1. A Business Investment
CELLUON
Manufacturer of Patented Optical Input Devices
Offered by:
10900 NE 8th
Street, Suite 1495
Bellevue, WA 98004
(425) 637-0117
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2. Celluon: Manufacturer of Patented Optical Input Devices -2-
Table of Contents
Executive Summary 3
Product Details 5
Magic Cube 5
Epic 10
Prodigy 4 10
evoMouse 12
Power Cube 13
Medic 13
Next Generation Embedded Solutions for Mobile Devices 14
Development Timeline 15
Company’s Patented Electronic Perception Technology 16
Patents and Licenses 17
Management and Employees 18
Organization Chart 21
Facilities 21
Investment Opportunity 25
Financial Overview 27
Balance Sheet 35
3. Celluon: Manufacturer of Patented Optical Input Devices -3-
Executive Summary
Celluon (“Company”) develops, manufactures, markets, and sells peripheral products
and built-in modules using finger motion detection technology.
Company is currently headquartered in Seoul, South Korea, but is in the process of
moving its headquarters to the U.S. Company has plants in Seoul and Heilongjiang
Province, China. Company plans to move the Chinese factory to Vietnam for component
manufacture only, with final assembly in South Korea.
Company holds granted and registered patents in the U.S., China, Hong Kong, South
Korea, and Germany for its unique 3D technology, which it uses in the design and
manufacture of several projection keyboard solutions for the emerging mobile market.
Current Products
Magic Cube - a projection keyboard that doubles as a virtual multi-touch
mouse. At the flip of a switch, Magic Cube projects a keyboard layout onto any
flat surface by means of a type of laser, allowing the user to type on a full-size
keyboard. It began production in June 2011, and works with the mobile devices
that support Bluetooth. It comes with a long-lasting rechargeable battery.
Epic – the successor to Magic Cube, in a new
more portable form. New software creates a
more user friendly experience while improving
accuracy. Epic made its debut in May 2013.
evoMouse - a virtual mouse that remains
stationary while the user employs his finger as a pointer. It connects via
Bluetooth as well as by means of a standard USB port and launched in third
quarter 2013.
Prodigy 4 - a sturdy and sleek case for the iPhone 4, coupled with a built-in
extended battery and a virtual projection keyboard. Production began in the
second quarter 2013. Prodigy launched in fourth quarter 2013.
4. Celluon: Manufacturer of Patented Optical Input Devices -4-
Power Cube – a mini version of the Magic Cube. It is scheduled to debut in
fourth quarter 2013.
Medic - a medical virtual keyboard solution
that eliminates the high bacteria retention in
physical keyboards. This solution aims to
address cross contamination in hospitals,
which costs the healthcare industry billions of
dollars annually. Medic is slated for release soon.
Company also leases its projection keyboard chipset to licensed device manufacturers.
Company’s major target markets are:
Business to business: Sales of modules to device manufacturers
Business to consumers: Sales of accessory products to smart device users
Company sales rose dramatically in the three years it fabricated an marketing its
products. Sales were expected to be high in 2013 as Office Depot was slated to carry
Company products during the 2013 holiday season. However, due to lack of capital,
Home Depot did not stock Company products until early 2014, thus missing the all-
important holiday season sales period.
Company Sales 2010-Projected 2015
2010 2011 2012 2013
Revenue $251,121 $3,232,457 $6,353,201 $3,888,608
EBITDA $63,337 $511,520 $995,532
5. Celluon: Manufacturer of Patented Optical Input Devices -5-
Projected 2014 Projected 2015
Revenue $22,199,000 $37,062,000
EBITDA $3,559,000 $6,698,000
Product Details
Magic Cube®
Magic Cube is a projection keyboard that doubles as a virtual
multi-touch mouse. With the flip of a switch, Magic Cube
projects a keyboard layout onto any flat surface by means of a
type of laser and allows the user to type on a full-size virtual
keyboard. It began production in June 2011, and works with
the latest mobile devices with Bluetooth support. It comes with
a long-lasting rechargeable battery.
Magic Cube is made possible through the incorporation of a patented Electronic
Perception Technology (Quasi 3D), which tracks finger movements and translates them
into keystrokes in the device.
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With the integration of Company’s technology in a low-cost, embedded module,
virtually any electronic device can perceive and interact with its immediate
environment.
Features of this product include:
19mm-key pitch standard English QWERTY keyboard layout
Projection layout in English (German, French, Spanish, and Korean are
coming)
Compact size for easy mobility
Function icons and shortcut keys
Non-mechanical optical mechanism
Built-in lithium polymer rechargeable battery
Compatible currently with Windows XP/Vista/7/8, iOS 4. Android 2.0
and later and Mac OS X are coming.
Full-sized keyboard layout with multi-touch mouse capability
Works on most flat, opaque surfaces
Easy connection via Bluetooth or USB
No driver installation required for HID supported devices
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Company offers a projection keyboard prototyping program to OEMs or device
manufacturers that are considering integration their product with a projection
keyboard or any form of virtual data input solution.
Program participants receive a package of developer tools including sample
components, a demonstration and testing unit, an assortment of supporting
software and documentation, and technical support to address questions
regarding electrical, software or mechanical integration.
Company supplies special software that provides a quick and easy way to design
and test layouts. It plugs into Microsoft Visio so that even non-technical
personnel can create and test custom layouts.
See the next two pages for diagrams on how the virtual keyboard works.
10. Celluon: Manufacturer of Patented Optical Input Devices -10-
Epic
Epic is the next generation of the Magic Cube. The device is the size of a matchbox,
hence more portable than the Cube. It also features improved optics. Epic was released
in May 2013.
Prodigy 4
Prodigy 4 is a sleek, form-fitting case
for the iPhone. In addition to
providing protection, Prodigy features
a laser projection keyboard, an
extended battery, and a kick stand, all
in all, a great mobile tool.
Prodigy 4 will be released in the second quarter 2013.
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evoMouse
The evoMouse is a virtual mouse where the user’s finger
serves as the pointer, eliminating the need to manipulate a
physical mouse. The evoMouse offers these features:
Works on nearly any flat surface
Can be used as a traditional mouse
Works as a multi-touch mouse
Uses your natural movements
Requires very little space
Less than half the size of a traditional mouse
May help prevent Carpal Tunnel Syndrome
The evoMouse is scheduled for release in third quarter 2013.
Diagram 1: evoMouse structure
13. Celluon: Manufacturer of Patented Optical Input Devices -13-
User operating evoMouse
Power Cube
A mini-version of the Magic Cube, the Power Cube can fit
easily into a pocket.
This version will be ready for release in fourth quarter 2013.
Medic
The Medic, a no-key medical keyboard, is an upcoming release from Company.
The medical environment features an
increasing number of computers, each
with a keyboard. A computer keyboard is
known to hold five times more bacteria
than a toilet. The physical keyboard
increases the risk of users and patients
becoming ill from cross-contamination.
Hospitals have been making a relentless
14. Celluon: Manufacturer of Patented Optical Input Devices -14-
effort to provide a sterile environment.
The Medic addresses this issue. It can be sterilized with a single wipe of its operating
surface.
Next Generation Embedded Solutions
Celluon technology can be integrated into any device that requires data input and/or
user interface such as:
Tablet PC
Smartphone
Notebook PC
Educational toys
Appliances
Automotive
TV and Remote Control
Security systems
Handwriting recognition for mobile users
Future applications of this technology may include automobiles that can see and avoid
obstacles before an accident occurs, video games that sense the player's movements
15. Celluon: Manufacturer of Patented Optical Input Devices -15-
without the need for a controller, and even home security systems that can easily
recognize the difference between a member of the household and an intruder.
Development Timeline
16. Celluon: Manufacturer of Patented Optical Input Devices -16-
Company’s Patented Electronic Perception
Technology
The electronic perception technology Company uses in its products offers the following
features:
Uses thick beam
• Rejects sympathy fingers better - improves keystroke detection
• Uses top of the beam for reference resulting in better performance on
uneven surfaces
Features smart tip tracking and sticky key technologies
• Less unintentional keystrokes - rejects non-finger objects
• Handles finger occlusion and modifier keys (e.g. Ctrl + C)
High performance pixel
• Rectangular pixel form factor provides maximum resolution with minimal
processing power
• Global shutter allows greater resilience to ambient light
Wide-angle diffractive optical element
• Allows compact projection system with crisp clear lettering
Supports multiple keyboard layouts
• Multi-modal operation allows keyboard, mouse, pin pad, etc.
17. Celluon: Manufacturer of Patented Optical Input Devices -17-
Patents and Licenses
Company holds granted and registered patents in the U.S., China, Hong Kong, South
Korea, and Germany for its unique 3D technology, which it uses in the design and
manufacture of several projection keyboard solutions for the emerging mobile market.
Company’s patents include:
• Light Source Mounting Module
• System and Method for a Virtual Multi-touch Mouse and a Stylus Apparatus
Company offers these exclusive licenses:
• Method and Apparatus for Entering Data using a Virtual Input Device
• Quasi-Three-Dimensional Method and Apparatus to Detect and Localize
Interaction of User-Object and Virtual Transfer Device
• Method for Enhancing the Performance in a System Utilizing
an Array of Sensors that Sense at Least Two Dimensions
18. Celluon: Manufacturer of Patented Optical Input Devices -18-
• Method and Apparatus for Approximating a Source Position of a Sound Causing
Event for Determining and Input Used in Operating an Electronic Device
• Method and Apparatus for Approximating Depth of an Objects Placement onto a
Monitored Region with Application to virtual Input Devices
• System and Method for Determining an Input Selected by a User through Virtual
Interface
• System and Method for a Virtual Multi-touch Mouse and a Stylus Apparatus
Management and Employees
CEO
Ray Cha, Founder and CEO. Ray worked as a Manager at Samsung in both
South Korea and the U.S. Branching out on his own; he founded Silicom
Multimedia Systems in San Jose in 1995 and acquired Eiger Labs, Inc. in 1999.
He established Celluon in Seoul in 2004 with Canesta, Inc. as a business partner.
Under Ray, Celluon developed its unique optical platform and products. The
Korean government honored Ray with the tenth Global IT Leader award from the
minister of the Knowledge and Economy of Korea in October 2012. Ray is fluent
in English.
Research and Development Team
Jae-eul (Jason) Koo, CTO. Jason holds a PhD in Electronics from Korea
Aero Space University and a MSEE from Yonsei University. He served as Senior
Engineer at AdMOS, Inc., a Silicon Valley corporation (1990-1993) and as
Professor at Soongsil University in Seoul (1996-1999). He founded Hwa Sound
Sources, Co. Ltd. in Korea and was the former CEO of Kookje Communications, a
KOSDAQ listed company (1994-2008). Jason has more than 20 years of
19. Celluon: Manufacturer of Patented Optical Input Devices -19-
experience in designing algorithm, firmware and system semiconductors,
including:
o Invented world first 128 poly Sound IC for mobile Devices
o Developed and commercialized 64 polyphony Melody IC,
o Developed and commercialized 16 polyphony Melody IC
He is a consulting member for the ministry of Knowledge and Economy in
Electronics in South Korea. The Korean government honored him as a Man of
New Knowledge in 2oo1 and also gave him an Award of Contribution for Export
Promotion. Jason is fluent in English.
Kwang-Hui Jeong , Chief Researcher: Kwang holds an MSEE in
Electronics from Inha University, Korea. He was Senior Engineer at Kookje
Communications, a KOSDAQ listed company (1994-2008). He has over 20 years
of experience in designing algorithm and firmware. His experience in
semiconductors and system design includes:
o MUPASS for mobile in Japan (mobile data communication)
o Video Signal Processing expert for Virtual Keyboard
o Digital Piano O/S expert
o Audio Effect Processor Algorithm, firmware, and system design
Kwang is fluent in English.
Chun-Bae Park, Senior Engineer: Chun-Bae holds a BSEE from Seoul
National University of Science and Technology, Seoul, South Korea. His resume
includes positions as Engineer at Daehan Cable and Telecommunications, a
KOSPI listed company in Korea (1995-1997), Engineer at NSI Technology, Korea
company (1997-1999), and Senior Engineer at Eigernet, Inc. (a Korean company)
(2000-2003). He has over 13 years of experience in designing H/W circuitry,
mechanics, and mass production. His experience in engineering and developing
custom tools and jigs includes:
20. Celluon: Manufacturer of Patented Optical Input Devices -20-
o Fax/modem card
o Computer peripherals
o ADSL modem
o Sound board
o Camera sensors and optics design for motion detecting devices
Kwang-Hui reads and writes English
Cheng-Feng Sze, Head of Software Development:Cheng-Feng holds a
Ph.D.in Electrical and Computer Engineering from Maryland University. He has
served as Senior Software Engineer at Microsoft in Mountain View, CA, and
Software Manager at Canesta, Inc., San Jose, CA, where he developed the
algorithm for the world’s first projection keyboard and virtual mouse. He has
done 15 years of research and development of algorithm, firmware and SDKK to
host applications, and image and digital signal processing for 2D/3D imaging
sensors. Cheng-Feng is fluent in English.
Employees
There are 15 employees total in Korea, including the CEO, Research and
Development Team, and ten marketing, accounting, and administrative staff.
There are three marketing staff in the U.S. office in the Bay Area.
There are an operational manager and 17 employees at the factory in China.
Everyone plans to stay when the company is sold.
21. Celluon: Manufacturer of Patented Optical Input Devices -21-
Organization Chart
Facilities
Company is currently headquartered in Seoul, South Korea, but is in the process of
moving its headquarters to the U.S. Company owns plants in Seoul and Heilongjiang
Province, China. Company plans to move the factory to Vietnam soon. Components will
be manufactured in Vietnam, but the final products will be assembled in Korea and
labeled “Made in Korea.”
All facilities are included in the sale.
CEO
Ray C.
CTO
Jason W.
Senior Engineer
Chun-Bae P.
Chief Researcher
Kwang-Hui J.
Head of Software Development
Cheng-Feng S.
Chinese Manager & 17
crew in Chinese factory
Administrative Staff
(Korea)
Marketing Staff
(Korea)
He said he has
figured out email
attachments now.
I told him you have a
possible buyer in
mind.
ting 1
Accounting Staff
(Korea)
Marketing Staff
(U.S. office)
22. Celluon: Manufacturer of Patented Optical Input Devices -22-
Factory in China
The Chinese factory comprises 18,000 square feet.
Please see photos below.
Chinese factory floor
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Floor plan of Chinese factory
Workers Assembling Company Products at the Chinese Factory
25. Celluon: Manufacturer of Patented Optical Input Devices -25-
Investment Opportunity
Given the growing prevalence of mobile devices and continuous expansion of computing
worldwide, Company has a huge potential international market.
Company holds the only patent on this technology in the world.
The Magic Cube and evoMouse can be used with virtually all tablets and the majority of
smart phones (those with USB or micro-USB connectors) should the user desire access
t0 a full-size keyboard than the cramped tablet on-screen keyboard. According to
Strategy Analytics, the number of smartphones alone in use globally crossed one billion
for the first time in the third quarter of 2012 and will double by 2015. There will be 760
million tablets in use globally by 2016, estimated Frank E. Gillett in his report “Tablets
Will Rule the Future Personal Computing Landscape,” Forrester Research, April 23,
2012.
Apple has sold a total of 85 MM iPhones in the U.S. alone since its launch in 2007,
according to Hayley Tsukayama, “How many iPhones has Apple sold?” Washington
Post, Aug. 10, 2012. This indicates Prodigy’s approximate potential in the U.S. market
alone, not to mention Company’s capability to launch similar products for other popular
devices in the market.
Company’s technology and products have unlimited potential for use in medical
environments, where unsanitary nature of keyboards and mice create a health hazard.
There were 16,421 hospitals in the U.S. in 2011, according to the American Hospital
Association, all of them filled with equipment that is increasingly computer operated.
Kaiser Permanente alone has over 400,000 work stations in the U.S. This does not
count a wide range of other equipment requiring data input. Company’s products are
tailor-made for initiatives to address cross-contamination issues in hospitals.
With such a vast potential market across multiple industries, Company anticipates
26. Celluon: Manufacturer of Patented Optical Input Devices -26-
becoming a $100 million vertically integrated mobile input peripherals corporation
within the next three years.
It anticipates increasing its ROI two to five times within three years either by IPO or
merger.
This is an outstanding investment opportunity.
27. Celluon: Manufacturer of Patented Optical Input Devices -27-
Financial Overview
FINANCIAL OVERVIEW PROJECTION
2013 - USD
Revenue $12,463,000 100%
Cost of Goods Sold 9,358,000 75%
Gross Profit 3,105,000 25%
Expenses
Advertising & Promotion Expenses 314,000 3%
Automobile 11,000 0%
Bad Debt 52,000 0%
Depreciation 136,000 1%
Dues & Subscriptions 18,000 0%
Employee Benefits 99,000 1%
Entertainment Expenses 12,000 0%
Freight 7,000 0%
Office Supplies 15,000 0%
Outside Services 87,000 1%
Overseas Travel Exp. 67,000 1%
Payroll & Burden 735,000 0%
R&D & Amortization 542,000 4%
R&D & Supplies 104,000 1%
Rent 60,000 0%
Second Party Services 12,000 0%
Telephone 6,000 0%
Travel Expenses 19,000 0%
Miscellaneous 49,000 0%
Total Selling & Admin Expenses 2,345,000 19%
Operating Profit/ (Loss) 760,000 6%
Other Income:
Non-Operating Income 400,000 3%
Total Other Income 400,000 3%
Other Expenses:
Non-Operating Expenses 8,000 0%
Interest Expense 110,000 1%
Total Other Expenses 118,000 1%
28. Celluon: Manufacturer of Patented Optical Input Devices -28-
Net Income Before Operating Tax 1,042,000 8%
Net Income 1,042,000 8%
ADD BACKS:
1. Depreciation 136,000 1%
2. R&D & Amortization 542,000 4%
3. Interest Expense 110,000 1%
Sellers Cash Flow $1,830,000 15%
Add Back Explanations
1. Non cash expense.
2. Non cash expense.
3. All debt to be retired at closing.
34. Celluon: Manufacturer of Patented Optical Input Devices -34-
Net Income Before Operating Tax $1,033,000 10% $2,508,000 11% $5,200,000 14%
Net Income $1,033,000 10% $2,508,000 11% $5,200,000 14%
ADD BACKS:
1. Depreciation 136,000 1% 146,000 1% 379,000 1%
2. R&D Amortization 542,000 5% 682,000 3% 842,000 2%
3. Interest Expense 110,000 1% 73,000 0% 67,000 0%
4. R&D Supplies 75,000 0% 150,000 1% 210,000 1%
EBITDA $1,896,000 18% $3,559,000 16% $6,698,000 18%
Add Back Explanations
1. Non-cash expense.
2. Non-cash expense.
3. All debt to be retired at closing.
4. Non-cash expense.
35. Celluon: Manufacturer of Patented Optical Input Devices -35-
Balance Sheet
The Company
Balance Sheet - USD
December 31, 2012
ASSETS
Current Assets
Cash $105
Bank Deposits 86,966
Trade Receivables in Foreign Currency 618,484
Non-Trade Receivables 314,293
User Setup Accounts 60,220
Advance Payments 170,285
Prepaid Expenses 190
Prepaid Income Taxes 50
Finished Goods 233,677
Raw Materials 314,367
Work-in-Process 86,615
Total Current Assets 1,885,254
Fixed Assets
Vehicles 41,303
Accumulated Depreciation 32,733 8,571
Tools 534,476
Accumulated Depreciation 320,496
User Setup Accounts 55,686 158,294
Office Equipment 53,570
Accumulated Depreciation 43,659 9,911
User Setup Accounts 24,563
Accumulated Depreciation 21,210 3,354
Total Fixed Assets 180,129
36. Celluon: Manufacturer of Patented Optical Input Devices -36-
Other Assets
Patents 24,731
User Setup Accounts 3,753 20,978
Trademarks 1,804
Development Costs 1,515,500
User Setup Accounts 151,017 1,364,483
User Setup Accounts 803,610
Other Non-Current Assets:
Leasehold Deposits 54,005
Other Guarantee Deposits 38,704
Total Other Assets 2,283,585
TOTAL ASSETS $4,348,968
37. Celluon: Manufacturer of Patented Optical Input Devices -37-
The Company
Balance Sheet – USD
December 31, 2012
LIABILITIES
Current Liabilities
Trade Payables $143,331
Non-Trade Payables 402,909
Witholdings 12,539
Advances from Customers 1,842
Short-Term Borrowings 394,629
Accrued Expenses 131,946
User Setup Accounts 1,081,187
User Setup Accounts 61,932
Total Current Liabilities 2,230,315
Long Term Liabilities
Long-Term Non-Trade Payables 180,018
Total Long Term Liabilities 180,018
TOTAL LIABILITIES 2,410,333
EQUITY
Equity
Capital Stock 2,048,551
Capital Surplus 964,401
Deficit 1,074,317
TOTAL EQUITY 1,938,636
TOTAL LIABILITIES & EQUITY $4,348,968
38. Celluon: Manufacturer of Patented Optical Input Devices -38-
The Company
Balance Sheet – Won
December 31, 2012
ASSETS
Current Assets
Cash ₩117,040
Bank Deposits 96,619,463
Trade Receivables in Foreign Currency 687,135,597
Non-Trade Receivables 349,179,824
User Setup Accounts 66,904,884
Advance Payments 189,186,502
Prepaid Expenses 211,053
Prepaid Income Taxes 55,750
Finished Goods 259,615,351
Raw Materials 349,262,215
Work-in-Process 96,229,584
Total Current Assets 2,094,517,263
Fixed Assets
Vehicles 45,887,964
Accumulated Depreciation 36,365,946 9,522,018
Tools 593,802,412
Accumulated Depreciation 356,071,361
User Setup Accounts 61,866,904 175,864,147
Office Equipment 59,515,862
Accumulated Depreciation 48,504,939 11,010,923
User Setup Accounts 27,290,000
Accumulated Depreciation 23,563,966 3,726,034
Total Fixed Assets 200,123,122
Other Assets
Patents 27,476,622
User Setup Accounts 4,169,690 23,306,932
39. Celluon: Manufacturer of Patented Optical Input Devices -39-
Trademarks 2,004,316
Development Costs 1,683,720,342
User Setup Accounts 167,779,677 1,515,940,665
User Setup Accounts 892,811,250
Other Non-Current Assets:
Leasehold Deposits 60,000,000
Other Guarantee Deposits 43,000,000
Total Other Assets 2,537,063,163
TOTAL ASSETS ₩4,831,703,548
40. Celluon: Manufacturer of Patented Optical Input Devices -40-
The Company
Balance Sheet – Won
December 31, 2012
LIABILITIES
Current Liabilities
Trade Payables ₩159,240,437
Non-Trade Payables 447,631,378
Witholdings 13,930,290
Advances from Customers 2,046,963
Short-Term Borrowings 438,433,121
Accrued Expenses 146,591,666
User Setup Accounts 1,201,199,254
User Setup Accounts 68,806,302
Total Current Liabilities 2,477,879,411
Long Term Liabilities
Long-Term Non-Trade Payables 200,000,000
Total Long Term Liabilities 200,000,000
TOTAL LIABILITIES ₩2,677,879,411
EQUITY
Equity
Capital Stock 2,275,940,000
Capital Surplus 1,071,450,000
Deficit 1,193,565,863
TOTAL EQUITY 2,153,824,137
TOTAL LIABILITIES & EQUITY ₩4,831,703,548
