Financial Services Company

BUSINESS PLAN     DIAMOND STRATEGIC SERVICES

5059 Vine Street
New York, New York 10001

Diamond secured $1.5 million to fund one of the first incubators in the United States. This is a perfect example of how a company with highly experienced executives can successfully raise needed capital using a short but "to the point" business plan without financials.

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• diamond principals
• executive summary

EXECUTIVE SUMMARY

Diamond Strategic Services LLC, a New York limited liability corporation, and its affiliated companies, provides financial and strategic advisory services to foreign and domestic clients. Diamond's objective is to enhance the value and accelerate the growth of its clientele through the establishment of long-term strategic relationships.

Diamond's foreign client services include the evaluation of venture capital and special situation investments on their behalf, and the identification of new business ventures and entrepreneurial opportunities with innovative U.S. businesses. The company's foreign clients are often large enterprises seeking to participate in venture capital and private equity investments, establish domestic operations or distribution channels, obtain licenses to new innovative technologies, explore strategic alliances in the United States for its products or services, access the U.S. capital markets or—as is often the case—a combination of all of the above.

The services to its domestic clients, which include emerging growth companies focused on the communications and high technology industries, include evaluating and structuring business relationships, financing strategies, formulating and preparing business and financial plan documents, plus creating operating strategies and corporate goals.

In connection with these services, Diamond assists its clients in obtaining capital through equity and debt financing from third parties (including public and private securities offerings) and in assembling the management team when necessary. The company evaluates alternative methods of obtaining appropriate types of financing, with an emphasis on equity offerings led by a strategic partner in Europe. Recommendations are made on the type of financing best suited to a client's needs, the potential sources of such financing and an analysis of how such financing could be obtained. Diamond may also arrange for sources of financing.

Additionally, the company assists clients by introducing them to potential suppliers, customers, joint venture partners, and merger or acquisition candidates. Diamond also helps clients establish relationships with law and accounting firms, commercial and investment bankers, management consultants, executive recruiters, and other professionals.

Diamond has successfully completed assignments for numerous world-famous foreign corporations doing business in high-tech, telecommunications, and distribution industries. Recently the company has been retained to provide advice to a large foreign conglomerate with respect to the technology licensing and product distribution of a new medical device in the United States.

The company seeks to capitalize upon Diamond's access to larger and unique business opportunities, as well as upon Diamond's ability to take swift advantage of such opportunities. This access can be attributed not only to Diamond's extensive network of relationships, but also to its principals' proven ability to complete transactions successfully and manage companies efficiently.

Diamond's management possesses a unique combination of foreign cultural sensitivity and understanding of international and U.S. business practices. The company believes that this sensitivity and the experience and skills of its management team are directly applicable to the development of venture capital and other business opportunities with strategic partners in foreign countries. Management believes that there is substantial opportunity to provide foreign partners with a trustworthy and direct approach to potential domestic technology partners through Diamond's strategic alliances with key legal and accounting firms, investment and commercial banks, and other professionals. At the same time, Diamond provides its domestic clients with access to the highly desirable international marketplace for a variety of interests, including technology licensing, investment, manufacturing, distribution, or other strategic considerations.

The company believes that many U.S. technology companies and foreign conglomerates have a strong mutual interest and share a common objective of seeking global opportunities and markets. The economic opportunity provided by this common objective is highlighted by government mandates and incentives now offered by certain foreign countries in connection with their own technology development policies. Utilizing its principals' financing acumen and their extensive knowledge of the communications industry and others, the company will satisfy the growing demand of foreign technology companies and conglomerates seeking to diversify into these areas through joint ventures, technology transfers, and other strategic alliances. The company believes that it is well positioned to satisfy this demand by facilitating business relationships between these interested parties.

The company believes its primary competitive advantage is that the Diamond principals have developed long-term personal and professional relationships in the foreign marketplace (the "Region"). Majority ownership of Diamond is held by multicultural professionals with extensive experience and long-term relationships in the Region and throughout the United States. These trustworthy, reliable relationships are an important asset to the company. They enable Diamond to broaden the business opportunities available to its clients and assess more quickly the prospects for the appropriate strategic partner on a cost-effective basis.

Diamond's management believes that it also offers the following benefits:

• Well Timed Investment Opportunity – Diamond contends that many attractive opportunities exist for communications and high technology businesses for those with the financial strength and experience to pursue them. Utilizing Diamond's well-established relationships and contacts in the Region, the company will seek to capitalize on these opportunities by establishing a portfolio of investments in companies that will benefit from Diamond's legal, technical, financial, and management expertise and services (the "Incubator Services").

To facilitate and focus the development of a portfolio company's technologies, Diamond will provide Incubator Services to emerging growth companies. By providing such services in return for meaningful equity positions in these companies (in addition to cash compensation), management believes it can ensure its investors' interests will be effectively monitored and managed. The company's objective is to work closely with 12 to 18 companies in which it invests, and to develop these investments with a planned exit strategy involving a public offering.

• Experienced Entrepreneurial Management – Team Diamond believes that it is one of the few multicultural majority owned investment firms with both an operating and financial focus. Diamond's officers and directors offer a sophisticated and diversified professional expertise involving engineering, law, finance, and international business relations.

Diamond's four principals have successful experiences in managing the growth of entrepreneurial enterprises from the start-up phase to market leadership positions. With this vast experience developed at publicly and privately held companies, Diamond's management will use its proven knowledge of emerging growth markets and capitalize on this expertise, offering its investors access to opportunities that might otherwise be unavailable or not pursued due to a lack of experience.

• Strategic Focus – Diamond intends to focus on companies in industries in which its principals have significant experience. Diamond will organize and develop strategic alliances and other business opportunities between foreign companies and U.S. emerging growth "middle market" companies in the communications, multimedia, transportation and logistics, and other related industries.

The rapid development of the Internet and communications technologies has led to the formation of a large number of alliances in recent years. The Region represents one of the largest markets for these technologies, primarily developed by domestic companies. The company believes that many foreign companies would like not just to learn the technology, but also to "localize" the technology by continuing its growth and development there. This provides the strategic foreign investor with both a significant economic opportunity and a discernible market advantage to be the dominant exploiter of the technology in the Region. Diamond's role will be to work with both entities to make their strategic alliance or other business relationship successful.

• Bridging Business Cultures – Diamond's principals offer a unique combination of cultural sensitivity and understanding of international and U.S. business practices and policies. In many countries, sensitivity to cultural factors and local business customs is as important as (and sometimes more important than) having the right business deal. Understanding the nuances of conducting business in the proper cultural contexts can mean the difference between a successful alliance and one that is unproductive. Many emerging growth companies have not developed the management resources, experience, and comprehension of local business practices and customs that are necessary to succeed in these diverse settings.

Diamond's experience provides its clientele the expertise in conducting business in the international marketplace and the working knowledge of each country's infrastructure. Domestic companies will seek local partners that Diamond's principals will identify based on their personal introductions, the local partner's reputation and its strong relationships with the local or national government.

At the same time, foreign companies have enjoyed rapid growth in their local markets and have accumulated investment capital. Relatively unknown to the U.S. business community, these companies are now seeking to deploy their newly acquired wealth, to diversify their investments, and to broaden their access to productive business opportunities around the world. Many of these opportunities were created by events such as the convergence of media, telecommunications, and technology companies; favorable regulatory changes; and beneficial U.S. financial markets that have provided much of the needed capital. Diamond provides the bridge to such opportunities.

• Access and Evaluation of Business Opportunities – Through Diamond's principals, its board of directors, and members of its Advisory Board, Diamond has established a strong foundation of experience in the financial, business, and technical communities. Through its strategic partners, Diamond will avail itself of a steady flow of new business opportunities, as well as the technical expertise necessary to evaluate potential transactions and close those best suited to fit the parties' strategic objectives. Where appropriate, business opportunities will be provided to investors before making them available to third parties. These may take the form of senior debt, subordinated debt, or equity securities. Additionally, Diamond will promote cooperation among its investors to build synergistically on their strengths.

Management of the company has not conducted market research which confirms that a market exists for the expanded services the company proposes to offer. However, Diamond's principals believe that, based on their collective professional experiences, numerous domestic and promising companies are in need of management and financial support from outside parties and have no reliable entry into the international marketplace.

Diamond's management believes that foreign companies which had previously focused on basic industries must now address the global opportunities for businesses beyond this focus. For example, the wide acceptance of the Internet and the accelerated growth of the communications and high technology industries has caused a tremendous demand for foreign companies seeking to gain access to these opportunities. This phenomenon and the rising interest in reducing the exposure of risk from currency devaluation or other adverse economic circumstances through innovative outside investments by foreign entities offers Diamond and its investors a timely and exceptional financial opportunity. The company believes that it will earn its revenues from recurring advisory fees, placement fees in connection with the sale of a client's securities and performance fees in closing mergers and acquisitions. The company also expects to receive substantial revenues from the liquidation of its equity holdings in their portfolio investments over time.

The company intends to raise approximately $1.5 million to fund initial working capital needs from a few select sophisticated investors and to commence full-scale operations by the end of the fourth quarter of 1997.

DIAMOND PRINCIPALS

William B. Winters , the founder of Diamond, has been Chairman of the Board of Directors and Chief Executive Officer since the company's formation in 1985. Mr. Winters has more than 20 years of experience advising emerging growth companies. He possesses a thorough knowledge of the communications, consumer electronics, information technologies, multimedia, and Internet industries and has a comprehensive understanding of the legal and regulatory framework in which these industries operate. Mr. Winters has advised foreign and domestic clients on the development of strategic alliances and joint ventures, public and private equity and debt offerings, initial public offerings, mergers, acquisitions, and other strategic planning matters.

His international reputation in starting new ventures and implementing corporate strategic initiatives recently earned him the assignment of advising one of the world's premiere aerospace companies in this area. He has advised a diverse group of European companies regarding their diversification into new business ventures with innovative U.S. businesses, as well as evaluating venture capital equity and debt investments on their behalf.

Prior to founding Diamond, Mr. Winters was President of the international division of a major telecommunications firm marketing innovative wireless products. In this position he was responsible for establishing its strategic alliance and joint technical development and license agreement with well-known high-tech foreign companies and governmental authorities in that region. As a senior executive officer in charge of law, finance, and administration, Mr. Winters also was responsible for structuring the strategic alliances and investments by the company's communication and technology partners, and for raising equity capital in excess of $100 million from foreign and domestic institutional investors.

Upon graduation from law school, Mr. Winters worked in Philadelphia with one of that city's most prestigious law firms. He served as counsel to multinational investment banking firms and prominent venture capital funds funding high technology, health care, communications, entertainment, and broadcasting companies at various stages of maturation and growth. While at the firm, Mr. Winters closed transactions involving emerging growth companies in connection with initial public and secondary offerings valued at more than $200 million and multi-million dollar acquisitions/divestitures of both public and private companies.

Mr. Winters obtained an honors degree in English Literature from Yale, a degree from NYU, and an M.B.A. from Harvard. He is a member of the New York, Ohio, and California Bar Associations.

Timothy L. Moster is the founder of Moster Associates, a private investment advisory firm, and has served as Diamond's President since May 1996. Prior to this, and for more than five years, Mr. Moster served in several senior executive officer positions with one of the world's largest providers of global distribution services with sales of approximately $250 million. In his last position, Mr. Moster served as this firm's Senior Vice President, Finance and was the Chief Financial Officer. Mr. Moster has substantial experience in raising capital through the sale of debt and equity securities, as well as operational responsibility for multinational offices where he oversaw the design and implementation of complex risk management and information systems.

Mr. Moster holds a B.S. in finance and is a graduate of the M.B.A. program at the University of Notre Dame.

Nicholas Brown joined the company as Senior Vice President, Western European Business Development in July 1997. Mr. Brown advises senior management of European conglomerates who are interested in transportation and logistics, high technology, and other business opportunities in the U.S. and Europe. He is also the founder, President and Chief Executive Officer of an international trading company and the exclusive importer and distributor in North America of a leading foreign clothing line. He also serves on the board of a start-up high tech company based in San Diego, California. Prior to starting his own company in 1990, Mr. Brown held executive positions with one of the largest distribution companies in the East Coast for years. During that time he supervised all the marketing, sales and operations of its U.S. subsidiary, which had annual sales of approximately $300 million.

Mr. Brown is an honors graduate of the University of California, and holds dual degrees in business and philosophy.

Robert C. Marquardt is the founder and chief executive of an accounting and tax consulting firm with a staff of over 25 professionals. The firm's clients include international trade and emerging growth technology companies as well as U.S. subsidiaries of European-based companies involved in a diverse group of industries. After beginning his professional career at one of the "Big 6" accounting firms, Mr. Marquardt founded his own firm over 15 years ago to focus on the needs of entrepreneurial clients and federal government agencies. Mr. Marquardt presently serves on governmental technological advisory committees for two foreign nations.

Mr. Marquardt holds a B.S. in accounting from Xavier University and an M.B.A. from Harvard University. He is a certified public accountant.