2009 Skadoit Executive Summary

E x e c u t i v e S u m m a r y

Skadoit LLC

Mission: To change the way data is valued, protected, stored and

Phone: 904-215-8989 Fax: 904-215-8990 Email: [email protected] Web Site: www.skadoit.com

Business Summary: Skadoit, LLC (“Skadoit” or the “Company”), is

Management Team: President and CTO: Mr. Stephen Nye CEO and VP of Franchising: Mr. Ken Hollowell COO and VP of Product & Channel Development: Steven B. Highfill, CPC Industries: Cloud Computing; Online Data Recovery, Backup & Restore; Data Insurance; Franchising Capital Required: $1 Million The Company is currently engaged in a Regulation D Rule 504 Private Offering

restored by more than 4 billion computer and digital device users worldwide. a national franchisor that provides online data storage and protection software, services and insurance. Our products and services will recover, back-up, restore and insure data from any computer, laptop, cell phone, or other digital storage device. Our solutions secure the digital lives of customers in the new era of “Cloud” computing. The Company is developing the world’s first franchise system in the online data backup industry. The Company acts as a systems integrator and value added reseller that distributes data storage technologies and services through a proprietary “Multi-Channel” and “Open Source” franchise network. Our licensed franchisees are highly trained data protection experts who, upon completion of their franchise training, receive a Skadoit Certified “Data Protection Expert” or (DPE) designation before selling and servicing mass market end users.

Company Background: The Company is a privately held firm formed as a Limited Liability Company under the laws of the State of Florida in April, 2008. After nearly a year of research and development and beta testing, the Company began commercial operations in January 2009. Its principal offices are presently located at 1835 East West Parkway, Suite 9, Fleming Island, Florida 32003.

The Company is emerging from development stage and is now engaged in early stage commercialization and growth capital fundraising activities to expand its franchise network.

Confidential

Page 1 11/6/2009

Products/Services: With worldwide personal computers, cell phones, cameras and other digital devices numbering more than 4 billion worldwide, users of these devices are becoming digitally savvy and dependent on data they create, share, and use. The skyrocketing use of the Internet and reliance on data in the new digital

economy is generating massive amounts of data that doubles every 18 months. In 2008, stored bits of high quality content and data exceeded the estimated number of stars in the universe. The amount of data generated and stored on devices will continue to grow at a rapid exponential pace each and every year. More than 85% of this data moves through the Internet, corporate networks, and from one device to another with a 50% chance the data will be lost, degraded, or damaged in transmission. Virtually every single person on the planet and virtually every business or entrepreneur carries his or her entire life (personal, business, financial, work product, contacts, photos, music, and videos) on some computer, laptop, PDA, camera, flash drive, or mobile device. Whether or not this is a smart idea, it’s a fact and one that can’t be denied. But like everything else in life, stuff happens. Millions of computers, laptops, and mobile devices are stolen, lost or damaged each year. As our population and economies become more data dependent, the value of data increases. In the business environment, the production and use of data is the core of business and critical to the survival of any business. Just 1 megabyte (“MB”) of data is valued at $10,000. It takes 19 days and costs $17,000 to reproduce just 20MB of lost data. It is estimated that the value of every lost business contact or customer file is more than $200, and that the average business has $60,000 worth of computer data and no protection at all. Many small businesses that suffer significant data loss file bankruptcy within 10 days, and 60% will go out of business within 6 months. Despite the increasing value of data and the fact that two out of every five PC users (43 percent) have lost digital files or data at some point in their lives, it is estimated that less than 2% of computer and cell phone users are backing up the data stored on their devices. There are a number of barriers preventing the majority of people and businesses from backing up their data. Most people simply forget. People forget or simply don’t elect to back up their data because traditional methods and processes are not automatic, they take too long, the process requires hardware or technical knowledge, it’s too complicated, or they think it’s not that important or too expensive. Traditional data protection has always been problematic regardless of the technology or methodologies used. The average PC user will use CDs, DVDs, Flash, Disc, or external hard drives to backup data if they do anything at all. Unfortunately, these methods are unreliable and costly. Moreover, the user typically stores the CDs or drives in the same physical location as the device they backup, so in the event of a natural disaster, fire, etc, all data is still lost. Businesses have traditionally relied on “tape” backup and offsite or (“remote”) storage. Tapes are transported to a remote location and stored there for a predetermined period. Tape-based backup and recovery is slow, cumbersome, labor-intensive, and expensive. Skadoit’s “Secure Cloud” computing principles and backup/restore technology solve these simple and complex data protection challenges. Cloud data backup and restore solutions reduce costs while improving network, application and device performance. The key advantage of a Cloud computing approach to backup and recovery is the ability to use wires full of data—instead of trucks full of tape—to send backups to a remote site for compliance and disaster recovery. We believe that the discovery and integration of these market changing data backup and restore technologies has the potential to change the fabric of the computer industry in the same manner the Internet changed the industry and the way data is produced and shared. We believe data is fast becoming the most valued asset in the new digital economy, similar to gold or oil in our industrial based economy. We believe that most people and small and medium businesses do not protect their data assets adequately and cannot afford to use the current offerings of the major storage vendors in the market today. As a result, we believe that a Cloud computing environment offers a systems integrator of these technologies a rare opportunity to deliver low cost, automated, secure and reliable backup solutions to mass markets, essentially changing the way data is transmitted, stored, and insured.

Unique Technologies/Key Differentiators: Lost data leads to frustrated users, employees, and information technology administrators. Skadoit is addressing this critical issue through the global launch of Skadoit’s Secure Cloud Remote Backup and Restore, an expanded suite of software and managed services that overcome the

Confidential

Page 2 11/6/2009

limitations of traditional remote data protection services. Our solutions are built upon a diverse portfolio of patented technologies that have emerged over the past decade. Our software platform is installed in more than one million computers and is available in multiple languages covering 90% of worldwide population. Until recently, these innovative technologies were only available to narrow business vertical markets at high price points. Using advanced technologies such as “Smartscan™”, “data compression”, “in flight” and “at rest” data encryption, “data healing”, “de-duplication”, and “continuous data protection”, Skadoit services provide individual consumers and businesses of any size with low-cost powerful enterprise level data recovery, backup and restore solutions. Skadoit’s proprietary mobile software solutions will help to protect all personal mobile data and media content. Skadoit will make it possible to backup and restore videos, pictures, ring-tones, browser bookmarks, SMS “text” messages, MMS “text with content” messages, as well as, personal data like contacts and calendar entries. All data can be restored to a new mobile phone in case of replacement, repair or loss of the phone. Data can also be saved and transferred between different carriers and platforms. Best of all, Skadoit’s software pro-actively protects customer’s mobile phone media content, data, and applications by using groundbreaking “Over-the-Air” “OneButton-Push” backup. Users download the software over-the-air and backup and restore data over-the-air by pressing a single button on their device. Traditional mobile data backup and recovery solutions are “re-active” and require customers to physically connect their device to a computer at home where they have purchased software that can backup and recover data from internal memories cards and SIM cards. Skadoit also provides additional personal data protection by offering unique “neutralizer” technology that allows users to call their lost or stolen phone and enter a secret code that will wipe out all the internal memory and data on the SIM card. Skadoit is also in negotiations to become one of the first system integrators and resellers of the world’s first data insurance platform capable of proactively insuring a company’s liability of its confidential data if it is compromised while in-transit or stored. We are in negotiations with the inventors and holders of numerous patents that provide the world’s only “Internet Protocol Data Transmission Insurance System” and “Internet Protocol Data Insurance Policy Management System” which provides “real time” assessment of data value, data risks and issues an insurance policy related to the transmission and storage of such data. This will allow Skadoit to provide customers with insurance that addresses risk associated with the valued electronic data maintained in digital format and digital assets that are included on balance sheets. Such risks include loss and theft, errors in transmission, privacy-security violations, copyright infringement and compliance with government security mandates, required privacy protocols and a host of Internet perils.

Markets: The IDC conducted a recent study on the growth of “Computer Managed Services”. In this study “Managed Services” is expected to grow from current annual revenue of $200 billion in 2009 to over $500 billion within the next 5 years. IDC research also anticipates that global online backup services are poised for growth. The growth will be fueled by a combination of factors, including the tremendous growth in digital data generated by both individuals and small businesses. IDC said it estimated that revenue for this emerging market would reach $715 million by 2011, up from $235 million in 2007, representing a 33.3% compound annual growth rate between 2006 and 2011. Skadoit’s volume based low-cost pricing strategy and subscription based “Software as a Service” revenue model should allow the Company to capture significant market share while producing sustainable recurring revenue.

Distribution Channels: We plan to distribute our products and services through our unique multi-channel franchise network. Each franchise will cultivate multiple distribution channels including direct, indirect, retail, B2B, and enterprise sales that successfully drive and expand market presence. This will include developing affiliate marketing channels, partner and vertical market channels, retail kiosk channels, retail vendor channels and the social enterprise channel.

Franchising Skadoit is the first franchisor in the online data backup and restore industry. Skadoit has developed a proprietary Multi-Channel and Open Source Franchise System that encourages franchise to franchise collaboration and creativity allowing for rapid growth of sales and strong brand development. Skadoit, through the licensing of franchisees expects to award 500 fully operational franchises over the next 36 months.

Confidential

Page 3 11/6/2009

Each franchise will be provided with marketing materials, training, advertisements, and a marketing plan developed and approved by Skadoit. The marketing strategies provided will include multi-media advertising, promotion and public relations campaigns in support of multi-channel development and sales. This will include radio, television, and cable broadcasting; print; direct mail; interactive; event marketing and sponsorship; co-op marketing; trade show marketing; and “geo-targeted” search engine marketing (“SEM”) and optimization (“SEO”). The Company will also support each franchise by providing effective cross promotional and Internet based marketing and lead generation through a national SEM, SEO, content targeting, display, rich media, social networking, strategic partnering and linking agreements. Retail Distribution Skadoit plans to be the world’s first online backup and restore service to offer its first-to-market feature set to consumers at the retail level by selling packaged software on the retail shelf. We plan to distribute our products directly through our franchises to tens of thousands of small to “big-box” retail storefronts, including Wal-Mart, Costco, Target, Staples, Office Depot, Office Max, and Best Buy. We are currently in negotiations with numerous category managers at retail stores, such as Walgreens, Publix and Winn Dixie, that will provide potential shelf and point-of-sale distribution opportunities in more than 10,000 locations in the Southeast. We also plan to distribute packaged retail software products through franchised retail kiosk locations in more than 1,200 high traffic shopping and outlet malls.

Competition: The burgeoning new “Online” or “Cloud” sector of the Data Storage space has attracted many competitors over the past five years. Some 30 to 40 new start-ups, such as Carbonite, Digital Railroad, The Linkup and Mozy, and several well capitalized new online data storage divisions of bell weather companies like AOL, Hewlett Packard, Sony, Yahoo and Verizon have launched some form of service. The methods of competition vary widely between accounts and between individual sales opportunities, but, in general, include a blend of product performance, service, and price. As competition heated up from 2005 through 2007, before the world financial crisis and economic downturn, many entries launched low-cost “paid” service or some form of “free” storage service that caused the market to mature and forced it to find a footing. More than half of the small services and many of the well-funded divisions of bell weathers have all closed down. With a lack of a clear business model, poor management and customer service, and limitations on the software, many failed under cost-cutting and economic pressure. Of those named above, only Carbonite and Mozy remain of the start-ups and Verizon is the only bell weather still in the business. Skadoit is entering the marketplace with perfect timing and easily differentiates itself from competitors. Our competitors offer software inferior to Skadoit. Their software is not compatible with many technologies and operating platforms which severely limit who they can sell to. Also, their services are focused on the “home” consumer market and have complicated user interface and restore procedures and a lack of functionality. Their service and business model is one dimensional, as they only offer basic online data storage. Another weakness of our competitors is distribution. Our competitors only sell and service their products over the Internet. This model results is poor customer service and unsatisfactory purchase experiences. Contrary to this model, Skadoit distributes our software and services through multiple channels. This allows us to offer products in various forms, such as downloads or packaged software. Customers who prefer to have physical possession of the software, not just a downloaded file, can purchase the software off the retail shelf or online. We have also developed the industry’s first franchise business model that boosts highly trained Data Protection Experts in local markets capable of providing exceptional face-to-face product demonstration, installation, and customer service. This “high touch” customer service approach assures the highest level of responsiveness, customer satisfaction, and cross selling opportunities for other services.

Financial Projections: Yearly Sales Forecast Year Growth (%)

2010

2011

2012

2013

2014

0.0%

355.0%

80.5%

40.0%

30.0%

$3,323,760

$15,123,108

$27,297,210

$38,216,094

$49,680,922

Skadoit Three Pack

$516,800

$2,351,440

$4,244,349

$5,942,089

$7,724,716

Skadoit Business Class

$391,040

$1,779,232

$3,211,514

$4,496,119

$5,844,955

Skadoit Secure Cloud Backup

Confidential

Page 4 11/6/2009

Skadoit Mobile

$150,405

$684,342

$1,235,237

$1,729,331

$2,248,131

Skadoit Franchise

$2,460,000

$11,193,000

$20,203,365

$28,284,711

$36,770,124

Totals

$6,842,005

$31,131,122

$56,191,675

$78,668,344

$102,268,848

Cost of Sales Forecast Year

2010

Growth (%)

2011

2012

2013

2014

0.0%

60.0%

50.0%

40.0%

30.0%

$2,340,481

$3,744,770

$5,617,154

$7,864,016

$10,223,221

Skadoit Three Pack

$434,629

$695,406

$1,043,109

$1,460,353

$1,898,459

Skadoit Business Class

$311,930

$499,087

$748,631

$1,048,083

$1,362,508

Skadoit Mobile

$112,785

$180,456

$270,683

$378,957

$492,644

$738,000

$1,180,800

$1,771,200

$2,479,680

$3,223,584

$3,937,824

$6,300,519

$9,450,778

$13,231,089

$17,200,416

Skadoit Secure Cloud Backup

Skadoit Franchise Totals Gross Profit Year Total

Confidential

Page 5 11/6/2009

2010 $2,904,181

2011 $24,830,603

2012 $46,740,897

2013 $65,437,255

2014 $85,068,432