Bryson Wright and Dustyn Groomse-Vapes

4724 Natchez CourtSavage, MN 55378

Bryson.eVapes@gmail.com

e-Vapes Business Expansion Plan

Table of ContentsExecutive SummaryThe CompanyCompany ExecutivesProductsThe MarketMission StatementObjectivesExpansion SummaryExpansion SummaryExpansion ExpensesExpansion Funding

Market Analysis SummaryMarket SegmentationMarketing StrategyIndustry AnalysisProducts and ServicesProductsServices

Strategy and Implementation SummaryCompetitive Edge Sales StrategySales ForecastMilestones

Management Summary Customer Relations

Operational PlanLocationBusiness HoursPersonnel

ProductionProduction Techniques and CostQuality controlInventoryProduct developmentLegal Environment

Financial PlanProjected Cash FlowProjected profitability Projected Business Finances

Executive Summary-The Company

E-Vapes is a Class C Limited Liability Company registered in the State of Minnesota. E-Vapes is Co-Owned by Dustyn Grooms and Bryson Wright. The company will be considering investors for the purpose of start-up capital and profit sharing.

e-Vapes has been in business since August 1, 2013. We are currently creating and manufacturing a variety of e-cigarette liquid. Our flavor catalogue has now reached 32 different flavors. In that short time we have had nothing but positive feedback from both consumers and retailers in our industry. We have also established relationships with several retail outlets that are interested in carrying our product. The amount of research and preparation that we did prior to establishing our business has allowed us to produce high quality products that have exceeded everyone's expectations. During the early stages of being in business, we have been operating part time with the executives of the company being able to run the operations while working full time jobs. However, we have quickly come to realize that the demand for our product, along with the necessity for opening a retail location, can not be met without full time commitment and additional financial resources. We are presently running operations out of one of the executives residence but will need to relocate into a business location to meet production and sales needs as well as establish a retail presence for our expected growth.

Executive Summary- Company ExecutivesDustyn GroomsIn 2009 Dustyn Grooms had his first experience with electronic cigarettes

living in Fargo, ND. The industry was still in its infancy and options were

limited but he knew that this would revolutionize the tobacco world. As the

industry has evolved, Dustyn has kept a close eye on the environment and

the popularity of the product. He is involved in a few forums, learning of

upcoming changes and constantly seeks the input of other users in the

industry to see what is needed. As a smoker of 16 years and an e-cigarette

user of 3 years, Dustyn has learned the value of flavor variety and quality.

E-smoking is a great alternative but finding the flavors to make you

completely forget about a real cigarette is key to sticking with it. Dustyn has

researched the science and methods for mixing E-liquid and has mixed

flavors from raw materials with success as a hobby. He has also invested

time into learning the different flavor profiles, sustainable providers from

which to get materials and quality practices laid out by the AEMSA

(American E-Liquid Manufacturing Standards Association). Dustyn has

been in the sales and sales management field for the past 12 years, selling

everything from airline tickets to insurance.

Bryson WrightAfter smoking cigarettes for 5 years and failing to quit time and time again

Bryson Wright made his first purchase of an electronic cigarette. Although

this was a lower quality device Bryson knew right away that this was the

most viable option for quitting that he had come across. As his knowledge

of the products on the market expanded, Bryson became further convinced

that vaping was the best alternative to traditional tobacco use. After

making a commitment to quitting smoking, Bryson quickly became

intimately knowledgeable of the vaping industry. As a businessman and an

entrepreneur there was a great deal to get excited about. Recognizing the

amount of potential growth and the lack of controlled market shares Bryson

knew that this industry had great potential. With his experience and

knowledge acquired over the previous decade in marketing, sales, and

business management, Bryson knew that the right partners, with more

extensive knowledge of the industry, would prepare them for substantial

success.

Executive Summary- Products

E-Vapes will offer E-Cigarette Liquids in up to 150 different flavors with nicotine strengths from 0-24. Bottles of liquid will be offered from 5ML (sample size) to 30ML. E-Vapes will also offer Electronic Cigarettes, Batteries, Disposable Cartomizers for refillable Cartomizer tanks, drip tips, and smoke tanks along with all of the accessories and necessities for vaping.

Executive Summary- The Market "Imagine a product that is possibly greater than 99% less harmful than cigarettes, delivers a similar user experience and offers a better economic bargain—this is the proposition of electronic cigarettes (e-cigs)." Judy Hong of Goldman Sachs. E-cigarettes are number one on Goldman Sachs’s list of “The 8 Extraordinary Technologies Forcing Business To Adapt Or Die.”E-Vapes, LLC has been in operation as a retail and wholesale e-cigarette and accessory provider since 2013. E-Vapes offers a wide variety of e-cigarette liquid flavors and necessary consumable accessories direct to consumer and wholesale to retailers.

Over the past 6 years, e-cigarette commerce has boomed in the new health conscious era. E-smoking has become the prime choice for traditional cigarette replacement and, as such, has seen exponential growth. The expected sales of e-cigarette consumables in 2013 are over 1.7 billion dollars in the United States alone. This number is expected to double in 2014 and continue to see strong growth. Many retail stores, such as E-cig Crib and Smokeless Smoking have seen success and operate multiple outlets in the Minneapolis/ St. Paul area. Along with E-Cigarette specific stores, E-Cigarette options are offered in Tobacco Shops, Gas stations and Online. E-Vapes intends to penetrate the existing market with new and customizable flavors, Cutting edge devices and superior customer service.

Executive Summary- Mission and Objectives

Mission StatementWe strive to always maintain a focus on innovative thinking, constant research and development, a commitment to the use of industry leading safety and production methods, and first class customer service.

ObjectivesThe objectives for e-Vapes in the first three years of business will include:1. Establish brand recognition and company

reputation for providing high quality flavorful products and first class service to wholesale and retail customers.

2. Establish 10 wholesale clients.3. Expand our wholesale distribution outside

of our home market.4. Process 2000 retail transactions monthly.5. Open at least one additional retail

location.

Expansion Summary

e-Vapes expansion costs will include all the equipment needed for an office, production lab, retail store, website (and social media) creation and maintenance, six months of rent and utilities payments, six months of payroll, production materials, e cigarette hardware, business insurance, and marketing and advertising costs. The finances allocated towards our inventory will be roughly 29% of the expansion cost. The minimum retail value of our investment of production materials and hardware inventory will exceed $100,000. Greater than $80,000 of that will be hardware from reputable suppliers with established market presence.

Expansion Summary- ExpensesExpenses

Rent $2,000

Utilities $500

Insurance $480

Accounting $200

Web Services $200

Payroll $5000

Marketing/Sales Material $1,500

Office Supplies $500

Shipping $180

Printing $500

total Expenses $11,060

Assests

Cash Required $49,190

Current Inventory $1,000

Expansion Inventory $34,000

Other current assets $500

Non-cash assets(furniture) $10,750

Total Assets $90,440

Totals summary

Total Assets $90,440

Total Expenses $11,060

Total Required $101,500

Expansion Summary- FundingExpansion Funding

Expansion expenses to fund $11,060

Expansion assets to fund $88,940

Total funding required $100,000

Assets

Non-cash assets initial expansion $39,750

Cash balance after expansion $49,190

Current assets $1,500

Total assets $90,440

Liabilities

Current borrowing $(2,500)

Capital

Planned investment

Investor 1 $100,000

Other $0

Additional investment rq’d $0

Total planned investment $100,000

Loss at start-up $10,010

Total capital $89,990

Total liabilities $(2,500)

Total capital and liabilities $87,490

Total Funding $100,000

Market Analysis Summary- SegmentationRetail

Our retail customers are individuals looking to fulfill their personal vaping needs. They will range from the beginner looking to purchase their first e-cigarette, to the veteran Vaper purchasing accessories, additional MOD’s or replacement parts. These consumers will have a varying degree of knowledge and assistance needs. Being knowledgeable about the industry, changes happening and new trends, coupled with great service and cutting edge equipment, will be the best way to earn their business.

WholesaleWholesale clients will also want flavorful vapes with a lot of options, however they will have a higher level of concern for product quality and production methods as their business’ reputation will be tied to our product. By manufacturing our products with the highest quality materials and meeting or exceeding industry standards for safety and production methods we can ensure that our products will be safe, consistent and of superior quality. The service that we offer to our wholesale clients is what will secure and build our wholesale market share.

Market Analysis- Segmentation Strategye-Vapes will target both wholesale and retail customers with the primary focus being as a Retail outlet. We feel that Retail sales, in the first 3 years ,will be the most effective and profitable way to build our business in the current business climate. Our profit margin is roughly 140% higher in the retail market and allows us to reach more individuals on a personal level. However, while looking at business expansion we have determined that continual growth of our wholesale program will be a critical to our success. This will naturally create a boost to our retail sales as well as help to establish our business with local end consumers.

In addition to opening a storefront retail location, we will also be working to establish an online retail customer base with a professionally built website. alongside this, we will be managing active social media accounts providing our followers with consistent content and posts in an effort to maintain consumer engagement. Using a mailing list to send out a periodical email will also help us to inform our established customers about new products or promotions in an effort to drive new and repeat business. Online retail can be a large portion of our business as currently about 40 % of industry sales are done online.

Market Analysis- Industry AnalysisThere are three local wholesale liquids providers that will be our primary competition in this area of our business; PB Dragon, Hell’s Vapors and Vermillion River. There are several Electronic Cigarette stores in the metro area, we feel that our most established competitors will be; Smokeless Smoking, E-Cig Crib and Vermillion River. Attached to the business plan are detailed analysis of these competitors as a benchmark for determining our competitiveness. We will discuss further in the competitive edge section of this presentation where we feel we distinguish ourselves from the competition.

Products and Services- ProductsE Liquid - E-Cigarette liquid can be made with infinite flavor possibilities but the basic components are all the same. The primary ingredients do not change yet slight adjustments can be made to meet desired characteristics such as a stronger hit or higher nicotine content. The biggest part of research and development, as well as production, is the flavoring. Finding the perfect recipes and being able to duplicate it over and over is what will establish loyal customers and develop our brand name. Using the highest quality materials gives us consistency to our product and makes our flavors really stand out.

E-Cigarettes - The e-cigarette industry is flooded with 100’s of e-cigarette options for users to choose from. e-Vapes will offer e-cigarettes for the brand new vaper as well as the veteran vaper looking for a more customizable experience. Our Brands will include; Joytech, Smoktech,Provari, E-go, Kanger, iClear and many others. The brands we carry in our stores and on our website will be from recognized and reputable suppliers whose names are industry standard and whose markets are well established. We will offer all components of the e-cigarette, from the battery to the heating element to the replacement parts required for continued vaping.

Accessories - E-cigarettes require and are enhanced by the accessories that are offered for them. Rechargeable batteries, battery chargers and drip tips are all essential components to every e-cigarette. However, those items can be upgraded, swapped out and replaced. In addition to these items there are also cases, lanyards, designer covers and many other items available for vaper’s to customize their personal vaping device. e-Vapes will be a premier supplier of all of these accessories by carrying name brands, such as Cherry Vapes and Surefire. Our accessories will be of the same high quality as all of our other products at the same great value.

Return and refund policy- It will be the policy of e-Vapes to refund or replace any broken or defective hardware items brought back within 30 days**, provided that, the device was not broken due to customer neglect or directly due to customer use. It will also be our policy to have an in-store credit program available to customers should they not be satisfied with their original purchase within the first 30 days. They can return their purchase for store credit towards a different device. E-liquid, will not be subject to this program and is non-refundable.

**The exception to this policy will be on any disposable units such as; cartomizers, replacement coils, wick heads or tank cores. These items will be nonrefundable.

Products and Services- ServicesOnline Retail: For our retail customers, we will have a professionally designed and built website to make finding and ordering the products they want quick and easy. This type of service is nearly a requirement in any retail market today. In this market it is vital, as online sales account for roughly 40% of all sales in the industry.

In-store experience- Our store will be a welcoming environment for our customers from the moment they walk through the door. Every customer will be acknowledged, greeted and thanked for coming in as soon as they walk through our doors. We will have couches for our customers looking to relax and vape as well as tables and chairs for customers to set up new devices. Our staff will all be trained in the aspects of the products we provide to be knowledgeable and possess the ability to assist our customers in setting up, troubleshooting and assembling new purchases. Our retail location will be a trusted place to go when you need a question answered or a problem fixed. Our display cases will be clean, organized and set up to provide viewing capability to the most customers possible. We will also have all of our liquids available in our sample area for our customers to taste flavors available to them for purchase.

Custom Flavors: One of the aspects that we can offer our clients and our retail customers that no other provider is offering is completely customizable flavors. With our research and development team at their disposal we will make any flavor that our customers would like. We can offer them the flavor that they have been looking for and have not been able to find or we can help to make a flavor they like into one that they love.

Customer Service: With the primary focus of our business being retail, meeting and exceeding our customers needs will always be of critical importance to the success and growth of our business. We understand that every customer will have different needs and goals and we want to be able to help meet them all. We will take the time to understand what each customer is looking to get out of their vaping experience. This will allow us to create customized options based on their needs to help them find the vape that is perfect for them.

Client Management: We realize that each of our wholesale clients will have a different set of business needs. In an effort to most accurately serve each client we will meet with them individually and see where e-Vapes can bring the most value to their business. It will be our policy to meet with wholesale clients regularly to evaluate their wholesale program and suggest implementations to better suit their needs. Our Client Management Program is designed to work in correlation with our Marketing Partnership to identify the most effective way to generate new customers and increase revenue in our clients stores.

Marketing Partnership: Many product distributors have overlooked the fact that it is their responsibility to ensure that their product is purchased. By establishing a successful marketing partnership with our wholesale clients we can ensure that our product is being sold, improve and secure our relationship with our retail partners and build our name as a professional business partner that is invested in the success of it’s business partners. Doing this job exceptionally well is a vital component to our business plan. We believe this is the best way for us to ensure our success.

Strategy and implementation summaryAs a Start-up company in our infancy, our need to monitor, change and reconsider our marketing strategies will be based upon initial results and effectiveness. Consideration of expenses and allocation of marketing budget will be reviewed on a monthly basis to determine effectiveness of each strategy and redistribute resources accordingly. The overwhelming positive response our products have seen has greatly impacted our need for business expansion. By expanding our production and establishing an effective marketing strategy we will be able to capture available market shares and achieve our growth potential. We are looking for investors to help us grow and meet our production needs to match the amount of interest we are seeing.

Word of mouth and networking through our existing contacts has been a valuable method of exposing our business and establishing a customer base in the beginning. Both partners are associated with an exceptionally large natural market that is saturated with current e-smokers. Access to this natural market is a critical component of our initial market penetration. This also lends to a very effective word of mouth campaign as many will be already loosely associated with the founders of the company. This gives us a competitive advantage with an already established customer base prior to opening our doors.

Our first three months of our expansion we will have a grand opening for our retail storefront and begin to allocate more resources towards establishing a brick and mortar retail customer base. These marketing efforts may include, but are not limited to, product presentation events, product sampling and giveaways, retail partnership marketing, face to face, street team marketing, viral marketing, and video marketing. We believe that effectively expanding our marketing efforts will allow our business to grow more rapidly and reach company objectives at or ahead of schedule. However, our distribution channel marketing strategy we are using has been based upon previously successful businesses using this model. We are currently trying to maximize our channels without overextending.

Our primary allocation of resources during the first three months will be focused on establishing our retail location. Additionally we will solidify wholesale agreements with the retail outlets that are currently interested in carrying our products. We will then be able to actively pursue new clientele by regularly stopping in to retail locations with samples of our products and professionally designed sale materials providing information about our company and products. If decision makers are unavailable we will leave a wholesale packet with our samples and follow-up in the within 3 business days.

Competitive EdgeThe knowledge and abilities that we have in producing e-liquid allows us to do all of our production in house. This keeps the cost of our liquid considerably lower than purchasing through a 3rd party wholesaler. This will also allow our prices to always remain competitive as well as afford us the opportunity to do giveaways, discounts, and customer loyalty programs. The most significant advantage this provides is complete control over our flavor line-up and the ability to offer customizable flavors to our customers.

Creating flavors truly is our passion. We don’t ever expect our catalogue to be complete because we enjoy creating new flavors. In our first month in business, we created, tested and developed over 30 final product flavors. This matches many of our competitors established catalogues. We always want to be on the cutting edge of flavoring and setting trends for the rest of the industry to follow. The larger selection of flavors we offer will attract a wider consumer base extending our reach and potential for growth.

Our custom client management program is designed to help us meet and exceed all of our clients goals and needs. By meeting individually with each client we can be intimately aware of their needs and provide personalized service. This approach differentiates us as a wholesale provider invested in the success of our clients. More importantly it will establish our commitment to service and foster a strong long term relationship with retail and wholesale customers. This will also give us an advantage in our wholesale efforts by providing potential clients with referrals from stores that have seen the value that our team brings to their business.

A marketing partnership is something that is far too often overlooked. We feel that this is one of the most commonly neglected areas of business that causes distributors to fail. This can offer us a significant advantage over our competitors who do not excel in this area. By focusing our efforts to not only promote our products, but to promote the business that carry (and purchase) our products, we can increase sales for our company as well as our wholesale clientele’s companies. Improving the success of our clients companies will establish us as a valued business partner and help us stand out from the competition.

Sales Strategye-Vapes sales strategy will be targeted at obtaining wholesale clients as well as retail customers both online and instore. These two different sales processes will require unique sales strategies and preparation. We have put considerable time and thought into the challenges that these different areas of our business will provide and we feel as though we are prepared to overcome and succeed in both markets.

Traditionally, most of our retail traffic will be people who are looking to buy, as we are a specialty store with products in a very specific market. Our prospective customers can get a similar product from other vendors. With this in mind, e-Vapes will attempt to close the sale by showing our high quality products, extensive product selection, and expert knowledge and service that sets us apart. Our products will be competitive in both quality and price, our service and knowledge will be exceptional and we will always have a constant focus on establishing our business’ reputation.

Sales Strategy- Market SegmentsRetail and Online

We provide several ways to acquire our products in an effort to make our products readily available and to infiltrate the market as thoroughly as possible. One way is for the customer to come by our retail store and make a purchase. Here we will have all of our flavors and hardware on display and ready for sampling. The customer can also make a purchase on our website and have their order shipped to them directly. Additionally, our customers will have our liquids available to them in multiple outlets participating in our wholesale program. Lastly, we will look for opportunities to get our name and products out in the community at any events that will be beneficial to our marketing and branding efforts.

In addition to our store, our marketing efforts we will be designed to drive people to our website. Once on our site, customers will see the wide range of products we have to offer. The website will have valuable content about the quality of our materials, our safety standards and our production methods. Online sales will be especially useful for customers out of town. By establishing a strong online presence we can effectively reduce geographical restrictions on our retail business. When a customer establishes a secure account on our site, we will have the opportunity to offer them advertising and discounts to save on future purchases, as well as unique service such as auto ordering to ensure that they never run out of liquid and/or replaceable hardware. Services, such as auto ordering, are a great way for us to stand out from other online retailers and increase customer retention.

Wholesale

e-Vapes sales method for wholesale clientele will be a well thought out presentation of our value as a business partner. We are confident that after trying our product, store owners will know that they have a market for our flavors. From there, we will discuss with them the quality of our materials and our commitment to final product quality and industry leading safety and production methods. After establishing e-Vapes as a quality product, we will place an emphasis on service and discuss briefly our focus and goals with our custom client management program and marketing partnership. We feel this direct and effective presentation of our company's values and objectives will establish substantial value in creating a business partnership between our companies. Closing with our prices being equal to or less than all of our local competitors should finalize the sale. We expect the most repeat wholesale customers to utilize the website as a catalogue and ordering system, because it takes less time for them to order on the web then it does from them to do so in person or over the phone. This is one of many ways we hope to make their experience with us easy, and beneficial to their bottom line.

Sales Forecast- Quarterly

● Wholesale ● Retail

Milestones

Milestone DateSign Lease 11/15/2013Set-up lab 11/22/2013Obtain licensure 11/22/2013Inventory at par 11/29/2013Soft opening 11/29/2013Grand opening 12/06/2013

Management Summary- ExecutivesBryson’s primary position will be as the Head of Marketing and Business Development. He will manage and oversee the development process of company marketing materials such as, but not limited to, company logo, website, product labels and in store promotional material. His responsibilities will also include planning and coordinating marketing and business development related events such as in-store promotions, product demos, sampling and market research. Working closely with Dustyn to will develop and implement sales systems and materials to identify consumers wants and needs as well as changes in our market to maximize the effectiveness of our marketing program and the efficiency of our sales and production teams. Additionally his time will be spent researching and identifying prospective wholesale clients, initiating contact, delivering sales pitch, securing contract and establishing client management systems to address individual clients goals and needs.

Dustyn’s primary responsibilities will be as the Head of Production and Product Development. As the primary product developer, he will invest time, materials, resources and knowledge in developing final deliverable products. He will manage, oversee and and produce final deliverable products to maintain a prudent inventory to meet the needs of our clients, both wholesale and retail. He will also work closely with Bryson and the retail store manager to account for changing production needs based upon companies sales, as well as forecasted growth. Dustyn will also be the acting Inventory and Supply Manager. Responsible for supplier and buyer relationships and negotiations. Completing research and identifying changes in the supplier market on a regular basis to ensure we are always offering our customers the highest quality products as well as new and changing trends, while maintaining our competitive prices and maximizing profit.

Management Summary- Customer RelationsDelivery: Will be provided to online retail customers as well as all wholesale clientele. Shipping costs will be deferred to online customers at cost. Shipping costs to wholesale clients will be absorbed by e-Vapes as part of a wholesale incentive program.

Warranty: All hardware will have a 30 day warranty. Any product distributed that fails to meet quality standards will be replaced free of charge and, if determined to be necessary, all lot and batch items will be recalled and replaced at the expense of e-Vapes.

Support: Our Wholesale Client Management and our Marketing Partnership are services that are designed to provide our clientele with as much support as we can offer. We will assist anyone in our store with hardware setup and troubleshooting and will be available by phone and email to provide the same support to our online customers.

Follow-up: A customer satisfaction email will be sent out to our online retail customers roughly one week after receiving their products. This will help to ensure customer satisfaction as well as provide us with feedback to better improve our products and services. Consistent follow up will also be a vital part of our wholesale client management program.

Customer Service: It is the expectation of e-Vapes to respond to any customer inquiry within a 24 hour time period. Our policy will also be that of a quality guarantee.

Management Summary- Operational PlanLocation-

Our retail location will ideally be in a high traffic retail commerce strip mall location. We are looking to situate our retail location in the western suburbs of Minneapolis, with a focus on the St. Louis Park/ Minnetonka area. This segment of the market currently does not have a retail e-cigarette presence with a large market segment available to be capitalized on.

Business hours-

Our business hours will be as follo

10-8 Monday thru Thursday,

10-10 Friday and Saturday

10-6 on Sunday.

These hours have been decided upon based on other retailers currently in operation hours’ and the hours of local businesses near our location.

Personnel-

Our hiring structure is laid out in detail in the investment finances. Our process for decision in hiring new employees is a combination of daily traffic count and monthly profit. We have established these breakpoints in all three scenarios to follow a logical thought process in deciding when it will be the most financially responsible to hire employees.

Employee selection and training-

We will source established hiring avenues to acquire employees. Every employee will go through an interview process for selection.

Training of new employees will follow the established handbooks and manuals to ensure continuity of employee knowledge.

Production- Techniques and costThe products we produce will be made in a lab set up specifically for the manufacture of e-cigarette liquid. The lab will have stainless steel tables, sanitary gloves, disposable single use production supplies and separate individual compartments for storage. All items used in the manufacture of e-liquid will be kept at room temperature, in visible and clearly labeled containers. All Nicotine, Propylene Glycol, Vegetable Glycerin, and flavorings are kept in original labeled containers or are in approved BPA free bottles with labels containing all original manufacturer information.

All e-liquid manufactured in our facility is made in batches of 1000 ml or smaller. This ensures quality consistency of product and allows for better quality control of product. Each batch of liquid is mixed with minimum nicotine Amount (6mg) to allow for steeping of flavors and nicotine. The only exception would be product mixed with 0 nicotine to be sold as 0 nicotine liquid. All flavor recipes are written down and recorded in a production log book and all batches of each flavor are given a lot number and batch number. Each lot and batch has recorded amounts of product used in production. After completion of each batch produced, final product is “flash steeped” in hot water for 15 minutes to meld individual components of flavor.

Production- Quality controlE-Liquid- Each Batch of liquid is tested upon completion of a 3 day steeping process by 2 separate staff members to ensure quality. This process is in place to ensure product quality and consistency for every lot and batch. Nicotine test kits are also used to test every bottle of nicotine received and test results are logged in log book. This is in effort to make sure every batch of nicotine is at desired strength and ensures nicotine levels in completed product is as advertised.

Hardware- All hardware will be checked in and marked with the date received. Each set of new hardware will be kept separate based on the date received so that if any piece of the hardware is defective, other similar items in that date receipt of inventory can be tested for defect. Any devices or batteries going out on to the sales floor will be tested prior to being set out for merchandising. All accessories will be checked over for manufacturer defect prior to being made available for sale. Any issues determined by sales or pre-sales inventory will be logged and tracked. If a certain supplier or manufacturer shows a track record of defective or damaged products, a conversation will be initiated to determine whether or not a long term relationship will continue.

Production- InventoryOur inventory and ordering system will be tracked on an inventory spreadsheet and managed daily to ensure adjustments are made as order frequency increases. Plans have been made for a future inventory management system but the same attention will need to be paid to this automated system to ensure accurate levels of product are on hand.

Our inventory level, at any point in time, will be between $10,000-$35,000 in raw product, bottles, hardware and finished goods. That $10,000-$35,000 will be valued between $40,000-$150,000 as finished product depending on retail or wholesale.

At present, industry standard is that of shortage. Every supplier is currently working to keep up with demand for product which has created lapses in product availability. Our goal will be to establish breakpoints at which we decide to increase par levels for every inventory item. Lead time on ordering for every product should be at least a week so we will be ordering on future expectations every week to ensure always having new product coming in before need arises.

Inventory will be controlled and monitored as follows:

● An inventory management spreadsheet is already in place and will be upgraded with an inventory management software as demand increases.

● Pars for each product offered have been created and will be updated weekly based upon sales. Pars of product take into account recurring orders, current orders received and product on hand.

● The inventory spreadsheet will be updated and monitored daily and orders of base materials will be ordered in advance based on Milliliter calculations of material needed per 1000 ml.

● Wholesale agreements have been set-up with suppliers to ensure our demand for raw materials can be met and discussions about product availability at multiple different need levels have been had to ensure wholesale supplier can meet growth needs.

Production- Product development● e-Vapes will be in a continual state of product development. Surveys

from the market of product will be used to modify existing products for maximum flavor potential. New flavors will be created as suggested and on an ongoing basis by production team.

● Best practices will be monitored on various industry websites to ensure current production methods and raw materials are up to date with industry standard.

● Suggestions will be taken from wholesale and retail clients and reviewed by production team for potential action needing to be taken.

Financial Plan- Sales and costYear 1 Year 2 Year 3

Sales

Retail $201,350.22 $598,600 $1,803,100

Wholesale $122,760.00 $301,878 $565,254

Total Sales $324,110.22 $900,478 $2,358,354

Cost

Retail $39,207.43 $116,678.87 $351,459.52

Wholesale $35,596 $87,533.80 $163,903.40

Total Cost $74,803.43 $204,212.67 $515,362.92

Financial Plan- Cashflow projections

● Cash Balance ● Net Cash Flow

Financials- Profititability

● Sales ● Gross Margin ● Net Profit