CompanyX 1 of 8

TABLEOFCONTENTS

EXECUTIVESUMMARY 2REVIEWOFTHEMARKET 3 Business 3 Whatbusinessarewein? Whathaveweaccomplished? Competitors 3 Whoareourcompetitors? Whathavetheydonerecently? Market 4 Whatdowethinkwillhappennext?STRATEGYGOALANDEXIT 5 StrategyGoal 5 Whatdowewanttoachieve? Howarewegoingtodoit? ExitPlan 7 Howdoesthisend/whathappensnext?APPENDICES 9 LegalandAdministrative 9

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EXECUTIVESUMMARY

CompanyXprovideshostedcontentserviceswithintheonlineapplicationsandplatforms(OAP)marketviaitsProductXproduct.ProductXisaplatformforbusinessesandorganizationstostore,manage,andpublishcontenttothewebandmobiledevices.ProductXservicesaresoldatproductx.comandusedbyourcustomersonaself‐servicebasis.DevelopmentofProductX1.0beganin2006andwaslaterlaunchedinthewinterof2007.SoonthereafterwebeganplanningforProductX2.0,whichafteralmostayearofdevelopmentanditerationbasedoncustomerfeedbackwaslaunchedinApril2009.ProductXiscurrentlyinusebyover800organizationsofalltypesandsizesandprovidesCompanyXwiththenecessaryfoundationtoachieveourmainobjectivesoverthenext12months.ProductXcustomersincludeadagencies(WPPGroup),universities(MIT),largeenterprises(Ernst&Young),industryassociations,non‐profits,filmproducers(OliverStone),mediapublishers(Meredith),governmentagencies(FDA),andmanyothertypesoforganizationsthatrelyoncontentforcommunications,marketing,andothercorebusinessactivities.OurcustomershavetoldustherearethereprimaryreasonswhytheychoseProductXoverthecompetition.Firstisprice:ProductXisthemostcosteffectiveplatformonthemarket.Secondismobile:ProductXsupportsthedeliveryofcontenttoallthemostpopularmobiledevices.ThirdisAPI:ProductXoffersabuilt‐for‐developers‐by‐developersAPIthatenablesrapidintegrationwith3rdpartyappsandservices.AccordingtoaForresterResearchreportpublishedearlierthisyear,onlineapplicationsandplatforms(OAPs)generatedrevenuesof$4.1Bin2008,up86%over2007,andareexpectedtogenerateroughly$5.9Bin2010.ThatsamereportalsopredictsthatOAPsfocusedonmobilecontentdeliveryand3rdpartyintegrationswillincreasetheirmarketsharefrom13.4%in2008toover22%by2010.OurgoalistoestablishProductXastheleadingSMB‐focusedonlineplatformbyQ42010.Weplantodothisbygrowingnewsignupsandcustomers,andmaintainingourleadinproductinnovationandcosteffectiveness.Todatewehaveraisedroughly$4MinSeedandSeriesAfinancingfromasmallgroupofprofessionalangelinvestors.Weareseekingtoraise$3MinSeriesBfinancingtoachieveourobjectivesoverthenext12months.InternetentrepreneurandCompanyXCEOBobB.foundedthecompanyinthewinterof2005withavisionforhowtheInternetwasgoingtogreatlyenhancetheroleofcontentasacommunicationsandmarketingtool.Fromitsinception,theCompanyXleadershipteamhasincludedCTOJohnD.,SVPMarketingJaneT.,andadevelopmentstaffoffour.AllmembersoftheCompanyXleadershipteamattendedMassachusettsInstituteofTechnology.

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REVIEWOFTHEMARKETBusiness

‐ Whatbusinessarewein?CompanyXprovideshostedcontentserviceswithintheonlineapplicationsandplatforms(OAPs)marketviaitsProductXproduct.ProductX,isawebplatformforbusinessesandorganizationstostore,manage,andpublishcontenttothewebandmobiledevices.ProductXservicesaresoldatproductx.comandusedbyourcustomersonaself‐servicebasis.

‐ Whathaveweaccomplished?DevelopmentofProductX1.0beganin2006andwaslaterlaunchedinthewinterof2007.SoonthereafterwebeganplanningforProductX2.0,whichafteralmostayearofdevelopmentwaslaunchedinApril2009.ProductX2.0iscurrentlyinusebyorganizationsofalltypesandsizesandprovidesCompanyXwiththenecessaryfoundationtoachieveourmainobjectivesoverthenext12months.Competitors

‐ Whoareourcompetitors?ProductX’sdirectcompetitorsareotherSMB‐focusedcontentplatformproviders(SMBs)suchasCompetitorA,CompetitorB,CompetitorC,andCompetitorD.ProductX’sindirectcompetitorsarethemarket‐leadingcontentplatformprovidersandincludeCompetitorE,CompetitorF,CompetitorG,andCompetitorH.

‐ Whathavetheydonerecently?o Product

TherehasbeenverylittleproductdevelopmentorinnovationonthepartofSMBsoverthepast6months.Withtheexceptionofoneortwoplayers,SMB’sgenerallycontinuetopositiontheirproductsascheaper,slimmed‐downversionsofthemarketleaders’platforms.MostarewellbehindinofferingeventhemostbasicfeaturesandservicesfoundinProductXorthemarket‐leadingplatforms(i.e.,automatedencoding,high‐definitionpublishing,comprehensiveAPIs,etc.).Marketleadershavecontinuedtofocusheavilyonadvertisingtoolsandservices,includinghooksintopartnernetworks,syndicationfeatures,and3rdpartyadserverintegration.MarketleadersnowofferHDorclose‐to‐HD(commonlyreferredtoashigh‐quality,orHQ)publishingfeaturesandareorwillsoonbefocusingonsimplemobilepublishing.Manychallengesstillexistwhenitcomestomobile,howeverincreaseddemandonthepartofcustomersandtheirend‐usersisforcingthemarketleaderstomoveinthisdirection.

o Go‐to‐market Fromabusinessstandpoint,wehaveseenalotofslimming‐down(eliminatingfree/subsidizedofferings)andre‐focusingoccuroverthelast9months.Theprimarytrendwecurrentlyseeisare‐balancingofgo‐to‐marketstrategies:ashiftawayfrompurecontentmonetization(thecouplingofcontentcontentwithadvertisements)towardswhatwerefertoasaudiencemonetization(afocusoncontentaccessibilityandquality).Bothgroups–SMBsandmarketleaders‐areengaginginthisshift.Why?Becausetherearealotmorebusinessesandorganizationsthatneedtoolstostore,manage,andpublishtheircontentthanneedtoolstomonetizeit.

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Market‐ Whatdowethinkwillhappennext?

o Marketactions? Despitemacroeconomicconditions,thereisclearlysustainedandinmanyareassubstantialgrowthwithintheonlinecontentapplicationsandplatformsmarket(OAPs).AccordingtoanAnalystXreportpublishedearlierthisyear,OAPsgeneratedrevenuesof$4.1Bin2008,up86%over2007,andareexpectedtogenerateroughly$5.1Bin2010.Thatsamereportalsopredictsthatthemarketshareofcontentadvertisingplatforms(i.e.,marketleaders)willdropfrom41%in2008to39%by2010,whiletheshareofplatformsfocusedoncontentencoding,organization,andintegrationservices(i.e.,ProductX)willincreasefrom12.4%in2008toover20%by2010.SuchvolcanicgrowthisaffectingOAPbusinessmodelsandgo‐to‐marketstrategies.Aspreviouslymentioned,contentmonetizationcannolongerbeaplatformprovider’ssolefocus.Giventheincreasedimportanceofrevenuegeneration,marketleadersandSMBsappeartobediversifyingtheirstrategiesbyalsoservingbusinessesandorganizationsthathavenoneedtomonetizetheircontent,butdohaveaneedto“deal”(i.e.,store,encode,manage,publish)withwebcontent.Wecallthisgeneralneed“audiencemonetization”‐furtheringcorebusinessobjectives(mostcommonlyattractingandretainingusers)throughcontentqualityandaccess.Weseethisasthebeginningofamajorlong‐termopportunitybecauseitappliestosomanyorganizationsofdifferenttypesandsizes.ProductXhasbeenfocusedonaudiencemonetizationsincedayoneandisverywellpositionedtotakeadvantageofthegrowthoccurringwithinthissectorofthemarket.

o Newsolutionsandcompetitors? Newsolutionsandcompetitorswillcontinuetobeverylimitedoverthenext12months.Weexpecttheonly,ifany,newthingsaregoingtocomefromplayersalreadyoperatingwithinthespacewhohaveadequateresourcestore‐alignorfurtherfocustheirofferingtowardwhattheyseeastheprimaryopportunity.

o Competitoractions? Bothmarket‐leadersandtheSMBswilllikelycontinuetoadjusttheirstrategiesbasedonwhattheyperceiveastheprimarymarketopportunityandastheresultofcontinuedtectonicshiftswithinthegreateronlinecontentvaluechain.However,webelievemostplayers,ifthey’restillhere,arefairlywelllockedintotheparticularstrategythey’vechosentopursue.Itisclearthatthemarketleaders,supportedbydealswithmajormediapublishers,willcontinuetopursuelong‐termstrategiesfocusedoncontentmonetization.Theirnear‐termfocusesareongainingmarket‐shareandgeneratingrevenue,andrangefromgoingaftereverymajormediapublisherintheworld(CompetitorE),toservingasthefoundationfor“contenteverywhere”initiatives(CompetitorF),topoweringsocialnetworksandconsumerbrandwebsites(CompetitorG).TheSMBmarketisamuchdifferentstoryandanareawhereweexpectmanyplayerstoexperiencesignificantchallengesoverthenext12months.Specifically,webelieveSMBplatformproviderswhoare1)nottargetingorabletoservicelarge,marqueecustomersand/or2)areintheprocessofplayingcatch‐upwiththeirproductswillhavethehardesttimegrowingtheirbusinessesoverthisperiod.

“SolutionsproviderslikeProductXoperateinsideahighgrowthcontentapplicationssegment,withcontractwinsspanningawidespectrumofpublishingverticals.In2009and2010,allbrandsaremediabrands,withthecommonstrategicimperativeofexpandingaudiencereachcosteffectivelyandefficientlyandincreasingrevenue.Digitalisamusthaveexploitationwindowthatisexpectedtocontributetothebottomline.That’swhyOAPprovidershavegrownthroughthemarketdownturn,andareforecasttocontinuethatpathbeyond2010aspublishersfocusmoreintentlyondigitalbrandvalue.”­ChiefAnalyst@AnalystXResearch

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Withgrowthcomesfracturing.TwoyearsagovirtuallyallOAPproviders(marketleadersandSMBs)werefocusedonasinglegoal:sellingwebcontentsolutionstomajormediapublishers.Sincethenallhavebeenforcedtomakesignificantadjustmentsinordertoestablishtheirownmarketniches.Whilethetotalmarketmayappearcrowded,ProductXistheonlyplatformpurelyfocusedfromitsinceptiononaudiencemonetization.Solongasweareabletopursuethestrategyplanlaidoutbelow,wedonotbelieveanycompetitor–marketleaderorSMB–willbeabletomatchProductXonpriceorvalue.

STRATEGYGOALANDEXITStrategyGoal

‐ Whatdowewanttoachieve?OurgoalistoestablishProductXastheleadingSMBwebcontentplatformbyQ12010.Weplantodothisthroughgrowingnewsignupsandcustomers,andmaintainingourleadinproductinnovationandcosteffectiveness.

o Short‐term? Theshorttermhasbeenthelast6months(5/1/08through11/30/08).Overthatperiodwehavedoneahandfulofthingstosupportourlong‐termgoalsincludingtighteningupandoptimizingProductX2.0,promotingProductX2.0tobuildbrandrecognitionandincreasemarketshare(i.e.,intheformofnewsignupsandcustomers),andraisingSeriesBgrowthcapitaltoscalebusinessdevelopment,sales,andproductdevelopmentactivities.

o Long‐term? Thelongtermisgoingtobethenext12months(12/1/08to11/30/09).InanticipationofraisingourSeriesBfinancingbyearlyDecember’08,ourprimaryfocusesoverthefollowing12monthsaregoingtobe:1)continuetopromoteProductX2.0tobuildbrandrecognitionandincreasemarketshare(i.e.,intheformofnewsignupsandcustomers),2)developandlaunchProductX3.0tomaintainourleadastheSMBmarketinnovator,and3)raisegrowthcapitaltofurtherscaleand/orsellProductX.

• Cash Webelieveit’sgoingtotake$3MinSeriesBfinancingtoachieveourmainobjectivesoverthisperiod.Useofproceedsbreaksdownintothreeprimarycategories:

BusinessDevelopment/Marketing:EmployPRandonlineadvertisingcampaigns,anddevelopaffiliatemarketing/partnerprogramstogrownewsignupsandcustomersProductDevelopment:LaunchProductX3.0tomaintainleadintheareasofencoding,web/mobilepublishing,reporting,anddevelopertoolsTeam:Addingpeoplecapacityintheareasofbusinessdevelopment,finance,customersupport,andsystemadministrationtosupportgrowthobjectives

• Customer

Makingsureourmarqueecustomersaresatisfiedandthatwearemaintainingourguaranteeofaconsistentlyhighqualityofservicetoallcustomersiscriticaltoourlong‐termobjectivesofincreasingcustomerretentionandreinforcingProductX’sbrandasastandardbearerforperformanceandreliability.

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• Prospect

Non‐marqueeprospects–thosethatarelikelytosignupforaProductXaccountontheirown–aremanagedinalargelyautomatedmannerviaresourcesandsystemsathttp://ProductX.com.Marqueecustomers–largercompanies/namebrandsthatarenotlikelytosignupforaProductXaccountontheirown–arecurrentlymanagedbyCompanyXCEOBobB..Growingournon‐marqueeandmarqueepipeline‐theformerviaincreasedpublicrelationsanddirectmarketingandthelatterbyincreasingthecapacityofourdirectsalesdevelopmentteam‐isachieffocusandanareawherewewillbedevotingasignificantportionofourSeriesBproceeds.

• Product

“Ofallthesolutionswetested,ProductXwastheonlyonethatprovideduswiththetoolsweneedtoenhanceourgradandundergradprograms,bothinandoutoftheclassroom.”–WebServicesManager@UniversityX

PlanningforthedevelopmentofProductX3.0willbegininQ4’08,withthelaunchplannedforQ2’09.UnlikeProductX2.0,whichreplacedvirtuallyeveryaspectofthe1.0applicationandplatform,ProductX3.0isgoingtobuildonthefoundationthatwaslaidwiththe2.0launchinAprilofthisyear.AllareasoftheProductXapplicationandplatformwillgetsomeattention,howevertheprimaryareasoffocusfor3.0aregoingtobeencoding,webandmobilepublishing,analytics,anddevelopertools.Withtheexceptionofanalytics(anareawherewehavesomecatchinguptodo),theseareallareaswhereProductXisaleaderandthatourcustomershavetoldusweighedheavilyintheirdecisiontochooseProductXoverourcompetitors.

Encoding:ContinuetoensureProductXcandecodefrom/encodetomoreformatsthananyotherplatformonthemarketPublishing:FurtherimprovetheProductXPlayer’ssupportformobiledevicesandusercustomizationReporting:EnsureProductXcapturesandpresentsusagedatathat’smeaningfultoourcustomers’businessesDeveloperTools:ContinuetoensureProductXremainsthemostwebdeveloper‐friendlycontentplatformonthemarket

• People

Webelievecontinuingtomaintainanagileandleanteamiscritical.Overthisperiodwe’regoingtobelookingtoaddtwotothreeadditionalengineers(likelyasystemadminandanotherfront‐end/webappdeveloper)andacoupleQA/customersupportstaff.Additionally,wearelookingtofillsomeblindspotsintheareasofbusinessdevelopment/marketingandfinancebyhiringaheadofmarketingandaCFO.

o Engineering 1xsystemadministrator 1‐2xfront‐end/webappdeveloper

o QA/Support 1xQA/testingstaff 1xcustomersupportstaff

o Management SVPMarketing CFO

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• Infrastructure SincethelaunchofProductX1.0inlate’07,wehaveownedandmaintainedallProductXphysicalproductioninfrastructure.PriortothelaunchofProductX2.0inAprilof’08wedoubledproductioncapacityandarenowabletosupportbetween3‐4xthecurrentnumberofProductXcustomers.Thisinfrastructure–allofwhichishousedatacollocationfacilitymanagedbyTelecomX–canbefurtherscaledonanas‐neededbasistoserveupto10xthecurrentnumberofProductXcustomers.Goingforward,themaininfrastructurefocusesaregoingtobeonsettingourselvesupforfurtherscalability(from10xto500x)andmaintainingaconsistentlyhighqualityofservice.Inordertoachievebothoftheseobjectives,weintendtopartnerandintegratewithacontentdeliverynetwork(CDN).WearecurrentlyindiscussionswithanumberofCDNs(CDNA,CDNB,CDNC,andCDND)withthegoalofestablishingaoneormorepartnershipsbytheendofQ1’190andhavingProductXfullyintegratedwiththeirsystemsbytheendofQ2’09.

• Brand

"Clientswanttodomorewithlessinvestment[…]thereisatrendtowardlow‐touch,highlyscalableandefficientsystemsandcorrespondingpricingmodelsthatkeepbillingfeeslowandoverheadcostsdowntoattractmultipleclientverticals”–ChiefAnalyst@AnalystXResearch

ContinuingtobuildtheProductXbrandas“themostcost‐effectiveplatformforstoring,managingandpublishingcontenttothewebandmobiledevices”andalsodriveanincreasingnumberofprospectivecustomerstohttp://productx.comisatoppriority.TodothiswewillbecontinuingtoworkwithourPRagency(CommunicationsX)togeneratepressandrecognitionaroundourcustomerandproductsuccesses,securespeakingengagements,andattendindustryevents.Further,wewillbeengagingadirectmarketingagencytohandleemail,mail,andonlineadvertisingcampaignsalongwithanyjointmarketingcampaignsconductedwithProductXpartnerssuchasPartnerAandPartnerB.ExitPlan

‐ Howdoesthisend/whathappensnext?OurexitgoalistopositionProductXinamannerthatallowsustoexploreasaletoastrategicacquirer.Webelievetheconditionswilllikelyberightforexploringasalebeginningin12‐18months.

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APPENDIX‐LEGALANDADMINISTRATIVETheCompanyX(“Company”)StrategyPlanisconfidentialandproprietarytotheCompany.ProtectionoftheCompany'sconcepts,tradesecrets,businessmodels,andotherconfidentialinformationisofparamountinteresttotheCompany.InordertoprotecttheconfidentialityofsuchinformationandtheStrategyPlanforthebenefitoftheCompanyandallinvestors,therecipientofacopyoftheStrategyPlanorotherCompanyinformationagreestomaintaintheconfidentialityoftheStrategyPlanandsuchinformationandtonotdisclosesuchinformationordocumentationtoanythirdparty,orusetheinformationordocumentationforanypurposeotherthantheevaluationoftheCompanywithrespecttothepossibilityofaninvestmentin,orbusinessrelationshipwith,theCompany.ThisStrategyPlanandanymattersrelatedtotheStrategyPlan,theCompany,oranyuseordisclosureoftheStrategyPlanshallbegovernedbythelawsofthestateinwhichtheCompanywasformedorhasitsprimarybusinessoffice.ThecourtswithinsuchstateshallhaveexclusivejurisdictiontoadjudicateanymattersrelatedtothisStrategyPlan,includingtheprotectionoftheCompany'sconfidentialandproprietaryinformationfromimproperdisclosureoruse.IfyoudesirefurtherinformationregardingtheCompanyoritsStrategyPlan,youmaycontacttheCompanyasfollows:Address:CompanyXAttn:BobB.,CEO1222BroadStreetNewYork,NY10011Phone:212‐234‐6660E‐mail:bob@CompanyX.com