Revolutionary Product

FreeHand Systems, Inc. (www.freehandsystems.com), a subsidiary of FreeHand Systems International, Inc., is a 5 year old company headquartered in Los Altos, CA. The company is an elite digital music distributor and manufacturer of a music performance and education computer tablet.

Revolutionary technology is shaping the future distribution and performance of sheet music. The company has two products: the MusicPad Pro® and a Digital Sheet Music Website.

The MusicPad Pro is a hardware/software product that enables convenient usage and storage of sheet music in digital format, based on patented technology. The Digital Sheet Music Website, founded in 1996, provides the product (digital sheet music) that links with the MusicPad Pro and delivers robust, flexible, and attractive downloadable sheets of music - achieved by converting printed sheet music into a digital format using a low cost/high speed process.

FreeHand is the only company that manufactures a music performance computer tablet, and its digital sheet music site is the largest in the industry with 98,000 titles.

Market Potential

Music product sales are an approximate $7B industry in the US, according to leading industry trade group, NAMM (National Association of Music Merchants). The global market recently reached $15.4B in total annual sales.

Music products are sold in over 8K music retail stores in the US and over 17.8K globally. The industry has consistently grown at a steady rate of 6% annually, with increasing digital and on-line distribution of music, significant additional growth is expected. Apple’s iPod sales are up 61% from 1 year ago with 8.5M iPods sold in 2nd Quarter of 2006.

53% of US households have one musical instrument, 40%
have two.

Niche sheet music market is expected to mirror the Digital Audio Player market which should experience 400% growth by 2009 and the digital download market which anticipates a 134% growth rate in 2005.

Worth Considering:

• One-of-kind high-tech product (MusicPad Pro®) that’s changing the music industry.
• Strong US distribution PLUS recently opened distribution in Asia and Europe.
• 6 technology patents.
• Not just hardware, company offers digital sheet music for use with its product, provides ongoing revenue.
• Largest Digital Sheet Music Site in industry with over 98,000 titles.
• Exclusive technology provider.
• Exceptional management team with broad experience and history of success.
• 5-year old California-based, international company with strong profit potential.
• Strong, highly motivated management team with $18 million paid in capital.

Current Product Distribution:

• The company aggressively distributes its products both in the US and internationally.
• US and Canadian retailer base supported by strong internal sales team and manufactures reps.
• Major international distributors opening markets in Asia, Europe, Latin America and the Middle East.
• Music retailers offer companies digital sheet music via downloading and printing in-store (FreeHand Sheet Music Now).
• Direct to consumer sale of digital sheet music via company website (freehandmusic.com) offering over 98,000 titles.

Financial Reports:

The consolidated financial statements in the below PDF files are presented for convenience and information purposes only, and while reasonable efforts have been made to ensure the integrity of such information, they should not be relied on. A copy of the printed consolidated financial statements will be provided on request.

Investors contact investorrelations@freehandsystems.com
or call 650-941-0742.

Corporate Milestones