Investor Presentation

Who We Are• Vera Fitness is a group personal training

studio for women.–Yoga, Pilates, Resistance–Cardio–Nutrition Counseling

Our Five-Year Goal: 150 locations & $85 million in sales

A Winning Strategy• 80/20 Rule: 80% People; 20% Fitness

• Research Says: Women Want More

• Low Overhead: 1,500 sq/ft Facility

• High Margin: Group Training

A Winning Strategy• Key Strategic Partner: TechnoGym

– Kinesis: Revolutionary Exercise Equipment– Providing Lease Financing for all Equipment– Key Exclusivity Agreement for Five Years– Wellness System: Integrating Vera & Life

The US Market•Women Fitness Sector

– Since 2000: More than Quadrupled– $9 billion in 2005– 9.3% Membership Growth Last Year

•More Awareness = Will Continue Growing

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Heard of Curves?• Revolutionized the Fitness Industry

• 10,000 US Locations

• 4 Million Members

• A Problem:– Women Leave Curves for Other Gyms

• Almost 100% Attrition in 4 Years

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Why Women Leave Curves• 4 Reasons:

– Physically Stop Improving– Bored– Physical Space is Uninviting– Poor Customer Service

• Women are Flooding the Market…But They Want More…and will pay for it!

The Competition

Curves

Low-end High-end

24-HourVera

Bellevue ClubZum

Personal Training Hourly Rates

NA $50-$55 $75 $$$$

$40$50 per month

Sales & Marketing- Customers

• Women– 34-65 years old– Household income > $100,000– Passionate Exercisers

• 13,500 potential customers within Seattle City Limits– Single Location Monthly Breakeven: 100

women!

Sales & Marketing- Customer Acquisition

• Location• Pre-Opening Campaign to Blanket

Neighborhood• Local Business Partners• Signage• Door Hangers• Grand Opening• Strong Referral Program• Interactive Website

Why We’re Different

• Exceptional Customer Service• Web Based Wellness System: Integration of Life

and Fitness• Revolutionary Equipment; No Dilutive Financing• Low Space Requirements = Low Overhead• Leveraging Curves Turnover• Price

Surveyed / Interviewed Over 500 Women… Incredible Insight

ManagementExecutive Leadership Team

Name Title

Ryan SchmidPatricia Diaz-KismartonJoel DeJongTom Norwood

President & CEOVP OperationsVP Facilities

AcquisitionVP Sales & GM

Advisory Team

Name Title Profession

Kent JohnsonKevin NickelThomas

OsbornLisa Johnson

Managing Director, AHVPExercise Specialist, PinnacleSenior VP, WaMuPresident and Owner, Reach

Group

Venture CapitalistExercise PhysiologistCommercial BankingMarketing Consultant &

Author

Financial - Financing Schedule

• Year One– Private Placement: $300,000

• Founder’s Contribution: $40,000

• Future– Internally Generated Funds

Financial

• Growth Plan– Year 1 - Build one location, attain profitability,

prove our concept, fine tune the details– Year 2 – Expand to 3 locations in local market– Year 3 – Expand to 10 locations. First out of

state location(s)– Year 4 – 50 Locations– Year 5- 150 Locations; Liquidation Event

Financial - 12 Month Cash Balance

Month

-

50,000

100,000

150,000

200,000

250,000

Start-

up 1 2 3 4 5 6 7 8 9 10 11 12

Minimum Balance:$105,000

Financial - Single Location Start-up Costs

•Kinesis Equipment Leased: $120,000 per Location

Expenses TotalsOffice Equipment 5,000 Total Marketing 19,000 Total Software 3,000 Total Facility 54,000 Total Professional Fees 3,000 Contingency 16,000

Total Expense 100,000

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Financial- Operating Breakeven6 7 8 9 10 11 12

Revenue 33,600 38,400 43,200 48,000 52,800 57,600 67,200

PKGS Bought 47 53 60 67 73 80 93

ExpenseTotal COS 32,122 32,194 32,266 32,338 32,410 32,482 32,626

Contribution 1,478 6,206 10,934 15,662 20,390 25,118 34,574 Total SG&A 7,430 8,314 13,148 8,582 9,466 9,350 10,118

Operating Income (5,952) (2,108) (2,214) 7,080 10,924 15,768 24,456 Interest 946 932 918 904 890 876 861

Net Income Before Tax (6,897) (3,039) (3,131) 6,177 10,035 14,893 23,595 Tax - - - 2,100 2,694 5,064 8,022

Net Income (6,897) (3,039) (3,131) 4,077 7,341 9,829 15,573

Net Margin -21% -8% -7% 8% 14% 17% 23%

Financial - Normalized Single Location

•Assumes 75% of Capacity

TotalRevenue 864,000

ExpenseTotal COS 385,967

Gross Income 478,033 Gross Margin 55%Direct SG&A 103,744 Direct Interest 11,256 Corporate Overhead 86,400

Contribution per Location 276,633 After Start-up CostsContribution Margin 32%

Financial - 5 Year Income Statement1 2 3 4 5

Revenue 436,800 1,710,720 5,702,400 28,512,000 85,536,000 # of Locations 1 3 10 50 150 FTE Locations 1 2 7 33 99

ExpenseCost of Service 385,967 822,251 2,728,047 13,526,429 40,823,957 Gross Income 50,833 888,469 2,974,353 14,985,571 44,712,043

Gross Margin 12% 52% 52% 53% 52%

SG&AStart-up 135,500 474,250 2,710,000 6,775,000 Individual Locations 26,372 52,217 174,055 870,276 2,610,828 Corp Overhead 77,372 344,657 978,084 4,306,680 11,200,320

Total SG&A 103,744 532,373 1,626,389 7,886,956 20,586,148 Operating Income (52,911) 356,095 1,347,964 7,098,615 24,125,895

Operating Margin -12% 21% 24% 25% 28%

Interest 11,256 33,768 112,561 562,804 1,688,411 Net Income Before Tax (64,167) 322,327 1,235,403 6,535,811 22,437,484

Before Tax Margin -15% 19% 22% 23% 26%

Tax 17,880 86,325 342,484 1,834,413 6,465,455 Net Income (82,047) 236,002 892,919 4,701,399 15,972,029

Net Margin -19% 14% 16% 16% 19%

Head Count 13 38 127 620 1,850

Stock Offering For Investors

•300,000 shares at $1.00 per share

•30% ownership

•5-Year Return: 50-75 x results

Investment Considerations

Thank You Curves, We’ll Take It From Here…

Questions?

Appendix A - Customer Service

1. Teams and Leaders - Strategic partnership

2. Required National Training Certification• National Academy of Sports Medicine

3. Required TechnoGym Training Program

3-Tier Approach

Appendix B - Competitor Matrix

Benefits Vera

Fitnes

s

ZumBel

levu

e Clu

b

Curves

Met

ropolit

an P

ilate

s

Customized personal training available Customized personal training included in base price Emphasis on human connection (customer service) Group personal training Flexible schedule Select your workout group at no additional cost Spa-like atmosphere Multiple locations Access to multiple locations at no additional cost Just for women Cardio Nutrition Counseling at no additional cost Superior equipment Integration of life and exercise via technology Various group classes (such as steps, kickboxing, spinning, etc) Child care Club with facilities such as pool/sauna/jacuzzi/tennis courts

Appendix C - Layout

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Financials - Capitalization Table

Pre-Financing Post-Financing

Security # of Shares % # of Shares %

Common – FoundersRyan Schmid, President and CEOPatricia Diaz Kismarton, VP

OperationsJoel DeJong, VP MarketingTom Norwood, VP SalesOther Justin Elsner

149,071119,760119,760119,760

1,649

21.317.117.117.1

.3

159,071 129,760 129,760 129,760

15.913.013.013.0>.01

Common – Employee Stock PoolIssuedUnissued

150,000 21.4 150,000 15.0

Common – New Investors(includes 40,000 shares to be purchased

by founders)

40,000 5.7 300,000 30.0

Total 700,000 100% 1,000,000 100%

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Kinesis -Combining Yoga, Pilates, & Resistance Training