Vc pitch 2013-03-01-2

VARILUX Intelligent Light

Conservation

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VARILUXEnhance it…

Street Light DimmerStepless 3-Terminal Dimmer Jack I. J’maev

ReadyTrace, Inc.14277 Albers WayChino, CA 91710909-437-8390

[email protected]

www.varilux4hps.com


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FULL POWER

Sized for End of Life

Lumen Output60% POWER

Meets RP-8 Requirements


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3-Terminal Means Plug & Play in 5 Minutes

Remove Photocell

Install variLux

Save Money


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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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Beta Tested


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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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Global Interest


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Competition

Induction

LED

ConventionalDimming

variLux

HPSBaseline

Operation Costs Maintenance Costs Purchase Cost

Installation Costs Payback Period


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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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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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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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The Technology

• Prior Art – 4 Terminal Dimmer– 50% More Cost

• VARILUX

– 3 Terminal Dimmer– Power Factor

Preservation– Supports Plug & Play– More Reliable


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Conventional Dimming(European “E-Street” Concept)

INCOM

A

REGULATED POSITIVE RAIL

GROUND RAIL

A

B

DIGITAL SIGNALPROCESSOR

INPHS

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ACTIVEFEEDBACK

ACTODC

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R F

AC

TO

R C

OR

RE

CT

ION

PR

E-R

EG

ULA

TO

R


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variLux 3-Terminal Dimmer

SYN

CH

RO

NO

US

FR

EE

WH

EE

L

D S

DS

IFD

D

S

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IFD

CONTROLBOARDWITH

READYTRACERECEIVER

IN OUT

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BUCK SWITCHES


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variLux Street Light DimmerRADIO

TELEMETRY

0.2 ACCURACYCLASS METER

READYTRACERECEIVER(AM BAND)

STEPLESSDIMMER

POWERFACTOR

PRESERVATION

LUMENMAINTENANCE

TOKENDECRYPTION

FIRMWAREVALIDATION


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Pre Money Capitalization

OptionsExercised

Options Outstanding

Warrants Outstanding

Preferred WarrantsWarrants

to be Issued

Founder

Investors

Compensation

8%

20%

7%

15%

25%

17%

• $4.3 MM Paid-In – 1.3MM Shares– Avg. $3.30/Share

• 3.5 MM Shares• 1.5 MM Options• 0.6 MM Warrants• Debt - $1.45MM

– Preferred Warrants

– IP Security– $500M

Unsubscribed


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Post Money Capitalization

• New Money - 39% Stake

• Prior Stake Holders– Issued 27%– Promissory 25%

• New Employee Options– 9% (Discretionary)

• Debt - $1.45MM– Paid from Cash

Flow

New Money

ExistingStakeholders

Options&

Warrants

New Options

25% 39%

9%

27%


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Financials

2013 2014 2015 2016 2017Sales 6,475,000 30,905,000 43,050,000 57,400,000 82,950,000COGS 3,500,000 15,400,000 21,000,000 28,000,000 42,000,000Other Direct Expense 1,438,500 5,281,000 7,260,000 9,680,000 13,890,000Gross Profit 1,536,500 10,224,000 14,790,000 19,720,000 27,060,000Operating Budget 1,467,470 3,753,525 6,804,740 5,604,594 6,664,314Development & Certifications 257,500 715,000 0 0 0Marketing 33,000 250,000 250,000 250,000 250,000EBIT -221,470 5,505,475 7,735,260 13,865,406 20,145,686Tax 0 0 3,831,419 6,239,433 9,065,559Net after Tax -221,470 5,505,475 3,903,841 7,625,973 11,080,127


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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 C O G S 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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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 orPartner with Existing Provider


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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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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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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

Investor Relations

Vc pitch 2013-03-01-2