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Last Updated: Tuesday, May 27, 1997

Copyright © 1997
Blades Arena
All Rights Reserved

Management Team
Our management team consists of a qualified individual whose background consist of a total of 15 years in the roller hockey/family entertainment industry and 9 years of corporate development.

In-House Management
George M. Babineau, President/C.E.O.
Undetermined, Vice President of Sales & Marketing
Undetermined, Vice President of Finance
Undetermined, Vice President of Operations
Outside Management Support
[Undetermined], Accountant / CPA
[Undetermined], Corporate Attorney
[Undetermined], Architect
Additionally, our outside advisors will provide tremendous support for management decisions and creativity.

Objectives
The goals of RTEC are to design, build and manage the Baldwinsville complex to create a positive cash flow for the company, while balancing the commitment to the community in providing wholesome family entertainment and recreation as well as for competitive roller sports programs to develop athletes in the sport they enjoy.
RTEC will not be the first youth sports and family entertainment center within a 90 mile radius, but its unique design and style of management, comprehensive programs and implementation of marketing strategies will far exceed any one centers efforts.
Marketing efforts that will be used are, local business cooperative sponsorships, cross promotions, a strong presence with communication to the schools, parent groups and other non-profit organizations. Local media and direct mail will be another avenue to reach our target market.
Revenue projected for fiscal year 1998 without external funding is expected to be $ 800 Thousand. Annual growth is projected to be 34.5% per year through 2007. We feel that within 3 years RTEC will be in a suitable position for further expansion and public offering. Our objective, at this time, is to propel the company into a prominent market position.

Market Analysis
Demographics 1 Mile 3 Mile 5 Mile
Population 6,877 69,714 157,453
1999 projections 7,944 76,267 169,907
Avg. HH Income $67,572 $78,036 $73,453
The total market within a Ten mile radius is 363,612 residents comprising of primarily young dual income working families with an average of 2.97 children per household. With an average median income of $53,637 per year. Employment is primarily executive management, administration and professional sales. Residents are comprised of 86% White, 12% Hispanic, 1.4 % Asian and .6% Black.
The Donnelly Marketing forecasts for positive growth and anticipates a 1.6% increase of population on the average over the next 5 years.
Why They Will Buy
The family time together is limited. With little or no quality time to spend together, families within our target market look for something affordable and fun, even unique to share their time together with each other. The demands for the "state of the art" facility, or at least above the expected norm, has been on the increasing rise with families today. Children, and families are looking for more than a parking lot or school gymnasium to roller skate or roller blade on. More than the inadequate facilities available within a 30 mile radius have to offer. Our focus is to provide a unique, wholesome, interactive family activity to enjoy together, at an affordable rate. Encouraging family entertainment by creating fast paced, fun games, that they can, as a family, participate in. Providing a better quality of facility as well as management will benefit our organization as well as the community at large.
The roller hockey market is growing rapidly. The ice hockey market is currently at its capacity with growth trends for both exceeding the number of quality facilities to participate in.
According to the Roller Skating Associations the overall market for the youth sports and family entertainment industry nationwide is projected to be $228 billion by the end of 1999.
The area of biggest growth in the youth sports and family entertainment center market has been in the Southern California market. Currently, the market distribution is shared by 16 outdoor roller hockey facilities, 11 indoor roller hockey facilities, 11 ice hockey facilities, 18 indoor family entertainment/roller skating centers within a 180 mile radius.

Industry Trends
The growing trend of this action packed sport and recreational activity has been exploding all over the country. The track record for growth has been phenomenal. It seems business owners are spending as little money as possible to capitalize on the growing market, by offering some kind of roller skating activity, but failing to meet the desires and needs of their customers. It is time to focus on the long term benefits, rather than the quick profit. The state of the art management tools include leading edge technology, operations training, cooperative marketing, personnel manuals and customer service training, TV/Radio/POS advertising materials, community involvement for a positive image creation, as well as a positive marketing strategy to outlast more than just the fast growth of the sport. The opportunity exists now to produce a facility that will outlive the sidewalks, outdoor facilities and inadequate indoor facilities.
Target market
It is a fact that 9 out of every ten children own their own pair of outdoor recreation roller blades. Most of these inline skates are not rink safe, but these children do enjoy the recreation aspect of inline skating. In the winter months it is virtually impossible to roller blade outdoors in upstate New York. Thus, creating an exciting recreational and entertaining environment where children can participate with adults and enjoy themselves in indoor heated comfort, once entertained, a customer is won for life provided they were given a value for the entertainment dollars they spent in the facility. So in the hot summer months these families are destined to escape the heat by attending the cool air conditioned family entertainment facility. It is a year round recreation and entertainment event.
Our primary market is comprised of 67,274 children ages 6 to 18 in the Liverpool and North Syracuse School Districts. Our target market will be focussed on 262,473 residents ages 14 to 24 within the immediate thirty mile radius. Young adults looking for the cutting edge in recreation, entertainment and competitive roller sports will be our target market

Risk
Investment Prospectus for RollerSports Total Entertainment Center
Although the Limited Liability "partnership" or "company" anticipates that the entertainment center will generate a positive cash flow and appreciate, there can be no assurance that the property will operate on a profit or will appreciate. Operating costs of the property may not be met in full by operating income from the property, although every precaution will be taken, especially during the first year. Although projections show a profit raised by this pro-forma, there can be no assurance that sufficient funds will be available to cover all debt and operating expenses. A provision must be made for contribution of operating capital, if needed.
The financial projections of this pro-forma are based on numerous assumptions. Actual results may differ from those projected and the variance could be material. All estimates of operations and future value are subject to material uncertainty, and no assurance can be given as to the actual results of the operation.
Building acquisition $50k Annual Net Lease 20k sq. ft. facility located in Baldwinsville.
3 months advance rent payment 12,500; 3 months Escrow 12,500; total $25,000
Lease agreement negotiations:
Repair roof, Install two 50 ton Air-conditioning units, Convert electric heat to forced hot air gas heat. Provisions for Three months free rent in exchange for tenant improvements.
Business Tenant Improvements: (labor not included in these figures)
Build-out lobby and reception desk $500
Build-out Food Court Area $500
Build-out Skate ‘N’ Stick Shop $500
Build-out 2nd floor office area $future endeavor
Build-out party/multi-purpose rooms $500
Build-out Skate Rental/Repair Shop $500
Repair damaged roller floor $5,000
Repair restrooms $500
Common Area Carpeting/Seating $3,000
Roller Floor Light Fixtures $1,000
Repair Drop Ceiling $500
Total Tenant Improvement $12,500 (3 months rent equivalent)
These improvements must be done by ourselves and volunteers in order to maintain this 3 month rent budget. Should we go over this budgeted amount, we either have to negotiate with the landlord, or enlist more contributions, sponsors may also be an opportunity to create revenue for these above tenant improvements.

Pre-Opening Operations Budget Version 3 Updated 5/27/97 Business General Expenses: Quarterly FY97-3 Quarterly FY97-4 Deferred Payment Attorney and Accounting fees: Credit Purchase Form Corporation $1,000.00 $500.00 Set Up Corporate Books $1,000.00 $500.00 Business Licensing Fees: Building Permits $200.00 City Inspector $200.00 Zoning $200.00 City Health Dept $200.00 Operation License $200.00 Building Lease $12,500.00 $12,500.00 Insurance $3,000.00 $3,000.00 Management Payroll $10,000.00 $10,000.00 General Payroll $6,000.00 $14,400.00 Skating School Payroll $ $6,000.00 Payroll Taxes/Workers Comp. $5,750.00 Personal Property Taxes $ $8,000.00 Bank Charges $300.00 Administrative Business Cards $100.00 Stock Paper $500.00 Postage Machine $500.00 Paper Cutter $500.00 Office Supply $1,500.00 Coin Sorter $500.00 Bill Counter $500.00 Cash Vault $1,000.00 General Office Supply $- $1,000.00 Sanitation/Janitorial $- Vacuum Cleaner $- $200.00 Shop Vac $- $200.00 Floor Scrubber $- $3,000.00 $4,000.00 Restroom Partitions $- $600.00 Waste Containers $- $400.00 Maintenance Supply/Operations $- Roll-On Plastic $1,500.00 $3,000.00 Floor Sander Rental $1,000.00 Paper Products $- $500.00 Cleaning Chemicals $- $500.00 Fire Extinguishers $900.00 Birthday Party Supply $900.00 Dues and Subscriptions RSA $525.00 $- USAC/RS $250.00 Chamber $325.00 ASCAP/BMI $- $600.00 Music Subscription $500.00 $125.00 General Operating Supplies Point of Sale System $2,000.00 $2,000.00 $8,000.00 Photo ID Badge System $1,000.00 $500.00 Phone System/Voice Mail $500.00 Metal Detector $500.00 Security System Alarm $2,000.00 $300.00 Camera/Monitors $2,000.00 $300.00 Staff Shirts $500.00 Wristbands $500.00 $300.00 Barcode Scanner/Software $2,000.00 Utilities (Deposits) Telephone $1,000.00 $1,500.00 Gas $1,000.00 $1,500.00 Electric $1,000.00 $4,500.00 Cable $1,000.00 $300.00 Common Area Maintenance $1,000.00 $1,500.00 Sound System Bose Speakers $4,000.00 $1,000.00 Amplifier $2,000.00 Dual CD Player $1,000.00 Dual Cassette Deck $500.00 Mixer/Compresser/Equalizer $3,000.00 Direct TV/Monitors $1,000.00 $250.00 Light Upgrades $2,000.00 Back Office Desk/Fixtures $1,000.00 $300.00 Accounting PC/Printer $1,000.00 Leased Copy Machine $1,000.00 Leased Printing Press $1,500.00 Lockers 125 $12,500.00 Food Court $- $- Refridgerator $500.00 Freezer $1,000.00 Plymold Tables 24 $6,000.00 Birthday Tables 8 $8,000.00 Skate Rental-Inline/Quad $- $- Riedell Quad Skates 300 $- $22,500.00 Inline Skates 150 $- $15,000.00 Skate ‘N’ Stick Shop $- $- $5,000.00 Tools/Rolling Cabinet $1,000.00 $500.00 Total Operations Investment $100,000.00 $86,925.00 $61,400.00 Cash Recurring Credit Revenue Schedule/Preliminary Estimated FY1997-Q4 Budget: Recreation Schedule $Amt. Gross Revenue Cost of Sales Membership Fees 1500 $20.00 $30,000.00 $600.00 Day Pass 3500 $2.50 $8,750.00 $175.00 General Admission 5000 $5.00 $25,000.00 $500.00 Skate Rental 2000 $4.00 $8,000.00 $160.00 Birthday Parties 1000 $7.50 $7,500.00 $150.00 Food Court 5000 $3.00 $15,000.00 $4,950.00 Recreation Skating School $- $- 1 Basic Skills x3 60 $29.00 $1,740.00 $- 4 Progressive Skills x3 240 $49.00 $11,760.00 $- 4 10 Wk. School 80 $89.00 $7,120.00 $- 1 Speed Team x3 60 $69.00 $4,140.00 $- Private Rentals 20 $250.00 $5,000.00 $- Vending and Video Games 5000 $2.00 $10,000.00 $5,000.00 Locker Rental 2500 $0.50 $1,250.00 $- Skate ‘N’ Stick Shop 100 $100.00 $10,000.00 $3,300.00 Total Revenue FY1997-Q4 $145,260.00 $14,835.00 Minus Cost of Expences/COS $101,760.00 FY97-Q4 Profit $43,500.00 FY97-Q4 Total Liabilities Loan Repayment $100,000.00 $25,000.00 12 month repayment@8.75% Credit Repayment $61,400.00 $15,350.00 12 month repayment@19.75% Debt Load/Service $161,400.00 $8,070.00 Cash Reserves (Liquid) $3,150.00 Estimated FY98-Q1 $188,838.00 Estimated FY98-Q2 $207,721.80 Estimated FY98-Q3 $145,260.00 Estimated FY98-Q4 $249,266.16 1998 Projected Revenue $791,085.96

Marketing Plan
Responses from customers indicate that our industry is enjoying an excellent reputation and we fully intend to continue this trend. Inquiries from prospective customers suggest that there is considerable demand for it. Relationships with other youth sports, family entertainment centers, commercial ice hockey facilities, schools, local businesses, national organizations, manufacturers and distributors substantiate the fitness of RTEC for considerable growth and accomplishment in our industry, especially in the area of development within the community.
RTEC's marketing strategy is to aggressively enhance, promote and support the fact that our products, programs and services will far exceed what is available in our industry today and will exceed our customers expectations resulting in repeat and long term business with our community.
Sales Strategy
Our primary method of sales will include local business cooperative efforts, sponsorships, direct marketing to the students in our schools and local media publicity. Our image, designed by the corporate RTEC will provide a cut above in image for family entertainment and youth sports facility. Radio and television may be used to promote grand opening and special events.
Our primary market will be reached through the school district’s parent groups and a multitude of other for profit and non-profit groups like, day care centers, summer camp programs, day camp and after school programs, Boy and Girl Scout programs, 4H programs and an affordable recreation birthday party program will also bring in new business as well as encourage repeat and word of mouth business.
Word of mouth of the affordable, fast paced, exciting facility, real indoor family entertainment center excitement with a food court area, meeting rooms, full service sports shop, interactive video game arcade, and our new, clean, safe, futuristic and state of the art entertainment facility. The opportunity to purchase memberships and excellent customer service will surely be a strong opportunity to encourage repeat business.
RTEC would become integral partners with the area Chambers Of Commerce, Kiwanis, Rotary and other local organizations as active business leaders to create a positive image and relationship for the cooperative effort of business and the community. We will commit to the education department by offering a work-study program as well as a mentoring program to include involvement with the Junior Achievement organization.

Advertising and Promotion
Our advertising and promotion strategy is to position RTEC as the leading family entertainment center and youth sports facility in the market.
We will utilize the following media and methods to drive our message home to our customers:
1. Host to tournament play and invitationals and regional championships
2. Direct marketing to the students through an aggressive fundraising program with the parent groups
3. cooperative advertising with local dentist’s, doctors, libraries
4. cooperative efforts with dare and pride programs
For the next 12 months, advertising and promotion will require $24 thousand dollars
On an ongoing basis we will budget our advertising investment as 3 % of total sales.
Public Relations
During FY1998 Q-2 and 3, RTEC will focus on the following publicity strategies:
1. Cooperative advertising and marketing with local businesses and national accounts.
2. Cooperative sponsorships with local schools for summer programs.
3. Cooperative sponsorships with local dentists, doctors and hospitals.
This strategy will place RTEC in a secure financial position in the conclusion of the first year of business, offering a successful investor buy-out, eliminating the accruing debt service.
Financial Plan
Exit / Payback
The attached financial projections indicate that the exit of private investors will be achievable in one year. The exit settlement will be in the form of a cash buyout at a rate of accumulated interest in the amount of no more than prime or 8 and ¾ percent of the total $200 Thousand Cash Investment, whichever is less. Repayment Plan as follows. (Divided appropriately among each partners initial investment):
FY97-Q4 $50,000 $5,250 $55,250
FY98-Q1 $100,000 $10,500 $110,500
FY98-Q2 $100,000 $10,500 $110,500
FY98-Q3 $50,000 $5,250 $55,250
FY98-Q4 (residual if added funds are required)

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