATION } Featured lisAngs for retailers } Featured lisAngs for manufacturers } AdverAsing slots for vendors and lenders FEATURES } The largest, most comprehensive collecAon of manufactured home ﬂoor plans } Custom price quotes } Retailer and builder directory and proﬁles } Searchable lisAng of previously owned homes } Retailer price comparison tool } Local site contractor ﬁnder } Model home gallery locator
Conﬁdenal and Proprietary Page 14 Vercal: Recreaonal Sports OPPORTUNITY } Approx. 50 million people in the US play recreaAonal sports once a month } Over $20 billion is spent annually in the US in adverAsing sports or sports related products } There is a signiﬁcant need for individuals to locate and read reviews of faciliAes, other players and organize schedules } Instantaneous informaAon is vital for individuals with limited Ame to organize and/or ﬁnd events in their geo-‐targeted area MONETIZATION } Ad supported ‘basic’ or ‘lite’ app versions } Advanced pro version with higher pricing } Payment processing commissions } Tournament organizaAon commissions } Fees for collecAng registraAon or league dues FEATURES } A searchable database to ﬁnd great places to play } Easy game scheduling } The ability to ﬁnd and join local games, leagues, and programs } Experience level matching } Social media IntegraAon } The largest U.S. database of people playing recreaAon sports/pick-‐up games
Conﬁdenal and Proprietary Page 15 Addional Vercals Modularhomes.com } Similar to manufactured homes, modular homes are factory built, but the components are joined at the building site and are regulated in the same way as site-‐built homes. The market for home and commercial sales exceeded $2.7 billion in 2011, and it is expected that 2012 will exceed this mark as sales numbers are ﬁnal. Currently, there are approximately 150 modular home manufacturing faciliAes in the U.S. alone. www.ModularHomes.com will serve as the de facto online desAnaAon for all consAtuents in this growing and regionally diverse industry. The Modular Home site will feature tools for both consumers and retailers from custom price quotes and a local site contractor ﬁnder to retailer and builder directories and proﬁles, including featured lisAngs and adverAsing opportuniAes for retailers and builders. Karate.com } This ﬁnder site is anAcipated to become the number one consolidated site for all types of marAal arts. It will build a community of marAal arts enthusiasts and industry professionals who can share interests and make friends, locate studios and training faciliAes, ﬁnd equipment and tournaments, and post items for sale or inquiries. SearchCore has already compiled a database of over 60,000 stores and faciliAes in the US, and the ﬁnder site will launch in third quarter of 2013. Rodeo.com } With Rodeo.com, SearchCore is posiAoned to capitalize on the $3 billion global adverAsing, markeAng, and product spend in the rodeo industry by becoming the online hub for related informaAon, products, and services. SearchCore is in the planning and discovery phase of transforming Rodeo.com into a social plaeorm for rodeo enthusiasts.
Conﬁdenal and Proprietary Page 16 Corporate } Nevada corporaAon formed in 2003 } Headquarters in Lake Forest, California } OTCQX listed: SRER } 38.0m shares outstanding (200m authorized) } 9.1m in ﬂoat } No material debt } Recent price: $0.23 per share (May 1, 2013) } Market cap: $8.7 million (May 1, 2013) } DAD: Merriman Capital, Inc. } Legal: The Lebrecht Group, APLC } Audit: Tarvaran Askelson & Company
Conﬁdenal and Proprietary Page 17 Transacon } $1.5m in growth ﬁnancing • $250k for premium domain acquisiAon • $300k for addiAonal human and technical resources • $300k for research and development • $150k for sales and markeAng • $500k working capital and transacAon costs } Senior converAble promissory notes and warrants • Note converts at $0.20 per share at opAon of holder • 3 year term • 5 year warrants at $0.40 (50% coverage) } $50,000 minimum unit ($50,000 note and warrants to purchase 125,000 shares) } Expected closing Q2 2013 } Placement agent: Core Equity Group (through Merriman Capital, Inc. member FINRA & SIPC)
Conﬁdenal and Proprietary Page 18 Summary } Proven business model: Sold previous ﬁnder site for $12M } Technology, process and people are established and scaling successful business model across mulAple industry verAcals } Diverse business model, with mulAple recurring revenue streams } Seasoned management team, proven through delivery