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Zylux Acoustic Corporation

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Introduction

•  Zylux Acoustic Corporation was founded in 1980 and has grown into a multinational company, with a global presence in Asia, North America and Europe.

•  Zylux is a privately held Taiwan based Original Equipment and Design Manufacturing Company specializing in the design and development of variety of loudspeaker systems and CE lifestyle audio systems, working with renowned technology partners, servicing major brands.

•  Zylux focuses on the Worldwide market penetrations and having presence with offices in Taipei, Shenzhen, Suzhou, Japan, Europe, California, Pennsylvania US.

•  Zylux operates a design center (ZTC) in Southern China, and is at the forefront of new audio technologies. such as….

Ø  iPod/iPhone/iPad Integrations Ø  HDMI / TV soundbar Ø  DAB / HD Radio Audio Ø  Internet Radio Audio Ø  Airplay / Android Embedded Audio Ø  BT, WiFi, Wireless Audio Ø  DLNA / Digital Home Network

•  Zylux prides itself on having world class quality and certification standards.

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Zylux Corporate Overview

Zylux has worldwide facilities based in Taiwan, China, Hong Kong, North America and Japan.

Zylux Acoustic Corp. - Headquarters (Taipei, Taiwan)

Herman Lu – Chairman / CEO

Sylvia Chuang – CFO Mandy Wang – COO

Zylux Shenzhen Factory

(Shenzhen, China)

Sophia Young – President

Zylux Suzhou Factory (Suzhou, Shanghai)

Roger Chang –

Manager

Zylux America Inc. – US Headquarters (Los Angeles, CA)

Wyatt Briant –

President

Zylux America Inc. – US Sales & Operations

(Bridgeville, PA)

Zylux Technology Center (Shenzhen, China)

Paul Yip – GM

of Sales & Marketing / CTO

Zylux Japan Inc. – (Tokyo, JP)

Nao Ohtake –

President

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Fast Facts: Founded in 1980 •  Current Capital: USD$20,000,000 •  Current Gross Asset Value: USD$70,000,000 •  Target Annual Turnover of 2014: USD$160,000,000 •  Zylux has worldwide facilities based in Taiwan, China, Japan, Europe & North America •  Zylux has a global warehouse network

Taiwan, Taipei Headquarters Strategic Planning Accounting/Finance Greater China Sales Team Project Management Group Engineering/R&D Group Logistics Group

US Headquarters - Irvine, CA. and Branch Office - Bridgeville, PA. Account Management & Operation/Logistic Support Sales Activities Market Research

South China, Shenzhen factory ISO 9001 ISO 14001 T/S 16949 OHSAS 18000 Lead Free & RoHS Manufacturing IECQ QC 080000

China, Suzhou factory ISO 9001 Lead Free & RoHS Manufacturing

Operations

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•  Located in, Guang Ming New District, Shenzhen, China –  30 minutes from either ferry or downtown train station

•  67,800 square meter •  1500 Employees

–  Quality Inspectors and Engineers = 80 –  R&D Engineers and technicians = 155 –  Factory and Line Managers = 70 –  Assembly and Indirect Labor = 1,500~2,500 peak season

•  ISO 9001 Registered with BSI International •  ISO 14001 Registered with CEPREI •  T/S 16949 Registered with BSI International •  OHSAS 18000 Registered with CEPREI •  Lead Free and RoHS Compliance production •  IECQ QC 080000 Certified by BSI International •  5 SMT lines (capacity: 3M dots/day) •  18 assembly production lines (capacity: 600K/shift/month, 1,200k/

2 shifts/month) •  3 transducer production lines (capacity :1,300K/shift/month,

2,600k/2 shifts/month) •  Several temperature controlled manufacturing workplace locations •  Automated adhesive application equipment •  Anechoic Chamber •  Full Product Validation Testing Chambers

Shenzhen China Factory

The Factory – Shenzhen, China

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Speaker System Assembly Lines •  New semiautomatic assembly line •  Ultra-sonic welding capability •  U-turn shaped pallet assembly line •  Burn-in capability •  ESD controls/SPC controls •  100% in-line testing/Sweep (rub/buzz) test/ Functional test •  Computer based Acoustic test or Music test

Shenzhen China Factory Facility

The Factory – Shenzhen, China

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Shenzhen China Factory Facility

PCBA Production: •  Automated axial & radial insertion •  Manual insertion •  A.I. – 4 lines •  In-circuit testing •  100 % End-of-line functional testing •  Clio or APII computer base testing •  Lead free and RoHS manufacturing

The Factory – Shenzhen, China

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Surface Mount Technology •  SMT – 5 lines (capacity: 3M dots/day) •  AOI Test •  Solder Paste Measurement System

The Factory – Shenzhen, China

Shenzhen China Factory Facility

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Transducer Production •  Automated glue application •  SPC controls •  100 % end of line testing

Ø  Sweep (rub/buzz) test Ø  Computer based acoustics test (LISTEN/LMS/Neutrik) l  Semi-Automatic Transducer Lines replenished at Q4/08 and Q2/09

The Factory – Shenzhen, China

Shenzhen China Factory Facility

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The Factory – Shenzhen, China

Semiautomatic Transducer Production Line •  One semiautomatic line for manufacturing 3” to

6” transducers •  Capacity: 17,000 units per day •  Head Count: 6-10 operators

Shenzhen China Factory Facility

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The Factory – Suzhou, China

Suzhou China Factory

•  Located in Suzhou Wuzhong District, China　

–  60 minutes from either Shanghai ferry or downtown –  20 minutes from SIP –  30 minutes from Wu-Xi Airport

•  Established in July 2004 •  8,100 square meters (Planned expansion 13,000

square meters) •  600 Employees •  ISO 9001 Certified •  Dedicated to ODM manufacturers in PC speaker,

Notebook speaker, LCD TV speaker production and Logistics management

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The Factory – Suzhou, China

Suzhou China Factory

•  8 assembly production lines and 3 speaker production lines

•  Lead Free Capable •  Anechoic Chamber, LMS and CLIO on-line test •  Factory Expansion in process

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R&D Engineering and Technology

•  R&D Engineering Head Count – Taipei, SHZ & ZTC Team: ME-37, EE-32, HW-18, SW-10, Transducer-32, System-14, DQE-7, Total: 150, with various international talents (Taiwan, Hong Kong, Korea, Singapore, India, Philippines) •  R&D Engineering Core Competencies/Skill Sets GUI, FW, SW, EE, PCBA layout, Integration, EMI testing & Packaging •  Industrial Design Services Life Style Design in Ca. USA (Klipsch iGroove, Polk PSD, Bushnell Travel 1.0) Tandem Design in Ca. USA •  Advance Engineering Validation (2 weeks)

•  Tooling Design Management Tool design review for efficiency, cost and cosmetics; Mold flow analysis for cosmetic finish, texture; Molding process settings for cosmetics and yield •  New Technology Platform iPod, iPhone, iPad Dock with Airplay, WiFi, BT Audio Steaming System; Touch Panel Audio System; DAB, Internet Radio, DLAN Audio System; 2.0, 2.1 & 5.1 TV Sound Bar with Dolby, SRS, HDMI

R&D Engineering & Technology

BridgeCo

Technology Partners

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Zylux Technology Center (ZTC)

Ø  Component Selection Ø  Circuit Layout Ø  Design Quality Ø  GUI Design

Ø  Sourcing Link Ø  Costing Data Base Ø  Purchasing Link Ø  Project Management

Ø  Amplifier design Ø  Integrated HW Ø  Special SW Ø  RF Design

Ø  OSD Configuration Ø  New Application Ø  System Integration Ø  Digital Integration

ZTC’s focus is to develop new technologies in addition to the design, development and integration of complex systems. with deployable technologies in…..

q  802.11 wireless q  2.4 GHz wireless q  Internet Radio q  Satellite Receivers

q  HD Radio Receivers q  MP3 (iPod/Zune) Audio Accessory Products q  Media Centre / Network Storage q  Wireless Speakers ( Airplay/DLNA/Play-Fi/BT Speakers)

Zylux Technology Center

Electronics Hardware Software System

(ZTC is currently staffed with approximately 50 engineers)

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•  Design – Transducer –  Design & Test Equipment

Speed D, Klippel, MLSSA, APII, B&K & LMS –  In-House Environmental Testing –  State-of-the-art Anechoic Chamber

•  (Fo = 50Hz) with automated on/off-axis measurement capability

Technology Deployment Zylux Corporate Overview

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•  Design – Mechanical –  Enclosure & Port design –  Tooling design & support –  Pro-E™ / AutoCAD™ / SolidWork™ software tools

Technology Deployment

Zylux Corporate Overview

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•  Design -- Electronics PCBA –  In-house test chambers for product development –  Software tools Protel, PADS, Altium, Symsyt, LEAP, APII development tools

Technology Deployment

Zylux Corporate Overview

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Program Management

•  Dedicated Program Manager for Top Tier Customer with fluent English speaking ability and engineering background located in Taipei HQ and Factory •  NPI Factory Cross functional core team members include: EE, ME, SYS, SW, IE, PE, QE, SQE, Sourcing •  Development of Existing Platform: 2 months after business award

•  Development of Advanced Platform and New Technology: 3~6 months

•  Sustaining Core Team: Manage mass production issues, ECR (internal and customer requested), cost-reduction initiatives, qualification trial runs, validation tests, cut-in schedule •  Communication with Customer: Weekly tele-conference calls and day to day e-mails

Program Management

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Logistics & Operations

•  Global Logistics & Operations Capability – Efficiently distribute to Worldwide Hub-Site and Daily Warehouse/Invoicing Management •  Capacity, Supply & Demand Commitment – Effectively plan manufacturing capacity based on customer demand; confirm delivery within 48 hours upon PO receipt for any demand changes (up/down); update weekly delivery schedule per rolling F/C provided •  Flexibility & Recovery Management – Actively manage upside flex and quickly recover from downside flex to protect against any excess material inventory

•  COS Initiatives – Qualify back-up suppliers for critical components prior to RTS; Secure safety stock for long-lead components to prevent mass production ramp or ongoing sustaining production gap-out •  EOL Management – Submission of weekly inventory/material status report to target “last-time buy PO” to protect against excess material inventory at EOL •  Zylux Logistics Management Skills won high credibility of our major customers

Logistics & Operations

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Zyrardow, Poland

Prague, CZ

Tao Yuan, Taiwan

El Paso, USA

Global Warehouse Network

Copenhagen, Denmark

Austin,USA

Reno,USA

Limerick, Ireland

Coventry, UK

Tilburg, Holland

Johannesburg, SA

Tokyo, Japan

20 Third-Party WW Warehouses

Xiaman,China

Nashville,USA

Ohio, USA

N. Carolina,USA

Los Indios, USA

Penang, Malaysia

Sydney, AU

Suzhou, China

Global Warehouse Network

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Customer List

Multimedia Loudspeaker Systems

(PC/Notebook)

Satellite Radio (Sirius XM Satellite Radio Accessories) Internet Radio & HD/DAB Radio

Audio Docking Systems (iPod/iPhone, iPad, Android phone, GPS Audio Docking)

Evolved & Converged Loudspeaker Systems

Home Theater/ Sound Bar/ Outdoor Loudspeaker Systems

Automotive Loudspeaker Systems

PRODUCT PLATFORM LISTING

Wireless Speaker ( Airplay/ DLNA/ Play-FI/ BT Speaker)

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Product Category

Multimedia Loudspeaker Systems:

PC / Multimedia Speakers: Ø Dell (Monitor SB)

Ø HP

Ø Pioneer

Ø JBL/Harman Kardon

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Audio Docking Systems:

Product Category

iPod, iPhone, iPad & Android Phone Audio Docking Systems:

Ø Harman

Ø Pioneer

Ø Onkyo

Ø Vizio

Ø Sonoro

Ø Samsung

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Product Category

Airplay/DLNA/Play-FI/Bluetooth speakers system:

Wireless Speakers:

Ø Boston

Ø Onkyo

Ø Pioneer

Ø Braven

Portable Bluetooth Speakers :

Ø HP

Ø Pioneer

Ø Sonoro

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Satellite Radio:

Product Category

Satellite Radio Accessories:

Ø SiriusXM

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Product Category

Evolved & Converged Loudspeaker Systems:

Internet Radio:

Internet Radio:

Ø SirusXM (TTR)

Ø Bush/Harvard (Trio Touch)

Ø iLUV (INT170)

Converged Loudspeaker Systems:

Ø JBL (Music Station)

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Product Category

DAB/HD Radio:

DAB/HD Radio:

Ø Accurian

Ø Polk Audio Design

Ø iSonic2 (Polk)

Ø iHD400 (JBL)

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Product Category

Automotive Loudspeaker Systems:

Car:

Ø Polk Audio

Ø Boston Acoustic

Ø Delphi/GM OEM

Ø Robert Bosch

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Product Category

Home Theater/Sound Bars/Outdoor Loudspeaker Systems:

Home Audio: (incl. Sound Bars) Ø Polk Audio

Ø Vizio

Ø TOSHIBA

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Product Category

Sound Bars:

Ø Built and Shipped 800K Soundbar Systems in Y2013

Ø Project to Build 1,300K Soundbar Systems in Y2014

Ø Current Platforms: u  Power Handling (RMS)

Total System 30W for 2 channels ~ up to total 200W for 5.1 channels

(8.1 channel & 10.1 channel in design phase)

u  Features •  Analog Input: RCA-in/Stereo-in •  Digital Input: SPDIF-in (PCM)/Coaxial-in •  USB Decode •  HDMI •  Bluetooth •  WiFi (incl. Play-Fi and other wireless audio-content streaming technologies) •  Wireless Subwoofer •  Dolby Decode/DTS Decode/DTS SRS/Nusound

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Value Proposition

The Zylux Commitment

Ø  Zylux is committed to our valued customers and continues to make sure we produce the right product with the highest quality standards.

Ø  Zylux is committed to bringing products to market in a timely manner. We have always been and continue to be committed to providing the necessary resources available to our customers that allow a seamless development cycle.

Ø  Zylux is committed to innovation and invests in new technologies that gives our customers an advantage in the market place. Ø  Zylux is committed to providing the highest quality products and services. We provide complete product design, development and manufacturing, along with global logistics. Additionally, Zylux provides real-time account management, operations and product development support through our US based offices staffed by individuals with a combined 70 years of experience.

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