Offer to Venture Capitalists In the Pipeline

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In the Pipeline
Offer to Venture Capitalists

The management team will contribute $150,000 to ITP for start up costs. Venture capitalists achieve a return of 35% with reduced risk through the use of a convertible debt instrument. ITP is seeking an investment of $500,000 for working capital requirements. The investment would be in the form of a five year convertible note.

Terms of the Offer

The five year note will be offered from November 1, 1997 with interest payable quarterly at the rate of 35% per annum. The venture capitalist will be offered a charge over the assets of ITP, including a charge over the intellectual property.

The following options will be available to the venture capitalist:

Convert the note to 25% equity in ITP at their option during the six month period, January I to June 30, 2000. Interest will be paid during this six month window even if the venture capitalist chooses to convert prior to end of it. Equity on the converted note vests on July 1, 2000. Dividends declared in December 2000 accrue to the investor. On conversion the venture capitalist will be entitled to one representative on the board.
Not convert the note. Full repayment of the $500,000 initial investment is made at the end of 2002.
Invest further capital to fund new ventures through note issues or equity subscriptions.

Future Growth and Exit Strategies

The shareholders in ITP have a number of future growth and exit options available to them. These include:

1. Continue to grow the business by:

Expanding nationwide through replication of ITP's business strategy and managerial structure
Ensuring the rapid evolution and commercialization of new products
Expanding the strategic focus to include international expansion - initial targets include Canada and Europe

2. Exit the business by:

Independently valuing the shares in ITP. Original investors have first option to purchase shares
Listing the company on NASDAQ
Selling shares to an outside investor
Selling, the entire company

Conclusion

ITP's management team is totally committed to the success and growth of ITP. They have invested substantial time, capital and knowledge in ITP. They bring to ITP the necessary expertise, experience and education to implement the company's strategies and realize its aims and objectives.

In the Pipeline
Table of Contents	Appendices
1. Executive Summary 2. Company & Product 3. Marketing 4. Operational Plan 5. Financial Plan 6. Offer to Investors	Product Diagrams Executive Resumes Action Plan Financial Statements
The information and ideas herein are the confidential, proprietary, sole, and exclusive property of the company's founders.