eSecureSystemsLLC

Dataasof3/11/2013
BusinessAnalysis
BENCHMARKING ANALYSIS Alert Level Alert High Moderate Moderate Projectedbusinessoperationsmaybeundercapitalized NetChangeinWorkingCapitaliszeroforall5projectedyears Weightedaverageannualprojectedrevenuegrowthrateisgreaterthan50%

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*BenchmarksderivedfromEquityNet'speerbusinessdatabase.

INVESTMENT ANALYSIS

EAValuationEstimateEAestimatedpre-moneyvalueoftheenterprisebasedon competitivecash-flowdiscountingusingtheMedian IRR of Peer Group.

Investor Risk-Adjusted IRREAestimatedannualrateofreturnforinvestorsafter accountingfortheProbability of Enterprise Survival.

EAestimatedProbability of Enterprise FailureisstatisticallydeterminedforeachenterprisebytheRisk Quantification System. Risk-Unadjusted IRREAestimatedannualrateofreturnforinvestorswithoutaccountingfortheProbability of Enterprise Survival.

EAestimatedProbability of Enterprise SurvivalisstatisticallydeterminedforeachenterprisebytheRisk Quantification System. Itestimatestheprobabilityofenterprisesurvivaltoitsprojectedfiscalyearofliquidityeventordebtmaturation.

EAestimatedProbability of Enterprise SurvivalissegmentedintostandardizedRisk Categories. Adirectcomparisonisprovidedbetweentheenterpriseandthepeergroupmedian.

EAestimatedProbability of Enterprise SurvivalissegmentedintostandardizedRisk Categories. Adirectcomparisonisprovidedbetweentheenterpriseandthepeergroupmedian.

Summary
Company eSecureSystemsLLC 210CongressAve. Austin,TX72113,UnitedStates www.esecure.com Contact EntrepreneurDemo 555-391-4567 555-391-1304 demo@email.com Privacy & Confidentiality Personalandbusinessinformationisprivateand confidentialinEquityNet.Suchinformationcan onlybeviewedbyanEquityNetmemberif specificallysharedwiththatEquityNetmember.

SeeEquityNetsPrivacyPolicyformore information.

BUSINESS SUMMARY
eSecureSystems,LLCprovidesaffordable,trustedsolutionsthatsecuredigitalidentitiesandinformationforconsumers,enterprisesand governments.TheCompany'ssoftwareandassociatedservicesenablebusinessesandgovernmentsaroundtheworldtoconducthigh-value, highlysensitivetransactions,overwiredandwirelessnetworksincludingtheInternet,incompliancewithtodaysregulatoryguidelines.The Companysstrategyconsistsoftwoprimarypillarstohelpsecureinformationandidentitiesandenablesecurity-consciousenterprisesand governmentstoimplementefficient,cost-effectiveandinteroperablesolutionsthatstimulaterevenue,mitigaterisk,secureinformationandprotect end-users.

AgeofEnterprise(years) LegalStructure HistoricalFinancialRecords FinancialProjections MarketAssessment CompetitiveAssessment BusinessPlan 4 LimitedLiabilityCompany Complete Complete Incomplete Incomplete Complete

MILESTONES
Month Year Milestone Jan Mar Jun Jan Dec Dec 2010 2011 2012 2013 2014 eSecureobtaineditsfirstpatent.U.S.patentnumber7,698,180describesamethodthatutilizesadigitalsignatureverificationmap containingapluralityofacceptablemessageheaderidentifiers. eSecureobtaineditssecondpatent.U.S.patentnumber7,698,180describesamethodandapparatusforestablishingsecurity credentialsforausertoaccessandsubsequentlyuseinsecureon-linetransactionsbegins. eSecurewillacheive$1millionintotalrevenue.eSecureplanstoaccomplisedthislandmarkwithonly8employees,withan averagerevenueof$125,000peremployee. eSecurewilldoublethesizeofitsstafffrom8to16employees.Thisincludes4newsalesemployees,anincreaseofover200%in salescapacityfrom2011. eSecurewillreachover30,000transactionsforIdentityShieldatanaveragesellingpriceof$135,generatingover$4millionin revenue.

2016 eSecureispositioningitselftobeacquiredbyormergewithanentitysuchasVeriSign,Microsoft,orEntrust.

Model
BUSINESS MODEL
eSecureSystems'businessmodelistocontinuethemomentumestablishedin2009andgrowthecompanyprofitablybypromotingtrustedsecurity forlessforconsumer,enterpriseandgovernmentenvironments.Toachievethisgoal,theCompanyhasimprovedupontheoverallstrategyand implementedtheappropriateinternalchangestodriverevenuegrowthby:expandingmarketsforitsprovensolutions;focusingonsolutionsthat providesubscription-basedrevenue;executingonverticalandgeographicalopportunities;increasingchannelstomarket;keepingatightholdon costs;continuingtobethesecurityforglobalgovernments;andremainingfocusedoncustomers.

STRUCTURE

EnterpriseIndustrySector PeerGroupIndustrySector

SecuritySoftware WebServiceSoftware 7 5 0 19 18

NumberofBoardofDirectors/Members NumberofBoardofAdvisors NumberofSupplierRelationships NumberofBuyerRelationships NumberofStrategicRelationships

Key Supply-Chain Partners Key Strategic Partners

Symantec,TrendMicro,Websense,EMC,McAfee

Kaspersky,CA(formerlyComputerAssociates),Verint,AVG,Sophos

Product/Service
GENERAL SUMMARY
Product / Service Industry Availability General Description Sector Appropriateforenterprise,government orconsumerenvironments, IdentityShieldisanopenversatile authenticationplatformthatenables organizationstolayersecurity accordingtoaccessrequirementsor theriskofagiventransactionacross diverseusersandapplications.The platformsauthenticationoptions includestrongusernameand passwordenforcement,IP-geolocation, machine/deviceauthentication, questionsandanswers,out-of-band one-timepasscode(deliveredvia voice,SMSore-mail),gridcardsanda rangeofone-time-passcodetokens. TransactionShieldmonitors transactionsandseeksfraudulent behaviorandaccesspatternsamidthe massivevolumesofdatageneratedby transactionalWebsites.Thesolution examinesthisdataandidentifies potentiallysuspiciousbehaviorand high-riskactivitieswithoutimpacting theuserexperienceorsystem performance.Itservesasaresource toprotectconsumersandhelp organizationsdefendandmanagethe riskassociatedwithonlineservices. Key Features IdentityShield:1)Reduces costbychoosingfromamixof authenticatorsbasedonrisk, userrequirementsandcost,2) Createsstrongersecurityfor transactionsthathavegreater risk,3)Minimizesuserimpact byonlyrequiringstronger authenticationwhenneeded, 4)Secureidentitiesacross desktops,networksand resources,5)Offersstrong authenticationacrossdifferent communicationchannels. TransactionShield PerformanceAttributes:1) Zero-Touch,Rapid Deployment,2) ComprehensiveMonitoring,3) MultipleChannels,4)RealTimeRiskScore,5)Alert ManagementWorkflow,6) Step-UpAuthentication,7) ComprehensiveManagement, 8)360-DegreeAssessment,9) PowerfulAnalytics&Forensic Reporting,10)Rapid Response,11)Automated StatisticalLearning,12)Open FraudIntelligenceNetwork Distribution Channel(s) Number of Customers

IdentityShield

Security 2009 Software

DirectSales, ValueAdded Reseller, Partnership, 55 Sales Representative, Reseller

Security TransactionShield 2010 Software

DirectSales, ValueAdded Reseller, Partnership, Distributor

35

IntellectualProperty
PORTFOLIO
Status Pending Granted U.S. Patents 3 2 International Patents 3 1 Trademarks 0 6 Copyrights 0 10

PATENTS
Patent Product/Service Relation Status Remaining Own or Independent Life Abstract Summary License Claims (Years) Amethodandapparatusutilizesadigitalsignature verificationmapcontainingapluralityofacceptablemessage headeridentifiersassociatedwithapublickeycertificate identifier.Inoneembodiment,amethodincludes determiningadigitalsignatureverificationerrorbasedona receivedmessageheader,suchastransportheader identifierassociatedwithapublickeycertificateidentifier, suchasthesubjectfieldofthecertificate.Themethod includesgeneratingasignatureverificationmaporupdating asignatureverificationmapcontainingapluralityof messageheaderidentifiers. Amethodandapparatusforestablishingsecuritycredentials forausertoaccessandsubsequentlyuseinsecureon-line transactionsbeginswhenaserviceprovidergeneratesa registrationsecretforauserinresponsetoaregistration request.Theregistrationrequestidentifiesuserinformation ofaparticularuser.Beforearegistrationrequestcanbe providedtotheserviceprovider,theusermustestablisha relationshipwiththeserviceprovider.Havinggeneratedthe registrationsecret,theserviceproviderstoresauser

Methodand apparatusfor providing information securityto preventdigital signature forgery.

IdentityShield

Granted 15 inU.S.

Own

Methodand apparatusfora serviceprovider Granted TransactionShield 15 toprovide inU.S. secureservices toauser.

Own

identifyingsecret. Amethodandapparatusforestablishingsecuritycredentials forausertoaccessandsubsequentlyuseinsecureon-line transactionsbeginswhenaserviceprovidergeneratesa registrationsecretforauserinresponsetoaregistration request.Theregistrationrequestidentifiesuserinformation ofaparticularuser.Beforearegistrationrequestcanbe providedtotheserviceprovider,theusermustestablisha relationshipwiththeserviceprovider.Theserviceprovider storesauseridentifyingsecret,whichincludesinitialization data,userinformation,and/orasecurityname. Asystemandmethodgrantssecurityprivilegeina communicationsystembyprovidingprivilegetestcriteria dataforasubscriberunitsothatthesubscriberunitorsome otherentitycanselectamongsubscriberprivilegedata basedontheprivilegetestcriteriadata,sothatonlythe necessaryprivilegeinformationiscommunicatedbetween therelyingpartyandthesubscriberunitofinterest.Adata selectorselects,forexample,amongapluralityofattribute certificatesassociatedwithaselectedsubscriberunit,the certificatethatmatchestheprivilegedtestcriteriadata. Amethodandapparatusforinitializingoperationfor informationsecurityoperationforanentityutilizesshared information,suchassharedsecretinformation,thatmaybe sharedbetweentheentityandotherapplicationsor operationswithinasystemtoinitializeanentity.Prestored sharedinformationthatcanbeusedasentityidentification data(RV)andauthenticationdata(IAK)thatisassociated withtheentityidentificationdataisencryptedandsentin cleartextfashiontoaninitializationauthenticationunit,such asaserverorotherprocessingunit.

Methodand apparatusfora serviceprovider IdentityShield, Pending 16 toprovide TransactionShield inU.S. secureservices toauser.

Own

16

Systemand methodfor granting IdentityShield, Pending security 17 TransactionShield inU.S. privilegeina communication system.

Own

Systemand methodfor initializing operationforan IdentityShield information security operation.

Pending 18 inU.S.

Own

Enterprise's Planned Protection of Future Intellectual Property: Patents,Copyrights,TradeSecrets,Trademarks

Markets

IdentityShield

Market Year Of General Market Description Introduction Thismarketisaresultofdemand fromglobalenterprisesthat continuetorespondtoregulatory andgovernancecompliance demandsandextendtheirinternal andexternalnetworkstomoreand moreindividualsinsideandoutside theirdomain.Inthismarket, enterprisestypicallybuyfortheir immediateneedandthenaddto theirpurchasesasprojectsbegin rollout. Thismarketconsistsofmedium sizedenterprisesthatcontinueto respondtoregulatoryand governancecompliancedemands andextendtheirinternaland externalnetworkstomoreand moreindividualsinsideandoutside theirdomain.Inthismarket, enterprisestypicallybuyfortheir immediateneedandthenaddto theirpurchasesasprojectsbegin rollout. Drivers for Adoption eSecureSystemshelps businessesmitigateriskby securinginformationand securingidentities.Secure solutionsprotectusersand reducelossfrombusiness fraudandprotectsensitive data,regardlesswhereit resides,whileproviding robustcontrolsandauditon thosewhocanaccesscritical systems. eSecureSystemshelps businessesmitigateriskby securinginformationand securingidentities.Secure solutionsprotectusersand reducelossfrombusiness fraudandprotectsensitive data,regardlesswhereit resides,whileproviding robustcontrolsandauditon thosewhocanaccesscritical systems. Barriers to Adoption Abreachofsecurityatoneofourcustomers, whetherornotduetoourproducts,couldharmour reputationandreducethedemandforourproducts. Awell-publicizedactualorperceivedbreachof networkorcomputersecurityatoneofour customers,regardlessofwhethersuchbreachis attributabletoourproducts,third-partytechnology usedwithinourproductsoranysignificantadvance intechniquesfordecodingorcrackingencrypted information,couldadverselyaffectthemarkets perceptionofusandourproducts. Abreachofsecurityatoneofourcustomers, whetherornotduetoourproducts,couldharmour reputationandreducethedemandforourproducts. Awell-publicizedactualorperceivedbreachof networkorcomputersecurityatoneofour customers,regardlessofwhethersuchbreachis attributabletoourproducts,third-partytechnology usedwithinourproductsoranysignificantadvance intechniquesfordecodingorcrackingencrypted information,couldadverselyaffectthemarkets perceptionofusandourproducts.

Large Enterprise 2010 Market

Small Market

2009

TransactionShield

Market Year Of General Market Description Introduction Thismarketconsistsoflarge, globalenterprisesthatcontinueto respondtoregulatoryand governancecompliancedemands andextendtheirinternaland externalnetworkstomoreand moreindividualsinsideandoutside theirdomain.Inthismarket, enterprisestypicallybuyfortheir immediateneedandthenaddto theirpurchasesasprojectsbegin rollout. Drivers for Adoption eSecureSystemshelps businessesmitigateriskby securinginformationand securingidentities.Secure solutionsprotectusersand reducelossfrombusiness fraudandprotectsensitive data,regardlesswhereit resides,whileproviding robustcontrolsandauditon thosewhocanaccesscritical systems. Barriers to Adoption Abreachofsecurityatoneofourcustomers, whetherornotduetoourproducts,couldharmour reputationandreducethedemandforourproducts. Awell-publicizedactualorperceivedbreachof networkorcomputersecurityatoneofour customers,regardlessofwhethersuchbreachis attributabletoourproducts,third-partytechnology usedwithinourproductsoranysignificantadvance intechniquesfordecodingorcrackingencrypted information,couldadverselyaffectthemarkets perceptionofusandourproducts.

Medium Enterprise 2011 Market

MARKET SIZE
(inthousands)
Fiscal Year IdentityShield: LargeEnterpriseMarket SmallMarket Total TransactionShield: MediumEnterpriseMarket Total 2010 $1,413,894 $725,624 $2,139,517 $942,596 $942,596 2011 $1,456,311 $761,905 $2,218,215 $970,874 $970,874 2012 $1,500,000 $800,000 $2,300,000 $1,000,000 $1,000,000 2013 $1,545,000 $840,000 $2,385,000 $1,030,000 $1,030,000 2014 $1,591,350 $882,000 $2,473,350 $1,060,900 $1,060,900 2015 $1,639,091 $926,100 $2,565,191 $1,092,727 $1,092,727 2016 $1,688,263 $972,405 $2,660,668 $1,125,509 $1,125,509 2017 $1,738,911 $1,021,025 $2,759,936 $1,159,274 $1,159,274

Market LargeEnterpriseMarket MediumEnterpriseMarket SmallMarket Source of Market Estimates InternalResearch InternalResearch,ExternalIndustryResearch,PaidConsultantResearch InternalResearch,ExternalIndustryResearch,PaidConsultantResearch

 MARKET DEVELOPMENT STRATEGY

Marketing Plan: eSecureSystemsoffersitsproducts,solutionsandservicesthroughamultichannelsalesapproach,reflectingthecharacteristics andbuyingbehaviorofthetargetmarketscovered.eSecureSystemsplanstocontinuetofocusitsmarketingandsaleseffortstocapitalizeupon theneedforsecuredigitalidentitiesandinformationwithintheconsumer,enterpriseandgovernmentmarkets.eSecureSystemsplanstoutilizea prioritizedcombinationofdirectandindirectsaleschannelsaroundtheglobe.eSecureSystemsbelievesthatitsdirectsalesforce,workingin conjunctionwithindirectchannelsofferingcomplementaryproductsandservices,provideseSecureSystemswithacompetitiveadvantagein respondingtocustomerneedsastheyevolve.

Sales Plan: TosupportitsdirectsalesforceandtheTrustedPartnernetwork,eSecureSystemshasamarketingteamwhosegoalsaretocreatea consistent,focusedcommunicationstrategythatincreasesawarenessofEntrustsdigitalidentityandinformationsecuritysolutionsandservices, andleveragesthatawarenessintheidentificationofnewsalesopportunities.Themarketingteamcreatesandconductsintegratedprogramsthat includeadvertising,directmail,tradeshows,seminars,Webmarketing,publicrelationsandongoingcustomercommunication.eSecureSystems intendstoinvestintargetedmarketingprogramsforexistingcustomersandprospectsinkeyverticalandgeographicmarkets.

Competition

IdentityShield
Competitor Markets Verisign BlueRidge Networks Verisign Large Enterprise Market Large Enterprise Market SmallMarket Name of Competitor Description Product/Service VerisignIdentity 7.0 IDTheft Preventer VerisignIdentity 7.0 ActiveIdentity IDTheft Preventer ActiveIdentity VeriSignAuthenticationServicesprovidessolutionsthatallowcompanies&consumersto engageincommunications&commerceonlinewithconfidence. ProtectionfromMalware,Dataleak,andNetworkAttackRisks. VeriSignAuthenticationServicesprovidessolutionsthatallowcompanies&consumersto engageincommunications&commerceonlinewithconfidence. ActivIdentityisagloballeaderinidentityassuranceandstrongauthenticationsolutionsfor enterprise,governmentandonlinebankingsecurity. ProtectionfromMalware,Dataleak,andNetworkAttackRisks. ActivIdentityisagloballeaderinidentityassuranceandstrongauthenticationsolutionsfor enterprise,governmentandonlinebankingsecurity.

Large ActivIdentity Enterprise Market BlueRidge Networks SmallMarket

ActivIdentity SmallMarket

Unpenetrated-Theportionofthetotalmarketrevenueopportunitythatisnotpenetrated(i.e.,captured)bytheenterpriseoranyothercompetitor.

TransactionShield
Competitor Markets Verisign Medium Enterprise Market Name of Competitor Description Product/Service Verisign VeriSignAuthenticationServicesprovidessolutionsthatallowcompanies&consumersto engageincommunications&commerceonlinewithconfidence.

Unpenetrated-Theportionofthetotalmarketrevenueopportunitythatisnotpenetrated(i.e.,captured)bytheenterpriseoranyothercompetitor.

COMPETITIVE PROTECTION STRATEGY

Strategy: eSecureSystemsreliesonacombinationofpatent,copyright,trademarkandtradesecretlaws,nondisclosureagreementsandother contractualprovisionstoestablish,maintainandprotecttheCompanysproprietaryrights.eSecureSystemscurrentlyhasaportfolioofover10 patentsandpendingpatentapplications.Pursuanttopatentcross-licenseagreements,eSecureSystemsalsolicensessomeofitspatentstoother corporationsand,inreturn,receivesrightsfromthosecorporationsinrespecttopatentsownedorlicensablebysuchcorporations.

Management
EXISTING MANAGEMENT
Position ChiefExecutiveOfficer ChiefFinancialOfficer ChiefTechnologyOfficer VicePresidentSales& Marketing Name ChrisFlanigan William Anderson DavidRhodes MichaelMallet Employed Age Undergraduate Discipline Full-Time Full-Time Full-Time Full-Time 48 45 39 49 Engineering: Industrial/Mechanical Business:Accounting/Finance ComputingorComputerScience Engineering:Electrical Graduate Discipline Business:Management/Information Systems Business:Management/Information Systems Business:Management/Information Systems None

Position

Name

Biographical Information

Special Skills Mr.Flaniganhasbeenaleaderintheeffortto elevateinformationsecuritytoacorporate governanceissueandfashionapublic-private partnershiptoprotectAmericascritical infrastructure.Helaunchedandco-chairedthe BusinessSoftwareAllianceInformationSecurity GovernanceTaskForce,whichreleaseda securitymanagementframeworkinApril2003. Healsoco-chairedtheNationalCyberSecurity PartnershipsCorporateGovernanceTask Force,whichreleaseditsinformationsecurity governanceframeworkinApril2004.

Chief Executive Officer

FromNovember1999toApril2001,Mr.FlaniganservedasPresident, EnterpriseNetworksandeBusinessSolutionsofNortelNetworks,where heledtheturnaroundoftheEnterprisebusinesswhileredefiningand deliveringebusinessapplications.FromSeptember1998toOctober 1999,heservedasthefirstChiefMarketingOfficerofNortelNetworks, Chris leadingtheefforttorepositionthecompanyasagloballeaderinbuilding Flanigan thehigh-performanceInternet.From1992toSeptember1998,Mr. ConnerheldanumberofkeyexecutiveleadershippositionsatNortel Networks.Mr.FlanigangraduatedfromPrincetonUniversitywitha bachelorsdegreeinmechanicalengineering.Healsoearnedamasters degreeinbusinessadministrationfromtheWhartonSchoolofthe UniversityofPennsylvania.

Chief Financial Officer

Mr.Anderson'sbroadexperienceateSecureSystemsincludes significantinvolvementincross-functionalresponsibilitiesbothinfinance andoperations.PriortojoiningeSecureSystems,heheldvarious William financeandaccountingpositionsatNortelNetworksfrom1991through Anderson 1995andatRaytheonSystemsfrom1982to1991.Mr.Andersonisa graduateofThePennsylvaniaStateUniversitywherehereceivedan undergraduatedegreeinaccountingandamastersofbusiness administration. Mr.Rhodeshasmorethan12yearsofexperienceinhightechnology, hasheldavarietyofrolesintheindustryandiscurrentlyresponsiblefor allaspectsofresearchanddevelopment,productmanagement, technicalsupport,andtraining.HeisalsoresponsiblefortheCertificate ServicesSSLandManagedServicesPKIbusinesses.Priortojoining eSecureSystems,Mr.Rhodeswasthevicepresidentofresearchand developmentatVeriSign,Inc.Mr.Rhodescompletedhisundergraduate studiesincomputerengineeringattheUniversityofOttawaandSt. LawrenceCollege.Inaddition,Mr.Rhodesearnedamastersdegreein businessadministrationfromQueensUniversityinKingston,Ontario, Canada. Mr.MallethastheroleofleadingtheNorthAmericanandU.S.Federal salesteam.HewasPresidentofCygnaComSolutionsfromMarchof 2000untilNovemberof2005.CygnaComSolutionshasbeenproviding professionalinformationsecurityservicesandcryptographicsolutionsto governmentandbusinessclientssince1994.ThisbusinessincludesUS Federalgovernmentaccreditedsecuritytestlaboratories.Priortojoining eSecureSystems,Mr.Malletheldvariouspositionsofincreased responsibilityatNortelNetworksfrom1985-1998intheareasof engineering,technicalsupport,marketing,andordermanagement.He graduatedfromRensselaerPolytechnicInstitutewithBSinElectrical Engineering. Mr.Simzersprofessionallifehasbeen distinguishedbyanumberofindustryfirsts,as wellasinnovativeresearchanddevelopment. HiscareerbeganatBellNorthernResearch, Nortelsresearchanddevelopmentarm,working onproductdevelopmentforlarge-scale switchinganddatasystems.Keyprojects includedtheworldsfirsttelephoneswitching systemsupportingIntegratedServicesDigital Networkandahighlyscalabledistributed systembuiltusingAdvancedIntelligent Networkingtechnology. Mr.Mallethas22yearsintheindustry,andis notedforhisstrongcombinationoftechnicaland businessacumen.Mr.MalletjoinedNortelas DirectorofNorthAmericanProfessional ServicesinFebruaryof1985tohelpbuildthe professionalservicespracticeandorganization. HesuccessfullygrewtheNorthAmerican ProfessionalServicesfromastartuptoa$6 millionbusinessovera4yearperiod.

Chief David Technology Rhodes Officer

Vice President Sales& Marketing

Michael Mallet

ANTICIPATED MANAGEMENT
Position ChiefOperatingOfficer VicePresidentSales Undergraduate Discipline Business:Accounting/Finance Graduate Discipline Duration Until Needed ComputingorComputerScience Business:Management/InformationSystems 6Months Business:Management/InformationSystems 10Months None 10Months

VicePresidentBusinessDevelopment Business:Accounting/Finance

Financial
FINANCIAL CHARTS

Blacklinesrepresenthistoricalvaluesprovidedbytheenterprise.Bluelinesrepresentvaluesprojectedbytheenterprise.

Blacklinesrepresenthistoricalvaluesprovidedbytheenterprise.Bluelinesrepresentvaluesprojectedbytheenterprise.

Blacklinesrepresenthistoricalvaluesprovidedbytheenterprise.Blueorothercoloredlinesrepresentvaluesprojectedprovidedbytheenterprise.

Blacklinesrepresenthistoricalvaluesprovidedbytheenterprise.Blueorothercoloredlinesrepresentvaluesprojectedprovidedbytheenterprise.

Blacklinesrepresenthistoricalvaluesprovidedbytheenterprise.Blueorothercoloredlinesrepresentprojectedvaluesprovidedbytheenterprise.

INCOME & CASH FLOW (nominal)

Fiscal Year Revenue: IdentityShield TransactionShield Other Total NumberofCustomers: IdentityShield NumberofCustomers: TransactionShield AverageRevenueperCustomer: IdentityShield AverageRevenueperCustomer: TransactionShield CostofRevenue: IdentityShield TransactionShield Other Total GrossProfit: IdentityShield TransactionShield Other Total OperatingExpenses: Sales&Marketing General&Administrative Research&Development Depreciation&Amortization Total OperatingIncome OtherIncome InterestExpense IncomeTax/MemberTaxPayout NetIncome CashFlows: NetChangeinWorkingCapital OperatingCashFlow CapitalExpenditures FreeCashFlow 2010 $45,890 $0 $0 $45,890 306 0 $150 $0 $8,260 $0 $0 $8,260 $37,630 $0 $0 $37,630 $45,080 $52,090 $160,670 $8,562 $266,402 ($228,772) $0 $0 $0 ($228,772) $0 ($220,210) $15,078 ($235,288) 2011 $150,560 $0 $0 $150,560 1003 0 $150 $0 $22,560 $0 $0 $22,560 $128,000 $0 $0 $128,000 $85,330 $73,896 $153,560 $8,688 $321,474 ($193,474) $0 $0 $0 ($193,474) $0 ($184,786) $23,010 ($207,796) 2012 $423,890 $68,900 $0 $492,790 2825 765 $150 $90 $59,872 $7,651 $0 $67,523 $364,018 $61,249 $0 $425,267 $204,570 $135,567 $164,380 $15,564 $520,081 ($94,814) $0 $0 $0 ($94,814) $0 ($79,250) $34,672 ($113,922) 2013 $1,087,500 $198,000 $0 $1,285,500 7500 2200 $145 $90 $150,000 $20,000 $0 $170,000 $937,500 $178,000 $0 $1,115,500 $500,000 $380,000 $400,000 $15,268 $1,295,268 ($179,768) $0 $8,000 $0 ($187,768) $0 ($172,500) $64,000 ($236,500) 2014 $2,310,000 $450,000 $0 $2,760,000 16500 5000 $140 $90 $300,000 $40,000 $0 $340,000 $2,010,000 $410,000 $0 $2,420,000 $1,000,000 $770,000 $800,000 $21,258 $2,591,258 ($171,258) $0 $8,000 $0 ($179,258) $0 ($158,000) $105,000 ($263,000) 2015 $4,185,000 $850,000 $0 $5,035,000 31000 10000 $135 $85 $500,000 $70,000 $0 $570,000 $3,685,000 $780,000 $0 $4,465,000 $1,500,000 $1,250,000 $1,250,000 $33,854 $4,033,854 $431,146 $0 $8,000 $0 $423,146 $0 $457,000 $140,000 $317,000 2016 $7,540,000 $1,480,000 $0 $9,020,000 58000 18500 $130 $80 $830,000 $120,000 $0 $950,000 $6,710,000 $1,360,000 $0 $8,070,000 $2,250,000 $1,600,000 $1,800,000 $45,684 $5,695,684 $2,374,316 $0 $8,000 $705,100 $1,661,216 $0 $1,706,900 $180,000 $1,526,900 2017 $11,000,000 $2,500,000 $0 $13,500,000 85000 33000 $129 $76 $1,200,000 $250,000 $0 $1,450,000 $9,800,000 $2,250,000 $0 $12,050,000 $2,500,000 $2,400,000 $2,500,000 $56,782 $7,456,782 $4,593,218 $0 $8,000 $1,620,000 $2,965,218 $0 $3,022,000 $220,000 $2,802,000

 Capitalization: NewEquityInvestment GrantCapital NewDebtBorrowing DebtPrincipalRepayments TotalNetCapitalization CashLiquidityBalance

$500,000 $0 $0 $0 $500,000

$0 $0 $0 $0 $0

$0 $0 $100,000 $0 $100,000 $92,994

$600,000 $0 $0 $20,000 $580,000 $436,494

$0 $0 $0 $20,000 ($20,000) $153,494

$0 $0 $0 $20,000 ($20,000) $450,494

$0 $0 $0 $20,000 ($20,000) $1,957,394

$0 $0 $0 $20,000 ($20,000) $4,739,394

INCOME & CASH FLOW (relative)

Fiscal Year MarketShare: IdentityShield TransactionShield AnnualGrowthRateinRevenue: IdentityShield TransactionShield Other Total GrossProfitMargin: IdentityShield TransactionShield Other Total OperatingExpensesasa%ofRevenue: Sales&Marketing General&Administrative Research&Development TotalProfitMargins: OperatingProfitMargin NetProfitMargin 2010 0.00% 0.00% 0.0% 0.0% 0.0% 0.0% 82.0% 0.0% 0.0% 82.0% 98.2% 113.5% 350.1% -498.5% -498.5% 2011 0.01% 0.00% 228.1% 0.0% 0.0% 228.1% 85.0% 0.0% 0.0% 85.0% 56.7% 49.1% 102.0% -128.5% -128.5% 2012 0.02% 0.01% 181.5% 0.0% 0.0% 227.3% 85.9% 88.9% 0.0% 86.3% 41.5% 27.5% 33.4% -19.2% -19.2% 2013 0.05% 0.02% 156.6% 187.4% 0.0% 160.9% 86.2% 89.9% 0.0% 86.8% 38.9% 29.6% 31.1% -14.0% -14.6% 2014 0.09% 0.04% 112.4% 127.3% 0.0% 114.7% 87.0% 91.1% 0.0% 87.7% 36.2% 27.9% 29.0% -6.2% -6.5% 2015 0.16% 0.08% 81.2% 88.9% 0.0% 82.4% 88.1% 91.8% 0.0% 88.7% 29.8% 24.8% 24.8% 8.6% 8.4% 2016 0.28% 0.13% 80.2% 74.1% 0.0% 79.1% 89.0% 91.9% 0.0% 89.5% 24.9% 17.7% 20.0% 26.3% 18.4% 2017 0.40% 0.22% 45.9% 68.9% 0.0% 49.7% 89.1% 90.0% 0.0% 89.3% 18.5% 17.8% 18.5% 34.0% 22.0%

BALANCE SHEET
Fiscal Year 12/31/2012 CurrentAssets: Cash&Short-TermInvestments AccountsReceivable Inventory OtherCurrentAssets TotalCurrentAssets Long-TermAssets: TangibleCapitalAssets IntangibleCapitalAssets AccumulatedDepreciation TotalLong-TermAssets TotalAssets CurrentLiabilities: AccountsPayable Short-TermDebt OtherCurrentLiabilities TotalCurrentLiabilities Long-TermLiabilities TotalLiabilities Equity&Capital: Paid-InCapital InterestinNon-ConsolidatedEnterprise(s) TotalEquity&Capital(NetWorth) $92,994 $23,090 $0 $562 $116,646 $115,232 $123,500 $0 $238,732 $355,378 $31,698 $20,000 $0 $51,698 $80,000 $131,698 $500,000 $0 $15,754

RetainedEarnings ($484,246)

TotalEquity,Capital,&Liabilities

$147,452

PROJECTION METHODS
Operational Revenue Cost Projection Underlying Projection Assumptions Projection Method Method Basedon Assumed Market Shares Basedon anAssumed Portionof Revenue Someoftheassumptionsthatunderliethesefinancialprojectionsinclude:1)arevenuegrowthrateofaround100%in thenexttwofiscalyears,2)theexecutionofakeymarketingrelationshipwith2strategicpartnersbytheendoftheyear, 3)5%operatingcostasapercentageofrevenuedevotedtogoogleadwordsadvertisements,and4)a300%increasein yearlyorganicsearchtrafficbytheendof2013.

Capitalization
CURRENT CAPITALIZATION

Capital Needed: $600,000 Capital Type: Equity

FutureCapitalEnterprisesestimateoffuturecapitalneedspostinvestment. UndercapitalizationEAestimatedriskcapitalthatisunaccountedforbyenterprise.

Post-MoneyOwnershipEquityshareoftheenterpriseafteraccountingforthedilutionofthe currentcapitalbeingsought.(basedontheenterprisesestimatedvaluation)

S&MSales&Marketing|G&AGeneral&Administrative|R&DResearch&Development|AssetAcq.AssetAcquisition

Area of Use Sales&Marketing Research&Development General&Administrative Specific Use NewSalesEmployees SystemUpgades,PatentCosts NewEmployees,LargerOffice Amount $200,000 $200,000 $200,000

PAST CAPITALIZATION
Name Round1AngelInvestors BankLoan Relationship Individual CommercialBank Capital Type PreferredEquity Long-TermDebt Contributed Capital $500,000 $100,000

EQUITY EXIT STRATEGIES / DEBT TYPE & DURATION

Ranking MostLikely Likely LeastLikely Equity Exit Strategy / Debt Type Desired Acquisition Merger SecondaryPrivateOffering Year 2017 2017 2018 Name of Potential Acquirers or Merger Partners VeriSign,Entrust,SAP,Oracle