The worst headache and apprehension of parents and society is caused by excessive virtualization of games and all the occupations of today’s kids and teens. That leads to loss of reality… We at Toytemic believe games should be brought back from behind the screen into here: the real world of tangible things. Toytemic’s project “Strategy on Carpet” http://www.youtube.com/watch?v=aPwQIjAsTPI has won first prize at Skolkovo Innovation Award competition supported by Cisco I-PRIZE. “Strategy on Carpet” technology transfers computer game fantasy into reality. Real toys are being turned into game units, and played and controlled in the same manner as units in computer games.

1. NextGen Toys for NextGen Kids
Slide 1. Title:
STRATEGY-ON-CARPET
STRATEGY-ON-
CARPET…
extending video-
games into reality
The winner of «Skolkovo
Innovation Award»
supported by
CISCO I-PRIZE
(May, 2011)
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

2. NextGen Toys for NextGen Kids
Slide 2. Summary:
PROJECT SUMMARY
Technological platform designed to support wireless ad hoc networks
Technology of mobile and self-propelled devices in personal area (up to 10 m radius).
Electronic sets for game systems of toys, interacting with each other, able
Product for adaptive behavior, able to form teams and act in concert
Global sales of interactive electronics-containing toys > 185 M pcs (2010)
Market Forecast for 2015 > 310 M pcs ($9,4 per year)
Global Toy, Game and Robotic companies
Client End User – kids (2-12) together with their parents
Business В2В: licensing, reference design, OEM supplies, customization.
Model $ 1,5 – 3 per copy. Revenue on 5th year - $60M
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

3. NextGen Toys for NextGen Kids
Slide 3. Problem:
DEREALIZATION
• excessive virtualization of games and
entertainments of kids and teenagers
• colorful violence
• loss of reality
• inadequate behaviors
Games should be brought from
behind the screen back into the
tangible world of real toys
HAS THE TIME COME?
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

4. NextGen Toys for NextGen Kids
Slide 4. Solution:
ESTABLISH THE MISSING LINK
Electro-mechanics and electronics used in
modern interactive toys are perfect enough for
turning these toys into game units.
THE MISSING LINK IS POSITIONING SYSTEM
Toytemic positioning system:
• units (toys) form ad hoc networks
• mobile and self-propelled nodes
• every unit positions any other unit
accurate within 2-3cm/30degrees
No beacons, no external detectors
Area
At first stage - up to 1,5m radius
At second stage - up to 10 m radius
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

5. NextGen Toys for NextGen Kids
Slide 4. Technology:
TOYTEMIC PLATFORM
Breakthrough technology under development
for controlling an arbitrary number of self-propelled units
with a single pointer-like remote controller
System-on-Crystal
Compact built-in
navigation module
$2 in mass
production
Toy units may be grouped and act in concert as
a unitary team
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

6. NextGen Toys for NextGen Kids
Slide 6. Business-model:
LICENSING & CUSTOMIZATION
End Users – kids (2-12) and their parents
B2B Customers – Large and medium companies in:
- Toys new tech platform for interactive toys
- Video-Games new game applications
- Service Robotics advanced navigation
- Entertainment new features for public entertainment
Invent => Prototype => Patent => License => Customize => Support
Royalty Rate 10% from Wholesale price.
$1,5 – 3,0 per copy
50% margin for customized electronics sets supply
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

7. NextGen Toys for NextGen Kids
Slide 7. Market:
MARKET ESTIMATION, SALES FORECAST
Global Toys&Games Market >$125B CAGR 4%. 15% 9%
10%
In the world - 2B children 5%
In “Golden B” - 200M children: $250-330/child/year
China growth - CAGR 40% 9%
12%
MOST GROWING SECTORS 6% 13%
ITP (infant, toddler, preschooler) 15 - 20% a year 8% 3% Target
10%
HiTech toys 10 – 20% a year segments
Action Figures & Action Role Play Arts & Crafts
Toy Robotic Kits 50 times in 6 years Games/Puzzles Infant/Preschool Toys
Youth Electronics (incl. Robotic Kits) Vehicles (incl. RC Toys)
Other Toys (incl. Electronic Edutainment) Plush
Dolls Building Sets
Outdoor & Sports Toys
UNITS SOLD PER YEAR (forecast)
RC Toys/vehicles (2011) 100M
Electronic Edutainment (2012) 140M Market in 2015 г. >300M units
Interactive Dolls & Plush (2011) >50M
We want to take 10% or more
Toy Robotic Kits (2009 – 2014) ~35M
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

8. NextGen Toys for NextGen Kids
Слайд 8. Competition:
COMPETITIVE LANDSCAPE
Companies We Can Do, They Can’t We Can’t Do, They Can
Freescale and other Develop integrated toy- Reuse and/or quickly modify
microelectronics suppliers for specific technologies their own old techs for toy
toy industry applications
Leapfrog, WowWee, Make a real breakthrough in Sell toy products
WowStaff and other interactive toy robotics Provide wide distribution
toys’ companies
Mattel, Hasbro, Nintendo and Create NextGen toys Buy NextGen technologies/
other toy giants companies
LG, Samsung and other home Make perfect robot Make home robots and
robotic producers navigation and mapping bring them to the market.
Time Domain and other UWB- Create strategy-on-the Sue us for real or fantastic
tech leaders carpet and other UWB-toy infringing on their IP.
applications Pay litigation expenses
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

9. NextGen Toys for NextGen Kids
Slide 9. Team:
TEAM’S COMPETENCE
Management Team Worked together in a number of
projects – developing and launching
products in:
Evgeny Smetanin, CEO
Producer and developer in digital • radio electronics
edutainment, computer games, • bio-implants
interactive toys and gadgets. • computer games
Licensor to global game publisher.
• interactive toys
Alexey Chechendaev, CTO
engineer, designer, director of
projects in microelectronics and
• Interdisciplinary engineering
RF engineering; sensor networks,
interactive educational products team (robotics, adaptive
behavior, chip-design)
Andrey Gabelko, COO/Biz-dev
Ph.D. in Physics, 20-year as • Board of advisors with
business driver in software strongest track record in UWB,
designing, UWB, Mesh networks, robotics, toys (including
telecom and laser; launched 3 Western experts)
start-ups (incl. abroad)
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

10. NextGen Toys for NextGen Kids
Slide 10. Key Metrics:
5 YEAR FORECAST
Expected indices till the end of 2015 Road Map
Quantities of products Prototypes for niche pilots - Q2 / 2012
used Toytemic technology >30M units Niche pilots on the market - Q4 / 2012
Income per unit sold $1,5-3 Integrated platform prototype - Q2 / 2013
Number of patents >20 SoC for mass production - Q4 / 2013
Mass global sales - Q4 / 2014
$K
Re v e nue fore cast
$70 000
$61 440K
$60 000
5th year revenue - $60M
$50 000
Investment required - $ 1M
$40 000
(1st stage)
$25 440K
$30 000
- $ 5M
$20 000 (2nd stage)
$10 000 $4 620K Break-even point - Q11
$- $300K
$- IRR (Internal Rate of Return) - 104 %
FY1 FY2 FY3 FY4 FY5
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

11. NextGen Toys for NextGen Kids
Slide 11. Current Status:
PLACE D’ARMES PROTOTYPES
TOYTEMIC in 2011
March 2011 - first place winner of “Innovative Toy”
Immediate goal is
contest at “Toy Russia’2011 Expo
May 2011 - first place winner at “Skolkovo to occupy a place d’armes
Innovation Award” (Cisco I-PRIZE) on the target market
July 2011 - prototype demo and negotiations in
two of Top-5 global Toy companies with niche products
5 patent applications through PCT
Current Status: FUNCTIONAL PROTOTYPES
Interface Puppet Bunnies’ Flock Brain Train
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic

12. NextGen Toys for NextGen Kids
Slide 12. Reminiscence:
NEW LIFE OF THE OLD GOOD GAME
The most famous science fiction novelist Herbert Wells playing toy soldiers according to
the rules he described in his book. That was the first modern table top strategy game.
TOYTEMIC Inventions, LLC www.toytemic.com facebook.com/Toytemic