VC Pitch Deck Mar 2013

1. VARI LUX Enhance it…
Street Light Dimmer www.varilux4hps.co
m
Stepless 3-Terminal Dimmer Jack I. J’maev
ReadyTrace, Inc.
14277 Albers Way
VARILUX
Chino, CA 91710
909-437-8390
Intelligent Light Conservation jjmaev@readytrace .com
Page 1

2. FULL POWER
Sized for End of Life
Lumen Output
60% POWER
Meets RP-8 Requirements
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3. 3-Terminal Means Plug & Play in 5 Minutes
Remove Photocell
Install variLux
Save Money
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4. Problem
• Street Lights – 35% to 50% of
City Electricity Costs
– Rising Electricity Costs
• Shrinking Municipal Budgets
– No Other Economical Options
– Willing to Spend to Save Money
• Environmental Concerns
– Carbon Footprint Reduction
– Light Pollution Concerns
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5. Beta Tested
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6. Market
• Street and Area Lighting
– 400,000,000 Units Globally
– $66 Billion Potential Market
– Distribution Partner Identified
– “Displacing” Technology
• Early Adopters
– Mexico
– Brazil
– Costa Rica
– Bulgaria
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7. Global Interest
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8. Competition
HPS
Baseline
variLux
Conventional
Dimming
LED
Induction
Operation Costs Maintenance Costs Purchase Cost
Installation Costs Payback Period
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9. VARILUX is the New Answer
VariLux Street Light Dimmer (SLD)
Energy savings calculated relative to HPS luminaries at various power levels depicted in the chart.
This energy calculation is based on a cost of $0.10 US per KW-Hr & accounts for Power Factor Correction.
Payback Period (P.B.P.) calculated on cost of acquisition and difference in installation labor.
Life Cycle Cost (LCC) Savings based on 10 year maintenance and electricity usage relative to existing HPS installations and use of standard dimming profiles on a solstice quarter basis.
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10. Non Price Determinates
• Non-US Markets
– Immediate Demand
– Not Influenced by “LED Hype”
– Markets Embrace Dimming
• United States Markets
– Federal LED Incentives
– Public Utility Commission
Action Required
– Non-Company Owned Meter
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11. Intellectual Property
• 3-Terminal Dimmer
– USPTO PCT Search Report
– Favorable for Issuance
– International Examination
– National Stage Filings Complete
• USA, EU, RU, IN, JP, BZ, MX
• Street Light Metering System
– Patent Pending
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12. The Technology
• Prior Art
– 4 Terminal Dimmer
– 50% More Cost
• VARI LUX
– 3 Terminal Dimmer
– Power Factor Preservation
– Supports Plug & Play
– More Reliable
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13. Conventional Dimming
(European “E-Street” Concept)
A
ACTIVE DIGITAL SIGNAL
FEEDBACK PROCESSOR
B
REGULATED POSITIVE RAIL
POWER FACTOR CORRECTION
A B
PRE-REGULATOR
IN AC
PHS TO
DC
B A
IN
COM
GROUND RAIL
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14. variLux 3-Terminal Dimmer
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15. variLux Street Light Dimmer
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16. Pre Money Capitalization
Compensation Options
• $4.3 MM Paid-In Exercised
– 1.3MM Shares
8%
– Avg. $3.30/Share Investors Options
Outstanding
• 3.5 MM Shares 25%
20%
• 1.5 MM Options
• 0.6 MM Warrants 7%
17% Warrants
• Debt - $1.45MM Outstanding
Founder 15%
– Preferred Warrants
– IP Security Warrants
Preferred
Warrants
– $500M Unsubscribed to be Issued
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17. Post Money Capitalization
New
• New Money - 39% Stake Options
• Prior Stake Holders 9% New
– Issued 27%
Options Money
– Promissory 25% & 25% 39%
• New Employee Options Warrants
– 9% (Discretionary)
27%
• Debt - $1.45MM
– Paid from Cash Flow Existing
Stakeholders
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18. Financials
2013 2014 2015 2016 2017
Sales 6,475,000 30,905,000 43,050,000 57,400,000 82,950,000
COGS 3,500,000 15,400,000 21,000,000 28,000,000 42,000,000
Other Direct Expense 1,438,500 5,281,000 7,260,000 9,680,000 13,890,000
Gross Profit 1,536,500 10,224,000 14,790,000 19,720,000 27,060,000
Operating Budget 1,467,470 3,753,525 6,804,740 5,604,594 6,664,314
Development & Certifications 257,500 715,000 0 0 0
Marketing 33,000 250,000 250,000 250,000 250,000
EBIT -221,470 5,505,475 7,735,260 13,865,406 20,145,686
Tax 0 0 3,831,419 6,239,433 9,065,559
Net after Tax -221,470 5,505,475 3,903,841 7,625,973 11,080,127
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19. Financials
2,013 2,014 2,015 2,016 2,017
Sales 1,450,750 26,022,500 43,050,000 57,400,000 82,950,000
COGS 765,000 12,700,000 21,000,000 28,000,000 42,000,000
Other Direct Expense 125,950 2,219,750 3,630,000 4,840,000 6,945,000
Gross Profit 559,800 11,102,750 18,420,000 24,560,000 34,005,000
Operating Budget 2,075,366 4,596,063 5,454,025 6,484,688 7,635,667
Development & Certifications 515,000 480,000 - - -
Marketing 88,000 250,000 250,000 250,000 250,000
EBIT (2,118,566) 5,776,688 12,715,975 17,825,313 26,119,333
Tax - - 5,343,344 8,021,391 11,753,700
Net after Tax (2,118,566) 5,776,688 7,372,632 9,803,922 14,365,633
2,013 2,014 2,015 2,016 2,017
G&A 2,804,316 7,545,813 9,334,025 11,574,688 14,830,667
COGS 765,000 12,700,000 21,000,000 28,000,000 42,000,000
Tax - - 5,343,344 8,021,391 11,753,700
Debt Pay-Off 1,950,000
Sales 1,450,750 26,022,500 43,050,000 57,400,000 82,950,000
Investments 3,500,000 0 0 0 0
number of units 8,290 148,700 246,000 328,000 474,000
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20. The Plan
• Development Complete
– No Hardware R&D Required
– Market Specific Variations
• New Money for Operations
– Inventory
– Sales and Marketing
– Customer Support
• Product Cost Reductions
• System Control Software
– In-House Development or
Partner with Existing Provider
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21. Immediate Needs
• New Management Team
– Funding Appointed CXO and CFO
• Additional Bridge Funding ($500K)
– Support National Stage Filings
– Complete UL Testing
• Expansion Capital ($2.5MM)
– Inventory
– Sales and Marketing
– Customer Support
– Product Cost Reductions
– System Software
• Lobby Support
– Political Connections in US
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22. Exit Strategy
• $200MM in 5 Years
– Net Present Value of Future
Income Stream
• Established Lighting Company
– Two “Nibbles” Already
• LED Industry
– Displaces LED Roll-Outs
– Buy and Bury
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23. The Deal
• $ 250K Additional to Bridge
• $ 2.5 MM VC Round
– $ 1.5 MM 1st Tranche
– $ 1 MM 2nd Tranche
• $ 200 MM Exit
– 5 Years after 1st Tranche
– NPV1 at 5 Years $ 225 MM
1. NPV – Net Present Value Future Income Streams
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