“Making Music Child’s Play” ™ “Making Music Child’s Play” ™ Customers Kids Like compelling, challenging video games, easy to play, difficult to master. Parent & Grandparents Buy toys for kids, can learn side by side with their family. People Who WANT to be musicians. “Making Music Child’s Play” ™ New Video Game Market Market Size Went from $6 Billion to Over $11 Billion Annually Expected to double again in next few years, to over $20 billion Triple that for global numbers. (Korea alone, $5.2 Billion) “Making Music Child’s Play” ™ Broad Based Demand Age 3 and Older 60% play video and computer games 145 million identify video & computer games as most fun entertainment activity “Making Music Child’s Play” ™ Broad Based Demand Surpassed Movie Industry Market 35% of Americans 43% of them women, with few choices for their tastes “Making Music Child’s Play” ™ Little Known Tidbits Mario Bros brought in twice the revenue of all five Star Wars movies combined. Pokemon is multi-billion dollar per year industry. Lara Croft, Tomb Raider, billion dollar game BEFORE the movies. Sims series is a billion dollar franchise. Sim City 2, sold 1 million copies in 10 days. Grand Theft Auto/Vice City made a billion dollars. Tetris sold 50 million units, and 32 million of Nintendo’s Game Entertainment Systems when they bought the rights and bundled the game. Disney just launched a blue PC with Mouse ears, loaded with their video games. EA did almost 3 Billion in revenue last year, mainly through their sports categories. YOU can invest in a future billion dollar game company today. We intend to do with music what EA did with sports, and our niche markets are limitless We are first, only and best in this space. “Making Music Child’s Play” ™ Logical Exit Strategy: Merger/Acquisition The State of the Market Microsoft, Sony and Nintendo battling it out for control of the living room, the interactive nerve center of the home for the next century. Disney and Infinium jump in this year as well. “Making Music Child’s Play” ™ Logical Exit Strategy: Merger/Acquisition How customers choose. Popular games drive console purchases. Mario Brothers can only be played on Nintendo. The next 20, or 30 games bought will be on the Nintendo platform. “Making Music Child’s Play” ™ Logical Exit Strategy: Merger/Acquisition Video Market Dilemna. Demographic dominated by 13 to 34 year old males. Reputation for mindless violence creates public resistance to game market. Gender, age, and violence issues must be overcome to become truly mass market. “Making Music Child’s Play” ™ The key into the home: Piano Wizard Non-Violent Productive Musical Educational FUN Simple Action Packed Challenging Compelling Harvard Study “Making Music Child’s Play” ™ 2 years of keyboard lessons increases math and spatial scores by 30-40 percent. We can hard wire our children’s minds to multi-task and parallel process with early access to classical music playing. Probable Exit: Potential Buyers of Company Game Console Manufacturers Microsoft Nintendo Sony Infinium Media Companies Dreamworks Disney Warner Bros “Making Music Child’s Play” ™ Keyboard Manufacturers Yamaha Casio General Music Independent Video Game Manufacturers EA Vivendi Universal Historical Example of Logical Buyout Scenario: In September 2002, MICROSOFT Purchases RARE from NINTENDO “Making Music Child’s Play” ™ RARE produced Donkey Kong, other Nintendo exclusive titles in past. Accounted for less than 1.5% of Nintendo sales. MICROSOFT pays 400 million dollars for 49% of company. MICROSOFT desperately needs EXCLUSIVE hit games to drive customers to their platform (Xbox) HIT GAMES DRIVE PLATFORM SALES Opportunities: Logical Buyout Scenario: Allegro Rainbow Revolutionary Video Game Concept “Making Music Child’s Play” ™ Bypasses and Takes Current Video Game Market by Surprise with Quick, Large Volume sales via Direct TV. Public Relations Bonanza. Wholesome Educational and Musical Values welcomed by Family-Oriented Households and Home Schooling Markets that shun current violent Video Games. Welcomed by Schools, Churches, Libraries, Senior Wellness Centers, and many other Institutional Markets through fund-raisers. Ongoing Revenue Streams via Online club supplying Popular Licensed MIDI files, New Graphics, “Free” Piano Teacher Lessons and Referrals, Musical Online Community and more. Acquires Great Brand with Large Database of Enthusiastic, Involved Customers. Unique Lucrative Sales Channels. Global Replication of US Markets/Sales. Key Marketing Advantages Direct Sales via Demonstration Little Used in Video Game Marketing Exciting and Powerful Instant Gratification Commission Based Marketing, pay AFTER the sale. Measurable Results for Fine Tuning Demonstration Sales are the Rocket Fuel of Direct TV Home Shopping Phenomenon Piano Commando is a Perfect Product for TV Demonstration Universal Appeal, Colorful, Kids, Seniors, Family, Safe, Musical, Educational, Fun Video Game, Affordable, PR opportunities are abundant and constant. “Making Music Child’s Play” ™ Pricing: Full Version $249.95 (+-) with Keyboard $125 (+-) Wholesale $65 (+-) Cost $60 Gross Profit $129.95 without Keyboard $60 Wholesale $5 cost $55 Gross Profit “Making Music Child’s Play” ™ Pricing: Easy Mode Version $99.95 (+-) with mini-Keyboard $50 (+-) Wholesale $25 (+-) Cost $25 Gross Profit $49.95 without Keyboard $25 Wholesale $5 cost $20 Gross Profit “Making Music Child’s Play” ™ Pricing: Lite Bundle Version $0 for 10 song version Partner supplies media, Allegro supplies stickers and rebate. 10 more free songs enabled upon registration, starts email cycle. 20% rebate to customer to upgrade to either Easy Mode or Full version. 20% commission to partner 60% of retail price to Allegro “Making Music Child’s Play” ™ Where we are “Making Music Child’s Play” ™ Finished Product First Revenue Final Packaging/Branding Implementation of Sales and Customer Support Systems Regional Launch Strategic Alliances Forming Financial Partner Opportunity Future Products “Making Music Child’s Play” ™ Drum Wizard Band Wizard Karaoke Wizard Voice Precise Captain Kalimba Music Mobile Stand Alone Game Unit (No PC, plugs straight into the TV) Future Platforms MacIntosh Xbox PlayStation Nintendo Arcade Embedded Chip in Keyboard Handheld Devices, Phones “Making Music Child’s Play” ™ Future Markets “Making Music Child’s Play” ™ Hispanic (Spanish) Canada (French) Europe (German, Italian, etc.) Japan Singapore Australia Korea India China Afghanistan Future Generations Your Children Your Grandchildren Your Great-Grandchildren Your Great Great-grandchildren Their Children Etc. 100 years from now all people can play and read music as a birthright, and do so with great joy. Even You. “Making Music Child’s Play” ™ Near Term Goals Ramp up PR Campaign Begin Marketing Plan Expand Strategic Partner and Channel Negotiations Regional Christmas Launch in Utah National Launch to follow “Making Music Child’s Play” ™ TEAM Board of Directors Choice Key Management All-Star Advisory Board Resumes don’t build great companies, great teams do, and this team’s strength is it’s commitment, enthusiasm, perseverance, alignment and integrity. Each plays their part in this symphony, and delights in helping bring music making to the whole world with a new system of thinking and learning about music. All earn their right to be named as part of this team through constant focused effort and results. We are proud to work together, and have not yet begun to render our best and most exciting results, both for the children and our investors. “Making Music Child’s Play” ™ TEAM Board of Directors Nicholas Zaldastani Harvard Business School (MBA) ; University of Paris (Diploma in French Studies) ; Duke University (BS Engineering and Economics) Operational Experience: Oracle Corporation (Director), Open Horizon (President & CEO), Ogilvy and Mather (Account Management), SABA (General Manager), FMS (CEO) “Making Music Child’s Play” ™ Venture Capital Experience: SABA, Continuity, Careerstream, World Energy, PaybyTouch, Talon Audio Boards: CNWE, CNWF, World Energy, PaybyTouch, American Academy in Tbilisi Awards: CLEO Nicholas is the CEO of Crocodiles Not Waterlilies, a children’s entertainment company producing wonderful animated stories to help children make wiser, integrity based decisions through vicarious ethical dilemmas, examples and experiences, based on the time proven and deeply loved stories of author and speaker Roger Anthony. Faculty member at IBI Global. TEAM Board of Directors Bob Mangum Harvard School of Business “Making Music Child’s Play” ™ Has long demonstrated commitment to working with entrepreneurs, sharing his core emphasis on integrity in business, and his extraordinary career, including President of MSI, Inc., a developer, manufacturer, and marketer of precision motion control equipment President of McGraw-Edison, Canada, a subsidiary of McGraw-Edison (NYSE), President of Central Foundry Company, a subsidiary of Gable Industries, Inc. (NYSE), (Mr. Magnum also served as a Vice President of GBI); and General Manager of Celco Plant, Celanese Corporation (NYSE), President of Project Arts, Inc., a 501(c)(3) Arts based rehabilitation non-profit for severely mentally ill adults; Director and Vice President of Harvard Business School Club of Arizona; Director and Member of Executive and Trust Investment Committees, First National Bank of Tuscaloosa, Alabama; Director of First National Bank, Narrows, VA, a subsidiary of First Virginia Bankshares (NYSE); Director of Arizona Small Business Association; and Director of Phoenix Rotary Foundation. He has testified before committees of U.S. Senate and House of Representatives on business issues, is the author of numerous published articles, and is a panelist of Business Roundtable on KFNN Radio. He has military and NSA experience with top-secret security clearance. TEAM Board of Directors, Chairman Chris Salter, Founder and CEO “Making Music Child’s Play” ™ 2 BA’s, from SIU Carbondale, Linguistics and Music and a Master’s in Music from UCLA. A voracious learner, he speaks 6 languages and plays 4 instruments and has traveled and lived abroad for almost 7 years in 5 continents and 23 countries, including a stint in Botswana for the Peace Corps, and doing his master’s thesis research in Brazil. Previously ran a software sales company and led a team of telemarketers, outside sales reps, computer technicians and administrative personnel from an $8,000 initial capital investment to $1,000,000 gross revenues in 14 months by selling through demonstration at computer shows. He later took intensive courses in web development, project management, database design, graphics and beginning programming, which has proved invaluable in managing the software development process. Since joining IBI, an entrepreneur training network, he founded Allegro Multimedia Inc in August 2001, and in spite of the tech bubble collapse, the scandal and terror economy, was able to raise 1.8 million dollars, develop and finish the core game and software engine that will revolutionize music education in our lifetime. His passion and commitment to children and learning and his vision of a world where everyone feels music making is a birthright not a privilege has led him to leave no stone unturned to create this company of like-minded investors, team, and strategic partners. TEAM Key Management Dan Goldman, Interim CFO Finance/Accounting-San Diego State University Over 21 years of experience building companies. Extensive experience in corporate development and financing, strategic planning, financial analysis, Tax planning, due diligence, marketing, selling, investing and managing organizations. Acting as a founder, Director, CEO, CFO, VP of Finance or VP of Corporate Development, assists in financial analysis, business & marketing plans, developed pro forma financial statements, business development, structure, acquisitions, accounting, tax planning and assist in raising corporate debt and equity capital. “Making Music Child’s Play” ™ TEAM Key Management David Caffey, Interim Director of Bus. Dev. University of Southern California Marketing “Making Music Child’s Play” ™ Manager of Executive Programs for Microsoft since 1991, Focused on Customer Management/Sales Force Automation solutions, for Microsoft. Helped build brands for Microsoft’s Channel programs as the Brand Development Manager. As Director of Business Development, Mr. Caffey led negotiations for the Microsoft Network (MSN) to acquire and implement revenue generation opportunities and strategic partnerships. Specifically, he was pivotal in negotiations and relationship building with varied clients that include Disney, ESPN, Expedia, Ticketmaster, USA Networks, NBC, WebMD, and many others. Prior to joining Microsoft, Mr. Caffey was the Marketing Projects Manager of Jaguar Cars Inc., a division of Ford Motor Company. Mr. Caffey spent 6 years at Nissan Motor Corporation He helped develop the Total Ownership Experience customer satisfaction program. TEAM Key Management John Wheeler, Interim COO Mr. Wheeler is the Managing Partner with SalesQuest Group, a consulting firm specializing in helping emerging and established firms achieve competitive advantage through the optimization of their sales, marketing, and customer service functions. He has particular expertise in helping firms develop and execute strategic and tactical plans. He has multi-disciplinary expertise in the telecommunications, utilities, high technology, information services, process manufacturing, and insurance industries. Mr. Wheeler is a respected industry leader with over 30 years of experience in sales, marketing, product development, management, operations improvement, and information technology. “Making Music Child’s Play” ™ TEAM Key Management David Sipple, Interim VP of Sales “Making Music Child’s Play” ™ University of Wyoming, Broadcast Journalism and an MBA from the University of South Florida . President of Brainy Computing Inc. and owns his own consulting firm, Poseidon Dynamics. Nationally renowned sales, marketing and management expert, with a successful professional history of increasing revenues at The Home Shopping Network, Quarterdeck Software and SAS Institute. His unique insights and approaches have consistently led to record setting sales and ROI’s, while minimizing expenses and costly mistakes. With extensive experience in acquiring and managing customers and partners in corporate, government and higher education and consumer goods markets, David’s plain speak and direct approach appeals to professionals across all industries. His management philosophy is to lead by example and his training philosophy is preparation equals performance. He revels in proving that high integrity sales is the true road to success. TEAM Key Management Rex Hale, Interim CTO Brigham Young University Deep high level experience with such companies as Intel Corporation and Novell Inc. Experience building dozens of networks from the ground up. Extensive PC hardware experience and troubleshooting skills. Designed, implemented, and administered Novell, Windows, Linux and LANtastic Networks. Extensive programming experience in Delphi, C, C++, Java, JavaScript, PERL, CGI and FoxPro. Database experience in MySQL, Advantage, MSSQL Minimal experience in Visual Basic, dBASE and Fortran. Proficient in HTML, PHP and web communications protocols. Teaching experience in C and NetWare troubleshooting. “Making Music Child’s Play” ™ TEAM All-Star Advisory Board And Strategic Partners See Business Plan for full scope, but what follows is a choice sampler of Allegro Multimedia’s team and resources. “Making Music Child’s Play” ™ Linda Chandler serves as strategic advisor to technology ventures. The former securities executive and investment banker from Silicon Valley takes a select number of assignments each year. She and her firm Chandler-Drew, LLC specializes in software firms, telcom ventures, and financial services companies. “Making Music Child’s Play” ™ Leading Authority On Venture Capital and Emerging Growth Companies Linda is former senior vice president of Sutro & Co. She was the first woman broker hired by the prestigious securities firm in the Bay Area. In 11 months, she made associate vice president, and full vice president in two years! She became the youngest person and first woman to become vice president of a major U.S. securities firm. Chandler went on to co-found and serve as CEO of the nation's first all-women's securities firm. After two brilliant years, she merged her firm with the leading investment banking firm on the West Coast. They named Linda senior vice president and she helped take a number of Silicon Valley startups public. During her career, Chandler personally raised over $1 billion in investor funds. Steve Taylor Lead technical / production direction Twelve years software development experience Eight years developing video games Head of production at Wahoo Studios for the last 2 years Involved in projects on numerous platforms including PS2, GameCube, Xbox, GBA, N64, PS1, PC, Mac, and Nuon Has credits on more than a dozen published titles, developed at Wahoo Studios and Saffire Corp. “Making Music Child’s Play” ™ Cynthia Dominic Hall “Making Music Child’s Play” ™ Cynthia Dominic Hall was instrumental in negotiating the landmark purchase by Nintendo of the worldwide licensing rights to TETRIS, and she has signed on as Allegro Multimedia Inc.'s exclusive licensing agent for Piano WIzard. Steve Corn “Making Music Child’s Play” ™ President of Corn Music Services, Inc. (www.cornmusicservices.com), a consulting company specializing in new media, business development, and licensing for the music industry. Clients range include both online and offline music-based companies including Universal Music Publishing, Encore Karaoke, Sounddogs, and Taxi.com. Prior to creating CMS, he was Executive Vice President for LicenseMusic.com, a pioneer in online music licensing. His background also includes VP/GM at Megatrax Production Music, one of the most successful independent music libraries. Prior to joining Megatrax, he served as executive in charge of music for many theatrical and home video releases at LIVE Entertainment (now Artisan Entertainment). He negotiated soundtrack deals and administered their catalog of publishing rights in over 60 films. Infomercial queen, known for her work with Ed McMahon, George Foreman, Ron Popeil, Chuck Norris, Magic Johnson, etc, has signed on to the team and offered to write, direct, produce and star in the Piano WIzard infomercials for nothing up front, only a percentage on the back end, after bringing it personally into QVC. “Making Music Child’s Play” ™ Fred Brown “Making Music Child’s Play” ™ Executive Producer of Home Shopping Network (“HSN”) (Consumer Electronics Division) joined Allegro Multimedia Inc.'s Advisory Board in a very proactive capacity, for example helping make key introductions and recommendations to Yamaha’s National Directors of Sales and Marketing. Fred Brown’s Perspective of Piano Wizard’s Potential From an excerpt of an e-mail from Fred Brown, Allegro Multimedia Advisory Board member and Executive Producer at Home Shopping Network, who oversaw the Casio “Magic Light” campaigns, and who views Piano Wizard as a clearly superior product. "HSN sold over 20,000 Casio Magic Light keyboards IN ONE DAY last November 2000. The magic light keyboard is a fair comparison as a method of teaching people how to play the piano. ” “Making Music Child’s Play” ™ The relevant number here is 20,000 units X $200 apiece =$4,000,000 in sales IN A DAY. Richard Crawford Filmmaker/Videographer “Making Music Child’s Play” ™ Richard Crawford's awards include four area Emmy Awards, Gold Cindy Awards for multimedia, a New York Art Directors Award, and he has extensive experience creating effective compelling infomercials. Howard Lim “Making Music Child’s Play” ™ Founder and CEO of How Studios (www.howstudios.com) is an expert in visual branding, and is the CEO of a world class graphics firm whose clients include Disney, 20th Century Fox, DreamWorks, City of Los Angeles Marathon, Cartoon Network, City of Santa Monica, Cirque du Soleil, Hanna Barbara, Fujitsu and Sanwa Bank to name a few. Howard's graphic and branding expertise help assure that Piano Wizard will be an instant classic, with tight organic integration of the visuals and the branding ensured. Howard Lim’s Piano Wizard Work “Making Music Child’s Play” ™ Allegro Multimedia, Inc. Current Organization Board of Advisors Donald Beattie Fred Brown James Burk Linda Chandler Steve Corn Richard Crawford Parviz Firouzgar Alexey Pajitnov Board of Directors Bob Mangum NicholasZaldastani Chris Salter (Chair) Chris Salter CEO Kurt Koenig Interim Director of Mkgt/PR JohnWheeler Interim COO Kim Auten Ron Coston David Sipple VP of Sales Dan Goldman Interim CFO Finance, Accounting John Gonzales, CPA William Black, CPA Legal Burk & Reedy Rich Lehman - Corp McDermott Will and Emery Dave Stewart - Patents Mike Starkweather - Patents Maria Speth - Trademarks Strategic Planning Group Interim Administration Streetmaker Rod Richardson Chris Allen Kushal Ibrahim Randy Kraft “Making Music Child’s Play” ™ Christie Dolan Product Development Wahoo Studios Q90 QDial Howard Lim Web Site Nexation Fresh Ground Scott Herring Allegro is currently transitioning from a virtual, outsourced team to a dedicated, integrated team. We are gradually filling the following positions. Make Product Sell Product Service the Product ‘Count the Numbers’ “Making Music Child’s Play” ™ VP-Operations VP – Marketing/Sales Chief Service Officer CFO - Administration 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Develops Ops Plan Oversees Product Development Interfaces with VP Development/Testing Operations Firms Provides input to contract development, negotiations Oversees Fulfillment processes Insures quality control Contributes to corporate visioning process Contributes to corporate business plan Manages staffing Manages to budget Chris Salter CEO VP 2. 3. 4. 5. 6. 7. 8. “Making Music Child’s Play” ™ Chief Customer Officer Marketing/ Sales 1. Develops Mktg, Sales Plan Oversees execution of Mktg, Sales Plans Oversees development, management of web site Contributes to corporate visioning process Contributes to corporate business plan Drives sales compensation plan Manages staffing Manages to budget Executive Assistant 1. 2. 3. 4. 5. 6. 7. Develops customer support plan Oversees Technical Support Staff Oversees Customer Service Operation • Billing Issues • Customer Satisfaction Contributes to corporate visioning process Contributes to corporate business plan Manages staffing Manages to budget CFO/ Administration 1. 2. 3. 4. 5. 6. 7. 8. 9. Develops corporate budget Oversees corporate financial planning Oversees corporate financial reporting Acts as interface with external Law Firm Oversees all other administrative functions • Policies, procedures Contributes to corporate visioning process Contributes to corporate business plan Manages departmental staffing Manages to budget VP Operations M gr Fulfillment/ Pkging M gr- Product Development 1. 2. 3. 4. 5. 6. 7. 8. Develop/Test Product Enhance Product • Existing • New Applications • Extensions to existing If outsourced,interface with development, testing firms Provide input to vendor contracts Enforce product quality control Manage personnel Manage to budget Evaluate personnel “Making Music Child’s Play” ™ 1. 2. 3. 4. 5. 6. Develop/Manage Fulfillment, Packaging processes Manage inventory Manage copies Identify distribution partners Manage distribution process Enforce quality control, according to standards VP M arketing/ Sales M gr M arketing 1. 2. 3. 4. 5. 6. Contributes to Marketing Plan Executes Marketing Plan (including Public Relations) Identifies Marketing performance metrics Reports on Market initiative returns Manages staffing (as required) • Hiring, firing, evaluations Manages to budget Sales M gr 1. 2. 3. 4. 5. 6. 7. Contributes to Sales Plan Executes Sales Plan Identifies Sales performance metrics Reports on sales results Manages staffing • Hiring, firing, evaluations • Sales effectiveness Works to continually improve sales effectiveness Manages to budgets M gr - Sales Support M gr - Web Site 1. 2. 3. 4. 5. 6. Contributes to Market Plan Develops Site design spec Develops Site Enhances Site, as needed • Through tracking, other metrics Manages Staffing • Hiring, Firing, evaluations Manages to Budget 1. 2. 3. 4. “Making Music Child’s Play” ™ Contributes to Sales Plan • Sales Support Area Manages Sales Compensation Program • Definition (in conjunction with Sales Mgr) • Review of compensation • Payout accuracy • Approves adjustments (as needed) Manages sales training program • Identify needs • Develop/deliver training Manages staffing 1. Hiring, Firing, Evaluations Chief Customer Officer M gr Customer Service M gr - Technical Support 1. 2. 3. 4. 5. 6. 7. Develops Technical Support Requirements • Evaluates technologies to enable technical support Develops Technical Support materials and tools • If outsourced, manages relationship with vendors • If outsourced, contributes to contract development Manages technical support operation • provides technical support, as needed Manages Resource needs • Hiring, Firing, Evaluations Insures Support in accordance with established standards Manages technical support customer satisfaction process • Contributes to development of satisfaction instrument Manages to budget “Making Music Child’s Play” ™ 1. 2. 3. 4. 5. 6. 7. 8. Develops Customer Service support requirements • Evaluates technologies to enable customer service Develops training requirements, materials Directs Svc Rep training Manages Customer Service operation Provides customer service activities, as required Insures customer service activities provided in accordance with established standards Manages Resource needs • Hiring, Firing, Evaluations Manages customer support customer satisfaction process • Contributes to development of satisfaction instrument CFO/ Administration Legal Counsel External Firm 1. 2. 3. 4. Develops, negotiates contracts Researches, files patents/copyrights Resolves legal disputes • Product, personnel,… Provides counsel to Executive Team M gr Administration 1. 2. 3. 4. 5. 6. 7. 8. Drafts corporate policies, procedures for executive review/approval Manages headquarters operation Maintains corporate files Manages administrative resources • Hiring, Firing, Evaluations Coordinates administrative support to Executives Coordinates company meetings Works with Marketing on all internal communications Manages to group budget M gr - Finance 1. 2. 3. 4. 5. 6. 7. 8. “Making Music Child’s Play” ™ Develops corporate financial plans, as part of corporate planning process • Includes corporate budgeting process Defines key corporate financial performance metrics Evaluates technologies to enable financial management Manages collection of financial information Completes analysis of financial results Develops/delivers financial results and analyses to Executive team Manages financial group personnel • Hiring, Firing, Evaluations Manages to departmental budget Coming soon to an Infomercial near you. “Making Music Child’s Play” ™