Auto Load Logic.Crowdfunder.Business Summary.rev.4.23.14

IT'S TIME TO RETHINK AUTO TRANSPORT. EASY. FAST. EFFICIENT.

BUSINESS SUMMARY The Only Logical So<ware for Auto Transport

The Problem The largest auto aucDon company in the US has said, regarding the used vehicle market:

“The thorniest barrier to achieving the promise of a digital marketplace is not technology or management commitment; it is vehicle logisDcs. We have made it easy to bid on a vehicle anyDme and for consignors to list cars sDll at remote locaDons. So buyers have access to tens of thousands of vehicles online, but transporDng vehicles over long distances, in less than truckload quanDDes, is difficult and expensive.” -‐ Manheim Inc.

TransportaDon of used vehicles represents a large market that is growing increasingly complex as the way we buy and sell cars changes. Technology is creaDng great opportuniDes for efficiencies in vehicle transacDons but that, in turn, creates complexiDes in the transport market. Only with beTer technology in the transport market can we solve the problems created by beTer technology in the transacDon market.

www.autoloadlogic.com

Our Product Is a complete so<ware soluDon for managing the process of auto transport. It connects:

o  Those who need to ship cars – car dealers, aucDon buyers or individuals who are shipping their cars to or from other locaDons or have bought cars that are far enough away that 3rd party transport is needed

o  The auto transport brokers – many transports are arranged by specialized brokerage companies. There are about 1,000 of these companies acDve in the market today.

o  The trucking companies that transport cars – there are about 4,000 trucking companies in the US that transport used vehicles, and

o  Those to whom cars are shipped – many used car dealers buy their inventory at aucDon

or from other dealers and need to have the cars shipped to their lots, for example; and many individuals are now buying vehicles on-‐line and then need to arrange transport.


Our Product The “SoluDons” and “Features” pages on our website contain descripDons of features offered as well as text and video explanaDons of many aspects of our market and product.

o  Provides industry-‐leading, unique and valuable funcDonality for each type of user o  Allows each type of user to search for, analyze, select, contract for, track and document the

services needed; or the opportunity to offer the services it provides.

o  Is seamless, end-‐to-‐end and fully integrated o  Includes a number of funcIons for which patent protecDon is pending (#13/246,514)

o  Provides important cost savings, operaDng efficiencies and risk reducDon for all user groups



Our Market We define our addressable market as including all used vehicle transports of 500 miles or more. That market currently includes about 4.0 million vehicle transports per year. As more and more transacDons are made on line, our market will conDnue to grow at a rate greater than that of overall vehicle transacDon volume.

An Unusual Market CharacterisIc: o  Few markets enjoy the benefit of protecDon against

disrupDon at a basic funcDonal level. Transport of used vehicles is one of them.

o  When used vehicles need to be transported they are moved almost exclusively over roadways and on trucks.

o  UnDl Amazon creates a drone that can airli< a Ford F150 to your driveway, that’s preTy much how it’s going to stay.

Our Market TransporDng a used car typically takes from one to five days. As soon as one vehicle is delivered, the trucker wants to fill that empty truck space with another paying load. Ideally, that next load has already been idenDfied and contracted. But the ideal is not the norm. Any tool that allows the trucker to reduce Dme spent with empty truck space can improve efficiency and profitability.



The Internet Effect An increasingly large percentage of auto purchase transacDons are being made on-‐line by both industry professionals and private individuals.

In an industry that was once defined largely by physical locaDon: i.e. of car lots and aucDon yards; the internet is making physical locaDon increasingly insignificant.

As on-‐line purchasing of vehicles grows, purchase opDons and opportuniDes grow for both professionals and individuals.

And, very importantly, the distance between the purchaser and the vehicle purchased tends to increase.

1

2

3

4


Transport Distance Analysis Distance of Transport: (miles)

Under 100

100 to 200

200 to 300

300 to 400

400 to 500

Over 500

500 to 1,000

1,000 to 1,500

1,500 to 2,000

Over 2,000

NAAA (onsite) 60

12

8

5

3

12

NA

NA

NA

NA

Manheim (OVE online) 20

12

10

8

7

43

NA

NA

NA

NA

Manheim (simulcast Online) 20

18

12

8

5

37

NA

NA

NA

NA

Central Dispatch 1

4

4

5

5

81

21

21

13

26

uShip 0

3

2

5

3

87

23

18

17

29

All figures stated as % of total volume NAAA = Na4onal Auto Auc4on Associa4on Source: NAAA, Manheim, Central Dispatch, uShip

Our Market As distance of required transport increases, complexity of transport and of contracDng for and managing transport increases. As that complexity increases, the need for more effecDve transport management tools increases.

“Over the past several years, buyers have grown comfortable buying units from a wider geographical area. As a result, they have become more reliant on transportaDon soluDons that streamline business processes and maximize profits.” -‐Manheim Inc.

But the technology available in the used car transport market has not kept pace. Far too much of the process conDnues to depend on phone and fax, on paper and pencil; and those inefficiencies damage both process efficiency and profitability. The parDcipants in our market badly need new tools to beTer manage the transport process, to beTer control operaDng costs and to beTer manage risk.



The CompeIIve Environment There are two primary segments in our market:

The industry professionals: o  Car dealers o  Transport brokers, o  AucDon companies, o  Fleet operators, o  Car rental companies, etc. Individuals o  Who need to either send a vehicle to another

locaDon o  To arrange to have a vehicles shipped to

themselves.

The professional market is by far the larger of the two, but the individual market is growing at a rapid rate. In each of those segments there is currently one primary so<ware offering.


Central Dispatch In the Professional User market, the dominant product is Central Dispatch.

Central Dispatch has held the dominant posiDon since its introducDon in 1999. It was developed and owned by 1st Auto Transport Directory unDl August of 2012 when it was purchased by Dealertrack Technologies, Inc. (TRAK) We esDmate that Central Dispatch is used to facilitate the transport of about 1.4 million vehicles per year, of which about 1.1 million are transported 500 miles or more.

It is widely acknowledged among professional users that Central Dispatch, once a disrupDve technology, has failed to keep pace with changes in the transport market or in technology. Central Dispatch does not provide a product for use by individuals

That represents only a 27.5% market share.

uShip is a newer entrant in the auto transport market. Its primary business is managing the shipping of general freight.

We esImate that o  uShip is used to manage the transport of about 150,000

vehicles per year, of which about 135,000 involve transport of 500 miles or more.

o  that one-‐third of uShip’s volume represents professional user

acDvity and the balance represents individual users.


That represents only a 3.4% market share.

Auto Load Logic will offer the individual market a beTer product than uShip at a much lower price. uShip has not gained real tracDon in the professional market because of both funcDonal weaknesses and customer service issues.

uShip The product most used in the Individual User market is uShip, which makes its planorm available to both professional and individual users.

Our Pricing Model Professional Users o  Central Dispatch uDlizes a monthly-‐subscripDon

pricing model.

o  Rates do vary among users. A volume-‐based Dered-‐pricing system has been recently insDtuted. But payment is due whether the customer uses the product or not.

o  Our pricing model is based on use.

o  Our aim is to a generate a revenue-‐per-‐vehicle level that is compeDDve with the average pricing of Central Dispatch but to achieve that by charging each user based on only actual usage.

Individual Users o  The uShip pricing model is based on a

percentage of the price of transport. The fees are significantly higher than the corresponding per-‐unit price of Central Dispatch.

o  We use a price-‐per-‐use model in this market also but at a cost well below that of uShip.



Other CompeIIve Issues There are other so<ware products in use to manage vehicle transport, principally those created by or serving the aucDon market. Two aucDon companies represent about 70% of the total vehicle aucDon market in the US.

AucIon Businesses: o  Require the efficient movement of vehicles to

the aucDon sites for sale and from the aucDons sites a<er sale.

o  Have invested in so<ware tools that help manage the flow of vehicles into and away from their locaDons.

o  Mostly require relaDvely short distance transports that are not a part of our market. Some though, do require longer transport.

But transport is an ancillary acDvity for the aucDon companies, not a primary one. The aucDon-‐based products are not primary compeDtors.

Our Company


Auto Load Logic is Texas limited liability company based in Abilene, Texas. Our product design reflects a deep understanding of the needs of parDcipants in the auto transport market as well as a rigorous analysis of market characterisDcs, trends and potenDal. Product design began in 2010 and iniDally focused on creaDng a unique trailer loading algorithm intended to allow truckers to more efficiently decide how to best load their trailers. As it became apparent that the transport industry would need to respond to rapid changes in the transacDon market, the team developed a new and larger vision of the product potenDal. In 2013, having completed our market analysis and idenDfied the opportunity for a substanDal expansion of product scope, we completed a financing round that allowed expanded product development to move forward.

FOUNDERS Deron & Laurie Balch The Company was formed by industry professionals Deron and Laurie Blach. Deron and Laurie have established and operated both an auto transport trucking company and an auto transport brokerage company.

2012 ANGEL INVESTOR Mr. CliZon H. Morris, Jr. In 2012 Mr. Morris, the founder and former Chairman and CEO of AmeriCredit Corp. (NYSE: ACF – now GM Financial Corp.) made a significant investment in the Company. That investment allowed us to more fully explore the potenDal scope of the market opportunity.

2011 SEED CAPITAL Don Balch Don Balch is founder and managing partner of a mulD-‐locaDon truck driving school that has operated in Texas for over 25 years. William Barnes, DDS Dr. Bill Barnes has been a partner in that business since its founding.


Our Company For more detail on our company, our management team and our business philosophy, please see the "About Us" page of our website.

CEO Charles Lightner During that process of analysis and planning, Charles Lightner joined the Company as CEO. Chuck did not come from the transport industry but has a broad background in investment management and finance.


TracIon We released a Beta version of the professional planorm in summer 2013. As development of the professional planorm proceeded we looked more closely at the private party market and concluded that a significant opportunity existed there as well. We decided to create a simplified user interface that would allow individuals to benefit from the power of the professional planorm.

In 4Q 2013 we returned to the market with the professional planorm, modified to incorporate user feedback obtained during the Beta tesDng period, and including the newly-‐created private party product. The ALL system is now being used successfully and is performing well. There are over 100 registered professional users of the system and private party acDvity is increasing.

Our markeDng efforts during this period have concentrated on securing a relaDonship with a high quality “catalyst” user in the professional market. In that effort we have concentrated on the larger brokerage companies. Successful brokers bring with them both vehicle inventory and networks of trucking companies.


The Catalyst We have now formed a relaDonship with the perfect catalyst user!

One of the largest brokerage companies in the industry, and one of the most respected, has indicated its desire and intent to use the Auto Load Logic system. This company manages the transport of thousands of vehicles per month and has an excellent, long-‐term reputaDon in the industry. Their use of our product will require our creaDon of a connecDon between their in-‐house management informaDon system, in which they have a substanDal investment, and our system. That work is currently underway. We expect this vote of confidence in our system and our company to be an important asset as we accelerate our penetraDon of the top-‐Der professional user market.

Auto Load Logic.Crowdfunder.Business Summary.rev.4.23.14

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