Page 6 - NTIT Solutions, LLC: “Go Locker”

C. Competitive Advantage Competitive Advantage Currently, consumers are forced to use large, cumbersome exercise equipment at a gym or purchase expensive devices to receive a full-featured core workout. Small, portable devices are limited in scope and function, and only feature linear ranges of motion. The Ab Machine will enable the user to experience an unrestricted, multi-directional core workout that also works ancillary muscles in the arms, legs, and gluteus. Through the utilization of its unique patented and trademarked roller-ball technology, the Ab Machine can provide an individual of up to 350 lbs. with a wide variety of workout opportunities. D. Investment Merits Investment Merits The Company ’s investment opportunity has the following merits: Strong demand growth for at-home fitness industry o At-home exercise equipment industry grew 12% from 2008 to 2012, reaching $3.6 billion in revenue o Large market opportunity with $211 million in manufacturer sales of ab workout machines o In 2012, 7.6 million people used ab machines Barriers to Entry o Experienced team with product management experience o First-mover advantage with multi-directional core workouts o Unique patented and trademarked design cannot be replicated Attractive Revenue Model o Ab Machine wholesale, online, and Amazon sales o Future additional products and services Highly Scalable Opportunity o Flexible large-scale product manufacturing with appeal for TV, web, and retail product placements o Company has potential for added expansion Strong Financial Returns o Strong revenue growth: $1.9 million in year 1 to $6.7 million in year 5 o EBITDA greater than 58% by year 5 o Majority of preliminary R&D is finished o Low maintenance capital expenditures drive cash flow Qualified Management Team o Track record of accomplishment and existing press exposure o President has highly relevant business development experience o Over three years of research, development, and testing have yielded a quality product ready for public use 6