5 Year Plan

Written by Oren Shavit(Table of contents begin on page 5)

D m Safe

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Protect your employees’ safety and expensive machinery: Five protections: Leakage, Electric Shock, Lightening, Fire & specialized for small Children.

• Fast &Sensitive: 8ms & 6mA • Fits into the current socket space (box).• The Electrical Panel will remain as back-up• Can replace any socket of your choice• Also fits: Hospitals, Nursing home, Kindergarten.• Will me marketed gradually to the residential market• Disconnects only the current socket but not the whole line• The rest of the sockets can continue to function, while the ‘damaged’ socket await a technician.

Today’s Status:Electrical Panel

(20-40ms)Slow reaction time :(mA 30)Not Sensitive Enough

:Does not protect fromElectric Shock, Lightening & FireRemains as back-up

Protect Expensive Equipment

Protect employees safety

‘SAFE ZONE’by DOMO SAFE Ltd.

Fits inside current wall outlet box

Connects the current socket from behind

SAFE ZONEInternal view

SAFE ZONEExterior view

Green Light=

Working well

Red Light= Malfunction

SAFE ZONEFront view

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SAFE ZONE PROTECTEDUNPROTECT

ED

DURING AN ELECTRICAL

MALFUNCTION

Only one socket is down, let’s connect the machine to

another outlet.

The whole line is downWe have a problem!

Thr whole line is down, I’m running to buy a generator

The whole line is downNeed to wait for the technicianThe whole day is gone!

Only one socket is down, can connect the cooler to any other outlet

Only one socket is downWe can connect the computers to the other outlets.!We’re saved

Patent Potential

• Currently a patent pending, will be filed in selected world countries.

• Patent can be used for:

- electrical outlets single socket

- electrical outlet with Local audio alarm

and/or communication alarm.

- electrical outlets double socket

- Single Plug/Socket

- Plug set

- Embedded in other products 4

SIM CardGSM - embedded

Table of contentsThe Problem, The Product & Competition Page 6-14The Market & Marketing Plan 15-18

Timetable for the first three years 21First & Second Year Budget 22-23Sales & Net Income Projections 24-29Calculation of Working Capital 30

The Team 19-20

Future Products, Recommendations 31-33

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The Problem )The need(:

D m Safe

Fatality Statistics:•Each year, there is an estimated average of 60 fatal electrocutions associated with consumer products.  The three most common product categories associated with electrocutions are small appliance, power tool, and lighting equipment.•Every year in the U.S., more than 2,600 people are killed in home fires.•In the U.S., injury is the leading cause of death among children and young adults, and nearly half of these accidents occur in the home, according to the National Safety Council.•Worldwide, accidental injury kills more than 2,000 children each and every day.•According to the U.S. Consumer Product Safety Commission, 70 percent of child-related electrical accidents occur at home, when adult supervision is present.•Fires and burns are the third leading cause of unintentional death among children 14 and under.• According to a study published by the National Safety Council: over 300 workplace fatalities and approximately 4,000 injuries occur each year due to electrical hazards in the workplace

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The Problem )The need(:

D m Safe

Household Injuries and Accidents:•More than 30,000 non-fatal shock accidents occur each year.•Each year in the U.S., more than 100,000 people are treated in hospital emergency rooms due to a scalding injury.  •Property damage. Total economic losses due to electrical hazards are estimated to exceed $4 billion annually.

 

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The Problem )The need(:

• The Consumer Product Safety )CPSC( estimates that there are about 46,000 fires involving the home electrical distribution system in the USA, each year.

• These fires result in 440 deaths, 1420 injuries and $434 million in property losses. It is estimated that there are approximately 760 electrocutions from all causes each year. Of these electrocutions 310 involve consumer products )bases on national center for health statistics data(.

D m Safe

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The Problem )The need(:

• According for the European commission for Health and Consumer Protection electric shock account for approximately 25% of the injuries due to the use of consumer products.

• According to the UK Electrical Safety Council approximately 300,000 shock cases occur within a year,

D m Safe

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The Product

Domo Safe socket is divided into two working actions:• An Electronic Parameters measurement unit

)“EPMU”( that measures continuously the current and voltage parameters.

• A control System that disconnects the electric current when parameters deviates from the standard.

Domo Safe Socket protects from four main hazards:• Leakage- at 6ma, 8 ms )lower than the necessary

European regulation(.• Electric Shock• Lightening• Fire

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The Product )continued(

• The 5V Domo Safe product will connect to the 230V 50Hz European/Israeli electric system, and the 110V 60Hz American electric system.

• There are 13 types of Sockets in the world, with different PCBA dimensions, Products, AC and DC systems, from 3 to 7 kinds of protection and their combination which means more than 200 different domo Safe models.

• The Domo Safe basic model can hold up to four protections; which can be extended by microcontroller to seven protections if the market would demand it.

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Product benefit

The Domo Safe Socket benefits include:• The Domo Safe socket disconnects the electric

current when the current reaches 6ma-more strict than the required standards.

• The Domo Safe Socket reaction time is extremely fast- 8 milli-second (ms).

• The Domo Safe Socket allows for the House's Shut off switch in the Electrical Panel to remain active as backup.

• Reliable• Good for 60 years )no need to replace(.

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Competition )Europe(

• The European Leakage safety regulation reaction time is 20-40 milli-second )ms(, and a current of 30 milli-Amper )mA(.

• Currently there are Mechanical safety sockets who stand in that regulation.

• Our product stands in a much higher leakage standard )6ma, 8 milli second(. This difference could save life.

• Our socket is electrical and prevents the Mechanical wear and tear )of solenoid glue material(.

• Our socket offers four protections in one )Leakage, Electric Shock, Lightening & fire(.

• Our socket is a premium brand sold for a “generic” price.

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Competition )USA(

• The USA Leakage safety regulation current is stricter: 6 milli-Amper )mA(.

• Our product stands in the American standard.• Our socket offer four protections in one )Leakage,

Electric Shock, Lightening & fire(, while the American offers only leakage, or only lightening protection separately.

• Our premium brand socket is a sold for a lesser price than the one protection socket.

• The competing American products are in an emerging market and are not very well known )as leading brands(.

• More than half the Houses in the USA do not have electrical protection at all.

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The Market

USA Residential Buildings

Nearly 128 million residential housing units existed in the U.S. in 2007. Approximately 7.188 million new housing units were built between 2005 and 2009.

Commercial Buildings Nearly 4.9 million office buildings existed in 2003 in the U.S.4 Every year, approximately 170,000 commercial buildings are constructed,

Assuming there are about 40 sockets in a residential building then there are about 40 million sockets installed per year in new buildings. Perhaps an additional 40 million installed in renovations. Assuming there are about 200 sockets in a residential building then there are about 34 million sockets installed per year in new buildings. Perhaps an additional 34 million installed in renovations. Estimated total sockets sale in the USA per year: 148 million

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The Market

There were approximately 1.8 million new buildings built in Europe in 2007. Estimating 1.5 million residential with 40 sockets per house, and 0.3 million residential with 200 sockets per building the total amount of sockets installed reach (not including renovations): Total estimated Sockets installed in Europe per year: 120 million

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The Marketing plan

* According to market experts it is easier to penetrate the commercial market first, and the residential market later. And so Domo Safe plans to market the safe socket as a

“Safe Zone” for commercial establishments first.

The safe zone would protect the equipment & lives at: * kindergarten, through high-school. * hospitals. * Nursery homes. * Equipment, as computers, in Business settings.

• Domo Safe also plans to contact Insurance companies in order for them to demand that their clients install the “Safe Zone” sockets in their business establishment.

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(continued:) The Marketing plan

According to market experts the product has a high chance of selling if it is : * An excellent product. * A reasonable price. * Reliable delivery time and low product defects. * Quality service/relationship with the wholesaler. Since Domo Safe has already got a letter of intent for 700,000 units from a Ukrainian wholesaler, it plans on following through on that order as soon as the product is ready for the European market )the beginning of the second year(.

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The Team

• Research & Development: Boris Fradkin is the inventor and owns the majority of the shares in the company. Mr. Fradkin has been a senior hardware & software engineer with 30 years of experience in Israeli defense high tech divisions as well as the private sector. Mr. Fradkin has been a project manager at Elbit Ltd, Astronautics Ltd, Tadiran Telecom, Telrad Telecom & ECI Telecom, . Boris holds an B.S. in Aeronautics, and M.S. in electronics from Leningrad Electrical Engineering University, Programmer diploma from Technion.

• Although Boris is the boss he believes in the team concept, and that major decisions should be decided as a team.

• Marketing: Abraham Tibi has started as an electronics Technician in 1995, and went up the ladder into owning and managing Waisboard Holding, a known Israeli electricity wholesaler, in 2009. During Abraham’s time, Waisboard holding expanded and bought out Ronen Wolf and Dig electric. Abraham has 25 Years of experience in the Israeli, European and worldwide electricity market.

• Mr Tibi will come as a consultant in the first six months and will join as Marketing V.P. as soon as he’s available.

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The Team )continued(:

• Management: Oren Shavit has a Business Management degree with a concentration in Marketing from Temple University in Philadelphia. Oren’s has worked in business development and fundraising overseas, as well as in Business management in two Israeli High-Tech industry & Start-Up companies.

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Timetable for the first three years

First Year

Working prototype for Israel &Europe, Market

Research

DecemberJanuary

Sales Israel & Europe Begin, Mass production, Working

prototype USASecond Year

January December

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Sales USA begin, Europe Sales increase, R&D work on future

productsThird Year

DecemberJanuary

Quality Assurance, Safety Regulations, Lab

Testing)First 6 months(

)Second 6 months(

First Year Budget

R&D salaries and outsourcing (Six Months to a working prototype)..……………$428,850 Safety Regulations ......................................................$50,000 Salaries and office….………..…….….……..…….$130,000 Marketing Consultancy & Full time….….….……$225,000 First Production (10,000 units)45,000$..................................

TOTAL BUDGET FIRST YEAR $878,850SINCE THERE ARE NO SALES IN THE FIRST YEAR

THE TOTAL INVESTMENT NECESSARY FOR THE FIRST YEAR IS THE WHOLE AMOUNT.

* Budget does not include ASIC ** Budget does not include the salary of a President, if required by the investors

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Second Year Budget

R&D salaries and outsourcing…….……………$450,250 Safety Regulations .................................................$50,000 Salaries and office……..……………………….$135,000

Marketing Full time & exhibitions…….………$600,000 Interest on cost of production\Loan

(5% yearly) 125,000$...........................................................

TOTAL BUDGET SECOND YEAR $1,360,250SINCE THERE ARE SALES IN THE SECOND YEAR

THE TOTAL INVESTMENT NECESSARY FOR THE SECOND YEAR IS $860,000.

* Budget does not include ASIC ** Budget does not include the salary of a President, if required by the investors.

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Sales projectionsin units per year

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  Year 1 Year 2 Year 3 Year 4 Year 5

Units Israel

10,000

30,000

60,000

100,000

150,000

Units Ukraine  

700,000

725,000

750,000

775,000

Units Europe  

700,000

980,000

1,372,000

1,920,800

Units USA    

700,000

980,000

1,372,000

Total Units

10,000

1,430,000

2,465,000

3,202,000

4,217,800

Sales projections

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Total Sales $ 65,000 $ 9,375,000 $ 16,182,500 $ 21,133,000 $ 28,055,700

Cost of goods sold(4.5$ per unit) ) $ 45,000( ) $ 6,435,000( ) $ 11,092,500( ) $ 14,409,000( ) $ 18,980,100(

Cost of three phase meter

)$4 per unit(   ) $ 40,000( ) $ 80,000( ) $ 160,000( ) $ 320,000(

Interest on cost of goods sold (5% Yearly) - ) $ 117,188( ) $ 202,281( ) $ 264,163( ) $ 350,696(

Earnings after Sales expenses $ 20,000 $ 2,900,000 $ 5,010,000 $ 6,564,000 $ 8,755,600

Marketing Cost

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Earnings after Sales expenses $ 20,000 $ 2,900,000 $ 5,010,000 $ 6,564,000 $ 8,755,600

Marketing Salary (1.75 people) ( $ 75,000) ( $ 150,000) ( $ 150,000) ( $ 150,000) ( $ 150,000)

Marketing Exhibition4 per year including 50K$ initial setup ( $ 150,000) ( $ 300,000) ( $ 300,000) ( $ 300,000) ( $ 300,000)

Face to Face sales - ( $ 150,000) ( $ 300,000) ( $ 450,000) ( $ 600,000)

Earnings before R&D ( $ 205,000) $ 2,300,000 $ 4,260,000 $ 5,664,000 $ 7,705,600

R&D Cost

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Earnings before R&D ) $ 205,000( $ 2,300,000 $ 4,260,000 $ 5,664,000 $ 7,705,600

R&D outsourcing Israeli Socket(material, samples, molds) ) $ 95,000(        

R&D outsourcing European "Shucko" Socket(material, samples, molds etc) ) $ 38,850( ) $ 38,850(      

R&D outsourcing 3 phase Multimeter ) $ 40,000( ) $ 40,000(      

R&D outsourcing American Socket(material, samples, molds etc)   ) $ 46,500( ) $ 46,500(    

R&D Manager Salary(20 years expiriance) ) $ 72,000( ) $ 79,200( ) $ 87,120( ) $ 95,832( ) $ 105,415(

R&D Engineer Salary(5 year expiriance) ) $ 54,000( ) $ 59,400( ) $ 65,340( ) $ 71,874( ) $ 79,061(

R&D Engineer Salary(2 year expiriance) ) $ 33,000( ) $ 36,300( ) $ 39,930( ) $ 43,923( ) $ 48,315(

R&D trips to china to follow R&D/production ) $ 20,000( ) $ 20,000( ) $ 20,000( ) $ 20,000( ) $ 20,000(

(continued:) R&D Cost

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ASIC mold   ) $ 230,000(      

Patent *2 ) $ 16,000(        

Lab equipment ) $ 20,000(        

Computer software for R&D ) $ 20,000(        

Production machinery (OEM) ) $ 20,000(        

V.P or Office manager ) $ 50,000( ) $ 55,000( ) $ 60,500( ) $ 66,550( ) $ 73,205(

Office: including rent, insurance, Alarm

phone, internet, electric , ) $ 60,000( ) $ 60,000( ) $ 60,000( ) $ 60,000( ) $ 60,000(

Accounting, Lawyer, etc' ) $ 20,000( ) $ 20,000( ) $ 20,000( ) $ 20,000( ) $ 20,000(

Earnings before Taxes ) $ 763,850( $ 1,614,750 $ 3,860,610 $ 5,285,821 $ 7,299,603

: Net income & Investment necessary

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Earnings before Taxes ) $ 763,850( $ 1,614,750 $ 3,860,610 $ 5,285,821 $ 7,299,603

Taxes (22%) - )$ 187,198( ) $ 1,058,532( ) $ 1,162,881( ) $ 1,605,913(

Net Income ) $ 763,850( $ 1,427,552 $ 2,802,078 $ 4,122,940 $ 5,693,690

Inestment needed ) $ 763,850( ) $ 1,285,250(

$)2,049,100( $13,304,410

Total Investment needed

Total income (profit)

: Capital needed for Manufacturing

at Year 2

In order to hold a ¼ year manufacturing cost the calculation is:

Cost of Goods Sold* 3 months units sold= Capital needed

(Year 2) $4.5 * ¼* 1,530,000 = $ 1,721,250

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Future Products

In addition to the Safe Socket, Domo Safe plans to develop electronic protection in:• Single portable socket with plug.• Plug set• Embedded in Electric appliances: as fans,

washing machine, hair drier, Air Conditioner, Lighting fixtures.

• Three phase Sequence Tester.• Tester for Socket Protection

   Socket Plug Plugs Set Electric appliances 31

Recommendations:

Here is a short list of industry experts who have consulted us and believe in our the project. Their contact info is provided below:

* Abraham Tibi- has started as an electronics Technician in 1995, and went up the ladder into owning and managing Waisboard Holding, a known Israeli electricity wholesaler, in 2009. During Abraham’s time, Waisboard holding expanded and bought out Ronen Wolf and Dig Electric. Abraham has 25 Years of experience in the Israeli, European and worldwide electricity market.

Abraham's Email: tibi00@netvision.net.il; Mobile phone number: +972-50-5284077

* Tal Dayan- holds an MBA from Tel-Aviv University, and has extensive experience in financial management and business development within technology companies and start-up businesses. Some of his positions include: VP of Business Development of Synel Industries; VP of Business Development at CDI Technologies ; CEO of DVDemand Inc. He also serves as a management member of the “Future Managers Forum” at the Israeli Management Center.

Tal's Mobile phone number 0546969952; Home Phone number: 04-6388852

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