House of Treborough Ltd. t/a snugs 2015 1

House of Treborough Ltd. t/a snugs 2015 1

House of Treborough Ltd. t/a snugs 2015 2

Invest in snugs Custom- fitted In- Earphones Brand The growth trend in a burgeoning market: There are 1.75 billion Smartphone s worldwide [1] of which 31m are in the UK and 300 million tablets deliver superb operating and visual experiences but extraordinarily poor sound experiences. Beats by Dr.Dre have created a mass market of customers prepared to pay 200+ for their headphones [2]; this was unheard of just a few years ago, and Apple Inc paid them $3.2bn for the Beats brand. Now the market for 100+ earphones is expanding. Innovations in wearable Hi- Fi Audio were two of this years key market trends at the US Consumer Electronics Show [3]. snugs are a great product: Recently dubbed as probably the best consumer headphones in the world by Jonathan Margolis in British Airways online magazine. snugs are the best fitting custom in- ear headphones, snugs are really comfortable, they shut the world noise out, they don t let your sounds out and they deliver truly great sound quality. They are a quantum leap forward that are both affordable and accessible for consumers. Brand Vision: Our vision is to make snugs the leading consumer brand for custom in- ear headphones being sold through multiple channels, both online and through physical stores. We intend to build the snugs brand as founded and manufactured (initially) in London, trading on London s worldwide cool credentials synonymous with music and style. The roots of the brand being in London will be very important when we roll- out to other major cities, snugs will embody London Sound and London Style with premium service. A Proving Model: snugs have created a brand that is gaining recognition and traction: sales are growing month- on- month; direct sales conversion rates have doubled since June. We have established the concept and created buzz had great reviews (FT, BA Business Life, Men s running, Daily Mail, Trusted Reviews & What Hi- Fi etc.) and have created passionate journalist advocates. We have outstanding customer video testimonials, numerous customer service praise and repeat customers. Marketing: Most earphones are bought online and people are heavily influenced by reviews and endorsement. We have a strategy to ally snugs with people at the top of their profession: sports, music etc. We are focusing on an online marketing strategy using behavioural display advertising and PR. We will use Apps and other products that appeal to the whole earphone & headphone market to drive awareness to snugs i.e. our unique Sensaround Video player APP (developed with our partners Dirac in Sweden) will be free for limited period use before in- app purchase to extend usage. Our unique new- era wireless earphones, planned launch in Q2 2015, will drive users to snugs through a promotion voucher in every one sold. It will be a volume winner in the under 100 earphone market at 50+% margins. We have already secured Amazon (Europe) and Richer Sounds as retail partners. The London Marketing Challenge: snugs seeks investment primarily to boost its marketing budget to drive forward brand saliency and product sales in London, to be able to credibly present it as The Hottest Consumer In- Earphones In London. Investment will buy an intense PR campaign, media oriented events, extensive promotional campaign, targeted direct marketing campaigns and behavioural advertising campaigns, a limited amount of highly visible advertising (online and posters) and importantly a flag- ship snugs experience store. We have real metrics and conversions rates to demonstrate a viable return- on- investment which we believe we can drive down to below 15% of net sales. House of Treborough Ltd. t/a snugs 2015 3

Experienced Team - snugs has a highly motivated management team with in- depth experience in creating consumer trends, building and managing businesses, leading staff, brand building and PR. Paul Jobin, Founder, owner and MD of snugs has 25 years management, retail and product experience - former London Stock Exchange Topic product manager; in 1989, founded TKC group Ltd that grew to a 12m t/o, 200+ staff, wholesale, 18 RouteOne retail stores and online business; in 1998 creating the British Yo- yo craze and sold 10m Yo- yo s. Robin Burton, Director and shareholder of snugs: sales, marketing and branding expert; former European director of Ketchum PR & Natwest Bank; vast experience of developing and implementing brands, communications and sales and marketing strategies. We have also built key supplier partnership with the best in their field. We outsource and employ no direct staff, yet. Competition is entering the market: OwnPhones (USA) Uses a self imaging app due to launch May 15; Normal (USA) Uses a self imaging app and a fin to hold ear bud in, with mixed reviews so far; ACS (UK) similar product to snugs but focused on professional music market only; Decibullz (USA) a DIY product, low end with mixed reviews; Comply (USA) Replacement buds for existing earphones but lasts for a short time; Sensaphone (USA) similar product to ACS in the USA. However, no new entrant is competing from our top- down position with us, they are all coming bottom up. Financials: Founded in April 2013, Incorporated in July 2013. Turnover to date: 42,713 (31- Dec- 14). 167 Average Order value (excluding promo items). Entry margins +40% net improvable to +50% net with volume. Positive cash flow, Manufacture & stock outsourced, no tangible assets. No direct staff and no salaries taken. Sales driven by variable promotional costs. Low fixed costs. Patents applied for. Trademarks registered. The Investor Opportunity: Team have entrepreneurial track record, have spent two years identifying the right products at the right retail price, and the right partners to exploit this exceptional market opportunity. They have proved that sales can be generated, and that buyer satisfaction is extraordinarily high. This is a product and brand ripe for further investment. The founder shareholders want to see this business maximise its opportunity and would like to offer majority control and sooner not later, to the right partners. Meet with Paul: call him on: +44 (0) 77966 184 856, or email him on: paul@snugsearphones.co.uk Snugs 2.5 minute video on Youtube about the Investment Opportunity References: 1. Smartphone Users Worldwide Will Total 1.75 Billion in 2014 http://www.emarketer.com/article/smartphone- Users- Worldwide- Will- Total- 175- Billion- 2014/1010536 2. How Dr.Dre made $300 headphones a must- have accessory - Time.com http://business.time.com/2013/01/16/how- dr- dre- made- 300- headphones- a- must- have- accessory/ 3. Four Trends from the Consumer Electronic Show, Jan 2014, Las Vegas, USA Billboard.com http://www.billboard.com/biz/articles/news/digital- and- mobile/5869711/four- trends- from- ces- 2014 4. Worldwide Traditional PC, Tablet, Mobile Phone Shipments On Pace to Grow 7.6 Percent in 2014 http://www.gartner.com/newsroom/id/2645115 This document provides summary information on the business, management, products, and financial condition of Snugs and is intended to be evaluated by select existing accredited investors only. It should be used for informational purposes only and should not be read or viewed as an offering or solicitation to purchase securities. House of Treborough Ltd. t/a snugs 2015 4

snugs Investment Proposal House of Treborough Ltd, trading as, snugs earphones was founded in April 2013, Incorporated in July 2013. Turnover to date: 42,713 (31- Dec- 14) 167 Average Order value (excluding promo items). Entry margins currently: +40% net but easily improvable to +50% net with volume. Positive cash flow business model. Manufacture & stock handling outsourced. No tangible assets. No direct staff and no salaries taken. The sales are driven by variable promotional costs and low fixed costs. Patents have been applied for and Trademarks registered. Management accounts of monthly profit and loss with a balance sheet, audited by accountants, Milstead Langdon, available up to 30th November 2014 We have invested over 47,000 of our own money. Have an approved overdraft facility in place to 20,000 with Natwest. We have not charged our two years of full time working to the business. snugs are an approval investment by HMRC for SEIS & EIS. In September we sold 3 new shares under the SEIS scheme for 30,000. We have 120,000 left under SEIS. Subdivision of shares took place on 14 th January, 2015 from 114 shares to 11,400 penny shares. To date 11,400 penny shares have been issued, Paul Jobin & family own 8,200 shares. Share registry available We are seeking an investment of 400,000, for 4,000 new 1p shares, 27.78% of the equity, to accelerate sales and firmly establish the snugs brand as the custom earphone brand of choice in London and the United Kingdom. Total investment 400,000 of which 120,000 is under SEIS and the remaining 280,000 under EIS. The board will consider offering a Non- executive Directorship to a major investor. An EMI option scheme for future staff has been established, with 1,000 shares allocated for future options. If these are fully taken up then the 4,000 new shares sold for investment will represent 25.97% of the total shares, diluted down from 27.78%. This money will be used to drive sales growth. Exactly how this money will be spent is detailed in the financial plan, but as a quick summary, the investment of 400k will be offset by sales growth and hence sales profit. 2015 2016 PR 31,000 122,000 Behavioural advertising 255,000 615,000 Pay- per- click 28,000 174,000 Social media 22,000 102,000 Poster campaign 55,000 163,000 Flagship experience Store 70,000 174,000 Media Events 11,000 39,000 Total Marketing & Advertising 444,000 (33%) 1,444,000 (27%) % of Turn- over A 3- year fully illustrative financial plan, with a summary and detailed, 3 year profit and loss, cash flow and balance sheet are available upon signed acceptance of our non- disclosure agreement. Also available is a fully detailed Company Summary and Investment Brochure (55 pages), press editorials & cuttings and compliance information. House of Treborough Ltd. t/a snugs 2015 5

Get Tax Relief on your Investment in snugs under HMRC s Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are government initiatives offering some of the most attractive tax breaks available in the UK. SEIS is an incredibly generous derivative of the Enterprise Investment Scheme (EIS) and was introduced in April 2012. Its aim is to encourage seed investment in early stage companies such as snugs. snugs has already raised 30,000 under SEIS in exchange for 3 new shares and has 120,000 left to raise under SEIS. Seed Enterprise Investment Scheme (SEIS) tax breaks are even more generous than EIS. 1. You get income tax relief of 50 per cent. 2. You ll pay no capital gains tax on any profits 3. You can offset any loss against income tax. 4. There s no inheritance tax 5. Capital gains reinvestment relief. The downside protection is 86.5 per cent so you ll get back 8,650 from a 10,000 investment that totally fails if you pay enough tax to use all the reliefs. snugs have our SEIS advanced assurance letter from HMRC on 17th June 2014 (Copy available upon request) confirming that investors in snugs will benefit from SEIS. snugs meet all the SEIS criteria. Another big investor benefit is SEIS relief can be claimed up to five years after the 31st January in the year you made the investment. Once the 120,000 under SEIS has been used up we are eligible for the remaining 280,000 under the Enterprise Investment Scheme (EIS). This is not quite as generous as SEIS and offers 30% income tax relief as opposed to 50% under SEIS. The main benefits are: Enterprise Investment Scheme (EIS) tax breaks 1. You get income tax relief of 30 per cent. 2. You ll pay no capital gains tax on any profits 3. You can offset any loss against income tax. 4. There s no inheritance tax How to claim your SEIS / EIS relief: When you invest in snugs we submit form SEIS1 to the Small Companies Enterprise Centre of HMRC, who then issue form SEIS3 for every investor for them to complete and submit as part of their tax return. More Information: Please take independent advice before making any investment. Visit the HMRC website for further information on SEIS tax relief http://www.hmrc.gov.uk/seedeis/ SEIS Window.org is a very detailed resource website about SEIS, including case studies and a SEIS Tax calculator: http://www.seiswindow.org.uk/ House of Treborough Ltd. t/a snugs 2015 6