Worldwide CRYPTOLOGICA Market

1. Worldwide CRYPTOLOGICA Market 1

2. CRYPTOLOGICA Markets • Credit-card Swipe Terminals • Automatic Teller Machines • Bank Computers • High-Frequency Trading • Medical Equipment • Intelligence Agencies • Department of Defense • Security Agencies • Government • First Responders • Police • Firefighters • Internet Games of Chance • Slot Machines • Electronic Roulettes • Mobile Phones (+/- NFC) • Smart Phones • Tablet Computers • Netbooks • Notebooks • Laptop Computers • Desktop Computers • Servers • Handheld Video Games • Portable Video Players • Portable Music Players • Digital Still Cameras • Camcorders • Set Top Boxes • TV Sets 2

3. Worldwide Mobile Device Sales to End Users in 2010 3

4. Worldwide Smartphone Sales to End Users by Operating System (OS) in 2010 Smartphones and tablets will incorporate NFC more quickly than other portable devices. 4

5. Business Models Licensing CRYPTOLOGICA technology to producers of end user devices. Limited time exclusivity of selected embodiments of CRYPTOLOGICA for major producers of end user devices. License is free for manufacturers of integrated circuits (devices) using CRYPTOLOGICA methods. Negligible company running costs in comparison with revenue from licensing. ALL DEVICES are the market for CRYPTOLOGICA! 5

6. CRYPTOLOGICA Implementation Licensees CRYPTOLOGICA technology is first provided under license to a device manufacturer (“CRYPTOLOGICA Implementation Licensees”), who will make and sell devices to manufacturers of end-user products, which are “CRYPTOLOGICA System Licensees”, which are allowed to make and sell end-user products that incorporate devices purchased from CRYPTOLOGICA Implementation Licensees. CRYPTOLOGICA Implementation Licensees pay CRYPTOLOGICA a one-time, up-front administrative fee per license, in order to receive a licensing package, which includes certain information useful in implementing CRYPTOLOGICA technologies into their devices. CRYPTOLOGICA Implementation Licensee are required to provide CRYPTOLOGICA a sample prototype device that incorporate CRYPTOLOGICA technology for quality control evaluation. If CRYPTOLOGICA approves the device, the CRYPTOLOGICA Implementation Licensee is permitted to sell devices only to CRYPTOLOGICA System Licensees. CRYPTOLOGICA does not receive any royalties from CRYPTOLOGICA Implementation Licensees. 6

7. CRYPTOLOGICA System Licensees CRYPTOLOGICA System Licensees pay CRYPTOLOGICA an initial fee for the technologies they choose to license from CRYPTOLOGICA, in order to receive a licensing package, which includes useful information for using CRYPTOLOGICA technologies in the licensee’s products. CRYPTOLOGICA System Licensees are required to provide CRYPTOLOGICA a sample prototype products that incorporate CRYPTOLOGICA technology for quality control evaluation. If CRYPTOLOGICA approves the product, the CRYPTOLOGICA System Licensee is permitted to buy devices from any CRYPTOLOGICA Implementation Licensee and to sell approved products to retailers, distributors, and consumers. Unlike the sales of devices incorporating CRYPTOLOGICA technology by CRYPTOLOGICA Implementation Licensees, sales of end-user products incorporating CRYPTOLOGICA technology by CRYPTOLOGICA System Licensees are royalty-bearing, generally based upon the number of units incorporating CRYPTOLOGICA technology, shipped by the CRYPTOLOGICA System Licensee. 7

8. CRYPTOLOGICA Integrated Licensees CRYPTOLOGICA Integrated Licensees are at the same time device manufacturers and end-user product manufacturers. They pay CRYPTOLOGICA company an initial fee for the technologies they choose to license from CRYPTOLOGICA, in order to receive a licensing package, which includes useful information for implementing and using CRYPTOLOGICA technologies in the licensee’s products. CRYPTOLOGICA Integrated Licensees are required to provide CRYPTOLOGICA a sample prototype products that incorporate CRYPTOLOGICA technology for quality control evaluation. If CRYPTOLOGICA approves the product, the CRYPTOLOGICA Integrated Licensee is permitted to produce devices incorporating CRYPTOLOGICA technology and to sell approved products to retailers, distributors, and consumers. Sales of end-user products incorporating CRYPTOLOGICA technologies by CRYPTOLOGICA System Licensees are royalty-bearing, generally based upon the number of units incorporating CRYPTOLOGICA technology, shipped by the CRYPTOLOGICA Integrated Licensee. 8

9. CRYPTOLOGICA Products CRYPTOLOGICA companies can also design and manufacture end-user products incorporating CRYPTOLOGICA technology using devices manufactured by CRYPTOLOGICA Implementation Licensees. CRYPTOLOGICA companies can also design and manufacture end-user products incorporating CRYPTOLOGICA technology using products manufactured by CRYPTOLOGICA System Licensees or CRYPTOLOGICA Integrated Licensees. CRYPTOLOGICA companies can also design and manufacture devices using their own technology. CRYPTOLOGICA companies can also design and manufacture end-user products using their own devices. 9

10. Example of Dolby Laboratories, Inc. Dolby licenses intellectual property (IP) that is internally developed, acquired, or licensed from third parties. Dolby technologies are licensed to CE manufacturers and to software vendors in 40 countries with worldwide distribution rights. Dolby sells its own products and provide services in over 85 countries. Revenue from outside of the United States comprises 66% of the total revenue. 10

11. Royalties paid to Dolby Laboratories, Inc. 100% Royalties are paid in countries with Dolby patent protection. 50% Royalties are paid in countries without Dolby patent. 11

12. Revenue Example of Dolby Laboratories, Inc. 12

13. Type of revenue of Dolby Laboratories, Inc. The decrease in licensing revenue as a percentage of total revenue was due to a greater increase in the growth of Dolby products revenue relative to the growth of Dolby licensing revenue, as well as 28% increase in total revenue from 2009 to 2010. 13

14. Gross Margin of Dolby Laboratories, Inc. 14

15. Prof. dr. Milan Prokin Dr Prokin is full Professor at Faculty of Electrical Engineering, University of Belgrade, Serbia, since 2003. He graduated as the Best student of the same University in 1986 after only 3.5 years of studying instead of 5 and immediately joined Department of Electronics. He received M.Sc.E.E. and Ph.D. degrees in 1988 and 1990, respectively, from the same faculty. His projects covered wide research areas of: extremely secure encryption, high power efficiency 2D/3D displays, new image and video compression methods, gaming machine controllers, retail turnover controllers, signal processing, optical sensors, instrumentation, sport simulators, 3D mapping, radio-navigation systems, switching amplifiers, electromagnetic compatibility and microcontroller applications, for government, military and industry. He has 3 US, 2 European, 1 Japanese, 1 South Korean, 1 Chinese and several Serbian patents granted, with several worldwide patents pending. He cooperated for many years with Robert Bosch (10), Philips (6), Siemens (7), etc. Since 2003, he is technical and law expert of Government of Serbia, Ministry of Finance, Games of Chance Administration, Tax Administration, co-authoring Fiscal cash register law, Excise law, Tobacco law, 9 Government Decrees and more than 40 Regulations related to Games of chance law and Fiscal cash register law. He also organized homologation of: fiscal cash registers, remote GPRS terminals for reading fiscal cash registers, point-of-sale software, etc. His laws are already implemented in Republic of Srpska, Federation of Bosnia and Herzegovina, Ethiopia, Tanzania, Albania, etc. while being in various stages of the approval in Slovenia, Macedonia, Montenegro, etc. He helped European Commission, Directorate-General Taxation and Customs Union, Indirect taxation and Tax administration, Administrative cooperation and fight against fiscal fraud, in the prevention of tax evasion, “carousel tax fraud”, infiltration of both counterfeited and original but duty not paid goods and diversion of original goods, using electronic control of manufacturers, importers, exporters and retailers. 15