Secure E-Mail Technology (“SET”)
Confidential - June 2007
1
Disclaimer
Certain information contained in this Confidential Private Placement Memorandum (the “Memorandum”) regarding SET Ges.m.b.H. (“SET” or the “Company”) includes
forward-looking statements. Any statements that express, or involve discussions as to, expectations, plans, beliefs, assumptions, projections, objectives or future
events or performance (often, but not always, through the use of words or phrases such as “anticipates,” “expects,” “plans,” “projection,” “projects,” “believes,” “could,”
“estimates,” “intends,” and “will”) are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions and
uncertainties, which could cause actual results to differ materially from those expressed in the forward-looking statements. Accordingly, there can be no assurance
that actual results will match or even come close to the forward-looking statements, and such statements are qualified in their entirety by reference to, and are
accompanied by, the factors discussed throughout this Memorandum.
Neither SET nor any of their respective affiliates, employees or representatives makes any representation or warranty, express or implied, as to the accuracy or
completeness of any of the information contained in the Memorandum or any other information (whether communicated in written or oral form) transmitted or made
available to prospective investors, and each of such persons expressly disclaims any and all liability relating to or resulting from the use of this Memorandum or such
other information by a prospective investor or any of their affiliates or representatives. Only those particular representations and warranties, if any, which may be
made by the Company to an investor in a definitive written agreement, when, as and if executed, and subject to such limitations and restrictions as may be specified
therein, will have any legal effect.
This Memorandum is submitted to prospective investors on a confidential basis for use in deciding whether to proceed with a further investigation and evaluation of the
Company in connection with their consideration of an investment in the Company. The disclosure of any of the information contained herein or supplied in connection
herewith or the use thereof for any other purpose, except with the written consent of the Company, is prohibited. This Memorandum may not be reproduced, in whole
or in part, and it is delivered to prospective investors with the understanding that it will be returned immediately on request if the recipient does not purchase the
securities offered hereby. The financial projections presented in this Memorandum represent the views of the Company Management and their current estimates of
future performance based on various assumptions which they believe are reasonable, but which may or may not prove to be correct. There can be no assurance that
the views of the Company Management are accurate or that their projections will be realized. Industry experts may disagree with these assumptions and with
managements’ views of the market and the prospects for the Company.
Neither the Company’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the
projected financial information contained in the Memorandum for the Company, nor have they expressed any opinion or any other form of assurance on such
information or its achievability, and assume no responsibility for, and disclaim any association with the Memorandum for the Company.
This Memorandum has not been filed with or reviewed by, and the securities discussed herein have not been registered with or approved by, the Securities and
Exchange Commission (“SEC”) or any securities regulatory authority of any state, nor has the SEC or any such authority passed upon the accuracy or adequacy of
the Memorandum.
This Memorandum does not constitute an offer to sell or solicitation of an offer to buy any securities. The sole purpose of this Memorandum is to assist prospective
investors in deciding whether to proceed with a further investigation and evaluation of the Company in connection with their consideration of an investment in the
Company. This Memorandum does not purport to contain all information that may be material to an investor and recipients of the Memorandum should conduct their
own independent evaluation of the Company. Each recipient agrees, and the receipt of this Memorandum serves as an acknowledgement thereof, that if such
recipient determines to engage in a transaction with the Company, its determination will be based solely on the terms of the definitive agreement relating to such
transaction and on the recipient’s own investigation, analysis and assessment of the Company and the transaction.
The Company reserves the right, in its sole discretion, to reject any and all proposals made by or on behalf of any prospective investor with regard to an investment in
the Company, and to terminate further participation in the investigation and proposal process by, or any discussions or negotiations with, any prospective investor at
any time. The Company does not intend to update or otherwise revise this Memorandum following its distribution and the Company makes no representation or
warranty, express or implied, as to the accuracy or completeness of any of the information contained in this Memorandum after the date of the Memorandum.
Confidential - June 2007
2
Executive Summary
The SET Concept
The SET Team
SET Optimises E-Mail Traffic Security …
… and Empowers the Sender to Actively Monitor
the Entire Information Flow
 SET is an integrated E-Mail and messaging system
providing maximum security and the sender with full
control and authority over the information embedded
in and such attached to messages
 Christian F , 41, CEO
 Andreas W, 44, CTO
The Intended Transaction
 Raise EUR 150,000 of equity from private investors
to complete the EUR 1.2m finance requirement
according to the business plan
 SET core target customers are foremost informationsensitive corporate clients - such as finance-related
services and applications -, but also retail clients
Use of Proceeds
 SET user-friendly graphical user interface enhances
productivity and facilitates awareness of access rights
and document security
 Anticipated Exit
 SET combines proven technologies and in-house
innovation
 An operational “proof of concept” application is
available





Finalise product development and …
… prepare SET for market launch in 3Q2008
As of 2012, SET is expected to serve approximately
13,300 customers combining a total of 200,000
accounts, to generate ca. EUR 3.5m of revenues and
more than EUR 1.0m of EBIT …
… with a very dynamic growth momentum …
… which should provide the basis for an exit
opportunity via sale to a strategic investor or to the
private equity markets
The SET Alpha Version has been tested successfully since November 2005
Confidential - June 2007
3
“A typical E-Mail message is no more secure than a holiday
postcard sent through the public postal system … ”
Christian F , CEO, SET
Confidential - June 2007
4
The SET Concept
SET Secure Mail Server System
SET Optimises E-Mail Traffic Security …
… and Empowers the Sender to Actively Monitor
the Entire Information Flow

SET is an integrated E-Mail and messaging system providing
maximum security and the sender with full control and authority
over the information embedded in and such attached to
messages



Messages and confidential content – once submitted - cannot
be amended, forwarded or processed without the sender´s
authorisation and / or knowledge
The entire message flow can be actively monitored by the
sender
Optimal E-Mail traffic security because of full integration

SET core target customers are foremost information-sensitive
corporate clients, but also retail clients

SET user-friendly graphical user interface enhances productivity
and facilitates awareness of access rights and document
security

SET combines proven technologies and in-house innovation



Secure Line
Secure document access control software technology based on
proven open-source systems
Every user is enabled to (remotely) access, write or annotate
documents over an encrypted Internet connection
Documents are stored on a secure central server and access
can easily be set by authorized users even without involvement
of the IT department
Confidential - June 2007
5
SET Optimises E-Mail Security
Traditional E-Mail Traffic
SET
Numerous Moderately Secure Mail Servers
SET Secure Mail Server System
Unsecure Lines
Secure Lines
The Issues
The SET Solution
Manipulation
SET ensures that an E-Mail – once sent – cannot be
manipulated or amended by any recipient
Once sent, E-Mail with confidential content can be
forwarded to any third party without the sender either
being aware or having any control
Monitoring
SET ensures that the information embedded in or
attached to an E-Mail can only be distributed to
“authorized” third parties and E-Mail traffic can be
actively monitored by the sender
E-Mails and attachments are transmitted over the
lines (xDSL, cable, WiFi, backbone) without any
protection
Secure Transmission
100% secure E-Mail transport over encrypted SSLConnections (like bank transactions over the
Internet)
Once sent, E-Mail content can be manipulated or
amended by recipient without the sender either being
aware or having any control
Confidential - June 2007
6
The SET Team
Christian F , CEO
Andreas W, CTO
Strategy, Finance, Sales
Research & Development
Christian F , 41, is an expert in the field of electronic data
transmission and acquired his experience in the course of nearly 20
years' involvement in the field of electronic data processing and
networking.
In 1995 Andreas W and Christian F set up Alternative Telekom
AG, the first publicly listed telecom company on the Austrian Stock
Exchange. In 2000 Alternative became the second largest
alternative telecommunication company in Austria.
Within Alternative Christian F was Speaker of the Board and among others - responsible for strategy. He was involved in various
successful capital markets transactions.
Andreas W, 44, a typical entrepreneur, founded his first company in
1983 to develop electronic equipment for the polygraphic industry.
He has extensive experience in managing complex software
development projects:
• 1991: ERP (Enterprise Resource Planning) Software (still in
operation)
• 1995: Logistic Software (with Web-Interface) for waste
management (still in operation)
Within Alternative Telekom AG he was Member of the Supervisory
Board and Member of the Management Board of CyberSoft,
alternative’s voice and data billing system company.
Founding Shareholders
SET Founding Shareholders are: Alfa AG (Christian F and Andreas W); Andrea G-S and Christian S
Confidential - June 2007
7
Intended Transaction
Overview
Structural Details
 Capital Raising
 Structure
 SET intends to raise an amount of EUR 150,000 of
equity from private investors (“New Investors”) to
complete the EUR 1.2m finance requirement according to the
business plan
 Structural Overview
USE OF PROCEEDS
Personnel / Product
Development
Equipment
Sales / Admin
Other
Total
EUR
700,000
100,000
200,000
170,000
1,170,000
FUNDS AVAILABLE
EUR
Curr. Shareholders
Venture Capital
ABC Consulting
110,000
600,000
100,000
Debt
210,000
New Investors
Common Stock
150,000
Total
1,170,000
 New Investors are envisaged to subscribe an amount of
EUR 150,000 in Common Stock.
 Common Stock
 New Investors will contribute EUR 150,000 of
equity capital and post-transaction combine a total
of (xx.x)% of the shareholder capital
 Present Commitments
 Current Shareholders: LOI to contribute EUR 75,000 (in
addition to EUR 35,000 already invested)
 Venture Capital: LOI to contribute EUR 600,000
 ABC Consulting: LOI to contribute EUR 100,000
 Prerequisites
 Bank LOI to grant a loan in Q3/2009 of EUR 210,000
(based on operational target achievement)
 Funding Strategy
 SET might envisage potential additional funding rounds
to accelerate market penetration, possibly as of 2011
 Anticipated Exit
 As of 2012, SET is expected to serve approximately
13,300 customers combining a total of 200,000 accounts,
to generate ca. EUR 3.5m of revenues and more than
EUR 1.0m of EBIT …
 … with a very dynamic growth momentum …
 … which should provide the basis for an exit opportunity
via sale to a strategic investor or to the private equity
markets
Confidential - June 2007
8
“The current architecture and mechanics of E-Mail traffic do not
meet current requirements and even less future demands ….”
Andreas W, CTO, SET
Confidential - June 2007
9
How the E-Mail Traffic Works: The Postcard Comparison
“A typical E-Mail message is no more secure
than a holiday postcard sent through the public postal system … ”
Christian F , CEO, SET
The Postcard Traffic

The postcard is sent off and the sender never really knows
whether it will arrive safely …






… the postman
… the wrong recipient (if it gets to the wrong destination)
… and be passed on to persons who should neither get the
card nor become aware of the message attached





… after sending an E-Mail the sender has no further control
about the mailed content: E-Mails and attached files can be
read, printed, copied, destroyed, modified or forwarded without
the sender ever realising
And else …

The message attached to the postcard can be further
distributed on its way to the recipient and its content could
make it as „gossip“ to ones „friends“ or as „rumours“ into the
„press“
The postcard could even have been written and posted by
someone else than the one who supposedly appears to be the
sender …
… will it ever arrive?
… when will it arrive?
… will the right person receive it?
On its way, the E-Mail cannot quite be read by everyone, but …

And else …

The E-Mail is sent off and the sender never really knows
whether it will arrive safely …



… will it ever arrive?
… when will it arrive?
… will the right person receive it?
On its way, the postcard can be read by everyone …




The E-Mail Traffic
During its transfer an E-Mail and its attachments are stored on
various servers making content vulnerable
On any firm’s mail server the IT department has full access to
every E-Mail and any attached file
On the Internet a “false sender” can hide behind someone
else´s identity and send E-Mails in that other person’s name
And Spams …


Confidential - June 2007
Even if incoming E-Mails have to pass a firewall or filters, still
spam mail will be received daily; and …
… one’s E-Mail account is an open entry point for viruses,
worms and similar
10
How the E-Mail Traffic Works: Technical Basics
Traditional E-Mail Traffic
Mail Server
 Corporate (in-house)
Mail Server:
 IT department has
full access to every
E-Mail and
attachment
 Mail Server operated by
ISPs
 During the transfer
of a message
numerous Mail
Servers are
involved – in the
course of which
each and every ISP
can read, copy or
even alter E-mails
without the sender
realising
Numerous Moderately Secure Mail Servers
Backbone Network
 Even if E-Mails are
transferred securely
between the sender’s
Computer and the Mail
Server via “SSL” - there are
currently no security
mechanisms during the
exchange of messages
between Mail-Servers
 Programs called “Sniffers”
can trace E-Mails and read
messages and attachments
Unsecure Lines
Core Threats
Local Network and Internet Access line
• Without SSL communication between the sender’s
computer and the Mail Server, all transferred content is “free
and available” within the local network and on the Internet
Access line
Manipulation
Once sent, E-Mail content can be manipulated or
amended by the recipient without the sender
being aware or having any control
Monitoring
Once sent, E-Mail with confidential content can
be forwarded to any third party or processed
without the sender being aware or having any
control
Secure Transmission
E-Mails and attachments are usually transmitted
via xDSL, cable, WiFi, backbone without any
protection
Confidential - June 2007
11
Why Secure E-Mail is a Necessity: Situations
Common, Everyday Questions
“Did
the Recipient
Receive
the E-Mail?”
Special Situations
 Once an E-Mail has been sent, the sender does
not know if and when the message actually
arrived at the recipient’s destination
 Note: The “request read receipt” function of MS
Outlook does not (!) serve as confirmation
“Did
the Recipient
Read
the E-Mail?”
 Once the E-Mail has safely arrived, the
recipient may decide to read (i.e. open) or
ignore an E-Mail message and the information
attached …
 … with the sender not in a position to actively
monitor recipients actions
 Note: The “request read receipt” function of MS
Outlook does not (!) serve as confirmation
What Did
the Recipient
Do With
the E-Mail?”
 The sender has neither control nor can monitor
the recipient’s actions in respect to the E-Mail
sent and / or its attached information …
 ... E-Mails and attached information can be
copied, modified, forwarded or processed
without the sender being aware or having
control
The
“Monday
Morning
Glitch”
Remote
E-Mail
Access
The
“Identity
Game”
 As E-Mails are transferred through various
Mail Servers, transmission errors are typically
reported after several hours only and the
sender receives no information if and when a
E-Mail has successfully reached the recipient
 If Web-Mail is used to access E-Mails (e.g. on
a public Internet Terminal) then all E-Mail
content information will be (temporarily) stored
on a local server …
 … opening opportunities to all sorts of breach
and misuse of confidential information
 In the current E-Mail configuration it is
possible to hide behind a specific sender’s
identity and – hence – E-Mails can be sent
under a wrong name
Simple Mail Transfer Protocol (“SMTP”) is the standard for E-Mail transmission …
… which is a simple, text-based protocol, designed around 1970, and …
… without any real improvements over the last 35 years …
Confidential - June 2007
12
Why Secure E-Mail is a Necessity: Legal Framework
„Approaching deadlines, regulatory enforcement actions, harsh penalties, along with the prospect of
enormous civil damages and even criminal prosecution have made regulatory compliance and legal
risk management a top priority for E-Mail/messaging managers and CIOs …“
„Regulatory compliance ranks #3 on the list of top concerns of CIOs, just behind viruses and spam …“
Ferris Research (2005)
United States

Sarbanes-Oxley Act (“SOX”)








Identification and handling of information that must be kept
confidential
Identification of individual message senders
confidential transmission of email
Hardening email and other servers that store confidential
information
Tracking and logging message traffic
Auditing capabilities
Message indexing, archiving, and retention

EU Data Protection Directive


Gramm-Leach-Bliley Act (“GLBA”)


Europe
In practice GLBA´s Safeguards Rule means that
companies must implement policy enforcement tools that
can encrypt or block E-Mail traffic based on message
sender, recipient, and content as appropriate.
Data protection is all pervasive in the European Union: The
EU Data Protection Directive was drafted in October 1995
and member countries were required to legislate Directive
provisions by October 1998. The Directive sets standards
for protecting personal data within the European Union, and
applies to any organization that processes personal data, in
both public and private sectors. It also applies to foreign
entities that process personal data within the EU
An organisation has the right and duty to retain data in
order to protect itself in case of legal action. This can
include personal or private E-Mails. These, however, must
not be read by the organisation unless needed for a legal
action. The organisation must simply ensure that records
can only be used for prescribed purposes, and that it
deletes any records that contain personal data once the
required retention period has come to an end
Health Insurance Portability and Accountability Act
(“HIPAA”)

Under HIPAA everyone has the right to request the
communication flow concerning personal health information
through confidential channels
Confidential - June 2007
13
Development of World-Wide E-Mail Traffic
Statistics

Trends
World-wide
 By year end 2005 there have been more than 1bn online
users world-wide, 95% of which use E-Mail
Europe
 By year end 2005 European mailboxes will total 381m,
32% of all world-wide
 E-Mail traffic is set to rise from 26bn messages per day
in 2005, to 49bn in 2009 (17% annual growth)


E-Mail has proven to be the most used application for every
device that operates on PCs, the Internet, interactive digital TV
and – increasingly - mobile phones

Convergence is happening both in the application area with
more media-enabled, network-based services and in the
device world with technologies like the RIM Blackberry, which
integrates mobile phone and palmtop functions

Convergence and the digital world represent a significant
expansion of today’s technology marketplace
 In Europe, the past years have demonstrated how the
Internet transforms shopping (in 2004 17% of users
have shopped online), banking (18 % bank online) and
communication (E-Mail is a popular application on all
interactive channels)

Various current and newly offered services will become
significantly more popular when they are seamlessly and
securely available anywhere through a user-friendly
application
European E-Mail Statistics
400
300
200
100
0
2005
Total Mailboxes (m)
2009
Corporate Mailboxes (m)
E-Mail Users (m)
E-Mails Sent (bn)
Source: EITO 2005;
Radicati Group 2005
Confidential - June 2007
14
The Global Internet and E-Mail Security Market
Statistics


Trends
World-wide
 In 2005 the global Internet security market amounted
to about US$ 27.7bn and is expected to grow at an
annual 16% to reach US$ 58.1bn by 2010
 The global market for E-Mail security products and
services is expected to grow from US$ 3.7bn in 2005
to US$ 5.5bn by 2010; the near-term annual revenue
growth rate will hover near 25%
Europe
 The European E-Mail Security market is expected to
grow from about EUR 825M by year-end 2005, to EUR
1.4bn by 2009
European E-Mail Statistic
3.000
180
160
2.500
140
120
100
1.500
80
1.000
EUR (m)
2.000

With E-Mail traffic increasing rapidly concerns have grown
regarding security in terms of protecting against E-Mail-borne
viruses, spams and a variety of potential information leaks and
intrusion

Revenue generated in the European E-Mail Security Appliance
segment is expected to grow at an average rate of close to 50%
per year between 2005 and 2009, constituting the fastest growing
segment. Installed base attributable to this segment will grow
from 16m in 2005 to 73m by 2009

Managed E-Mail Security services are also becoming
increasingly popular, and are expected to grow at an average rate
of about 25% per year
 In Europe, the total installed base of mailboxes served by
Managed E-Mail Security Service Providers is expected to
grow from 14m in 2005 to 38m in 2009 and …
 … companies are increasingly considering Managed EMail Security Services as a long-term solution, rather than
just a quick-fix or transitional substitute
60
40
500
20
0
0
2005
Corporate Mailboxes (m)
Internet Security Market (EUR m)
2009
Managed Mailboxes (m)
E-Mail Secuity Market (EUR m)
Source: IDC 2005
Confidential - June 2007
15
Players in the Internet and E-Mail Security Market
Proposition
Document
Management
Group
Collaboration
Internet
Enabled
Services
Major Players
Comments
 Enables
organizations
to
create
centralized repositories or libraries …
 … containing all unstructured data
generated
 Powerful search and retrieval tools make
information easily available for use and
collaboration across the entire enterprise
 Typically in-house solutions
 Group-based but not document-based
access control with need for administrator
 Enables customers to quickly and easily
build secure and reliable messaging,
calendaring
and
scheduling,
and
collaborative application solutions
 Very complex software aimed at large
organizations
 Specialized training necessary to use the
group collaboration and Web folder
technology effectively
 Implementation,
installation
and
maintenance requires professional services
 Comprise different types of Internet-based
services which address specific needs for
the active Internet user
 While Hushmail and Postini solved the
specific addressed issues …
 … global Internet Enabled Services appear
to miss security features
Assessment
Closed Networks
Focus
of
Major Players
 Applications and security provided are
usually limited to applications within a
closed system
(i.e.
within
an
organisation) ….
 … leaving the external messaging flow
vulnerable
Product Focus
 System complexity requires substantial
in-house technology and IT teams …
 … with only limited service provided by
suppliers
Confidential - June 2007
Premium Price
 Due to customers focused on, i.e. large
organisations, positioned as premium
price products
16
The SET Solution
Key Features
SET Secure Mail Server System


Manipulation

Secure Line

Monitoring



Secure
Transmission

SET ensures that an E-Mail – once sent – cannot be
manipulated or amended by any recipient
Every SET user has a unique authentication - which
assures that no spam or viruses will be sent via E-Mail
No one will be able to send an E-Mail using someone else’s
identity
During the lifetime of an E-Mail the sender will have full
control over all aspects of content distribution and can
monitor all relevant E-Mail traffic
The sender allows or prevents further distribution (forward,
redirect, copy, export), the print out, storage and the
availability of the E-Mail and related documents
The owner has the right to pull back an E-Mail at any time
All E-Mails will be transferred using 100% secure Internet
links (Secure Socket Layer)
There will be no unknown connections - only one secure
point-to-point connection between the sender and the EMail server and the E-Mail server and the recipient
Positioning
Focus of Major Players
SET Focus
Closed Network
Open Standards

SET relies on open standards - transmitting data over Secure Socket Layer Technology
Product Focus
Service Focus

SET is not selling a software, but provides a unique secure E-Mail solution service ...
Premium Price
Competitive Price

... for a very competitive price
Confidential - June 2007
17
SET E-Mail Traffic: Examples





Sender uses SET like standard E-Mail
Message, Subject and Attachments are encrypted and are transferred over secure lines
Receiver is allowed to copy, print and save the message
Receiver is allowed to reply and forward the message, but must not modify the original content
Sender receives status information about all actions of the receiver






Sender uses some of the SET security functions
Message, Subject and Attachments are encrypted and are transferred over secure lines
Receiver is allowed to make a print out of the message
Receiver is allowed to reply the message, but must not modify the original content
Receiver must not copy or save the contents and is not allowed to forward the message
Sender receives status information about all actions taken by the receiver





Sender sets maximal confidentiality for the message
Message, Subject and Attachments are encrypted and are transferred over secure lines
Receiver must not copy or save the contents
Receiver must not forward or reply to the message
Sender sets validation timeframe for the E-Mail between 14. Jan. 2006 08:00 and 15. Feb.
2006 20:00. The Subject-line will not be seen by the recipient before 14. Jan. 2006 08:00; the
message can only be viewed until 15. Feb. 2006 20:00
Sender receives status information about all actions taken by the receiver

In addition: SET enables Users to transfer files without any file size limitation
Confidential - June 2007
18
SET - Functional Overview
The Server
Secure Against Physical Attacks



SET servers will be operated in
secure server-housing locations
At least two servers will be installed
on two different continents with 100%
redundancy
All data will be saved on hardwareencrypted storage systems

Hence: In the unlikely case
that a server were “stolen”,
stored data will not be
readable
The Client
Secure Against Internet Attacks





SET servers will be hidden behind
state-of-the-art firewalls and only
registered customers - with SET
Client Application - will be able to
pass the firewalls
Transmission of messages does take
place in an absolute secure way using
“Secure Socket Layer” encryption
Only secure point-to-point connectivity
between sender and server or
recipient and server are allowed
Only authenticated customers are
allowed to send messages
All data will be saved with a customer
related encryption key


Hence: Only the sender and
the recipient of an E-Mail are
able to read the content or
the attached files …
… even SET employees will
be unable to read anything
Full Control by Sender over Access Rights

During the lifecycle of the E-Mail the
sender will have full control over all
aspects of content distribution
The sender allows or prevents any
further distribution (forward, redirect,
copy, export), print out
and / or
availability of information
Sender has the right to pull back an EMail any time


Elimination of Local Filing

If requested, not a single file or piece of
information is stored on local hard-disc
All client-related information is loaded
directly from the server during startup of
the application
installable on mobile storage devices like
USB-sticks


Full Control by Sender over Access Rights

Confidential - June 2007
SET avoids Spam and Phishing Mails,
as only authenticated users have
access
19
Investor Relations: An SET Application
The Investor Relations Context
CEO
Shareholders
CFO
Board Member
The SET Solution
Accounting
IR
Treasury
PR
Controlling
…..
Board Member
Research Analysts
Stock Exchange
Stakeholders
Press
Employees
Internal Communication
 If a secure IT environment is already in place, then the
established system will be used further on
 If not, then SET will be used for all relevant communication
between Supervisory Board, Board members, senior staff
positions and Accounting, Treasury and Controlling to ensure
absolute confidentiality in-house and tracking of document flow
External Communication
 All external communication of relevant documents will be
executed via SET:
 Shareholders
 All documents to accomplish a company’s legal
disclosure requirements (eg. Ad-Hoc Releases) shall be
transmitted via SET to companies like DGAP, Hugin,
Bloomberg, Reuters, etc. to guarantee confirmable,
simultaneous delivery
 Professional Services
 All non-disclosed documents which have to be shared
with Investment Bankers, Lawyers, Auditors, Advisors
etc. shall be routed via SET to ensure verifiable
transmission and authenticity - furthermore all parties are
able to check the document flow at any time
Confidential - June 2007
20
Target customers
Corporate Clients
Service
Package


Direct Corporate Clients
Retail Distributors
CFO Offices
and
Investor Relations Teams
Telecom Service Providers
and
Internet Service Providers
SET E-Mail Client-Software
Consulting Service


Full operational services and
maintenance provided by SET
SET-operated call centre and
Help Desk

Direct sales - One-on-One

Sales
and
Distribution
Revenue
per E-Mail p.m.



Maintenance
and
Support



Retail Clients
EUR 8.50 per E-Mail address


Direct Retail Clients
“Branded” SET E-Mail ClientSoftware for customers of
Telecoms/ISPs
If requested “SET Server”Application

SET E-Mail Client-Software
All operational services and
maintenance provided by SET
All direct end user-related
services provided by respective
Telecom/ISP

Full operational services and
maintenance provided by SET
Support through SET Web-Site
Direct sales - One-on-One to
Telecoms/ISPs …
… whereby end user has contract
with chosen Telecom/ISP


One-To-Masses
Internet-Sales via fully automated
Sales-System
EUR 2.50 per E-Mail address …
… based on anticipated revenue
split

EUR 5.00 per E-Mail address

The SET Read-Only Function for E-Mails received via SET can be downloaded for FREE from the SET Website
Confidential - June 2007
21
Product features
“Single ClientApplication”

The application
consists of just one
file, which can be
stored easily on
mobile devices like
USB-sticks (no
complicated InstallMechanism)
Standard
E-Mail Functions


Sending “New”,
“Reply-To” and
“Forward” messages
Receiving already
“filtered” and
(individually-defined)
category-sorted by
selected criteria
Advanced
E-Mail Functions






SET direct respond: when E-Mail sent to an unknown EMail Account, sender receives immediate response from
server
If E-Mail is “forwarded” or “replied to” original message
content cannot be modified and a visible timestamp will
be set in the E-Mail
Sender has the possibility to withdraw an E-Mail at any
time
Timed E-Mail: Set exact time for E-Mail message to
appear in recipient’s E-Mail box
Temporally Available E-Mails: Set time frame for E-Mail
message to appear in recipient’s E-Mail box
Message Status: Sender can trace entire E-Mail
circulation and the current location









Application
Functions




Unlimited attachment
file size
Drag and drop support
Live resizing of
windows
Support for long file
names
Received Notification
Received Subject Line
Received Message
Received Message-Counter
Current Location
Forwarded To
SET active communication: Server able to establish
client connection actively notify user (e.g. “New
Message has Arrived”-note is actively sent by server)
All relevant parts of the E-Mail and its attachments are
encrypted
Server-side address book
Confidential - June 2007
22
SET - Product Building Blocks
Product Development
Sales & Distribution
Maintenance & Service
Achieved
 Market research
 Detailed definition of SET E-Mail
Client functionality
 Detailed definition of SET E-Mail
Server functionality
 Sample Client- and Server Application
for Windows, Mac OS X and Linux
The SET Alpha Version
has been tested successfully
since November 2005
Next Steps










Coding of final SET Secure Mail
Client Solution
Coding of final SET Secure Mail
Server Solution
Internal documentation
Software Quality Assurance
In-House Beta Test Phase
End User documentation
Select final Hardware Platform for
Servers
Select Server Centers (Europe,
America, Asia)
“friendly” customers Test Phase
Final Release 1.0







End-User Web-Site
Online registration for SET Service
Preparation of marketing materials for
all sales channels
Setup and Implementation of
international Sales
(Telecommunication Companies and
Internet Service Providers)
Setup and Implementation of
“Professional Services” Sales (CFOs
and Investor Relation Departments of
public listed companies)
Setup and Implementation of “public”
Sales
Setup of Accounting and Billing
Confidential - June 2007




Definition of Quality of Service
Agreement with Server Centers
Definition of Quality of Service
Agreement with Hardware vendors
Setup of Call Center (Germanspeaking)
Setup of Call Center (Englishspeaking)
23
SET - Implementation Time Table
Maintenance
& Service
Sales &
Distribution
Product Development
2005/2006
2007
2008
2. HY 2008
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
Market research
Preparation of Businessplan
Definition of functionality
Development of Sample Application
Coding of "final" Application
Internal Documentation
Software Quality Assurance
In-House Beta Testing
End User Documentation
Server Hardware selection
Server Center selection
"friendly customer" Beta Test
final 1.00 Release
Web-Site design
Development of Online registration
Preparation of marketing material
Implementation International Sales
Implementation "Professional Services" Sales
Implementation Public Sales
Setup of Accounting and Billing
QoS Agreement Server Centers
QoS Agreement Server Hardware vendors
Call Center (German-speaking)
Call Center (English-speaking)
Confidential - June 2007
24
Financial Overview - Assumptions
Revenues
Operations
Secure Mail Service – Corporate Customers






Commencing July 2008 with five business customers
Signing up five additional customers per month with an additional growth
rate of 3% per month
Addresses business customers with at least 30 mail accounts
For each account SET charges EUR 8.50 per month
We do not assume any price decreases over time, as SET will provide
more service to the customers
Nevertheless we assume a decrease in the average number of accounts
per customer by -1% per month; stopping at 16 accounts per customer


SET will operate (rent rack
space) one technical server
center in Europe and one in
North America
Billing will be outsourced



Personnel Costs


SET E-Mail Technology - ISPs




Development and SG&A
Commencing October 2008 with one ISP customer
Signing up one additional ISP customer per quarter
Address ISPs with at least 50,000 mail accounts in operation
For each new ISP 1% of its accounts will start to use the SET Secure Mail
Service
Each month 1%+ of ISP’s accounts start to use SET Secure Mail Service,
up to a maximum of 10% of all users per ISP
For each account (once in use) SET charges EUR 2.50 per month
We assume a price decrease of 1% per month, stopping at EUR 1.00 per
month.
Starting in 2007 SET will
employ one software
developers and one technical
admin. After being fully
operational two persons to
be in charge of the Help Desk
(US/EU), one administration
secretary, one person Sales
ISP and one person Sales
Business will be employed
In line with growing account
numbers additional personnel
will be employed
Sales Expenses



ISP customer acquisition
costs: EUR 5,000 per
customer
Business customer
acquisition costs: EUR 900
Public customer
acquisition costs: EUR 20
Secure Mail Service – Retail Customers





Commencing Juli 2008 with 500 customers
Signing up 100 additional customers per month with an additional growth
rate of 3% per month
SET addresses everyone around the Globe for this service
For each account SET charges EUR 5.00 per month
We do not assume any price decreases over time, as we will give more
service to the customers
Confidential - June 2007
25
Financial Overview – Income Statement
P&L Statement
2007
2008
2009
2010
2011
2012
2013
2014
46.768
629.828
1.706.694
2.600.208
3.537.338
4.591.207
5.889.657
direct operational costs
21.437
160.785
388.280
597.233
830.493
1.104.869
1.452.816
Gross Margin 1
Gross Margin 1 (%)
25.331
54%
469.043
74%
1.318.414
77%
2.002.974
77%
2.706.845
77%
3.486.338
76%
4.436.841
75%
71.500
534.085
809.777
1.000.406
1.240.711
1.500.579
1.694.333
1.948.649
EBITDA
EBITDA (%)
-71.500
-9999%
-508.754
-2008%
-340.734
-73%
318.007
24%
762.263
38%
1.206.266
45%
1.792.004
51%
2.488.192
56%
Depreciation
EBIT
EBIT (%)
1.250
-72.750
-9999%
56.503
-565.257
-2231%
92.667
-433.401
-92%
107.694
210.313
16%
122.667
639.596
32%
135.167
1.071.099
40%
58.552
1.733.452
50%
51.000
2.437.192
55%
Interest paid
Net Profit/Net Loss
-72.750
-565.257
9.144
-442.545
12.843
197.470
438
639.159
1.071.099
1.733.452
2.437.192
Tax
Profit/Net Loss
Profit/Loss cum
-72.750
-72.750
-565.257
-638.007
-442.545
-1.080.552
197.470
-883.082
639.159
-243.924
166.078
905.021
827.175
337.547
1.395.906
2.560.628
476.069
1.961.123
4.997.820
Revenues
Revenue (EU)
Costs
OPEX
Confidential - June 2007
26
Financial Overview – Balance Sheet
Balance Sheet
2007
2008
2009
2010
2011
2012
2013
2014
13.750
263.747
219.080
163.385
91.719
7.552
Current Assets
382.800
167.881
33.499
235.172
955.238
2.034.229
3.550.168
5.661.251
Total Assets
396.550
431.628
252.579
398.558
1.046.956
2.041.781
3.550.168
5.661.251
349.750
321.993
-120.552
76.918
716.076
1.621.098
3.017.003
4.978.126
46.800
109.635
373.131
321.640
330.880
420.684
533.165
683.124
396.550
431.628
252.579
398.558
1.046.956
2.041.781
3.550.168
5.661.251
Assets
Non-Current Assets
Equity and Liabilities
Equity
Liabilities
Equity and Liabilities
Note: The negative Equity position in 2009 is covered by a Bank Loan (EUR 210.000)
Confidential - June 2007
27
Financial Overview – Cash Flow Statement
Cash Flow Statement
2007
EBIT
Depreciation
EBITDA
Cash Flow from operating activities
-72.750
1.250
-71.500
-30.683
Cash Flow from investing activities
2008
2009
2010
2011
2012
2013
2014
-565.257
56.503
-508.754
-471.215
-433.401
92.667
-340.734
-310.355
210.313
107.694
318.007
357.782
639.596
122.667
762.263
825.727
1.071.099
135.167
1.206.266
1.074.438
1.733.452
58.552
1.792.004
1.487.732
2.437.192
51.000
2.488.192
2.049.153
-15.000
-306.500
-48.000
-52.000
-51.000
-51.000
-51.000
-51.000
Cash Flow from financing activities
422.500
537.500
210.000
-122.500
-87.500
Cash Flow
Cash Flow cum
376.817
376.817
-240.215
136.602
-148.355
-11.753
183.282
171.529
687.227
858.756
1.023.438
1.882.194
1.436.732
3.318.926
1.998.153
5.317.079
Confidential - June 2007
28