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Knowledge2Go
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Executive Summary
August 1999
Knowledge2Go
Executive Summary
The information in this Executive Summary is furnished by Solomon Alliance Group, Inc. D/B/A Knowledge2Go (“Knowledge2Go”, “K2Go” or the “Company”). While the financial and other information contained herein is believed to be accurate, Knowledge2Go expressly disclaims any and all liability for the contents or omissions from this Executive Summary and for any other written or oral communication transmitted or made available to prospective investors. This Executive Summary, and the information contained herein, shall be kept confidential. The recipient agrees not to disclose to any person any information contained herein, the fact that the recipient obtained confidential information concerning the Company, or any terms, conditions, or other facts with respect to any such possible transaction. Recipients who do not wish to pursue this matter, or upon request of the Company, shall promptly return to Knowledge2Go all material received from Knowledge2Go including the Business Plan and any other materials received in the course of investigation, without retaining any copies thereof.
Statements regarding financial matters in this Executive Summary other than historical facts are “forward looking statements” within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such statements about the Company's future expectations including future revenues and earnings, and all other forward looking statements be subject to the safe harbors created thereby. Since these statements (future operational results and sales) involve risk and uncertainties and are subject to change at any time, the Company's actual results may differ materially from expected results.
EXECUTIVE SUMMARY
OVERVIEW
Knowledge2Go (“Knowledge2Go”, “K2Go” or “the Company”) is a leading provider of customized wireless data communications solutions for individual and business needs. The Company designs, develops and markets wireless network products and services that provide low-cost, high performance and easy-to-use IP-based data communications. Its products and services can be used in a broad range of personal computer and industrial applications.
The Company's primary service provides users of hand-held, laptop and desktop computers with fast, reliable and portable wireless access to the Internet, private intranets, local area networks ("LANs"), e-mail and on-line services. The Company provides this service under various pricing plans including an affordable flat monthly subscription fee that permits unlimited usage.
Knowledge2Go provides its wireless services to consumers and business customers using the nationwide Cellular Digital Packet Data (CDPD) network. CDPD is a nationwide wireless data network which overlays the existing circuit-switched cellular network. It covers approximately 70% of the U.S. business population and over 135 major metropolitan areas.
Knowledge2Go's mission is to become the premier Wireless ISP in North America. K2Go has the necessary skills, industry relationships and innovative technology to accomplish that mission.
In order to offer its customers a full range of solutions for wireless needs, Knowledge2Go recently merged with MPTG Communications, Inc. (“MPTG”). MPTG is a manufacturer of innovative wireless hardware. MPTG brings its own strong relationships in the wireless industry to the table. With a powerful combination of world-leading intellectual capital and an unmatched ability to execute in response to a rapidly evolving market, the new combined entity (“Knowledge2Go”) is strongly positioned to exploit the current growth trend in the wireless data industry.
From the beginning of the wireless Internet access revolution, K2Go has developed applications that lead the wireless data solutions industry in flexibility and performance. Knowledge2Go has built valuable relationships with industry leaders such as Hewlett Packard, Lucent Technologies, Bell Atlantic Mobile, GTE, AT&T Wireless Services and 3Com. In addition, the Company has assembled a team of highly skilled and motivated key managers.
PRODUCTS AND SERVICES
Knowledge2Go has developed a portfolio of communication solutions that satisfy the many needs of today's mobile workforce. The telecommunication infrastructures are already established and wireless network service costs have fallen to an affordable level, which make this the optimum time to launch these solutions. The Company offers wireless network services utilizing the CDPD infrastructure of its strategic partners Bell Atlantic Mobile, AT&T Wireless Services, GTE, and Ameritech.
Hardware Value Added Reseller - Knowledge2Go's primary revenue source is the resale of wireless Internet access related hardware products. The Company resells hardware like palm PCs, hand-held devices, laptops, wireless modems, accessories and completely integrated AVL hardware solutions. K2Go offers numerous wireless CDPD modems from manufactures such as Uniden, Novatel Wireless, Sierra Wireless and INET along with its own GO HP Modem and vModem that are manufactured by MPTG. Although the Company has strategic alliances with Hewlett Packard and Lucent Technologies, Knowledge2Go intends to resell all brand name hardware. In order to resell most brand name hardware, the Company has established alliances with various distributors including Ingram Micro.
Real Estate.Knowledge solution provides the real estate professional (“REP”) with anytime/anywhere, continuous access to their Multiple Listing Service ("MLS") database via their portable computer and a CDPD modem. Knowledge2Go expects that within one year after introduction to a targeted market area at least 10% of the area's REPs will be using this service. A modification of this solution is currently being developed to allow it to work with the new PCS and digital phones now being introduced. This modification will provide computerless access.
Agent.Knowledge solution provides the REP with Internet marketing tools at an affordable cost and without requiring any time consuming updates by the REP. Knowledge2Go will provide each REP with the ability for their MLS listings to be viewed via the Internet with links to and from a Web page about the REP.
Talking Listing (“TL”) solution provides REPs a means of communicating with drive-by potential buyers. The TL is a fully digital recording/FM-transmitting device that retains its memory without power. The TL will record about 30 seconds of information, then continuously broadcast that information via a low power FM transmission.
AVL.Knowledge solution is an Automatic Vehicle Location technology that allows its users to see the current position and status of vehicles from remote locations, via computer displayed maps. In addition to AVL solutions based on dedicated computer systems, the Company is introducing an Internet based online vehicle tracking system that is the latest in vehicle tracking technology. Combining the best of CDPD technology, event-based AVL, and Internet technology, online vehicle tracking is the wave of the future for the Internet, as well as for AVL.
Sales.Knowledge solution provides field sales team with real-time access to client company's central contact database. Thus, business customers can enhance the level of service provided to their clients while increasing overall sales.
Field.Knowledge product is a digital data service from Knowledge2Go that lets businesses communicate online between their field staff and their home office. By using Field.Knowledge, the Company's business customers are able to transmit work order information directly to their technicians, delivery drivers, maintenance people, or other out-of-office workers.
Stock.Knowledge is a wireless application custom designed for brokers and investors. The Stock.Knowledge application takes advantage of the latest wireless digital data technology to allow instant on-line access to financial information, client profiles, current market values and the latest market news, so a user can maintain their productivity when away from the office.
Customized Vertical Industry Segment Services are offered by the Company to develop applications and help its business customers to reap the benefits of wireless technology. Most corporations require customized services to satisfy their specific needs. Knowledge2Go offers the ability to customize any of the applications to fit the individual needs of today's high technology companies.
Consumer Products and Services are offered by the Company to individual consumers. Some of these services include Wireless Internet Access for Homes, Wireless Internet Access for Educators and Students, Wireless Internet Access for RV's and Wireless Internet Access for individual Sales Professionals.
MARKET OPPORTUNITY
The Internet is fundamentally changing the way consumers and businesses communicate, obtain and share information, purchase goods and services, and transact business. It is experiencing spectacular growth. IDC estimates that there will be over 400 million Internet users by 2002. In many cases, however, the growth of content and services has not been supported by a commensurate investment in infrastructure. Therefore, for the Internet to mature into the content delivery and e-commerce medium that investors expect, significant infrastructure build-outs will have to occur.
The telecommunications revolution can be characterized by increasing wireless subscriber growth, increased minutes of use per year, and Internet growth. Thus, the Internet revolution can be characterized by creating a new competitive arena, the Wireless Internet market, where expertise in mobility, telecom, and datacom will be necessary for long term success.
Killen & Associates estimates that for the year 2002 the potential revenues of the wireless data industry range as high as $38.5 billion for wireless Internet applications alone. In addition, according to Wireless Data Forum's 1998 Carrier Survey, the number of data devices actively in service as of July 1, 1997 was about 30,000 compared to over 260,000 a year later. Gartner Group predicts that the opportunity for wireless data communication in the United States is huge, with over 25 million in the workforce having a mobile job requirement.
The Company's goal is to secure a market-defining role in wireless Internet access. The basic strategy to achieve this goal is to combine the Company's industry leading position in wireless communications with a strong commitment to IP technologies.
Knowledge2Go is poised to grab market share. Also, the Company has been positioned so that it can grow with the market. The wireless industry has experienced an incredibly rapid rate-of-change and Knowledge2Go is capable of evolving with that change, as well as keeping ahead of the changing technology curve.
STRATEGY
The Company is looking to acquire subscribers in consumer and business markets. These markets include (i) corporations in vertical industry segments seeking customized wireless Internet solutions for themselves and their business partners, (ii) individual users of portable computers in metropolitan areas, (iii) corporate users of portable computers in metropolitan areas, (iv) individual and small-office/home-office users of desktop computers in metropolitan areas, (v) students, faculty and staff using computers at educational institutions and (vi) federal, state and local government users of portable computers in metropolitan areas.
To accomplish its mission, Knowledge2Go needs greater financial resources. The Company's most pressing need is to invest in an aggressive sales and marketing campaign. This campaign will allow it to quickly leverage its advantage in management skills, industry relationships and innovative technology. As a result, those advantages will be transformed into greater Company awareness, a well-established public brand, and ultimately into powerful, loyal and long-term consumer relationships.
FINANCIAL HIGHLIGHTS
Knowledge2Go, Inc.
Summary Financial Statements Year 1 Year 2 Year 3
Revenue
Hardware $8,374,225 $35,716,311 $51,671,320
Wireless Service 593,067 4,220,344 10,020,113
Agent.Knowledge/Talking Listing 378,473 3,508.858 11,258,064
Internet Services 368,200 1,262,400 1,893,600
Total Revenue $9,713,965 $44,707,913 74,843,097
Gross Profit $2,236,702 $12,717,828 $26,963,900
Gross Margin 23% 28% 36%
Operating Income (Loss) ($893,772) $6,399,631 $18,977,467
Operating Margin n/m 50% 70%
Income Before Tax ($622,406) $6,594,399 $19,383,701
Net Income ($391,646) $4,312,421 $12,614,859
MANAGEMENT
Thomas I. Weston Jr., 42, has a wide range of business experience. Mr. Weston served as Corporate Controller for Hayes Corporation, a company that designs, manufactures, and markets computer communications products worldwide. Prior to Hayes, Mr. Weston served as the Director of Business Planning and Analysis and later became CFO of the Abex Friction Products Group, an international manufacturer of brake friction materials. As an integral part of the senior management team, he was responsible for assuring that the company's business goals were properly set and then met. Before Abex, Mr. Weston worked as a Senior Financial Analyst for the Pinkerton Tobacco Company, a manufacturer of tobacco and candy products. While there, he devised pricing tactics, prepared annual and strategic plans, and performed numerous business studies and financial analyses. Later as Manager of Corporate Accounting, his responsibilities included the analysis and acquisition of a candy company, the financial oversight of the 240+ sales representatives, and the tracking of annual A&P expenses exceeding $12 million. Mr. Weston earned a BS in Accounting from the University of South Carolina and an MBA from the Owen Graduate School of Management at Vanderbilt University.
Mark Bayliss, 40, has been a businessman and entrepreneur for almost 15 years. Mr. Bayliss has worked for several years at companies providing services to the U.S. Government. In 1985 he became a partner of Baylor Instrumentation Systems (BIS), a company providing computer and control processing systems to its clients. In 1987, BIS split into two separate businesses. Mr. Bayliss became the sole owner of Baylor Instruments and Technology (BIT), a company of systems integration specialists and developers of customized computer and communications solutions. Starting in 1993, besides running BIT, he founded a group of operating entities under the “Visual Link” name. Mr. Bayliss is a member of numerous technology development groups including ones at IBM, Lucent, and Microsoft. Some of Mr. Bayliss' most recognizable clientele include AT&T, Lucent Technologies, Bell Atlantic/Nynex, IBM, Bayer Corporation/Miles Pharmaceutical, the F.B. I., the U.S. Department of Agriculture, the American Red Cross, and the Three Mile Island Nuclear Facility.
Lawrence M. Rotkin, 46, has an outstanding record of accomplishment in high growth, fast revenue sales. Prior to joining Knowledge2Go, Mr. Rotkin served as Vice President of Sales for COM 1 SA of Bordeaux, France. While at COM 1 he was responsible for expanding sales from $40,000,000 to $85,000,000 through greater global and European distribution. Mr. Rotkin was also responsible in managing OEM/Private label agreements with many companies including Apple and Compaq. Before COM 1, Mr. Rotkin served as Managing Director for Hayes' Analog Communication Group. While there, he broadened Hayes' modem lines to include European and Pacific Rim distribution as well creating an OEM/Private Label division. Mr. Rotkin's division revenue quickly grew to $50,000,000 per year. Prior to Hayes, Mr. Rotkin held the position of Director of Marketing for Motorola Analog Transmission Group. While there the Motorola Analog Transmission Group's annualized revenue grew from $91,000,000 to $210,000,000 in just 14 months. Mr. Rotkin also held various sales management positions in Honeywell's Optoelectronics. Mr. Rotkin earned a BS in Business Administration from Boston University.
David T. Shaheen, Esq., is a business attorney with nearly fifteen years of experience. He practices in the areas of corporate and securities law, project finance and development and asset protection. Mr. Shaheen is a partner of Babirak, Albert, Vangellow & Shaheen, P.C., a general practice law firm with offices in Virginia, Maryland, Washington, D.C. and London, England. The firm is A-V Rated by the Martindale-Hubbell Law Directory, representing the highest rating for legal ability and professional ethics. Mr. Shaheen is experienced in a wide variety of business matters and transactions. Mr. Shaheen has served as counsel for public and private companies and individuals in a number of diverse businesses such as finance and venture capital, telecommunications, Internet-based ventures and emerging technology, medical products and various consumer-oriented businesses, to name a few. Such representation has included public securities offerings and private placements of equity and debt, acquisitions and mergers and negotiation of numerous business agreements. Mr. Shaheen advises new ventures regarding the most appropriate operating entity and ownership structure and advises established companies regarding corporate governance and long-term business strategies.
Mr. Shaheen serves as the Chairman of the Corporate Law Committee and a member of the Board of Directors of the Bar Association of the District of Columbia. He was honored by the Bar Association as the recipient of the Committee Chair of the Year award in 1999. Mr. Shaheen serves on the Board of Directors of The Foundation for Veteran's Health Care and as an officer and director of the Le Rosey Foundation, an international charitable organization. Mr. Shaheen graduated from the University of Notre Dame with honors, received his Juris Doctor degree from the National Law Center of George Washington University in Washington, D.C. and interned with the Securities and Exchange Commission. Having completed his secondary education at Institut le Rosey, Rolle, Switzerland, Mr. Shaheen speaks French and maintains contacts in major business centers in Europe and other foreign markets. Mr. Shaheen has been a business commentator on radio, has authored articles pertaining to new and growing companies, and is a frequent lecturer on the subject of corporate and securities issues related to the structure, finance and operation of business ventures
CONTACT INFORMATION
The Company's corporate headquarters are located at 3025 Windward Parkway, Alpharetta, GA 30004. Its telephone number is (770) 619-0116 and it fax is (770) 619-0115. Its Web site is located at k2go.com.
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