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Page 1
variLux an Energy Management Company
VARILUX Stands Alone
• World’s Only Cost Effective Solution
• Works with Unmodified HPS Streetlights
• Reduces Energy and CO2 Emissions
• Reduces Maintenance Costs
• Pays for Itself in as little as 5 Years
DEVICE
It’s the Right Thing to Do…
Jack Jmaev, CEO
909-437-8390
Jack@VARILUX4HPS.com180320
Page 2
The VRLX Opportunity
Cities Need to Reduce Streetlight Operating Costs
• 35% to 50% of Electricity Budget for Streetlights
• Maintenance Costs Driven by Bulb Failures
• Carbon Emission Credits at Stake
LED Streetlights Not Economically Viable
• Don’t Pay for Themselves
• Hidden Operating Costs
• Untenable Acquisition Costs
• Dangerous Lighting Spectrum
• Harmful to the Environment
Page 3
Cities Need VRLX
• Intelligent Streetlight Dimmer
• Enhances Current HPS Infrastructure
• IoT Ready for Smart Cities
• Power Metering
• Environmental Sensors
• Pays for Itself in as Little as 3 Years1
• Maintains Safe and Adequate Lighting
• 40% Less Electricity and Carbon Emission
• Reduced Maintenance Costs
• “Dark-Sky” and Environmentally Friendly
1. VARILUX payback period varies with wattage of HPS Fixture.
Page 4
Plug & Play 5 Minute Installation
Remove Photocell
Patented
3-Terminal Design
Essential for
Quick Installation
Install VRLX
Save Money
Page 5
VRLX Intelligence Saves Money and Energy
Adjustable Level
Adjustable Time
Selective Dimming
100%
95%
90%
85%
80%
75%
70%
65%
60%
55%
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
22,500
25,000
72%
76%
81%
86%
92%
100%
68%
BURN HOURS
27,500
30,000
32,500
35,000
BULBOUTPUT
OPERATINGPOWER
64%
Lumen Maintenance
 Constant Luminance
 Maintains Safe Light Level
 Extends Bulb LifeHPS Without VLX
LEDs Don’t Pay for Themselves
Page 6
$-
$200
$400
$600
$800
1 2 3 4 5
6
7
8
9
10
11
12
LEDs Never Pay for Themselves
• LEDs Light Output Fully Depleted in 12 Years
• LED Power Supply Fails Every 5 or 6 Years
VARILUX Pays for Itself in 5 Years “Lumen Depletion” means entire LED fixture must be
replaced after 12 years.
No Payback With LEDs
Due To “Lumen Depletion”
VLX Cost Recovery
LED Acquisition Cost
All values are based on 12 Year Operation with 150W HPS
compared to 84W LED. Cost of Electricity based on $0.07 per
Kilowatt-Hour. ROI in 3 Years with higher power luminaires
and more expensive power costs.
Page 7
Real Savings with VRLX
All values are based on 12 Year Operation of 150W
HPS Fixtures. Cost of Electricity based on $0.07 per
Kilowatt-Hour. ROI in as little as 3 Years with higher
power luminaires and more expensive power costs.
$-
$50
$100
$150
$200
$250
1 2 3 4 5 6 7 8 9 10 11 12VARILUX Pays for Itself in 5 Years
Delivers Net Savings for 7 Years
Acquisition Cost
VLX Cost Recovery
Net Savings
Page 8
The Current Product
• Ready for Production
• Parent Node
• Dual-Redundant
• Controls 1,000 Child Nodes
• Solar Calculator
• Cellular Modem
• Child Node
• Reports to Parent Node
• Controllable Dimming
• Power Metering
Patented
Stepless
Dimmer
1 Mile
Radius
Radio
Control
IoT
Ready
Power
Meter
Page 9
Product Roadmap
Page 10
Inflection In Market Trajectory
• Federal Government
– Rationalizes Solid State Lighting
– Encourages LED Streetlight Subsidies
– Disagrees with Health and
Environmental Warnings
• Local Government
– Apparently Misled by LED Manufacturers
– Uncertain of Actual LED Operating Costs
• American Medical Association
– Blue Light from LEDs is Hazardous
– Recommends 3000K LEDs that are Less Efficient
– Rising Awareness Among Residents
• Broken Promises
– LEDs Only Last 12 Years
– Power Supply Lasts 5 years
– No Return of Taxpayer Investment
AMA Recommends “warm LEDs” having a Color
Temperature of 3000 Kelvin (K) or less. These are less
energy efficient than LED proponents admit.
Total Available Market
Page 11
LEDs Already Don’t
Pay For Themselves
3000K LEDs are Even
Less Efficient
Page 12
Business Development Plan
• Low Hanging Fruit
Cities with Metered Strings
• Utility Companies
For Use on Company Owned Lighting
• Unmetered Lamps
Requires Utilities Commission
Support for “Per-Pole Metering”
Page 13
Pro Forma Tabular
G&A 5,036,100 9,718,535 20,908,591 39,389,557 97,220,790
1st Year 2nd Year 3rd Year 4th Year 5th Year
Sales 973,500 11,081,000 41,690,000 97,970,000 281,400,000
COGS 604,500 6,596,500 19,479,375 45,525,625 130,231,250
Other Direct Expense 262,845 2,991,870 11,256,300 26,451,900 75,978,000
Gross Profit 106,155 1,492,630 10,954,325 25,992,475 75,190,750
Operating Budget 3,718,255 5,714,615 7,317,791 9,748,557 15,364,790
Development & Certifications 989,000 922,050 2,084,500 2,939,100 5,628,000
Marketing 66,000 90,000 250,000 250,000 250,000
Earning before income Tax -4,667,100 -5,234,035 1,302,034 13,054,818 53,947,960
Tax 0 0 585,915 5,874,668 24,276,582
Net after Tax -4,667,100 -5,234,035 716,119 7,180,150 29,671,378
Cash on Hand, Beginning 0 682,900 448,865 1,164,984 8,345,133
(+)Cash from operation -4,667,100 -5,234,035 716,119 7,180,150 29,671,378
(+) Investment 5,350,000 5,000,000 0 0 0
Cash on Hand, Ending 682,900 448,865 1,164,984 8,345,133 38,016,512
Page 14
Operational Projection
0
50
100
150
200
250
300
1st Year
2nd Year
3rd Year
4th Year
5th Year
Millions
G&A COGS EBIT
Total Height
Represents Sales
Page 15
Funding Strategy
• Initial Seed Round, $350,000
– Minimum Participation: $10,000
– 2 Warrants per Share Purchased
• First Round, $5 Million
– Minimum Participation: $100,000
– Board Seat: $1 Million
– 1 Warrant per Share Purchased
• Second Round, $5 Million
– Minimum Participation: $500,000
• Current Round
– Seed Round
– Pre-Money $16.9MM
– 3.7% Stake, with Warrants
(After First Round)
Founders
45.9%
First
Round
16.6%
Employee
Options
12.6%
BOD
Grants
7.8%
Angels
9.4%
Funder
3.8%
Seed
1.3%
Seed
Warrants
2.3%
Equity After First Round
Anticipated Equity Progression
Page 16
Seed
Round
First
Round
Second
Round
Third
Round
350K 5MM 5MM 10MM
Angels 14.257% 9.418% 6.824% 6.668%
Founders 57.213% 46.112% 37.937% 37.068%
Funding Partner 5.764% 3.807% 2.759% 2.696%
Seed Round 2.017% 1.333% 0.966% 0.943%
Warrants (Seed Round) 2.33% 1.69% 1.65%
BOD Grants 9.22% 7.76% 6.52% 6.95%
Employee Options 11.53% 12.61% 11.85% 13.30%
First Round 16.639% 12.057% 11.781%
Warrants (First Round) 10.350% 10.113%
Second Round 9.05% 8.84%
Page 17
Use of Proceeds
G&A
570
Management
284
Certification &
Production
Ramp Up
1,294
Cost Reduction
1,521
Business
Development
464
Political
Efforts
264
First Year Use of Proceeds in 1,000s USD
Safety Certification
Radio Compliance
Initial Production
Special IC Chips
Low Cost Version
COGS Reduced by 38% ($40 Per Unit COGS Reduction)
Page 18
i-Sense Module Power Meter Module
First Special Chip
i-Sense &
Power Meter
Programmable
Logic Chip
Second Special Chip
Programmable Logic
Chip & “Glue” Logic
Replace
i-Sense Module &
Power Meter
With Custom Chip
Replace
Programmable
Logic Chip
With Custom Chip
Page 19
Exit Strategy & Valuation
• Strategic Acquisition
– Two Inquiries from
Existing Lighting Companies
• LED Industry Vexation
– Displace LED Roll-Outs
– Target for “Buy and Bury”
• Projected 5 Year Valuation
– $700MM (10XEBIT)
– $800MM (NPV-EBIT)
Page 20
Management Team
Fady Abushahla
Executive Vice President World-Wide Sales and Marketing
Fady has over 20 years experience in consultative sales, winning against established larger players by
focusing on customer needs, product differentiation and superior customer support. Fady recently
left a position selling LED Streetlights to governments and private industries. Previously, Fady was
responsible for Consulting Services, Electronic Design Automation Software and Intellectual Property.
Prior to his Sales Career, Fady spent over a decade designing and testing complex electronic circuits for
military and commercial applications. Fady has a BS in Electrical Engineering from Cal State Long
Beach.
Jack Jmaev
President and CEO
Patent attorney turned Entrepreneur. Jack started as an engineer at Jet Propulsion Laboratory and
then transitioned to Hughes Aircraft Company. This aerospace experience resulted in a wealth of
technical experience in circuit design, systems engineering and project management. Through a
combination of personal funds and support from friends and family, Jack developed the
3-Terminal variLux Street Light Dimmer in 2010. Jack earned a BS degree in Engineering Science in
1982 from California Polytechnic San Luis Obispo and became a patent attorney in 2000.
Min Kim
Executive Vice President and CFO
Dean of Administration and Director of Finance for Samra University of Oriental Medicine in Los
Angeles. Mr. Kim received a BA degree in business administration from Yonsei University in Seoul,
Korea and an MBA in business administration and information science from the University of
Washington in Seattle. After 2 years with Chrysler in Korea, Mr. Kim became a senior programmer for
Hi-Q Systems and then worked at Clinica Humanitaria Medical Group as an administrator.

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Exc pitch 2018-04-27-0b

  • 1. Page 1 variLux an Energy Management Company VARILUX Stands Alone • World’s Only Cost Effective Solution • Works with Unmodified HPS Streetlights • Reduces Energy and CO2 Emissions • Reduces Maintenance Costs • Pays for Itself in as little as 5 Years DEVICE It’s the Right Thing to Do… Jack Jmaev, CEO 909-437-8390 Jack@VARILUX4HPS.com180320
  • 2. Page 2 The VRLX Opportunity Cities Need to Reduce Streetlight Operating Costs • 35% to 50% of Electricity Budget for Streetlights • Maintenance Costs Driven by Bulb Failures • Carbon Emission Credits at Stake LED Streetlights Not Economically Viable • Don’t Pay for Themselves • Hidden Operating Costs • Untenable Acquisition Costs • Dangerous Lighting Spectrum • Harmful to the Environment
  • 3. Page 3 Cities Need VRLX • Intelligent Streetlight Dimmer • Enhances Current HPS Infrastructure • IoT Ready for Smart Cities • Power Metering • Environmental Sensors • Pays for Itself in as Little as 3 Years1 • Maintains Safe and Adequate Lighting • 40% Less Electricity and Carbon Emission • Reduced Maintenance Costs • “Dark-Sky” and Environmentally Friendly 1. VARILUX payback period varies with wattage of HPS Fixture.
  • 4. Page 4 Plug & Play 5 Minute Installation Remove Photocell Patented 3-Terminal Design Essential for Quick Installation Install VRLX Save Money
  • 5. Page 5 VRLX Intelligence Saves Money and Energy Adjustable Level Adjustable Time Selective Dimming 100% 95% 90% 85% 80% 75% 70% 65% 60% 55% 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 72% 76% 81% 86% 92% 100% 68% BURN HOURS 27,500 30,000 32,500 35,000 BULBOUTPUT OPERATINGPOWER 64% Lumen Maintenance  Constant Luminance  Maintains Safe Light Level  Extends Bulb LifeHPS Without VLX
  • 6. LEDs Don’t Pay for Themselves Page 6 $- $200 $400 $600 $800 1 2 3 4 5 6 7 8 9 10 11 12 LEDs Never Pay for Themselves • LEDs Light Output Fully Depleted in 12 Years • LED Power Supply Fails Every 5 or 6 Years VARILUX Pays for Itself in 5 Years “Lumen Depletion” means entire LED fixture must be replaced after 12 years. No Payback With LEDs Due To “Lumen Depletion” VLX Cost Recovery LED Acquisition Cost All values are based on 12 Year Operation with 150W HPS compared to 84W LED. Cost of Electricity based on $0.07 per Kilowatt-Hour. ROI in 3 Years with higher power luminaires and more expensive power costs.
  • 7. Page 7 Real Savings with VRLX All values are based on 12 Year Operation of 150W HPS Fixtures. Cost of Electricity based on $0.07 per Kilowatt-Hour. ROI in as little as 3 Years with higher power luminaires and more expensive power costs. $- $50 $100 $150 $200 $250 1 2 3 4 5 6 7 8 9 10 11 12VARILUX Pays for Itself in 5 Years Delivers Net Savings for 7 Years Acquisition Cost VLX Cost Recovery Net Savings
  • 8. Page 8 The Current Product • Ready for Production • Parent Node • Dual-Redundant • Controls 1,000 Child Nodes • Solar Calculator • Cellular Modem • Child Node • Reports to Parent Node • Controllable Dimming • Power Metering Patented Stepless Dimmer 1 Mile Radius Radio Control IoT Ready Power Meter
  • 10. Page 10 Inflection In Market Trajectory • Federal Government – Rationalizes Solid State Lighting – Encourages LED Streetlight Subsidies – Disagrees with Health and Environmental Warnings • Local Government – Apparently Misled by LED Manufacturers – Uncertain of Actual LED Operating Costs • American Medical Association – Blue Light from LEDs is Hazardous – Recommends 3000K LEDs that are Less Efficient – Rising Awareness Among Residents • Broken Promises – LEDs Only Last 12 Years – Power Supply Lasts 5 years – No Return of Taxpayer Investment AMA Recommends “warm LEDs” having a Color Temperature of 3000 Kelvin (K) or less. These are less energy efficient than LED proponents admit.
  • 11. Total Available Market Page 11 LEDs Already Don’t Pay For Themselves 3000K LEDs are Even Less Efficient
  • 12. Page 12 Business Development Plan • Low Hanging Fruit Cities with Metered Strings • Utility Companies For Use on Company Owned Lighting • Unmetered Lamps Requires Utilities Commission Support for “Per-Pole Metering”
  • 13. Page 13 Pro Forma Tabular G&A 5,036,100 9,718,535 20,908,591 39,389,557 97,220,790 1st Year 2nd Year 3rd Year 4th Year 5th Year Sales 973,500 11,081,000 41,690,000 97,970,000 281,400,000 COGS 604,500 6,596,500 19,479,375 45,525,625 130,231,250 Other Direct Expense 262,845 2,991,870 11,256,300 26,451,900 75,978,000 Gross Profit 106,155 1,492,630 10,954,325 25,992,475 75,190,750 Operating Budget 3,718,255 5,714,615 7,317,791 9,748,557 15,364,790 Development & Certifications 989,000 922,050 2,084,500 2,939,100 5,628,000 Marketing 66,000 90,000 250,000 250,000 250,000 Earning before income Tax -4,667,100 -5,234,035 1,302,034 13,054,818 53,947,960 Tax 0 0 585,915 5,874,668 24,276,582 Net after Tax -4,667,100 -5,234,035 716,119 7,180,150 29,671,378 Cash on Hand, Beginning 0 682,900 448,865 1,164,984 8,345,133 (+)Cash from operation -4,667,100 -5,234,035 716,119 7,180,150 29,671,378 (+) Investment 5,350,000 5,000,000 0 0 0 Cash on Hand, Ending 682,900 448,865 1,164,984 8,345,133 38,016,512
  • 14. Page 14 Operational Projection 0 50 100 150 200 250 300 1st Year 2nd Year 3rd Year 4th Year 5th Year Millions G&A COGS EBIT Total Height Represents Sales
  • 15. Page 15 Funding Strategy • Initial Seed Round, $350,000 – Minimum Participation: $10,000 – 2 Warrants per Share Purchased • First Round, $5 Million – Minimum Participation: $100,000 – Board Seat: $1 Million – 1 Warrant per Share Purchased • Second Round, $5 Million – Minimum Participation: $500,000 • Current Round – Seed Round – Pre-Money $16.9MM – 3.7% Stake, with Warrants (After First Round) Founders 45.9% First Round 16.6% Employee Options 12.6% BOD Grants 7.8% Angels 9.4% Funder 3.8% Seed 1.3% Seed Warrants 2.3% Equity After First Round
  • 16. Anticipated Equity Progression Page 16 Seed Round First Round Second Round Third Round 350K 5MM 5MM 10MM Angels 14.257% 9.418% 6.824% 6.668% Founders 57.213% 46.112% 37.937% 37.068% Funding Partner 5.764% 3.807% 2.759% 2.696% Seed Round 2.017% 1.333% 0.966% 0.943% Warrants (Seed Round) 2.33% 1.69% 1.65% BOD Grants 9.22% 7.76% 6.52% 6.95% Employee Options 11.53% 12.61% 11.85% 13.30% First Round 16.639% 12.057% 11.781% Warrants (First Round) 10.350% 10.113% Second Round 9.05% 8.84%
  • 17. Page 17 Use of Proceeds G&A 570 Management 284 Certification & Production Ramp Up 1,294 Cost Reduction 1,521 Business Development 464 Political Efforts 264 First Year Use of Proceeds in 1,000s USD Safety Certification Radio Compliance Initial Production Special IC Chips Low Cost Version
  • 18. COGS Reduced by 38% ($40 Per Unit COGS Reduction) Page 18 i-Sense Module Power Meter Module First Special Chip i-Sense & Power Meter Programmable Logic Chip Second Special Chip Programmable Logic Chip & “Glue” Logic Replace i-Sense Module & Power Meter With Custom Chip Replace Programmable Logic Chip With Custom Chip
  • 19. Page 19 Exit Strategy & Valuation • Strategic Acquisition – Two Inquiries from Existing Lighting Companies • LED Industry Vexation – Displace LED Roll-Outs – Target for “Buy and Bury” • Projected 5 Year Valuation – $700MM (10XEBIT) – $800MM (NPV-EBIT)
  • 20. Page 20 Management Team Fady Abushahla Executive Vice President World-Wide Sales and Marketing Fady has over 20 years experience in consultative sales, winning against established larger players by focusing on customer needs, product differentiation and superior customer support. Fady recently left a position selling LED Streetlights to governments and private industries. Previously, Fady was responsible for Consulting Services, Electronic Design Automation Software and Intellectual Property. Prior to his Sales Career, Fady spent over a decade designing and testing complex electronic circuits for military and commercial applications. Fady has a BS in Electrical Engineering from Cal State Long Beach. Jack Jmaev President and CEO Patent attorney turned Entrepreneur. Jack started as an engineer at Jet Propulsion Laboratory and then transitioned to Hughes Aircraft Company. This aerospace experience resulted in a wealth of technical experience in circuit design, systems engineering and project management. Through a combination of personal funds and support from friends and family, Jack developed the 3-Terminal variLux Street Light Dimmer in 2010. Jack earned a BS degree in Engineering Science in 1982 from California Polytechnic San Luis Obispo and became a patent attorney in 2000. Min Kim Executive Vice President and CFO Dean of Administration and Director of Finance for Samra University of Oriental Medicine in Los Angeles. Mr. Kim received a BA degree in business administration from Yonsei University in Seoul, Korea and an MBA in business administration and information science from the University of Washington in Seattle. After 2 years with Chrysler in Korea, Mr. Kim became a senior programmer for Hi-Q Systems and then worked at Clinica Humanitaria Medical Group as an administrator.