Direct Eats

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THE LEADING ONLINE ENGINE FOR THE NATURAL, SPECIALTY, AND ORGANIC FOOD SPACE

Transcript of Direct Eats

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THE LEADING ONLINE ENGINE FOR THE NATURAL, SPECIALTY, AND ORGANIC FOOD SPACE

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DIRECT EATS IS A TURN KEY SOLUTION

1. Direct Eats helps retailers and brands increase sales by dramatically

expanding product assortment on the existing channels as well as creating

new channels by creating end-to-end white label websites.

2. Direct Eats leverages our first mover advantage as the leading central

online hub in this sector to enable everybody from retailers to media

companies, and everybody in between, to sell more products to more

consumers more often.

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THE OPPORTUNITY IS SIGNIFICANT

Online Specialty & Natural Grocery

$120B SPACE

10-15% YOY Growth Rate

Direct Eats is already two things:

1. The largest online aggregator of natural, specialty, and organic food

2. The largest online aggregated repository of pictures, descriptions, and nutritional information for these products

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WHY THIS SaaS MODEL WORKS

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1. Direct Eats is a segment and scale business. Thus leveraging what we have built over the last 24 months into this SaaS model allows us to scale quickly without absorbing massive additional costs (customer acquisition costs primarily).

2. Thus with multiple signed deals already in place math is on our side. Example - we will have over 25 sites carrying inventory on their site or on the white label sites we create for them (at minimum) we project - 25 X 100 products sold a day X $20 per product = $18.25 million in yearly revenue. Factor in a minimal operational burn this will result in an EBITA of over $500,000 dollars and the valuation based on run rate significantly larger in the next 12 months alone.

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HOW THIS SaaS MODEL BENEFITS OUR PARTNERS

At 15% gross revenue share our segment and scale can deliver a higher effective net revenue than any brand can deliver on their own

Plus: • This space is hot — natural, specialty, and organic is a $120 billion dollar space growing 10% to 15% year-to-year

• The Expanding size of market — 4% of consumers buy groceries online going to 12% over the next 18months

• By opening up additional sectors our partners will reach additional consumers which they can cross promote to

• It's a consumable — so every six weeks or so a consumer has to repurchase

• Additional profit — they make 15% off the top

• They own the consumer, brand extensions, and the lifetime value of the consumer

• Provides a turn-key additional revenue stream

• Extends their brand’s online presence

• Satisfies consumers online shopping preferences

• Differentiate their brand against the competition

• Collective opportunity to compete with brands like Amazon & Walmart (equivalent to group buying)6

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HOW THIS SaaS MODEL BENEFITS CONSUMERS Direct Eats is already disrupting the $120 BILLION domestic Specialty, Natural, & Organic food space as well as the natural health and beauty market by taking a proven marketplace model, like what Etsy, Expedia, and Wayfair have done in other sectors, and applying to this sector online.

In this model we differentiate partner brands (in a sector with no definitive online leader) by providing consumers an overwhelming value proposition (a reason to shop). Through the Direct Eats platform consumers get:

1. The Best Selection: By aggregating the finest specialty and natural food makers as well as natural health & beauty from coast to coast we can deliver a more personalized and intuitive shopping experience that allow every customer to meet their needs based or diet, taste, or lifestyle preferences. We sell products from popular national brands alongside local specialty makers, giving them the access to a national audience. Our product line will soon be 10x the size of any grocery, specialty, or natural food market. Through this layered approach, we are already #1 in selection for the entire space from coast-to-coast, both offline and online.

2. The Best Prices: Using our exclusive ‘Community Price Protection’ Direct Eats has fully leveraged its ability to offer consumers the best price.

3. Always Free Shipping: With No membership charge & No minimum cart we have eliminated all barriers to purchase to maximize top line growth and quickly lower costs through economies of scale to make us profitable sooner and provide maximum differentiation in the marketplace. 7

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USING THE DIRECT EATS PLATFORM GROCERY STORES, RETAL, MEDIA COMPANIES, BRANDS WILL RIDE THE SHIFT TO ONLINE

Industry Growing Rapidly Typical online grocery transaction — $157*

E-commerce food sales increased by 21% in 2015 to $30 billion*

E-commerce food sales were 4% of the market in 2016 and projected to be 12% by 2019*

*supermarketnews.com/online-retail/click-now-amazons-rise-industry-growth-requires-retailers-get-selling-online

The movement of the entire grocery industry is growing — “More than 40% of digitally connected shoppers have made the jump to buying some groceries online”*

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Direct Eats vs. Thrive Market Model Direct Eats model provides many benefits to both the consumer and investors as compared to Thrive Market. With the right partners, we can do 4-8X what Thrive is projected at on the Direct Eats direct to consumer site in a reasonably short period of time.

• 4X more products

• No Membership Fee

• Always Free Shipping

• Lower Overhead Costs

• Media Partners

• White Labels

WE KNOW THIS WORKS FROM A CONSUMER PERSPECTIVE

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Direct Eats

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WHAT CAN YOU FIND ON DIRECT EATS? The Largest selection to meet every diet, taste, and need giving every consumer the most personalized, intuitive, shopping experience to meet the largest consumer base.

• Baby Food • Baked Goods, Cakes/

Pastries • Cookies • Chips & Crackers • Baking Mixes and

Ingredients • Meals • Condiments, Chutney/

Relish • Pesto • Salad Dressing • Salsa/Dips • Candy • Chocolate • Pudding

• Hors d'Oeuvres and Appetizers

• Ice Cream • Cereal • Pasta • Granola • Rice • Coffee • Oils • Seasonings • BBQ Sauce • Ethnic Sauces

(Soy, Curry, Etc.) • Extracts • Grilling Sauces

• Herbs • Marinades • Pasta Sauce • Rubs • Salts & Spices • Canned Seafood • Snacks • Chips • Energy Bars • Nuts • Popcorn • Pretzels • Soups • Stews • Beans

• Stocks • Dessert Toppings • Honey • Jams & Jellies • Spreads • Syrups • Preserves • Canned or Preserved

Vegetables/Fruit • Dried Fruit • Olives • Pickles & Pickled

Vegetables • Sun-Dried Tomatoes • Vinegar

Health & Beauty categories: • Cosmetics • Hair Care • Toothpaste,

Mouthwash • Pet food & Treats • Face & Skin Care

Products • Body Care • Bath & Shower

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Vegan Kosher Gluten Free Non GMO Vegetarian Dairy Free

Sugar Free Organic Nut Free Low Fat Fair Trade Soy Free

Low CarbPaleo Peanut Free Nitrate FreeLactose Free

17 DIET & LIFESTYLES ATTRIBUTES TO MEET EVERY CONSUMER NEED

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Makers/Brands

• New Makers signing on daily • Sell products from over 4,300 brands • 144 new brands have sales each month • The platform affords local brands national reach

Products

• 14,400 individual items sold to date • Averaging 1,500 new product sales per month in 2016

OUR PRODUCT SELECTION IS ALWAYS INCREASING (ALREADY #1 IN PRODUCT SELECTION BOTH ON AND OFFLINE) More Makers and Products are being added everyday from large, national brands as well as local, specialty brands

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Direct Eats

• Cumulus Media

• Total Trib Media

• Tribune Media

• iHerb

• Walgreens

• Lifetime Fitness

• Office Depot/Office Max

• Costco

• BJs

• Sequential Brands Group

• Peapod

• Kohl’s

• SpartanNash

• JC Penney

• Nature Box

• QVC

• Bluefly

• Vitamin Shoppe

• Hudson Bay Company

• Overstock

• Omaha Steaks

• Viacom

• Kmart

• CVS

ADDITIONAL DEALS ALREADY SIGNED OR EXPECTED TO BE COMPLETED SOON

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DIRECT EATS TEAM ORGANIZATION CHART ($75,000 A MONTH TOTAL BURN INCLUDING LABOR BEFORE REVENUE)

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David Hack President

Rocco Strazza Sr. Managing Director Operations & Finance

George Wickey Front End/IT

Alfred Garcia Graphic Designer

Sergio Pires Maker Account Manager

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2017* 2018 2019

Gross Revenue $5,000,000 $54,600,000 $125,100,000

Revenue Related Expenses $4,800,000 $49,600,000 $113,100,000

Overhead Expenses $700,000 $2,700,000 $4,300,000

Projected Earnings -$500,000 $2,300,000 $7,700,000

Projected Revenue and Earnings

* 2017 figures are for remainder of year

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THANK YOU