SOBR

Business Context and Reporting Period

Company: Imagine Media, Ltd. (acquiring TransBiotec, Inc.)
Reporting Date: September 19, 2011
Event: Completion of acquisition of approximately 52% of TransBiotec, Inc. (TBT) in exchange for 12,416,462 shares of Imagine Media common stock. The Company's former business (Image Magazine) was abandoned in 2009; the new business focus is the "SOBR" drunk driving prevention system.

Key Financial Metrics

Revenue: The filing states the Company has not generated any revenue. TBT has never generated revenue.
Profitability: The Company has never earned a profit and expects to incur losses in the foreseeable future.
Cash Flow:

• Net cash used for operations (6 months ended June 30, 2011): $(181,119)
• Net cash used for operations (Year ended Dec 31, 2010): $(94,752)

Debt and Convertible Notes (as of June 30, 2011):

• Note to Director Sam Satyanarayana: $154,774 principal + $241,951 accrued interest (8% interest, due 2012).
• Note to Shareholder: $150,000 principal + $266,025 accrued interest (22.1% interest, due 2013).
• Note to Shareholder: $240,000 principal + $937,465 accrued interest (67% interest, due 2009).
• Total contractual obligations (notes + accrued interest): Approximately $1,017,521.

Liquidity: The filing does not provide a specific cash balance as of the report date, noting only that the Company needs additional capital to fund operations.

Material Changes

• Business Transformation: Shift from a defunct magazine publisher to a developer of alcohol detection technology (SOBR).
• Capital Structure: Issuance of 12,416,462 shares to acquire 52% of TBT. Prior to this, the Company had 1,500,000 outstanding shares.
• Management Change: Greg Bloom and Harlan Munn resigned. New officers appointed include Charles Bennington (CEO) and Ronald Williams (CTO).
• Operational Status: TBT remains in the development stage with no revenue generation.

Guidance, Outlook, and Risks

Outlook and Plan of Operation:

• Target Markets: Original Equipment Manufacturers (OEM), retro-fit market (trucking, teen drivers), zero-tolerance commercial fleets, and judicial mandated markets.
• Production Goals: Target of 500 units by October 2011; 1,000 units/month by January 2012; 10,000 units/month by July 2012.
• Capital Needs: Projected costs of $160,000 (Oct 2011), $185,000 (Jan 2012), and $370,000 (July 2012). No firm commitments for additional capital exist.

Risks and Contingencies:

• Financial Risk: High risk of failure to obtain necessary capital; significant dilution expected from future equity sales.
• Legal Proceedings: Two pending breach of contract lawsuits against TBT (amounts: $9,720 and $60,541.76), though plaintiffs have taken no recent action.
• Regulatory: Entry into the judicial mandated market requires state government approval.
• Competition: Competing against established breathalyzer providers (e.g., National Interlock Systems, Lifesafer).

Unusual Items:

• High interest rates on existing debt (up to 67%).
• Agreement with Ventura LLC to issue up to 4,212,720 shares contingent on raising $1.25 million in capital.

Investor Verification Checklist

• Verify the current cash balance and ability to fund the projected $715,000 in operational costs through July 2012.
• Confirm the status of the two pending lawsuits against TBT and potential liability exposure.
• Assess the validity of the three patents (expiring 2021, 2024, 2025) and any freedom-to-operate issues.
• Review the terms of the convertible notes, specifically the high interest rates and conversion prices ($2.50/share), to understand potential dilution.
• Validate the "Ventura Agreement" milestones and the likelihood of raising the required $1.25 million to trigger share issuances.
• Confirm the timeline for beta testing completion and OEM partnerships, as revenue is entirely dependent on these milestones.