Mod Viz Angels Forum 050103

ModViz, Inc.The new leader in industrial visualization.

Dr. Robert Jacobson, CEOMr. Thomas Ruge, CTO

Ms. Shing Pan, VP MarketingAnd Business Development

[email protected]

2

What ModViz Does

• We serve industry’s need for affordable visualization of complex computer data used for critical business processes.

• Our software products turn simple PCs into powerhouse visualization systems.

• Visualization systems built with our software products are robust, portable, highly scalable, and inexpensive.

• With our business partner HP, we’re going to market now.

3

Our Mission

To become the leading vendor of softwarefor affordable high-performance, real-time,

industrial visualization.

4

ThomasRugeCo-FounderCTO

• Inventor of Renderizer software, patent co-author• Co-founder, Siemens Visualization Software Division• Siemens Virtual Reality Competence Center• MS, BS, Physics, Technical University in Munich•20 years of technology, product development experience

Dr. RobertJacobsonCo-FounderCEO

Yixin (Shing)PanCo-FounderVP, Marketing &BusinessDev.

• Entrepreneur, Researcher, Virtual Reality Pioneer• Worldesign Inc., HIT Lab, SRI Consulting• Ph.D., Urban Design UCLA; MA, Comm Industry Mgmt. USC• 25 years experience, online communications and virtual reality

• Senior Marketing Manager, SGI: “Intrapreneur” responsible for PC-cluster business; strategist responsible for corporate manufacturing market strategy• MBA, Cornell ; MS, Mech.Eng., Northern Illinois•14 years product marketing, business development experience

Who We Are: Core Management

• Software Development Manager, Discreet/AutoDesk• Co-Founder, VP Platform Technology, Intervista/Platinum• Founder of VRML Society, SIGGRAPH Events Organizer• MS, BS, Computer Science, Central Florida• 17 years software development and virtual reality experience

Brian BlauVP Engineering

5

Converging Trends Createan Historic Business Opportunity

TheModViz

Opportunity

Visualization’swidespread usewithin industry

PC technologyimprovements

IT usersincreasingly

are direct buyers

Displaytechnology

improvements

Utility andgrid computingdevelopments

Open systems’maturity

6

Visualization is Enterprise-wide

Product Development

Manufacturing Marketing Sales Distribution& Support

Digital Sales & Marketing

Digital Training & Simulation

After-Sales Service& MaintainabilityStudies

Functional Simulation,PerformanceEvaluation

CAE Visualization

Conceptual Modeling,Styling, Industry Design

Design Review,Ergonomics

Motion Simulation,Kinematics

Assembly Review

Factory Planning,Robotics, AEC, QA

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The Problem We Solve: We MakeIndustrial Visualization Affordable

The conventional solution: $500,000-$2,500,000+.

Proprietary. Hard-wired. Centralized.Tough to upgrade.

For most would-be users:Unaffordable and inaccessible.

High-end visualizationeverywhere it’s needed.

The Viz Cluster Alternative:

$30,000-$100,000+.Open. Scalable. Portable.

Easy to upgrade.Better performance.

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HIGH-END

1010%%$2.2B$2.2B

CONSUMER

46%46%$10.3B$10.3B

MID-RANGE

4444%%$9.8B$9.8B

Small BusinessesProfessional Offices

Individual Users$2K-$50K

Mid-Range CompaniesEducational InstitutionsLocal Public Agencies

$50K-$500K per system

Military & Government R&DFortune 500 Companies

$500K-$50M+ per system

Total Visualization Market:$22B+*

Replacement Expansion Universal

* Sources: Peddie & Associates 2001Frost & Sullivan, 2001,IDC 2001, Giga 2002(includes hardware, software, and displays)

ModViz’s$5B+Market

Opportunity

Unserved

Unserved

Underserved

The Addressable MarketFor Cluster-Based Visualization

Target IndustrialMarkets

(in order of priority*)

1.Oil & Gas2.Manufacturing3.Life Sciences4.Entertainment5.AEC (Architecture/ Engineering/ Construction)

• Based on importance of visualization to industry and industry’s current ability to buy.

Immediate Target Markets:Oil & Gas, Manufacturing = $2.7B

Concept DesignCAD/CAE

Virtual PrototypingSharing Information

With Suppliers

Geo-Analysis, Interpretation,And Well Location

Reservoir ManagementFacilities Planningand Management

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Our Technology and IP StrategyOur technology, the result of three years of labor and $3M investment, is protected…

-------------------------------------------------------------------------------------------United States Patent Application 20020002587Kind Code A1Kecik , Yalin Ahmet ; Ruge, Thomas; et al. January 3, 2002-------------------------------------------------------------------------------------------

Method and Arrangement for Determining Current Projection Data for a Projection of aSpatially Variable Area

Abstract

In a method and the arrangement for determining projection data for a projection of aspatially variable area, change data are determined in a first computing unit, where thechange data describe a change in the spatially variable area from a starting state to anend state. The change data are transmitted to a second computing unit and to a thirdcomputing unit, which are each connected to the first computing unit. First currentprojection data for a first projection of the spatially variable area are determined in thesecond computing unit using the change data and first previously stored projection data.Second current projection data for a second projection of the spatially variable area aredetermined in the third computing unit using the change data and second previouslystored projection data.------------------------------------------------------------------------------------------------------------Inventors: Kecik , Yalin Ahmet; ( Muenchen, DE) ; Ruge , Thomas; ( Muenchen,DE) ; Wiedemann , Claus Peter; ( Ottobrunn, DE)

Correspondence Name and Address: Schiff Hardin & Waite Mark Bergner 6600 Sears Tower Chicago Illinois 60606 US [email protected] (312)258-5779 (312)258-5700

Assignee Name and Address: Siemens AktiengesellschaftWittelsbacherplatz 2Muenchen80333Serial No.: 652671Series Code: 09Filed: August 31, 2000

…And four provisional patentsin process will further protectour unique technology:

Patent 1: Distribution of SceneGraph Among Multiple RenderingProcessors

Patent 2: Dynamic LoadBalancing Among MultipleRendering Processors

Patent 3: Dynamic Reallocationof Multiple Processors forRendering

Patent 4: Weighted Allocation ofComputational Tasks AmongMultiple Processors

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Our Technology

Synchronization of 3D data across a cluster in real-timeProprietary network protocol (patent pending in Europe, America andAsia)

Seamless migration of existing applicationsIntegration of existing 3D-API's (OpenGL Performer, Open Inventor) andsupport of OpenGL

Support of high-performance display systemsSupport of high-resolution single-screens, curved screens, CAVE's, anddisplays with edge-blending systems. Display configurationindependent of application by ASCII file

Unlimited Linear ScalabilityImage compositor enables huge datasets (>2 GB)

Desktop/Team Room

ModViz-ManagedVisualization Cluster

Master PC User interacts

with application here.

…

Nodes in Viz Cluster(w/ or w/o Image Compositor)

1 2 3 N

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• Turns common PCs into powerful visualization clusters, harnessing the power of multiple PCs and graphics processors

• Generates real-time graphics that equal or exceed anything available today -- at a fraction of the cost

• Synchronizes and optimizes multiple PCs’ rendering processes, in real-time, for an exceptional visual experience

• Is highly scalable and enables fail-safe operation

• Can transition to a grid-computing environment

Our Product: Renderizer™Software, Version 3.0

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We Make It Easy for Industrial Applications to Run on Viz Clusters

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Our Product Roadmap

Scalable PC-basedvisualization

for multi-channeldisplays

Scalable PC-basedvisualization

For single-screendisplays

Combined computationand visualization cluster

Utility and gridvisualizationUbiquity

2003 2004 2005 2006 2007

Universal productfor use with any

visualizationapplication

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Competitive Matrix

IndustrialStrength

EmbeddedApplications(Landmark,

Dassault, A/W)

Open-SourceProjects

(Chromium,OpenGS, etc.)

VisualizationSystems

(ORAD, CAE,Quantum3D)

GraphicsSupercomputers

(SGI, E&S, Custom)

MODVIZRENDERIZER™

MobileLowCost

OpenSystemScalableProduct

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Channel Sales Strategy

Sequence

PCHardware

Manufacturers

IndependentSoftwareVendors

Value-AddedResellers

MODVIZ

EndUsers

2

3

4

1

GridComputingUtility

Product FlowRevenue Stream

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Partners and Customers

Partners

Hewlett-PackardMechDyne/Fakespace

TGS

Pilot Customers

EADS (Eurocopter)Siemens Medical

Siemens Transportation3d Pixel

Prospective Customers(Shing Pan)

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Current Pre-Sale Projects, 1

Joint Proposals inProcess

• Shell• Chevron/Texaco• BP• University of Utah

O&G ISVs TestingRenderizer

• Shell (in-house application)• Schlumberger• Paradigm Geophysical• Seismic Micro-Technology• Staag Imaging

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Current Pre-Sale Projects, 2

IntegratorsEvaluatingRenderizer

• Nissho Electronics (Japan)• OFC plc (UK)• IVSL Ltd. (Singapore)• Holographic Imaging (Detroit)• VR Solutions Ltd (Australia)

End-User CustomersEvaluatingRenderizer

• Petrobras• TotalFinaElf• Lockheed Martin• Toyota• Brookhaven National Laboratory

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Leading ISV, Oil & Gas Industry: “ModViz’s Renderizer softwareoffers a lower cost solution for intensive graphics applications.This technology is extremely important to our clients. Itmaximizes our applications’ potential in an industry where ROIis crucial.”

Chief Engineer, Automotive Manufacturer: “We areencouraged with the potential of Renderizer to eliminateseveral steps in our current process that require multipleiteration of fiberglass and clay models. We have developed arequest for a supplemental funding to acquire Renderizer.”

Emerging Technology Director, Hewlett-Packard: “Renderizeris a cornerstone of our cluster management products.”

Fakespace CEO: ”The partnership between ModViz andFakespace takes immersive visualization one step further. Itenables both companies to offer highest quality turn-keysolutions."

Testimonials

Go-to-Market Strategy

1. Build Brand Recognition as…

• The de facto software platform for low-cost, scalable, real-time, high-performance visualization.

• The leader in distributed visualization software.

2. Execute Push-Pull Strategy with channel and technology partners, and via programs and promotions directed at end-users.

3. Create Market Awareness and Demand with our own and our partners’ coordinated marketing programs.

Sales Strategy1. Partner with software and hardware vendors (ISVs

and IHVs), integrators, and value-added resellers(VARs) to quickly penetrate key markets.

2. Integrate our products with our channel partners’ software and hardware products and system

solutions, to sell into the verticals they command.

3. Our partners are our customers. Their customersare our end-users.

4. Evangelize among end-users and with application developers.

5. Become a resource for end-users seeking advice.

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Revenue Model

1

SW Apps

HW Sepia

Support/Main

Services

SWPartners

59%

HWPartners

25%

Support& Main

15%

Service1%

Margins Software 86-89% Support 50%

Pricing

Starting 2003 Starting 2003 Starting 2004 Starting 2005 Starting 2006Manufacturing Oil&Gas Medical&Science Entertainment Construction

Vertical Application Market Size $1.75 Billion $1.6 Billion $1 Billion $3 Billion $500 MillionASP of Applications $12,500 $40,000 $35,000 $4,500 $10,000Total Addressable # of Seats 140,000 40,000 28,571 666,667 50,000ModViz % of Install Seats 5% in 5 years 5% in 5 years 5% in 5 years 5% in 5 years 5% in 5 yearsAverage ModViz Royalty per Application Seat $4,500 $9,000 $4,500 $900 $1,800ASP of ModViz SDK $25,000 $50,000 $35,000 $15,000 $10,000Support & Maintenance 15% 15% 15% 15% 15%

Royalty = 15-25% of Application Offering Price

18-Month Sales Projection

Bottom Up Sales Projection for 18 months 2003 2004Manufacturing

SDK @$25K 0 4Parallelation Service @$120K/Unit 1 2

# of Install Seats 0 96ModViz Royalty Per Seat $4,500 $4,500

Support & Maintenance @15% $0 $64,969Sub-Total $120,000 $838,094

Oil & GasSDK @$50K 0 4

Parallelation Service @ $120K/Unit 1 2# of Install Seats 10 150

ModViz Royalty Per Seat $9,000 $9,000Support & Maintenance @15% $13,500 $202,500

Sub-Total $223,500 $1,992,500Hardware

# of nodes 24 928Price Per Node $3,000 $3,000

Equivalent # of customers @ 8 node cluster 3 116Support & Maintenance @15% $10,800 $417,600

Sub-Total $82,800 $3,201,600Total $426,300 $6,032,194

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Revenue Expectationsby Product Line

-

20

40

60

80

100

120

2003 2004 2005 2006 2007

Year

$Millions Support and Maintenance

OEM (with Hardware Partners)

Application Per-Seat Royalties

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Revenue and Income Statement,2003-2007

2003E 2004E 2005E 2006E 2007E

Revenues

Hardware Partners 82,800 3,201,600 14,262,300 24,950,400 31,160,400 Software Partners 343,500 3,163,004 17,298,313 43,651,045 75,960,089

Total Revenue 426,300 6,364,604 31,560,613 68,601,445 107,120,489

Cost of Revs 48,030 748,269 3,969,886 9,018,634 14,532,228

Gross Margin 378,270 5,616,335 27,590,726 59,582,811 92,588,262

% of revenue 89% 88% 87% 87% 86%

Operating Expenses

G&A 610,731 945,403 1,835,445 2,509,094 3,256,593

% of revenue 143% 15% 6% 4% 3%

S&M 815,183 3,241,021 5,984,792 10,758,880 15,922,267

% of revenue 191% 51% 19% 16% 15%

R&D 1,314,454 3,076,689 5,068,330 7,240,609 11,018,463

% of revenue 308% 48% 16% 11% 10%

Total Op Exp 2,740,369 7,263,113 12,888,567 20,508,582 30,197,324

Operating Income (2,362,099) (1,646,777) 14,702,160 39,074,229 62,390,938

Interest - - - - -

Net income before taxes (2,362,099) (1,646,777) 14,702,160 39,074,229 62,390,938

Taxes 40% - - (5,880,864) (15,629,691) (24,956,375)

Net income (2,362,099) (1,646,777) 8,821,296 23,444,537 37,434,563

% of revenue -554% -26% 28% 34% 35%

Projected Revenues and Net Income

Annual Projections

(20.00)

-

20.00

40.00

60.00

80.00

100.00

120.00

2003 2004 2005 2006 2007

Year

$M

illi

on

s

Revenues

Net Income

Wildcard Revenue Accelerators

• Popularity of high-endholography

• Pace of utility and gridcomputing environments

• Improvements in displays

• Greater visual literacyamong industrialcomputer users acrossthe board

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ModViz’s First Year

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep2002 2003

Funding/IP Transferfrom Siemens

O&G ApplicationIntegrations

Hire VPHire VPEngineeringEngineering

Hire SeniorHire SeniorDeveloperDeveloper

HP SepiaPrototype

IA-64Ports

Co-founders/Co-founders/ExecutivesExecutives

Renderizer forPerformer-Plus

Renderizerfor Windows

InstitutionalFunding

Seed RoundInvestment

Legacy Siemens’Customers

Hire Developer,Hire Developer,Systems Engineer,Systems Engineer,Biz Dev DirectorBiz Dev Director

Recruit & HireRecruit & HireFirst-Year StaffFirst-Year Staff

CompanyFormation

Product & MarketDevelopment, Phase 1

Fundraising CompanyBuilding

Product & MarketDevelopment, Phase 2

Renderizer forOpen Inventor

SeismicMicro-TechChannel Deal

File NewIP Apps

HP SalesHP Tests

Begin OpenGlUniversal Product

Houston OilIndustryDemos I & II

Houston OilIndustry Demo III

Other ISVDeals

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ModViz: A Short History ofRemarkable Accomplishment

1. ModViz incorporated in October2002

2. Headquarters located in SanMateo, CA

3. Currently, a team of nine

4. Several existing customers, withmore pending

5. Patent-protected product,Renderizer, is in Version 3.0

6. Renderizer demonstrated atDaratech CAD Summit, SIGGRAPH,SEG, Supercomputing, I/ITSEC,and Digital Energy conferences;more events scheduled for 2003

7. New products ready for releasein April and May 2003 includingWindows version of Renderizer

8. IP formally transferred fromSiemens to ModViz, receivedinvestment from Siemens

9. New IP (four provisional patents)in process

10. Projects in the pipeline withprospective customers

11. Key partnerships with IT industryleaders (including HP)

12. Receiving revenues from HP andcustomers

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Hiring Projections

721

29 34 3917

23

30

3740

6

8

11

1212

-

10

20

30

40

50

60

70

80

90

100

2003 2004 2005 2006 2007

Year

$Millions

General & Administrative

Research & Development

Sales and Marketing

VC Interest is High

Azure CapitalBattery VenturesIgnition (Seattle)Kleiner PerkinsMobius Venture

SofinnovaHP Investments

Shell Technology VenturesSiemens Ventures

Our Funding Requirementsand Exit Strategy

• Angel Forum capital takes us through institutional financing in Q3-4 2003

• $2-3M in institutional financing powers company to profitability in Q4 2004

• M&A in three to five years with one of our channel partners

• Consistent value gains for our company generate wealth for our shareholders