2015 - Paolo Poffandi - Executive Summary

PAOLO P O F F A N D I

LUXURY APPAREL

FOR MEN

MA D E I N I T A L Y

Contact: Paolo Poffandi p.poffandi@aol.com

The reader acknowledges that the information provided in this Executive Summary is confidential; therefore, reader agrees not to disclose it without the express written permission from Paolo Poffandi.

It is acknowledged by reader that information to be furnished in this Executive Summary is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use by same of reader, may cause serious harm or damage to the Paolo Poffandi Brand.

Upon Request, this document is to be immediately returned to or deleted from any computer or storage device.

CONTENT INTRODUCTION

i

CORPORATE STRUCTURE

1

LAUNCH

2

BRANDING

3

THE COMPETITION

5

THE MARKET PLACE

16

MARKETING

19

RETAIL PRICE POINTS

21

OPERATIONS

22

FINANCIALS - 1

23

FINANCIALS - 2

30

MANAGEMENT TEAM

37

ADVISORY TEAM

38

INVESTMENT

40

APPENDIX A

41

APPENDIX B

42

APPENDIC C

43

CONCLUSION

44

i INTRODUCTION Launching a men’s luxury fashion line is like dancing with Edyta Śliwińska.

She is complex and requires your undivided attention.

Who is Paolo Poffandi? His origins stem to Corfu, and farther back to Venice, Italy. He has lived in nine countries and describes himself simply as Tanned. He enjoys ten-minute chess and staying fit. He has lived in nine countries and can speak French, Greek and some Italian.

Eight years as a stockbroker and fifteen years in project finance have shaped his views on the world of investments. Now, he is investing in his own creation.

The Paolo Poffandi Brand targets the ultra high net worth perfectionist. The entire collection will be made in Italy, assuring “quality” is never compromised.

There are plans to open storefronts in Dubai, Beverly Hills, Milan, New York, London, Paris, Moscow, Shanghai, Beijing, Macau, and Monte-Carlo.

We will also market on the Web, through personal stylists, and top end retailers. The apparel will come ready to wear as well as custom fitted.

Franchising the brand is a possibility once we have demonstrated the viability of a corporate model.

Patent pending signature accessories composed of precious metals and gems are also part of the product line.

Paolo Poffandi

1

CORPORATE STRUCTURE

The Paolo Poffandi Brand represents the original name of its creator. A corporation will be structured once seed capital has been secured.

2 LAUNCH The launch will consist of a Start-Up and Ramp-Up stage in the first two years.

The Start-Up Stage (Year 1) In this stage, we will: 1) design an e-commerce web site 2) create samples for Spring/Summer Collection; Autumn/Winter Collection/ Evening Wear, shoes, and accessories.

3) create marketing packages for agents and distributors 5) implement accounting systems 6) launch an advertising/PR campaign This stage will require an investment of $100,000 The Ramp-Up Stage (Year 2) In this stage, we will: 1) invest in a storefront (please see Financials 1) 2) penetrate retail channels This stage will require an additional investment of $1,500,000

3 BRANDING Apart from the sophisticated logo, which has garnered acclaim, and stylish clothing, how does Paolo Poffandi distinguish himself from the competition? The brand is not to be confused with a mid-luxury brand. It is a Top End Luxury Brand.

Below, and in no particular order, are suits of mid-luxury brands by Fendi, Burberry, Louis Vuitton, Canali, Dolce & Gabbana, Calvin Klein, Gucci, Armani and Hugo Boss. Which one is the Armani* suit? They are indistinguishable.

It appears that if we did nothing else but imitate a mid-luxury brand, we would still be able to carve a niche in the marketplace, after years of branding campaigns.

* The second suit from the right

4 The Paolo Poffandi Brand is synonymous with unparalleled luxury and uncompromising craftsmanship.

The creation of Patent Pending jewelry, featuring men’s accessories never seen before, promises to revolutionize men’s luxury apparel. You have not seen anything, yet.

PICTURE OF PATENT PENDING ACCESSORIES NOT INCLUDED

Key to Branding is Innovation

5 THE COMPETITION Hugo Boss Angelo Galasso

Isaia

Armani

Jacob Cohen

Brioni

Just Cavalli

Brunello Cucinelli

Kiton

Burberry Calvin Klein

Maison Martin Margiela

Canali

Ralph Lauren

Caruso

Stefano Ricci

Corneliani

Tommy Hilfiger

Eddy Monetti

Valentino

Fendi

Zegna

Givenchy

Zilli

We really have only one competitor Stefano Ricci A close second is Brioni

6

In order to fully appreciate the Stefano Ricci Brand, we examine his stores and apparel

7

STEFANO RICCI Flagship Store

8

STEFANO RICCI Beverly Hills Store

9

STEFANO RICCI New York Store

10

STEFANO RICCI Moscow Store

11

STEFANO RICCI Shanghai Store

12

STEFANO RICCI Apparel

13

STEFANO RICCI Apparel

14

STEFANO RICCI Pen

15

STEFANO RICCI web site www.stefanoricci.it

16 THE MARKET PLACE The retail experience for Luxury goods is evolving. The luxury consumer expects craftmanship and ease of purchase, as has always been the case.

1. From a Forbes article(a) : “Gucci for example has made Amazon.com their official authorized online retailer.

Why? Again, because people look to these services more and more to make purchases rather than purchase decisions. They are learning about products elsewhere such as via advertising, social media, and more traditional media. The comfort and sophistication of buying via the internet’s largest retailers is both trusted by and appealing to consumers. In the end consumers are looking for an easy way to get the things they want. The hassle of the traditional luxury buying experience is the industry’s biggest threat.

Today successful luxury brands have taken responsibility over manufacturing, creating retail demand, and finally fulfilling the demand by selling direct to consumers. The value of the middleman third party retailer is quickly evaporating.

Conclusion: Online marketing should be an integral compoment of the marketing mix.

17 2. From a Business of Fashion (BOF) article(b) : “One of the most exciting findings is that by 2018, in the next five years, based on our predictions and based on how fast the region is growing, Asia Pacific will be the biggest region in the world for luxury goods,” Flur Roberts, the head of luxury goods research at Euromonitor, told BoF. “This is predominantly due to China, but also the emerging Asian markets like Malaysia and Indonesia. India is also a major contributor.”

Since the start of the firm’s luxury goods research practice back in 2004, Western Europe has been the “clear leader” in luxury consumption and has accounted for more than 33 percent of all luxury spending in the past year. However, with luxury consumption in Asia Pacific expected to grow 170 percent over the next five years, the region is set to dethrone Western Europe as early as 2018.”

Conclusion: Penetrate the Asia Pacific market.

3. From a Sphere article(c) : “Rebecca Robins and Manfredi Ricca, directors at brand consultancy Interbrand, and co-authors of 2012’s Meta-Luxury: Brands and the Culture of Excellence argue that Luxury as a term has become bloated, overused and meaningless.

They call for a refocusing on true luxury, luxury as a pursuit of painstaking craftsmanship, quality and excellence, to maintain consumer confidence and impress today’s discerning connoisseurs who aren’t fooled by luxury that isn’t credible. They argue that true luxury brands such as Hermès and perfumer Francis Kurkdijan put excellence and product first, and let business follow, and are still a commercial success because people believe in them.

“It makes the brand irreplaceable, rather than disposable. Something truly unique. Consumers today are looking for something with meaning and longevity and this is the way to achieve that,” explains Robins.”

Conclusion: Put excellence and product first, and let business follow. Become irreplaceable.

18 MARKETING Projected % Revenue By Sales Channel Digital

Storefront

Clothiers

Retail

20% 40% 20% 20% The marketing mix will consist of advertising and public relations campaigns to support direct in-home sales, digital marketing, corporate storefronts, and affiliated retail chains. The Public Relations effort will consist of sponsoring artists, white paper research, social media curators, sponsorships, magazine/television publicity, and fashion shows.

19 Digital Marketing Integrating a central manufacturing hub to an ecommerce web site is a matter of necessity, not choice. The internet experience must also be multi-lingual. Traffic will be directed to the web site through advertising and public relations campaigns. Internet marketing provides the most lucrative profit margins.

Email campaigns will direct buyers to the web site where they can shop online.

Wealth Window (www.wealthwindow.com) is a unique, high performing database of 18MM individuals that consistently outperforms the competition. While most providers of highincome consumers rely on information derived from census data, geo-targeting, and demographics to identify the rich, WW utilizes over 80 proprietary sources (many that are not included anywhere else) to identify positions, possessions and proclivities, at an individual level, and categorize many wealthy individuals that other resources overlook or miss. Wealth Window is an Omni-channel portal to the most affluent consumers in the US, and allows direct mail, email, digital, mobile and video messages to the same individuals in a true integrated campaign.

Outlets of Luxury brands like SHOPSTYLE.com, will also provide additional revenues, but are considered Retail channels due to the markups.

Storefronts For those consumers who are not as adept with the internet, there is the storefront experience - and in-home fashion stylists. We are projecting opening one store. The assumption is that it will cost(d) $100,000 [$112 /sq ft] to furbish a 800 sq ft space and $500,000 per year ($625 /sq ft ) to lease in Beverly Hills’s Rodeo Drive (e). This is reasonable compared to other cities in the world (f).

20 Storefronts for luxury brands are capital-intensive and must be in the most prestigious real estate in order to gain acceptance. They must also be backed by ample advertising budgets.

The interior design must border on palatial. Profit margins are expected to be the least generous. Potential cities for storefronts include but are not limited to Beverly Hills, Paris, Dubai, Abu Dhabi, New York, Beijing, Monaco and London.

Clothiers Equipped with a laptop, a catalog, a tape measure and swatches, Clothiers (personal Stylists) can visit their clients in their homes or offices. They transmit the client’s measurements directly to the manufacturing hub over the internet. Profit margins are expected to be greater than Storefronts’ but not as great as those of the Internet portal.

This model has been tried and tested by J. Hilburn (www.jhilburn.com/partnerlocator) a midluxury men’s clothing line. The commissions they offer stylists range from 10% to 30%. The model includes team leaders which share in the success of their teams.

Astor & Black also provides a remarkable commentary on the trends in this video.

Retail This entails creating relationships with established luxury retailers such as Harrod’s of London. The profit margins are expected to be modest, even though revenues are expected to be double that of other sales channels. We expect retailers to command a 300% markup on our apparel, and a 100% markup on accessories. If our suits cost $500 to make, and we wholesale them for $1,000, the retail price will be in the $4,000 - $8,000 range.

Retail also includes internet outlets such as shopstyle.com.

For accessories such as a pair of Button Cuff Bars, which may cost $30,000 to make, the wholesale price is expected to be $45,000, and retail at $90,000.

21 RETAIL PRICE POINTS HIGH

MID

LOW

OUR COST

SUITS

$8,000

$5,000

$3,500

$300

JACKETS

$4,000

$2,500

$1,000

$200

SHIRTS

$2,000

$500

$200

$40

PANTS

$2,000

$1,000

$500

$80

SHOES

$1,200

$800

$400

$100

SWEATERS

$1,200

$600

$400

$80

BELTS

$300

$200

$150

$40

FRAGRANCES

$400

$250

$200

$40

CUFF BARS

$120,000

$90,000

$65,000

$35,000

SHIRT CUFFS

$4,000

$2,000

$1,000

$500

OVERCOATS

$6,000

$4,000

$2,000

$200

22 OPERATIONS MANUFACTURING In keeping with the ‘made in Italy” benchmark of unsurpassed quality, all manufacturing will be in Italy.

PERSONNEL An Operations Manager in Italy will coordinate the manufacturing of clothing and accessories. He will report to the President in Year 1. This position could also be filled by a Consultant on a retainer basis. We have sourced a Consultant who exacts $4,000 per month for his services which include overseeing all aspects of production. He also has previously consulted for the brands Stefano Ricci and Isaia.

In a best case scenatio, the VP Operations position will be created in Year 2. He will oversee the Operations Manager and Store Managers. The VP Marketing will coordinate Retail Chain sales, oversee Advertising with the President, coordinate with the Webmaster and direct the Sales Director. An in-house Webmaster will coordinate the Internet portal and will report to the VP Marketing. The VP Finance will oversee financing strategies, This position will be created in Year 2. He will have oversight of Accounting and Investor Relations.

The Store Manager will manage commissioned Sales Associates in storefronts and report to the President in Year 1, and to the VP Operations as of Year 2.

The Sales Director will oversee a commissioned direct sales force of fashion stylists. New territories will be added every 6-12 months in major cities worldwide in conjunction with storefront expansion.

The President in Year 1 will have oversight of Designers, Store Manager, the Operations Manager, Public Relations, Investor Relations, and any Consultants. An Administrative Assistant will be retained in Year 2 to assist the President and VP’s.

23 FINANCIALS 1

Best Case Scenario Assumptions

Aggressive Revenue Growth $1.5 Million 2nd round financing 4 Sales Channels Full Product Line

24 ORGANIZATIONAL CHART - BEST CASE PRESIDENT

VP FINANCE CONSULTANTS

VP MARKETING

VP OPERATIONS INVESTORS

OPERATIONS MANAGER

STORE MANAGER

MANUFACTURERS

SALES ASSOCIATE

ADMIN ASSISTANT

ACCOUNTING

WEBMASTER

SALES DIRECTOR

DIRECT SALES STYLISTS

Year 1 Year 1 Year 2

RETAIL CHAINS

25 5 Year Personnel Salaries - Best Case ($000) Year 1

Year 2

Year 3

Year 4

Year 5

President

120

140

180

220

300

VP Marketing

100

120

150

200

250

VP Operations

n/a

100

120

140

160

VP Finance

n/a

100

120

140

160

Operations Manager

100

150

200

225

250

Store Manager

80

80

80

80

80

Webmaster

75

90

120

150

150

Director of Sales

50

160

170

230

290

Admin. Assistants

n/a

120

120

120

120

Total

525

1,060

1,260

1,505

1,760

26 5 Year Sales Projections - Best Case ($000) Year 1

Year 2

Year 3

Year 4

Year 5

Channel

Retail

Web

Direct

Store*

Retail

Web

Direct

Store

Retail

Web

Direct

Store

Retail

Web

Direct

Store

Retail

Web

Direct

Store

Suits

200

100

100

100

400

200

200

200

600

300

300

200

800

400

400

200

1000

500

500

200

Revenue

$200

$350

$350

$350

$400

$700

$700

$700

$600

$700

$800

$1,000

$1,750

$1,750

$700

Shirts

400

200

200

200

800

400

400

400

1200

400

1600

2000

1000

1000

400

Revenue

$40

$80

$80

$80

$80

$160

$160

$160

$1,200

$160

$1,600

$2,000

$4,000

$4,000

$160

Jackets

80

40

40

40

120

60

60

60

160

80

80

60

200

100

100

60

240

120

120

60

Revenue

$16

$64

$64

$64

$24

$48

$48

$48

$32

$64

$64

$48

$40

$80

$80

$48

$48

$96

$96

$48

Cuff Bars

40

20

20

20

60

30

30

30

80

40

40

30

100

50

50

30

120

60

60

30

$5,400

$5,400

$5,400

$2,700

$500

$250

$250

$100

Revenue $1,800 $1,800 $1,800 $1,800 $2,700 $2,700 $2,700 $2,700 Other**

$100

$50

$50

$50

$200

$100

$100

$100

Total $2,156 $2,344 $2,344 $2,344 $3,304 $3,708 $3,708 $3,708 Revenue

Total

$9,188

$14,428

$3,600 $300 $5,732

$1,050 $1,050 600

600

$2,400 $2,400

$3,600 $3,600 $2,700 $4,500 $150

$150

$100

$400

$7,264 $7,264 $3,708 $7,340

$23,968

$1,400 $1,400 $700 800

800

400

$3,200 $3,200 $160

$4,500 $4,500 $2,700 $200

$200

$100

$9,380 $9,380 $3,708

$29,808

$8,948

$11,496 $11,496

$35,648

* Assuming only one corporate store will be operational in the first 5 years. The corporate store could be located in Beverly Hills, Dubai, London or Paris - it remains to be determined. ** Other items include belts, shoes, fragrances, socks, cufflinks, watches, sweaters, pants and ties.

$3,708

27 5 Year Cost of Goods Sold - Best Case ($000) Year

Year 1

Year 2

Year 3

Year 4

Year 5

Product

Units

Cost

Units

Cost

Units

Cost

Units

Cost

Unis

Cost

Suits

500

150

1000

300

1400

420

1800

540

2200

660

Shirts

1000

40

2000

80

2800

112

3600

144

4400

176

Jackets

200

200

300

300

380

380

460

460

540

540

Cuff Bars

100

3,500

150

5,250

190

6,650

230

8,050

270

9,450

Other*

TBD

100

TBD

200

TBD

280

TBD

360

TBD

440

Total

3,990

6,130

*Other items include belts, shoes, fragrances, socks, cufflinks, watches, sweaters, pants and ties.

7,842

9,554

11,266

28 5 Year P&L - Best Case ($000) Year 1

Year 2

Year 3

Year 4

Year 5

Revenue

9,188

14,428

23,968

29,808

35,648

COGS

3,990

6,130

7,842

9,554

11,266

Gross Profit

5,198

8,298

16,126

20,254

24,382

Retired Debt*

150

150

150

150

1,650

Accounting/Legal

200

200

200

200

200

Beverly Hills Store

600

500

500

500

500

Sales Personnel**

720

1,080

1,260

1,440

1,620

Personnel

525

1,060

1,260

1,505

1,760

Advertising/PR

600

1,200

2,000

2,000

2,000

Total Operating Expenses

2,795

4,190

5,370

5,795

7,730

Net Profit Before Tax

2,403

4,108

10,756

14,459

16,652

* Debt represents a $1.5 Million obligation to investors, repaid in interest only payments at 10% p.a. and the principal in one balloon payment at the end of the 5th year ** 20% commissions paid to sales personnel engaged in Retail and Direct sales.

29 Year 1 - Cash Flow - Best Case ($000)

Cash Received from

Cash Paid for

Q1

Q2

Q3

Q4

Cash at Beginning of Year: $1.5M

Clients

400

900

2,500

5,300

9,100

Inventory

-200

-450

-900

-2,440

-3,990

Wage Expenses

-187

-187

-187

-187

-748

G&A

-50

-50

-50

-50

-200

Advertising / PR

-150

-150

-150

-150

-600

n/a

n/a

n/a

-150

-150

-225

-125

-125

-125

-600

-412

-62

1,088

2,198

2,812

Interest Storefront Net Change in Cash

* Estimated time to set up a store is 3 months at a cost of $100,000

30 FINANCIALS 2

Worst Case Scenario Assumptions

Revenues are low and remain flat Initial Injection of $100K Limited Product Line 2 Sales Channels

31 ORGANIZATIONAL CHART - WORST CASE PRESIDENT

ADVISORS

OPERATIONS MANAGER

INVESTORS

ACCOUNTING

MANUFACTURERS DISTRIBUTORS

RETAIL CHAINS

Year 1 Year 1 Year 2

WEBMASTER

ADMIN ASSISTANT

32 5 Year Personnel Salaries - Worst Case ($000) Year 1

Year 2

Year 3

Year 4

Year 5

President

50

100

150

150

200

VP Marketing

n/a

n/a

n/a

n/a

n/a

VP Operations

n/a

n/a

n/a

n/a

n/a

VP Finance

n/a

n/a

n/a

n/a

n/a

Operations Manager

50

80

100

120

120

Store Manager

n/a

n/a

n/a

n/a

n/a

Webmaster

50

90

100

150

150

Director of Sales

n/a

n/a

n/a

n/a

n/a

Admin. Assistants

n/a

80

80

80

80

Total

150

350

430

500

550

33 5 Year Sales Projections - Worst Case ($000) Year 1

Year 2

Year 3

Year 4

Year 5

Retail

Web

Retail

Web

Retail

Web

Retail

Web

Retail

Web

Suits

100

50

200

100

300

150

300

150

300

150

Revenue

$100

$175

$200

$350

$300

$525

$300

$525

$300

$525

Shirts

200

100

400

200

400

200

400

200

400

200

Revenue

$20

$40

$40

$80

$40

$80

$40

$80

$40

$80

Jackets

40

20

60

30

120

60

120

80

120

80

Revenue

$8

$32

$12

$48

$24

$96

$24

$128

$24

$128

Other**

$50

$25

$100

$50

$100

$50

$100

$50

$100

$50

Total

$178

$272

$352

$528

$464

$751

$464

$783

$464

$783

Total

$450

$880

$1,215

** Other items include belts, shoes, fragrances, socks, cufflinks, watches, sweaters, pants and ties.

$1,247

$1,247

34 5 Year Cost of Goods Sold - Worst Case ($000) Year 1

Year 2

Year 3

Year 4

Year 5

Product

Units

Cost

Units

Cost

Units

Cost

Units

Cost

Unis

Cost

Suits

150

45

300

90

450

135

450

135

450

135

Shirts

300

12

600

24

600

24

600

24

600

24

Jackets

60

6

90

9

180

18

200

20

200

20

Other*

TBD

20

TBD

40

TBD

40

TBD

40

TBD

40

Total

83

163

217

219

219

35 5 Year P&L - Worst Case ($000) Year 1

Year 2

Year 3

Year 4

Year 5

Revenue

450

880

1,215

1,247

1,247

COGS

83

163

217

219

219

Gross Profit

367

717

998

1,028

1,028

Retired Debt*

10

110

n/a

n/a

n/a

Accounting/Legal

30

30

30

30

30

Personnel

150

350

430

500

550

Advertising/PR

40

50

70

80

100

Total Operating Expenses

230

940

530

610

680

Net Profit Before Tax

137

177

468

$418

$348

* Debt represents a $100,000 obligation to investors, repaid with interest only payments at 10% p.a. and the principal in one balloon payment at the end of the 2nd year

36 Year 1- Cash Flow - Worst Case ($000) Q1

Q2

Q3

Q4

Cash at Beginning of Year: $100,000

Clients

50

100

100

200

450

Inventory

-10

-20

-30

-23

-83

Wage Expenses

-38

-37

-38

-37

-150

G&A

-10

-10

-10

-10

-40

Advertising / PR

-25

-25

-25

-25

-100

Interest

n/a

n/a

n/a

-10

-10

Total Cash Paid

-83

-92

-103

-105

-373

Net Change in Cash

-33

8

7

95

77

Cash Received from

Cash Paid for

37 MANAGEMENT TEAM PRESIDENT Mr. Paul Adams (born Paolo Poffandi) has 15 years experience in project finance, and 8 years as a stockbroker. He has consulted for such personalities as Richard Waryn CEO of YTR, and formerly a Director of the World Bank in the CIS; Darryl Quarles, director of the TV series Family Ties; and, Larry Namer, CEO of E! Entertainment. He is the designer of patent pending accessories for men’s jackets.

Email: p.poffandi@aol.com

OPERATIONS

FINANCE

TBA.

TBA.

MARKETING TBA.

39 ADVISORY TEAM Mr. Christopher Paro Mr. Paro is an international award winning jeweler with thirty five years experience in the jewelry industry. As a Master Jeweler, he has created countless fine jewelry items for some of the finest jewelry retailers throughout the United States and Canada.

With a focus on engineering and product quality, Mr. Paro now consults with a select few manufactures and retailers, while maintaining an exclusive list of very discerning retail clients around the world.

Email: christophparo@msn.com

Mr. Jordan Hill Mr. Hill is currently Director of Finance at Jukin Media Inc., and was previously an Accounting analyst with MarVista Entertainment.

Email: jordanmichaelhill@gmail.com

40

INVESTMENT The Start-Up Stage We seek an initial investment of $100,000 in the form of equity or loan secured by inventory bearing an interest rate of ten (10%) percent per annum. Interest only payments to be paid quarterly over the first 2 years. The principal to be repaid in its entirety at the end of the second year.

The Ramp-Up Stage Following the Start-Up Stage, in commencement of Year 2 we will seek an investment of $1,500,000 in the form of equity or loan secured by inventory and store improvements bearing an interest rate of ten (10%) percent per annum.

Interest only payments to be paid quarterly over the first five years. The principal to be repaid in its entirety at the end of the fifth year.

41 APPENDIX A References: (a) http://www.forbes.com/sites/arieladams/2013/05/23/luxury-consumers-value-products-notbuying-experiences/ (b) http://www.businessoffashion.com/2013/10/euromonitor-coach-michael-kors-louis-vuittonversace-fflur-roberts.html (c) http://www.spherelife.com/future-trends/ (d) http://www.reedconstructiondata.com/rsmeans/models/retail-store/ (e) http://articles.latimes.com/2013/aug/20/business/la-fi-mo-retail-rents-20130819 (f) http://retailindustry.about.com/od/famousretailers/a/Highest-Retail-Store-Rental-Prices-InThe-World-Global-Comparison-2007-2012.htm

42 APPENDIX B PO Financing Financing the manufacturing will be accomplished by a PO financing credit facility, once Purchase Orders are present.

The credit facility will use the PO from the retailer as a guarantee to lend up to 90% of the PO value to pay the manufacturers. This form of financing cannot be employed for the creation of samples or for consignment sales.

Retailer

PO financing is a function of the creditworthiness of the retailer and the reliability of the manufacturer.

The following PO Purchasing credit facilities are interested in servicing our accounts once we are rolling:

B. Inventory received by retailer.

Credit Facility collects from Retailer

1. Crossroads Financial 2. H&A Commercial Capital 3. Commercial Finance Partners

Factory

Credit Facility

C. 10% balance - minus fees - paid to Brand

by Credit Facility

Brand

4. HRH Funding Solutions 5. Plus Funding Group 6. RCR Development / International Finance

A. Brand receives 90% of Invoice value to cover production costs.

43

APPENDIX C

Web Site: www.paolopoffandi.com

44

CONCLUSION

The climate for luxury goods has never been better. Affluence seeks the best the world has to offer. Superb Quality and Personalized Service will always be in style and at a premium.

The Paolo Poffandi Brand has strong market appeal, and with the right Advertising and PR mix can easily be identified as one of the premiere top-tier luxury Italian brands.

The competition has a Storefront, Clothier, Retail, and Digital marketing models which have weathered the test of time and which can be easily replicated.

In addition, the Paolo Poffandi Brand offers innovative patent pending signature accessories which will go far in distinguishing the Brand as an innovator in the luxury men’s fashion arena.

Shareholders can expect to be rewarded within the first 2-5 years.

PAOLO P O F F A N D I

LUXURY APPAREL

FOR MEN

MA D E I N I T A L Y