SMALL BUSINESS’SMALL BUSINESS’ RESPONSE TO GLOBAL TRENDSRESPONSE TO GLOBAL TRENDS

IN GREEN MARKETIN GREEN MARKET

Dr. Misha Plam

President and CEO

AlphaSniffer, LLC

Boulder,Colorado,USA

Presentation for New Ventures Investor Forum in China

October 22, 2004

AlphaSniffer, LLC is a start up company in Boulder, AlphaSniffer, LLC is a start up company in Boulder, Colorado, USA, funded by VC investors in 2004Colorado, USA, funded by VC investors in 2004

Company is developing a novel Handheld detector for Homeland Security and Industrial Applications. The Detector will alert workers to exposure to dangerous toxic levels of Industrial Toxic Chemicals (TIC) present in the working space. The same detector will help companies to comply with EPA and OSHA Regulations.

What is the US SBIR What is the US SBIR Program?Program?

10 Government Agencies10 Government Agencies DOD DefenseDefense HHS HealthHealth NASA SpaceSpace DOE EnergyEnergy NSF IT, AM, EL, BT USDA AgricultureAgriculture DOC CommerceCommerce EPA EnvironmentEnvironment DOT TransportationTransportation DoED EducationEducationTOTAL ~ TOTAL ~ $1.5B$1.5B

AnnuallyAnnually

What is the SBIR Program?What is the SBIR Program?

Small companies have innovative ideas.

Government agencies provide funds to small companies to explore and commercialize those ideas.

What Is the SBIR Program?What Is the SBIR Program?

Companies submit proposals(Competition, peer-review, merit)

Government funding in three phases Companies do not repay funds Companies keep intellectual property Government benefits: jobs, taxes

SBIR Program:SBIR Program:Funding ProcessFunding Process

PHASE IFeasibilityResearch

PHASE IIIProduct

Developmentfor

CommercialMarket

Private Sector Investment

Taxes

Federal Investment

PHASE IIPrototype Research

Gov’tAgencyR&DBudget

SBIR Program Results: SBIR Program Results: 20 Years20 Years

400,000 proposals received 65,000 proposals funded: $13 billion Creation and growth of thousands of

companies (including Microsoft, Intel)

Catalyst for economic development

Every Large Company in the beginning of their life was a SMALL company.

It is very important that Entrepreneurs who start the new company develop a culture, which will be foundation for the future Big Company in terms of Environmental Concerns and Social Responsibilities.

However small businesses very often luck necessary recourses – Money, Knowledge and Infrastructure. The KEY is Education at the Universities, Government support

through tax breaks/regulations and support and collaboration with Big Business.

Very often small businesses are suppliers to big businesses , who can require from their vendors strict compliance with the Environmental Government Regulations .

•Big Businesses very often a very good neighbor, protect Big Businesses very often a very good neighbor, protect Environment and protect their workers. They do it back in US and Environment and protect their workers. They do it back in US and they are trying very hard to do the same in Foreign Countries where they are trying very hard to do the same in Foreign Countries where they conduct business and trying to penetrate market.they conduct business and trying to penetrate market.

Good example is Shell Corporation, which is supporting this Good example is Shell Corporation, which is supporting this conference.conference.

But Big US businesses can do much more by supporting Education But Big US businesses can do much more by supporting Education through special courses in Chinese Universities by providing through special courses in Chinese Universities by providing financial support. They can also give Guest lectures by their financial support. They can also give Guest lectures by their Environmental Compliance Officers, provide Scholarships for Environmental Compliance Officers, provide Scholarships for Environmental Education and Apprenticeship in their facilities. Environmental Education and Apprenticeship in their facilities.

Typically Big business has Money, Knowledge and infrastructure to Typically Big business has Money, Knowledge and infrastructure to address Environmental concerns. address Environmental concerns.

In protecting environment and making socially In protecting environment and making socially responsible rules and legislature the Government responsible rules and legislature the Government has to have a leading role.has to have a leading role.

I visited China since 1996 and I saw incredible I visited China since 1996 and I saw incredible improvements in social aptitudes and culture, I will improvements in social aptitudes and culture, I will provide only several obvious cases , which could provide only several obvious cases , which could be seen by the naked eye .be seen by the naked eye .

1515years ago driving in Chinese taxi was like driving years ago driving in Chinese taxi was like driving inside of operational trash can and ashtray. inside of operational trash can and ashtray.

Government changed it overnight and now China Government changed it overnight and now China has uniformly the BEST taxi in the word.has uniformly the BEST taxi in the word.

I applaud you !!!I applaud you !!!

Taxi drivers were educated how to be polite, provide receipts Taxi drivers were educated how to be polite, provide receipts and say nice words. It creates incredibly good mood in a and say nice words. It creates incredibly good mood in a passengers, except traffics jams.passengers, except traffics jams.

I wish we have posted the same regulations in the taxi, which I wish we have posted the same regulations in the taxi, which you have here.you have here.

The public toilets equipped with modern equipment became The public toilets equipped with modern equipment became very clean .very clean .

And there are many other examples of protecting Environment And there are many other examples of protecting Environment and Health of the People in the Modern China.and Health of the People in the Modern China.

However much more has to be done!However much more has to be done!

China has incredible number of small China has incredible number of small restaurants preparing foods, very often with a restaurants preparing foods, very often with a lot of fat. The Fat disposable is a big lot of fat. The Fat disposable is a big environmental problem with pollution of environmental problem with pollution of municipal water supplies. Small restaurants municipal water supplies. Small restaurants cannot solve this problem by themselves, but cannot solve this problem by themselves, but if big Oil American and Chinese companies if big Oil American and Chinese companies will create Fats refinery to convert used food will create Fats refinery to convert used food oils to oils for car engines and provide oils to oils for car engines and provide collection services from restaurants and collection services from restaurants and other food establishments then it will be great other food establishments then it will be great service to Chinese Nation .service to Chinese Nation .

Another example of typical business pollution Another example of typical business pollution recently discovered in US is Arts Schools and recently discovered in US is Arts Schools and Individual artists. This business was never Individual artists. This business was never regulated by the Government, because nobody regulated by the Government, because nobody considered an Art school as a chemistry lab, but considered an Art school as a chemistry lab, but they are. Artist use a lot of toxic chemicals, which they are. Artist use a lot of toxic chemicals, which they dispose to the sink.they dispose to the sink.

US government provided grants to the Art Schools US government provided grants to the Art Schools to solve this problem, created regulations and ask to solve this problem, created regulations and ask small businesses through SBIR program to develop small businesses through SBIR program to develop new purifications technologiesnew purifications technologies

CONCLUSIONCONCLUSION

American Big businesses working in China has to help small Chinese businesses to become socially responsible and environmentally friendly.

In order to do this they have to invest money in education of the future Chinese business leaders and show by example how to be a good and friendly neighbor

Thank you !Thank you !

m.plam@comcast.netm.plam@comcast.net

Dr.Dr.Misha PlamMisha Plam