EFTA00730006.pdf

Revenues Projected # • % Dec projected % Inc - _ 2019 10 21 /01. Seed Media 1 495 938 1 005 552 32.78% 2 449 785 143.63% Science Blip .s 641 545 398 036 37.96% ■ Planet - - Magazine ended in May / June 2009 I Pro'ected Seed Customers clio of Revenue 2009 1 1 211 GE 23% 87% 58% Brockman 6% Aglient 4% Misc 14% 3% Schering Plough 6% __ __ Kaiser Permanete 3% Magazines 13% Conferences 18% Licensing 14% Ipad Sales 11% Council on Competiveness 40% Totals 100% 100% 100% Comments: 1 2011 Revenue forecast is very aggressive - 1,500,000 seems more realistic 2 GE is to large a % of revenue and company has no diversification 3 No re • eat business from customers which is not a ood si • n Cash Flow 1 Nov 20th cash balance was 25,000 2 CFO claims that projected negative cash flow from 11 23-1 31 2010 is 250,000 (Seed -$0 Science Blogs 125,000 and Planet 125 000 3 2011 Seed Cash flow even with 2,450,000 revenue is projected to be (661,427) That number includes a salary of 175,000 for adam which I would eliminate so revised ■ fl • ure would be I -486427 I L 4 Conclusion: In a perfect world 750,000 'nvestment only allows you to continue to be in business until 2012 no Interest on Investment / extra mone to re 300k adam borrowed ■ i 1 Partner Is aware of financial situation and will not •ut any more mone In 2 Development has been halted due to lack of funds ... Sale did not happen since there was no buyers - asking price was 2 000,000 1 Sales •rocess was done online and no offers were made Attempting to shut down by end of 2010 which is unrealistic and comes with costs Burda invested 2,500,000 on August 7th 2007 for 30% and based on sales fl. ures Seed will get $0 upon sale therefore they are trying to negotiate a better s. lit 5 80 b . • •ers on contract with only 3 Employees 6 Adam believes business is worth 1,500 000 7 Adam claims that National Geographic wants to take over operation of Science Blo s effective January 1, 2011 r- EFTA00730006 _payroll Taxes 1 2009 Paid in Full on all companies 2 2010 Unpaid for Seed Media, Science Blogs, & Planet 3 Payroll used to be done by Intuit but they switched to manual by accountant when they decided to sto paying payroll taxes and withholding I 4 Plan is to pay IRS over 60 months however NYS is much more difficult to make a deal with 5 Every owner / director is ersonally liable for payroll taxes projected with interest as of & enalties • 121 • 12/31/2010 $324,036. J75,129 91 736 $380,000 $109,000 $135,000 Seed Media Science Blogs Planet Total $490,901 $624,000 NOTE: Totals do not include interest or aenalties which could amount to another 100,000 in total I Bankruptcy Scenario Payroll Taxes $624,000 Factor $120,000 Landlord $100,000 Legal $100,000 Miscellaneous S56.000 Total Bankruptcy Cost $1,000,000 Total Dollars Raised Ownership Structure & capital Contrillutions ,5eed Media see attached schedule !pity $ 23,920,000 waiting on ownership percentages debt $ 5,010,665 Science Blogj subtotal $ 28 930 665 Seed Media 70% Burda 30% via 2,500,000 investment 8/7/2007 2,500,000 National Geographic Invested 250,000 via promissory note 11/16/2009 $ 250,000 I subtotal $ 2,750,000 I note due 11/16/2012 with interest at 1 ear libor and Seed 55% Exempli (che In 2008) $ 3,000,000 45% via TOTAL FUNDS RAISED - DEBT & EQUITY $ 34,680,665 I 1 I I EFTA00730007 Miscellaneous Notes ____ i L 1 Adam 300,000 loan went towards working capital 2 Line of credit 9 12% was for 400,000 and raised by Innovium 3 Innovium trying to raise money for company 4 Walnut is funded from SBIC (government) and is out of funds 5 Excuse for lack or revenues is that Adam is spending all his time trying to raise funds 6 Status of Fabian (230,000) a former employee f that had an employment agreement with a 6 month severance period Trying to cut deal to pay only 2 months since he has a new job Office Lease 1 Rents 3,500 square feet at cost of 18,623 per month or 2 PayiLig $63.85per sq ft which is approximately_$10-$15 above market { $10 per sq ft above x 6 years remaining 210000 $15 per sq ft above x 6 years remaining 315000 Signed 10 year lease in 2007 at height of market which expires on October 31, 2017 3 Made settlement on 7th floor with Adam giving personal guarantee 4 Future rent obligations Rent per per Month $18,262.60 Aunpaii;ed $219,151.20 So Ft $62.61 11/1/2010 - 10/31/2011 11/1/2011 - 10/31/2012 $18,673.51 $224,082.12 $64.02 11/1/2012 - 19/31/2013 $19,926.99 $239,123.88 $68.32 11/1/2013 - 10/31/2014 $20,375.35 $244,504.20 $69.86 11/1/2014 - 10/31/2015 $20,833.80 $250,005.60 $71.43 11/1/2015 - 10/31/2016 $21,302.56 $255,630.72 $73.04 11/1/2016 - 10/31/2017 $21,781.86 $261,382.32 $74.68 Audit Committee 1 Innovium - Jamie M . 2 Innovium - Julie 3 Walnut - Jimmy 4 Adam Sly EFTA00730008 Proiected Cash Flow 2011 - 2012 seed Media Group L1 frprifIdential SaiBsolm W :L-1, Feb-11 MIS API:11 t;LI Jun-11 181-11 &F.ti ULU Sall asal Mal Digital Media • GE 85,250 85,250 85,250 85,250 109,500 97,375 97,375 I 85,250 85,250 85,250 85,250 85,250 1,071,500 Digital Media • Wad Sales & Advertising 5,000 5,000 15,000 15,000 20,000 32,475 I 32,475 32,475 34,970 34,970 34,970 262,335 Visualization 10,000 10,000 35,000 22,500 47,500 22,500 52,500 27,500 52,500 27,500 27,500 15,000 350.000 licensing 4,250 4,250 29,250 4,250 4,250 34,250 4,250 4,250 34,250 4,250 34,250 169,250 331,000 Conferences 0 45,000 50,000 50,000 95,000 149,950 0 0 0 45,000 0 0 434,950 Total Cash Receipts 99,500 149,500 204,500 177,000 271,250 324,075 186,600 I 149,475 204,475 196,970 181,970 304,470 2,449,785 Curnmulative 99,500 249,000 453,500 630,500 901,750 1.225,825 1,412,425 I 1,561,900 1,766,375 1,963,345 2,145,315 2,449,785 Cash Owl Operating Digital Media .22k payroll 30,281 42,081 44,081 49,081 35,831 33,331 33,331 33,081 33,081 33,081 33,081 33,081 433,420 Visualization- 3.2k payroll 3,730 3,730 11,230 11.230 11,230 11,230 11,230 11,230 11,230 11,230 3,730 3,730 104,760 licensing - 1.1k payroll 14,073 13,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 166,130 Conferences 500 50,500 15,500 10,500 45,500 500 500 500 500 35,500 500 500 161,000 G&A - Payroll & Related 64,608 64,150 64,150 64,150 64,150 64,150 64,150 64,150 64,150 64,150 64,150 64,150 770,258 G&A • Consulting & Professional 11,750 21,750 21,750 16.750 11,750 11,750 16,750 I 11,750 11,750 11,750 11,750 11,750 171,000 G&A • OperatIN & Administrative 26,020 26,020 26,020 26,020 26,020 26,020 26,020 26,020 26,020 53,020 26,431 27,281 340.907 Total Cash Outlays 150,962 222,054 196,554 191554 208,304 160,804 165,804 I 164584 160,554 222,554 153,465 154,315 2,147,47S Net Cash From Operations I (51,462) (72,554) 7,946 (14,554) 62,946 163,271 20,796 (11,0791, 43,921 (25,584) 28,505 150,155 302,310 Cummulative I (51,462) (124,016) (116,070) (130,623) (67,677) 95,594 116,390 105,312 149,233 123,649 152,154 302,310 Nc s•OftuSgatligaarsau Jan-11 Feb-1! 1812:11 898:21 21.4 bail &La , boWI Sea11 gan Nov-fl ( -11 'mg Settlement Meringoff 24,004 19,826 7,824 7,824 7,824 7,824 23,472 98,597 Settlement, Versant 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120.000 Severance Obligations 15,000 7,500 7,500 30,000 Interest payments, Sly 5,096 5,095 5.095 5.095 5,095 5.095 5,095 5,095 5,095 5,095 5,095 5,095 61,140 illStOritil Payables, Seed Media Group LLC 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000 Trade Payables, Seed Media Group, Overdu 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 180,000 Trade Payables, kienceWide, Overdue 5,000 5,000 5,000 5,000 5,000 25,000 Payments, Payroll Tax 2010 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000 Payments, itS8C credit card balances 1,500 1,500 1,500 1,500 1,500 1,500 2,500 2,500 2,500 3,500 4,000 5,000 29,000 Total RnancingjinvesUng Outlays 110,599 86,421 86,919 74,419 86,919 74,419 96,067 67,595 72,595 68,595 69,095 70,095 963,737 NET CASH FLOW from Operations and Other (162,061) (158,975) (78,973) (88,973) (23,973) 88,852 (7%2n (76,674) (28,674) (94,179) (40,590) 80,060 (661,427) CurnmulatIve (162,061) (321,035) (400,008) (488,981) (512,953) (424,101) (499,371) (578,045) (606,719) (700,898) (741,487) (661,427) EFTA00730009 ifiroiected (Seed Cash Flow 2011- 201j Media Group RC Confidential Cash Rees) - S Ethit iUt ar nin agrzla Mw-U Jun-12 JS -12 - Oct-12 Nov-12 Dec-12 Dig Digital Media • GE 72,750 72,750 72,750 72,750 84,875 84,875 72,750 72,750 72,750 72,750 72,750 921,500 97,000 !Digital Mesa - Wad Sales & Advertising 37,465 37,465 37,465 37.465 39,960 39,960. 39,960 47,455 47,455 42,455 44,950 44.950 497,005 :Visualization 40,000 52,500 40,000 52,500 52,500 45,000 32,500 45,000 32,500 52,500 27,500 27,500 500,000 [Licensing 34,250 4,250 39,250 34,250 4,250 54,250 34,250 4,250 54,250 34,250 54,250 4,250 356,000 (Conferences 0 45,000 120,000 75,000 120,000 234,920 0 0 45,000 45,000 0 0 684,920 Total Cash Receipts 184,465 211,965 309,465 271,965 313,710 459,005 191,585 169,455 251,955 246,955 199,450 149,450 2,959,425 Curnmulative 184,465 396,430 705.895 977,860 1,291,570 1.750,575 1,942,160 2,111,615 2.363,570 2,610,525 2,809,975 2,959,425 CO+ Disdain. Ogstagg Digital Media -22k payroll 35,031 42,531 42,531 42,531 37,531 35,031 35,031 35,031 35,031 35,031 35,031 35,031 445,370 Visualization - 3.2k payroll 11,480 18,980 11,480 11,480 18,980 3,980 3,980 11,480 11,480 11,480 11,480 11,480 137,760 Licensing - Ilk payroll 23,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 13,823 165,880 Conferences SOO 35,500 35,500 20,500 I 55,500 20,500 20,500 500 35,500 35,500 SOO 500 261,000 G&A - Payroll & Related 71,483 71,483 71,483 71,483 71,483 71,483 71,483 71,483 71,483 71,483 71,483 71,483 857,800 G&A • Consulting & Professional 11,750 21,750 21,750 16,750 11,750 11,750 16,750 11,750 11,750 11,750 11,750 11.750 171,000 . . G&A • Operating & Administrative 26,431 26,431 26,431 26,431 26,431 26,431 26,431 26,431 26,431 36,431 27,684 28,534 330,523 - Total Cash Outlays 170,498 230,498 222,998 202,998 235,498 182,998 187,998 170,498 205,498 215,498 171,751 172,601 2,369,333 Net Cash From Operations 13,967 (18,533) 86,467 68,967 78,212 276,007 3,587 (1,043) 46.457 31,457 27,699 (23,151) 590,092 Cummulative 13,967 (4,566) 81,901 150,868 229,080 505,087 508,674 507,631 554,088 585,545 613,243 590,092 1 /Jon-Operating or Cash Only Items lain Edtli OW Air-f2 Mit:12 Jun-11 ol LS2 amit-11 Seo-12 .M1-2 - .A - Pala Tot Settlement, Meringolf 0 Settlement Versant 6,000 6,000 Severance Obligations 0 'Interest payments, Sly 5,095 5,095 5,095 5,095 5,095 5,095 5,095 5,095 5,095 5,095 5,095 5,095 61,140 :Historical Payables, Seed Media Group LLC 0 'Wade Payables, Seed media Group, Overtly 0 Trade Payables, ScienceWide, Overdue 0 Payments, Payroll Tax 2010 10,000 10,000 10,000 10.000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000 Payments, WIC credit card balances 0 Total Financing/InvestIng Outlays 21,095 13,095 15,095 15,095 , 15,095 15,095 15,095 15,095 15,095 15,095 15,095 15,095 187,140 I i NET CASH FLOW from Operations and Other (7,128) (33,628) 71,372 53,872 63,117 260,912 (11,508) (16,138) 31,362 16,362 12,604 (38,246) 402,952 Commutative i (7,128) (40,756) 30,616 84,488 1 147,605 408,517 397,009 380,871 412,233 428,595 441,198 402,952 EFTA00730010 Seed Media Group LLC Revenue Assumptions - Projections 2011 - 2012 Digital Media Revenue Assumptions o GE visualizing.org - $75k per month in retainer fees for 2011 and 2012. Current contract is up for renewal May 31, 2011. GE has indicated that it wishes to renew. o GE visualizing.org - new development for visualizing website assumed at $50k per year in both 2011 and 2012. o Ipad Application - we plan to develop an ipad app for Seed Magazine content and have assumed a $4.99 sales price with 20k customers by year end (based on Seed Magazine subscriber list on file). o Advertising - digital revenue from Seed and its properties; assumed at $200k for 2011 and $250k for 2012. Visualization Revenue Assumptions o Designs - We assume $50k as the average contract size for each visualization and assume we will do 4 in 2011 and 6 in 2012 as one-off visualizations. Seed recently won a $50k visualization engagement from Amway who have indicated that they will want to do more. o Retainers - We are closing on a deal with Bausch & Lomb for a visualization platform with a $50k upfront payment for development and $10k monthly retainer for one year. Licensing Revenue Assumptions o McGraw Hill - We have pitched a content licensing deal with McGraw Hill at their request for a higher education life sciences digital portal that will launch in 2012. McGraw Hill has been quoted $330k for archival content; paid half in 2010 and the balance in 2011 and $120k per year for a three year future content deal beginning 2012. These deal specs are incorporated into the attached projections. o Other Licensing - We will exploit other avenues for content licensing and have set a modest goal of $115k for 2011 and $185k for 2012. Conference Revenue Assumptions o Seed Science - Seed will begin hosting its own Science conferences starting in 2011. We have assumed a registration fee of $1999 per attendee with 50 paid attendees in 2011 and 80 in 2012. The conferences will additionally be underwritten by corporate sponsorships projected at $200k in 2011 and $250k in 2012. o Visualizing.org Marathons - with one successful marathon under our belt, GE has indicated they will want to do 4 - 6 next year. We have assumed 3 in 2011 and 5 in 2012. EFTA00730011 Seed Media Group 10/15/10 Cap Table Shares Issued % of Class Owned % of Issued Equity % of Diluted Equity Purchase Cost in US$ Common shares • 5,000,000 100.0% 6.5% 5.5% 5,000,000 Series A Preferred Innovium Media Properties 4,263,173 25.3% 5.6% 4.7% 1,025,000 All Other Investors 12,581,556 74.7% 16.4% 13.8% 3,024,999 Total: 16,844,729 100.0% 21.9% 18.5% $ 4,049,999 Series B Preferred Innovium Media Properties 10,552,605 60.0% 13.7% 11.6% 3,000,000 Wexner Group 7,035,070 40.0% 9.2% 7.7% 2,000,000 Total: 17,587,675 100.0% 22.9% 19.3% $ 5,000,000 Series C Preferred Innovium Media Properties 26,599,617 71.3% 34.7% 29.2% 7,042,500 All Other Investors 10,718,391 28.7% 14.0% 11.8% 2,827,500 Total: 37,318,008 100.0% 34.7% 29.2% $ 9,870,000 Issued and Outstanding: 76,75%412 100.0% 72.5% $ 23,919,999 Management Participation Units " Adam Bly 14,295,880 15.7% Effective Fully-Diluted Shares: 91,046,292 100.0% $ 23,919,999 18% Secured Loans Innovium Media Properties 485,665 56.4% 3.6% All Other Investors 375,000 43.6% 2.8% $ 860,665 100.0% 6.4% 12% Secured Extension Notes • 4,000,000 100.0% 29.5% 6% Unsecured Long-term Loans • $ 150,000 100.0% 1.1% Accrued Dividends and Interest Innovium Media Properties 2,980,107 34.3% 22.0% All Other Investors 5,706,891 65.7% 42.1% $ 8,686,998 100.0% 64.1% All Debt Outstanding: $ 13,547,663 100.0% $ 13,547,663 Total Capitalization: $ 37,467,662 Innovium Consolidated Ownership Equity Debt Innovium does not own any of this instrument 25.6% 45.5% EFTA00730012 Schedule A Seed Media Group LLC Limited Liability Company Agreement List of Members, Capital Contributions, and Units (as of December 15, 2009) Capital Name and Address of Members Contribution Units Innovium Media Properties Corp. $7,042,500 26,599,617 Series C Preferred 130 Adelaide Street West Suite 3210 $3,000,000 10,552,605 Series B Preferred Toronto, Ontario M5H 3P5 $1,025,000 4,263,173 Series A Preferred Wexner Children's Trust H $1,360,500 5,212,644 Series C Preferred 551 Madison Avenue, 9th Floor New York, NY 10022 $2,000,000 7,035,070 Series B Preferred Walnut Private Equity Fund. ■. $860,000 3,295,019 Series C Preferred 312 Walnut Street, Suite 1150 Cincinnati, Ohio 45202 $1,220,000 5,074,214 Series A Preferred John Porter $500,000 1,724,138 Series C Preferred David B. Peterson Trust do Mr. Paul Newman $104,000 398,467 Series C Preferred Peterson Management 712 Fifth Avenue, 48th Floor, New York, NY 10019 Steven Hirth $50,000 191,571 Series C Preferred Hauser 46 LLC $20,500 78,544 Series C Preferred 8260 Northcreek Drive, Suite 200 Cincinnati, OH 45236 Hauser Davis Tysoe LLC $20,500 78,544 Series C Preferred 8260 Northcreek Drive, Suite 200 Cincinnati, OH 45236 Joys Omnimedia Corporation Inc. $575,000 2,391,536 Series A Preferred 12 West 21'r Street, 7th Floor New York, NY 10010 $5,000,000 5,000,000 Common 2 30669414 EFTA00730013 4230094 Canada Inc. 1 Place Ville-Marie, Suite 2125 Montreal, QC H3B 2C6 $400,000 1,663,676 Series A Preferred Walnut Investment Partners, Ill 312 Walnut Street, Suite 1150 Cincinnati, Ohio 45202 $305,000 1,268,553 Series A Preferred 88650 Canada Ltd. c/o Spiegel Sohmer Inc. 5 Place Ville-Marie, Suite 1203 Montreal, Quebec H3B 2G2 $125,000 519,899 Series A Preferred Beneficial Capital Corp. P. O. Box 40A Villanova, PA 19085 $100,000 419.919 Series A Preferred Mercury Trade International Ltd. P.O. Box F 42475 Freeport, Bahamas $100,000 419,919 Series A Preferred Mirth Family LLC 36 West 44th Street, Suite 1412 New York, NY 10036 $100,000 419.919 Series A Preferred Dan Burstein $50,000 207,960 Series A Preferred Paradigm Ventures 1609 Via Arriba Palos Verdes Estates, CA 90274 $50,000 207,960 Series A Preferred Adam BI Services rendered to the Company 14,295,880 Participation Units Tot, Alec( 24/oo8,000 3 3066942 4 EFTA00730014