vc deck - march 2013
TRANSCRIPT
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VARILUX Intelligent Light Conservation Page 1
VARI UXEnhance it…
Street Light DimmerStepless 3-Terminal Dimmer Jack I. J’maev
ReadyTrace, Inc.14277 Albers WayChino, CA 91710909-437-8390
www.varilux4hps.com
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VARILUX Intelligent Light Conservation Page 2
FULL POWERSized for End of Life
Lumen Output
60% POWERMeets RP-8 Requirements
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VARILUX Intelligent Light Conservation Page 3
3-Terminal Means Plug & Play in 5 Minutes
Remove Photocell
Install variLux
Save Money
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VARILUX Intelligent Light Conservation Page 4
Problem
• Street Lights – 35% to 50% of City Electricity Costs– Rising Electricity Costs
• Shrinking Municipal Budgets– No Other Economical Options– Willing to Spend to Save Money
• Environmental Concerns– Carbon Footprint Reduction– Light Pollution Concerns
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VARILUX Intelligent Light Conservation Page 5
Beta Tested
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VARILUX Intelligent Light Conservation Page 6
Market
• Street and Area Lighting– 400,000,000 Units Globally– $66 Billion Potential Market– Distribution Partner Identified– “Displacing” Technology
• Early Adopters – Mexico– Brazil– Costa Rica– Bulgaria
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VARILUX Intelligent Light Conservation Page 7
Global Interest
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Competition
Induction
LED
ConventionalDimming
variLux
HPSBaseline
Operation Costs Maintenance Costs Purchase Cost
Installation Costs Payback Period
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VARILUX Intelligent Light Conservation Page 9
VARILUX is the New Answer
VariLux Street Light Dimmer (SLD)
Energy savings calculated relative to HPS luminaries at various power levels depicted in the chart.This energy calculation is based on a cost of $0.10 US per KW-Hr & accounts for Power Factor Correction.
Payback Period (P.B.P.) calculated on cost of acquisition and difference in installation labor.Life Cycle Cost (LCC) Savings based on 10 year maintenance and electricity usage relative to existing HPS installations and use of standard dimming profiles on a solstice quarter
basis.
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VARILUX Intelligent Light Conservation Page 10
Non Price Determinates
• Non-US Markets– Immediate Demand– Not Influenced by “LED Hype”– Markets Embrace Dimming
• United States Markets– Federal LED Incentives – Public Utility Commission
Action Required– Non-Company Owned Meter
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VARILUX Intelligent Light Conservation Page 11
Intellectual Property
• 3-Terminal Dimmer– USPTO PCT Search Report– Favorable for Issuance– International Examination– National Stage Filings Complete
• USA, EU, RU, IN, JP, BZ, MX
• Street Light Metering System– Patent Pending
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VARILUX Intelligent Light Conservation Page 12
The Technology
• Prior Art – 4 Terminal Dimmer– 50% More Cost
• VARILUX– 3 Terminal Dimmer– Power Factor Preservation– Supports Plug & Play– More Reliable
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VARILUX Intelligent Light Conservation Page 13
Conventional Dimming(European “E-Street” Concept)
INCOM
A
REGULATED POSITIVE RAIL
GROUND RAIL
A
B
DIGITAL SIGNALPROCESSOR
INPHS
B
AB
ACTIVEFEEDBACK
ACTODC
PO
WE
R F
ACTO
R C
OR
RE
CTI
ON
PR
E-R
EG
ULA
TOR
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VARILUX Intelligent Light Conservation Page 14
variLux 3-Terminal Dimmer
SY
NC
HR
ON
OU
SF
RE
E W
HE
EL
D S DSIFD
D
S
D
S
IFD
CONTROLBOARD
WITHREADYTRACE
RECEIVER
IN OUT
COM
BUCK SWITCHES
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VARILUX Intelligent Light Conservation Page 15
variLux Street Light DimmerRADIO
TELEMETRY
0.2 ACCURACYCLASS METER
READYTRACERECEIVER(AM BAND)
STEPLESSDIMMER
POWERFACTOR
PRESERVATION
LUMENMAINTENANCE
TOKENDECRYPTION
FIRMWAREVALIDATION
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VARILUX Intelligent Light Conservation Page 16
Pre Money Capitalization
OptionsExercised
Options Outstanding
Warrants Outstanding
Preferred WarrantsWarrants
to be Issued
Founder
Investors
Compensation
8%
20%
7%
15%
25%
17%
• $4.3 MM Paid-In – 1.3MM Shares– Avg. $3.30/Share
• 3.5 MM Shares• 1.5 MM Options• 0.6 MM Warrants• Debt - $1.45MM
– Preferred Warrants– IP Security– $500M Unsubscribed
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VARILUX Intelligent Light Conservation Page 17
Post Money Capitalization
• New Money - 39% Stake• Prior Stake Holders
– Issued 27%– Promissory 25%
• New Employee Options– 9% (Discretionary)
• Debt - $1.45MM– Paid from Cash Flow
New Money
ExistingStakeholders
Options&
Warrants
New Options
25% 39%
9%
27%
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VARILUX Intelligent Light Conservation Page 18
Financials
2013 2014 2015 2016 2017Sales 6,475,000 30,905,000 43,050,000 57,400,000 82,950,000COGS 3,500,000 15,400,000 21,000,000 28,000,000 42,000,000Other Direct Expense 1,438,500 5,281,000 7,260,000 9,680,000 13,890,000Gross Profit 1,536,500 10,224,000 14,790,000 19,720,000 27,060,000Operating Budget 1,467,470 3,753,525 6,804,740 5,604,594 6,664,314Development & Certifications 257,500 715,000 0 0 0Marketing 33,000 250,000 250,000 250,000 250,000EBIT -221,470 5,505,475 7,735,260 13,865,406 20,145,686Tax 0 0 3,831,419 6,239,433 9,065,559Net after Tax -221,470 5,505,475 3,903,841 7,625,973 11,080,127
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VARILUX Intelligent Light Conservation Page 19
Financials
2,013 2,014 2,015 2,016 2,017 Sales 1,450,750 26,022,500 43,050,000 57,400,000 82,950,000 COGS 765,000 12,700,000 21,000,000 28,000,000 42,000,000 Other Direct Expense 125,950 2,219,750 3,630,000 4,840,000 6,945,000 Gross Profit 559,800 11,102,750 18,420,000 24,560,000 34,005,000 Operating Budget 2,075,366 4,596,063 5,454,025 6,484,688 7,635,667 Development & Certifications 515,000 480,000 - - - Marketing 88,000 250,000 250,000 250,000 250,000 EBIT (2,118,566) 5,776,688 12,715,975 17,825,313 26,119,333 Tax - - 5,343,344 8,021,391 11,753,700 Net after Tax (2,118,566) 5,776,688 7,372,632 9,803,922 14,365,633
2,013 2,014 2,015 2,016 2,017 G & A 2,804,316 7,545,813 9,334,025 11,574,688 14,830,667 C O G S 765,000 12,700,000 21,000,000 28,000,000 42,000,000 Tax - - 5,343,344 8,021,391 11,753,700 Debt Pay-Off 1,950,000
Sales 1,450,750 26,022,500 43,050,000 57,400,000 82,950,000 Investments 3,500,000 0 0 0 0
number of units 8,290 148,700 246,000 328,000 474,000
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VARILUX Intelligent Light Conservation Page 20
The Plan
• Development Complete– No Hardware R&D Required– Market Specific Variations
• New Money for Operations– Inventory– Sales and Marketing– Customer Support
• Product Cost Reductions• System Control Software
– In-House Development orPartner with Existing Provider
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Immediate Needs
• New Management Team– Funding Appointed CXO and CFO
• Additional Bridge Funding ($500K)– Support National Stage Filings– Complete UL Testing
• Expansion Capital ($2.5MM)– Inventory– Sales and Marketing– Customer Support– Product Cost Reductions– System Software
• Lobby Support– Political Connections in US
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Exit Strategy
• $200MM in 5 Years– Net Present Value of Future
Income Stream• Established Lighting Company
– Two “Nibbles” Already• LED Industry
– Displaces LED Roll-Outs– Buy and Bury
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VARILUX Intelligent Light Conservation Page 23
The Deal
• $ 250K Additional to Bridge• $ 2.5 MM VC Round
– $ 1.5 MM 1st Tranche– $ 1 MM 2nd Tranche
• $ 200 MM Exit– 5 Years after 1st Tranche – NPV1 at 5 Years $ 225 MM
1. NPV – Net Present Value Future Income Streams