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SKS ConsultingInterim Executives, Capital Stabilization, and Turnaround Management

SKS ConsultingServices List

•Turnaround Management•Divestitures•Interim Executives•Board of Directors Assignments•Capital Stabilization Initiatives•Financial Analysis•Management Consulting•Onsite Business Assessment•Strategic Planning•Management & Board Review•FTE & Expense Reduction•Public Company CFO services

Our Business Philosophy

• SKS Consulting focuses on aligning our interests with shareholders and the Board of Directors to maximize value.

• Each client’s circumstances are unique. We ‘custom design’ the most cost effective utilization of our in house skill sets to deliver optimal results.

• Our compensation structure is designed to:• Offer a competitive daily fee structure• Provide long term rewards by equity participation in the success of

the enterprise based upon the work that we perform.

• We do not only “write reports”. We roll up our sleeves and work side by side with our clients management teams. We prefer to share the risk and reward.

SKS Interim Executives

SKS offers our consultants’ expertise for short-term assignments to help manage organizations on a temporary basis. Our consultants are qualified to fill all C level and senior management positions to provide flexibility and custom fitour clients’ strategic plans.

Typical Assignments:•Board Director•CEO•President•COO•CFO•General Manager•Chief Restructuring Officer•Chief Marketing /Sales Officer•Controller

SKS’s Business Cycle

Underperformance

Viability and investment decision

Corporate renewal/ Turnaround

Growth & ExitRelative Value

Relative Time Horizon

Strategic & Operational Advisory Services

Business AssessmentCorporate Renewal

ServicesExit/Asset Recovery Services

Provide performing companies with guidance so as to increase financial and operational efficiency

Comprehensive assessment of a business to justify new/further investments. Focus on risk/return and exit strategy (mode & timing)

Lead the implementation of turnaround efforts :•Crisis & interim mgmt•Operational & financial restructuring•Strategic planning & growth

Facilitate successful exit as a result of successful turnaround or quick sale of assets if decision not to invest further

SKS’s typical entry points

Sale & Asset Recovery

Performing

The Turnaround Process

Strategic PlanningSituation Assessment Execute Strategic PlanRe-organization

Key Activities:• Financial Analysis• Conduct executive

mgmt & board interviews

• Report findings

Deliverables:• Complete

Assessment Report• “This is what I would

do if it was my company…”

Timeframe:• 2-4 days

Key Activities:• Develop strategic

plan• Develop execution

plan• Structure Latent

Intellectual Capital Assets

Deliverables:• MYRNA session

and outputs

Timeframe:• 2 days Initial

session• 1 day quarterly

follow-ups

Key Activities:• Execute focused

initiatives outlined in strategic plan (growth/sale/merger etc.)

Deliverables:• Acting C Level• Transactions –

buy/sell• Capital stabilization• Hire full-time mgmt

team• IP Portfolio / Strategy

Timeframe:• 12-24 months

Key Activities:• Execute

reorganization activities focused on stopping the burn rate and stabilizing the company:FTE and expense

reductions

Deliverables:• Successful

organizational restructuring

Timeframe:• 30 days

The Assessment Product

SKS offers a standalone assessment product to provide our clients an accurate understanding of an organization’s current operational and financial state by performing a thorough due diligence. Upon completion of our review, we provide our clients with an extensive analysis outlining the companies strategic position. Our assessment will provide a bottom line recommendation that helps our clients make better informed decisions. In all cases, we offer our professional opinion regarding the viability for future investment, whether or not we can help facilitate a re-organization, or if we can assist in executing a controlled exit strategy.

• Two week process (4 days on site)• Interview of board members, senior management, & operational management• Thorough review of financial statements, operational processes, sales strategy, business

plan assessment, and capital spending review• Examination of business practices and cultural conditions

Assessment – Key Work Flows

Executive InterviewsFinancial Statement

AnalysisBusiness Plan Assessment Develop Recommendations

• Private, individual interviews with leadership team and board members and other key executives

• ABC analysis – best and worst performers; are individuals in the right positions?

• Organizational structure analysis - gaps and redundancies

• Performance and compensation structure

• Operating structure – burn rate

• Key financial metrics• Capital structure• Balance sheet analysis

• Sizing the market and competitive landscape

• Key revenue and cost assumptions

• SG&A assumptions• R&D assumptions• Business development

initiatives• Valuation assumptions –

comparable deals, DCF analysis

• SWOT analysis to include:• Organizational restructuring• Recommended operational

and financial restructuring initiatives

• Sales & marketing recommendations

• Valuation Scenarios based on comparables and DCF analysis

• Investment recommendation

Objective: obtain key executives’ thoughts on “what immediate changes they would make if it were their company”

Objective: Understand current financial situation and identify opportunities for immediate improvements

Objective: Review viability of business plans in the context of the market and competitive landscape. Develop valuation estimates of the investment opportunity

Objective: Develop robust recommendations on areas for improvement and provide assessment and our recommendations

MYRNA - Strategic Planning• SKS Consulting facilitates on site strategic planning seminars for its clients through the

efforts of MYRNA Associates, Inc.

• We enlist the expertise of John Myrna and his team of professional strategic planning

experts to develop the overall planning process to drive all functions in the client company towards a cohesive, measurable, and accountable action plan.

• Success flows from the executive team's consensus and commitment to achieving a small number of goals through specific action plans. Myrna Associates' Total Quality Planning (TQP) process facilitates this happening. Myrna Associates can take total responsibility for pre-planning, meeting facilitation and the transcribing and printing of a company's plan. After completion of the intensive two-day meeting, managers will receive a final comprehensive plan for moving forward.

• The deliverable from this session is a clear understanding of what each team member must accomplish in the next 30-60-90 days and how performance will be measured. Quarterly one day update meetings ensure we stay on target and allow for adjustments required by internal or external variants.

Board of Director Assignments

• SKS Consulting seeks to assist PIPE companies and Private Equity firms in managing their investments in an arms length fashion by assigning our consultants to the Board of Directors.

• Our consultants assist in managing firms from the Board of Directors level, while managing the interests of the investor so they can remain within SEC rules and regulations.

SKS’s Clients Include:

• NeoGenomics – Bio Medical

• Icoa - Telecom

• NeoMedia - Software

• Southern Metal Products – Metal Fab

• NS8 - Software

• SmarTire - Automotive

• Coroware – Robotics

• FutureMedia – E-Learning and Exhibitions & Events

• Falcon Natural Gas - Energy

• ATSI - Telecom

• Cellution – Telecom

• Isonics – Semiconductor & Security

• TelePlus World, Corp. - Telecom

• Mobil Pro Corp. – Telecom

• PBMAI – Advertising Agency

• Naples Women’s Center – Physician

Practice

• BridgeLabs / eTeleNext – Medical

Software

• Ultra Life – Vitamin Manufacturer and

Distributor

The NeoGenomics Case Study

• Approximately 500k in revenue

• Poor leadership at the top

• Management had unacceptable background for the genetics industry

• 1.5 million LOC due in 6 months

• Stock trading at $.10 per share

• Only 500 shares were trading a day

Critical Issues

Action Steps & ResultsAction Steps:1.Eliminated 8 out of 10 initial personnel2.Hired new President & management team3.Took interim positions as COO & CFO4.Restructured Board of Directors5.Raised $5 million through SEDA with investor6.Refinanced debt to eliminate call on LOC7.Started quarterly shareholder meetings8.Restructured balance sheet9.Bought out old investors at healthy profit10.Took seat on Board of Directors

Results:1.1st year growth – $500k to $2.5 million in rev.2.Total tenured growth – $500k to $20 million3.Stock price rose from $.10 to $2.10 per share4.Stock price currently $.75 per share5.Trading volume went from 500 to 125,000 per day6.Trading volume currently 25,000 shares per day7.Company is poised for strategic merger

The Futuremedia Case Study

Critical Issues Prior to SKS

Action Steps & ResultsAction Steps:1.Immediately eliminated CEO, and made 26 employees redundant to decrease burn rate2.Took interim positions as President, CEO & Board Member3.Initiated immediate 2 day strategic planning session4.Separated business into two divisions, requiring them to stand on their own merits5.Made two more rounds of redundancies to right size both divisions6.Moved office locations& negotiated early termination of both leases7.Focused sales efforts on “hero clients”8.Company headcount reduced from 115 on 5/31/07 to 60 within 1 year right sizing the business9.Eliminated old BOD and replaced with 3 new members10.Moved from NASDAQ to OTCBB with seamless integration11.Hired FD, Sales Managers & Strategic Development head12. Sold underperforming division to focus on company’s core business and path to profitability

Results:1.Within three quarters achieved first EBITDA and cash flow positive quarter in over 5 years2.EBITDA improvement of $10 million in 18 months3.Reduced corporate overhead by $2.5 million4.Move of offices created $500k per year in savings5.Obtained shareholder approval for reverse split 6.Increased number of authorized shares to ensure company corrected default on covenants with institutional investors7.After meeting milestones, secured $10 million in capital 8.Avoided bankruptcy, and finally stabilized stock price

1. Sr. Mgmt. & Board chasing NASDAQ Listing2. Former CEO hired 5 finance directors in 18

months3. Company overpaid for bad acquisitions4. Revenues decreased 19% from prior year5. Acquired company shut down after 6 months6. Parent company treating newly acquired

company poorly, creating un-repairable damage with clients and vendors

7. Clients, vendors, employees, & Investors expecting bankruptcy

8. Management used method of robbing one company to fund the other, weakening both

9. Management increased corporate over-head at a time when they were losing business

10. Management hired unqualified people externally, ignoring in-house talent that was more appropriate

11. Company had unclear & unbelievable strategy

The NeoMedia Case Study

Critical Issues Prior to SKS

Action Steps & Results

Action Steps:1.In first week, CEO, COO & Top Finance Consultant positions were eliminated2.Immediately reduced corporate overhead by 50%3.Terminated EVP of sales when it was determined he was working for another company concurrently4.Negotiated that sellers take stock instead of cash top off and paid off remaining obligations5.Focused strategic direction on core business6.Divested three non-core business units7.Focused on properly integrating IP technology8.Started quarterly shareholder conference calls9.Took COO, acting CEO, SVP of Sales and Board of Director seat s for first six months10. After six months hired industry leader as CEO and replaced him within 12 months with more entrepreneurial CEO from a competitor in the business.

Results:1.Reduced burn rate from 800k to 400k per month2.Secured funding for new burn rate3.Augmented capital structure for optimal performance4.Raised $10 million for operations and seller obligations5.Divested business units and restructured debt for ROE of $8 million6.Reduced full time employees from 92 to 407.Focused enterprise on core business and created U.S. Market8.Completed new software product NEOREADER, and is currently being implemented in U.S. & Europe

1. Inability to commercialize patented technology

2. Flawed business plan, with no chance of success

3. Approximate burn rate of $800,000 per month

4. Sellers were promised cash top off if stock dropped below $.40 per share

5. Stock dropped to $.04 per share

6. Management had zero ability to execute or provide leadership or vision for the company

SKS ConsultingInterim Executives, Capital Stabilization, and Turnaround Management

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