MANUFACTURING COMPANY

LLC VERSHINA-VISION

Project Title:
Manufacture and installation in Moscow (on the visible parts) of large
format (5x15 m) dynamic prism advertising units (with a radically new
design for the Russian market) with the power supply from alternative
energy sources (solar and wind power) .
 Project Title:
Manufacture and installation in Moscow (on the visible parts) of large format (5x15 m) dynamic
prism advertising nits (with a radically new design for the Russian market) with the power supply
from alternative energy sources (solar and wind power) .

The project is the production of the

“Vershina-Vision" company.
Creation date of the company is December 1999.
Information Office, Moscow. Location of production sites, Khlyupino township, Odintsovo district, Moscow region.

Business owners:

Alexander Khaylis, President and CEO Yevgheniy Sivokon, Chairman of the Board

Company sales, million. $:

2005 2006 2007 2008 2009

2004
9,0 12,0 13,5 17,7 12,0 6,1
 The company has:

• Park equipment and unique equipment (net book value of approx. 24,5
million USD, the market value of approx. 40 million rubles)

•Stock of raw materials amounting to 10,0 million USD

•Special vehicles (tape trailer for transport roller designs, the car
RENAULT Kang, etc.)

•Intellectual property (patent of Russia in the invention

and a certificate for TK)

Extensive customer base (all the largest operators of outdoor advertising, the Russia and CIS)
 COMPANY
is a Russian leader in the production of dynamic advertising units (dynamic prism
and roller constructions)
 Team project
President and CEO of “Vershina-Vision” Khaylis
Alexandr Higher Education (Moscow Institute of
Management). Experience in leadership
positions 28 years. In the advertising business
since 1995 One of the founders of the company.
Chairman of the Board of “Vershina-Vision” Sivokon'
Yevgheniy higher education (the National Agrarian
University, Kiev, specialty automation of agricultural
production. The experience of management experience
- 15 years. Experience in production and advertising
business - 12 years. One of the founders of the
company.

Director of the plant for dynamic prism constructions

Sales Director Nikolay Mukhin,
education:Moscow Power Engineering Institute ,
a specialty - management . Experience of
management experience - 3 years. Experience
in the advertising business - 2 years.
Makeev Andrey
Education: The South-Russian state technical university.
A specialty: The electrical engineer
Experience of management experience - 2 years.
Experience in the manufacturing business - 5 years.

Head of the Service Department Shmelev Vladimir

PR-manager of the company Orintseva Irina
Education: The Mordovian state university of N.P.Ogaryov
Education: Moscow University for
Specialty:The mechanical engineer
Humanities, specialty - Public relations.
Experience of management experience - 10 years.
Experience in the advertising business - 5
Experience in production or advertising - 2 years.
years.

Total number of employees in the company (currently) is 59 peoples between 2004 and 2008 the number of employees ranged from 130
to 170 people work will be involved (some are already involved, as the work has already begun), designers and contractors (primarily all
NGO ENEKSIS) organization. In addition one or two sale managers are planned to be engaged.
 Business - ideas, products and degree of novelty
This project was created because of at least three business ideas:

1.Demonstration possibility of using clean energy technologies in the most public and
democratic marketing industry - outdoor advertising

Theme of energy conservation and alternative technologies is now one of

the most popular and the most innovative. There is no sphere of activity,
where it had not begun or should begin as soon as practical use of this
type of innovation (housing, communications, transportation, agriculture,
etc.).These ideas should be implemented in the outdoor advertising
media, located on the edge of any marketing solutions. The most effective
advertising medium - a dynamic structure, in particular, dynamic prism.

On the one hand, we want to demonstrate the possibility of using energy-saving technologies for the most technically
sophisticated form of advertising systems – dynamic prism (the need for continuous, not just the night of power supply),
large format (4x12 m and more);On the other hand, in conditions of constant increases in the cost of electricity and the
huge bureaucracy of contractual relations with the city energy-supplying organizations to provide market operators an
alternative power supply designs and to create Russia's first dynamic advertising medium targeted for placement of
information from advertisers, positioning their marketing on environmental conservation.

According to our research, nowhere in the world (even in countries with more suitable climatic conditions for the
project)such project was not implemented.

2.Anderstending ongoing commitment of all operators, owners of dynamic advertising structures get cheaper
and lighter vehicles, reducing the cost of service advertisements and replacing images, and make the
operations more simple (in particular, without using special equipment)
 Business - ideas, products and degree of novelty
As the leaders in the Russian market of manufacturers of dynamic advertising and constantly studying and
analyzing all the innovation market and related technologies, we created a construction ("Prizmabo аrd-Light"),
taking into account all these wishes. Dynamic prism advertising units is facilitated, when applying and replacing
the images there is no need to use a spare set of removable panels, environmentally hazardous adhesives and
special equipment (advertising vehicle etc.)

Nowhere in the world do not use this method of fixing and replacing images (the technology in more detail will be
described below)

Possibility of accomplishment of the above mentioned business ideas within an existing company (without need
for new production facilities, equipment, recruitment and staff training)
 Our customers are all the major operators in Russia and CIS countries. We offer clients a full range of dynamic advertising
(roller and construction).
Range of products and services of “Vershina-Vision" company includes :

- Dynamic prism constructions of any format (TM Prizmaboard ") with

changing panels (collapsible), and non-collapsible. A new type of product,
"prizmaboard - Light", which is the innovation of this project.

roller constructions, size 2,7 x3, 7 m (City-

board), 1,2 x1, 8 m (City format) - radio monitoring system of dynamic advertising
(GPRS-technology).

-static advertising structures of aluminum

and other metals;

Service advertising structures and the - installation of advertising

replacement of images on them -Outdoor furniture with advertising surfaces and
structures;
without them;
The company is well recognized in the market as the best in the field of innovation. We were the first in Russia to produce steel
roller constructions (since 1999), first mastered the production of prefabricated prisms (split-system), first made a prism with a width
of 200 mm panel. The first and the only put into operation a system of GPS monitoring. The authors of the unique global projects
(Russian Book of Records and Guinness) for the production of prisms formats 6x18m, 6x24m, 12x30(!!)m.
 Advantages compared with counterparts
1.ADVANTAGES from the use of alternative sources of electricity

For owners of structures: For local authorities:

• the rejection of bureaucratic procedures for annual
renewal of contracts with energy supplying
Organization (save for the owners of structures in
terms of value and there is no need to divert staff to
implement those procedures, not less than 100,0
thousand rubles. For one design per year);
•downswing in energy consuming for advertising
structures (for one advertising unit is 17 520-kilowatt
•hour, per year) improvement of urban infrastructure,
reduce congestion of city streets, protection of the
environment

•Savings for the owners of structures on payments

for the use of electricity - not less than 180,0
thousand rubles for one design per year;
 2. Advantages of using the “light-technology” in comparison with traditional
technology (according to the cost of new construction and replacement of images)
are shown in the tables below:
Price (in rubles. And weight characteristics) advertising structures "Prizmaboard ®».

«Prizmaboard» 190 мм (split-sistem) «Prizmaboard-light» (100 мм) «Prizmaboard-light» (190 мм)

5х15 1 221 500 2250 822 000 1500 909 000 1650

Comparative characteristics of the replacement images to Dynamic Prism

Constructions in using existing technologies and technologies «Prizmaboard-
Light»
Comparative characteristics of the replacement images to Dynamic Prism
Constructions in using existing technologies and technologies
«Prizmaboard-Light»
 Staff time and cost
(for prizmaboards mainly of 3x6 m, one surface)
 Brief description of the technology used
1.Innovation energy supply
• The novelty of large-energy dynamic advertising structure is used for the purpose of
alternative energy sources (a combination of vertical wind generator, solar panels and
accumulator batteries.
•In world practice there are examples of the use of these elements (separately or in
combination) for the energy supply of advertising constructions, but until now this was done
only for the lighting of static advertising during the night (and usually not for large format). We
want to demonstrate the possibility of using energy-saving technologies for the most complex
kind of advertising systems, dynamic (the need for continuous, not just a night of power
supply), and large format.

2.Innovation of dynamic prism advertising units

Existing technology of advertising images demonstration on dynamic prism constructions suggests the
presence of elements of the advertising image on the verge of triangular box (structural component), a
set which represents a planar image with the gap between the face of the box. (Currently on the
market, the classic technique of application and replacement of image-poster glued to the removable
panels that are inserted in the face of the box. When replacing the image with the existing technologies
a new poster pasted on a spare set of panels, which vary in advertising). When these elements move
simultaneously, brinks form a new image. As a rule, dynamic prism constructions are tripartite.

The novelty of the proposed advertisement (unlike the existing analogues) is in use in prism's brinks
specially refined design of plastic rails, allowing to fix on each side of the tripartite parallelepiped (the
name of the parallelepiped established on the market is “Prism”) specially laminated picture element.
This technology (we have decided to call it "light") allows you to make extremely simple and economical
(no stickers, a set of spare panels and the use of special equipment) applying and replacing images on
the advertising units.
 Ready to commercial realization and timing of commercialization
Time for the accomplishment of the whole project swings from 6 to 9 months (primarily because of the duration of the timing of the receipt of permits
for the installation of the advertisement). Research and Development period is almost complete, now actual tests of the advertising unit model with
energy supply from alternative sources are being finished.

The “prismaboard-light” construction has already been tested completely, and almost all of its elements may be immediately
commercialized

The commercial use of the project is as follows:

1.Operator activity, namely the actual sale of the right advertising information on the installed large prizmabord, which will be the property
of the manufacturer (or customer). Approximate cost of accommodation may be 120,0-150,0 thousand rubles a month on the one surface of
the advertising unit.). Construction may be one-sided (3 surfaces) as well as two-sided (6 surfaces).

2.Selling of the installed advertising unit to the third company (we count on a large number of firms that wish to get the construction),
especially to leaders on the outdoor advertising market.

3.Manufacturing and installation of new constructions, similar to the project accomplished in Moscow and Russia on the orders of third
companies. After the success of the project and its broad PR-company, we look forward to an abundance of orders, including those regions
with the most favorable climate conditions for the project.
4.Re-equipment of existing installed large dynamic advertising units with the energy supply from alternative sources. Market size-from 100
to 200 units.
5.Re-equipment of illumination of static advertising units surfaces at night time (large and of standard-size 3x6 m) with the power supply
from alternative sources. It should be noted that the need for energy only at night time simplifies much the requirement to the
completeness of energy supplying alternative modules. Market size-more than 10 000 units.

6.Updating and widespread selling to advertising market companies of compact simplified energy supplying modules for illumination of
advertising surfaces in the night time period. Market size-more than 10 000 units.
7.Re-equipment of existing dynamic prism constructions with the new technology (we are designing the "light-technology" brand or
"prizmaboard-light" brand). The market in Moscow is up to 7400 constructions, in Russia is up to 15 000 constructions.
8.Selling of new dynamic prism constructions with "light-technology" as the most effective option of prisms (with a lower
selling price and substantially lower cost of service). The volume of potential orders is unlimited, especially in a rising market.
 Market
Geography of the Russian outdoor advertising market is characterized by almost total federal coverage. A similar situation in
most CIS countries (especially in those with whom we work, Belarus, Kazakhstan).Major players in this field of
communications operators (contractors) who own advertising sites and installed constructions on them (in accordance with
the Federal Law "On Advertising" and the Rules of placement of outdoor advertising and information

As a rule, none of these groups has its own manufacture to produce advertisements. Manufacturers of advertising
constructions are engaged with this. Manufacturers of dynamic advertising structures are elite company among the
manufacturers (products rather complicated, innovation, which requires extensive training and investment to start). Our
company "Vershina-Vision" (in the market since 2000) has become a real Russian leader, provider of dynamic structures,
especially in the European region.

Also, owners of advertising structures are the enterprises of the consumer market (retail, service companies, etc.), as well as
owners (tenants) of office and production facilities (signboards, display cases, etc.).

The volume of production of dynamic advertising in the pre-crisis (2003-2007g.g.) period is at least $ 50.0 million per year.

Now we can talk about the technological satisfaction of operators and advertisers by proposed types of dynamic advertising
units.
 Market Trends (especially in crisis and post-conditions) will be determined by the
following factors:

•requirement of urban municipalities to replace the

static (plywood) constructions in central parts of
cities by the dynamic (hi-tech) constructions;

•implementation in the largest metropolitan areas of so-

called concepts (but in fact it is simply reducing the
number of constructions), forcing the operators to
maintain quality programs (the number of surfaces in
the offer) to change the static advertising units by the
dynamic.

In addition, there is a problem of moral and physical deterioration of huge number of dynamic advertising units, the peak
production of which was in 2002-2006, (warranty period for our constructions varies from 2 to 5 years);
 Dynamic prism constructions:
Manufacturers market share according to the ESPAR-ANALITIC company's and
our own data obtained by
01.02.2010, (in %)
Planned change Planned change
All formats
after the project after the project
Moscow The 3x6 format accomplishment, accomplishment,
end of 2012 end of 2012
«Prismaboard» (Vershina) 46 65-70 44 55-60

«Prismavision»+SMF(England) 48 43

«Treevision» (Favor Garant) 4 7

«Prismatron» (Omsk) 1 2

Other manufacturers 1 3

Planned change Planned change

after the project All formats after the project
Russia The 3x6 format accomplishment, accomplishment,
end of 2012 end of 2012

«Prismaboard» (Vershina) 26 35-40 24 33-35

«Prismavision»+SMF(England) 13 8
«Treevision» (Favor Garant) 26 33
«Prismatron» (Omsk) 27 20
Other manufacturers 10 15
 Advantages of the opponents

Technical and technological Marketing and organizational:

•more modern constructing and technological •balanced price policy;
solutions;
•proximity (especially territorial) to major customers;
• simplifying constructing weight; •high level of service and efficiency in solving client's
problems.
•suggested additional set of equipment,
providing the desired services and features

Key Advantages
The presence of the largest and solvent customer base, friendly relations with management and major shareholders
of the largest Russian operators
 Finance
1.Financing project to manufacture and installation in Moscow (on the visible parts) of large format (5x15 m)
dynamic prism advertising units (with a radically new design for the Russian market) with the power supply from
alternative energy sources (solar and wind power

Total project cost 17.0 million rubles

Investment need -15,0 - 17,0 million rubles
Investment distribution – million rubles

Research and Development (already underway), 2,0.

including actual testing

Production of 2 dynamic prism constructions 2,0

(technology "Light") of format 5x15m

Production of energy supplying module and 2,0

equipment it with LED lighting elements

Getting rights reserving documents, including competitive 1,5

conditions

Production of support and installation unit 8,5

Installation of advertising units 2,0

 Forecast sales trends from the project over the next 4 years, million rubles.
Level of profitability
Sales destination to operating expenses, 2010 2011 2012 2013 Всего
not less than

Selling the right to place the

1 advertising information on 85 5,0 7,0 9,0 9,0+20,0 50,0
advertising units (or p.2) with
selling the construction in 4 years

2 Selling the advertising unit to a 25,0 25,0

third company (or p.1)

Manufacture and installation of

3 new constructions, similar to the 44 25,0 25,0 25,0 25,0 100,0
accomplished project
Re-equipment of existing installed
large dynamic advertising units with
4 40-50 5,0 10,0 15,0 20,0 50,0
the energy supply from alternative
sources
Re-equipment of illumination of
static advertising units surfaces at
5 night time (large and of standard- 5,0 5,0 7,0 7,0 24,0
size 3x6 m) with the power supply
from alternative sources.
Updating and widespread
selling to advertising market
companies of compact simplified
6 40-45 2,0 5,0 10,0 10,0 27,0
energy supplying modules for
illumination of advertising surfaces in
the night time period
 Forecast sales trends from the project over the next 4 years, million
rubles.

Re-equipment of existing
7 dynamic prism constructions 50-60 10,0 15,0 15,0 15,0 55,0
with the new “light” technology

Selling of new dynamic prism

8 constructions 30-45 12,0 18,0 15,0 15,0 60,0
with "light-technology"

Total: 59,0+(5,0) 85,0 96,0 121,0 366,0

or +(25,0) or 341,0

The income of investor in the selling of the advertising unit to a third organization (momentary) is 25,0 million rubles (Line 2 of the Table.)
And further stipulated royalties from sales of the directions (p.3-8 tables, from 30 to 70%). The reason for these deductions may be that
investors receive attribution in the patents of our company. The investor's income for the abandonment of the advertising unit in the
property and renting it surfaces for the display of information advertisers: annually in the amount of 5,0 to 9,0 million rubles (Line 1 of the
Table.) For at least 5 years. In addition, the possible selling of the advertising unit at any time in the amount of 20,0 to 25,0 million rubles
and further stipulated royalties from sales of the directions (p.3-8 tables, from 30 to 70%). The basis for these deductions may be that
investors receive attribution in the patents of our company.
The investor can quit the project at any time by selling the advertising unit to the third company.
2.participation investor in all the current activities of the company LLC “Vershina-Vision" by acquiring 55 to 70%
share of the company (100% of assets estimation is not less than 1,9 million USD).

The sales forecast from sales of products and services of the company “Vershina-
Vision" for the next 4 years, million rubles.
Sales destination Level of profitability 2010 2011 2012 2013
to operating expenses,
not less than
1 Manufacture of «prismaboard»
including «prismaboard light» 45 47 70 90 100
2 Manufacture of roller constructions
(including city-boards) 40 50 80 120 120
3 Manufacture and installation
of “prismaboard” with alternative 44 25,0 25,0 25,0 25,0
technology of energy supplying

4 Re-equipment of existing installed

large dynamic advertising units with 5,0 10,0 15,0 20,0
40-50
the energy supply from alternative
sources
5
Re-equipment of illumination of
5,0 7,0 7,0
static advertising units surfaces at 5,0
night time (large and of standard- 40-50
size 3x6 m) with the power supply
from alternative sources
6
Updating and widespread selling to
40-45 2,0 5,0 10,0 10,0
advertising market companies of
compact simplified energy supplying
modules for illumination of
advertising surfaces in the night time
period
The sales forecast from sales of products and services of the company “Vershina-Vision" for
the next 4 years, millions rubles.

Re-equipment of existing dynamic prism

7 constructions 50-60 10,0 15,0 15,0 15,0
with the new “light” technology

8 Manufacturing of outdoor furniture 25-30 7,0 15,0 15,0 15,0

9 Services 25-30 10,0 12,0 10,0 10,0

Selling and service

10 of the radio monitoring system 40-45 2,0 2,0 5,0 5,0
of dynamic prism constructions

11 Selling of spare parts 75 5,0 10,0 5,0 5,0

In total 168 249 322 332

The investor can quit the company according to the second option by selling the firm to the one of the world's leading manufacturers of
dynamic advertising (primarily to PRISMAFLEX (headquartered in France) and ARCOMAT-France).

We have negotiated with these companies about the acquisition of up to 100% of our company by these firms (100% of assets estimation was
about $ 3,5 – 4,0 million). Because of crisis the negotiation was temporarily suspended.
The list of potential buyers (primarily European and Asian) who could have interest to our company is not limited by these two companies.