MeshcastMaking Internet Radio Viable.

Mission

Establish Meshcast as a new Internet standard for transmitting audio.

Establish Meshcast the place to go for listening to internet radio.

Establish the Meshcast brand name through joint ventures and co-branding partnerships.

Position the Meshcast technology as THE platform for audio streaming.

Innovative Technology Meshcast is based on a proprietary hybrid peer-to-peer technology that supports multicast and Unicast as well. This will eliminate all bandwidth cost that have been the limiting factor in the success of internet radio.

Innovative Strategy Meshcast plan it to create a major broadcast network with over 10 million listeners constantly. This is done by allowing 10s of thousands of amateurs and professionals to broadcast using our network. Advertising will generate revenue as well as charging clients to eliminate the advertising.

Management TeamJohn Sokol, CEO - One of the pioneers of streaming Audio in 1986. And Video in 1991

Niranjana Balasundaram, CMO Co-founder and Chief Marketing Officer of Simutest Design Systems

Jesse Rendleman, CFO 13 years of experience in software development and management.

Shankar Kuppuswamy, CTO - 6 years of experience in development, currently a Senior Software Engineer

OwnershipMeshcast total issued shares = 10,000,000

John Sokol, CEO3,000,000[30%]Niran Jana, CMO 600,000[ 6%]Jesse Rendleman, CFO 600,000[ 6%]Shankar Kuppuswamy, CTO 600,000[ 6%]----------------------------------------------Total[48%]

Reserved for investors3,200,000[32%]Reserved for employees2,000,000[20%]

Meshcast THE TECHNOLOGY

ChallengeStreaming high quality audio over the internet

SCALABLEECONOMICALSECURE

Existing Solutions

Internet Streaming / UnicastNot scalalable. Distributed / Edge ServingHuge transmission costsLimited scalability.

Comparitive Analysis

Network Topology

HighlightsLow Bandwidth costsUnlimited scalabilityDynamicSelf healingAdaptive Rate Multi-servingDistributed intelligenceUnique fault correction

Uniqueness

Quick channel surfingMassive scalabilityNegligible transmission costsDemographics accumulation

PatentsDistributed databaseMeshed Data Distribution MechanismError correction codes

R&D Roadmap

PHASESTime FrameHeadcountSetup phaseJan 2002OutsourcedDevelopment phaseJan 2002 Jun 200211Enhancement / Support phaseJul 2002 Jul 200622

Definition

The targeted markets are Streaming audio over Internet for both, Enterprise and Entertainment sectors.

MeshcastThe Market

Market Trends

Broadband listener growth from 2 million to 8.5 million in 3 years (1998 - 2001).Predicted market for broadband users in 2005 is 85 million.Business week suggests that listeners spend about 31/2 hrs listening to streaming audio.

Market Trends

Player Downloaded

#of downloads

(in millions)

Real Player

170

Windows media player

200

Quick Time

20

Market Trends

Radio

Web Casters

96

97

98

99

00

U.S

100

400

1200

2540

3800

Market Trends 6000 hrs worth of streaming program is created every week.70,000 streaming pages have been created so far.To assert the growth of web-casting Yahoo! Acquired Broadcast.com for nearly $6 billion, it added 8.5 million unique users to the web traffic.

Market Segments

Media [Radio] streaming.Corporate streaming.Internet advertisement market.Individual content generators.

Market Growth

Listener growth

Year

#of listeners

(in millions)

1998

14

1999

35

2000

45

2001

53

Listener Growth(cont)

Online Radio Stations Growth

Year

# of Radio stations online

1998

1250

1999

2250

2000

8100

2001

17000

Corporate Streaming

Corporate StreamingCCBN an investors specialist company, started offering conference calls using streaming audio now has 3000 customers.In corporate segments, streaming media could be used in the following areasExecutive addressesEmployee EducationSales training

Corporate Streaming

Intra company meetingsProduct launchesCustomer trainingCustomer serviceEarning announcements

Online Advertisement market

Internet Advertising Forecasts: World $15bn in 2003

Source: IAB, Forrester

Barclay Dutson

Clarifications

Internet radio alone the market is $60 million in 2001. It is projected to grow to $90 million in 2003.

Meshcasts role in the market!!

Today online radio is suffering partly because it has to shoulder unique burdens. Each listener requires an individual audio stream, which means bandwidth costs rise for the online broadcaster with each new fan. NetRadio's Wise estimates that the bandwidth necessary to stream online transmission costs $0.05 to $0.10 per hour per listener.

Meshcast

Problem is eliminated with Meshcasts underlying peer2peer technology.

Available Market

MeshcastThe competitors mentioned above differ from Meshcast either in the underlying technology or in the target market. The market share is shown in the direct areas Meshcast is directly competing with them. Total numbers of radio stations are 17,000. Among which 10% [1,700] is already captured by the competitors. 85% of the Market is open for webcasting using peer2peer.

TAM for Ad in streaming audio

2002

2003

2004

2005

2006

$60 million

$90 million

$135 million

$200 million

$300 million

Action...

Target Markets

Postioning

Strategy

Pricing

Meshcast

Meshcast is planning to capture 9% [160 radio stations] of the shared available market [SOM] by 2006.11% of the $300 million Internet Ad revenues by 2005.10% of the $616 million Internet radio revenue by 2007.3% of the $3.7 billion Enterprise streaming by 2007.

Visibility... Promotional offers to the listeners.Alliances with Internet radio tuners to increase listener base.Trade shows.OEM opportunity for the media companies.Technical patents and articles.Technical Demo to the media and corporate.

Cash Cow Segments

Contigency

If the Internet Ad revenues does not yield to the sales, Meshcast marketing will change to address the Enterprise Segment.

Sales Forecast

Meshcast The Financials

IncomeSales increase exponentially due to marketCost of goods sold is only about 5%Operating expenses level off after 2 yearsIncome of $30 million/year by 2006

Income Statements

Assets and LiabilitiesNo liabilitiesRent or lease space and equipmentPay cash for expensesAccounts Receivable ~10% of sales$58 million in cash by 2006

Balance Sheets

Sheet1

7.6a Balance Sheets - Projected Quarterly7.6b Balance Sheets - Projected Annually

Projected quarterly balance sheets for Meshcast's first eight quarters:Projected annaul balance sheets for Meshcast's fiscal years 2002-2006:

Pro Forma Balance Sheet (x $1000)Pro Forma Balance Sheet (x $1000)

as ofas ofas ofas ofas ofas ofas ofas ofas ofas ofas ofas ofas ofas of

Assets12/31/013/31/026/30/029/30/0212/31/023/31/036/30/039/30/0312/31/03Assets12/31/0212/31/0312/31/0412/31/0512/31/06

Cash4,0003,4462,8072,1952,0031,9171,7891,6011,662Cash2,0031,6623,58618,74058,258

Accounts Receivable0002466938575107Accounts Receivable661072,2533,8385,000

Total Assets$4,000$3,446$2,807$2,219$2,069$2,010$1,874$1,676$1,769Total Assets$2,069$1,769$5,839$22,578$63,258

as ofas ofas ofas ofas ofas ofas ofas ofas ofas ofas ofas ofas ofas of

Liabilities and Equities12/31/013/31/026/30/029/30/0212/31/023/31/036/30/039/30/0312/31/03Liabilities and Equities12/31/0212/31/0312/31/0412/31/0512/31/06

LiabilitiesLiabilities

Other Liabilities000000000Other Liabilities00000

Total Liabilities$0$0$0$0$0$0$0$0$0Total Liabilities$0$0$0$0$0

EquitiesEquities

Paid-in Capital4,0004,0004,0004,0004,0004,0004,0004,0004,000Paid-in Capital4,0004,0004,0004,0004,000

Retained Earnings0(554)(1,193)(1,781)(1,931)(1,991)(2,126)(2,325)(2,231)Retained Earnings(1,931)(2,231)1,83918,57859,258

Total Equities$4,000$3,446$2,807$2,219$2,069$2,010$1,874$1,676$1,769Total Equities$2,069$1,769$5,839$22,578$63,258

Total Liabilities and Equities$4,000$3,446$2,807$2,219$2,069$2,010$1,874$1,676$1,769Total Liabilities and Equities$2,069$1,769$5,839$22,578$63,258

Sheet2

Sheet3

Cash Flow

Chart1

40005543446

06392807

2168282195

6188102003

903989.51916.5

858985.51789

760948.51600.5

1038976.51662

Cash Received

Cash Spent

Cash Balance

Cash Flow Summary (x $1000)

Sheet1

7.5 Projected Cash Flow7.5 Projected Cash Flow

Meshcast's cash balance projections for the first eight quarters of operation:Meshcast's cash balance projections for the first twelve months of operation:

Pro Forma Cash Flow (x $1000)

20022003Pro Forma Cash Flow for year 2002 (x $1000)

Cash ReceivedQ1Q2Q3Q4Q5Q6Q7Q8Cash ReceivedJanFebMarAprMayJunJulAugSepOctNovDec

Capital Input4,0000000000Capital Input4,00000000000000

Cash Sales00216594837765675963Cash Sales000000727272198198198

From Receivables0002466938575From Receivables000000000888

Subtotal Cash Received$4,000$0$216$618$903$858$760$1,038Subtotal Received$4,000$0$0$0$0$0$72$72$72$206$206$206

Cash SpentQ1Q2Q3Q4Q5Q6Q7Q8Cash SpentJanFebMarAprMayJunJulAugSepOctNovDec

Payroll Expenses426496636636770770771773Payroll Expenses142142142165165166212212212212212212

Sales Costs0081418243450Sales Costs000000233455

Operating Expenses128143184160202192144154Operating Expenses484040534545646060605050

Subtotal Cash Spent$554$639$828$810$990$986$949$977Subtotal Spent$190$182$182$218$210$211$278$275$275$276$267$267

Net Cash Flow$3,446($639)($612)($192)($87)($128)($189)$62Net Cash Flow$3,810($182)($182)($218)($210)($211)($206)($203)($203)($70)($61)($61)

Cash Balance$3,446$2,807$2,195$2,003$1,917$1,789$1,601$1,662Cash Balance$3,810$3,628$3,446$3,228$3,018$2,807$2,601$2,398$2,195$2,125$2,064$2,003

Sheet1

Q1'02Q1'02Q1'02

Q2'02Q2'02Q2'02

Q3'02Q3'02Q3'02

Q4'02Q4'02Q4'02

Q1'03Q1'03Q1'03

Q2'03Q2'03Q2'03

Q3'03Q3'03Q3'03

Q4'03Q4'03Q4'03

Cash Received

Cash Spent

Cash Balance

Cash Flow Summary (x $1000)

Sheet2

JanJan

FebFeb

MarMar

AprApr

MayMay

JunJun

JulJul

AugAug

SepSep

OctOct

NovNov

DecDec

Cash Received

Cash Spent

Cash Flow Summary for FY 2002 (x $1000)

Sheet3

Break-Even Analysis

Chart1

0554

0639

240820

660796

930972

850962

750915

1070927

Sales

Expenses

Break-even Analysis

Sheet1

7.4a Projected Quarterly Income StatementsExhibit A. Projected Annual Income Statements

The following table provides Meshcast's projected quarterly income statements for 2002-2003.The following table provides Meshcast's projected annual income statements for 2002-2006.

Pro Forma Quarterly Income Statements for Q1-Q8 (x $1000)Pro Forma Annual Income Statements for 2002-2006 (x $1000)

20022003

Q1Q2Q3Q4Q5Q6Q7Q820022003200420052006

Sales:Sales:

No-ads Server Revenues00406050505050No-ads Server Revenues1002004008001,600

Custom Server/Client Revenues000080100100120Custom Server/Client Revenues04002,0004,00010,000

No-ads Client Revenues00100400600400100100No-ads Client Revenues5001,2008001,6003,200

Advertising Revenues00100200200300500800Advertising Revenues3001,8005,40016,00033,000

Total Sales$0$0$240$660$930$850$750$1,070Total Sales$900$3,600$8,600$22,400$47,800

Sales Commissions0071317233349Sales Commissions201203901,0402,230

SW Delivery Costs00111111SW Delivery Costs246810

Total Cost of Sales$0$0$8$14$18$24$34$50Total Cost of Sales$22$124$396$1,048$2,240

Gross Margin002326469138277171,021Gross Margin8783,4768,20421,35245,560

Gross Margin %nana96.7%97.9%98.1%97.2%95.5%95.4%Gross Margin %97.6%96.6%95.4%95.3%95.3%

Operating Expenses:Operating Expenses:

Marketing & Sales (M & S) Expenses:Marketing & Sales (M & S) Expenses:

M & S Payroll3838158158183183183183M & S Payroll392732790850850

Allowance for Payroll Adjustment000018181819Allowance for Payroll Adjustment07386101111

Advertising01210121Advertising44566

Printing, Graphics & Collateral01001555520Printing, Graphics & Collateral2535404550

Public Relations01000100Public Relations11000

Travel1010605040404040Travel130160170180190

Trade Shows & Events00452020202020Trade Shows & Events6580304045

Partnerships & Alliances0500005000Partnerships & Alliances505075100100

Market Research20002000Market Research22334

Conference Sponsorships000050000Conference Sponsorships0500600

Promotions/Give-aways05505000Promotions/Give-aways105101015

Website Dev & Maintenance333333333Website Dev & Maintenance4212421242

Total M & S Expenses$83$118$273$247$326$321$271$286Total M & S Expenses$721$1,204$1,251$1,407$1,413

Research & Dev (R & D) Expenses:Research & Dev (R & D) Expenses:

R & D Payroll293363363363403403403403R & D Payroll1,3821,6121,7902,0502,230

Allowance for Payroll Adjustment000040404041Allowance for Payroll Adjustment0161195241283

Software Licenses10101010Software Licenses22234

Total R & D Expenses$294$363$364$363$444$443$444$444Total R & D Expenses$1,384$1,775$1,987$2,294$2,517

General & Admin (G & A) Expenses:General & Admin (G & A) Expenses:

G & A Payroll9595115115115115115115G & A Payroll420460540540540

Allowance for Payroll Adjustment000011111212Allowance for Payroll Adjustment046596471

Rent3030303030303030Rent120120130130150

Internet connection66666666Internet connection2424262830

Equipment/Furniture Leases1216202024242424Computer leases6896100105110

Legal fees150102010Legal fees163456

Accounting fees20042004Accounting fees667810

Recruiting fees66666660Recruiting fees2418555

Utilities33334444Utilities1216171819

Office Supplies82222222Office Supplies148899

Total G & A Expenses$177$158$183$186$202$198$200$197Total G & A Expenses$704$797$896$912$950

Total Operating Expenses$554$639$820$796$972$962$915$927Total Operating Expenses$2,809$3,776$4,134$4,613$4,880

Income before Interest & Taxes($554)($639)($588)($150)($60)($136)($199)$94Income before Interest & Taxes($1,931)($300)$4,070$16,739$40,680

Taxes Incurred000000024Taxes Incurred0241,0174,18510,170

Net Income After Taxes (NIAT)($554)($639)($588)($150)($60)($136)($199)$70Net Income After Taxes (NIAT)($1,931)($324)$3,052$12,554$30,510

Sales/NIAT0.0%0.0%-40.8%-440.0%-1563.0%-627.3%-377.8%1539.6%Sales/NIAT-46.6%-1109.7%281.7%178.4%156.7%

7.4c Projected Quarterly Income Summary7.4d Projected Annual Income Summary

Pro Forma Income Summary for Q1-Q8 (x $1000)Pro Forma Annual Income Summary for 2002-2006(x $1000)

20022003

Q1Q2Q3Q4Q5Q6Q7Q820022003200420052006

Sales$0$0$240$660$930$850$750$1,070Sales9003,6008,60022,40047,800

Cost of Sales0081418243450Cost of Sales221243961,0482,240

Gross Margin002326469138277171,021Gross Margin8783,4768,20421,35245,560

Gross Margin %nana96.7%97.9%98.1%97.2%95.5%95.4%Gross Margin %97.6%96.6%95.4%95.3%95.3%

Operating Expenses:Operating Expenses:

M & S Expenses83118273247326321271286M & S Expenses7211,2041,2511,4071,413

R & D Expenses294363364363444443444444R & D Expenses1,3841,7751,9872,2942,517

G & A Expenses177158183186202198200197G & A Expenses704797896912950

Total Operating Expenses$554$639$820$796$972$962$915$927Total Operating Expenses$2,809$3,776$4,134$4,613$4,880

Income before Interest & Taxes($554)($639)($588)($150)($60)($136)($199)$94Income before Interest & Taxes($1,931)($300)$4,070$16,739$40,680

Taxes Incurred000000024Taxes Incurred0241,0174,18510,170

Net Income After Taxes (NIAT)($554)($639)($588)($150)($60)($136)($199)$70Net Income After Taxes (NIAT)($1,931)($324)$3,052$12,554$30,510

Sales/NIAT0.0%0.0%-40.8%-440.0%-1563.0%-627.3%-377.8%1539.6%Sales/NIAT-46.61%-1109.74%281.74%178.43%156.67%

Sheet1

000

000

000

000

000

Total Expenses

Gross Margin

Sales Revenues

Income Statement Summary (x $1000)

Sheet2

Q1'02Q1'02

Q2'02Q2'02

Q3'02Q3'02

Q4'02Q4'02

Q1'03Q1'03

Q2'03Q2'03

Q3'03Q3'03

Q4'03Q4'03

Sales

Expenses

Break-even Analysis

Sheet3

7.4 Income Statements - Projected

The following table provides Meshcast's projected annual income statements for 2002-2005.

Pro Forma Annual Income Statements ($ in thousands)

20022003200420052006

Sales:

Internet Radio Revenues0.04,575.010,675.015,250.015,250.0

Corporate Sales Revenues0.0750.01,250.02,000.02,000.0

Advertising Revenues0.017,000.026,000.034,000.034,000.0

Licencing & Partnerships0.01,000.05,000.010,000.010,000.0

Total Sales0.023,325.042,925.061,250.061,250.0

Cost of Sales3.06.06.06.06.0

Gross Margin0.023,319.042,919.061,244.061,244.0

Gross Margin %0.00%99.97%99.99%99.99%99.99%

Operating Expenses:

Marketing & Sales (M & S) Expenses:

M & S Payroll0.0615.0615.0615.0615.0

Sales Commisions0.03,498.86,438.89,187.59,187.5

Advertising0.04.05.06.06.0

Printing, Graphics & Collateral0.035.040.00.00.0

Public Relations0.00.00.00.00.0

Travel0.020.030.00.00.0

Trade Shows & Events0.030.030.00.00.0

Website Development & Maintenance0.012.042.012.012.0

Total M & S Expenses0.04,214.87,200.89,820.59,820.5

Research & Development (R & D) Expenses:

R & D Payroll0.03,650.03,650.03,650.03,650.0

Software Licenses0.01.01.01.01.0

Total R & D Expenses0.03,651.03,651.03,651.03,651.0

General & Administrative (G & A) Expenses:

G & A Payroll0.0250.0250.0250.0250.0

Rent0.060.060.060.060.0

Internet connection0.012.012.012.012.0

Computer leases0.028.020.020.020.0

Legal fees0.01.01.01.01.0

Accounting fees0.03.04.05.05.0

Utilities0.03.04.05.05.0

Office Supplies0.00.50.61.01.0

Total G & A Expenses0.0357.5351.6354.0354.0

Total Operating Expenses0.08,223.311,203.413,825.513,825.5

Income before Interest & Taxes0.015,095.831,715.747,418.547,418.5

Taxes Incurred0.03,773.97,928.911,854.611,854.6

Net Income After Taxes (NIAT)0.011,321.823,786.735,563.935,563.9

Sales/NIAT0.00%206.02%180.46%172.23%172.23%

Pro Forma Annual Income Summary ($ in thousands)

20022003200420052006

Sales0.023,325.042,925.061,250.061,250.0

Cost of Sales3.06.06.06.06.0

Gross Margin0.023,319.042,919.061,244.061,244.0

Gross Margin %0.00%99.97%99.99%99.99%99.99%

Operating Expenses:

M & S Expenses0.035.040.00.00.0

R & D Expenses0.012.042.012.012.0

G & A Expenses0.028.020.020.020.0

Total Operating Expenses0.075.0102.032.032.0

Income before Interest & Taxes0.023,244.042,817.061,212.061,212.0

Taxes Incurred0.00.00.015,303.015,303.0

Net Income After Taxes (NIAT)0.023,244.042,817.045,909.045,909.0

Sales/NIAT0.00%100.35%100.25%133.42%133.42%

Return on InvestmentIPO after 8 quarters profitable: Q4 of 200512.5 million/year income at IPOGiven a 10/1 PE ratio, market cap = $125MWith 10M shares, IPO @ $12.50/shareInvestment of $4M for 3.2M shares worth $40M10/1 ROI in 4 years!

U.S population is 285 million.

World wide projectionsWhat the