WHITE STAGG, LLCBUSINESS PLAN

Chad WhiteBen Stagg

White Stagg, LLC Business PlanRevision 2.6

May 21, 2014

Serial Number:

Date Issued:

Issuing Party:

Receiving Party Name:

Receiving Party Company:

This Business Plan is furnished to select individuals for the sole purpose of disclosing certain proprietary information complete with ideas, concepts, marketing plans and financial projections for this venture. It does not constitute an offer to sell or a solicitation of an offer to buy any securities. We reserve the

right, at our own discretion, to modify or withdraw this plan, to reject any offers regarding an investment and to terminate discussion with a recipient at any time.

CONFIDENTIALITY AND DISCLAIMER

i

This Business Plan is the sole property of White Stagg, LLC (the Company). The information contained herein is

confidential, has not been released publicly and is disclosed solely for the purpose of assisting potential investors

in evaluating the Company. This Business Plan is intended for persons to whom it is transmitted and does not

constitute an offer to any other person or to the general public to acquire any securities of the Company.

Receipt of this Business Plan shall constitute the agreement of the recipient that the Business Plan, togeth-

er with any additional information, verbal or otherwise, that may be provided, (i) shall be treated and

maintained as confidential, (ii) shall not be reproduced or used for any purpose other than to evaluate

the proposed investment, (iii) shall not be submitted to or discussed with persons other than the authorized

representatives, agents and advisors of those to whom it is transmitted by the Company (and only then on

the confidential basis described in this paragraph) without prior written consent of the Company, and (iv)

shall be returned to the Company promptly at any time upon request. Any distribution of this material, in

whole or in part, or the divulgence of any of its contents, without the prior written consent of the Company

may result in a violation of federal or state law and is expressly prohibited.

All of the statements made herein with respect to the projected operating results of the Company are

based on information projected to the best of managements knowledge, or sources believed by manage-

ment to be reliable. No representations are made as to the accuracy or attainment of such statements,

estimates or implications as to these future operations.

This Business Plan does not constitute an offer to sell nor a solicitation of an offer to buy in any jurisdiction in

which such offer to sell or solicitation of an offer to buy would be unlawful. The Company will not offer, and

this Business Plan does not constitute an offer of securities, to any person in any jurisdiction in which such an

offer would not be in compliance with the securities or blue sky laws of such jurisdiction. The shares or interest

will not be qualified for offer or sale to the public under the securities laws of any foreign country or jurisdiction.

Neither the delivery of this Business Plan nor any sale of the shares or interest shall, under any circumstances,

imply that the information contained herein is correct as of any time other than the date set forth hereof.

Investors are not to construe the contents of this Business Plan or any other documents delivered herewith

as legal, business, accounting or tax advice. Each prospective investor should consult their own attorney,

business or tax advisor as to legal, business, tax and related matters concerning this investment. Each Inves-

tor must conduct and rely on its own evaluation of the Company, including the merits and risks involved in

the Companys valuation, in making an investment decision.

Any investment will involve a high degree of risk. It is only appropriate for Investors who have the financial

means to bear the possible loss of their entire investment. Prior to the making any investment, a prospective

Investor will be required to represent and warrant that he or she (i) is an accredited investor as defined in

Regulation D under the Securities Act; (ii) is acquiring the shares for his/her own account, for investment only

and not with a view toward the release or distribution thereof; and (iii) that he/she is aware that the transfer

of the shares or interest is restricted by applicable federal and state securities laws and by the absence

of a market for the shares or interest. Each Investor may also be required to satisfy additional suitability

requirements, if any, as imposed by the jurisdictions in which the shares or interest are sold.

The Company is currently not subject to the reporting requirements of the Securities Exchange Act of 1934,

as amended and, therefore, does not file reports, proxy statements or other financial information with the

Securities and Exchange Commission.

Company Contact: Ben Stagg, Co-Founder & CEO

222 S. Church St, Suite 100; Charlotte, NC 28202

Tel: 704.502.1781 | Ben@white-stagg.com ii

1table of contents

In setting out the walls of a city

the choice of a healthy situation is

of the first importance: it should be

on high ground.

-Vitruvius, De architectura, 15 BC

2

i. Confidentiality and Disclaimer ........................................................................................................................... i

I. Table of Contents ................................................................................................................................................. 1

II. Executive Summary ............................................................................................................................................. 3

III. General Company Description .......................................................................................................................... 7

IV. Products ................................................................................................................................................................. 9

V. Marketing Plan ................................................................................................................................................... 13

VI. Operational Plan ................................................................................................................................................ 25

VII. Management and Organization ...................................................................................................................... 29

VIII. Startup Expenses and Capitalization ............................................................................................................... 33

IX. Financial Plan ..................................................................................................................................................... 35

X. Appendices ........................................................................................................................................................ 39

I. TABLE OF CONTENTS

3executive summary

Excerpted from Family stressing the importance of weather radios, Chris Womack, WIAT-TV CBS42

Its a morning many in Alabama will never forget. In the wee hours of January 23, 2012

a tornado barreled through the Clay area, leveling homes and taking the life of Christina

Heichelbech.

The tornado lifted the roof of the house off, remembered her father, Darrell Heichelbech.

And it knocked us [he and his son] to the ground. The whole second floor ended up in

the backyard in the pool.

The 16-year old junior at Jefferson County International Baccalaureate was found

several feet from her father, still lying on her mattress. She never woke up, he said,

fighting back tears. She looked like she was sleeping.

I truly believe, if we had a weather radio we would have had more time and been able

to make it down to the basement, and she wouldve survived, said her father.

Darrell Heichelbech wants every home to have a weather radio. He says if they save

only one life, its well worth the pain of sharing their story. Get a weather radio, he

said. Its as important as having a smoke detector.

This tragic story, and many other like it, begin the story of White Stagg.

4White Stagg has developed its patented GUARDIAN

and HALO products to give customers the greatest

opportunity to identify and address hazards in and

around the home and pave the way for a new gen-

eration of connected home users by focusing on

the safety and security of their families. We are seek-

ing $500,000 in order to achieve commercialization

and get our first series of products

to our customers by Q2 2015.

The market for White Staggs

products is very large at 25%

of all US households and grow-

ing, with each household cur-

rently owning an average of 4

smoke detectors. The market

encompasses every residence

built since 1989 and all new

residential construction, currently

estimated at 30M households

and increasing by approximately

1M homes per year.

Each of the Companys products meets an un-

derserved need, driven by a powerful and funda-

mental human motivation to protect ones family.

In addition to these emotional demand drivers, the

weather-specific alert products address the needs

of the 57% of the US that lives in areas affected by

fatally severe weather and the smoke detection

products meet the federal regulation requiring

hard-wired smoke alarms inside and outside of all

sleeping areas.

White Stagg has created multiple products that

meet customers current needs and is creating a

foothold in the connected home space by securing

the most valuable real estate in the home: the high

ground. As the Internet of Things (IoT) and connect-

ed home spaces become more prevalent, electri-

cal outlets will become even more cluttered and

consumers will seek less obtrusive installation loca-

tions for their connected devices. White Staggs

products are the first to implement the smoke alarm

as the nerve center and hub of the connected

home and is positioned to continue gaining traction

as consumers and retailers increase their engage-

ment in the connected home device market.

The features, functions and benefits

and an affordable price create an

attractive value proposition for our

customers (see detail in Section 4,

Products). These products fill a gap

in the mid to high range currently

unserved by our competition, from

both feature and pricing perspec-

tives. The Company expects to gain

market share with minimal obstruc-

tions due to the significantly slower

speed of innovation and technology

adoption demonstrated by larger

competitors as well as White Staggs

intellectual property portfolio.

White Stagg is afforded patent and trademark

protection for several of its key product features

and branding elements, including US Utility Patent

6121885 for a Combination Smoke Detector and

Weather Radio and several other patent and trade-

mark applications pending.

Manufacture and distribution of White Staggs

products will be executed by established, US based

industry partners with a proven track record of

attention to detail, customer service and timely,

reliable delivery of quality work products.

The initial GUARDIAN WX product will provide the

cash flow required to roll out future safety, security

and connected home devices currently in various

stages of development and testing.

White Stagg has been built by an experienced man-

agement team with past successes, and has recruit-

ed a first-class advisory board with demonstrated

and deep domain skill sets in the disciplines needed

by the Company at this stage of development.

The Company expects to be able to scale rapidly,

leveraging the size and strength of its supply chain

partners. These scalability and growth opportunities

are expected to allow White Stagg to achieve $35M

in sales and $4.9M in EBITDA annually by 2019.

II. EXECUTIVE SUMMARY

Smoke alarms

will do more to

protect families

and become

the nerve

center of the

connected home.

SMOKE ALARM

+ ADVANCED ALERTS + CONNECTED HOME

5general company description

Consumer Focused Product Development

Life Saving Technology Application

Stale Category Ripe for Innovation

6White Stagg, LLC provides alert solutions that provide

warnings to hazardous conditions in and around the

home. The Companys products are developed

using a simple three step process: Identifying the

conditions that present families with risk,

determining the trigger events

that allow for intervention

and integrating technol-

ogy to overcome envi-

ronmental and behavioral

hurdles. Using this process, the

Company has been able to identify

multiple opportunities to engage technology in a

way that can truly make an impact in the number of

accidental deaths and injuries in the United States

and potentially worldwide.

White Stagg believes your familys safety is its busi-

ness. The Company is dedicated to developing and

deploying solutions that reduce the number of pre-

ventable tragedies associated with hazards in and

around the home.

The goal of White Stagg is to become the thought

leader in the advancement and adoption of home-

based alert systems. The Companys objectives

include national recognition of the innovation and

effectiveness of its devices, market penetration of

greater than 2% in 10 years and 1,000 lives saved

thanks to the Companys systems.

White Staggs business philosophy is built on these

three tenets: Respect, Responsibility, and Self Dis-

cipline. Living with respect for the Companys cus-

tomers, vendors, partners and team. Demonstrating

responsibility for its words, actions, products and meth-

ods. Practicing self-discipline in its decision-making,

product development and financial controls.

The products offered by White

Stagg are targeted towards

the hero/protector arche-

types in the home. The

Companys solutions provide

a means for those charged

with the care of others to maintain

the safety of loved ones, especially in the case of

unforeseen potential danger. While this archetype

typically includes mothers, it easily extends into fa-

thers, grandparents, pet owners, those caring for

aging parents and safety professionals.

The global smart home and buildings market is cur-

rently a $4.8 Billion marketplace and is expected to

grow at a compound annual growth rate (CAGR) of

29.5% between 2012 and 2020 to $35.3 Billion. This mar-

ket is expected to evidence significant growth due

to growing security concerns and enhanced safety

features that smart automation systems can offer.

The strength of White Stagg in the industry is its abil-

ity to understand consumer behavior and develop

effective technology solutions, moving quickly to

deploy products that meet their safety needs and

convenience desires. Factors influencing White

Staggs success include the increase of consumer

adoption of the concept of the connected home,

increased awareness by consumers and legislative

officials regarding the need for better methods for

the identification and communication of hazardous

events, and advancements in the technology relat-

ed to efficient wireless machine to machine (M2M)

communication. Competitive strength is achieved

through the Companys consumer-centric design

process, the lack of existing legacy manufacturing

equipment or processes, an innovative brand im-

age, and manufacturing agility that accelerates

product delivery to market. In addition to these

factors, the combined expertise and diversity rep-

resented in the Companys executive team as well

as the Board of Advisors enables White Stagg to de-

sign, build, market and deliver quality products that

meet a clear consumer need faster and better than

its competitors.

III. GENERAL COMPANY DESCRIPTION

7TECHNOLOGY & INNOVATION

White Staggs HALO and GUARDIAN platforms utilize highly reliable electronic components to identify trig-

ger conditions and relay warnings to its customers using audible and visual alerts. Depending on the trigger

event and proximity to the alert mechanism, these components may contain analog, digital and/or wireless

subsystems to relay warnings to the primary platform, which then provides the alert message via internal

speakers as well as color-coded LED lighting to ensure message recognition.

The combination of multiple alert technologies is not inherently innovative, but the Company is the first to

combine fire warning and severe weather warnings into a single device as it has in its HALO platform. The

GUARDIAN platform, on the other hand, is incredibly innovative in that it allows White Staggs customers

to customize their alert system for the dangers that affect their families while maintaining the reliability,

affordability, ease of use and visual appeal the Companys customers expect.

The HALO and GUARDIAN platforms have completed proof of concept milestones such as market research,

technical feasibility, industrial design, bill of materials (BOM) generation, initial printed circuit board (PCB)

layout and consumer feedback. The Company is currently developing prototypes of each platform in order

to better gauge manufacturing needs and demonstrate the product features and benefits.

Intellectual property has been a focus for White Stagg from its inception. US Utility Patent 6121885 is currently

licensed exclusively by White Stagg, LLC from Fire Storm Technologies, LLC, and the Company believes this

patent protects the HALO platform from competitors seeking to combine a smoke detector and a weather

alert device into a single housing.

The GUARDIAN platform and the distinctive halo lighting feature are each patent pending based on a

provisional applications filed in late 2013 and early 2014, respectively, owned exclusively by White Stagg, LLC.

As of March 2014, White Stagg, LLC sought trademark protection for the HALO brand name as well as filed

a Design Patent application for visual features distinctive to the Companys product lines.

MARKET

Since 1989, National Electrical Code has required newly constructed homes to include hard-wired smoke

alarms, resulting in a current total available market for White Staggs products of almost 30 Million house-

holds. This number continues to grow as new homes are built and older homes receive electrical upgrades

to meet current code compliance. Core serviceable market groups within the total available market

include households in regions subject to fatally severe weather events (17 Million), those that own swimming

pools (5 Million) and adults cohabitating with chronically ill, disabled or elderly parents (10 Million).

In a recent nationwide survey of over 300 potential customers, 8% stated they would buy the HALO product

at $100, 12% stated they would buy the HALO product at $50 and 30% stated they were interested in pur-

chasing the HALO product but were unsure at what price. In open feedback sessions with dozens of target

customers in 17 states, the most common response is: Why would you NOT have one?

RISKS

White Staggs position in the value chain includes the activities typical of a physical product development

organization including assembly, logistics, sales, marketing and support. As such, the Companys critical risks

include: upstream supply chain issues such as availability and quality of chipsets required in product man-

ufacture; acquisition of effective distribution channels offering access to potential customers; consumer

acceptance and adoption of its solutions; and finally potential intellectual property infringement by White

Staggs competition and the associated legal expense in its defense.

In order to mitigate these risks, the Company will continue to evaluate its system architecture in search of

highly available components and hold its vendors to clear and reasonable QA/QC standards; work with

retailers and wholesalers on a non-exclusive basis to identify mutually beneficial relationships and effective

shopper marketing initiatives; and make defensible intellectual property one of the Companys top priorities.

8TEAM

Its two co-founders, Chad White and Ben Stagg, anchor White Staggs executive management. Chads

experience in sales leadership roles for medical device manufacturers large and small combined with

Bens experience in operational leadership of communication technology companies mix perfectly to

provide unique but complementary perspectives on the Companys potentially life-saving communication

solutions. White Stagg, LLC is the second collaboration between Chad and Ben, after the successful launch

and liquidation of their digital advertising services company in 2005.

A very highly esteemed Board of Advisors also supports White Stagg with representatives from various

disciplines including finance, operations, marketing, manufacturing and consumer product development.

This gives White Stagg the opportunity to identify potential pitfalls early and critical business decisions are

vetted through over 100 plus years of executive experience.

MILESTONES

White Stagg is currently pre-revenue, but the Company has had overwhelming positive feedback from po-

tential customers, resellers, partners and advisors. The Company has established functional electronic alpha

prototypes and the

Company is current-

ly beta prototyping

external enclosures

and drafting custom

circuit board designs.

White Stagg is look-

ing forward to field

trials of prototype

units this summer

in preparation for

planned final design

revisions, UL and FCC

testing and its first

manufacturing runs

of consumer ready

units later in 2014.

Significant highlights

of recent strategic

partnership meetings

include an offer while

attending the National Tornado Summit from the National Oceanic and Atmospheric Administration to be-

come a registered partner and Weather Ready Nation Ambassador as well as an invitation to debut White

Staggs products in partnership with the National Weather Service in their booth at the Consumer Electronic

Show in 2015. During the same summit, a major storm shelter manufacturer interested in a potential part-

nership also approached the Company. The potential strategic partner is seeking an opportunity to work

with White Stagg in pairing its devices with their shelter offerings as part of a 2-year deal with a major home

improvement retailer.

CAPITALIZATION

White Stagg has over $75,000 invested to date from sources including founder contributions, loans and

grant proceeds. Current debt is $11,200 and the Companys founders currently hold 96% of its interest.

9products

The HALO and GUARDIAN Life Safety Products by White Stagg offer its customers a simple

and easy to use way to keep informed of hazardous events in and around the home. All of

the Companys products are designed from the beginning with the end user in mind and

include features not seen at the Companys target price points. One of the defining features

of this product line is the use of an integrated set of discreet LED lights that when activated

produce a backlit halo around the device on the accompanying ceiling or wall. By alter-

ing the color and tempo of the visual alert, White Staggs customers are better informed of

the nature and location of hazardous events. The HALO Life Safety Series includes planned

products such as:

10

IV. PRODUCTS

HALO SERIESSMOKE ALARM (ESTIMATED LAUNCH IN 2016)

SMOKE ALARM + ALL HAZARDS ALERTS (2016)

SMOKE ALARM + CARBON MONOXIDE (CO) ALERT (2016)

SMOKE ALARM + CARBON MONOXIDE (CO) ALERT + ALL HAZARDS ALERT (2016)

The HALO Smoke Alarm presents a sleek, stylish updated design to the visually stale smoke alarm market-

place. The patent pending design warns customers of danger with an audible voice alarm as well as a

visual alert. Wireless remote control of the device (via a dedicated remote or wireless handheld such as a

cellular phone or iPod) gives White Staggs customers the ability to utilize the integrated lighting system as

an energy efficient nightlight in hallways or bedrooms.

The Companys patented combination device includes the features and benefits of its Smoke Alarm and

adds the ability to deliver All Hazards warnings as they are broadcast. The All Hazards alerts are provided

at no charge, are available to over 95% of the United States and include real time updates to critical

messaging such as severe weather (tornadoes, hurricanes, floods, severe thunderstorms, earthquakes, etc),

nuclear power plant emergencies, AMBER alerts and terrorist attacks.

The most feature rich product in the Life Safety line, the combination of all three warning systems provides

the most comprehensive alert system on the market today.

GUARDIAN SERIES GUARDIAN WX WEATHER RADIO (2014)

MODULAR ALL HAZARDS ALERT (2018)

ADDITIONAL ALERT MODULES

Explosive Gas Detector (2018)

Poolside Activity Alert (~2019)

Wearable Drowning Alert (~2019)

Proximity Alert (~2018)

Fall Detection Sensor (~2018)

The patent pending Modular Alert System gives White Staggs customers the ability to add the benefits of

the All Hazards warning system to the smoke detector of their choice with minimal effort, from any manu-

facturer thanks to the included mounting and power adaptors. The modular alert system is easy to use, easy

to install and is always working to protect the Companys customers thanks to its persistent connection to

power, battery backup and out of the way overhead installation location.

The Modular Alert System also includes the ability to add additional trigger modules that relay an alarm to

the central Modular Alert Device for various hazardous conditions around the home including drowning,

gas leaks, accidental falls and activity in restricted areas.

PRODUCTS

HALO SMOKE ALARM - $39

The HALO Smoke Alarm features an updated design to the visually stale smoke alarm marketplace. The

patent pending design warns White Staggs customers of danger with an audible voice alarm as well as a

visual alert. Wireless remote control of the device (via a dedicated remote or wireless handheld such as a

cellular phone or iPod) gives the Companys customers the ability to utilize the integrated lighting system as

an energy efficient nightlight in hallways or bedrooms. The dual-sensor technology ensures that fires of all

types are identified promptly, whether the trigger condition is smoke or heat. The exterior design gives the

Companys customers a smoke detector option that complements their home decor rather than being an

eyesore, while the functional visual elements gives White Staggs customers confidence in knowing that the

Companys devices will let them know exactly where the danger is located by indicating whether a specific

device has detected the hazard (fast blink) or is simply relaying an alert from another device (slow blink).

HALO Smoke Alarm (cont.) The dual sensor technology provides the Companys customers a sense of se-

curity, ensuring that in the event of a home fire of any type the system will be able to identify it, produce

an alarm and give customers and thier families enough time to respond or get to safety. A 10-year battery

provides reliable system function even in the case of a power outage without having to replace the battery

for the effective life of their purchase.

HALO SMOKE ALARM + WX - $79

The patented combination device21 includes the features and benefits of White Staggs Smoke Alarm and

adds the ability to deliver All Hazards warnings as they are broadcast. The All Hazards alerts are provided

at no charge to the Companys customers, as they are provided by the National Oceanic and Atmospheric

Association (NOAA) via the National Radio Service (NWR). These alerts are available via radio broadcast to

over 95% of the United States and include real-time updates to critical messaging such as severe weather

(tornadoes, hurricanes, floods, severe thunderstorms, earthquakes, etc), nuclear power plant emergencies,

AMBER alerts and terrorist attacks. The weather alert system features simple setup including automatic

detection of the strongest radio signal, easy-to-program location codes to reduce false alarms due to

geographically irrelevant warnings and simple single connection installation that, thanks to its overhead

installation, does not require installation or aiming of an external antenna. By combining the easy setup,

out-of-the-way installation and the reduction of false alarms, White Stagg is able to address the primary

reasons consumers fail to utilize the advance warning provided by weather radios and give them the best

possible tool to help protect their families in the event of an impending natural or man-made disaster.

SMOKE ALARM + CO - $59 | SMOKE ALARM + CO & WX - $99

The most feature-rich product in the Life Safety line, the combination of all three warning systems, provides

the most comprehensive alert system on the market today answering the challenge offered by Consumer

Reports to Produce a single device that senses both types of fire and CO22. In addition to the dual fire

sensors, easy elevated installation, simple weather alert setup, persistent power connection and battery

backup, this comprehensive alert device provides a sense of preparedness unparalleled by existing alert

options. Customers that purchase and install this device sleep better knowing the system is watching out for

dozens of hazardous conditions, ready to alert them at the first indication of danger and providing families

with the greatest opportunity to resolve a dangerous situation or escape to safety.

GUARDIAN WX - $45

White Staggs initial product offering, the GUARDIAN WX gives homeowners in areas affected by severe

weather the ability to add weather alert functionality to their existing smoke detectors. This revolutionary in-

stallation capability ensures that our customers can sleep well at night knowing that our system is constantly

monitoring for dozens of hazards around the home such as severe weather events, nuclear disasters, civil

emergencies, wildfires, earthquakes and more. In areas where tornadoes and hurricanes are a normal part

of life, knowing that your alert system is always connected, always powered on and always watching out

for your family provides a level of confidence and security unrivaled by any other device in the market-

place. The intuitive and simple configuration reduces false alarms and provides geographically targeted

weather alerts, giving our customers more time to prepare and increasing the likelihood of getting to safety

in time. The overhead installation, persistent power connection and battery back up ensure that temporary

disconnections that often accidentally become permanent will not leave our customers unprotected when

they need it the most.

GUARDIAN MODULAR ALL HAZARDS ALERT (2015) - $199

The patent pending23 Modular Alert system gives customers the ability to add the benefits of the All Hazards

warning system to the smoke detector of their choice with minimal effort, from any manufacturer thanks

to the included mounting and power adaptors. The modular alert system is easy to use, easy to install and

is always working to protect White Staggs customers thanks to its persistent connection to power, battery

backup and out of the way overhead installation location. This device allows the Companys customers

to gain the advantages its All Hazards Alert device provides while maintaining trust in their smoke alarm

manufacturer, even if that manufacturer isnt White Stagg.

11

ADDITIONAL ALERT MODULES - $19-$99

The patent pending Modular Alert system gives White Staggs customers an even greater level of threat

identification and alert, giving those charged with the care of others (parents, children, pet owners) one

of the most comprehensive and effective tools to safeguard their loved ones. The system includes the

ability to add additional trigger modules that relay an alarm to the central Modular Alert Device for various

hazardous conditions around the home, such as:

Explosive Gas Detector (2015) - $29 A small, potentially battery-powered device capable of detecting

Natural Gas (NG) or Liquid Propane (LP) within the home in and around appliances such as a water heater,

dryer or stove and wirelessly signaling an alert to Modular Alert Hub. This device is especially effective for

aging adults and those suffering from memory degradation, enabling an extra layer of security in the event

an appliance is left on and/or unattended.

Poolside Activity Alert (~2016) - $99 A pool-mounted sensor (undefined sensor technology, possibly sonar

or tympanic membrane) indicates unauthorized activity in a pool, alerting homeowners to a potential

drowning even in cases of trespassing. Not only are customers complying with state and local laws requiring

poolside alert devices and mitigating legal risk, but they are also able to prevent an accidental drowning

and the psychological impact of such a tragedy.

Wearable Drowning Alert (~2016) - $19 A small, battery-powered, wearable device triggers an alert in the

home if submerged for more than an acceptable amount of time alerting homeowners and caregivers to

a potential drowning regardless of the body of water (pool, lake, river, garden pond). This device allows

parents and other caregivers to be warned of a potentially hazardous condition that is the number one

cause of accidental deaths in children under 4. White Staggs customers know that even looking away for

just a moment is all it takes for a little one to wander out and into danger. This device gives customers

an extra set of eyes for one of the most hazardous dangers for young children in and around the home.

Proximity Alert (~2016) - $19 This wearable device triggers an alert when the device exceeds a prescribed

distance from the Modular Alert Hub (abduction, wandering) or fails to maintain a prescribed distance from a

secondary sensor (restricted areas such as a gun safe, medicine or chemical cabinet). Similar to the Wearable

Drowning Alert, this gives customers an extra set of eyes that could alert them to a dangerous event and reduc-

es the potential risk created by the distractions of multitasking required in the Companys customers daily lives.

Fall Detection Sensor (~2017) - $49 An accelerometer based wearable device that triggers an alert on

the Modular Alert device if the user exceeds a safe distance and speed of movement. Two-way commu-

nication could be enabled from the wearable device through the Modular Alert Hub to a family member

or emergency medical personnel, giving caregivers and the children of aging adults an additional means

to making sure their loved ones are alright, even when they cant be there.

2-Way Communication (~2018) - $89 Low power, 2-way communication module could allow Emergency

Medical Services (EMS) personnel to communicate with distressed occupants utilizing battery backup pow-

er to locate and identify individuals trapped during or after a catastrophe as well as identifying unoccupied

residences to move on more quickly to those in need of rescue. Application examples include Multiple

Dwelling Units (MDU) such as apartment buildings and senior care facilities, giving safety and medical

personnel an effective tool to use the time and resources they have available in an emergency.

Future Solutions (~2018) As technology components costs continue to decline, opportunities are created

to further enhance the consumer experience by integrating GPS, Wi-Fi, and cellular connectivity. These

enhancements will answer customer needs by enabling better geo-targeting of warnings down to polygo-

nal detail rather than county level for environmental hazards and redundant communication channels to

ensure message delivery.

Additional examples of White Staggs customer centric-product delivery include a 30-day money back

guarantee, hassle-free returns for products purchased through the Companys website, and at least a

5-year warranty on all of its products (the HALO Smoke Alarm is warranted for 7 years). As an added ben-

efit to customers purchasing White Staggs weather alert products, the Specific Area Message Encoding

(S.A.M.E.) code associated with the shipping address will be prominently displayed on the shipping label.

This eliminates one of the hurdles customers face in getting the most out of their HALO+ experience and

helps to ensure White Staggs systems deliver the most timely and relevant information possible. 12

13

marketing plan

Proven Marketing Spend Strategy

Customer Acquisition Cost of $2.95

Highly Targeted Advertising Methods

14

ECONOMICS

Industry data for the Companys products falls into the Consumer Electronic industry and comprises multiple

facets of currently separate sectors including the Smoke Alarm, Weather Radio and Connected Home

segments. For the purposes of creating a conservative market forecast, we will focus on the areas where

these disparate industry sectors overlap for our customers.

FACTS ABOUT OUR MARKET:

> There are approximately 120M households in the United States.8

> 33M New Residential Construction Housing Units Completed since 1989 when the National Electric

Code (NFPA 70) began requiring hard-wired smoke detectors in all new construction.9

> 57% of Americans live in states affected by fatally severe weather such as tornadoes, hurricanes, or

severe thunderstorms.9, 10, 11, 12

> While fatal tornadoes and hurricanes dominate the weather related headlines, in 2012 twice as many

people died from heat as tornadoes and on a 30-year average almost twice as many people died in

floods as hurricanes.14

> From 1950 to 2005, a mere 27.3% of tornadoes were nocturnal, yet 39.3% of tornado fatalities and

42.1% of killer tornado events occurred at night. Tornadoes during the overnight period (local midnight

to sunrise) are 2.5 times as likely to kill as those occurring during the daytime hours.15

> Unintentional drowning is the number one cause of injury deaths in children ages 1-4 in the United

States and remains in the top three causes until age 15.16

> Unintentional fall is the number one cause of injury death in adults age 65+ in the United States, and is

the third highest cause of total injury deaths across all age groups.17

Given the lack of design innovation and marketing communication of technical innovation in the weather

radio market and the recent successful launch and penetration of similar innovations in adjacent markets

(Thermostats by Nest Labs at 1% in 4 years), White Stagg expects the Company will be able to achieve its

goal of 0.5% market penetration in 5 years and 2% in 10 years for each of its products.

Current demand for White Staggs products in the market is positive. There is a significant gap in the smoke

alarm product matrix for a feature-rich product in the $40-$100 range. The optional addition of a weather

alert feature combines two critical alarm functions for many families and consolidates their warning needs

into a single device. In a recent national survey conducted by White Stagg, consumers who had purchased

a smoke alarm in the last 3 years were asked Would you have considered purchasing a combination

SMOKE DETECTOR and SEVERE WEATHER ALERT device if it had been available? They relayed their interest

in the combination smoke alarm/weather alert device as follows:

8% stated Yes, I would have paid around $100.

12% stated Yes, I would have paid around $50.

30% stated Maybe, but I am not sure how much.

This data shows that not only is half of the market interested in a product such as ours, but also demon-

strates the premium price point likely to be accepted by the Companys targeted consumers.

V. MARKETING PLAN

15

Trends in the target market are just as promising.

Housing starts and home purchase behavior are

continuing to rebound18, creating opportunities for

consumers in a household transition. Interest from

consumers as well as investors has made connect-

ed home product category one of the most talked

about technology areas, driven recently by Goo-

gles acquisition of Nest Labs for $3.3B in cash19 and

Jawbones most recent $300M round on a valuation

of $3B+20. Similar to White Stagg, both of these com-

panies have created consumer-centric connected

home products, but one of the key differences lies

in the consumer benefit provided: other companies

have driven toward nice to have convenience

products, where White Stagg has elected to focus

on must have safety products.

Growth potential and opportunity for White Stagg

is significant, given that almost every home in the

United States likely needs at least one smoke alarm

replaced each year and over half of the country

lives in an area affected by lethal weather condi-

tions. Barriers to achieving this growth for a com-

pany like White Stagg include: the cost of product

development and third-party testing prior to market

launch; consumer acceptance and brand recogni-

tion of a new company relative to a safety product;

and the protection of unique technology to inhibit

competition from established organizations.

White Stagg is able to overcome these barriers by

ensuring product design and development begins

with the end in mind, keeping development costs

low by reducing rework due to consumer use issues

or testing hurdles; developing the Companys brand

reputation by partnering with trusted resources in

the safety community such as The Weather Compa-

ny (The Weather Channel parent), NOAA (we are a

registered Weather Ready Nation Ambassador) and

local Fire Safety professionals as well as leveraging

earned media through channels such as local news

outlets; and identifying and establishing utility and

design patents as well as trademarks (including

purchasing/licensing existing intellectual property)

as early in the process as possible to protect the

Companys unique offerings.

16

Product Marketing OverviewProduct GUARDIAN WX HALO GUARDIAN+Price $59 - Weather Radio $39 - Smoke Alarm $199 - Connected Home Hub

$79 - Smoke Alarm + Weather Radio

$59 - Smoke Alarm + CO

$99 - Smoke Alarm + CO + Weather Radio

Placement Available nationally online via white-stagg.com, our afliated sites and amazon.com.Available regionally in

home improvement and hardware retail outlets.

Available nationally in retail outlets such as Lowes Home Improvement and Home Depot and through

independent retail afliates of Ace Hardware and True Value.

Available through security and alarm service and installation contractors.

Available during construction of new homes through custom and tract builder partners.

Available locally through Fire Departments and Community Safety Managers.

Available locally through home automation installers.

Promotion Launch Mix: 80% Introduction, 20% DiscoveryPost-Launch Mix: 50% Introduction, 50% Discovery

Marketing spend of 8.9% to 11.8% of sales

Regionally targeted advertising Nationally targeted advertising

Weather Channel App, weather.com, Google AdWords, Regional Parenting Magazines such as Metro Family (OKC),

SEO, Social Media, Earned Media

National parenting magazines and associated digital content

such as Parents, Google AdWords, SEO, Social Media,

Earned Media

Home technology magazines and associated digital content

such as Electronic House, Google AdWords, SEO, Social

Media, Earned Media

Physical Environment

Online (none); Home Improvement Warehouse; Independent or Afliate Hardware Store; Mass Market Retail, Warehouse Club.

Campaign Cornerstone

Safety & Security - Reliable Alert Performance

Safety & Security - Comprehensive Alert Detection

Security & Convenience - Connected Alerts and

Easy Integration

People Key account managers working with retail and construction partners, print and digital marketing specialists working with media outlets to promote earned media,

manage marketing spends and inbound marketing efforts.

Process Made in the USA; Industry best warranties; No hassle returns; Customer Service via email, phone and online support portal.

Packaging Online: Cardboard packaging focused on product protection in transitRetail: Clear plastic packaging to showcase product quality/visual appeal and demonstrate function.

PRODUCT MARKETING OVERVIEW

17

Smoke Detector Top Media Spends

1,500

3,000

4,500

6,000

Q2 11 Q4 11 Q2 12 Q4 12 Q2 13 Q4 13

Network Radio Spot Radio Spot TVNational Magazine National Internet Local Internet

Weather Radio Top Media Spends

0

450

900

1350

1800

Q2 11 Q4 11 Q2 12 Q4 12 Q2 13 Q4 13

Local Newspaper National Newspaper Spot TVNational Magazine Business to Business National Internet

2%19%

10%

69%

Network Radio National InternetNational Magazine Local Internet

7%5%5%

45%

38%

National Newspaper Local NewspaperNational Magazine Business to BusinessSpot TV

1

Marketing Spends by Category

NEST LABS Marke:ng Spends

Sum of Q2 2011

Sum of Q3 2011

Sum of Q4 2011

Sum of Q1 2012

Sum of Q2 2012

Sum of Q3 2012

Sum of Q4 2012

Sum of Q1 2013

Sum of Q2 2013

Sum of Q3 2013

Sum of Q4 2013

Sum of Q1 2014

Local Internet 2.551 5.431 23.472 57.518 29.218 57.124 9.299 0.03 184.643NaConal Internet

38.094 38.429 36.183 97.76 234.986 322.251 53.96 18.373 840.036

NaConal Magazine

638.787 681.075 395.031 169.11 196.9 2080.903

NaConal Sunday Supplement

107.075 107.075

Spot Radio 1.068 17.518 18.586SUM 40.645 44.928 698.442 836.353 766.31 548.485 277.677 18.403 3231.243

Spend by Medium

0

175

350

525

700

Sum of Q2 2011 Sum of Q4 2011 Sum of Q2 2012 Sum of Q4 2012 Sum of Q2 2013 Sum of Q4 2013

Local Internet National Internet National Magazine National Sunday Supplement Spot Radio

Total Spend

1%3%

64%

26%

6%

Local Internet National InternetNational Magazine National Sunday SupplementSpot Radio

Nest Labs Unit Sales (Estimated)

NEST LABSSum of Q2 2011

Sum of Q3 2011

Sum of Q4 2011

Sum of Q1 2012

Sum of Q2 2012

Sum of Q3 2012

Sum of Q4 2012

Sum of Q1 2013

Sum of Q2 2013

Sum of Q3 2013

Sum of Q4 2013

Sum of Q1 2014

Thermostat (Launched October, 2011)

5000 15000 30,000 50,000 78,000 120,000 155,000 200,000 248,000 300,000 1,201,000

Nest Protect (Launched October, 2013)

160,000 280,000 440,000

SUM 30,000 50,000 78,000 120,000 155,000 200,000 408,000 580,000 1,641,000

Customer Acquisition Cost Per Unit Sold

NEST LABS (Launched May, 2011)

Sum of Q2 2011

Sum of Q3 2011

Sum of Q4 2011

Sum of Q1 2012

Sum of Q2 2012

Sum of Q3 2012

Sum of Q4 2012

Sum of Q1 2013

Sum of Q2 2013

Sum of Q3 2013

Sum of Q4 2013

Sum of Q1 2014

Average

Thermostat (Launched October, 2011)

$1.35 $0.90 $8.95 $6.97 $4.94 $2.74 $0.68 $0.03 $2.95

0

75000

150000

225000

300000

Sum of Q4 2011 Sum of Q2 2012 Sum of Q4 2012 Sum of Q2 2013 Sum of Q4 2013

y = -112.86x3 + 4585.7x2 - 5256x + 6600R = 0.9996

Estimated Thermostat Unit Sales (Launched October, 2011) Trendline

0

70,000

140,000

210,000

280,000

Sum of Q4 2013 Sum of Q1 2014

Estimated Nest Protect Unit Sales (Launched October, 2013)

1 2

12 http://www.businessinsider.com/nest-revenue-2014-1

http://gigaom.com/2013/01/29/exclusive-nest-has-raised-another-80m-now-shipping-40k-thermostats-a-month/

MARKETING SPEND REPORT NEST LABS, INC APRIL 14, 2014

CONFIDENTIAL "3 WHITE STAGG, LLC

COMPETITIVE MARKETING ANALYSIS

18

CUSTOMERS

The White Stagg customer is best identified initially

by their need to care for others. The Companys

customer prides herself on providing the safest envi-

ronment for those around her, and is diligent in her

efforts to maintain a level of aware-

ness and control, even for events

deemed out of her control (Acts of

God). She seeks out products and

services that allow her to do more

and remove the variables that could

make her home unsafe for her

wards, whether they be her children,

her parents or her pets. In many cas-

es, these variables are compounded

by other carefully weighed environ-

mental factors (living close to family,

owning a pool, parent holding on to

independence) but she never loses

sight of the care for which she has

been charged.

Geographically, the Companys

customer is weighted toward areas

most significantly impacted by the

risk factors White Staggs devices

seek to mitigate. She typically lives

in a residence constructed in the

last 25 years in a suburban or rural

setting, most likely in the Midwest,

Southeast, Central Plains and At-

lantic Coast regions. The customer

is almost always married, often with

children, although the consumer

may ultimately be the parent or

child of the customer. While she may

be somewhat technically savvy, she

is not on the lookout for the next

great gadget. Instead, her primary

impulse to purchase is driven by the

need to create a safe environment

or the fear of preventable harm due

to a catastrophe.

White Staggs customers come from professional dis-

ciplines across the board, from stay-at-home mothers

to surgeons. This creates a diverse class, educational

and income array, but there is a tendency towards

lower-paying jobs as the emotional fulfillment of ser-

vice and supporting others far outweigh any financial

gain or loss. The combination of lower pay/higher

fulfillment occupations, the desire to provide the

most inviting environment possible, the social accep-

tance of manufactured homes in these areas and

the inherent weaknesses of these structures during

severe weather events increases the likelihood the

Companys customer lives in a manufactured home

versus the national average, but certainly not at the

exclusion of other home types. It is worth noting that

nearly 10% of total housing in the U.S. are manufac-

tured homes and up to 18% in some of the high-risk

states such as South Carolina.

19

COMPETITION

Competition for the HALO Smoke Alarm includes offerings from the following manufacturers:

Kidde Fire Safety/FIREX1 First Alert/BRK Brands Nest Labs

1016 Corporate Park Drive 3901 Liberty Street Road 900 Hansen Way

Mebane, NC 27302 Aurora, IL 60504 Palo Alto, CA 94304

While there is not currently a competitive manufacturer of a combination smoke detector and weather

alert device, White Staggs customers are able to achieve roughly similar results by purchasing, installing

and operating multiple devices from separate manufacturers. In addition to the smoke detector offerings

from the manufacturers listed above, customers are able to receive weather alerts with S.A.M.E. (coun-

ty-level location based) targeting through weather radios from the following manufacturers:

Midland Radio Corporation Eton Corporation Alert Works, Ltd

5900 Parretta Drive 1015 Corporation Way 6800 W. Central Ave #L2

Kansas City, MO 64120 Palo Alto, CA 94303 Toledo, OH 43617

Oregon Scientific AcuRite/Chaney Instrument Co. La Crosse Technology

10778 SW Manhasset Drive 965 Wells Street 2817 Losey Blvd South

Tualatin, OR 97062 Lake Geneva, WI 53147 La Crosse, WI 54601

Indirect competitors for the Companys solutions vary by product, and include the following by category:

WEATHER:

Online applications and websites accessed by desktop computer or mobile phone or tablet

FIRE:

Neighborhood Watch programs, local Fire Departments, Alarm & Security Providers

DROWNING:

Lifeguards, flotation devices, fences

FALLS:

LifeAlert

AUTOMATION AND SECURITY SERVICE PROVIDERS:

ADT Pulse, ATT Digital Life, Time Warner Intelligent Home, Staples Connect, Lowes IRIS, SmartThings

The combination weather and smoke detector products offered by White Stagg will deliver most of the

major features offered by the upper end of the competitive matrix such as long life components, user

friendly operation and contemporary design while occupying the established pricing gap between the

mid/low ($20-$60) and high end ($90-$120) product offerings. The connected home alert products will

compete with subscription-based service offerings from the primary competitors, with the advantage of

being a hardware purchase and a stand-alone system versus the competitors pay to play service/

subscription model.

20

With such a diverse range of competition in size and

scope, differentiation will be vital to White Staggs

success in the marketplace. The Companys prod-

ucts will win the hearts and minds of its customers

by joining disparate technologies and perspectives

to create the most attractive

purchase option. Aesthetics will

no longer suffer for function, or

capability sacrifice ease of use.

White Staggs products are built

from the ground up with the end

user in mind, focusing on the

behavioral hurdles its customers

create and using technology to

overcome those hurdles promot-

ing adoption and effectiveness.

Without the burden of legacy pro-

cesses, technologies, designers

or engineers the Company has

been free to create a compre-

hensive suite of home safety alert

devices that look as good as they

work, are appropriately priced

in a current positioning gap and

meet the high standards of reli-

ability expected by its customers.

As the lineup continues to grow

and evolve, the Companys products gain further

advantage by introducing customers to the con-

nected home concept with a safety solution rather

than one of convenience.

Another key differentiator is the Companys market-

ing strategy, focusing on education and empower-

ment. So many of its competitors appear to market

as if their goal is win by default, whereas White

Stagg is committed to outreach in a genuine effort

to save lives. Of course

the fiscal health and sta-

bility of the organization is

a critical need to achieve

that goal, but the Com-

pany believes it can truly

make a difference in the

number of lives lost due

to preventable tragedies.

White Stagg also be-

lieves the authenticity of

its motivations will come

through in its customer

engagements and will res-

onate with its customers,

creating a solution for its

customers that meets the

needs of both the heart

and mind.

Competitive Analysis

White Stagg Strength Weakness Kidde First Alert Nest Labs Midland Radio Eton Importance to Customer

Products Price

Quality Selection

Service Reliability

Stability Expertise

Reputation Location

Appearance Sales Method

Credit Policies Advertising

Image

21

TARGET MARKET

Geographic

White Staggs niche customer lives in an area affected by fatally severe weather such as tornadoes,

hurricanes or floods. She is heavily concentrated in areas such as Tornado Alley, Dixie Alley, and the

Midwest, Southeast, Atlantic Coast and Gulf Coast regions of the United States.

Psychographic

The primary archetype of White Staggs customer is that of the Hero/Protector. They are caregivers and

caretakers, often even professionally. They are sometimes labeled as worriers or helicopter parents at

home, but they work to transform the home into a haven or safe harbor for those they love. Other common

labels include preparers, planners, control freaks and weather nuts. They are most often parents,

but also include the children of aging but independent seniors and the family members of impaired adults.

The Companys customers are typically technology aware, but not necessarily technology savvy indicating

that they are more interested in form and function than owning the newest device on the market.

Demographic

She lives in a home built in the last 25 years, from mobile homes to mansions. Education has little impact on

White Staggs customer makeup, other than the obvious income implications related to the semi-premium

price point.

Strategy

Utilize marketing programs that ensure White Stagg is showing up as a trusted resource where its customers

would look for solutions to their problems.

Promotion

White Stagg will initially promote its message via earned and social media outlets as well as its website to

reduce cost and leverage the momentum of the Companys new solutions and the seasonally surges of

hazard related incidents. Customer education will be front and center to establish the HALO brand as a

trusted advisor and thought leader in the home safety alert device marketplace. As the marketing budget

grows, the Company will have the opportunity to expand its communication efforts to more traditional

means of marketing such as television, radio and in-store shopper marketing while continuing to utilize the

earned and social media channels to maintain relevance and engagement.

White Stagg will also leverage the professional safety community including fire departments, disaster pre-

paredness teams and weather professionals to create a grass roots network of brand advocates. White

Staggs interviews with members of these professional groups has resulted in overwhelming interest and

support, with nearly unanimous requests to keep them updated with product availability information. White

Stagg has been accepted as a member of the following alliances and communities:

Weather Ready Nation (WRN) Ambassador on behalf of NOAA

Pool Safely, Consumer Product Safety Commission

National Weather Service (NWS) Partner

National Preparedness Community, FEMA

International Association of Fire Chiefs Associate Member

As a member of these alliances and communities, White Stagg regularly provided marketing campaign

materials such as talking points, press release templates, blog posts, posters and social media components

(posts and tweets) to maintain the currency and relevance of its marketing messages. Regarding the Com-

panys online outreach, this ensures its content meets the requirements of popular search engine algorithms

and keeps it at the top of search results.

The image projected by White Staggs corporate persona will be of a trusted resource for mitigating the

risks faced by its customers and their families. Similar to the function of its solutions, this image is realized in

the delivery of relevant and timely communication that allows its customers to know more and worry less

about events that impact their familys safety.

22

In addition to advertising, White Stagg will visually support the HALO brand with graphic support by

continuing to build existing relationships with its layout, design and implementation partners. The Com-

pany is constantly working with its partners to develop and improve its web, social, print and broadcast

marketing messaging and channels and have identified key initial hires in the support of these efforts.

Pricing

The Companys pricing method is based on achieving consumer pricing that matches feature and

benefits expectations as well as exploiting the gap in current consumer offerings for each product

category. White Stagg is able to obtain a premium on its units due in large part to the attractive de-

sign elements and ease of use, as well as the convenience of integrating multiple warning solutions

into a single device. To demonstrate, lets look at the HALO+ WX product. Priced at $79, it is somewhat

higher than the cost of purchasing entry-level versions of individual alert systems ($15+$30=$45), but

less than the cost of purchase for premium versions of the individual systems ($99+$120=$219). It is also

significantly cheaper than the closest integrated alert system ($329), although this price reflects the

targeting of impaired persons (and

therefore limited market size) more

so than the quality or effectiveness of

the product. Positioning the price to-

ward the lower end of the identified

price gap will result in higher adoption

across the middle and lower end of

its customer demographic, increasing

word of mouth and earned media

advertising opportunities and raising

the likelihood that White Staggs

products will be able to do what they

are designed to do: save lives.

Customer Service

White Stagg will offer customer ser-

vice via phone during regular busi-

ness hours in addition to an online

portal where email, chat, installation

instructions, videos and answers to

frequently asked questions (FAQs) will

be available 24 hours a day, 7 days

a week. Customers leaving an email

or voice message for White Stagg will

receive a response by the end of the

next business day, regardless of the

method of communication. The hiring

plan developed by White Stagg iden-

tifies key thresholds for customer ser-

vice as a function of customer engagement and establishes key hires based on growth achievements.

Credit Policies

Customers purchasing the Companys products through direct channels such as the website or

other online stores will pay for products as they are ordered, reducing payment delay to that of

the processing time required by its merchant services partners.

Direct Partners purchasing units for direct to consumer resale, such as direct sales representatives

and fire departments, will be provided credit terms based on creditworthiness, deposit amount and

desired term length.

Retail Partners purchasing units for resale in their retail facilities will be evaluated on a case-by-case

basis and will consider attributes such as opportunity scale and scope, delivery timelines, and

competitive vendor terms.

23

Placement and Location

Placement of the Companys products will include

various online outlets and retail partners throughout

North America. White Stagg has secured several

relevant web domains related to the products, sat-

isfied the requirements to become an amazon.com

partner and begun working with home improve-

ment retailers and other industry manufacturers

to facilitate the delivery of our product to market.

Home improvement retailers currently involved in

the Companys go to market strategy include

Lowes, True Value Hardware and Ace Hardware

buyers cooperative.

Customer foot traffic will be practically non-existent,

so consumer expectations of the location are less

relevant than the production capabilities the loca-

tion will provide. Competitor location is also relative-

ly unimportant, as almost all of White Staggs com-

petitors are based in various metropolitan areas of

the United States. It is worth noting that the current

market leader in the smoke detector marketplace,

Kidde Fire Safety, is headquartered in Mebane, NC

approximately 2 hours away.

White Stagg is currently headquartered in the Packard

Place building in uptown Charlotte, North Carolina. This

location provides White Stagg easy access to meet-

ing and office space as needed and offers intangible

benefits such as regular meetings with individuals and

organizations connected to the entrepreneurship

community such as legal advisors, financial and tax

planners, investors and potential partners.

Upon execution of the production plan in Q4 2014, White

Stagg will lease a currently undefined mixed-use space

in or around Charlotte that allows the Company to oper-

ate administrative, support, assembly and logistics teams

in a single facility as well as providing warehouse space

to accommodate a small level of inventory.

Charlotte, North Carolina will remain the headquarters

location for White Stagg for a minimum of 6 years in or-

der to fulfill its obligation to the grant provided by the

Innovation Fund of North Carolina, although it would

likely remain so even if the requirement did not exist.

Charlotte has created an environment that is support-

ive of new business endeavors and the area continues

to attract young talent in the skilled and unskilled labor

forces, adding to the array of tools available to facili-

tate the Companys success. The quantity and quality

of partnership opportunities with electronic and plas-

tics manufacturers enables White Stagg to achieve its

goal of US-based production while reaping the finan-

cial and emotional rewards of creating local jobs and

supporting the American economy.

24

Distribution Channels

Products are targeted to be available for purchase online starting in 4Q 2014 through the Companys web-

sites and on Amazon.com. Using an online only approach initially enables White Stagg to perform several

key functions during product introduction: keeping costs low; validating customer interest; confirming the

business model; and testing manufacturing scalability prior to a retail rollout. During this period, the Com-

pany expects to work with retailers and strategic partners to identify opportunities to present its solutions to

a larger audience. After verification of the businesss ability to deliver quality products in a timely fashion

and establishing relationships with retail and alternate direct sales partners, White Stagg plans to begin

distribution to independent retail store locations in 2015 and mass-market retailers in 2016.

In addition to online and brick-and-mortar retailing, it is anticipated that customers will also be able to

purchase the companys products through a network of trusted partners such as local fire and emergency

management departments, direct sales representatives, and storm shelter manufacturers and installers.

Sales Forecast

DIRECT 2014 2015 2016 2017 2018 2019

GUARDIAN WX

2,000 28,000 32,000 36,000 44,000 62,000

HALO - - 5,000 24,000 40,000 68,000GUARDIAN+ - - - - 15,000 30,000

WHOLESALE

GUARDIAN WX

- 12,000 55,000 100,000 180,000 260,000

HALO - - 15,000 46,000 100,000 280,000

GUARDIAN+ - - - - 30,000 85,000

TOTAL 2,000 40,000 107,000 206,000 409,000 785,000

25

operational plan

Made in the USA

Utilize Partners to Achieve Scale

30+ Jobs Created by 2019

26

White Stagg, LLC plans to conduct operations from its headquarters in Charlotte, North Carolina. The

Companys facility is expected to provide critical functions including administration, sales and marketing,

engineering, product assembly and logistics.

PRODUCTION

The HALO and GUARDIAN products are slated to be assembled using components produced by US based

contract manufacturers and quality tested in house to ensure White Staggs products strive to meet its

customers expectations. The Company plans to install electronic components in the device enclosures

through its production team members at dedicated assembly workstations and tested for function prior to

being packaged by its logistics associates.

Quality control is enhanced by a dual approach to quality assurance. The leading strategy measures

include early dedication to process identification, documentation and improvement based on the core

aspects of Six Sigma and Lean Manufacturing methodologies prior to and during manufacturing. While

White Stagg will not be seeking ISO certification for its processes, the Company intends to engage process

consultants as needed to ensure its business processes meet or exceed those standards. Principles adhered

to during White Staggs drive for quality and efficiency in its manufacturing include:

Continuous Process Improvement Program Print Layout Material Flow

Quality at the Source Initiative Elimination of Non-value Added Waste

Yield/Quality Reporting Visual Workplace

White Stagg has also developed a continuous process improvement program based on the United States

Air Force IDEA Program that incents its team members to make improvements that positively impact the

Companys customers and the Company. The lagging strategy measures of quality control include stan-

dard and automated component inspection and testing prior to installation using dedicated test equip-

ment and final function test by White Staggs assemblers prior to packaging.

Another important aspect of White Staggs commitment to quality is the implementation of process con-

trols. These controls test for quality at all stages of the production lifecycle. These controls include:

Weekly quality review of defect data Internal and external process audits

Receiving inspections to ensure contract New Product Introduction (NPI) and Design for

manufactured components meet or Manufacturing (DFM) review processes

exceed specifications Manufacturing readiness reviews

White Stagg team members are scheduled to provide customer service and the appropriate contact should

be determined by customer need. Technical and installation support is intended to be provided initially by the

Companys engineering team and eventually by its technical support staff when inbound customer contact

warrants a dedicated resource.

Inventory control is planned to be maintained by the Wasp IC software that is designed to allow White

Stagg to monitor and track inventory as soon as it enters its warehouse to the time it is fulfilled and shipped,

prevent customer backorders due to product or components being out of stock, ensure audits are 100%

accurate and eliminate costly manual processes. Inventory data and reporting allows White Stagg to set

up minimum and maximum stock levels, helping ensure that desired inventory levels are on hand and in

the right place.

New product development is anticipated to be handled via collaboration with internal and contract-engi-

neering resources with a focus on consumer needs and market opportunities. White Staggs product philos-

ophy dictates that the company seeks out opportunities to improve the lives of its customers and identify

technology solutions that provide genuine benefit to its consumers.

White Stagg product development intend to utilize a Stage Gate model to measure and assess consumer

benefit and use a prescribed business casing format prior to consumption of engineering and prototyping

resources. This model is designed to prevent costly mistakes by engaging customers early in the development

process and allocating resources to only the most promising projects.

VI. OPERATIONAL PLAN

27

LOCATION

White Stagg, LLC has minimal location requirements, as its facility will primarily serve as an administrative

and light manufacturing center with no walk-in customer traffic. Space planning and strategy accounts

for the growth in the size of the team as well as the functional differences in its team members roles and

growing inventory needs.

Physical requirements of the space include an average of 200 square feet per employee including com-

mon areas with an 80/20 split of assembly area and administrative offices. In order to begin manufacturing

operations, the Company will require approximately 2,500 square feet of combined administrative and as-

sembly space. An additional 1,000 square feet of inventory storage space will be required for every 10,000

units produced annually in order to house components, consumables and completed product awaiting

shipment. Access to a loading dock will assist in inbound and outbound transportation transfers and easy

access to highways is preferred, but not required. Power and utility access are typical for business spaces

within its scope and include 200A power and broadband Internet connectivity.

Zoning requirements in the Charlotte/Mecklenburg County area require White Stagg to operate in a build-

ing within a zoning district designated as either Business (B-2, B-D, B-P) or Industrial (UI, I-1, I-2) as soon as

manufacturing activities commence.

We are currently headquartered in the historic Packard Place building in uptown Charlotte, but the Com-

pany is seeking a facility that meets its near term needs and offers the flexibility in space and terms that will

allow White Stagg to grow to best meet its consumer demands. Estimated costs for a space that meets the

Companys criteria is between $6.80-$12.00 per square foot per year, triple net (NNN). Utility expenses for a

space of comparable size and use are estimated at $1,183 per month or $14,196 annually. Up-fit expense,

if required, will be negotiated as a term of the lease.

Business hours will be 8:00 AM to 5:00 PM for administrative staff and 7:00 AM to 4:00 PM for manufacturing

staff. This allows its production teams to complete daily operations prior to logistics service delivery cutoff

times. During peak production periods, the Company expects to add additional shifts of assembly and

logistics staff in order to maintain pace with customer demand.

LEGAL ENVIRONMENT

White Stagg operations will be conducted within the regulations established by the Occupational Safety

& Health Administration (OSHA) and follow all licensing and permitting requirements established by local,

state and federal authorities. Particular attention to safe handling will be paid to tasks requiring interaction

with potentially hazardous components such as Americium (Am-241) found in smoke detectors.

Insurance requirements include standard liability coverage for business operations, product liability cov-

erage and umbrella policy for claims exceeding the Companys standard policies. A key requirement in

maintaining reasonable policy premiums will be White Staggs relationships with component manufacturers.

Working exclusively with electronics and plastics manufacturers that will name White Stagg, LLC as an

additional insured could provide the underwriters with the confidence to maintain the Companys policy.

Intellectual property is one of White Staggs most valuable assets, and the continued development and

acquisition of related patents and trademarks is a primary goal of its growth strategy. The Company is

currently the exclusive licensee of US Patent 6121885, a Combination smoke detector and severe weather

warning device, under a two-year agreement with Fire Storm Technologies, LLC of Melbourne, FL. The

terms of the exclusive licensing agreement also provides means for outright purchase of the patent in

exchange for cash and royalties.

White Stagg is also the sole owner of US Provisional Patent Application 61920255 and was granted Patent

Pending status on December 23, 2013 for its Modular Alert System. The utility application for its Modular

Alert System, also known as Guardian, is scheduled for submission in the third quarter of 2014. In addition to

the utility and provisional patent assets, the Company submitted design and trademark applications for its

HALO product and the distinctive brand features to be submitted to the USPTO in the first quarter of 2014.

PERSONNEL

The personnel plan for White Stagg includes a hiring plan for key engineering, manufacturing and support

employees in the first year and gradual additions based on production benchmarks.

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Projected employee roles in the first 2 years (in order of acquisition) include Engineers, Web Developer,

Assemblers, Shipping Associates, Marketing Manager, Customer Service, and Account Executives. Total

employee count by 2019 is projected at 33 employees assuming production benchmarks are met.

White Stagg intends to acquire the right employees by engaging various channels depending on the

desired employee attributes. In addition to evaluating acqui-hires and partnerships that could reduce

capital outlay, the Company is leveraging existing relationships with dozens of national staffing and recruit-

ing firms in its searches for proven professionals in management and oversight positions. To gain access to

new workforce talent, White Stagg also plans to continue working with local colleges and universities to

create professional development opportunities for students and forge relationships with top performers prior

to and after graduation.

Contract employees are also an important piece of the Companys personnel resource plan, as they

provide nearly instant impact to its production capability. This level of versatility supports the Companys

efforts to remain agile and respond to its customer needs better without incurring the expense of a full time

employee during peak periods.

INVENTORY

Inventory management will rely heavily on direct and open communication with the Companys component

suppliers. By accurately anticipating raw material and manufactured component lead times, White Stagg

should be able to maintain a reasonable inventory of materials, parts and finished products. This forecasting

will allow the Company to make its products available to its customers when and where they need them.

Accurate initial inventory levels are scheduled to be identified in the third quarter of 2014, after a test

launch and further research of consumer adoption and channel development to ensure the correct level

of finished product is available to customers starting in February 2015. Target days of inventory on hand

upon launch is anticipated to be 60 days to accommodate the expected 40-day lead time on a primary

raw component, at an estimated expense of approximately $80,000 for 2015.

Given the seasonal nature of the weather radio marketplace, a seasonal build up is anticipated from

February through May each calendar year. Offering the HALO smoke alarm without the weather radio

components provides a significant leveling of seasonal spikes, given that seasonal consumer interest levels

between smoke alarms and weather radios are essentially opposite each other. The most significant benefit

to this leveling comes in White Staggs ability to stock shared components most of the year and adjust

weather radio component levels based on projected seasonal sales.

SUPPLIERS

Key suppliers of device components and packaging include:

PRIMARY

White Stagg is not currently receiving inventory from its key suppliers as the Company continues to refine the

specifications of its designs, but based on previous engagements and relationships with its vendors the Compa-

ny is confident in their ability to deliver quality products on schedule with the proposed timeline. Vendor credit

and delivery policies are being developed and terms are expected to be solidified by third quarter 2014.

CREDIT POLICIES

White Stagg is not currently offering credit terms to its customers, as the Company intends to sell its products

directly through online channels initally. As retailer and wholesaler relationships are developed, credit terms

and account receivable management will play an important part of negotiations and will be addressed

on a case-by-case basis.

Accounts payable will take advantage of negotiated terms with White Staggs vendors in exchange for

contract duration, with a preference to vendors offering 60-day net terms.

Venture Plastics, Inc QEMS, Inc Stephen Gould CorporationInjection Molded Plastic Printed Circuit Board (PCB) Custom Packaging and Enclosures and Components and Electronic Components Distribution Services4000 Warren Ravenna Road 1310 Airport Road 13315 Carowinds Blvd Newton Falls, OH 44444 Monroe, NC 28110 Charlotte, NC 28273

29

management and organization

Demonstrated Executive Leadership

Start Up Experience

Knowledgeable and Diverse Board, Mentors and Support Team

30

White Stagg, LLC is a member-managed entity

currently operated exclusively by its two founders.

Ben Stagg, Co-Founder and Chief Executive Officer,

manages administration and operations while Chad

White, Co-Founder and Chief Sales Officer, oversees

sales and distribution.

Ben and Chad started their first business together,

Infiniflex, a digital marketing services company in

Canton, Ohio in 2003. Despite a significant upfront

hardware investment, they were able to recover all

startup costs and achieve break even in less than

30 days. Eventually, Chad and Ben sold their stake

in the company to a third partner and moved on

to other startup projects. Chad and Ben have con-

tinued working together on various concepts and

ideas for over 10 years, complimenting each oth-

ers passion, expertise and perspectives to develop

consumer products with speed and detail to meet

customer needs.

Building on his

leadership expe-

rience gained in

a decade as a US

Army Ranger, Chad

White has forged

an amazing career

in sales leadership

for organizations

large and small by

focusing on rela-

tionships rather than

transactions. His experience as VP of Sales for global

medical device technology groups has produced

a distinguished track record of market discovery,

customer focused product development, cost con-

trol, distributor training and management, brand

advocacy, international business development and

government regulatory compliance. He has also

been instrumental in his last companys most recent

private capital infusion, raising over 14M.

Since getting his start as a USAF Nuclear Missile Tech-

nician, Ben Stagg has been involved in cutting edge

technology his entire career. His previous positions

include Technology Solutions Manager, Chief Tech-

nology Officer, and most recently Chief Executive

Officer of a marketing communication technology

company right here in Charlotte. He founded his first

startup with Chad 10 years ago, a digital signage

company with a focus on hyper-local advertising.

Since then, Ben has been involved at an executive

and operational lev-

el in several tech-

nology ventures in

the audio, video

and web commu-

nication verticals,

but none of them

have captured his

passion and enthu-

siasm the way this

product has.

While alignment

between the founders experience and this venture

is certainly not an obvious one, the skills and exper-

tise that made Chad and Ben successful in medical

devices and communications fields are the same

hallmark attributes that will facilitate their success in

this field. Although characterized as consumer elec-

tronic devices, the White Stagg solutions share more