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EDSR INFORMATION 07-12-1999 DARTMOUTH Business Partners, LLC Turnkey management&performance improvement consulting 411) June 18, 1999 Mr. Paul Steinman Economic Development of Elk River 13065 Orono Parkway PO Box 490 Elk River, MN 55330 Dear Paul: The rent check for June is included with this letter along with the April financial statements. You will note from the financial statements that we have had little commercial activity year-to-date; however, we have completed all of the marketing tools that are included in our plan and are ready to implement a targeted marketing effort. We believe we have located a modest amount of additional funding to at least test the concepts that we • described at the review meeting last month. As we mentioned in the review meeting, we have entered into a call center and fulfillment agreement with a Brooklyn Park company to handle all of the order processing and shipping activities. Alltool Manufacturing in Elk River will be manufacturing, assembling and packaging the StepMateTM product and sending it to the fulfillment center. Therefore, it appears that we will not be needing the incubator space and would like to begin discussions to vacate the property as soon as possible. Nearly everything has been removed from the facility. We believe that we will meet the spirit of the agreement with the various development groups through the relationship with Alltool. Please give me a call at your convenience at 474-5332 to discuss this further. Best regards, Stephen C.Martin CC: Nick Stockwell attachments • 15500 Wayzata Boulevard • Suite 1018 • Wayzata, MN 55391 • 612-249-0210 • Fax 612-249-0250 S ENHANCED LIVING TECHNOLOGIES 05/26/99 Balance Sheet As of April 30,1999 • Apr 30, '99 ASSETS Current Assets Checking/Savings 110 • Park National- checking 18 111 • Riverside Bank checking 2,360 Total Checking/Savings 2,379 Accounts Receivable 117 • Accounts Receivable 1,525 Total Accounts Receivable 1,525 Other Current Assets 118 • Inventory 3,954 120 • Prepaid Expenses 4,807 Total Other Current Assets 8,761 Total Current Assets 12,665 Fixed Assets Prototype and Tooling 130 • Prototype and Tooling 10,264 135 • Accum. Depreciation (6,865) Total Prototype and Tooling 3,399 Total Fixed Assets 3,399 Other Assets 140 • Patent & Trademark Costs 17,648 142 • Development & Start Up C... 21,045 145 Organizational Costs 5,892 147 • Accumulated Amortization (20,470) 150 • Deposits 130 Total Other Assets 24,246 TOTAL ASSETS 40,309 • F F . ENHANCED LIVING TECHNOLOGIES 05/26/99 Balance Sheet As of April 30,1999 Apr 30, '99 LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 203 • Accounts Payable 72,619 Total Accounts Payable 72,619 Other Current Liabilities 200 • Loans Payable 75,000 201 • Line of Credit- Riversi... 77,500 202 • Accrued Interest 17,240 204 • Promissory Notes 26,583 205 • Accounts Payable- Ma... 28,895 210 •Accounts Payable-Pro... 25,888 Total Other Current Liabilities 251,107 • Total Current Liabilities 323,726 Total Liabilities 323,726 Equity 300 • Capital Stock 19,327 305 • Additional Paid-In Capital 319,169 310 • Accumulated Earnings/(De... (535,935) Net Income (85,978) Total Equity (283,417) TOTAL LIABILITIES & EQUITY 40,309 • Page 2 ENHANCED LIVING TECHNOLOGIES •05/26/99 Profit and Loss January through April 1999 • Jan - Apr '99 Ordinary Income/Expense Income 400 • Sales 401 • Wholesale 3,065 403 • Retail 590 Total 400 • Sales 3,655 Total Income 3,655 Cost of Goods Sold 500 • Cost of Goods Sold 501 •Product Cost 2,076 502 • Assembly & Shipping Labor 245 505 • Freight and Delivery 213 510 • Distribution Expense 860 Total 500 • Cost of Goods Sold 3,394 • Total COGS 3,394 Gross Profit 261 Expense 605 • Dartmouth Fees 26,668 611 • Payroll Taxes 179 618 • Liability Insurance 4,418 635 • Bank Service Charges 110 636 • Printing an Reproduction 10 637 • Repair& Miintenance 133 640 • Legal Fees 1,086 650 • Tax & Accounting 258 660 • Automobile Expense 448 662 • Office Supplies 233 663 • Telephone 32 664 • Postage and Delivery 39 665 • Depreciation Expense 523 667 • Amortization Expense 2,060 668 • Entertainment 28 669 • Rent 5,499 • 671 • Meals 70 ENHANCED LIVING TECHNOLOGIES •05/26/99 Profit and Loss January through April 1999 Jan - Apr '99 675 • Video Production 21,870 676 •Website Development & Mtce. 15,170 677 • Marketing Materials 2,113 Total Expense 80,945 Net Ordinary Income (80,684) Other Income/Expense Other Expense 701 • Interest Expense 5,247 705 • Taxes 47 Total Other Expense 5,294 Net Other Income (5,294) Net Income (85,978) •• Page 2 PAGE 8•STAR TRIBUNE•JUNE 1999 TECE r4 T f C • 4 Fledgling entrepreneurs continue to seek out = incubators as places to get their businesses off the ground.The hoped-for result is a sharing of �I � ' Yr'�:` r !N rii 4 T.mi technical and operations expertise. `". t Of/1 k t k, s 4.i„ r y ,qy Ad i �',h 'r.., 4 h N �1k, "1 • e i, v.,, Irr.0 aj4a S-i=` a ! = r.[''_ -,`.r `s :4'h �,y ot( i''''''' 144: 0 0 _Lai .„,.......Welatke.,,,,, i.. ;4,,,,,,,,:ii::' e x "mr" " h�� }" ,4 1215' t-F..p 4,":11/4,404""► ..p ' s -Sa o f F y s , " — x i£ )r._ . C,.'144 "{i � ` ..,„,1,71: ti<,. ' �> R>', L.. L u,i; F i `i: � r> s '-''''.'g' oft fb 4, Pi 10 "' • ,, �;, Star Tribune photos by Tracking Technologies; Duane Braley Entrepreneurs operating out of the Genesis Business Center,some with samples of their products,include,clockwise from left:Byron L Gilman, SurVlvai.Jnk;Brian BSlnykln Convey LLC;William Sweatt,SavvyNet inc;Todd Westerbeckt, ,First Circle;James Grabek,Comedicus;Roger Jensen, Anoka Sherburne Capital Fund•Paul Ashman,Med Link Medical;(row two):Dan HunEJ.Simon,Simon Industries Inc.;Ran' Ion Jacobs,Genesis;Lie Hur,Centuple Communications;Jerry Cued,NT International;and Ted Kelly,First Circle Medical. YrOlul NNE 1999•STAR TRIBUNE•PAGE 9 LOGY `e C 4 HD-1 e.4 '�,� ' t` 'x xs" &.,,,e - - t • {• .y; '',.....7:-..401,-. t �t . i' ROtyVj E �Nol,ibAy a''" 1 a 4 rt fl- • . �� ti - ham'. , i } t.„41...1.0�"t :•,---2.1,-..,1t:t 3-',�,,' 1; 4; ate' q� yJy pp1✓✓X ,...::,....-!:=4,„,•.77.., 1 yKy,,: r _ -,•,. ..,,,,,-,,,,c.,-„,..• i,w :,..>:•::,.,,•.•,2.-,,,,,--.,,,:-;.„,.:-.:•.-_ Am Stanley,left,gets help from Mike and Maureen Gill In assembling one of his swimming pool heaters.Stanley's com- pany,SolarAttic,makes and sells heating and ventilating systems and is downstairs from the Gills at the Genesis cen- ter.Their business,Watermark LLC,makes underwater video cameras for use by swimming coaches.They also do , engineering consulting. By Roger Yu rangements. "promote the delivery of value-added services,"she . Star Tribune Staff Writer Ideally,business incubators house a number of said.In the early'80s Campbell worked with one of start-ups in one location—often an office park— the Twin Cities'first incubators and has since writ- , Simon recently attended an to nurture them by"providing hands-on manage- ten numerous articles on the topic. •`a p revening reception hosted by ment assistance,access to financing and orches- Some incubators are not content with a mere li i`.'� n!'= ® those e and Sally Pillsburyin onor s, trated exposure to critical business or technical advisory role and are seeking equity stakes.Jacobs' ': rysupport services,"according to the National Busi- Genesis Business Centers,a for-profit operation,is [. Sheila Sisulu,the South African ness Incubator Association(NBIA). a highly profiled incubator that encourages the ambassador to the United States. Many incubators claim to save entrepreneurs rapid"graduation"of its tenants.About 20 compa- Simon,proprietor of a four-employee software precious cash by offering shared office services,ac- nies have graduated from the program,which is start-up called Simon Industries Inc.,told George cess to equipment,flexible leases and expandable sponsored in part by Anoka Sherbourne County Pillsbury and other guests of the goings-on in the space.In an enclosed space with people of common Capital Fund,a start-up fund run by Anoka County energy industry,leading to a group discussion that interests and goals,the hoped-for result is a sharing Economic Development Partnership.In return for piqued the ambassador's interest. of technical and operations expertise. equity stake,the Genesis start-ups,usually biomed- Simon also boasted a little about his energy "There's something significantly different about ical companies,receive funding access and busi- management software, which includes an ap- the path of each entrepreneur," said Candace ness services from the incubator."We've gotten so plication that monitors valves in nuclear power Campbell,a principal of Minneapolis-based CDC much interest in the past years,"said Roger Jensen, plants.Although he found an eager audience in the Associates,a management consulting firm,and a director of the fund."We probably get two calls a ambassador and a deputy minister,Simon thought former NBIA chairwoman."But[incubator manag- day,about 10 companies a week." little of the discussion when the night ended. ersi have business expertise,and their Rolodex— According to an NBIA study last year,there were i`-i, Two weeks later,an embassy official contacted the contacts—help that business grow.That's what 587 business incubation programs in North Amer- 1 Simon,requesting a meeting on whether Simon's makes incubators effective." ica.Over the last 20 years,business incubators have i-"' firm could help South Africa with its power distribu- created nearly 19,000 companies that are still in tion. Value-added service business,and more important,about 245,000 jobs. ,"•' Simon said he's not sure what,if anything,will In reality,though,many incubators resemble a come of the meeting,but that he has Harlan Jacobs real estate arrangement in which an office park is Twin Cities legacy to thank for it. occupied by tenants with little or nothing in com- The Twin Cities has a rich legacy in the incubator It was Jacobs—a self-described"angel,junior mon,aside from their being entrepreneurs with big movement.Bill Norris,former CEO of Control Data grade"—who passed along the party's invitation to dreams. Corp., championed the cause in the early'80s, Simon. Incubator managers admit there are plenty of becoming one of the first to do so in the region. About a year and a half ago,Simon submitted his skeptics—the bottom-line-oriented business folks The Ceridian Corp.predecessor built one of the :a business plan to the Columbia Heights-based Gen- whose eyes glaze over when they hear terms like first incubators in the Mears Park area in St.Paul esis Business Centers,a start-up"incubator"run by "incubation"and"hatching."The skeptics wonder and even sponsored training programs for incuba- Jacobs.In early February this year,Simon Indus- whether such setups,though ambitious in outlook tor managers.Control Data Business and Technol- tries'became the incubator's fourth tenant. and noble in goal,amount to little more than nurs- ogy Center,as it was called,was considered a model "He's leading me to the water,and I'm taking a eries for start-ups with niche products and poor incubator and drew visitors who intended to repli- big gulp,"Simon said of Jacobs. prospects,They wonder whether the much-touted tate its format. t j Such access is one reason that fledgling entre- business support is no more than secretarial service preneurs continue to look to incubators for inspira- that companies could get elsewhere at negligible INCUBATORS continues on page 10 x" tion,though their effectiveness is debated and few expense. • major successes have arisen from such ar- But Campbell is a believer.Business incubators s. ., . SPAGE •10 STAR TRIBUNE ' _ 1 JG�@`1f♦1 ifCNNDLDGY INCUBATORS from 9 i 'But Control Data's massive re- us any of that intangible stuff.'I get ) organization and a lack of focus eventu- asked the hard questions because we're 1 , ally killed that project,and numerous leasing the space well below the market f incubator projects have come and gone rate.They ask,'How many jobs have since.In Minnesota,NBIA has six mem- you created?'But now is not the time to - bers,many of them run as community ask that question.At some point,that is 1 ' economic development efforts by non- .the question,but not two years into the profit organizations. .::... :.: - project.' - 7 • dUthough most incubators in Min- eanwhile,the Minneapolis Green nesota have good intentions and list job'-•.Institute,a non-profit organization,will creation as their primary goal,few use open a 64,000-square-foot incubator in t4 what advocates say is the ideal model: July—dubbed Phillips Eco-Enterprise similar businesses pursuing similar Center-that will house about a dozen interests _tenants in the energy and environmen- I ) The Elk River model -. t�industries. �ups also look to incubators for ' Take the Elk River Incubator Pro- funding opportunities,though a corn t• • ject,run by the Elk River Economic -pany's incubator status alone by no Development Authority.The two-year-• means guarantees that investors will 4 old project houses four tenants,in a gladly open their checkbooks.Rather, 14,000-square-foot facility,that pursue incubator tenants can tap into modest i seemingly incongruent technologies."funds from a network of small investors. One tenant is developing underwater' The four tenants of the Elk River project { video technology,while another makes have access to a local investment club <y - a-device that makes walking up stairs made up of 21 members each of whom • •easier. ;_. chipped an $5,000, hardly an eye- Paul Steinman,Elk River's director popping amount, but significant for '. economic development and operator of start-ups.-" . .., • - -::,;,. the incubator,says its entrepreneurs' Genesis tenants are eligible.to 1 cohabitation can nonetheless be a re- receive funding from the Anoka Sher- source when done right.Watermark,an bume County Capital Fund,the state's - Elk River tenant,provided engineering Urban Initiative Fund and from its net-- II help to its incubator neighbor SolarAt- work of angel investors. • tic,which was developing an electrical "The idea of incubators is still loosey- ' unit that measures temperature andgoosey,"said CDC Associate's Camp- humidity in attics : bell.."But it's compelling when you Steinman said he even has skeptics at think of it conceptually.The acid test the city's Economic Development has to do with the management,the Authority(EDA),which has spent about quality of services"available to the start- $100.000 on the project."They are ask- ups. 0 ing me all the time about the incuba- tor,"he said."They tell me,'Don't give • - k There were 587 business incubation programs<i 6,,,,:,listed in the National Business Incubator- `Association's'database as of spring 1998.In its ' research on North American incubators,the ` association found that: - Incubators have treated ' ' > 16 percent of all facilities are nearly 19,000 companies still in Joint efforts among government, •'•business,and more than 245,000 nonprofit agencies or private devel- jobs. . opers. > 8 percent of at facilities are > Most Incubator facilities(75 run by investment groups or real percent)occupy less than 40,000 estate development partnerships. - 'square feet the average Is 36,657 square feet. > 5 percent of all facilities are sponsored by a variety of non- >- Incubators served an aver- conventional sources such as arts age of 20 entrepreneurial firms organizations,American Indian tribal each in 1997. governments,church groups,Cham- bers of commerce and port dis- > 51 percent of all facifties are tricts. sponsored by government and non- - j profit organizations,and are primar- > About a quarter of at Incu- ily for economic development. bators are dedicated to technology, and nearlyftalf,43 percent,are for >.27 percent of at facilities are mixed use. affiliated with universities and col- leges. \% - ii it.lky of ,/ River June 21, 1999 Craig Howse Fest& Howse, PA 360 Brookdale Corporate Center 6300 Shingle Creek Parkway East Brooklyn Center, MN 55430 Re: Leroy& Ruth Brown Property- Your File #C1820-01 Dear Craig: The purpose of this letter is to inform you that we have received word from the County • Assessor's Office regarding whether continued farming of the Brown Property, after EDA ownership, will affect our exemption from payment of property taxes on the property. John Cullen, from the Sherburne County Assessor's Office, has indicated that farming the property will not affect the EDA's exemption from property taxes on the property. However, it is my understanding from conversations with Mr. Cullen that if the EDA were to execute a lease agreement, such agreement may mean that a portion of property taxes may be due based upon such lease. The EDA has no intention of executing a lease. We will allow the property to be farmed for the remainder of 1999, and then subsequently to disallow any future farming of the property. My conversations with Terry Maurer, Elk River City Engineer,have indicated that there may be very little left to farm upon completion of the various public improvements on the Brown's property. It would be wise to pass this information on to Mr. Houlsum so that there is no misunderstanding on this issue. The city will not restrict its contractor to protect the current crop for its future harvesting. • 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • TDD & Phone: (612)441-7420 • Fax: (612)441-7425 If you have any questions or concerns,please feel free to contact me prior to closing at • 612-441-4905. Sing- - , diAlogPo' Paul T. Steinman Director of Economic Development cc: Pat Klaers, City Administrator John Cullen, Sherburne County Assessor's Office, via fax at 241-2995 The Economic Development Authority f:\shrdoc\eda\brwn6-21.doc • • - g,4.4e-----A-91- • (c 9 c1 • pM t. \BJbt je f `{i y ,._..T - - - is$ The City of Elk River Congratulates Metal Craft fverstde AlMachine&Engineering Machine&Engineering.ln, on their continued growth in a newly expanded facility. City of ElkRiver Paul I Steinman,Director of Economic Development 13065 Orono Parkway,Elk River,MN 55330 (612)441-7420•Fax:(612)441-7425 •devdirector@ci.elk-river.mn.us • • June 11, 1999 . INITIATIVE Sandra Peine,City Clerk FO U N DAT I O N City of Elk River/Elk River EDA PO Box 490 Elk River,MN 55330-5600 Dear Ms. Peine: The Initiative Foundation(formerly known as the Central Minnesota Initiative Fund)would like to thank you for the$5,000 contribution that you made to the Sherburne County Capacity Fund Campaign. We are very grateful for your interest and support of our programs and are pleased to provide you will a progress report on our various activities in our 14 county service area. We would also like to invite you to continue to support our programs through an additional contribution to the Foundation. In our 13-year history,the Initiative Foundation has improved the quality of life in the region by: • Distributing$20.3 million in grants and loans • Creating or retaining 5,000 jobs • Leveraging an additional$61.3 million in private business investment • Training 500 community leaders • In Sherburne County alone,the Foundation has provided much needed assistance by providing $890,401 in grants and loans,leveraging an additional$1.5 million in private business investment,and creating or retaining over 190 jobs. A complete grant and loan project listing is attached for your review. Recent grant activity in Sherburne County includes: • Zimmerman/Livonia Township and Elk River are currently participating in the Initiative Foundation's Healthy Communities Partnership (HCP) Program,which includes a grant of $10,000. • Education to Employment of Elk River received a grant to assist in hiring an EEP Coordinator. • A Three Rivers Community Foundation(TRCF) grant was awarded to the Elk River School District for the Community Band and Choir Project. • Sherburne County was given a grant for scenic area land preservation. • A grant was awarded to Sherburne County Public Health for an assessment of parents project called "Completing the Circle of Prevention". • St.John's Lutheran School,Elk River received a TRCF grant for an art immersion day. In addition,the Initiative Foundation was able to fill the financing gap for several of Sherburne County's new and CENTRAL MINNESOTA'S expanding businesses by providing them with business loans. INITIATIVE FUND The following Sherburne County companies have recently benefited from our business loan programs: 70 SE FIRST AVENUE • E • Protector Care,Inc.,Elk River LITTLE FALLS. MN 56345 • Watermark Corporation,Elk River PHONE: 320 632 9255 • Windmark,Inc.,Zimmerman FAX 320.632.9258 WAN W.[FOUND.ORG City of Elk River • June 11, 1999 Page 2 We encourage you to once again support our fundraising efforts in Sherburne County and ask that you consider making an additional contribution of$14,929 to the Initiative Foundation. This amount will bring your total contribution to the Capacity Fund Campaign to$19,929 which would represent a donation equivalent to$1.50 per capita. This is the level of participation that we are requesting from all of the cities in our region. Your gift could be made as a one-time cash contribution or could be pledged over the next three years. Contributions will be matched dollar-for-dollar by The McKnight Foundation,doubling the impact of your donation for the region. A pledge card is enclosed for your use. Thank you so much for your past support and consideration of this new request. We would be happy to present our funding request before your City Council at an upcoming Council meeting. Please feel free to contact Leah Posterick at 877-632-9255 to arrange such a presentation. Sincerely, • Kathy Gaalswyk Executive Director Enclosures Pledge Card County Project Listing Initiative Foundation Board Roster • CENTRAL MINNESOTA INTITIATIVE FUND PROJECTS FUNDED IN SHERBURNE COUNTY (through 4/30/99) GRANTS AWARDED ORGANIZATION NAME PROJECT TITLE FISCAL YEAR AMOUNT 2001 Arts Alliance,Elk River* Arts Festival 1998 $1,500 Big Brothers/Big Sisters,Elk River Sherburne County Expansion Project 1996 10,000 Big Brothers/Big Sisters,Elk River Sherburne County Expansion Project 1997 5,000 Big Brothers/Big Sisters,Elk River* Eastern Sherburne County Branch Office 1997 2,000 Big Lake School District HELPS 1995 2,500 Big Lake School District Focus Group 1997 10,000 Central MN Mental Health Center,Elk River Community Response to Youth Stress 1988 3,000 Child Care Mini Grants Sixteen Individual Awards 1991 2,563 City of Becker Community Planning 1991 1,000 City of Becker Senior Housing Study 1998 1,000 City of Big Lake Area Community Planning/Leadership Dev. 1996 2,500 City of Big Lake Implementing Community Vision 1997 10,000 City of Elk River Wilderness Trail 1989 5,000 City of Elk River* Education Officer Project 1997 4,000 City of Elk River* Elk River Heritage Festival 1997 1,000 City of Elk River/Chamber of Commerce* Leadership of Elk River 1995 1,000 City of Rogers* Senior Housing Study 1997 2,000 qiiief Zimmerman Community Planning 1988 1,000 f Zimmerman Creating A Healthy Sustainable Community 1997 10,000 City of Zimmerman Livonia/Zimmerman Voices for Community Choices 1999 10,000 Education to Employment,Elk River EEP Coordinator 1999 10,000 Elk River Area Arts Council * Strings for Youth Programs 1994 1,000 Elk River Area Chamber of Commerce Leadership Elk River 1998 1,500 Elk River Area Citizens League* Arts in Building a Healthy Community 1995 1,500 Elk River Area Citizens League* County Committee Structure Study 1998 1,000 Elk River Community Education Community Volunteer Network 1992 15,000 Elk River Community Theatre * My Fair Lady 1996 2,500 Elk River Leadership Council * - Area Youth Salute 1996 1,000 Elk River School District Sherburne County Violence Prevention Activity 1997 8,000 Elk River School District* VandenBerge Community Center 1998 3,000 Elk River School District* Community Band and Choir 1999 300 Elk River Youth Initiatives* Youth Initiatives Mentoring 1998 3,400 Greater Elk River Task Force Domestic Violence/Advocacy 1990 12,000 Guardian Angels of Elk River,Inc. * Elk River Senior Center/Dining Site 1997 3,000 Guardian Angels of Elk River,Inc. • Child Care Center 1998 10,000 Land of Lakes Choirboys,Inc.,Big Lake* Salem Boys Choir Festival 1996 1,900 Parker Elementary School,Elk River* Software Language Enhancement 1996 699 Rivers of Hope,Elk River* Youth Violence Prevention 1995 1,500 Rivers of Hope,Elk River* Community&Youth Advocacy 1996 1,500 Rivers of Hope,Elk River* Youth Advocacy Program 1996 5,300 ,rs of Hope,Elk River* Youth Advocacy Program 1998 4,000 River Health Services,Elk River Rum River Inter-Faith Caregivers 1997 5,000 1 4 ORGANIZATION NAME PROJECT TITLE FISCAL YEAR AMOUNT ., R.W. Handke Magnet Elem. School,Elk River* Odyssey of the Mind Training Sessions 1998 250 1 Salk Jr.High Improv Troupe,Elk River* Improv Troupe 1998 2,51, Sherburne Natural History,Zimmerman From Plow Furrows to Prairies 1994 10,0 Sherburne County Scenic Area Land Preservation 1999 5,000 Sherburne County Health Services Water Quality 1987 34,352 Sherburne County Health Services Central MN Water Quality 1989 44,200 Sherburne County Health Services Community AIDS Education 1988 10,000 Sherburne County Historical Society,Becker Courthouse Preservation 1990 4,000 Sherburne County Public Health Completing the Circle of Prevention-An Assessment of Parents 1999 2,500 Sherburne County Social Services Young Parents Program 1989 1,350 Sherburne Economic Development Com. Community Planning 1990 1,000 St.Andrew's Catholic School,Elk River* COMPAS Artist Residency Program 1998 900 St.John Lutheran School,Elk River* Art Immersion Day 1999 550 The 2001 Committee, Inc.,Elk River Youth Survey Conference&Action Plan 1990 1,000 The 2001 Committee,Inc.,Elk River Elk River Area Youth Task Force 1994 25,000 The 2001 Committee,Inc.,Elk River Education Awareness 1994 2,050 The 2001 Committee,Inc.,Elk River Elk River Area Planning&Visioning Preparation 1999 2,500 The 2001 Committee,Inc.,Elk River Healthy Community Partnership Training 1999 10,000 The 2001 Conf.Planning Committee,Elk River* Enriching Our Communities 1997 750 TLC and Company,Inc.,Elk River Facility Improvements/Staff Training 1990 3,887 Village Family Service Center,Elk River* Expanded Education 1995 2,100 TOTAL GRANTS (78): $342,101 . * Denotes grant awards made by the Three Rivers Community Foundation, an operating division of the Initiative Fund. • 2 EXAMPLES OF LOANS AWARDED BUSINESS NAME_ B3USINESS TYPE FISCAL YEAR LOAN TYPE relar, Elk River Welding 1994 Expansion reda Savings Bank- Iowa) Darter Plastics, Inc., Becker Plastics Manufacturing 1992 Expansion Diaper Express, Zimmerman Diaper Service 1992 Start-up National Bank- Elk River) ) Freeport Finishing, Zimmerman Finishing 1994 Start-up (Princeton Bank-Princeton) Horn Machine, Elk River Millwork Manufacturing 1989 Start-up (First National Bank- Elk River) Key Pattern, Elk River Pattern Design 1989 Expansion Marketech, Inc., Elk River Electronic Testing Service 1990 Start-up li (First National Bank-Elk River Marketech,Inc., Elk River Electronic Testing Service 1996 Expansion (First National Bank- Elk River) Mastoni's Pizza, Becker Pizza/Deli 1995 Expansion •herburne State Bank-Becker) Northstar Potonics, Inc., Plymouth High Performance Laser 1999 SEED Investment Pomeroy Tool,Elk River Tooling 1988 Expansion (First National Bank-Elk River) Protector Care, Inc., Elk River Carestair-Half Height Step Asst. 1998 Expansion Rohn Ironworks, Elk River Structural Steel Fabricating 1991 Expansion (First National Bank-Elk River) Sherburne County Insurance, Elk River Insurance Agency 1994 Expansion (The Bank of Elk River) Watermark Corporation, Elk River Manufactures Fishcam 1998 SEED Investment (The Bank of Elk River) Windmark, Inc., Zimmerman Design/Mfg. Rescue Air Boats 1998 Start-up (Breda Savings Bank-Breda, IA) TOTAL LOANS (18): $548,300 • GRAND TOTAL OF GRANTS & LOANS $890,401 3 CMIF 6/99 • INITIATIVE FOUNDATION Board of Directors Barrett Colombo, St. Cloud Attorney Dave Gruenes, St. Cloud Economic Development John Hoefs, St. Cloud Health Care Catherine Jackson, Waverly Banking Rita Clark-Johnson,Elk River Community Development Educator Harry Nysather, Brainerd Retired Technical College President Bill Scarince, St. Cloud Manufacturing John Schlagel, Cambridge Manufacturing Barb Schmitt, Staples Agri-Business Dorothy Simpson, St. Cloud Retired College Vice President Pat Spence, Rice Community Development,University Regent Warren Williams, Brainerd Banking S Loan Committee Barrett Colombo, St. Cloud Attorney Dick Donat, Staples Economic/Community Development Catherine Jackson, Waverly Banking Judi Knutson, Becker Manufacturing Leonard Paulson,Milaca --- Retired District Court Judge Barb Schmitt, Staples Agri-Business Rita Sobania,Rice Contracting Business Owner Boardlist i Development Advisory Board Pete Allen,Milaca Bank President Elaine Arndt,Lake Shore Community Volunteer • Dean Atchison,Little Falls Bank President Al Baas,North Branch School Superintendent,North Branch Steve Benda,Cokato Retired Owner,Injection Hanspeter Borgwarth,Nisswa Retired Poultry Executive Cal Clark,Pine City Banking/Economic Development Barrett Columbo,St.Cloud Attorney Richard Donat, Staples Economic Development Richard Duggan,Elk River President,Marketech Stanley Edin, Staples Retired Technical College President Bob Freeh,Zimmerman Chamber of Commerce Larry Foley,Wadena Retired School Superintendent Gordon Grimm,Center City Retired/Hazelden Foundation Executive Al Halaas,Pequot Lakes Business Owner Lee Hanson, St.Cloud Attorney Dale Hendrickson,Wadena Electric Co-op Manager Ron Hinnenkamp,Little Falls Mayor/Educator John Hoefs,St.Cloud Health Care Catherine Jackson,Waverly Bank President Rita Clark-Johnson,Elk River Community Development Educator Norm Krause,Staples Manager,Central Lakes Ag Center Tom Lambrecht,Finlayson Economic Development Don Levens,Cokato City Administrator Duane Lund,Staples Education/Author Susan Majors,Wadena Education Gary Marsden,St.Cloud Owner,Marco Business Products Neil McMillin,Maple Grove Wright-Hennepin Elec Co-op/Econ Development Dave Miller,Crosby Cuyuna Range Economic Development,Inc. ill Kathleen Miller,Delano City Administrator Harry Nysather,Brainerd Retired Technical College President Bob Obermiller,St.Cloud Retired Banker Leonard Paulson,Milaca Retired District Court Judge JoAnn Peterson,Cambridge Manufacturing , Dick Roesler,Mora Banker Judie Rose,Buffalo Retail Bill Scarince,St.Cloud Manufacturing John Schlagel,Cambridge Manufacturing Barb Schmitt,Staples Agri-Business Mary Schwartz,Mora Mayor Dorothy Simpson,St.Cloud Retired College Vice President Rita Sobania,Rice Contracting Business Owner Pat Spence,Rice Education,Community Development Dennis Troff,Cambridge Banker Doyle VanDyne,Mora Bank President Joan Vincent,St.Cloud Community Consulting Jim Vrchota,Maple Lake Bank Vice-President George Wallin,Big Lake Sherburne Tele-Systems,Inc. Char West,Menahga Menahga City Administrator/Clerk Warren Williams,Brainerd Bank President Sue Yarusso,Pine City CEO,Mercury Technologies,Inc. 7/98 • • WAYPOINT TECHNOLOGIES o S WAYPOINT TECHNOLOGIES, INC. 212 Third Avenue North, Suite 456 Minneapolis, MN 55401 (612) 341-9276 r --3411 - 01v THE COMPANY: WayPoint Technologies is a full service GIS (Geographic Information System) company - founded in 1992. Services include custom and commercial mapping software development and distribution. WayPoint also has full GIS map database production facilities and has produced software with map databases for clients throughout the country. The Company's ability to produce custom map databases and to combine them with commercial ready software applications allows the Company the opportunity to move quickly and independently into any GIS markets. Nationally WayPoint produces and supports mapping software applications for Real Estate Multiple Listing Systems in Florida, Ohio, Michigan and Indiana. Locally WayPoint produces the King's Twin Cities CD-ROM Atlas, an 11-county metropolitan mapping software used daily in the Twin City commercial and real estate markets. COMPANY PRODUCT(S): WayPoint has created LakeMaster, a GPS (Global Position System) compatible lake map software with a GIS Lake Contour map database, plus a Fishing Log database manager. LakeMaster will aid sport fisherman in the never-ending quest for improving their fishing equipment and techniques. It will provide fishermen with the ability to analyze fishing structure and then compute GPS points for transfer to their GPS receiver. LakeMaster will also allow fisherman to record fishing spots by importing GPS points back to their LakeMaster Map Database for a permanent record. In addition, LakeMaster software will lead the way for WayPoint's future in-boat hardware called LakeMasterGPS. This integrated GPS/Sonar/PC in-boat unit will use the LakeM iter software and WayPoint's exclusive Lake Map Contour databases. It will offer the ON) fisherman the ability to have all of the mapping, sonar and GPS technology at t1 uir • Waypoint Technologies, Inc. Page 2 fingertips while they are fishing. The first LakeMaster Maps released will cover the 1111 State of Minnesota. Future releases and upgrades will cover additional states and inland waterways. LakeMaster will have a statewide map database including 101 Premier LakeMaster lakes located throughout the state. Each LakeMaster Lake will display all necessary lake details including depth contours, islands, reefs, points, bays and public access points. In addition to the Premier lakes, each LakeMaster state database will show the name, coordinate location and shoreline (no depth contours) of all remaining lakes in the state that are approximately 100 acres or larger. The statewide map database will also include all standard geographic features such as roads, highways and cities for easy orientation when searching or driving to a specific lake. Additional lake databases can be purchased on an individual basis and added to - the original LakeMaster application as an upgrade. Individual lake database upgrades can be purchased and downloaded from the LakeMaster WEB site. Optional professional fishing locations "ProSpots" can also be purchased separately at any time as an upgrade. The ProSpots are a collection from participating professional fisherman whose experience and secret fishing locations can be enjoyed by every amateur fisherman. The potential customer for LakeMaster includes all inland water recreational fisherman in states where LakeMaster has created Lake Depth contour map databases. Since the LakeMaster product's initial release will be in the State of Minnesota the focus of this market analysis will primarily deal with target markets within the State of Minnesota. Additional market locations will be considered with future expansion or growth projections. Again this will be based on a State wide approach tied to the Premier LakeMaster Lake database for that state. However, it is assumed that the next state to be targeted with LakeMaster will be the State of Wisconsin followed by Michigan and the remaining Midwestern States and then expanding out into other states with a highly , visible sport fishing industry. The "second phase" of the business plan for LakeMaster would include the installation of our software and database technology in our own GPS/Sonar/PC unit for in boat use. This would enable WayPoint to offer a complete hardware/software package to the fisherman. Currently there are GPS/Sonar units available on the market, but they don't offer an inland water database. The only map databases available at this time are saltwater coastal maps with limited detail. • • • Waypoint Technologies, Inc. Page 3 MARKET: A more focused view of the LakeMaster customer would define him or her as a licensed fisherman who owns his or her own fishing boat. The Minnesota DNR released their fish and boating license statistics for the year 1998 with the following results. There were over 940,000 fishing licenses sold and approximately 780,000 boats licensed last year. Approximately 500,000 of the total number of boats are primarily used for fishing. Based on the assumption that most purchasers of LakeMaster will be boat owners, who fish, we have a general targeted market of 500,000-licensed fisherman who own a boat in Minnesota. Wisconsin, Michigan and other Midwestern states have similar boat ownership statistics for future sales projections. The bigger question beyond the size of the market is the trend or buying potential of the individual customer. The average fisherman does not hesitate to spend a significant portion of their income on all aspects of their fishing recreation. This is clearly evident in a demographic profile of 370,000 subscribers to In-Fisherman magazine. They determined that with an average household income of$64,500 the participants allocated an average of 4% of their total income or$2,587 on fishing gear, equipment, apparel and fishing travel annually. Based on the annual purchasing percentages from this • study, the size of the Minnesota market that would purchase LakeMaster could be as large as 410,000 buyers. The typical user of LakeMaster will be fresh water or inland lake sport fishermen. This is a focused market that is easy to reach with selective advertising combined with product shelf displays in commercial sport fishing retail stores. This market is estimated to include nearly 1 million customers in each of Upper Midwestern fishing states. It is estimated that 80% of all fishermen use some type of Lake Map information when they seek out fishing locations. The Company's minimum goal, over a 12-month period, is to have a 2% market penetration of the Minnesota target market and the same market share of each new state that has a LakeMaster product. Factoring the 500,000 licensed fishermen that own boats in Minnesota this sets the sales target of 5,000 LakeMaster units within one year of each product release. COMPETITION: Direct competition in the Minnesota market does not exist for LakeMaster at this tilos:. A competitor offering similar lake map software in the Oklahoma/Texas market (Top)o- Waypoint Technologies, Inc. Page 4 Log) has a much higher price point and doesn't include state or county base maps with • their product. Currently in the Minnesota market there are paper/vinyl lake maps available along with a WEB based subscription product which has a limited number of image only lakes available on their site. None of the WEB based competitors lake maps have any GPS (Lat/Long) capabilities and their site is extremely difficult to find. There are other lake map software competitors, however, these products vary in quality, function and price and only one of the competitors has a product for the Midwest fishing market. CD-Mapit has a large raster image only map database for the State of Wisconsin. Essentially this product has a set of 1400 Wisconsin DNR lake images on a CD-ROM. The only function this product has is the ability to display black and white low quality images and print each lake. Essentially all they have done is take a flat lake map, scan the map and put it on an image display software without any GIS correction for distortion or warping. MANAGEMENT: Mike Wood, President ID As one of the original founders Mr. Wood directed the development and release of the first MLS integrated GIS mapping software in the Real Estate industry. This established WayPoint as the leader in custom MLS mapping systems throughout the United States. Extensive knowledge of the real estate market and past experience as the President of the Saint Paul Area Association of Realtors in Minnesota, helped lead the way to promoting GIS mapping to Realtor Associations throughout the country. Past appointments by the Minnesota State Legislature include the Agency Law Review Committee, the Real Estate Property Tax Reduction Task Force Committee. Past business experience and education include Land Planning, Land Development, Land Surveys, Environmental Impact Studies with Professional Testimony, Registered and Licensed Landscape Architect and a BLA from the University of Minnesota. Jeff Edelstein — Vice President Corporate Development Mr. Edelstein founded WayPoint Technologies in the fall of 1992. Before working with WayPoint, Mr. Edelstein spent 8 1 years with CNS, Inc. designing and implementing mission critical intraoperative brain monitoring equipment for cardiac and neurosurgery, and clinical diagnostic equipment for the sleep lab. In total, Jeff designed and implemented five medical instruments for CNS before the company switched its charter to the BreathRight nasal dilator OTC family of products. Waypoint Technologies, Inc. Page 5 Before joining CNS in 1984, Jeff spent 5 years in Japan and 2 years in China for both • the ULVAC Corporation of Japan and the Physical Electronics Division of Perkin Elmer. Jeff is fluent in Japanese. Jeff's current professional interests and practice is centered on the Java language and development environment, with particular emphasis being placed on the client/server potential of Java. Jon Wood, Sales and Software Development Jon Wood is the WayPoint Sales Manager,Web Master and has been with the company since 1996. He directs sales and marketing strategies for all WayPoint products. Directs the production of all WEB site Pages including all graphics and links, oversees the production of all marketing pieces used at WayPoint. His GIS database production experience includes the conception and development of databases used in LakeMaster and the LakeArt products. After receiving his BA from Saint Johns University, Jon taught High School in an outreach program in Belize, Central America. He also founded the SJU Bone Marrow Donor Drive and fully-funded the largest donor drive in Minnesota history at that time. He personally raised over$14,000 from nine different sources and led all publicity campaigns. Bill Dando, Software Development and Data Management • Mr. Dando has been GIS Data Manager of WayPoint Technologies, Inc. since 1997. He manages proprietary GIS databases, evaluates, acquires and integrates new GIS databases, and assists GIS software development. Mr. Dando's GIS project experience includes wetland restoration, original land survey record digitization, soil and terrain analyses of presettlement forests, parcel and tax database application development, and street centerline database enhancement. Mr. Dando received a BS from Indiana State University and an MS in Geography from the Pennsylvania State University. Jeff Smith, Program Developer and Software Engineer Mr. Smith is the developer of Geomaster GIS software, the base software architecture used in LakeMaster. Jeff is the sole proprietor of his own company GSSI and works closely with WayPoint and our staff in developing multiple products for our markets. PROJECT DESCRIPTION Over the last 7 months WayPoint has --self financed" the current development of LakeMaster. This equates to a Software Development and Lake Database value of $135,000. Equity financing will be required to bring this product to market and or;,,t' monthly cash shortfalls during the initial release of LakeMaster. • Waypoint Technologies, Inc. Page 6 WayPoint is requesting equity/debt financing in the amount of$500,000 through a • Private Placement and/or low interest loans. This financing will be used to for growth capital to expand LakeMaster into additional markets, relocate WayPoint and to develop the LakeMasterGPS. At a minimum, the company would require 6,000 square feet of office/production space and the company's financial requirements would be as follows: Office/computer equipment $ 150,000 Leasehold improvements $ 25,000 Operating/start up capital $ 225,000 Product Development $ 100.000 Total funding $ 500,000 Based upon sales projections in the first three years, the company's employment would be as follows: YR 1 YR2 YR3 Administrative 1 2 2 Managers 1 1 2 • Software service/sales 6 9 13 Totals 8 12 17 • • • q0SPECT- _ • REEL-A-PAIL, INCORPORATED • S 41 REEL-A PAIL INCORPORATED 2473 Oliver Avenue South Cokato, MN 55321 (800)450-6507 VIAN,./6,0„,1<04' THE COMPANY: Reel-A Pail, Inc. was incorporated in the State of Minnesota on May 5, 1993. The company was founded to develop, market and commercialize the "Quick-Winder" an innovative cord and cable management device to support industrial applications. The company's founder, Daniel Barberg is the principal officer and controls the majority of the ownership. COMPANY PRODUCT(S): • The QuickWinder is a unique reel system designed to efficiently handle lengths of cord, hose, co-axial cable, rope and other miscellaneous items. It is available is three sizes, The Apprentice, The Journeyman and the Pro. The QuickWinderTM utilizes a new and innovative top design with a collapsible handle for stackability and a recessed cavity for storing lengths of cord, rope, co-axial cable or hose. A quick turn of the handle retrieves hundreds of feet of cord in seconds. The QuickWinderTM is used by fire departments, RV and rental stores, military and government, contractors and tradesman, utilities, studios and workshops, homes, farms and industry, marinas and boat dealers, and in numerous maintenance and janitorial - applications. Each size of the QuickWinderTM is also available pre-loaded with electric cord, of not less than 14/3 or to buyers specification, and ready to go. The QuickWinder Mobil Carry Kart makes transport of any of these models a snap. It features a convenient handle with a tool and halogen light holder. The Kart combined with a QuickWinder Pro is a direct result from an aircraft engineer who saw the QuickWinderTM Pro as a solution to OSHA's 18" plug in height requirement for aircraft hangers. • • Reel-A-Pail,Inc. • Page 2 MARKETING: A three phased sales and marketing plan has been designed by The S.M.A.RT.E. Group, Inc. with phase one launched in early 1999. Phase one includes the analysis of markets with the determination of five key local retail and specialty accounts for presentation, the development of sales tools for presentation, review of product pricing, recommendations for improvements in packaging, and account management tools. • Phase two includes the rollout of a sales effort to regional and national accounts such as the top ten home centers and warehouse clubs. Phase three builds on the success of phase two with the broadening of markets and push for market share dominance. Phase three also includes the active management of export sales and license agreements. MANAGEMENT: Its founder, Daniel Barberg, the current President and CEO, manages the company and Steven Carlson, Vice President, assists him The company has retained the services of Cascade Consulting(John Bel° and utilizes Bill Righeimer as a marketing specialist. The board of advisors consists of ten business professionals. .PROJECT DESCRIPTION Over the past several years Reel-A Pail has supported itself through generating an estimated $400,000 in sales. The product has developed from a crude prototype into a patented, trademarked, finished product. Additional debt and equity financing will be required to bring this product to a successful market commercialization. Reel-A-Pail is requesting equity/debt financing in the amount of$900,000. This financing will be used to for growth capital to expand Reel-A-Pail into additional markets, relocate the company and to automate the production process. o Reel-A Pail,Inc Page 3 At a minimum, the company would require 12,000 square feet of office/production space and the company's financial requirements would be distributed as follows: Office/production equipment $ 125,000 Leasehold improvements $ 50,000 Operating/marketing capital $250,000 New/updated molds $ 150,000 Refinance existing debt $250,000 Add inventory $ 75,000 Total funding - $900,000 Most likely, the company will out-source the injection molding and the company will principally be involved in the assembly, inventory and packaging of the product. Based upon sales projections in the first three years, the company's employment would be as follows: YR 1 YR2 YR3 • Administrative/management 2 3 5 Production 6 10 18 Distribution/warehouse 2 4 6 Totals 10 17 29 o . . • • _lice _ .. 4- Stop WiNDER WINDING CORD T , . fROMREEL•G•PA$L HAS NEVER BEEN lite Bait • `— 1 e R +�''1 EASIER! The simple,hie�to ell- hlade . - _4•,--... wite tangled anis,redo sortolle , CI rj) y-' it/ i - --•.,: bores aid save time and — .. %! O ?'• •- cord�... 3, �/''�` • � APPLICATIONS • �;_ Cords dean /i • File Depar> s • S__ `��'• (t.- �r _ :. • UL Listed \�\� — Vii/ !RYS&Ramat Stores ' • :Easy Ma ��'� • - - •lamGovernment . '. & ,Stackable with } .-..;!,71. _ ; • QormaCtoa&Tradesmen -47-Other Pail Tools=-i---- .s y • •rU!iDei -� r►i i4 _ • '' i-Prose Use =-#- ;:w �/at.�� w• —'> • rP-Elise g Holes yrs \ -4 pF- � `- -_` ft J •t - Y.. _, mums Bar� � . . "1 / _, ••des,F &t � YIDEO SYSTEIIAS - i . F., • &Boat owners ♦ • ., {` 'PICK HR—NAS 1997 �/� �I !�''+ . �alJ h4� �� r� - J�■YYffOI .;a ..-�I Msociation of Relax,as shown above or below. rs) . . _. i Icnvu,ewãicj - :."f t.13�iii, )"*-1 y �� rel • _:::_,..5., .., ,,..,___,_, .,...„ ,,:,.....,,. ,,,,......„ _ ::,._._ ....,, ,.„_,___ it* .'. ---. ‘ 4 .,....... _ ,, _ s,__ _______ ..........._____,.. ..„,, ,, ,:-,,,,,,,r,,.„ .4..• 1.7.*,A r—""‘W'"'----- .0-14/4„ - ..- . ------ op...... 4-,->-,400-441,- _ •lp *.,. Ndir.,,,„,, _ •/ 0 0 ' '.V''...i.:*-- - - -E-gr .../ . 010 siiii fi%iv a. t I iiiii4b . .. .. , „.... __,____:.... , , 4i. Easy to toad and Unload To Dispense Cord, Simply viol Recessed Cant Holds Load your cord by insertng either reale or Walk and Unreel -- Cord.Fob Down female plug-in into side and Trough too. Depene:ng cn wire Size.Ycu may allow up to 8' Depending on how you loaded Handle. your Cuickwinder.dispense wrd of werleng tail to reach work area or receptacle- ty walking to cr frcrn recepoc:e. Put foot on base.reef cord in with one hand. 0 \ C:.-.;de rd wit Te c 'er as shcwn above. Heavy-Duty Industrial Construction, Smooth Operating-Satisfaction 'f. For more information call REa-A-PAIL, inc: 1.800.450.8507 PRODUCTNETWORK.COM • PRODUCTNETWORK.C OM 802 Sunwood Park Drive Waite Park, MN 56387 (320) 255-9004 PROJECTED COMPANY LOCATION: ProductNetwork.com is open to a location for its office/warehouse space. The . Company requires approximately 12,000 square feet with expansion capabilities for an additional 2,000 - 6,000 square feet. THE COMPANY: ProductNetwork.com was formed in Waite Park, Minnesota in April 1998. 1110 ProductNetwork.com started out as Advanced Internet marketing Consultants and operated as a Partnership for ten months. The company incorporated as of February 1, 1999 ProductNetwork, Inc. as a Sub-S Corporation. The company is now operating as a d/b/a ProductNetwork.com. The company's web site opened to shoppers on May 1, 1999 with 8,000 products. COMPANY PRODUCT(S): ProductNetwork.com is an "Internet Mall" devoted to convenient, reliable, and fun shopping from the convenience of your home or office. ProductNetwork.com offers the consumer a shopping alternative to eliminate the day-to-day hassles of contemporary shopping in the local malls. Searching the many isles of every retail store in your local mall no longer needs to be a struggle for today's consumers. The Company sells quality manufactured, brand name products over the world wide web. The Company purchases products from manufacturers representives', distributors and direct from some manufacturers. • o ProductNetwork.com . Page 2 ProductNetwork.com will only allow quality products in their Internet mall. Currently the company has twelve product categories. They are as follows: Electronics Home & Kitchen Outdoor Equipment Fashion Home Office Sporting Goods Floral and Garden Jewelry & Fragrances Pet Supplies Health & Personal Care Novelties & Collectibles Tools & Supplies ,,),91 By January/February 2000 the Company plans to have 500,000 products on-line. MARKETS AND MARKETING: To kick off the opening and to increase customer traffic to ProductNetwork.com's web site, the Company will be sending out a press release to the New Groups on the Internet to the top twenty-five news groups on the www. They will also advertise in several Metropolitan areas, with TV and newspapers. • COMPETITION: ProductNetwork.com's Internet mall include several important features that set them apart from other Internet malls that may be considered competitors: 1. ProductNetwork.com has a Premier Buyers Club. The PBC is a membership club in which the customer is able to join for a yearly fee of S29.95 and enjoy lower prices on every item throughout the mall. The Company's competitor memberships range in cost of$25.00 and up to $69.95 per year. 2. The customers will see three prices on every item in the web site. • Suggested retail prices • Guest price (non-members price) • Members price 3. The Company will also be offering FREE ground shipping on many of the products on their web site. The Company's electronics suppliers offer them ' FREE UPS ground shipping on any orders over $500.00 and any big screen TV • over $2,500.00. The customers will also be able to select a faster method of shipping such as next day and second day delivery at an additional charge. �� ovl Com" Gam, 2ir�Q� �t--(Cod( ProductNetwork.com • 0) Page 3 The main market leaders on the internet at this time are: 1\1 iMALL, Inc. public held corporation ShopNow.com �1, � Inca rP P D� 0 ValueAmerica, Inc. went public 4/99 BuyitNow.com EarthLink Network, a publicly held Shopping.com corporation. Netmarket a C-corporation _ Most all of the malls on the Internet are offering higher prices. Most of them are offering the same price that you would find at your local stores, with one exception. Netmarket, which operates on a 10% or less margin. MANAGEMENT: Tire Barthelemy, President, CEO, CFO, Treasurer and Founder 110 Mr. Barthelemy is a majority stock holder, holding 70 percent of the company. He has had to "wear a lot of hats" with starting this company. Mr. Barthelemy has started up several successful companies in the past nine years. Nicholas Barthelemy, Vice President and Secretary Mr. Barthelemy started with ProductNetwork in May 1998. Nicholas brings many talents to the company. In addition, Mr. Barthelemy is a minor stockholder, holding 30% of the company's stock. COMPANY NEEDS: The company is seeking financial assistance and the opportunity to establish its operations center in a Midwestern community. To date the principals have invested over $200,000 in equity and loan funds to establish the company. At this stage, the company is seeking a financial package of$975,000 to be dedicated as follows: 6 r'oNu f RXt Rgroat rsHIED/Gos ooTs/Sriz.,r- s 0/;. 0 Office/warehouse equipment $ 75,000 't Operating capital $ 3 a,::: • Advertising/marketing costs ' 550 000 ON, Total funding 9 ,111 E-khorff-ig 'r (act C s 3 FRbw( 01 - /1R 3 w1rN 4/H ttLi 16 gwN ProductNetwork.com Page 4 Based upon sales projections in the first three years, the company's employment would be as follows: YR 1 YR2 YR3 Administrative 3 6 18 Managers 2 6 15 Data entry/customer service 10 32 48 Warehouse/shipping 3 10 14 Totals 18 54 95 SUMMARY: Although the company is still in the development stage, the establishment of its site, relationship with its distributors, and early success, makes it a good candidate for future development. 1111 • .) • TFG DIRECT, INC. • TFG DIRECT 9065 Lyndale Avenue South Minneapolis, MN 55420 (612) 884-8106 -20__,.qO was temet,i5f40.6 A Crit, CWIThyCOMPANY LOCATION: IN SEK, stiag TFG Direct has recently reached an agreement to establish a second site in an outstate Minnesota city. - c• • . - 's business continues to grow and they anticipate the need fo additional center, in other cities in the next six to 12 months. THE COMPANY: In June of 1993, TFG Direct opened its first office in downtown Minneapolis. At that time the company employed just two people. TFG set out to develop a • company that provided quality integrated direct marketing services. Today, TFG Direct is on pace to bill over $2.5 million in 1999, employs over sixty people and has impressive clientele including TCF Bank, Cargill, Polaris and others. PRODUCT(S): TFG Direct provides direct marketing services to non-traditional direct marketing companies that need external expertise and personnel to complete their direct marketing programs. Corporations with revenues of greater than $10 million and non-profit organizations with revenues in excess of$1 million have the greatest need for our services. Examples of the organizations that need our assistance are 3M, Cargill, Mack Trucks, Inc. and non-profits like Special Olympics and March of Dimes. 4 TFG Direct • Page 2 • MARKET(S): TFG Direct's target market is comprised of over 53,000 companies that employ the use of direct marketing in their sales and marketing strategy. The direct marketing industry as a whole generates over 1.4 trillion dollars in annual expenditures and is expected to increase by 50% over the next five years ' according to the Direct Marketing Association (DMA). TFG Direct focuses on companies that are considered non-traditional direct marketers. Companies that have traditionally sold through a sales force or distributors and now realize the value of directly communicating to their end customer to create sales. Additionally, TFG Direct recognizes an opportunity to grow their sales to non-profit organizations that use direct mail and telemarketing to raise funds. By providing telemarketing, direct mail, database management and fulfillment in an integrated manner, TFG Direct helps its customers maximize their sales and marketing dollars and ultimately their profits. The Company intends to utilize their own expertise in database marketing to identify potential new clients and generate sales. Through lead generation telemarketing and direct mail the Company can keep their sales staff in communication with their best prospects and focus on bringing in the most profitable business. MANAGEMENT: The principal managers for TFG are its founders, Pete Hainey and Darrel Damhof. Pete Hainey, co-founder, serves as the company's President and CEO and Darrel • Damhof, is the company's Chief Financial Officer and Chairman of the Board. • • TFG Direct ID Page 3 FINANCIAL OVERVIEW: TFG Direct doubled its annual revenues in 1997 over 1996 results and grew by another 50% in 1998. To date we are 60% ahead of 1998 revenues. Our average account now bills out at over $50,000 annually and we intend to increase that rate and the number of accounts. We have been operating at break even during 1999 but expect to end the year profitably. 1998 produced revenues of$1.5 million and an operational_ breakeven. In 1999 we expect to bring on at least 12 new accounts, generate over $2.5 million in revenues and end the year profitably. By the fourth quarter of 1999 we expect to have a $5 million dollar run rate and pre tax net income equal to 15% of revenues. PROJECT DESCRIPTION: The company supports its operation through existing cash flow and has adequate financing to support growth. The principal reason to seek alternate site locations is to establish a diverse employment base. A separate site does require additional resources to support the new operation. At a minimum, the company would require 5,000 square feet of office space and the company's financial requirements to establish a third site would be as follows: - Office/computer equipment $ 200,000 Leasehold improvements $ 45,000 Operating/start up capital $ 25,000 Employee Training $ 75,000 Total funding $ 345,000 JOGS • TFG Direct • Page 4 Based upon sales projections in the first three years, the company's employment would be as follows: YR 1 YR2 Administrative 2 4 Managers 2 4 Customer service/sales 25 75 Totals 29 83 • S o • SENTRANET, INC. SENTRANET, INC. 5600 Rowland Road, Suite 200 Minnetonka, MN 55343 (612) 933-7376 THE COMPANY: sentraNET, Inc. is a systems integration, electronic marketing and networking services company. We are leveraging our experience with back office applications and Internet connectivity and evolving to provide turnkey network and Internet access services for the hospitality market. - Our target market consists of 600 property management companies that are responsible for 9,000 full service properties domestically comprising over 2 million rooms. Internet service revenues for this market are expected to grow from less than $1 million in 1998 to $500 million annually by 2002 according to Jupiter Communications. • COMPANY PRODUCT(S): The sentraNET inetHoteim system provides high-speed dedicated Internet access to hotel guests via an in-room Internet access port. The turnkey system features the use of existing hotel wiring, plug and play laptop access, property management integration, full maintenance and help desk support, customized hotel Intranet sites, joint marketing and business development programs, and the most flexible business model in the industry. Our unique value proposition is that we go beyond the hotel facility to provide a network architecture that will support the entire property management company from application integration to email. No competitor currently offers the strategic approach enabled by sentraNET's knowledge of LAN systems and VPN connectivity. The inetHotelT"" system brings a new level of integration to the hotel market. By providing not only Internet connectivity but also file, print, email, shared resource, and VPN services; sentraNET will position its customers for more productive and efficient operations. In addition, with inetHotelTu, an infrastructure will be in place to support next generation systems such as NT-based PBX systems, voice over IP, and Internet video. • S • sentraNET, Inc. . Page 2 The sentraNET inetHotelT" system can be installed and maintained under four different programs ranging from usage-based revenue sharing of sentraNET-owned equipment to flat fee service pricing for hotel-owned equipment. sentraNET addresses the market requirement for new generation hotel Internet connectivity with the inetHotelTM System The inetHotelni System includes five major components: • Hotel Hardware and Software • Internet and VPN Connectivity Services • Hotel Intranet site development and hosting • Maintenance and Support • Cooperative Marketing Hotel Hardware and Software Components The hotel components include Internet laptop access ports, switches, router, server, • firewall and necessary cabling to provide a complete system for the hotel. . Tut Systems equipment will be used primarily to provide the guest Internet access using the existing phone wiring. In addition to guest Internet access, the hotel will be provided with a complete Windows NT LAN environment for file sharing,print sharing, email, group scheduling, etc. IPORT software will be used to provide plug and play laptop access capability, a shared print capability, and the property management interface. In either case, the user need only plug his system into the provided Ethernet port and start his browser to access the system. For conference rooms that require them, Internet PC appliances like the one pictured above are available. MARKETING: Our marketing approach is to use direct sales to contact property management groups, hotel general managers and hotel franchisers. The sales approach to the property management group emphasizes the synergy between hotel to property management connectivity and guest Internet capability. The sales approach to hotel general managers will be the value and benefit of Internet access for their guests, the opportunity for incremental hotel revenue, and high-spc.c:ri - access to their centralized property management offices. Franchisers will be contacted 411 for endorsement of the guest Internet access services for their franchisees, the sentraNET, Inc. • Page 3 availability of marketing demographics that will be collected at inetHotel equipped properties, and the advertising opportunities that inetHotelT"-equipped hotels can provide. The inetHotelT" brand will be established and marketed through in hotel signage and an inetHotelT"" web site. The site will feature hotels that currently use the system and serve as an information source for those travelers looking for high-speed Internet access. A business development effort will be included for each hotel site. The ongoing effort will be directed at the hotel's customers for the purpose of promoting VPN and other unique capabilities of the facility provided by the inetHoteP"" system. Elements of the program will include direct mail to frequent guests as well as direct sales support for the hotel's top contract clients. COMPETITION: • LodgeNet, and On Command and CAIS currently lead the market for guest room Internet service trials. Both LodgeNet and On Command began with television-based access. LodgeNet was committed exclusively to television-based Internet access initially, but is now testing port access as well. On Command is testing both television- based access and port-based access. CAIS is a Washington D.C. based ISP that has expanded into the hotel Internet access market utilizing a proprietary passive connection technology. No competitor is currently looking beyond simple Internet connectivity however. The inetHotelT" system brings a new level of integration to property management companies at virtually no cost. sentraNET will position its customers for the more productive and efficient operations by providing hotel LAN services and VPN support clearly beyond any competitive offering. MANAGEMENT: The management team consists of individuals with many years of experience in the • computer industry both in large organizations and start-up ventures. The team has 11111 managed technical programs as well as marketing, direct sales and channel develop r.;..t • sentraNET, Inc. • Page 4 efforts both domestically and internationally. Past successful ventures we have participated in include Lee Data (purchased by Northern Telecom), Tricord Systems, and Netstar, Inc. (purchased by Ascend Corporation). Ian Mackay, President Mr. Mackay has over 20 years of experience in the computer industry. He has held . technical, sales, marketing, and management roles in Fortune 50 companies as well as start-up ventures. Mr. Mackay served as VP of marketing and business development at Tricord Systems, a Minneapolis-based start-up server manufacturer, from 1993 to . • 1995. From 1995-1997 he managed a high technology research venture in the flat panel display industry. Mr. Mackay's operational role will be sales and business development. John Rotter, Vice President • Mr. Rotter has over 25 years experience in the computer industry with positions in sales, marketing, and management. Over the past 18 years John has held marketing 4111 director positions for several Minnesota start-up companies, including Data 100, Lee Data, Tricord Systems and Netstar, Inc. Mr. Rotter's operational role will be marketing and channel development. COMPANY NEEDS: Financial: First year revenues are forecast at $ .2 million growing to $137 million by year five. • EBIT is forecast at $44 million in 2004. The following sales forecast covers the first 5 full years of operation: 1999 2000 2001 2002 2003 2004 Installed Sites 15 130 240 500 900 1500 Total Revenue $.21M $4.5M $19.1M $46.9M $91.2M $136.7M Total funding requirements are about $1.5 million. Equity requirements range from $750K to $1 million with the balance being provided through debt financing. `ro r3 vsFeA. c Coas . sentraNET, Inc. • Page 5 Personnel/Facility: 2000 2001 2002 2003, 2004 Facilities (sq ft) 5,000 10,000 15,000 20,000 20,000 Employment Projections 2000 2001 2002 2003 2004 Management 1 2 3 4 8 Development Staff 3 6 9 16 25 ' Technical Support 8 1212 Total Staff 9 16 24 38 58 The development staff positions are $20+/hr level positions; the technical support staff positions are $10+/hr positions. Key requirements for the center are high-speed • network access and an affiliation with an educational institution. JAMES INTEGRATED TECHNOLOGIES, INC. • R i%tri CCN('( • NG D e7 CWZc cs JAMES INTEGRATED TECHNOLOGIES CORPORATION 350 E. County Road D. St. Paul, MN 55117 (651) 484-9549 THE COMPANY: JIT was started in 1989 by Bill and Chris James. They created a software company whose products could drive sales for other companies, while removing the "mystery" from the sales process. The software, in total, is designed to provide for the efficient "entry" of companies into the "e commerce" world. The Company reached $650,000 in sales in 1995. Since 1995, the Company has focused its efforts on the development of internet related software and sales have • dropped to $250,000. The internet products, are now developed and the Company is poised for rapid growth. COMPANY PRODUCT(S): The Company has developed four internet software products to date. They are as follows: theCustomer is enterprise software whose objective is to increase profitable sales. It accomplishes this objective by integrating marketing, sales and operations into a smooth flow of actions, assigning specific responsibilities to personnel and tasks throughout the sales process. It maintains proposals, sales orders, and invoices designed for ease of entry. Inventory is managed on multiple levels. Forecasting, bill of material and many just-in-time management techniques are implemented in the program. Tools for controlling time, profits and control are matched with powerful communications capabilities. Service records, e-mail (with internet service provider), web-serving (with internet service provider), work processor, letter writing, spread • sheet, custom reports, data mining, faxing, credit card approval, scripting and interfaces with other computer programs, improves value through convenient communications internally and with customers. James Integrated Technologies Corporation Page 2 WebClerk is an eCommerce solution andweb server. It is an implementation tool, not a development tool. WebClerk provides Internet catalogs, technical resources, forums, service and support. The web site is dynamically created from a database and web site template. As such, it is easy to install and maintain. All programming is server based and the site has not programming requirements. WebClerk and theCustomer share many resources and are delivered under the same • licensing agreement and product-suite. The are distributed on one compact disk and - form the Company's NetWork Suite of software. theStoreKeeper is enterprise software for retail businesses: The current installed base for this product is three companies and 20 stores. Wide market distribution is on hold pending the achievement of market objectives with theCustomer and WebClerk or substantial additional resources. TheAccumulator augments the StoreKeeper by its ability to tie in multiple retail locations into a single business. Seminars oriented towards sales and training are provided to support the products. The seminars will initially focus on the Company's NetWork Suite of software. MARKETS AND MARKETING: The target market for theCustomer is companies which sell business-to-business, such as manufacturers, wholesale/distributors, system integrators, and mail order companies. This software is for companies that have 4 to 40 users on their network or intend to grow to this level. The target market for WebClerk is companies of any size which wish to sell or service their customers via the internet. Although it is powerful enough to manage reprints of the Wall Street Journal (www.djreprints.com) it is priced at $649 specifically to compete with FAX technology. WebClerk's affordable price, web serving capabilities integration with the total sales and customer service operation of companies will replace as FAX as the standard for unattended communications. • The products' low costs (small size and few needs), rich feature set, direct marketing •% techniques and benefit to network allies as primary tools to gain users/customers. The Company plans to use these principals of competition to build on its efforts: James Integrated Technologies Corporation • • Page 3 Free. Free releases of single user software distributed over the Internet. Training CD. Offer the training CD for $99. The Company expects 20% of those downloading the software will buy the training CD. Partners. Free or near free releases through major marketing partners to gain access to their channels of distribution. CD Distribution. Use catalog capabilities to create CD catalogs for companies. - Free Introduction Seminars. Conduct 1.5 hour seminars to introduce many people to product capabilities. For Fee eCommerce WorkShops. Conduct 2 day seminars. People will be required to bring their data in specified formats and will leave the seminar with their eCommerce solution operations. Use software to develop ISP customers. • COMPETITION: The computer software market is one of constant change and rapid development. If the Company wishes to be successful, it must be constantly cognizant of its competition. Microsoft and Netscape have similar programs in the $5,000 range. They could offer a free eCommerce solution. iCat has a web catalog program that costs $5,000. They are competing very well against Microsoft. JIT needs to be very driven to capture wide portions of this market before it becomes flooded with competitors. It we succeed, JIT will gain market share and tremendous revenues through the recurring sales. MANAGEMENT: William James, Chief Executive Officer and President Mr. James has overall responsibility for the management of the corporation. Additionally, he serves as the lead product developer of all software for the corporation. Before joining the Company, Mr. James founded Applied Statistics, Inc., • where he served as president from 1986 through 1998. Mr. James has a 13S is Engineering from the United States Military Academy, West Point, New York. James Integrated Technologies Corporation Page 4 COMPANY NEEDS: With the advent of the "free" distribution of its software, the company stands to experience a strong growth cycle over the next six months. The company anticipates increasing sales, such that the company will be a "run rate" of$20M/year by late fall. The integration of the company into a community would involve the distribution of its software to all local businesses and a close working relationship with the area schools. Ultimately the company would occupy an estimated 7.500 sf of office space, with three principal functions, (1) Administrative, (2) Customer service/Call Center, (3) Software Customization/Development. The company is seeking financial assistance and the opportunity to establish its principal call center headquarters in a community. At this stage, the Company is seeking a financial package of$750,000 to be dedicated as follows: CD/Inventory development $ 65,000 Office/computer equipment $ 60,000 Operating capital $ 250,000 Seminar/training $ 250,000 Advertising/marketing costs $ 125.000 Total funding $ 750,000 Based upon sales projections in the first three years, the company's employment would be as follows: YR 1 YR2 YR3 Administrative 2 4 6 Management 2 3 4 Call center/customer service 15 45 85 Software development 5 8 12 Totals 22 60 107 •