NOTE: Show this slide until ready to deliver presentation.
PRESENTER: There have been a number of key inventions that have changed the way we see and hear and act and live. These inventions now comprise what we call media. Following are the milestones: The Printing Press and movable type courtesy of Mr. Guttenberg in 1440…
PRESENTER: Motion pictures, or film…
PRESENTER: Followed in 1899: The Radio.
PRESENTER: Then TV had many fathers -- and early prototypes were around in the 1880’s.
PRESENTER: In 1973 The Internet -- Its underpinnings date back to 1965.
PRESENTER: 2003 Social Networking, started by MySpace.com, was the first iteration of this modern phenomenon.
PRESENTER: And anticipated to arrive in 2013 is M-ERSE. Its impact on society is expected to reach beyond that of any of the foregoing media events.
PRESENTER: M-ERSE is built on the platform of the Internet. It will be the first medium in which the user is totally immersed -- the first medium wherein the user can view content from his own selected point of view.
PRESENTER: Two patents defend and protect the technology against U.S. competitors. Many more patents will be thrown off as M-ERSE is built out. Worldwide patents would be applied for with funding.
PRESENTER: Initial concept was screened and verified by Eigensoft (consultants to US Oak Ridge Laboratories) to determine feasibility. Engineering demo was created to successfully prove viability. Demo passed the scrutiny of IBM’s Watson and Hursley Labs, UMASS Computer Vision Laboratory, Microsoft consultants, Chief Scientist US Dept. of Defense and the TSA. Because of the potential in the fast moving world of technology of any outside organization (IBM, Panavision, Cisco, etc.) being surpassed technologically INOE management has made the decision to keep its options open regarding hardware infrastructure collaborations and will constantly pick and choose the best components available.
PRESENTER: Lets talk about the technology itself.
PRESENTER: Essentially, M-ERSE Technology allows the user to place himself within whatever content is being presented. In the case of a basketball game, the viewer could position his point of view on the basket, or the free throw line or under the basket and watch the action from there. M-ERSE above all else is an interactive experience – not a passive activity. In the case of surgical demonstration M-ERSE can deliver infinite points of view. Or, in the case of a supermarket M-ERSE can deliver an in-store shopping experience remotely with the viewer pushing their cart through the store and filling it as if they were actually there. Or, the viewer can test drive a car remotely or ride along with the test driver.
PRESENTER: Here is a 2D simulation of what will be a 4D presentation. NOTE: This slide has a 62 second video loop that requires a left-click to activate the video. At the end of the video loop (“TSE…As Close As You Can Get To Being There.”) presenter must right-click mouse and click “Next” and continue manual operation for the duration of the presentation.
PRESENTER: Two or more people can, for instance, sit side by side in a theatre or a boxing match, watching the event from whatever viewpoint they have agreed upon.
PRESENTER: M-ERSE will have a battery of simultaneous translators connecting with individuals or regions in the M-ERSE world, so that an English-speaking person appreciating M-ERSE Paris could listen to much of what is being said in an English version.
PRESENTER: Sound will be a critical component to the realistic experience of M-ERSE . Working with a company with advanced laboratories and business interests (such as Dolby) M-ERSE would create “soundpoints” which are analogous to viewpoints. That is, a noise emanating from a source that is close will be louder than one which is farther away. Once all this is done, then every sound in the environment and any sound that M-ERSE wants to introduce into the environment (even if it is not physically there) can be part of the M-ERSE experience, including radio broadcasts.
PRESENTER: Now that you know what M-ERSE can do lets take a look at the business opportunity it offers first by market size…
PRESENTER: Internet – 2.1 billion users. Internet users demand new compelling experience. Advertisers desperate for new ways to interact with customers. Retailing online is skyrocketing. US online retail sales will reach $247.8 billion by 2014. It will keep growing at a 10 percent compound annual growth rate through 2014, up from $155 billion in 2009. Last year, online retail sales were up 11 percent, compared to 2.5 percent for all retail sales. Digital devices growing at furious pace. Video – 70% of global online consumers watch online video plus growth of time-shifted content. New TV sets are Internet capable. (Forrester Research). M-ERSE’s goal is to displace a significant portion of the current online video media. Now, lets look at the market trends that will drive M-ERSE’s success.
PRESENTER: Video is being added to social media as enhancement to original platform. In 2011, 68.2% of US Internet users, or 158.1 million people, are watching video content online each month. By 2015, that figure will increase to 76% of Internet users, or 195.5 million people. In the same period, online video advertising spending will surge from $1.97 billion to $5.71 billion. The inexorable trend is toward convergence of TV and the Internet. As this trend grows, so does INOE usage and its revenue streams. The projected surge in online video advertising spending to $5.71B in 2015 will carry with it a video commercial production expenditure of 10% totaling $571MM. This will provide a significant income stream for INOE as embedded videos in M-ERSE environments will want to be presented in its 4D format instead of the current 2D format. Now, lets review the impact of the social media phenomenon on the world populace and how M-ERSE exploits these trends.
PRESENTER: Social networks allow Generation Yers to support many more and much deeper passive friendships than previous generations. They value social relationships and love to work, shop and date collaboratively a lot more than previous youth generations. Global social network users total 1 billion and there are 17 social networks. Facebook is the largest by far with more than 800 million users (which Facebook measures as users that have logged in during the past 30 days). That means Facebook has added about 50 million users since July 2011. Facebook achieved 1 trillion page views in July 2011 . The other 16 social networks account for just under 200 million users. Vkontakte is a strong social network in Russian and Ukrane and some instances out performs Facebook. Qzone IChina) and Orkut (Brazil and India) are network sites to take into account. 61 percent of U.S. consumers now maintain a social networking site. 600 million people use social networks daily. 347 million or 73% of European Internet users use social networks. Western Europe lags behind North, Eastern and Southern Europe in social network penetration. Emerging markets India and Brazil show highest awareness and penetration of social networks. The social nature of M-ERSE is vast… Now lets take a look a number of the business sectors M-ERSE can impact…
PRESENTER: This chart was conceived at the request of IBM for the purpose of defining the lowest hanging fruit and giving each segment/application an order of magnitude based on available secondary research. The upper right-hand quadrant being the easiest and most profitable to execute. It is broken down into 10 broad business sectors (see Section 4 for a full-size chart).
PRESENTER: There will be content channels available to the consumer. There will be production channels available to the content/commercial providers.
PRESENTER: Its delivered in 3D which becomes 4D because each individual viewer is immersed in the 3D environment. Its high definition. Its real time. It’s a real place. Many people can visit at one time and move independently throughout the environment. Two or more people can move through the environment together. Sound coordinates with the users movement through the environment. INOE brings all of this to the following categories.
PRESENTER: All content presented on the M-ERSE platform will have no equal. INOE management will use all of its long standing resources (talent representation, media, corporation, sports federations, etc.) to procure the very best events for its initial deployment.
PRESENTER: Now, lets take a look at how M-ERSE will be implemented with the goal of maximizing this opportunity.
PRESENTER: First, is the need to hire initial development engineers and administrative personnel to complement those of INOE’s initial engineering development team (six PhDs in all) who are in a position to join INOE to build the core platform. Second, at the same time INOE’s chief engineer and patent counsel will commence fine tuning and filing the Intellectual property opportunities that have already been identified. Third, concurrent with the aforementioned will be the building out of a working core platform. Fourth, management will commence deeper discussions with potential participants (Carnegie Hall, UK National Health System, Sports Federations) to form a content consortium capable of delivering the world’s best content via INOE in all business sectors. Fifth, while the working core platform is being built management, through it many contacts, will begin to generate sector/application licensees/sales. Sixth, once the core platform has been built INOE will transition form a pure development organization to licensing management with technology updating capability.
PRESENTER: How will INOE make money? A lot of ways!
PRESENTER: As mentioned earlier the projected video commercial production expenditure by 2015 is expected to reach $571MM. INOE anticipates getting a big portion of this expenditure. Live INOE street/mall environments will have immersed viewers worldwide wanting to enter retail stores. And retail stores will have their standalone INOE powered web site. Every time an INOE viewer enters a store INOE will get paid a promotion stipend and every time that viewer purchases an item INOE will get a percent of that sale. Pay-Per-View will be a big money maker because the viewer now gets to see the content from their individual points of view as shown in the earlier boxer video of this presentation. In 2009, 16 pay-per-view events (11 Ultimate Fighting Championship [4,885,000 buys] +5 Boxing matches [4,975,000 buys) brought in roughly 10,000,000 buys. Assuming an average buy price of $45, these 16 events ( and there were many others staged in other forms of martial combat) brought in approximately $500MM dollars. Pay-Per-Rerun will likewise be a big revenue generator. In the case of boxing the viewer now has the benefit of seeing the event over and over from the stored event in a data farm all from new view points. Each time, and INOE management thinks there will be many, INOE will receive a percentage of the pay-per-rerun . Ads that are imbedded in an INOE environment will also provide a large revenue stream when viewers click on them and are redirected to the advertisers’ web site presumably presented in INOE 4D. 4D content production will spin off substantial production fees. Last but not least will be the licensing or sale of completed content apps. No matter how you cut it the opportunity is enormous.
PRESENTER: Funds will be spent over a 36 month period to deliver a working platform of the core technology and a specific sale application (modular cage for sports which also has applicability to music, insurance, healthcare, etc.) for the purpose of simplicity and cost saving.
PRESENTER: Here is an illustration showing how a portable modular cage could be used for golf training. In actual use the cage walls would be a metal grid (20’ X 20’ X 20’) on wheels with cameras affixed to the inside walls and ceiling as required. The cameras would be covered by an appropriate backdrop, in this case a fairway scene. The cage could be moved from the tee, to the fairway to the green.
PRESENTER: Here is an illustration showing how the same golf training portable modular cage could be used track and field. Or the same cage could be used for basketball, baseball, tennis, boxing, wrestling, etc.
PRESENTER: Because it is portable the cage could driven to a car accident where the cage would incase the vehicle (or a car could be driven to the cage) as shown here where it can be remotely evaluated by the insurance company ending fraudulent claims.
PRESENTER: Since M-ERSE’s inception in 2001 over $450K has been spent towards patents, travel, engineering demo, etc., with the founders receiving no remuneration for their day-to-day activities in building the business. Current patents were awarded in 2008. Now lets look at the major milestones.
PRESENTER: This chart shows the start/completion of the major milestones. There are also sub-milestones in each of them, albeit not shown here. Please note, once again in Month 1, that INOE has already completed an engineering demo and two patents have been awarded, justifying the initiation on Month 1 the building of the core platform with its completion scheduled for the end of the 18 th month following the assembly of the required engineering personnel. The next major milestone, an aggressive business development initiative, will commence at the beginning of the 13 th month with the objective of realizing M-ERSE’s first revenues by the 19 th through the 24 th month. It is expected that during the core platform build out that many new and potentially lucrative innovations will evolve and merit development. Should that be the case then management will commence with their development using reserve funds from the $10MM initial investment if sufficient funds exist. If not, then it would seek a second round of funding for this purpose rather than abandon the innovations. This activity would commence at start of the 25 th month. Finally, with the completion of the core platform being realized M-ERSE will commence giving consumers/commercial customers exposure to a real-time demo for the beta phase.
PRESENTER: The figures in this chart are based on M-ERSE first beginning as a traditional manufacturing/process company selling apps to a singular business sector with a modular product (for example sports training, music education, healthcare training, fraudulent insurance claims to name just a few), first to build a brand (product) success to increase global licensing potential at a later date. M-ERSE has been approached by six IP acquisition firms attempting to buy its patents; thus, prompting management to make the decision to build brand first, then license. Moreover, using the modular cage platform as an initial deployment product greatly reduces investor risk and need for additional funding to build a fully equipped sound stage until fully proven. A fully equipped sound stage 60’ x 40’ x 20’ will acquire the equivalent of 6 modular cages. It should be noted that the higher expenses stated in Year-1 – 1 st 6 Months reflects a $2.5MM one-time expenditure for computers, processors, cameras, routers, etc. that early on were being supplied as in-kind mostly from IBM prior to management’s decision not to lock the company into a vendor of choice relationship due to the vulnerability of these products being surpassed by a competitor. This chart also illustrates what can be realized on a maximum investment of $10MM, and what in fact could cost less, in a best case, just $6.3MM. Either way, it provides investors with a significant return on investment and breakeven by the 25 th month. As applications expand beyond the modular cage configuration to the size of an Olympic stadium to an entire street, the component/implementation cost would increase exponentially just as with the sound stage. Thank you for listening. Do you have any questions? NOTE: After presenting this slide go to the next slide and leave on screen. Slides 39 through 42 are additional statistics re social networking if required.
NOTE: Hold this slide until question/answer portion is completed.