ࡱ> ~}7 ZbjbjUU (7|7|NlNNNNNNNb8">lbT22z(|(|(|(E(T-Ti1$3 5j1N1NN2NNz(z(r\""NNf# `n,bV#f#$20T2^#66f#bbNNNN Dear Sirs! We offer to your attention the Virtual Sphere investment project that provides for the development, manufacture and sale of products with the same name. The project is based on the invention The method of immersing the user in a virtual reality and the device for its implementation, protected by patents and patent applications in the Russian Federation and other countries. The authors and owners of the invention are the brothers Latypov. The first stage of the project including patenting, development, manufacture, tests and demonstration of several working prototypes at the largest world exhibitions in Europe and the USA has been successfully completed. We have received positive responses for our products are in great demand in the video-games and entertainment markets, education and health improvement, defense and other markets. This high technology, unique product is a small computer complex with the proposed retail price ranging between $ 15000 and $ 20000, depending on the completeness of a set. With the help of the complex the user can be submersed in the virtual space without any restriction of his motion. Our device gives the user a unique opportunity to walk in the virtual space with his own legs, which can be seen today only in science fiction films. These completely new and practically boundless opportunities make our product very attractive for the above-mentioned and other sectors of the market and guarantee its sales. We are forming a new direction of virtual technologies development requiring new hardware and software. The general trends of computer development will bring about a rapid growth of the new market (the basis for this has already been provided: there are appropriate programs, graphics accelerators, computers, virtual helmets and gloves). In the next 5 - 10 years the market turnover will reach billions of dollars. Under the business-plan, the output can begin in 6 - 8 months after the investment start, and products manufactured and sold in the next 6 months will completely return the invested capital. The investment requirements are estimated at $ 1.5 - 2 mln. Any volumes and forms of investment, mutual relations between investors and other participants in the project are possible: saling licenses, finding investment and manufacturing, another forms. If a partner involves the capital of an outside investor, we will provide shares to intermediaries. We are interested in partners who have experience in marketing, management and work with Western investment institutions. During the work on the project we have prepared a great amount of materials of various forms and volume which we will be glad to offer additionally according to your interest and requirements to the documents. We look forward to successful and mutually beneficial cooperation. Yours faithfully, Ray Latypov, Nurulla Latypov Moscow, Russia Tel. (7-095)723 75 00 + 2946 -mail: latypov@virtusphere.com http://www.virtusphere.com Executive summary Virtual Sphere Project 1. PURPOSE The purpose of the project is to manufacture products and to render services to a wide range of users, on the basis of the invention  Virtual Sphere, and to make profit. The invention aims to remove borders between the real and virtual worlds. Technically this problem has been solved. The Virtusphera technology enables the user to walk in the virtual space with his own legs like in real life. It gives the user new opportunities for training, health improvement and entertainment. The last step to be made is to make this development accessible for the user. 2. FINANCE Investment requirements: $1-1.5 mln. Investment period: 9 - 12 months Payback period: 9 months Expected profit: at least 150 % annual The volume and the schedule of investments will depend on the product model chosen and the rate of entry into the market: a minimum, reduced or optimum option. Items of expensesMonths from the beginning of financingTotalMonth123456789101112Sum (thsnd.$)Rent22222222222224Payroll (soft)252525252525252525252525300Compulsory deductions on payroll101010101010101010101010120Equipment5020101010202020160Overheads44444444444448Advertising55551020303020130Sphere manufacturing10305040603030151515295!ertificate 23333620Total =SUM(b4:b11) 101 =SUM(c4:c11) 93 =SUM(d4:d11) 101 =SUM(e4:e11) 86 =SUM(f4:f11) 46 =SUM(g4:g11) 59 =SUM(h4:h11) 109 =SUM(i4:i11) 94 =SUM(j4:j11) 94 =SUM(k4:k11) 112 =SUM(l4:l11) 106 =SUM(m4:m11) 96 =SUM(b12:m12) 1097 (not included salary of management team) Staff experts will carry out some of the operations listed and the expensive equipment necessary for their work will be rented but not bought. Other specialized firms, according to our terms of reference will carry out the major part of the work. According to our estimates, our product (virtual sphere) will cost about $2,000. The market does not have such a product at present and will not have it in the near future, if we do not deliver it, because we are the monopolists, and the patent and development are ours. The virtual sphere can be sold at $15,000 or possibly at $20,000, especially in the first two years, which promises super profit. And if 100 sets of Virtual Spheres are been sold at $15,000, the project will completely pay off. 3. PARTNERSHIP The following scheme and form of participation of partners and investors in the project is proposed (a investor can be a partner and/or a creditor): The owners of the invention patent (authors of the present project) establish a firm as a joint-stock company and the right to the patent will be contributed as the authorized capital. Then, the partners and the investors interested in the realization of the project receive a part of the stock depending on their interests, possibilities and how they participate in the project. Here are some options of our relations with partners and investors: full-scale realization of the project jointly with the partners and investors; partial realization of the project jointly with the partners and investors; joint realization of the project involving a loan; independent realization of the project involving long-term loans; sale of licenses (from complete to a various degree of limitation on quantity, terms and territories); other combinations. For some reasons the first option of cooperation is the most preferable. Under preliminary or subsequent arrangements, the shares can be bought back from the partners and investors as the firm gets income and pays the creditors and investors under the obligations. 4. GUARANTEE The following terms can be considered as guarantees on the correct use and return of the investments: the firms account on the project investments can be open in the bank trusted to the investor or creditor which will provide the assets control and the project progress; trustees, experts of the investors and creditors, can work in the board of directors and/or on the firms key positions; the investors and creditors become the co-owners of the rights of property to the patent and developments conveyed to the firm, in proportion to the quantity of shares. 5. PROJECT DESCRIPTION After Internet one of the most promising directions at the market of high technologies is VIRTUAL REALITY. The advanced software for 3-D graphics, operations for fast graphics processing being included in the latest processors (MMX) and cheap virtual helmets make an explosive growth of this sector inevitable. Till now the user submersed into the cyberspace could operate his motion only with the help of the keyboard, joysticks or manipulators. Now the user can move in the virtual space like in life with his legs. The technical decision is that a person with a virtual helmet on his head is placed in a simulator. The simulator is made like a sphere of about 2,5 m in diameter, capable of the rotating around the center on a special platform. Actually the person will move on the internal surface of the sphere like a squirrel in a wheel. Our way enables the user placed in a limited room to walk with his legs in the virtual space at any distance in any direction. The spheres center of gravity is fixed, it always remains in one point and a quite small effort is needed for the sphere to move. While the person stands, the sphere is motionless. As soon as he makes a step, the persons center of gravity is displaced with respect to the vertical going through the spheres center of gravity, which makes a moment of force rotating the sphere. The sphere returns the person into the initial position. The sphere rotates exactly as much as the person moves and in the direction he moves in. The information on the direction and the persons speed is transferred to the computer to draw a varying picture of the virtual space to him. For this purpose, motion gauges connected to the computer by the radio are placed under the sphere. The user takes a backpack with a computer notebook, for example with the game Doom, puts a virtual helmet on, comes into the sphere and can as if in real life start adventures through this popular computer game labyrinths full of suddenness and fascinating scenes. By the radio-Ethernet it will be possible to communicate and interact with partners or adversaries in other spheres, i.e. the game can become networked, and this opens up completely new vistas. The project provides for the manufacture of spheres, rotation platform, system of gauges and special computer programs. At the first stage, in connection with the labor intensivety of the process, it is proposed to use ready virtual helmets and widespread 3-D games after their adaptation to our system. At the same time, we will develop and manufacture virtual helmets and our models of computer programs and applying all new opportunities and in view of the market prospects. 6. APPLICATION The application of the virtual complex is possible in different areas, 6 of that are obviously more prominent than others: SPECIAL PURPOSE - as a link trainer for the army, special-purpose groups, militia, rescuers, security structures; HEALTH IMPROVEMENT - as a trainer for sport, medical and recovery centers and private fitness centers; ENTERTAINMENT - as an attraction for Disneyland, moon-parks, game automates rooms, recreational areas, clubs, pleasure places, individuals; EDUCATION, SCIENCE, CULTURE, TOURISM - as a way to make the cognition process pleasant, easier to digest and remember studied material, for education establishments and research institutes of any types and purposes, culture centers, travel agencies and individuals; TV - for virtual studios and TV-shows; ADVERTISING - for shows and buyer attraction. 7. MARKET REVIEW Indisputably the future belongs to virtual technologies. But is the market ready to accept our product? Yes, of course. This cannot be proved directly, but there is indirect weighty proof: Direct polls among potential consumers ready to buy the product as soon as it is available; Assortment and turnover of assets in manufacture and sale of hardware for virtual reality. Today 13 firms produce 23 kinds of virtual helmets of different quality and different purpose costing from $500 up to $250 000. 5 firms produce 5 kinds of virtual gloves costing from $500 up to $15 000, 5 firms produce 8 kinds of virtual suits costing from $5 000 up to $50 000. And there are many other appliances for virtual reality. Assortment and turnover of assets in manufacture and sale of software. Today thousands of firms write incalculable amounts of 3-D (virtual) programs, most of which are games. In 1999 the computer games market made about $6.6 billions, and as per forecasts, in 2000 it will reach $7 billions turnover. Economy considerations. The permanent question is how to save significant assets and time? And how to save a human life? Our system as a training complex will help the mankind in the solution of these issues. Companies making virtual reality devices and components to them, usually specialize in one or two specific areas, for example development and manufacture of virtual helmets and gloves, systems of gauges for body movement tracking and other. These companies do not compete with us because in our products and software we will combine products and software developed by these companies and while selling our products we promote their sales. Nevertheless, in spite of the significant growth of quality and expansion of opportunities of hardware for virtual reality in the last few months there has been a slack at the market. It can be easily explained. What for, for example, a virtual helmet or a glove is needed if the user has to sit near the computer with them. It is like a gold cage, the potential is large but is used just at 20 %. Our device solves this problem: it enables a person to move freely in the virtual space fully using advantages of the up-to-date virtual periphery. Nothing similar is offered today at the market and is not expected in the next few years. The patent search, study of computer editions and Internet pages, participation in international exhibitions has not revealed devices with similar opportunities. All this confirms that our products will not have obstacles at the market. We create a new market with hundred of millions of dollars and we have to study it competently and to saturate it. 8. PROJECT STATUS The above described concerns the second stage of the project implementation. The first stage including the concept developing, patenting, creating working prototypes and improving units, details and circuits on them, the preliminary marketing, preparing of this business-plan, has been carried out independently and successfully by the authors of the project. The status of the project is as follows: 1. SECURITY. The project is based on the invention named The method of submersing the user in a virtual reality and the device for its implementation, protected by Russian patent ! 95113085, US pat.5846134 and patent applications !" in Europe. 2. STAFF. The authors of the invention, the developers of the virtual sphere and the authors of the present business-plan are the brother s Latypov. They presented the working prototype of the virtual sphere at exhibitions and are negotiating for the realization of the project with potential investors and partners. Nurakmed (Ray) Latypov - is a professional radiophysicist, 1975-1980 Rostov-an-Don State University. He worked in the physical laboratory of one of the leading scientific research institutes. In 1983-1986 he did his postgraduate course in the Economics and Mathematics Institute of the USSR Academy of Sciences and worked over the dissertation Simulation modeling of economic processes. Nurakmed Latypov has professional experience in different fields, including programming and hardware development, participation in realization of a number of commercial projects. Nurakmed Latypov is the author of many patents, including the above-mentioned, and is rewarded with more then 10 GOLD medals at the European exhibitions and Grand Prix in Brussels and Paris in 1998. Nurulla Latypov - has university degrees in physics and management. He has professional experience in various areas of education and management control, organization of several successful commercial projects. In 1990 he co-operated with his brother Nurakhmed in realization of joint projects in the field of computer games and virtual reality. Nurulla Latypov is the co-author and co-owner of the above-mentioned patents and medals. A few professionals - experts on various questions - have been invited and there is a preliminary arrangement on their participation in the project on a constant basis. Experts on the part of the investors and partners can participate. 3. FINANCE. The authors spent about $370,000 on the realization of the first stage of the project, which took three years of continuous work of a small team. 4. MATERIAL BASE. There are 8 working prototypes of the virtual sphere, 6 virtual helmets, 10 computers and all necessary office appliances. The office of 80 sq.m. is rented. 5. TECHNICAL STUDY of the project. Various variants of units and fastenings of the virtual sphere and the platform for its rotation have been developed, their manufacturing technologies have been worked out, the opportunity of a virtual helmet development by our technical conditions has been investigated. There is a preliminary arrangement with the enterprises capable and ready with high quality and on acceptable terms to fill our orders. 6. MARKETING. The study of potential consumers response to our product was conducted in different ways, including participation in exhibitions and study of response in the press. The product first was introduced at the Brusselles International Invention Exhibition Evrika-96. In spite of the fact that in Brussels a model in scale 1:3 only represented the virtual sphere, it was honored with a Silver medal. In February 1997, at Europes biggest computer exhibition CeBIT-97 in Hanover (Germany) the working virtual sphere was first demonstrated in full-scale. The same virtual complex collected crowds of spectators at the exhibition Comtek-97 in Moscow. Then, in June 1997, the virtual sphere was exposed at the worlds largest exhibition of electronic entertainment Electronic Entertainment Expo97 in Atlanta (USA), and in March 1998 - at the exhibition Advertising Technologies in Moscow. Articles were published in specialized computer and popular scientific magazines, such as ! Week ,  Computerra ,  PC World ,  Arguments and Facts. There s an Idea ,  Youth and Engineering ,  Young Technician ,  Arms, Politics, Conversion ,  Science and Life , and also a few video on various TV-channels were made. Video and photo-albums have been prepared and a page in Internet has been open. Representatives of the entertainment industry, sports and health improving complexes, educational and security structures, shop owners and computer manufacturers showed interest in our product. Our product is recommended for the state order plan for army needs. 7. ASSETS BORROWING. Significant assets and experienced experts are required for the realization of the second stages of the project since we will not cope with this job ourselves. For this purpose a business-plan has been developed and negotiations with potential partners and investors are under way. 8. MARKET STRUCTURE AND SCOPE. In connection with a significant market capacity (hundred of thousands of pieces) and impossibility to cover and saturate it in 3 - 5 years even with the help of a substantial partner, it is decided to divide the market in 4 independent sectors with independent structures. The patent will be conveyed to appropriate territories, quantity or terms, under an arrangement with a partner or investor interested in this market. Proposed sectors: USA+ South America; Europe; Russia + CIS + East Europe; Near East + South-East Asia. Demand for the virtual sphere in each market (sector) listed above in the next 5 years is expected to be as follows: 1st year - 200 pcs, 2nd year - 600 pcs, 3rd year - 1.500 pcs, 4th year - 3.000 pcs, 5th year - 5.000 pcs. The authors of the invention have already registered a firm VirtuSphere, Inc. in the USA, to which they plan a conveyance of the given project on the territory of the USA. A business-plan has been prepared for this market. Documents for submission to the Securities and Exchange Commission are being prepared to receive the permission to sell in a part of the firms stock. The project is proposed to be carried out in the USA with the money of shareholders - private investors. 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