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ePower Systems
Executive Summary

The Company
ePower is an electronic bill presentment and payment (EBPP) solution provider, offering companies the ability to present bills and receive payment electronically. ePower's mission is to become the leading provider of EBPP services for all business-to-consumer transactions within the utility industry.

ePower's CustomerDirect solution enables utility firms ("customers") to provide interactive financial statements to their customers ("end-users") via email and on the Internet at www.payabill.com.1 ePower's electronically presented bill will retain the look of the biller's paper bill but adds interactive components, including the ability to initiate immediate payment from the customer's desktop. CustomerDirect integrates with the biller's existing systems, and allows the biller to retain control over proprietary customer databases. Essentially, the biller outsources the technical components of EBPP, while retaining control over data and content.

The Opportunity
In 1998, 15 billion recurring transactions were generated between businesses and their household customers. This market included utility, telecom, cable, and financial service businesses. On average, these businesses spent $1.50 - $2.00 per transaction to send and process a traditional paper bill. These direct costs include paper, printing, processing and postage costs. Businesses incur additional indirect costs including financing accounts receivables, and servicing customer inquiries about their bills. Savings from implementing ePower's CustomerDirect solution can reach $1.90 per transaction when all aspects of customer service, financing and billing costs are included. Therefore, the potential US market for EBPP is $30 billion each year. The utility industry constitutes about 25% of this market.

Marketing Strategy
The focus of ePower's service is on companies in the utility industry. This market is particularly attractive due to the large number of firms and the fact that the industry generates bills for essential services to over 100 million households on a recurring basis. From a utility biller's perspective, CustomerDirect provides significant costs savings and the ability to enhance its interaction and relationship with its customers. These dual benefits of costs savings and targeted marketing gives ePower clients a distinct advantage in the deregulated and more competitive utility industry. From a consumer's perspective, CustomerDirect provides cost savings (postage and check writing costs) and the convenience of reviewing and paying - "nuisance" - utility bills quickly.

Pilot Program and Sales Strategy
ePower intends to become the leading provider of bill presentment and payment solutions to this industry. ePower is currently targeting specific utility companies for pilot program participants and first adopters of the CustomerDirect service. Firms in the pilot program are chosen based on several criteria that enable ePower and the biller to benefit. The first firm targeted for the pilot program is Wellesley Power & Light, Wellesley, MA. Success of these pilot programs will be used as a springboard into the wider national market. The market segment targeted for initial sales, after the pilot program, are large and medium sized utilities in regions of the country with the highest Internet usage.

Revenues and Profitability
The company's financial projections are based on conservative assumptions of Internet usage, growth of financial transactions on the Internet, and number of billers using CustomerDirect. Based on these assumptions, ePower will achieve revenues of S26.2 million and net income of $10.9 million in 2003.

Startup Costs and Offering
ePower is seeking a strategic partner to provide $500,000 in capital, to finance development and deployment of the CustomerDirect prototype. After the initial financing stage, the majority of costs will revolve around the company's sales efforts and technical support. ePower will require an additional $3.0 million to fund marketing, client acquisition, and technical support.

Based on the current assumptions, after the company signs on 10 billers, it will achieve positive operating cash flows, which are estimated to occur in the first quarter of 2001. Investors will achieve a projected annual IRR of 75% on invested capital.

1 www.payabill.com is registered by ePower Systems.


ePower Systems
Table of ContentsAppendices
1. Executive Summary
2. The Industry
3. Company Description
4. ePower's Services
5. Market Research
6. Marketing Strategies
7. Management
8. Financial Plan
Technology
Monthly Financials
Quarterly Financials
Annual Financials
All information herein is confidential and belongs to ePower Systems