Business Plan For: - Laser Mania



Business Plan For:

[pic]

Patrick K. Rothwell

905 Hardy Street

Hattiesburg, MS 39401

(601) 543-0072

November 01, 1996

Copy No. ______

CONFIDENTIAL

This plan may not be duplicated or distributed without prior authorization

Index

Executive Summary...............................................................1

Mission ................................................................................ 3

Philosophy............................................................................ 3

Overarching Values............................................................... 3

Company Analysis................................................................. 4

Industry Analysis................................................................... 4

Market Analysis.................................................................... 5

Management Team................................................................ 6

Strategic Planning................................................................. 6

Pricing Strategy.................................................................... 6

Advertising........................................................................... 7

Financial Analysis................................................................. 8

Projected Expenses...............................................................10

Equipment Valuation Detail..................................................12

Frequency Graphs................................................................13

Community Survey...............................................................14

Biographies..........................................................................15

Statement of Confidentiality..................................................16

Laser Mania Executive Summary

Laser Mania is a startup company planning to operate an exciting laser tag arena in Hattiesburg. The sole owners will be Mr. and Mrs. Patrick Rothwell, of Hattiesburg. Mr. Rothwell is a former Air Force officer with degrees in Electronic Technology and Psychology. He has been an independent consultant in computer and electronics application, and has taught at Mississippi Gulf Coast Community College during the past two years. Mrs. Rothwell has been a Certified Respiratory Therapist for the last 12 years. Her most recent challenge was establishing a diagnostic clinic in Pascagoula, MS.

The laser tag industry is approximately seven years old and has been growing in both the US and abroad. Typical arenas can host 40 players in each session, running three sessions per hour. Several companies now market the required hardware and software systems, in a number of fashions. Laser Mania will purchase US made hardware and operate as a sole proprietorship. Several vendors market franchise and partnership arrangements, however, the costs of these ventures is high and none provide national exposure. To date there are no laser tag facilities in Mississippi. Our opportunity for local and statewide success is unlimited.

Laser Mania will develop a laser tag arena and support facilities consisting of party rooms, office space, video arcade and snack bar in 8,000 square feet of leased space within the Cloverleaf Mall. The facility will feature state of the art combat mazes complete with fog machine, high-tech lighting, sound systems, infrared scoring systems and radio control computer communications. All of this impressive hardware is designed to create the ultimate game of "King of the hill"

As previously mentioned, there are no laser tag facilities in the state, hence, no direct competition for our product. However, we plan to concentrate on the 6-34 year old leisure market, displacing a portion of the bowling, movie, skating, sporting and birthday party spending. This market makes up over 50 percent of the Hattiesburg population. Our plan to capture this leisure dollar will follow the established industry pattern outlined below:

The laser tag experience is broken into four phases:

Arrival: the customer registers and is assigned a number for an upcoming session

Briefing: numbers are called and players assemble for team selection and a pre-game briefing

Play: each session lasts 10 minutes costing $5.00 per player. Teams are pitted against each other (red against green)

RATING: Score cards are distributed at the end of the session near the snack bar.

These phases present five opportunities for profit

Arrival, collecting the session fee ($5.00)

The built in delay between arrival and call to briefing will encourage spending at the arcade and snack bar.

Deprived of food or drink for 5 minutes of briefing and 10 minutes of session time, thirst will encourage snack bar sales after the intense session of laser tag

Caps, T-shirts and other Laser Mania products make excellent mementoes of an exciting evening

The game is addictive and repeat play is the rule rather than the exception. Multiple play by walk-in traffic will multiply revenues. Additionally, individual and family memberships will be available.

Based on projected costs from other operators, we feel we can develop our facility for $100,000.00. The facility will house over $55,000.00 in equipment (lasers, vests, radio and computer systems) which will remain under a money-back warranty for the life of the loan. Startup costs for similar franchise or partnership operations range from $550,000 and up. Our lower startup is achieved by: buying directly from the system developer, using local build-out labor, and investing a great deal of sweat equity.

Although startup figures are usually exaggerated, we have based our cash flow and revenue projections on 50% of the largest franchise operators published projections. QZAR projects annual revenues of $1,050,000.00 per location against costs of $529,250.00 per location. We believe our performance will approach $500,000.00 per year against costs of $350,000.00 leaving $150,000.00 to be applied toward the financing of our initial $60,000.00 startup debt. At this rate our break-even should occur during our first year of operation. When we realize the profits from our first operation, we will doubtless look toward expansion throughout the state.

Laser Mania should be able to achieve revenues at significantly lower expense as follows:

We have located a US made product which is more versatile and costs less

As independent operators we will save $150,000.00 in royalties and management fees levied by QZAR and other franchise or partnership operations

We will experience minimal equipment downtime by using an exchange based warranty

We plan to maximize spending per square foot in video arcade, clothing and food sales

Our operations staff will be selected and trained to present an exciting, motivated, upbeat experience.

The laser tag industry appeals to both young people and families. It enjoys the distinction of offering true interaction between family members, without regard to age, size or athletic ability. Unlike video games or movies, the experience is person to person. Laser Mania is ready to apply this technology, bringing Hattiesburg families a new outlet for non-contact family fun.

MISSION

To provide a drug-free, high intensity, healthy environment for the young as well as the young at heart, to join others in the pursuit of a great time.

To develop outstanding employees and customers through incentive and recognition programs

To increase our share of the entertainment market, and become the most successful business of our kind in our area.

To eventually expand into other areas of the state, providing opportunities for our employees and benefit to other communities

PHILOSOPHY

The customer counts on courteous and friendly employees to maximize the entertainment experience.

The community deserves to have a clean, safe, drug-free entertainment complex in which to celebrate special events, or experience the thrill of non-contact competition

Without the return patronage of excited customers, this business will fail. Our job security rests in customer satisfaction.

Overarching Values

The following values dictate the actions of Laser Mania management under most conditions. These values are basic principles that our business is built upon and, in combination with the Philosophy and Mission statements of the company, they should provide guidance for conduct.

The elevated level of excitement, in combination with a fun and high-tech atmosphere allows our patrons to "get into" the game. This atmosphere is very important to the experience, and key to our success.

Our love of customers, especially young people, will be manifested by our enthusiastic attitudes in serving them.

Our commitment to providing a drug-free, exciting, and physically therapeutic place to spend leisure time, is based on our belief that there is truly a need for such a facility in our area.

Company Analysis

Laser Mania is an exciting new startup laser tag company modeled after the success of other laser arenas both nationally and abroad. The owners, Pat and Mony Rothwell are a high energy couple in their thirties. His background is in military electronics and war planning, she has been a high-tech medical special studies technician for 12 years. For the past two years Pat has taught and consulted along the Gulf Coast, while Mony has established a neuro-diagnostic clinic.

Laser Mania plans to develop systems and practices in our Hattiesburg location as a possible precursor to statewide expansion over the next 10 years. Growth in the laser entertainment industry is accelerating at a dynamic pace. At present there are no arenas in Mississippi, so we believe the time and market are right.

INDUSTRY ANALYSIS

The laser tag industry has been developing for the past several years, and is currently on the verge of explosive growth across the country. According to the International Association of Amusement Parks and Attractions (IAAPA) there are currently over 500 arenas in more than 20 countries worldwide. (Most data presented in this plan has been gathered from the IAAPA as well as various vendors such as QZAR, LaserTron, LaserStar and LaserRunner.) The industry exists as a collection of independently owned and operated arenas, much like skating rinks or bowling centers. These are stand alone or end destination laser arenas, as distinguished from added attractions within family entertainment complexes.

Several US and foreign vendors offer nearly identical hardware and software sets, accommodating 20 to 40 players. These sets are divided into three basic categories, separated by level of sophistication, portability, and purpose. Laser Mania will purchase and establish a world-class arena using top-of-the-line hardware and software systems. Lesser systems are currently being marketed as added attractions, rather than as end destinations. By establishing an arena in Hattiesburg, Laser Mania will preclude other laser vendors from exploring this area.

The laser tag industry is not a fad or passing fancy. According to Troy Peple, president of Zone Management, Inc. "We think we have the right formula: the excitement and pace of video, computerized scoring to satisfy the craving for feedback, and progressive levels of difficulty to challenge skill development. Plus, these games incorporate physical activity and social interaction, two elements missing in the development of an entire generation raised on video games."

The following summary of the industry was extracted from the IAAPA:

Typical facilities range from 7,000 to 10,000 square feet with actual game areas of 4,000 to 5,000 square feet.

Turn key facilities range in cost from $400,000 to $550,000.

Prices per player range from $5.00 to $9.00 per fifteen minute game.

Payback depends on the site and the marketing effort, but generally runs between eight and 16 months.

MARKET ANALYSIS

On a national level, the laser tag market consists of several target audiences ranging from age 6 to 35. This population is further divided into subgroups of 6-13, 14-18 and finally 19-35. Several laser arenas cater to only a select subset of the total market. Laser Mania will capitalize on our unique opportunity by playing to the entire 6-35 spectrum.

Birthday parties, Little league teams and scout groups are ideal target audiences to develop the 6-12 age group. This age group comprises over 10% of the Hattiesburg population, and catering to the needs and desires of this population builds the player base of tomorrow.

The largest number of plays per capita will doubtless come from the 14-18 year group. These teens have a large discretionary income relative to expenses. This age bracket is ideal for group activities such as church socials, club outings, etc. Their peer pressure and desire for both excitement and group interaction make them ideal patrons. In addition to their need for excitement, this group needs immediate feedback, and have outgrown the challenges of traditional video arcade games.

The Hattiesburg area presents an additional demographic of 18-24 year old college students. This group represents over 22% of the population. This group of students have built in rivalries well suited to competitive marketing (i.e. fraternity and sorority challenges). In addition to providing the largest number of players, this group will probably produce most of the employees. The strong connection between employee base and customer focus should produce even higher participation among this demographic.

The final group 25-35 represents 16% of the Hattiesburg population, and is further subdivided into young professionals and young parents. Young professionals play for many of the same reasons which draw the university crowd; excitement, visual stimulation, immediate feedback, etc. Additionally, the professional group will be targeted for corporate teambuilding training and possible league play. The young parent group finds the interaction between teammates and competitors particularly appealing. Laser tag offers the parent and child a unique opportunity to join forces and participate as peers.

Although no laser arenas exist in Mississippi to date, our competition will be for the young entertainment dollar. Therefore, bowling alleys, skating rink, theaters and sporting events will be our major competitors. We enjoy several distinct advantages over these more traditional attractions. Surveys of frequent players indicate the high-energy level, multiple sensory feedback, and interactive nature of laser tag provide more "bang for the buck" than bowling or skating. Soaring admission prices have frequent movie goers looking elsewhere for an evening out. And although Laser Mania will never eclipse sporting events, we can capture a large segment of the after-game entertainment market.

MANAGEMENT TEAM

Laser Mania management consists of the owner/operators, Pat and Mony Rothwell supported by a staff of professionals; Mr. Joel XXXXXX, attorney at law, Mr. William XXXX, CPA, and technical assistance from the system designer Mr. XXXXXXXX, EE (See Biography of Principals)

STRATEGIC PLANNING

Laser Mania will develop a laser tag arena and support facilities consisting of party rooms, office space, video arcade and snack bar in 8,000 square feet of leased space within the Cloverleaf Mall. The facility will feature two state of the art combat mazes complete with fog machines, high-tech lighting, sound systems, infrared and laser scoring systems, radio control computer communications. All of this impressive hardware is designed to create the ultimate game of "King of the hill" or "Capture the flag"

We plan to concentrate on the 6-35 year old leisure market, displacing a portion of the bowling, movie, skating and birthday party spending. The laser tag experience is broken into four phases:

Arrival, the customer registers and is assigned a number for an upcoming session

Briefing, numbers are called and players assemble for a pre-game briefing

Play, each session lasts 10 minutes costing $5.00 per player. Teams are pitted against each other (red against green)

Score cards are distributed at the end of the session near the snack bar.

These phases present five opportunities for profit

Arrival, collecting the session fee ($5.00)

The built in delay will encourage spending at the arcade and snack bar.

After 5 minutes of briefing and 10 minutes of session time, thirst will encourage snack bar sales

The game is addictive and repeat play is the rule rather than the exception

Caps, T-shirts and other Laser Mania products make excellent momentoes of an exciting evening

PRICING STRATEGIES

Walk-in play $5.00 per session

Dollar off for 3.0 GPA Report Card

Dollar off for church bulletin during that week

Dollar off on Wednesday Ladies Night

Birthday Parties $200 (Session, Cake, Drink and 6 Tokens each for up to 20 children)

Individual Membership $25.00 ($4.00 games, $5.00 in tokens, bumper sticker free hat or shirt)

Family Membership $100.00 per year ($4.00 games, $20.00 in game tokens, 2 Bumper stickers, $10.00 discount toward hats and shirts)

ADVERTISING

Laser Mania will approach advertising through several media:

Rock-n-roll radio, 30 second spots throughout the week (evening hours)

Billboards

School sporting events, school newspapers

We plan an aggressive news release program highlighting internal and external efforts such as Employee of the Month, Hot Shot Award winners, LaserLeague standings, etc.

Direct marketing campaigns will be aimed at corporate trainers, law enforcement and other specialty clients.

Word of mouth, coupled with walk-in traffic will increase our market exposure

We will offer dollar-off pricing for signed church bulletins during weeknight sessions.

We will offer academic incentives (free play for 4.0, dollar-off for 3.5 and up)

Definitions and Formulation of Cash Flow Predictions

Month Self explanatory

Hours Total hours for the given month based on

School year hours of : Summer/Holiday hours:

3-11pm Mon - Thur 10am - 12pm Mon-Sat

3-12pm Fri 12am - 10pm Sun

10am -12pm Sat

12am -10pm Sun

Revenues Calculated by hour assuming 21 plays per hour at $4.00 per play. This calculation generates 70% of revenues which will be supplemented by 30% from arcade, concession, private parties, etc. (Refer to Revenue Generation Estimates table)

Payroll Calculated at $55.00 per hour, this figure includes taxes and salaries for the owners.

Fixed Refers to fixed expenses of $ 7,145.00 to include:

Servicing Debt Financing $2,945.00 Financing & equipment costs

Lease payment $1,800.00 $ 81,600.00 Annually

Insurance $ 300.00 $1,000,000.00 Liability

Advertising $1,000.00 30 each 30sec. Radio Spots SL-100

Utilities $ 600.00 Estimate

Supplies $ 500.00 Party / Stationary / Concession

Taxes(28%) As previously stated, payroll taxes were incorporated into the $55.00 per hour payroll estimate. This figure represents the income/sales tax incurred on the difference between revenue and expenses. the calculation used was ((Revenue - (Payroll + Fixed)) X .28).

Debt This represents the outstanding balance after application of the monthly payment.

P/L Profit or Loss, this column represents the monthly profit expressed by the formula

(Revenues - (Payroll + Fixed Expenses + Taxes))

Net This column demonstrates the Accumulation of the Cash Account without benefit of interest accrual.

These figures are preliminary estimates based loosely on the performance data of other vendors. As performance data tends to be inflated, we have applied an approximate 40% reduction to all revenue claims (to adjust for reality). Factors such as depreciation of equipment, downward adjustments to workman's compensation, compound interest on cash accounts, etc. have not been factored into these estimates. We expect actual performance to surpass these estimates.

Laser Mania Cash Flow Estimates

|Month |Hours |Revenues |Payroll |Fixed |Taxes |Debt |P/L |Net |

|Nov |150 |18,000 |8,250 |7,145 |729.4 |60,000 |1,875.60 |1,875.60 |

|June |400 |48,000 |22,000 |7,145 |4,035.36 |58,555 |14,819.64 |16,695.24 |

|July |409 |49,080 |22,495 |7,145 |4,199.16 |57,110 |15,240.84 |31,936.08 |

|August |414 |49,680 |22,770 |7,145 |4,290.16 |55,665 |15,474.84 |47,410.92 |

|Sept |300 |36,000 |16,500 |7,145 |2,215.36 |54,220 |10,139.64 |57,550.56 |

|October |299 |35,880 |16,445 |7,145 |2,197.16 |52,775 |10,092.84 |67,643.40 |

|Nov |296 |35,520 |16,280 |7,145 |2,142.56 |51,330 |9,952.44 |77,595.84 |

|Dec |349 |41,880 |19,195 |7,145 |3,107.16 |49,885 |12,432.84 |90,028.68 |

|Jan-97 |314 |37,680 |17,270 |7,145 |2,470.16 |48,440 |10,794.84 |100,823.52 |

|February |281 |33,720 |15,455 |7,145 |1,869.56 |46,995 |9,250.44 |110,073.96 |

|March |329 |39,480 |18,095 |7,145 |2,743.16 |45,550 |11,496.84 |121,570.80 |

|April |290 |34,800 |15,950 |7,145 |2,033.36 |44,105 |9,671.64 |131,242.44 |

|May |300 |36,000 |16,500 |6,145 |2,215.36 |42,660 |11,139.64 |142,382.08 |

|June |400 |48,000 |22,000 |6,145 |4,035.36 |41,215 |15,819.64 |158,201.72 |

|July |409 |49,080 |22,495 |6,145 |4,199.16 |39,770 |16,240.84 |174,442.56 |

|August |414 |49,680 |22,770 |6,145 |4,290.16 |38,325 |16,474.84 |190,917.40 |

|Sept |300 |36,000 |16,500 |6,145 |2,215.36 |36,880 |11,139.64 |202,057.04 |

|October |299 |35,880 |16,445 |6,145 |2,197.16 |35,435 |11,092.84 |213,149.88 |

|Nov |296 |35,520 |16,280 |6,145 |2,142.56 |35,435 |10,952.44 |213,009.48 |

|Dec |349 |41,880 |19,195 |6,145 |3,107.16 |33,990 |13,432.84 |226,442.32 |

|Jan-98 |314 |37,680 |17,270 |6,145 |2,470.16 |32,545 |11,794.84 |238,237.16 |

|February |281 |33,720 |15,455 |6,145 |1,869.56 |31,100 |10,250.44 |248,487.60 |

|March |329 |39,480 |18,095 |6,145 |2,743.16 |29,655 |12,496.84 |260,984.44 |

|April |290 |34,800 |15,950 |6,145 |2,033.36 |28,210 |10,671.64 |271,656.08 |

Assumptions based on financing $60,000@ 7.5% over 4 years. Lease rates fixed at $10.20/sq ft

Laser Mania Revenue Generation

|SOURCE |Monthly (332hrs) |1st Year |2nd Year |

|Laser Plays(70%) |27,888 |334,656 |334,656 |

|VideoGames(5%) |1,992 |23,904 |23,904 |

|Consessions(7%) |2,788.80 |33,465.60 |33,465.60 |

|Hats/Shirts(3%) |1,195.20 |14,342.40 |14,342.40 |

| Members(10%) |3,984 |47,808 |47,808 |

|Party Sales(5%) |1,992 |23,904 |23,904 |

|TOTAL |39,840 |478,080 |478,080 |

Laser Mania

Community Acceptance Survey

I feel Hattiesburg needs a clean, safe, non-contact youth entertainment facility.

Strongly Agree Agree Neutral Disagree Strongly Disagree

I welcome businesses that offer young people a drug-free outlet for recreation.

Strongly Agree Agree Neutral Disagree Strongly Disagree

I welcome youth oriented businesses that maintain a smoke-free environment.

Strongly Agree Agree Neutral Disagree Strongly Disagree

I appreciate a company that offers young people incentives based on good grades.

Strongly Agree Agree Neutral Disagree Strongly Disagree

I would patronize a business that supported church attendance.

Strongly Agree Agree Neutral Disagree Strongly Disagree

I have heard of laser tag and think it sounds fun and exciting.

Strongly Agree Agree Neutral Disagree Strongly Disagree

An evening of entertainment usually costs at least $20.00.

Strongly Agree Agree Neutral Disagree Strongly Disagree

Hattiesburg needs a facility to host birthday and special event parties.

Strongly Agree Agree Neutral Disagree Strongly Disagree

Young people really seem to enjoy fast paced video attractions

Strongly Agree Agree Neutral Disagree Strongly Disagree

Young people want to buy shirts and hats featuring their favorite teams, groups or products.

Strongly Agree Agree Neutral Disagree Strongly Disagree

Young people spend a great deal of money on snack foods and beverages.

Strongly Agree Agree Neutral Disagree Strongly Disagree

I believe young people need more experiences which encourage teamwork and interaction.

Strongly Agree Agree Neutral Disagree Strongly Disagree

Projected Expenses (*Items in Italics are subsets of the preceding topic)

|Item or Service |Start-up Cost |Monthly Operations |First Year Cost (S+(MX12) |Second Year Cost (MX12) |

|EQUIPMENT | | | | |

|LASER WEAR |44,000 |1,000 |56,000 |0 |

|SOUND SYS |1,000 | |1,000 | |

|SPECIAL LIGHTING |540 | | | |

|FOG MACHINE |2,000 |200 |4,400 |2,400 |

|CARPET |3,000 | | | |

|BARRICADES |3,500 | | | |

|LIGHT FIXTURES |1,350 | | | |

|PARTY ROOMS |2,500 | | | |

|TABLES & CHAIRS |520 | | | |

|PAINTING |1,000 | | | |

|BOOTHS |1,800 | | | |

|COUNTERS |500 | | | |

|POPCORN |500 | | | |

|NACHO WARMER |200 | | | |

|SNACK BAR |500 |150 |2,300 |1,800 |

|OFFICE FURN |500 | |500 | |

|OFFICE MACH |500 | |500 | |

|EXPENSES | | | | |

|UNIFORMS |300 |12 |444 |144 |

|LEASE | |6,800 |81,600 |81,600 |

|LABOR | |18,260 |219,120 |219,120 |

|*Wages (Owners Included) | | |141,223 |141,223 |

|*FUTA (6.2%) | | |13,585 |13,585 |

|*FICA (7.65%) | | |16,763 |16,763 |

|*MWCI (5.0%?) | | |10,956 |10,956 |

|*MSTC (14.0%) | | |30,677 |30,677 |

|*MESC (2.7%) | | |5,916 |5,916 |

|INSURANCE | |300 |3,600 |3,600 |

|LICENSES |85 | |85 |85 |

|*County |35 | |35 |35 |

|*City |50 | |50 |50 |

|ADVERTISING |3,000 |1,000 |15,000 |12,000 |

|COST OF GOODS SOLD | | | | |

|UTILITIES |600 |600 |7,800 |7,200 |

|*Electric |200 | |2,600 |2,400 |

|*Telephone |200 | |2,600 |2,400 |

|*Water |200 | |2,600 |2,400 |

|SUPPLIES |1,900 |350 |6,100 |4,200 |

|STATIONARY |200 |50 |800 |600 |

|SHIRTS/HATS |400 |200 |2,800 |2,400 |

|PARTY WARE |200 |50 |800 |600 |

|CLEANING SUPPLIES |600 |20 |840 |240 |

|OFFICE SUPPLIES |500 |30 |860 |360 |

|MISC EXPENSES | | | | |

|Legal Fees |1,200 | |1,200 | |

|Accounting Fees |1,000 |50 |1,600 |600 |

|Office Software |500 | |500 | |

| | | | | |

| | | | | |

|Sub-total |75,080 |29,072 |614,854 |563,354 |

|Less italics |-2,585 |-350 |-233,105 |-230,605 |

|Operating Costs |52,495 |28,722 |381,749 |332,749 |

|Contingency Funds |7,500 | | | |

|Financing | |1,580 |18,960 |18,960 |

|Total Costs |-59995 |-30,302 |-400,709 |-351,709 |

|Revenues | |39,840 |478,080 |478,080 |

|Net | |9,538 |77,371 |126,371 |

Notes:

Labor is calculated using $55.00 per hour against an average month of 332 hrs.

Financing is calculated using $60,000.00 @ 12.5% for a term of 4 years ($1,578.36).

Lease is calculated using $10.20 per sq ft against 8000 square feet.

Explanation of Contingency Funds

A contingency account of $7,500.00 is budgeted to account for:

price changes in material or labor estimates

overestimation of cash flow

one-time expenses which may have been overlooked (fees, deposits, etc.)

Equipment Valuation Detail

|EQUIPMENT ITEMS |UNIT COST |UNIT RESALE VALUE |EXTENDED COST |EXTENDED RESALE |

|LASER WEAR | | | | |

| 30 VESTS |2,000 |1,600 |60,000 |48,000 |

| 3 TARGETS |1,200 |1,200 |3,600 |3,600 |

| 2 486 COMPUTERS |1,200 |1,200 |2,400 |3,600 |

|SOUND SYS | | | | |

| AMPLIFIER |400 |400 |400 |400 |

| CD PLAYER |200 |200 |200 |200 |

| 2 ea SPEAKERS |200 |200 |400 |400 |

|SPECIAL LIGHTING | | | | |

| 2 ea VERTIGO LIGHTS |270 |270 |540 |540 |

|FOG MACHINE | | | | |

| 2 ea 10,000 SQ FT |1,000 |1,000 |2,000 |2,000 |

|BARRICADES | | | | |

| 8FT WALL UNITS |3,500 |0 |3,500 |0 |

|LIGHT FIXTURES | | | | |

| 27 ea WITH BULBS |50 |50 |1,350 |1,350 |

|2 PARTY ROOMS | | | | |

| CARPET & DECOR |2,500 |0 |2,500 |0 |

|BOOTHS | | | | |

| 10 ea 4 SEAT w/TABLE |180 |180 |1,800 |1,800 |

|SNACK BAR | | | | |

| POPCORN POPPER |500 |350 |500 |350 |

| NACHO WARMER |200 |100 |200 |100 |

| RACKS & CANISTERS |500 |0 |500 |0 |

|OFFICE FURNITURE | | | | |

| DESK & CHAIR |500 |250 |500 |250 |

|OFFICE MACHINES | | | | |

| 2 ea CASH REGISTER |250 |125 |500 |250 |

|MISC | | | | |

|COUNTERS |500 |0 |500 |0 |

|TABLES & CHAIRS |520 |250 |520 |250 |

| | | | | |

|Total | | |80,890 |62,840 |

Notes. 1) As stated on page 8, depreciation schedules have not been factored in any cost or earnings projections. SEMCIC is free to place restrictions on depriciation scheduling to protect the value of inventory.

Biography of principals

Patrick K. Rothwell

Pat is a former Air Force Officer, currently participating in the Air Force Reserves. Additionally, he has taught at the Mississippi Gulf Coast Community College and is currently consulting on computer and electronics issues along the gulf coast.

His military career began as an enlisted electronics technician in the Precision Measurement Equipment Laboratory at Keesler AFB, MS. There he earned his Associates Degree in Electronic Measurement Technology. While at Keesler, he also attended USM, Long Beach, earning a Bachelor of Science Degree in Psychology. His enlisted career was highlighted with the receipt of many awards for technical achievement, as well as academic awards in Leadership and Management.

Rising through the ranks, Mr. Rothwell was commissioned as a Lieutenant in 1987. His service as an officer was in the Logistics Plans career field, primarily as a War Plans Officer. In these duties, he participated in the planning of Operation Just Cause and in Dessert Shield/Storm. During his tenure as a plans officer, he garnered awards as the "Best in 21st Air Force" (A division covering the entire eastern half of the nation). In a subsequent assignment to Japan, his office was awarded "Best in the Pacific Theater".

Although lacking retail experience in the amusement industry, Mr. Rothwell brings an outstanding record of achievement, highlighted by its diversity. He has excelled in every effort to date. The success of this venture will be immediately impacted by his efforts. Doubtless it will succeed.

Ramona "Mony" Rothwell

Mony is a Certified Respiratory Therapy Technician who has excelled in her field for more than 12 years. Her technical expertise has made her a leader in her profession, as evidenced by her ability to consult as an expert witness in court cases. In addition to respiratory care, she has worked as a Special Studies technician with today's most sophisticated medical hardware to include: laser, Doppler, ultrasound and neuro-diagnostic equipment. Most recently, she was hired to develop all procedures, practices and policies for establishment of a neuro-diagnostic clinic in Pascagoula, MS. The clinic was up and running in well under the expected startup time.

Mony's most important task, and the one which highlighted the need for youth attractions in Hattiesburg, is as mother to her six year old son Kenneth. In this role she currently volunteers as a team mother to the Petal Optimist Club T-ball team, and also volunteers at the Kamper Park Zoo. An energetic and committed parent, she is committed to making Laser Mania a fun, safe, family entertainment outlet. Both she and Pat intend to be hands-on operators of the business, ensuring their vision is brought to life.

Laser Mania

Statement of confidentiality

January 15, 1996

Patrick and Mony Rothwell

105 Pinehurst Street

Hattiesburg MS 39401

Gentlemen,

You and Laser Mania, have entered into this Agreement to define your responsibilities with respect to information received and to be received from the company in the course of discussions about your possible participation in a proposed investment in the company.

For ten dollars and other goods, valuables, mutual and reciprocal considerations, the receipt and sufficiency of which are hereby acknowledged and confessed, you have entered into this agreement with Laser Mania.

1. All information given to you about the company by the company, including but not limited to the company's business plan dated August 23, 1995, and any updates thereto, shall be deemed to be "Confidential Information" for purposes of this agreement.

2. You shall not use or disclose any of the Confidential Information without the Company's prior written permission, except for information which, when you received it, was well known to you as evidenced by prior written materials or publications.

3. You also agree that as long as this Agreement is in effect and for one year thereafter, you will not directly or indirectly, either alone or with one or more parties, seek to acquire or invest in the Company, without the prior written consent of the Company.

4. You agree that you will not, without the prior written consent of the Company, use the Confidential Information for any purpose other than required for the discussions hereunder. You represent that you have no obligations or commitments inconsistent with this Agreement. You agree to limit disclosure of Confidential Information received hereunder to only those of your officers and employees who are directly concerned with the discussions between you and the Company. You shall advise your officers and employees of the proprietary nature of the Confidential Information and shall use all reasonable safeguards to prevent the unauthorized disclosure of such Confidential Information by them.

5. Nothing contained in this agreement shall require either party to enter into any future agreement with the other. Upon termination of the discussions hereunder, you shall promptly return all materials containing Confidential Information, including all extracts and copies thereof, to the Company.

6. You agree that the remedy at law of the Company would be inadequate as to any unauthorized use or disclosure of the Confidential Information by you and agree that the Company shall be entitled to preliminary and permanent injunctions in any court of competent jurisdiction to prevent such unauthorized use or disclosure by you.

7. This agreement shall be construed and enforced in accordance with and governed by the laws of the commonwealth, which shall be the sole venue for resolution of any dispute arising under this Agreement.

8. This Agreement, including any term hereof, may be amended or terminated only in writing by the parties hereto.

9. This Agreement embodies the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to the subject matter hereof.

10. All of the terms of this agreement, whether so expressed or not, shall be binding upon the respective successors and assigns of the parties hereto and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns.

Please indicate your acknowledgment and acceptance of the terms of this Agreement by executing this original of this Agreement and returning it to the Company.

Laser Mania

Patrick and Mony Rothwell

Owners and Operators

ACKNOWLEDGED AND ACCEPTED:

By:

Name and Title:

Investment Summary

Total worth of Laser Mania: $ 100,000.00

Rothwell's participation $ 55,000.00 Goods & Services

Community Development $ 30,000.00 Loan (4 years @ 7.75%)

Investment Opportunity $ 15,000.00 Collateral to secure bank financing of $15,000.00

This could be cash or market traded stock.

As you can see we are offering 15% of the company to be held by investors. Our ideal situation would involve three $5,000.00 investors. This affords us the ability to cash out an investor, should an investor meet with an unfortunate circumstance (family emergency, etc). Although our preferences are for multiple small investors, we remain willing to accept a single investor for the entire $15,000.

As we see it, the potential investor may choose between one of the following options.

VENTURE CAPITAL:

The investor buys shares of stock equating to 5% of the company for a cash price of $5,000.00. The future value of the stock will be determined by the company accountant at time of liquidation, with Laser Mania being offered the right to buy-back. For this investment, the investor will receive a 5% share of profits after expenses each quarter. Current projections would indicate a very lucrative rate of return. Doubling initial investment in two to three years is very possible!!

INTEREST BEARING LOAN:

The investment of $5,000.00 is not tied to company performance. Rather, it is placed in deposit in a Certificate of Deposit account, securing bank financing. This CD is for the four year duration of Laser Mania's financing. The Bank compounds interest at a rate of 5.5% APR, interest which will be paid to the investor. Additionally, Laser Mania will pay an interest premium of 15% APR in Quarterly payments. Should Laser Mania reach it's target of payoff within 1 year, Laser Mania will reimburse the investor any penalties assessed by the Bank, should the investor choose to withdraw the CD at that time. The additional interest premiums of 15% will terminate upon payoff of Bank financing.

Remember, we would like to open within weeks, so time is of the essence.

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