Business Plan for a Startup Business - Neugent Technologies ...

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Business Plan

for

D
igital Video Recording and Surveillance Solutions


Michael Jang

Neugent Global

2621 W. Woodland Drive

Anaheim, CA 92801

Phone: 1 + 866
-
495
-
2288

E
-
mail:
michael@neugent.net

Global ID:
http://michael.neugent.net

Website:
http://dvr.neugent.net












2

Table of Contents


I.

Executive Summary

................................
................................
................................
..............

3

II.

General Company Description

................................
..............

Error! Bookmark not defined.

III.

Products and Services

................................
................................
................................
..........

4

IV.

Mark
eting Plan

................................
................................
................................
....................

13

V.

Operational Plan

................................
................................
................................
..................

25

VI.

Management and Organization

................................
................................
...........................

29

VII.

Personal Financial Statement

................................
................................
.............................

30

VIII.

Startup Expenses and Capitalization

................................
................................
..................

31

IX.

Financial Plan

................................
................................
................................
......................

32

X.

Appendices

................................
................................
................................
..........................

33

XI.

Refining the Plan

................................
................................
...

Error! Bookmark not defined.


3

I.


Executive
S
ummary

Write this section
last.

We suggest
that
you make i
t
two

pages or
fewer
.

Include everything that you would cover in a
five
-
minute interview.

Explain the fundamentals of the
proposed
business:

W
hat
will your
product

be
?

W
ho
will
your customers

be
?

W
ho are the owners
? W
hat do you think the future holds for
y
our business and your industry?

Make it enthusiastic, professional, complete
,

and concise.

If applying for a loan, state clearly how much you want, precisely how you are going to use it, and how the
money will make your business more profitable, thereby e
nsuring repayment.
















4

COMPANY PROFILE

Neugent Global

is a total security solutions provider

that helps Original Equipment Manufacturers
(OEMs) and other security solution providers from all over the world to complete the gaps in their product
li
ne
-
up, reduce development operating costs, and ultimately, increase end
-
user purchase revenues.
Neugent Global, with headquarters in Irvine, California, began its mark in the security industry with the
development of the Linux
-
based embedded DVR system an
d integrated application and network systems.
Since its founding, Neugent Global has produced sales across the United States and the Asian region
demonstrating its rapid acceptance in the marketplace. In addition, the company has continued to
develop new

and customized products in close conjunction with intended customers, which are expected
to further accelerate revenue growth in 2006 and beyond. In particular, Neugent Global’s mobile DVR
technology, is expected to be deployed by major distributors in th
e United States, Europe, and Asia. The
company expects to generate over $20million of revenue with 45% gross margin.


Neugent Technologies, Philippines, is the Research and Development Center of Neugent Global.
Neugent Technologies develops and sells secu
rity systems and solutions that cater to the needs of
customers worldwide. It is also the International Sales and Technical Service Center of the company.
The company’s core technologies are video processing, network IP communication, and mobile
technolog
y. To date, Neugent Global has also opened two outsourcing offices in Korea and China for
hardware production and technology.


Mission

We are committed to being the
top
-
of
-
mind security
systems and solutions provider

in the world

by
providing
our customer
s

with
greater value than our competition through optimized and innovative
technology and superior customer support.

.

Vision

We will become the company that provides our customers the best quality security system and solutions
at the most reasonable price
.


Our Industry


The Security Industry is one of
the world
's fastest growing sectors creating both employment and
economic growth at a rapid rate.
In the United States, t
he industry generates revenues of approximately
$
18.75

billion per year
with a growth

rate of 11.1%
.

The industry has developed in its innovation, diversity
and professionalism, often leading the way internationally. Today, it provides a wide range of security
products and services designed to meet the needs of the
worldwide

community.


T
he growth of the industry has partly been generated by the ongoing evolution of technology offering new
products and services that are not only more effective, reliable and convenient, but also more affordable.
In addition, the level of crime in the commun
ity and the random nature of crime, has encouraged many
consumers to take proactive steps to ensure that their assets and property is protected.


The services and products provided
by the industry can be categoriz
ed into three broad areas:



Electronic


CCTV

and surveillance, access control, video and audio intercom systems,
integrated security and fire systems, home automation, building management systems; biometrics, alarms
and alarm monitoring



Manpower
-

crowd control, airport security, guard services, mob
ile patrols, concierge duties,
traffic management



Physical & barrier security



locksmiths, perimeter fencing, security grilles, bollards and boom
gates; safes / records protection

Security systems are more than just alarms or simple barriers
-

they are
a combination of technology and
good human practices, ones that offer
s

an efficient and effective method of keeping
people and
business
es

secure, while also adding to the quality of
ones

life.


5

II.
Products and
S
ervices


What is Hawkeye Security?

Hawkeye S
ecurity

is
a comprehensive line of
surveillance and security solutions. Hawkeye Security is
built on open standards

hardware
, operates on a converged network infrastructure and integrates legacy
and advanced systems
.





High performance and reliability



H
awkeye Security is developed on the Linux
platform to deliver optimized performance, reliability and stability. It comprises a line of
Linux
-
embedded and PC
-
Based digital video surveillance
system
s,

Linux
-
based central
and mobile monitoring systems, Linux
-
based network
solutions

and complimentary
security applications. These are
:
Hawkeye PC
-
B
ased
,
H
awkeye Embedded
,
Hawkeye
Hybrid

&

Hawkeye Mobile

digital video recorders,
Hawkeye Video Servers
,

Hawkeye
Central Monitoring System and Hawkeye
Mobile Central
M
onitoring System
. We also
have

powerful
DVR card
s

that allow

you to capture true color images and full motion
videos, without the risk of system crashes, frame drops or virus attacks!



Converge
d networking

and integration



Hawkeye Security is readily expa
ndable and
compatible with a whole host of devices

and systems
. It allows a variety of security
-
related data streams, such as video, audio, alerts, command messages, and other digital
data to share a common IP
-
based network infrastructure, thereby providi
ng a centralized,
cost
-
effective system administration.
It also
enable
s

users to gather information from
numerous dispersed systems and consolidate
such information

on a single view for
decision
-
making. At the same time,
it
can provide decentralization a
nd collaboration
capabilities to enable many people to
view similar activities

concurrently

so that they can
take
appropriate

synchronized

actions.



Advanced core technologies



Hawkeye Security offers hardware MPEG4 (
hardware
H.264*) compression, robust vi
deo management functions that go beyond passive
detection, efficient network IP communication, advanced mobile security solution

and
much more
.

(*Note: Future versions of Hawkeye Security will utilize hardware H.264.)


Hawkeye Security Applications



6

A.

PC
-
Ba
sed DVR Series

1.

LX (Linux) DVR Series



The LX DVR
Series is a set of
8/16 channel
digital video recorders, built on the Linux
platform that integrates analog cameras in the
DVR unit. Together with our powerful
Hawkeye
DVR cards
, the
LX DVR Series

can wor
k as a
TRUE real
-
time digital video recording solution.

This robust digital video recording solution
features hardware MPEG4 compression,
hardware audio recording using G.723 audio
format, hardware motion detection, hardware
watermark, triplex multifuncti
onal operations,
remote client (remote management flexibility
with remote monitoring, playback, recording,
back up and PTZ control) & web connection,
PTZ functions, record schedule management,
easy search & playback, sensor and alarm
integration and much m
ore. (See Appendix for
complete details.)

The LX DVR Series are cost
-
effective VCR
replacement solutions that are ideal tools for
loss prevention and business process efficiency
strategies. The LX DVR Series is ideally suited
for corporate applications,
medium
-

to large
-
sized offices and buildings, hotels, airports &
seaports, and some retail
&

commercial areas.


2.

HX (Hybrid) DVR Series




The
HX DVR

Series
is
a set of

high
-
end

16/32 channel
digital video recorders that
integrates IP cameras and analog c
ameras in
the DVR unit.

T h e H X D V R S e r i e s f e a t u r e s
h a r d w a r e M P E G 4 c o m p r e s s i o n, h a r d w a r e a u d i o
r e c o r d i n g u s i n g G.72 3 a u d i o f o r m a t, h a r d w a r e
m o t i o n d e t e c t i o n, h a r d w a r e w a t e r m a r k, r e m o t e
c l i e n t ( r e m o t e m a n a g e m e n t f l e x i b i l i t y w i t h
r e m o t e m o n i t o r i n g, p l a y b a c k,

r e c o r d i n g, b a c k u p
a n d P T Z c o n t r o l ) & w e b c o n n e c t i o n, P T Z
f u n c t i o n s, r e c o r d s c h e d u l e m a n a g e m e n t, e a s y
s e a r c h & p l a y b a c k, s e n s o r a n d a l a r m i n t e g r a t i o n
a n d m o r e. ( S e e A p p e n d i x f o r c o m p l e t e d e t a i l s.)

T h e H X D V R S e r i e s i s i d e a l l y s u i t e d f o r
f a c i l i t i e s o r e n v
i r o n m e n t s w h i c h a r e r e m o t e l y
d i s p e r s e d, i n o r d e r t o l e v e r a g e o n e x i s t i n g
n e t w o r k i n f r a s t r u c t u r e a n d m i n i m i z e c a b l i n g
c o s t s.






7

B.

Embedded DVR Series

1.

S
X (
Standalone
) DVR Series



The
S
X DVR Series is our mid
-
range
embedded digital video recorders that prov
ide a
durable, heavy
-
duty surveillance solution
featuring 8 to 16 channel versions
, access
control system and POS integration
. It has an
embedded Linux platform to ensure system
reliability and stability of your surveillance
equipment!

The
S
X DVR Series ca
n provide integrated
solutions in order to strengthen perimeter
control, such as access control system
integration for a variety of industrial and
penitentiary environments. One other line of the
S
X DVR Series integrates the POS system to
guarantee 99.9%
shrinkage loss and increase
control of inventory in many retail and
commercial establishments.

T
he
S
X DVR Series

targets small
-

to
medium
-
sized buildings
, retail & franchise areas
,
commercial spaces & convenient stores, gas
stations,
warehouses, plants or
factories,
resorts, hospitals,
banks, government facilities,
museums and schools.


2.

MX
(
Mobile
) DVR Series

The MX DVR Series is specifically designed for in
-
the
-
vehicle video recording
requirements. It’s perfect for recording events such as police footage

or covert video
surveillance footage. Its very compact size is suited for all kinds of vehicles, such as
police patrol cards, private investigator surveillance vehicles,

subways and railways,

taxis, mini cabs, school buses and public transport.

Our MX D
VR Series, including

our

modern GPS solutions are protecting people

in motion.

Please see below for more
details.


3.

VS
(
Video Server
) Series

The VS Series is a high
-
performance video server designed for professional
surveillance applications, featuring 2 an
d 4 channel versions. It’s very easy to use and
it’s the perfect single
-
box solution for transmitting digital video over intranet networks or
the Internet.
The VS Series connects to a wide range of Ethernet devices, such as
Wireless Ethernet and Ethernet

to ISDN, PSTN, xDSL or cable modem routers.

The VS Series is ideal for a lot of applications: remote monitoring, security
systems, traffic surveillance, public transport monitoring, remote administration and
management, parking facilities and some retai
l shops.
Please see below for more
details.


C.

Network

Security Solutions

1.

MCMS


Mobile Central Monitoring System

The Mobile Central Monitoring System is

a turnkey surveillance solution for
business operators who want to centrally monitor and manage mobile
assets, resources
and people more efficiently. The Mobile Central Monitoring System provides
administrators and managers with unprecedented information on locations and status of

8

vehicles, powerful mapping capabilities and much more, thereby increasing pr
ofitability
and reducing operating costs.

The Mobile Central Monitoring System is ideally suited for banks, freight & cargo
companies, railway and transit stations, and police & military sectors.


2.

CMS


Central Monitoring System

The
Hawkeye
Central Monitor
ing
System pr
ovides an overall central monitoring solution
for
many applications
,

such as
commercial, industrial and residential
. Several Hawkeye
digital video surveillance systems

may be connected
in one centralized monitoring
program
with hundreds of cam
eras and integrated with sensors, alarms, and
other
related
systems

(access control systems, POS, etc)
.


What
are the competitive advantages of the
Hawkeye Security?

Hawkeye Security offers:



Optimized performance

-

Our
Linux
-
based
digital video surveillan
ce and security applications
are borne out of intensive planning & research, passionate development and numerous tests to
ensure
a
high performance

security solution
.
Hawkeye Security can be customized to provide
only optimum performance.



Scalability



C
hange is the only thing that is constant. Hawkeye Security can deliver
reliable,
durable and stable
protection today and tomorrow, adapting to the growth of company security
and safety needs.

We provide innovative products that match what the customer nee
ds.



Value for your Money



A
PC
-
based DV
R, which costs from $1,000 to $4
,000 has higher
performance and large
r

capacity storage. Su
ch are ideal for large offices.
Standalone DVRs
range from $400 to $1,000 and are perfect for small shops, like 7 Eleven and

small offices.
But
how does an organization choose which one is right solution for them? We
sit down with our
clients in order to come up with the best solution
and the right price

f
or their security needs
.

Take a look at some of the key
advantages & ben
efits of Linux
-
based security solutions
:



Optimized system performance

-

Since Linux is an open
-
source, the DVR

(for instance)

system
can be customized to include only functions and services which the customers need.
Unnecessary applications such as e
-
mail
and spreadsheet programs may be removed while
some services may be fine
-
tuned to deliver optimized system performance. When you boot a
Hawkeye DVR, the security application will auto
-
launch...and that is the only application inside
the server.



More reliab
le, stable and secure

-

Because Linux can be customized, it means that the
operating system is not constantly carrying unnecessary application code. This increases the
DVR's system reliability simply because there are fewer services running. Your surveilla
nce
system is also less susceptible to attacks since most of the active computer viruses today that
have been designed to strike server & desktop applications cannot damage anything (because
the applications are not running). Moreover, Linux provides the a
bility for security and
surveillance equipment developers to go directly into the code to remedy performance
vulnerabilities.



High
-
speed viewing, recording & playback

-

O
ptimized Linux
-
based DVR
s

and surveillance
applications require

less memory or RAM. It

also provides a bigger hard drive space.

Our Hawkeye Linux DVR solutions were built on the digital multimedia standard MPEG
-
4 codec. MPEG
-
4
delivers professional
-
quality audio and video streams over a broad range of bandwidths, from dial
-
up to
broadband,

in several distribution channels, from wireless to satellite television. MPEG
-
4 delivers DVD
-
quality video at low data rates and smaller file sizes and it can be viewed in most media players, such as
Windows Media Player, Quicktime and RealPlayer.


9


What a
re the advantages of MPEG4 over other codecs?



Motion JPEG & wavelet compression tend to limit video resolution and frame rate. With MPEG
-
4,
frame rates reach
30 frames per second
, thereby
delivering true real
-
time video
.



MPEG
-
4 has smaller file sizes, thu
s allowing
fast distribution over low bandwidths
and

longer
hours for storage



MPEG
-
4 provides
interoperability
, such that videos are readable in most applications.

What
are the features of the Hawkeye Security?

A.

PC
-
Based DVR Series

1.

LX (Linux) DVR Series



L
inux O/S platform to provide optimized system performance



total display rate of 480 fps (NTSC) / 400 fps (PAL)



total recording rate of 480fps (480fps: 352X240 (NTSC) / 400fps: 352X288 (PAL))



up to 16 channels (camera input) ( NTSC / PAL )



up to 16 channel
s for audio



up to 16 sensor inputs



up to 16 relay outputs



hardware MPEG4 Encoder/Decoder*



hardware G.723 Encoder/Decoder*



hardware motion detection and watermarking*



excellent & independent TV
-
Out Function



PTZ support for RS
-
485



alert on event (sensor/rel
ay/motion detection)



multi
-
tasking: simultaneous monitoring, recording, playback and remote monitoring



display mode 1, 3, 4, 7, 9, 10, 13, 16 screen division/split modes (H/W Display)



search recorded files by event type, via built
-
in calendar or by camera



schedule back
-
ups and restore old videos



alarm messages, i.e. e
-
mail and sms notification*



remote transmission via LAN and Internet



remote management: remote monitoring, back up, recording & playback



video recording modes: continuous or sequence, scheduled
, sensor/alarm
-
triggered, motion
-
detection with buffer



Watch Dog Function Support with auto rebooting & warning sound



OSD functions include Channel, Date, Time, Status OSD on TV



e
-
MAP with live camera display



multi
-
level access

The LX
-
8000
DVR
S
eries is a

set of
high
-
performance PC
-
based digital video recorder
s
that utilize

an on
-
chip MPEG4
encoder

capable of delivering 30 frames per second at ½
D1 resolution per camera. The LX
-
8000
DVR
S
eries runs on top of a very relia
ble and
secure operating system


Lin
ux
.

The LX
-
8000

DVR

S
eries are ideal for banks and
companies that require some form of integration with existing systems.


Model Name

Description


10

LX
-
8800

16 Channel H/W MPEG4 encoding, 480fps/480fps display & capture rates

LX
-
8700

8 Channel H/W MPEG4 enc
oding, 480fps/240fps display & capture rates

LX
-
8700
C

8 Channel DVR Card

Target start of sale: February 2006

The LX
-
E

DVR

S
eries is a more compact version of the LX
-
8000
DVR S
eries. At the
heart of the LX
-
E DVR is an MPEG4 chip that can churn out 480 fra
mes per second at
½ D1 resolution.


Model Name

Description

LX
-
E320

32 Channel H/W MPEG4 encoding, 960fps/960fps display & capture rates

LX
-
E160

16 Channel H/W MPEG4 encoding, 480fps/480fps display & capture rates

LX
-
E160
C

16 Channel DVR Card

Target sta
rt of sale: July 2006

The LX
-
9000
DVR S
eries is a
set of
high performance digital video recorder
s

tha
t
produce

superb quality video. The LX
-
9000
DVR Series utilizes

software MPEG4
encoding at the rate of 480 frames per second.


Model Name

Description

LX
-
9800

16 Channel S/W MPEG4 encoding, 480fps/480fps display & capture rates

LX
-
9500

8 Channel S/W MPEG4 encoding, 480fps/240fps display & capture rates

Products are c
urrently on sale

2.

HX (Hybrid) DVR Series




Linux O/S platform to provide optimized system pe
rformance



total display rate of up to 480 fps (NTSC) / 400 fps (PAL) for analog cameras



total recording rate of up to 480fps (480fps: 352X240 (NTSC) / 400fps: 352X288
(PAL)) for analog cameras



up to 32 channels (camera input) ( NTSC / PAL ) (16 IP camera
s; 16 analog)



32 (16)channels for audio



32 (16) sensor inputs



32 (16) relay outputs


11



hardware MPEG4 Encoder/Decoder*



hardware G.723 Encoder/Decoder*



hardware motion detection and watermarking*



excellent & independent TV
-
Out Function



PTZ support for RS
-
485



alert on event (sensor/relay/motion detection)



multi
-
tasking: simultaneous monitoring, recording, playback and remote monitoring



display mode 1, 3, 4, 7, 9, 10, 13, 16 screen division/split modes (H/W Display)



search recorded files by event type, via buil
t
-
in calendar or by camera



schedule back
-
ups and restore old videos



alarm messages, i.e. e
-
mail and sms notification*



remote transmission via LAN and Internet



remote management: remote monitoring, back up, recording & playback



video recording modes: contin
uous or sequence, scheduled, sensor/alarm
-
triggered, motion
-
detection with buffer



Watch Dog Function Support with auto rebooting & warning sound



OSD functions include Channel, Date, Time, Status OSD on TV



e
-
MAP with live camera display



multi
-
level access

T
he HX
DVR
Series are hybrid digital video recorders


capable of capturing video from
analog and network (or IP) cameras. The HX

DVR
Series are particularly useful for
customers that have both remote offices and a central office.


Model Name

Description

H
X
-
9032

16 Channel (analog) + 16 Channel (IP)

HX
-
9016

8 Channel (analog) + 8 Channel (IP)

Target start of sale: March 2006

B.

Embedded
DVR Series

1.

S
X (
Standalone
) DVR Series


The SX DVR S
eries are standalone DVRs that are very easy to install and operate. Th
e
SX
DVR Series

are ideal for industrial environments and for end users that are looking
for basic monitoring, recording, search & playback functions.


Model Name

Description

S
X
-
2016

16 Channel H/W MPEG4 encoding, 480fps/240fps display & capture rates

S
X
-
2008

8 Channel H/W MPEG4 encoding, 480fps/240fps display & capture rates


12

S
X
-
3008

Wall
-
mount DVR

S
X
-
4008

DVR integrated with Access Control System

S
X
-
5008

DVR integrated with POS

Target start of sale: March 2006

2.

MX

(
Mobile
) DVR Series


The MX DVR S
eri
es are digital video recorders specifically designed for vehicles. One
model comes with a GPS device that enables
the vehicle

to be tracked from a central
monitoring office. At the same time, the wireless modem will allow the video be remotely
viewed as we
ll.


Model Name

Description

MX
-
1004

4 Channel Mobile DVR

MX
-
2004

4 Channel Mobile DVR with GPS and wireless modem


3.

VS

(
Video Server
) Series


A

video server is a small device that converts analog video si
gnals to Internet Protocol.
Our VS Series
provides

a simple and cost
-
effective solution for remote monitoring
without the need for bulky equipment.


Model Name

Description

VS
-
1002

2 Channel with built
-
in camera (1 camera)

VS
-
1004

4 Channel


C.

Network Security Solutions


1.

Mobile Central Monitoring System


The Mobile Central Monitoring System works with mobile DVRs equipped with GPS and
wireless modems. The MCMS provides a real
-
time visual vehicle tracking system. The
MCMS is specifically useful for logistic companies like Fedex and DHL, and bus or taxi
oper
ators.


2.

Central Monitoring System




13

II.

Marketing
P
lan



What is
market size, trends in growth and consumer preferences?




From BCCResearch

o

2001
-

$11 billion market for electronic, optical, acoustic, security, detection, monitoring
and surveillance and securit
y systems

o

This is expected to reach $18.8 billion in 2006

o

The market is divided into Access Control Systems (ACS), Acoustic Monitoring (ACSM),
Biometrics, Detection Systems, Electronic Article Surveillance, Law Enforcement, Video
(Optical) Monitoring and
Security Alarm Systems (Video).

o

Video Monitoring and Security Alarms have the largest market shar
e
at under $5 billion,
followed by ACS segment with a share of about $2.2 billion.

o

1996
-

$4.27 billion total sales for Electronic Surveillance and Monitoring
Systems

o

1998
-

$6.47 billion total sales

o

2000
-

$9.87 billion total sales

o

2001
-

$11.09 billion total sales

o

2006
-

$18.75 billion total sales

o

Annual Growth Rate of 11.1%

o

Reference:
http://www.bccresearch.com





F
rom ScanSource

o

Table:
US CCTV Market Potential

Year

$Billions

Growth (%)

2004

1.66

12.7

2005

1.87

12.7

2006

2.1

11.9

2007

2.35

11.9

2008

2.62

11.4

2009

2.92

11.5

2010

3.26

11.6

o

Compound Annual Growth Rate (2004
-
2010): 11.9%


o

Table:
US CCTV DVR Mark
et Potential

Year

$Millions

Growth (%)

2004

412.9

35.3

2005

529.9

28.4

2006

666.8

25.8

2007

834.9

25.2

2008

1,028

23.1

2009

1,265

23.1

2010

1,557

23.1

o

Compound Annual Growth Rate (2004
-
2010): 26.2%


o

Table:
Global IP
-
Based CCTV Market Forecasts

Year

$Millions

Growth (%)


14

2004

159

39.3

2005

227

39.6

2006

312

40.9

2007

441

41.2

2008

611

38.6

2009

848

38.9

2010

1,180

39.1

o

Compound Annual Growth Rate (2004
-
2010): 39.6%




From Global Sources (December 2005)

o

Top value additions

in digital video recor
ding solutions

would include motion detection,
networking, remote and IP surveillance functions

o

Security products market (of which CCTV cameras are a key product) will be worth some
$74 billion by 2008

o

Industry drivers include heightened security needs, en
hanced attractiveness of higher
-
end electronic systems due to advancing technologies and moderating prices

o

A high degree of vertical integration will be taking place in China

and the most advanced
countries
. China’s CCTV product supply industry is growing

by 25
-
30% annually. About
50% of makes are capable
of manufacturing

total CCTV solutions, 25% focus on single
product type that they export directly or provide to other domestic makers who assemble
total CCTV solutions, and at least 70% produce two or mo
re product types.

o

More companies are exploring the market for standalone DVRs and some manufacturers
have forecast double
-
digit growth rates in 2006

o

In China, there are about 20 professional DVR manufacturers. There are also 20 new
entrants coming from ot
her CCTV product lines. Hangzhou Hikvision Digital Technology
Co. Ltd and Shenzen TMVideo Technology Co. Ltd lead the group of professional DVR
makers

in China
.

o

In South Korea, the industry is estimated to grow by 12.8%R in 2006. 2005 seems to be
the tur
ning point for the line, which shifted from PC
-
based DVRs to standalone DVRs.

o

Demand for DVR products

is not as high as that of consumer products, though it has its
niche market such as banks, telecommunications, transportation, factories and
warehouses.

o

M
ajor overseas markets include North America, Europe and Southeast Asia. The major
China DVR manufacturers export 70% of their output to America, Europe, UK, Italy and
Russia, while the remaining 30% goes to Singapore, Hong Kong, Taiwan and Australia.
Shen
zen Tongwei Tech Co. Ltd (China) will be exploring markets in South America,
specifically Argentina and Brazil.

o

South Korean makers’ main markets include the European Union, USA and Japan.




Miscellaneous Sources

2005

o

Rising instances of security breaches

such as attacks on the WTC, bombings in the J.W.
Marriot Hotels, attack on the Indian parliament and train bombings in Madrid have
reinforced the need to invest in security devices including video surveillance equipment.
CCTV systems have witnessed an in
crease in demand due to technological
improvements and advanced features in terms of integration with
ACS, biometrics and
digital video software. Smart cameras that provide intelligent analysis of captured video
images are also driving the market as the p
rocess of surveillance becomes more
proactive and efficient.

o

Technological advancements have removed some of the barriers to purchase such as
price, complexity of operating and installation.


15

o

While the US and European markets have reached maturity for conve
ntional video
surveillance technology, Asia Pacific is still in the late stages of growth and offers strong
potential for video surveillance equipment both in terms of manufacturing and
consumption.

o

The impending switchover from analog to IP systems, the

constant demand for video
networks, the rising influence of the IT executive, the oncoming trend in smart cameras,
intelligent video and new storage systems are all part of the rising importance of video
systems to corporate security executives who alloca
te a higher share of their budget to
the technology every year.

o

In New Zealand (4M population), there is also a growing awareness and acceptance of
safety and security equipment as a result of the world’s security conflicts and domestic
society changes. P
roducts from Japan attribute to almost 60% of market demand and
dominate the supply of video equipment. China comes in second. US imports of building
security equipment seems to be small, but there is a positive outlook for US security
companies to offer

surveillance equipment
, new innovative technologies for building and
car alarms. Key purchasing factors include product innovation, brand, reputation and
price.

o

In Taiwan, an increase in the demand for safety and security products is expected from
the pr
ivate sector (ongoing commercial and residential building construction projects,
expanding large wholesale and retail areas, high
-
tech manufacturing facilities and
personnel protection supplies), as well as the public sector such as military, law
enforceme
nt, Coast Guard, Customs and energy supply facilities. Taiwan’s safety and
security market increased by 27.28% from US $1.25 billion in 2001 to US $1.59 billion in
2003. Safety and security market includes: information and communication security,
system
integration, general safety equipment (surveillance) and fire fighting and industrial
safety equipment. General safety equipment total market size in 2001
was at US $403
million and grew to US $551 million in 2003. Taiwan imports safety and security syst
em
equipment primarily from Japan, US, UK, South Korea and Germany. Competitive
advantages for local and other Asian firms are lower prices, faster delivery schedules and
prompt support. Competitive advantages of US and European firms are quality and
per
formance.

o

In Thailand, the safety and security market in 2004 was valued at $433 million. For the
next few years, market is expected to expand steadily at 5
-
10% rate. Market includes
locks, safes, security boxes and doors, surveillance cameras, CCTV, bu
rglar/fire alarms,
exit/entry screening systems, outdoor perimeter protection, sensors, wireless
equipment/technology, installation tools, supplies & accessories, packaged software,
magnetic strip cards, smart cards, proximity cards, x
-
ray equipment and ac
cessories,
anti
-
shop lifting devices, fire extinguishers and rescue devices. Estimated total market in
2005 is $225 million. Commercial property, banks,
residential high rises and upper
-
end
hotels are major users of safety and security equipment. Retail
sector (currently about
117 discount stores, 230 department stores, 247 supermarkets, 3650 convenience stores
and 650 specialty stores) is also one of the major markets. In the next 12
-
18 months,
major purchases would come from maintenance and upgrade of
international and
regional airports, upgrade on security of government buildings and upgrade of ports.

o

Malaysian market size for safety and security equipment in 2004 was estimated at $170
million. About 65% of that total market demand, valued at US $110
million, came from
imports. US share of import was about 24% or US $26 million. Market remains strong
and is expected to experience an annual growth of 5%. Market size for airport and
seaport security equipment in Malaysia is 2004 was about $21 million.

Demand from
2005
-
2009 is estimated at $120 million. US companies presently dominate the market for
this sub
-
sector. Commercial,
public places,
offices and banks also demand safety and
security equipment.
(There are about 8,000 banking ATMs in Malaysia.)


16

o

Hong Kong is a growing market for safety and security equipment and services. In
general, Hong Kong market leans towards more sophisticated, high
-
tech products, an
area in which US firms enjoy prominent market share. In 2004, imports for security and
saf
ety equipment totaled approximately US $873 million. Please see the below table.
(Values are in US $ million)


Year

2003

2004

2005

Total Market Size

103

126

150

Total Impo
r
ts

772

873

1000

Total Imports from US

39

61

100


o

US companies should use Hong K
ong as a base for outreaching end
-
users in China.
Hong Kong is China’s major sourcing agent for safety and security equipment for the
2008 Olympics in Beijing.
Commercial and industrial users are major seekers of video
surveillance systems in Hong Kong.

o

Indian market for security and safety equipment was at $300 million in 2004. This is
expected to grow to about $356 million in 2006. India imports 40% of safety and security
equipment. Currently, the US is enjoying an approximately 40% import market shar
e.

o

The Singapore market leans towards more sophisticated, high
-
tech security products, an
area in which US firms enjoy a prominent market share. Increased commercial, industrial
and institutional construction/renovation continues to fuel the demand for se
curity
equipment in Singapore. While the most commonly used security hardware includes
intruder alarm systems, ACS, CCTV, CMS and door
-
entry systems, there are also
tremendous opportunities for US firms to develop new technologies to supply the growing
de
mand for security, innovation in products such as frequency identification technologies,
biometrics and identity technologies.

o

In Australia, most of the technology and equipment needed for security is imported.
Major suppliers originate in the US, EU and
Israel. Among the markets in Australia
include private enterprise
s, government
-
owned facilities,
national

landmarks,
manufacturing industries, aviation and maritime sectors.

o

In the Philippines, industry

insiders note increasing demand for ACS, CCTV and DV
Rs
and integrated building management systems. Property, buildings, commercial and retail
establishments, and industrial sector are potential end
-
users.

o

In Japan, the market for security products and sys
tems in 2003 was $110 million. Video
surveillance an
d monitoring systems are one the best prospects

for the coming years
.

o

Aside from major corporations, transportation hubs, casinos, correctional facilities,
hospitals and schools who have made the move to digital, there are literally hundreds of
thousands o
f different enterprises around the world who wan
t

to use the DVR for
improved security. Among these enterprises are small retail shop
s
, gas stations,
franchise and retail chain individual outlets, small workshop, warehouses, public utilities,
dispatch and

freight centers and cargo & luggage transportation depots.












17

What
are

trends in product development?




o

By now, many are aware of the advantages of a digital video recorder over VCRs: better
images; superior search capability; simultaneous record
ing, playback and live display;
flexible network and remote management capabilities; and robust integration with
systems, such as access control systems, POS, and storage systems.


o

The DVR market is growing at a very strong rate, with approximately 27% of

all recorder
units sold in the US in 2000 were digital. By the end of 2002, the number had increased
to 39%.

o

The most significant technological advances are occurring at the higher end of the
market. The DVR is moving
from a recording box to a sophisti
cated system loaded with
video management features. Some cool DVR enhancements are a combination of a
DVD/multiplexer, video content analysis, and out
-
of
-
the
-
box modular software solutions.
Other innovations include neural network processing, which allow
s security personnel to
have the system automatically look for a specific object that was detected during
playback.


o

Some DVRs can now analyze the color, shape and size of an object. It can also adjust
its parameters to an existing situation and learn wh
at counts as normal behavior in that
environment. Then it can watch for anything that does not fit that model.

o

Another feature concerns the frame rate. Some DVRs can auto
-
adjust frame rate of
stored video based on preset conditions. Some solutions have m
ulti
-
zone motion
detection.

o

Another advancement
in
DVRs
is integration with many systems such as access control
systems and POS. DVR integrated with POS systems offers search by time and date,
cashier, receipt number, transaction type, credit card or prod
uct. This integrated solution
can also generate graphs of employee activity and other reports. There is also a big
space
-
saving benefit users get from DVRs, because of advancing technologies in storage
solutions.

o

Being able to provide wireless video tran
smission is also an interesting development.
These transmissions include viewing recorded video

from cellph
ones, PDAs and wireless
PCs.

o

Some manufacturers are about to release network servers, hybrid DVRs, and
s
erver
-
type
DVRs. In China, manufacturers ar
e now focusing on standalone DVRs built on the Linux
OS, customized industry application, network ability, optimized storage use and
extension applications.


What features, benefits and advantages will our products and services have for the market?

Busines
ses demand profits and millions of people around the world want a safe and secure place to live,
work and play.
Security drawbacks lead to loss of millions of money and deaths.
Hawkeye Security aims

18

to provide a “safe and sound” environment for people ar
ound the world. It seeks to improve workplace
efficiency
, prevent criminal offenses, and deliver
safety and security
.


The LX DVR Series
product will offer the following:



high performance and reliability
* (no system crashes, no slow video speeds, no virus

attacks!)




first class video compression using a dual
-
speed full hardwired MPEG
-
4 encoder that can
process
e
s a 16 channel DVR 480 CIF video in real
-
time




unrivaled audio bitrate of 5.3
-

6.3 kbps (G.723 format) to
ensure clear and understandable
audio




crisp and high quality images, allowing full motion video for superior facial recognition




smooth real
-
time playback,
optimized bandwidth utilization

(lower data rates) and more
storage space




multi
-
level access control for increased management flexibility





unmatched stability

to ensure continuous recording for hours or days




integration

with access control systems
, energy conservation solutions,

storage servers
and
much more

The
HX DVR Series
has the following benefits (on top of the LX DVR
Series’ benefi
ts
):



Easy, single and highly accessible Video Management

-

Users can monitor, record and
manage IP video with any web browser
-
based device like a PC, PDA or a mobile phone. Internet
connection is all that is needed. Multiple cameras and locations can be ac
cessed and monitored
from a single log
-
on.



Value for your money



The HX DVR Series

is the most expensive and high
-
end DVR solution,
but when you think about the total cost of ownership over an analog CCTV/DVR system, the
incremental cost of the cameras ar
e not significant when compared to adding DVRs on site,
additional cabling and installation.



Complete integration

-

Both IP and analog cameras can be accessed and monitored on one
screen



Intelligent recording and intelligence at the camera level
*
-

Video
is recorded and or
transmitted only when a specific event or alarm is triggered, which saves up on video storage as
well as network bandwidth. Where else does action take place but in the DVR system itself? This
makes it difficult to run intelligent video
applications. However, the hybrid pushes intelligence out
to the camera level, to allow functions such as built
-
in event handling, sensor input, relay output,
video motion detection and other capabilities allow IP cameras to make decisions on when to
send
alarms and to whom, when to send video, and even at what frame rate or resolution to send
the video.



Scalability

-

Users can scale the system from one camera to thousands of cameras in individual
increments. On the contrary, DVRs usually require users to
increase in 8
-
channel or 16
-
channel
jumps, even if only one additional camera is actually added to the network.


19

The S
X DVR Series offers:




Durability

in order to stand the test of time and meet rigorous environments



Reliability and stability

via an embedde
d Linux platform



Increased retail/commercial transaction management capabilities

via integration of video
and transaction data, report generation, power searches

and much more


The MX DVR Series provides:




Peace of mind
, by providing high
-
quality products
that guarantee safety for passengers and
drivers



Cost
-
effectiveness and efficiency

to meet a variety of mobile needs
, such as being able to
track the speed, zone, route, or locale of the vehicle or being able to track driver performance



Easy
-
to
-
use

digital

video recording solutions that offer clear and crisp images and audio
, alarm
and GPS (Global Positioning Systems) integration and much more



Faster r
ecovery of stolen assets and reduction in insurance premiums


What after
-
sale services will we provide?

We
will provide up to two (2) years of warranty for our products,
phone and online live support, on
-
site
after
-
sales maintenance
,

and replacements.

Our
warranty covers only those defects which arise as a result of normal use of the product, and do not
apply t
o any:

A.

Improper or inadequate maintenance or modification;

B.

Software, media, parts, or supplies not provi
ded or supported by Neugent; or

C.

Operation outside the product’s specifications


Maintenance is optional and will be billed on a case
-
to
-
case basis, wh
ile

replacement products are
covered only for the original warranty period.

Please see Appendix for our detailed Warranty and
Maintenance Terms.


Who are your customers?


Our target customers are OEMs
, such as Fujitsu, D
-
Link, LG, Sony and the like

and le
ading
hardware/electronic manufacturers and distributors, who plan to enter the safety and security market.
Some of these customers can be distributing safety and security products already, and would want to
have innovative or supplementary products or ou
t
-
of
-
the
-
box solutions mixed with their surveillance
products.


Who are our competitors
?


FACTOR

Hawkeye

Strength
(s)

AverMedia

DX5000

GeoVision

Importance
to
Customer

Products


High
performance
and optimized
solutions



Windows
-
based
systems are
pron
e to
1


20

FACTOR

Hawkeye

Strength
(s)

AverMedia

DX5000

GeoVision

Importance
to
Customer

system
crashes and
virus attacks

Price


Very
competitive
pricing


Slightly
higher than
Hawkeye


Slightly
higher than
Hawkeye

2

Quality


Uses
hardware
MPEG4
compression
to deliver true
real
-
time
video


Almost
similar to
Hawkeye


Using
Wavelet
,
MPEG4
compression
and
proprietary
codec

1

Selection


Intelligent and
hardworking
R&D team



3

Service


24/7 Support

?

?

1

Reliability





1

Stability





1

Expertise



?

?

2

Company
Reputation





2

Location


Headquarters
in USA w
ith
R&D in the
Philippines,
plus
outsourced
manufacturing
in Korea and
China

US,
Germany,
China,
Japan,
Spain, and
Taiwan
branch

Taiwan, US
and Japan
offices

3


21

FACTOR

Hawkeye

Strength
(s)

AverMedia

DX5000

GeoVision

Importance
to
Customer

offices

Sales
Method


Step by step
and
aggressive;
customer
-
oriented
salesmanship

?

?

2


(Note: In the final column, 1 = critical and 5 = not very important.)

Legends:


Very Satisfactory

Satisfactory

Fair


What
are our marketing strategies?


Our major strategies would include:



Continuous product enhancement and development, as well as const
ant R & D
, adhering only to
strategic market positioning

standards as stated below:

Product

Highlights

LX DVR Series

Optimized Linux
-
based digital video surveillance solution using hardware
MPEG4 compression technology

HX DVR Series

High performance Linu
x
-
based hybrid digital video surveillance solution
s

integrating analog and IP cameras

for
corporations with a central head office
and many dispersed branches

SX DVR Series

Durable standalone surveillance systems integrating access control systems,
POS, al
arm & sensor and other applications, such as license plate recognition

for rugged & industrial environments

MX DVR Series

Core digital video surveillance solution for vehicles, protecting people in
motion

VS Series

The single
-
box solution for transmittin
g digital video over intranet networks or
the Internet

MCMS

A r
eal
-
time

feature
-
rich

visual vehicle tracking system

CMS

A powerful
overall central monitoring solution




Connection and strengthening business ties with potential partners, distributors and
customers



Expansion of market reach via aggressive product promotion



Educating the market about the need for safety and security products


How are we promoting our products?


The Hawkeye Security products will be promoted via print, online
,
aggressive belo
w
-
the
-
line marketing
tools

and a variety of other advertising media
.
Please see details below:




Print


22

o

Quarterly
Broadsheet and Magazine Advertisements

o

Annual
Direct Mail

o

Press Releases



Word of Mouth



Online

o

Website + E
-
commerce Websites

o

Search Engine Optim
ization,
monthly
Webmails, Newsletters, Paid Advertising and B2B
Online Trading

o

Press Releases



Online marketing is a
powerful way of getting our products out in the market.

(There are currently more than 700 million Internet users in the world.)

A lot of

competitors are educating the market about safety and security throug
h online
means.
There’s also

an essential percentage of B2B transactions taking place
online, which poses as a big opportunity for us.



Trade Shows

(at least 2 of the major safety and se
curity trade shows)



Participation in trade shows is a very effective way to meet business clients and
consumers alike. It will provide us the opportunity to introduce our company and
our products and services.



Dealer Promotions

o

Incentives


o

Discounts



Pro
viding dealers with the right incentive will make them push our products to the
market. An example would be giving the dealer a free product sample if the
dealer is able to meet a specific quota for a given period of time.



We also have set up a different
types of dealer membership, such as a Platinum
Membership, which in this case the dealer will receive the lowest dealer’s price,
on the condition that they sell this corresponding volume and amount of product.



Initially, we will be
sourcing out

many dealer
s
. This will get our products out into
the security channel sector. We will maintain cooperative relations with these
dealers and we will make sure that we set reasonable performance standards.



We shall guarantee the dealers’ responsibility for promoting

and marketing the
products. The dealers shall commit a launch plan with a budget to ensure
success. Dealers shall ensure that any marketing strategy or plan does not
deviate; harm or damage our marketing objectives for the product. The dealers
must at al
l times uphold the product and carry on an organized and effective
marketing plan for the product.



We will also provide full product and technical support



Business Partnerships



Our aim to get to know the key players in the industry and learn the marketing

strategies that they deploy.
There is a big opportunity to integrate certain
business applications with our products, such as POS, ATM, traffic systems, and
police & military systems.


On top of these promotional methods, we also plan to create new busin
ess cards, new product
presentations, case studies of safety and security requirements in vertical markets, and an online product
demonstration.


We want to be the top
-
of
-
the
-
mind digital video recorder provider. We believe that

the
mix of print, word
of

mouth and online advertising
will instill strong product recognition.


How do we set price policies?



23

Our prices are very competitive, providing value for the customer’s investment. We use standard
methods of setting the price via
thorough evaluation o
f product demand, volume of demand,

and

competitors’

prices.


Our 8ch DVR card’s selling retail price is
from

$800 to $850. Our OEM price for the 8ch DVR card ranges
from $400 to $450, depending on the volume of order.
Based on our research, our
price is

10%
-
15%
lower compared to other products in the market.

In fact, there are some cards (16 channel input and
software MPEG4 compression) which offer dealer’s price equal at our OEM price. The same card’s SRP
ranges from $950
-
$1,000.


Our DVR system pric
es are also very competitive
, with the LX
-
8000 Series SRP from $3,000 to $3,500.
Other DVR systems which have similar functions as our product,
except for hardware MPEG4
compression technology
, are priced from $3,500 to $4,500.


Price is one of the majo
r factors when consumers purchase products. We do not wholly believe in
lowering the price, just so to sell our products, although it works sometimes. We value
maintaining a
competitive price and w
e believe in other factors, such as quality, support and s
ervice.


To accommodate customers who have financial concerns, we have developed several methods of
payment such as leasing, installments, discounts, and demo
-
to
-
buy strategies.


What is the proposed business location?


Neugent is currently headquartered i
n the United States.
Rising instances of security breaches

and
acceptance of surveillance cameras in the public sector in the US have increased the demand for safety
and security products, thus making the USA one of the major markets for surveillance solu
tions. This is a
critical factor for our business’ success.


Instant and nearby access to customers will be beneficial because it would provide:



solid immediate
product and technical
support
and consultation



faster transaction processing and product deli
veries



convenient and cost
-
effective
business operations

Neugent Technologies, Inc.
, the R&D arm of Neugent Global, is currently situated in the Philippines for
the following reasons:



inexpensive labor costs



no
-
communication barrier, as English is a widel
y accepted second language



strong
business and workplace
cooperation, teamwork and

Filipino

ingenuity


Neugent Korea and Neugent China offer inexpensive manufacturing costs.


What are our distribution channels?


Our distribution channels include OEM pa
rtners, wholesale distributors and leading security dealers. On
top of these, we have our own sales force and a few independent representatives
.


What are our sales forecast?



24


Please see Appendix

for more details
.


25

III.

Operational Plan


Production

At present
, Neugent Global China is dedicated to outsourcing manufacturing companies for hardware
production. All products are shipped to the Neugent Technologies R&D Center Philippines for testing to
ensure that all products are designed and produced to meet or e
xceed customer requirements and
expectations.



Quality Control

Failure Testing


All
our
products undergo failure testing
in
Neugent Technologies Philippines

to expose any unanticipated
weaknesses. It is only after the engineering
team has conducted the n
ecessary improvements that they
are sent for production.


Total Quality Control

To avoid major problems

which
may lead
to a decrease in
sales, Neugent Global makes sure that the
specifications of all our products meet or
even
exceed customer requirements

especially in terms of
reliability, maintainability, and safety.



We follow the following procedure:


1.

Marketing
clearly defines the customer requirements..

2.

Specifications had to be defined to conform to these
requirements.

3.

Conformance to specifications we
re introduced during
development and manufacturing.


4.

Management had
makes sure that the
number of

engineers
is

equal to the work imposed on them
and holidays, celebrations and disputes did not affect any of the quality levels.

5.

Inspections and
tests

were c
arried out, and all
components and materials
bought in or otherwise,
conformed to the specifications
.


6.

Any
complaints
received from the customers were timorously and satisfactorily dealt with.

7.

Feedback from the user/customer is used to review designs.


I
f the original specification does not reflect the correct quality requirements, quality cannot be inspected or
manufactured into the product.

Eventually, we also p
lan to
achieve best
-
in
-
class operating practices and
leverage company
-
wide opportunities, ut
ilizing six sigma measurements.


Customer Service

Neugent Global takes time to satisfy customers. We conduct

constant

research to find out what our
customer actually wants. We
do calls and on
-
site visits to existing customers for maintenance of our
system
s and products. Customers may also reach our technical support group who work round the clock
24/7 through our GID (Global ID) or front office.


Location

The ideal location for the
Neugent Technologies, Inc.

R & D is to be in the PEZA

(Philippine Economic

Zone Area)
.

Business hours would be flexible from 8:00 am to 5:00am or 9:00 am to 6:00 am.


PEZA shall encourage and support investments of Information Technology (IT) Enterprises, as well as the
establishment and operation of IT Parks / Buildings to ser
ve as readily available suitable locations for
their operations, in order to accelerate the growth and development of the Philippine IT sector.


In this connection, PEZA shall implement the following guidelines on the registration of IT Enterprises and
IT
Parks and Buildings, for availment of incentives provided under Republic Act No. 7916 (The Special
Economic Zone Act of 1995), as amended by Republic Act No. 8748.



26

I. Definition of Information Technology, IT Enterprises and IT Parks and Buildings


In conn
ection with the PEZA registration of IT Enterprises and IT Parks and Buildings, for availment of
incentives provided under R.A. No. 7916, as amended by R. A. No. 8748, the following definitions shall
apply:



"Information Technology" or "IT" is the collect
iv
e term for the various techno
logies involved in
processing and transmitting information, which include computing, multimedia,
telecommunications, microelectronics and their interdependencies. Also called "informatics" or
"telematics", the term "IT" is now
also often used to refer to the convergence of various
information
-
based, broadcast and mass media communication technologies. (NITC 1997);



"IT Service Activities" are activities which involve the use of any IT software and / or system for
value addition;



"IT Enterprises" are companies operating / offering IT services;



"IT Park" is an area which has been developed into a complex capable of providing
infrastructures and other support facilities required by IT Enter
-
prises, as well as amenities
required by
professionals and workers involved in IT Enterprises, or easy access to such
amenities.



"IT Building" is a building, the whole or part of which has been developed to provide
infrastructures and other support facilities required by IT Enter
-
prises, and whi
ch may also
provide amenities required by professionals and workers involved in IT Enterprises, or easy
access to such amenities.



"Facilities
-
Providers" are owners / operators of buildings and other facilities inside economic
zones / IT Parks which are lea
sed to PEZA
-
registered locator enterprises.


II. Information Technology Service Activities Registrable with PEZA for Enjoyment of Incentives


IT service activities registrable with PEZA for enjoyment of incentives shall include:



Software development and a
pplication, including programming and adaptation of system software
and middleware, for business, media, e
-
commerce, education, entertainment, etc.;



IT
-
enabled services, encompassing call centers, data encoding, transcribing and processing;
directories; e
tc.;



Content development for multi
-
media or internet purposes;



Knowledge
-
based and computer
-
enabled support services, including engineering and
architectural design services, consultancies, etc.;



Business process out
-
sourcing using e
-
commerce;



IT resea
rch and development; and



Other IT related service activities, as may be identified and approved by the PEZA Board.

An IT Enterprise operating any of the above
-
listed IT service activities may register with PEZA for
availment of incentives provided under
R. A. No. 7916, as amended by Republic Act No. 8748, provided it
physically locates inside a PEZA
-
registered IT Park, Building or special economic zone, which is covered
by the required Presidential Proclamation.


Incentives for PEZA
-
Registered IT Enterpri
ses


PEZA shall grant registered IT Enterprises the following incentives



Income Tax Holiday for four (4) years for Non
-
Pioneer IT Enterprises, or six (6) years for Pioneer
IT Enterprises;



After the ITH period, the option to pay a special 5% tax on gross in
come earned, in lieu of all
national and local taxes, except real property taxes on land owned by developers;



Exemption from payment of import duties and taxes on imported machinery and equipment and
raw materials;


27



Additional deduction equivalent to 50% o
f training expenses, chargeable against the 3% share of
the national government in the special 5% tax on gross income;



Permanent resident status for foreign investors with initial investments of US$ 150,000.00 or
more;



Employment of non
-
resident aliens r
equired in the operation of IT Enterprises; and



Other incentives, as may be determined by the PEZA Board.


Personnel

W
e are proud to have engineers who strive for excellence. Our R&D team is composed of self
-
driven and
dedicated individuals with experien
ce and knowledge in software development, database system
architecture & design, web development, systems analysis, information systems administration and
network & security.

Their
expertise includes

the following:

Operating Systems: Windows, Linux and
Unix

System Architecture: Intranet/Internet and Client
-
Server

Hardware: x86, IBM PPC, Sun Sparc, DEC Alpha, Zilog 80, Motorola 68k, Firewall, Router,

Languages: C/C++, Java, Pascal, Python, VB, VB.NET, Perl, ASP

Web
-
based Language: PHP, HTML, CGI, Javas
cript, DHTML

Databases: MySQL, Oracle, MS Access, MS SQL, PostgreSQL, XML

Server Applications: Microsoft IIS 4.0/5.0, Microsoft Message Queue, Tomcat, Apache

Network: Extensive experience in TCP/IP, VOIP and VPN


At the same time, we have passionate sales

and marketing people who envision Neugent Global to
become a global leader in providing digital multimedia communication.


Inventory

We keep an inventory of

components as well as finished products. Product parts that have to be sourced
out from China hav
e to be ordered two weeks in advance.


Items

Annual Cost of Good
Sold

Inventory
Investment

Annual Inventory
Turns

LX
-
8800

270,000.00

273,600.00

0.99

LX
-
8700C

1,760,000.00

1,760,400.00

1

LX
-
8700

507,000.00

509,600.00

0.99

LX
-
E320

180,000.00

18
6,000.00

0.97

LX
-
E160C

1,450,000.00

1,450,500.00

1

LX
-
E160

500,000.00

504,000.00

0.99

HX
-
9032

342,000.00

348,000.00

0.98

HX
-
9016

260,000.00

264,000.00

0.98

SX
-
2016

1,610,000.00

1,611,400.00

1

SX
-
2008

1,800,000.00

1,800,800.00

1

SX
-
3008

800,000.00

801,000.00

1

SX
-
4008

400,000.00

401,000.00

1

SX
-
5008

400,000.00

401,000.00

1

MX
-
104

420,000.00

420,600.00

1

MX
-
204

350,000.00

351,000.00

1


28

VS
-
102

60,000.00

60,200.00

1

VS
-
104

90,000.00

90,300.00

1

MCMS

300,000.00

320,000.00


0.94



Suppliers


Neugent Technologies’ suppliers are accredited and established in the industry.


Hardware
Components

PC Express, Philippines

Acumax, Philippines

TQM, Philippines

Biostar, China


Cables and Connectors

Deeco, Philippines

Oriental,Philipp
ines


Ma
naging
Y
our Accounts Receivable


For payment policies, please see Appendix. For slow
-
paying customers, here are some of our policies:




Make phone calls within
two (
2
)

days before the due date



Send
letter sixty (
60
)

days after the due date



Demand l
etter
from attorney
90 days after the due date


Managing
Y
our Accounts Pay
able




29

IV.

Management and
O
rganization





B
oard of D
irectors

David J. Cruz Jr.

David R. Cruz III

Su Kwan Jang

Su Jaung Park

Joselito V. Banaag



Management
A
d
visory B
o
ard

David J. Cruz J
r.



Attorney



Accountant

Leoncio Y. Fuertes



Insurance agent



Banker



Consultant or consultants



Mentors and key advisors



30

V.

Personal
F
inancial
S
tatement


Please see Appendix.


31

VI.

Startup Expenses and Capitalization


A.

Monthly Personnel Salaries in Philippine Peso


See
Appendix.


B.

Depreciation and Repair and Maintenance


Depreciation expense was computed based on a straight
-
line method. Repair and Maintenance
cost is estimated at 15% of depreciation cost annually.


C.

Rental


Space and o
ffice rental is computed at Php
70,000
.00 per month, with an incremental increase
of
20% per annum
.


D.

Taxes and Licenses


Income tax is computed at 35% per annum.
There is also
Value Added Tax (VAT) of 12% on

all
Philippine
-
based

sales.



32

VII.

Financial
P
lan


See Appendix.


33

VIII.

Appendices