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Page 1: ITM Solutions Business Plan - Q1 2015
Page 2: ITM Solutions Business Plan - Q1 2015

ITM Solutions’ flagship product offering is the ITM SmartRegister, an advanced cash register and point-of-sale system, which is fully integrated with digital advertising, as well as prepaid financial services products and customer bill pay. The SmartRegister is provided to independent retailers such as convenience stores, liquor stores, smoke shops, non-branded gas stations, and neighborhood grocery stores at no upfront cost to them, and is offered at a modest monthly service fee for the complete, profit-generating SmartRegister system.

In addition to acquiring a state-of-the-art POS system with store and inventory management software, these merchants are equipped to boost their profits by $100’s each month from the sale of digital advertising, financial service products and customer bill pay on their SmartRegister. The increase in foot traffic to their stores due to the demand for these new products provides an added incentive for retailers to get a SmartRegister in their store.

Introducing The ITM SmartRegister

Page 3: ITM Solutions Business Plan - Q1 2015

• Introduction

• Executive Summary

• Products and Services

• Value Proposition for Merchants and Distributors

• U.S. Rollout and Market Expansion Plan

• Capital Raise and Use of Proceeds

• Intellectual Property and Product Development

• Marketing Plan

• Operational Plan

• Products Roadmap and Technology Overview

• Management and Organization

• Investor Value Proposition and Summary

ITM Solutions Business Plan Table of Contents

Page 4: ITM Solutions Business Plan - Q1 2015

ITM Solutions Executive Summary

ITM delivers Retail Solutions for the Digital Age. Specifically, ITM Solutions provides a platform which enables merchants to generate more profit for their retail business and at the same time acquire an advanced Point-of-Sale (POS) and inventory management system for their stores. The ITM SmartRegister is the premier dual-screen POS and profit-generating system which provides these retailers with incremental revenue from Digital-out-of-Home (DOOH) Advertising, as well as financial services and customer bill pay.

ITM Solutions generates revenue from 5 sources:

1) Monthly Recurring Charge (Service Fee) from all SmartRegister MerchantsA recurring monthly service fee is charged to merchants (typically either $99/month or $29/month) which serves as an anchor revenue stream and is based on the Program (No Money Down or Purchase) and current promotions

2) Share of revenue on all digital advertising revenues shown on the SmartRegister networkThe ITM digital advertising offering is unique in that it is a highly engaging format at the point of purchase, in contrast to other more passive DOOH platforms. ITM offers advertising at the neighborhood, regional, and national levels.

3) Share of revenue on each prepaid financial services transaction on the SmartRegisterITM currently offers wireless top up and international long distance, with other services in development such as remittance (money transfer). For cash-based consumers, purchasing these products at a SmartRegister in their neighborhood is a quick, convenient and cost-effective way for ITM’s core consumer base to access these services.

4) Share of revenue on customer bill pay transactions on the SmartRegisterITM provides the ability for the unbanked and underbanked (cash-based) customer segments to stay current on vital services such as utility bills, cable bills, and car payments, in addition to the mobile-device top up services.

5) Sale of aggregated consumer sales data to syndicated data firms and CPG companies ITM’s aggregated data offering is unique in its ability to deliver standardized business intelligence data on consumer purchases from small-format, local retailers such as convenience and liquor stores. As such, ITM fills an unmet need in the marketplace for aggregated data from these store types.

Page 5: ITM Solutions Business Plan - Q1 2015

ITM Solutions Executive Summary

This 5th revenue stream is derived from the sale of customer purchasing behavior data, which is collected and aggregated from all SmartRegister transactions, providing consumer products market intelligence which is highly valued by consumer goods companies. There is high demand for this aggregated, standardized data, which can thereby be monetized substantially once a critical mass of SmartRegisterplacements has been achieved, the timeline for which is estimated to be in late 2015 / early 2016.

In addition to the 5 current revenue streams, ITM is continually adding new and profitable products which can be sold in digital format on the SmartRegister, with no added inventory or overhead costs to merchants. The new products are added via a simple API connection at a relatively low one-time set up cost to new product providers.

ITM Solutions provides a turnkey, profit-generating system for independent retailers such as convenience stores, liquor stores and neighborhood grocers. The ITM SmartRegister is the primary vehicle by which we deliver this one-of-a-kind system, which allows merchants to generate incremental revenue for their stores. The SmartRegister system is comprised of state-of-the-art register hardware with advanced Point-of-Sale (POS) software, which includes comprehensive store and inventory management tools.

ITM brings the SmartRegister to market with 3 programs available to retailers:1) Purchase the SmartRegister for $1,995.00 and then pay $29/month as a recurring service fee2) Acquire the SmartRegister with No Money Down and pay $99/month as a recurring service fee3) Major advertisers can sponsor SmartRegisters, which are then provided at no cost to the stores

The ITM SmartRegister Program

Page 6: ITM Solutions Business Plan - Q1 2015

ITM Solutions Executive Summary

The ITM SmartRegister distribution plan is broken out into 3 sequential phases. Phase 1 calls for an initial launch in New York, Los Angeles and Seattle, with the goal of achieving significant, concentrated penetration in these strategic markets. SmartRegister distribution goals are 200 placements in each of these markets over a 6-month period beginning in Q1 2015. In Phase 2, ITM will be scaling up the model to expand into 4 new strategic markets: Philadelphia, DC/Baltimore, Denver, and Atlanta, again with the goal of 200 SmartRegister placements, geographically concentrated in each market. The Phase 3 rolloutcalls for a launch into the Dallas, Houston, Chicago, and Miami markets. The ITM model is highly-scalable and can be launched quickly and efficiently into new markets throughout the U.S. and Mexico.

ITM Solutions has corporate headquarters in Spring Valley, CA with key distribution partners in New York City and with ITM Authorized Representatives in Los Angeles and San Diego. The ITM organization is continually adding new channel partners to accelerate execution on our plan of placing, and fully monetizing, over 3,500 new SmartRegisters throughout the U.S. and Mexico by the end of 2017.

As part of the contract which ITM enters into with its retail partners, these merchants commit to a 5-year placement Agreement, during which time they agree to actively operate the SmartRegisters in their stores, with a significant early termination fee for failure to do so. This in effect secures the revenue derived from these locations, thereby underpinning the quality and sustainability ITM Solutions’ earnings.

The ITM target consumer demographic for end users of products sold on the SmartRegister are the unbanked and underbanked population segments typically located in dense urban areas, who need access to a cash-based payment platform which allows them to purchase everyday services such as wireless airtime and to stay current on other merchant accounts.

Page 7: ITM Solutions Business Plan - Q1 2015

ITM Solutions Executive Summary

For these consumers, secure and convenient access to these bill payment stations saves them time, money and hassle in staying on top of their monthly bills and merchant accounts. Without easy access to a SmartRegister bill pay station, this demographic, some of which have limited access to transportation, often must spend hours travelling across town and waiting in lines at the utility company. Merchants who can alleviate this hardship by providing such services in their communities are rewarded with increased foot traffic and loyalty from this core base of customers.

To achieve expanded penetration into U.S. markets, secure first-mover advantage for the SmartRegister profit-generating model, and to acquire IP assets for the organization, ITM Solutions is currently seeking a Series A round of funding to raise $5.5 million in new capital. This capital raise will fund a total of 1,400 SmartRegister placements in the top 7 strategic U.S. markets: New York, Los Angeles, Seattle, Philadelphia, Washington DC/Baltimore, Denver, and Atlanta. Additionally, $300,000 of the new capital will be used to develop a proprietary POS software platform and digital media management software. A breakdown of the Use of Proceeds from this capital injection is provided on page 11 of this Plan.

The ITM Solutions exit strategy is based on positioning the company with substantial and growing revenues and EBITDA such that it becomes an attractive acquisition target for numerous potential acquiring companies in the payments platform, retail POS, retail kiosk, digital media, or business intelligence / consumer data space. Whether by private acquisition or initial public offering, it is projected that ITM Solutions will be in a strong position to provide a very substantial return on capital to all shareholders within 3 to 4 years of completion of the Series A funding round.

Page 8: ITM Solutions Business Plan - Q1 2015

ITM Solutions Products and Services

ITM Digital Media Solutions provides and markets digital advertising to local merchants, as well as to regional and national advertisers, which appears on the customer-facing screen on each ITM SmartRegister. This digital advertising, as part of the rapidly-growing Digital-out-of-Home (DOOH) advertising space, is highly effective when displayed at the point-of-purchase. ITM offers both call-to-action based messaging and brand awareness campaigns. Digital Advertising provides a substantial, ongoing revenue stream for the ITM organization, as well as for ITM authorized merchants and distribution channel partners.

Smarter Advertising from ITM Digital Media Solutions

The library of digital products offered through the SmartRegister includes a variety of in-demand financial services products which can be accessed quickly and conveniently in the communities which ITM serves. These products, heavily used in the majority of urban U.S. communities, include:

• Wireless Top Up (i.e. mobile phone airtime refills)• PIN-less (i.e. no card needed) International Long Distance• U.S. and Mexico Bill Pay • ITM is continually adding new, profitable products and services

Financial Service Products from ITM Solutions

Page 9: ITM Solutions Business Plan - Q1 2015

Value Proposition for Merchants and Distributors

Benefits to ITM Authorized Merchants include the following:• The ability to make $100's more in profit each month from a share of

digital advertising revenue and fees on customer bill pay transactions• The generation of additional revenues from the sale of prepaid digital

products, with no added inventory or overhead costs• Increased foot traffic and customer loyalty from the additional, in-

demand services they provide to customers in their community• Powerful store and inventory management tools on the SmartRegister

Merchants earn revenue shares on these SmartRegister products:• 10% on digital advertising shown on their SmartRegister screen(s)• 5-10% commission on all wireless top-up transactions• 20% commission on all international long distance transactions• $1.00 to $1.50 on all customer bill pay transactions

ITM Representatives and Distributors are compensated as follows:• $200 to $500 one-time commission spiff on all SmartRegister

placements. Multiple SmartRegisters in a store earn multiple spiffs.• 20% commission on all digital advertising sales• $0.25 commission on all Bill Pay transactions• Distributors can also differentiate and lock in retailers with 5-year

agreements, not currently available with similar offerings

Page 10: ITM Solutions Business Plan - Q1 2015

SmartRegister U.S. Rollout and Market Expansion Plan

Phase 1* – New York, Los Angeles, SeattleEstimated Time Frame: within 18 months• 200 Placements in each of the 3 markets

Phase 2* – Philadelphia, DC/Baltimore, Denver, Atlanta

Phase 3 – Dallas, Houston, Chicago, Miami

Estimated Time Frame: within 18 months of market launch

Sales Projection: 3,500 SmartRegisterPlacements by the end of 2017

• 200 Placements in each of the 3 markets

Estimated Time Frame: within 18 months of market launch• 200 Placements in each of the 3 markets

* Phases 1 and 2 Market Rollout in conjunction with deal established with Korean American Grocers Association

Page 11: ITM Solutions Business Plan - Q1 2015

Capital Raise and Use of Proceeds

ITM Solutions Series A Capital Raise for Q1 2015 : $5.5 million

ITM Solutions Series A Funding Use of Proceeds Overview

Phase 1 Market Launch: 200 placements each in NYC / LA / Seattle $2,160,000

Phase 2 Market Launch: 200 placements each in Philly / DC / Atlanta / Denver $2,880,000

POS Software and Media Platform Development / Intellectual Property Assets $300,000

Marketing, Sales Collateral, and Promotions $160,000

Total Capital Deployment (staged) $5,500,000

Proprietary Software Platform

$5.5 Million

Page 12: ITM Solutions Business Plan - Q1 2015

Intellectual Property • Product DevelopmentNext-generation ITM POS System •Scope of Work

Core POS Offering• Scan/Sales• SKU database 10m+ SKUs• Promotions/Discounts/Volume • Inventory Management • Sales/Profit Reporting

Ad/Media Manager • Loop content builder • Deployment Manager • Trigger logic• Call to action (Text, 800#, email)

Integrations• Top Up / ILD (PPN, T-cetra, Epay)• Bill Pay (T-cetra, Precash)• Merchant Processing (MBS, Tsys)• Money Transfer (Moneygram, W/U)• Data Mining • Coupon Management • Card Issue / Load (prepaid Visa/M-Card)• Identify Verification (Experian)

Hardware• Windows / Integrated solution• Tablet / Android / Mobile

Mobile App• Customer account management • Alerts/Promotions• Opt-in• Beacon triggers • Online Marketplace (pay@ITM)• Location mapping

Data Analytics• Common pairing analysis• Detailed reporting• Data Mart for ‘slice and dice’ analysis,

drill down, pivot• Recommended triggers• Behavioral patterns

SmartRegister

ITM Payment and Services Ecosystem

Page 13: ITM Solutions Business Plan - Q1 2015

ITM Solutions Marketing Plan

The newly-redesigned website at www.itmrevolution.comincorporates the latest in responsive design to best highlight the ITM Solutions product offerings and company profile for all key stakeholders, on all devices, and across our 3 primary target audience segments:

1) Retail Merchants2) Digital Neighborhood Advertising Clients3) Distribution Partners

The redeveloped and enhanced ITM website is fully optimized to leverage the latest research in web analytics, heat mapping, consumer behavior analytics, conversions optimization, and search engine optimization to offer maximum value for site visitors and monetization potential for the ITM organization.

Web Campaign

Print CampaignCurrently, there are 3 primary sales collateral assets which highlightthe ITM Solutions key product offerings:• Smarter Advertising for the Digital Age• ITM SmartRegister: The Cash Register That Pays You• ITM Digital Media Solutions Rate Plan, including both

Neighborhood and Enterprise-level offerings

Page 14: ITM Solutions Business Plan - Q1 2015

ITM Solutions Marketing Plan

Two initial promotional videos were produced by ITM Solutions to tell our story to both the merchant and neighborhood advertiser audiences. These videos are fully optimized on the ITM YouTube channel to drive incremental site traffic, brand awareness, and lead generation, and are available as resources in both English and Spanish. Click on either (English) video below to launch on YouTube:

Video Campaign

Online Marketing CampaignTo complement the more traditional elements of our Marketing Plan, ITM utilizes the latest techniques in Search Engine Optimization, PPC Advertising, Web Analytics, and Social Media Marketing to fully engage with our customer base and target audiences, and to drive incremental, qualified traffic to the ITM website. This form of highly-targeted, digital marketing produces a very engaged audience which is systematically led through the process of brand awareness, brand engagement, and lead generation.

Page 15: ITM Solutions Business Plan - Q1 2015

ITM Solutions Operational Plan

ITM has streamlined the sales operation process and utilizes the latest in digital signature technology to ensure maximum security and efficiency in executing strategic partner agreements, for both distributors and merchants. Customer sign-up processes which previously required significant organizational resources in obtaining all necessary paperwork can now be executed in minutes through fully-customizable online signature platforms.

ITM’s electronic forms processing systems fully integrate user-friendly online web forms with the latest in validated digital signature technology…assuring 100% quality control and accuracy of legal agreements, as well as ensuring customer satisfaction and ease of doing business with ITM Solutions.

ITM has developed a multi-tiered customer support strategy and infrastructure. Authorized SmartRegister Merchants are serviced and supported at the sales territory level by their local ITM Authorized Distributor or Representative, as well as by the internal ITM staff, which is backstopped by technology partner DSmart on technical hardware or software issues. ITM also plans to offer multi-lingual (English/Spanish/Arabic) support out of our San Diego office to provide merchants a central support hotline.

Page 16: ITM Solutions Business Plan - Q1 2015

ITM Products Roadmap and Technology Overview

ITM Product Enhancements and Research & Development focus on 3 primary elements to expand the breadth and depth of the ITM SmartRegister offering:

1) ServicesAdding new products and services onto the SmartRegister increases both revenues and customer loyalty for the ITM organization, as well as for ITM authorized merchants and distribution partners. ITM is continuously looking to expand its library of products and services offered at the point of sale, capturing more of the average consumer spend. New services to be added soon include virtual gift cards, money transfer, check cashing and other value-added offerings.

2) Functionality Enhancing functionality across devices and platforms expands and accelerates adoption of the ITM solution within our target markets and provides additional touch points with customers and retailers. Major initiatives include:• Mobile Application - Allowing consumers to opt in for promotions and manage their finances

from their smart phone and expedite transactions at the point of sale• Media Manager – A sophisticated tool to enable easy creation and deployment of digital

media and advertisements, including the ability to manage ads at the network or screen level• Beacon Interaction – Customers who opt in for ITM services are ideal candidates to receive

real-time promotions, announcements and information when they are the vicinity of an ITM SmartRegister. Bluetooth LE technology provides an innovative and effective way of notifying the consumer that a promotion or offer is available at a mall or retailer nearby.

Page 17: ITM Solutions Business Plan - Q1 2015

ITM Products Roadmap and Technology Overview

2) Functionality (cont.)Data Mining - Consumer purchase behavior data, when mined and analyzed using advanced modeling techniques is a valuable asset for ITM. This creates Business Intelligence which is highly sought after by Consumer Packaged Goods (CPG) companies, as it identifies key spending patterns that can be used to increase product sales and to optimize marketing and advertising programs for these CPG firms. This data can be packaged and sold to syndicated data firms or CPG companies such as AC Nielsen, MSA, P&G and other similar organizations.

3) PlatformExpanding and enhancing the platforms available for the ITM POS, Digital Media, and Data Solutions allows the organization to expand our geographical footprint, brand awareness, and customer reach. Development of cross-platform technology allows ITM to create custom applications to address specific markets and opportunities. These include:

• Mobile and portable POS systems• Multi-platform terminals• Tablets and other cost-effective deployments• Integrated, all-in-one POS hardware• Chain-retail and enterprise-level POS systems• Gasoline Management Systems

Page 18: ITM Solutions Business Plan - Q1 2015

ITM Products Roadmap and Technology Overview

1.5 2.0 2.5

Services # 1

U.S. Bill PayInsuranceMoney Transfer

Services # 2

V Gift CardProduct PurchasePay@ITM

Services # 3

Check CashingMicro LoansServices

Functionality #1

SMS Thank youSMS MarketingCommissions

Functionality #2

CouponsMedia ManagerBeacon interaction

Functionality #3

Mobile AnalyticsPredictive Sales

Functionality

Platform #1

Integrated PC/TSAll-in-One POS

Platform #2

AndroidTablet Platform

Platform #3

Multi-PlatformMobile, Portable

Development

Page 19: ITM Solutions Business Plan - Q1 2015

ITM Solutions Management Team

Sean Simon • Chief Executive Officer

• 13 years of wireless experience including various leadership roles in corporate T-Mobile and U.S. Cellular

• As CEO, helped grow Rush Star Wireless into one of the nation's leading and most trusted wireless master distributors

• Strong understanding of wireless prepaid segment including time spent working on developing T-Mobile's M4G program

• Strong understanding of retail growth and franchising models

Matt Simon • VP of Marketing

• 15+ Years in Marketing, Sales, and Business Development • Founder of Sequoia Consulting, specializing in Online Marketing,

Website Design, PPC Advertising, Copywriting, Branding and Messaging, Search Engine Optimization, Conversions Management, Marketing Strategy and Web Analytics

• Broad-based proficiency across the Marketing spectrum• Consistently delivers ROI of 300% or more for B2B/B2C clients in

wireless, legal, automotive, technology, advertising, real estate• Former Director of Online Marketing, Rush Star Wireless • Former VP of Marketing and Business Development for Any Car

Any City, a startup providing web-based car buying services

Stephen Combe • Chief Technology Officer

• 20 Years in global technology, wireless, retail solutions. Built POS networks In US, Mexico, LATAM and Europe to over 50,000 locations.

• Pioneered development of GPRS terminals, tablet POS and self service kiosk solutions.

• Previous senior roles at Oracle Corp, Computer Sciences Corp deploying many of the world’s digital mobile telephony networks.

Oscar Peralta • President

• 19+ Years in the Telecommunications and Prepaid Wireless industry, vast experience in building organizations in USA, LATAM with primary focus on the Hispanic market.

• Founder of GPC Networks in Mexico, which offers Prepaid Bill Payments, Gift Cards, Calling Cards, Wireless Top Up to the largest retail chains and distributors on a nationwide level.

• GPC Networks currently offers all these products to thousands of retailers via online POS and Mobile applications.

Page 20: ITM Solutions Business Plan - Q1 2015

ITM Solutions Management Team

Nick Simon • Funding Partner / Board Member

• Managing Director of Bay Area Venture Capital firm ClarusVentures since the firm’s inception in 2005

• Prior to Clarus, General Partner at MPM Capital, a healthcare venture capital firm

• Over 20 years of operating and investment experience in the biopharmaceutical industry

• Served as Vice President of Business and Corporate Development at Genentech from 1989 to 2000

• BS degree in microbiology from the University of Maryland MBA from Loyola University

• Chairman of the Board of Sientra, represents Clarus on the Board

• Serves on the Board of Directors of QuatRx Pharmaceuticals Company and on the Foundation Board at the Gladstone

Institute

Sheldon Korlin • General Counsel

• 20+ years in corporate and environmental law• Secretary & General Counsel, John Beal Incorporated, June

2007 – March 2014• Oversaw and implemented corporate compliance, contracting,

employment, benefits, risk management, safety training and compliance and litigation functions.

• Negotiated, oversaw the due diligence investigation and documented the formation and acquisition of companies and new services to fuel the growth of the holdings.

• J.D., University of Missouri-Columbia School of Law 1984• B.A. Political Science, University of Missouri-Columbia, 1981

Page 21: ITM Solutions Business Plan - Q1 2015

ITM Investor Value Proposition and Summary

The true enterprise value of ITM Solutions extends beyond the revenue and profit generated from itscustom POS solution and services network. While ITM’s revenue and EBITDA projections alone tell a compelling story…the complete ITM Solutions offering, which combines advanced POS technology, financial services and bill payment platforms, digital advertising delivered at the point of sale, and marketable aggregated consumer data, presents a highly unique value proposition for all shareholders.

ITM is building a very robust nationwide network of retail and distribution partners, reinforced by long-term agreements and the corresponding low customer attrition rates, which underpin the sustainability of ITM revenues and profits. As such, the ITM offering is truly one-of-a-kind in the marketplace, and there exists a high barrier of entry to competitors due to the strong channel partner relationships which ITM has established, and the multi-dimensional nature of the complete retail solution which ITM delivers.

The $5.5 million in Series A funding that ITM is currently seeking will enable the organization to achieve a critical mass of 1,400 SmartRegisterplacements in the top 7 strategic U.S. markets, thus substantially increasing the marketability and monetization potential of ITM’s digital advertising and aggregated consumer data products. Early shareholders who are able to participate in this exponential growth of ITM Solutions’ revenues are expected to be in an extremely favorable position to achieve a very substantial return on capital.