Celilo Group Media, Inc.A Trusted Digital Multichannel Marketing Platform Descriptive Memorandum March 2020 Prepared by T.V. METZ & CO., LLC Boutique Investment Banking For further

Celilo Group Media, Inc.

A Trusted Digital Multichannel Marketing Platform

Descriptive Memorandum

March 2020

Prepared by

T.V. METZ & CO., LLC Boutique Investment Banking

For further information contact: Tom Metz [email protected] (206) 779-7707

The information contained in the attached memorandum has been obtained from the management of Celilo Group

Media, Inc. This information is believed to be accurate; however, T.V. Metz & Co., LLC disclaims any and all liability

for representations or warranties, express or implied.

T.V. METZ & CO., LLC CELILO DESCRIPTIVE MEMORANDUM 2

Table of Contents

Table of Contents ............................................................................................................... 2

Key Strengths ...................................................................................................................... 3

Key Opportunities ............................................................................................................... 4

The Company ...................................................................................................................... 5

The Platform – Chinook Book ............................................................................................. 6

Customers........................................................................................................................... 9

Sales and Marketing ......................................................................................................... 10

Technology Platform ........................................................................................................ 11

Financial Summary ........................................................................................................... 12

Employees and Management ........................................................................................... 13

Appendix A: Technology Platform Detail ......................................................................... 15

Appendix B: B Corporation Status .................................................................................... 16


Key Strengths

Robust Platform

The Chinook Book marketing platform is effective because it delivers valuable data to

merchants and is engaging for consumers. It is scalable.

Verifiable ROI

Chinook Book can objectively verify that its promotion has generated a positive return

on investment for the merchant. Chinook Book demonstrates verifiable ROI for

merchants through data collection at all levels of the sales and transaction funnel.

High Retention

Celilo’s system has proven to be successful in acquiring as well as retaining clients with

over 70% retention.

National and Local Reach

Celilo provides solutions to national eCommerce down to hyper-local advertising.


Key Opportunities

National Companies Can Connect Locally

National companies can create connections within a local community using rewards.

American Express is a good example. Chinook Book deals prompt people to go to stores

and use their Amex card to drive usage and reward loyalty. Transportation, media

companies and large nonprofits that want a local presence could also take advantage of

Chinook Book.

Platform Can be Applied to Any Vertical

An acquirer can integrate the Chinook Book platform into its existing business.

Organizations that have audiences can utilize this platform to acquire and retain

customers by providing rewards and loyalty.

Companies with Large Audiences Can Generate Additional Revenue

The Chinook Book platform can help companies with large audiences to generate new

sources of revenue from merchants that want to reach their existing audience.


The Company Celilo Group Media is a media and technology company that connects businesses to

customers. Its flagship, Chinook Book, is a multi-channel marketing platform that

integrates a mobile app with email, web, content, contesting and social promotions

that enable marketers and merchants to engage with customers.

Chinook Book delivers mobile coupons, promotes contests, product launches,

events, rewards and loyalty. Customers save on groceries, restaurants, cafés,

entertainment, home & garden, fashion, wellness and travel. Chinook Book is a

high-quality brand.

Celilo’s platform can be applied to an existing SMB’s user base; it can also provide

new users to the SMB. The platform was developed specifically for SMBs. In

addition, it provides an audience of existing and new consumers for these SMBs.

Revenues are $2 million. Almost all of Celilo’s revenue is from B2B, about 90%.

Advertising and incentive reward solutions for SMBs account for 80% of revenues

and 20% are from end-user subscriptions.

Celilo currently operates in five local markets: Denver, Minneapolis, Portland,

Seattle and the San Francisco Bay Area. Additionally, the Company has a growing

group of national eCommerce advertisers. The Company has more than 3,000

advertising locations, including stores and large events.

Celilo also works with organizations that have large audiences. These include energy

companies, universities and public media organizations. Celilo’s system gives them

tools to help gain and retain their customers.

The Company recently downsized (because of the coronavirus) from 20 to 14

employees. This includes a development center with five employees in Bucharest,

Romania. This strong and cost-effective in-house development team allows Celilo to

go to market quickly and adjust nimbly to changing market conditions.

Celilo Group Media was founded in 1999 and began by publishing print books of

coupon offers for sustainable advertisers that were sold in grocery stores and as a

fundraiser by schools. Celilo produced other custom publications during the early

days. During the late 2000s, Celilo published an online directory. That project

evolved into the Chinook Book mobile app, which launched in 2010 shortly after the

iOS app store was launched. The Celilo platform is designed for both Android native

and iOS native systems.

Celilo has embraced virtual work environments, leveraging solutions like Slack,

Google Docs, and other specialized tools since 2014. Celilo has small workspaces in

Portland, Minneapolis, and Bucharest Romania. The workforce is highly mobile and

virtual.


The Platform — Chinook Book The Chinook Book platform helps businesses tell their story, promote brand

awareness, drive in-store sales and encourage loyalty. It delivers mobile coupons

and promotes contests, product launches and events.

Chinook Book offers a hyper-local to national digital marketing tool for businesses. It

includes coupons to save money in a mobile app along with resources and news

stories that introduce customers to sustainable organizations in their area.

To see how Celilo tells the story of its platform solution see

https://www.chinookbiz.com.

The platform has uniquely valuable capabilities, including:

• Marketers can tell their story their way to their customers.

• Geo-located push reminders to use Favorited offers when the user is in the

neighborhood

• New weekly discounts to encourage loyalty and increase engagement

• Seasonal promotions for merchants that want to drive business at certain

times

• Punchcards that earn free pizza, coffee, bread and more

Figure 1 A Complete Marketing Funnel Solution

https://www.chinookbiz.com/


• Easy searches by name, category, new, expiring or popular to help

consumers find deals near them

• Users can save offers to a list with one tap

• Contests and prizes from Chinook Book business partners

Most advertising platforms either excel in "top of funnel" branding and storytelling

or "bottom of funnel" incentive and conversion. This platform does both with a

natural progression from discovery to education to redemption.

The Chinook Book app has better reviews than most discount offer apps, averaging

nearly five stars in the last 12 months. The platform is reliable, and most

importantly, the user experience is solid. Engagement with new Chinook Book

products, such as the News Feed on the home screen of version 5.0, is exceeding

expectations and industry metrics.

The platform can integrate seamlessly into existing customer loyalty models. As

currently deployed, the platform is focused on sustainability. The platform has the

functionality and scalability to serve any consumer-facing organization.

Figure 2 The Chinook Book App


The Chinook Book Community

Chinook Book has engendered a trusted community between merchants and

consumers, who share values of sustainability and support of local businesses. It

attracts premium merchants. This is a key reason that the Company has a high

retention rate.

Chinook Book connects businesses that meet basic sustainability business practices

and consumers that share like values. The significance of this focus is that Chinook

Book attracts merchants that do not advertise or provide discounts any other place.

In addition, the customers are high value. This creates a trusted community for both

merchants and users. While once a niche market, basic sustainability practices

including organic food and recycling are now mainstream.

Audience & Community Enhancement Programs To grow its audience and revenue and to entrench itself as a valued community

member Chinook Book has established two partnership programs.

Community Rewards The Chinook Book Community Rewards platform gives large membership

organizations a way to deliver rewards and discounts to their donors and

subscribers. The Chinook Book app makes it inexpensive and efficient for them to

participate. Donors and subscribers of these organizations can take advantage of

the Chinook Book app without needing to arrange agreements with merchants.

The Chinook Book Community Rewards solution is continuing to grow. Examples of

reward clients include:

• Minnesota Public Radio: the largest public radio network in the country

with more than 80,000 sustaining donors

• Oregon Museum of Science and Industry: more than 25,000 members

• Nike: more than 50,000 employees

• Portland General Electric: thousands of customers

• Boulder Valley School District: a reward for their 5,000+ employees


Customers Celilo sells to three sets of customers:

1. Direct to consumers

2. To marketers that want to reach consumers

3. To organizations with audiences (consumers)

Consumers Chinook Book has a total audience of 250,000. Of these, 58,000 have paid full-access

subscriptions and more than 20,000 of these have paid for a 12-month subscription

in-app with a credit card.

Marketers and Advertisers

Marketers include dining, retail, service sector, civic institutions, government

agencies, nonprofit organizations, attractions, destination marketing organizations

and wellness services. The Company has more than 1,400 advertising customers

with 3,000 locations. Advertisers have a local presence in Celilo’s markets and a

strong sustainability commitment.

Organizations with Audiences

These organizations use Chinook Book to acquire and retain audience. Target

audience partners include publications, membership organizations, destination

marketing organizations and nonprofits seeking to reward and incentivize

membership through discounts and rewards.

Energy companies, universities and large nonprofits have partnered with Chinook

Book to give their audiences incentives.

Brand Integrity

Chinook Book has an excellent reputation in its markets. The brand is trusted and

respected and is perceived to be a brand with high integrity. Chinook Book also

enjoys high user retention and engagement compared to other deals platforms due

to its strong brand alignment with schools, nonprofits and shared community

values.

Sales and Marketing

The sales team is currently managing more than 1,000 accounts that renew

annually. Many of these customers purchase additional advertising products

throughout the year. The team is also managing a new acquisition pipeline of more

than 2,000 prospects.


Pricing

Advertising products are sold as packages at various pricing levels up to $20,000.

End-user mobile app subscriptions are $16 per year.

Competitive Landscape

Celilo’s direct competitors fall into four broad segments:

• Programmatic and Display Ad & Content Platforms — Facebook, Google,

Instagram, Yelp

• Legacy Media — traditional print, radio, television and outdoor display

advertising organizations

• Deals Platforms — Groupon, Ibotta, ValPak

• Loyalty/Rewards Platforms — 5 Star, Square, Revel

The key point of differentiation from programmatic and content platforms (like

Google or Facebook) is that Chinook Book offers a narrowly targeted demographic

of pre-qualified prospects with “skin in the game” due to their subscription

purchase behavior and self-selection as values-oriented consumers. In addition,

Chinook Book offers extremely robust and verifiable attribution. Unlike most digital

displays, Chinook Book can verify that the promotion resulted in either an in-store

purchase or an online purchase.

Celilo’s key point of differentiation from legacy media is its mobile-optimized

promotion mechanism and its ability to prove sales attribution through geo-located

redemptions of the mobile offers.

The key differentiator from deals platforms is the flexibility and freedom that

Chinook Book provides the merchant to create an offer that will work for their

timing, promotional goals and business model. The mechanisms that Celilo offers

(such as contest activation, branded content, enhanced profile and punchcard)

allow the merchant to tell its unique story and incentivize loyalty/repeat business in

addition to first-time sales.

Celilo’s business customers prefer to attract customers that share their values. They

like receiving detailed actionable data about their promotion’s views, clicks and

redemptions so that they are convinced that it works. They also like that the

promotions include built-in mobile push reminders based on location and seasonal

relevance.


Technology Celilo has a technology platform that is designed for both Android native and iOS

native systems. The Company has a substantial server and app platform with a

number of new capabilities under development. Celilo has developed a platform

leveraging Amazon Web Services that is highly scalable on a global scale.

Details of the technology platform are outlined in Appendix A.

New Capabilities Under Development

Celilo’s current development roadmap remains relevant to supporting the

Company’s merchants during and after the Corona pandemic. These new projects

will strengthen the Company’s product offerings and increase business efficiency.

This will improve Celilo’s ability to be profitable when the Company emerges from

the slowdown.

• Production enhancements allowing the Company to produce more with

fewer staff.

• A brand update and app re-skin with new “user collection” functionality will

enhance partner’s exposure while allowing users to better position the

brand favorably for pitching to new strategic partners.

• The contest platform is being brought in house, increasing its utility for user

acquisition and driving improved in-app metrics for merchants.

• A new semi-automated merchant onboarding process will create

efficiencies in sales and production by allowing self-service onboarding and

renewal for small revenue merchants.


Financial Summary

The Company’s summary financial statements are presented below. Celilo Group

Media has been capitalized by a number of angel investors and approximately

$3 million has been invested to date. The Company is cash flow positive.

(000s) 2016 2017 2018 2019

Total Revenue: $3,296 $3,171 $2,596 $2,654

Operating Expenses 3,325 3,314 3,196 2,369

Operating Income (29) (143) (600) 285

Almost all of Celilo’s revenue is from B2B, about 80%. Advertising and incentive

reward solutions for businesses and organizations account for 80% of revenues and

20% is from end-user subscriptions.

Management Discussion — Recent Events

2019 was a pivotal year for Celilo. The Company demonstrated significant

operational competence in effecting these changes. Management reorganized the

Company to execute a completely digital strategy on a more national scale.

Celilo successfully converted merchants to a fully digital platform. The Company

wound down its legacy print coupon book in September to focus on its digital

audience singularly. Celilo has fully shifted its strategy and its product mix to digital

products. The response from local business, local eCommerce and national

eCommerce has been strong.

In addition, Celilo has done an excellent job of nimbly moving through a vastly

changing retail environment. The Company increased its user base significantly.

Celilo finished the year with a positive operating profit.


Employees & Management

Celilo has an excellent team all around. The Company employs 14 people:

Management 1

Sales & Marketing 5

Software Development 6

Customer Support 1

Administrative 1

Total 14

The Company has a development center with five employees (included above) in

Bucharest, Romania that was founded in 2014.

Management Team

Management and key employees are enthusiastic about taking the Chinook Book

business model to the next level as part of a larger organization.

Greg Keene, CEO

Greg has an extensive background in mobile technology, platform, and product

strategy. He has worked with Celilo Group Media as CEO for two years and as the

Chief Technology Officer for four years. Prior to that, Greg worked as an Internet

Strategy and Technology Consultant with Watertown, LLC.; was co-founder and CTO

of Qsent, a venture capital-backed mobile application and data firm that was

acquired by TransUnion; and was co-founder and CTO of Pacific Harbor Publishing,

an early 1990s web-development and hosting company. Greg has a Bachelor of

Science degree from Oregon State University and a postgraduate certificate from

Stanford University Graduate School of Business.

Trisha Pancio, Director of Marketing

Trisha has more than 15 years of experience in marketing and business

development. Prior to Celilo, she was Director of Marketing and Business

Development for Arciform and Versatile Wood Products and Director of Marketing

for Oregon Ballet Theatre and Artists Repertory Theatre. Trisha has a Bachelor’s

Degree from Reed College.

Katherine Mullen, Senior Vice President of Sales

Katherine has more than 20 years of sales experience. She has been with Celilo for

18 years. Prior to Celilo, she was an environmental consultant and writer, and a

Program Director for the Institute for Local Self-Reliance and a Project Coordinator

for the Minnesota Pollution Control Agency. Katherine has a Bachelor of Science

degree in Environmental Studies from the University of Minnesota.


Eugen Popescu, Director of Development

Eugen has been involved with engineering management and architecture for over

15 years. Prior to Celilo, Eugen was the Software Architect Team Lead for Twispay, a

Software Architect at Crossrider Plc, Irresistible Me, Bitterstrawberry and AMOMA,

and a freelance web developer. Eugen has a degree in Computer Science from the

Politehnica University of Bucharest.


Appendix A: Technology Platform Detail The Chinook Book platform is designed for both Android native and iOS native

systems. Chinook Book has a substantial server and app platform including:

• API server platform to support mobile apps.

• Affiliate platform to support revenue sharing for user acquisition

• Administration platform to support:

o Campaign production

o User management and support

o Affiliate network support

o Community Rewards administration

o Reporting

• Data warehouse with more than 400 million records

• Celilo develops using the following technology:

o Mobile

▪ Native iOS Development

▪ Native Android Development

o Server Development & Technologies

▪ Amazon Web Services (AWS)

• PHP Elastic Beanstalk Web & Workers

• Aurora (MySQL) Autoscale RDS

• SQS

• Cognito Mobile Sync

• CloudSearch

• CloudFront

• S3

▪ PHP (Laravel, Vue.js, Ember.js)

▪ Algolia (Search)

▪ Periscope (Redshift) Data Warehouse

▪ Github

▪ Postman

▪ Sentry Monitoring

▪ Zendesk

▪ Mailchimp/Mandrill

o Sales

▪ Salesforce

▪ Custom Salesforce sync integration to other in-house and

3rd-party platforms

o Financial and Accounting

▪ Stripe (standard and Connect) Billing integration

▪ Recurly Billing Integration

▪ Xero Accounting Integration


Appendix B: Certified B Corporation In 2010, the Company was certified as a B Corporation and was

recertified in 2013. Certified B Corporations are businesses that balance

purpose and profit. They are legally required to consider the impact of

their decisions on their workers, customers, suppliers, community and

the environment.

To qualify for B Corp status, Celilo underwent rigorous application and qualification

criteria designed to establish sustainable and ethical business practices. B Corp

certification increases trust with prospective advertisers by offering independent

third-party confirmation of the organization’s ability to follow through on its brand

promise. As the publication and mobile marketing arenas become saturated with

more fly-by-night unstable start-ups and failing legacy businesses, acquiring and

maintaining the trust of local merchant partners becomes increasingly difficult.

B Corp certification offers an important shorthand for Celilo’s track record and

operating principles. This resonates with Celilo’s merchants.

http://bcorporation.net/

Documents

Celilo Group Media, Inc.A Trusted Digital Multichannel Marketing Platform Descriptive Memorandum March 2020 Prepared by T.V. METZ & CO., LLC Boutique Investment Banking For further