Global Industry Products, Corp. Hotel Casino Distributor Business Plan “We carefully evaluated other vendors and found Global Industry Products to be the most cost effective. We were able to decrease our costs significantly last year because of them. GIP makes it so easy; they have all the products we order in the cage in one place. They provide us with outstanding customer service, and always come through when we need them.” - Gia Gemma, Mandalay Bay - Cage Department GIP Corporation Page 1 Dear Global Industry Products; We are pleased that the management team that we have worked closely with over the last year is now at Global Industry Products. As you know, Ampac is the largest global manufacturer of security bags and operates its own manufacturing centers in North America, Europe and Asia. Our customers include the Federal Reserve, major banks, retailers, casinos and armor car carriers. Wherever there is a need or concern in protecting the safe transport or security of a company’s valuables, our products are there to fill that need. In addition to our security bags, Ampac also manufactures higher end retail bags for the retail industry and also flexible packing film for the food industry. Before agreeing to work together, Ampac met with your management team in early 2008 to determine if we could be good business partners for each other. We say each other because we realize that business relationships are not based upon size, but rather if they work equally well for both parties. Per our meeting, it was determined that the opportunities of being successful in the casino industry would be dependent upon providing a proven security bag product, accompanied with your management team’s thorough understanding of the market and your ability to distribute our security bag into the Las Vegas casino market. Needless to say…. Our relationship with your team has greatly exceeded our distributing goal for the Las Vegas casino industry. Your management team has proven to us its knowledge and skill in the casino market by becoming one of our fastest growing distributors. Because of our mutual success and respect, we will rely on Global Industry Products to be our exclusive nationwide distributor for the casino industry as we together continue to grow this business partnership. Yes, we are committed to the management team of Global Industry Products and plan to support them in their dominance of the security bag market for the casino industry. Additionally, to reconfirm our recent meeting, we wish for Global Industry Products to also distribute a retail bag product line to the casino industry. Again, we thank you for being a valued Ampac partner and we look forward to continuing and growing our strong business relationship together. Best regards, Bill Moore National Account Manager Ampac Page 2 GIP Corporation Corporate Summary Global Industry Products, Corp., a Nevada Corporation, was co-founded by Chester Wright III, who is experienced in public offerings, accounting, strategic planning, operational management, financial analysis, negotiations and has been published in the fields of negotiation, finance and accounting, and Sean McCrory, a 20 year veteran of managing and building successful sales teams and has extensive sales relationships with Las Vegas based casinos. Global Industry Products provides conjoined industries with Horizontal Product Distribution. Unlike a single product line vendor that carries a product line along a spectrum of industries, Global Industry Products focuses on carrying numerous products specifically for a single industry. A large Casino is an example of a conjoined industry which is a business that combines many traditional industries into a single commercial enterprise. For example a casino would include the following: Gaming – a banking operation where money has to be counted, verified, controlled and tracked. Hotel – 500 to 5,000 rooms. Bell service, maid service, room service, front desk, pool and spa. Retail – anything from a small convenience shop to a small shopping center. Entertainment – Multiple major venue attractions, lounge and bar acts, movie theaters, bowling alleys, attractions, lounges and bar acts. Food & Beverage – Snack bars, food courts, buffets, multiple restaurants, bars and cocktail servers. Maintenance – Building and grounds and machine shop. Surveillance and Security – Eye-In-The-Sky, private police force and in-house holding cells Inventory control – On site and off site for products and supplies and data storage. IT – to support all departments. GIP Corporation Page 3 The challenge of a conjoined industry is the need for many different items from diverse product lines. The purchasing departments are overwhelmed by the different vendors they traditionally have to speak to for separate product lines. A casino with hundreds of thousands of product needs is not normally able to order the volume necessary to get the best pricing. Along with pricing, inventory control issues are also a major problem. With numerous products, the warehousing space, costs and spoilage have been a normal part of doing business until now. Anchor Products Global Industry Products has developed an “Anchor Product” approach to expanding its market share within the various casino departments. By providing key, anchor products (ex. security bags, vinyl gloves) at a substantial savings to a casino department, Global Industry Products is also able to capture a majority of the sales of complementary products associated with these anchor products. Strong exclusive vendor relationships allow Global Industry Products and the vendor to work closely together to select a price point for the anchor products to capture this lucrative market, while ensuring acceptable profit margins. The following table represents Global Industry Products current key anchor products. Current Anchor Products Market Penetration as of Jan 1, 2011 Las Vegas National Tamper Evident Bags for cash handling 75% >5% POS Paper Rolls 50% >5% Vinyl & Latex Gloves 50% >5% Ribbons & Ink 5% >5% Trash Liners 8% >5% 10% >5% Cups & Straws 5% >5% Air Filters 5% >5% Sanitation Paper Products Global Industry Products market growth potential is amazing. Based only on the current anchor products, Global Industry Products should be able to capture a market share of $10 - $20 million in Las Vegas, and hundreds of millions nationwide. Global Industry Products is further investigating vendor relationships and market viability for numerous additional anchor products. The following are Page 4 GIP Corporation product lines that GIP has been asked to carry by at least one of its current casino customers: Banking, Housekeeping, Janitorial & Sanitation, Engineering & Maintenance, Food Handling, Glassware, Paper and Plastic Cup, Straws and Flatware. Due to this rapid growth, Global Industry Products recently moved into larger facilities at the end of November 2009. This current space is 14,000 square feet, located at 1111 Grier Dr. Bldg A, Las Vegas, NV 89119. Through relationships with vendors /distributors, Global Industry Products is able to sell 200,000+ products and either have these products arrive at the corporate warehouse the next day or drop shipped directly to the customer. Through developed relationships Global Industry Products is able to personally brand distributors catalogs or offer reduced pricing from industry recognized catalogs such as Northern Safety or Medline. Global Industry Products unique business model of developing industry specific relationships with a multiple product line offering makes us a highly prized distributor for a vendor interested in increasing market share within these industries. Medline, which has annual revenues of $3 billion dollars, has chosen Global Industry Products as its only independent distributor in the State of Nevada. Casino Market Global Industry Products provides consumable products to the casino industry. Global Industry Products has capitalized on the opportunity to consolidate numerous industry related vendors and product lines into a single point purchasing solution. Primary product lines required by casinos are made available 24 hours a day, 365 days a year. Global Industry Products represents the standard for supplying products to the casino industry. The casino industry is a unique type of industry which is a combination of different commercial groups, which are: banking, gaming, hotel, food, entertainment, retail, and security. This casino industry conglomerate consumes a great variety of different types of products, creating strategic advantages not available to single product line vendors. By becoming a source of a large number of consumable product lines focusing exclusively on casino usage, Global Industry Products is able to capture a significant market share. Hundreds of vendors deliver thousands of products to each casino every day. This burdens casinos with the cost of managing a large number of vendors and warehousing a large quantity of products, which is necessary to obtain wholesale pricing. The casino industry is the perfect choice for Global Industry Products’ business model. By consolidating the daily products requisitioned by the numerous casinos, economies of scale are achieved. Global Industry Products leverages these GIP Corporation Page 5 economies to guarantee the best prices available to each casino, without the casino having to warehouse large quantities of products. Global Industry Products has exclusive relationships with some of the largest product manufacturers in the world and has negotiated to secure these discounts. Global Industry Products has capitalized on the opportunity to consolidate numerous industry related vendors and product lines into a single point purchasing solution. Primary product lines required by casinos are made available twenty-four hours a day, seven (7) days per week. Once Global Industry Products has captured a substantial market share in the Nevada casino market, Global Industry Products intends to expand by distributing products to one or more of the conjoined casino industry businesses to businesses in that particular industry. For example, one of the casino industry conjoined businesses is banking. Global Industry Products intends to offer its "restaurant products" to local companies in the restaurant industry. Global Industry Products is currently selling on many local restaurant and grocery stores chains including Subway and Raising Cane’s. Advantages of working with Global Industry Products No Shipping Charges – With no shipping charges, we’ve been able to reduce our customers’ overall cost of supplies by as much as 20%. 24/7 Emergency Service – Hotels/Casinos use a high volume of supplies daily. If a property runs out of something in the middle of the night, it could be a disaster. With our 24/7 emergency service, we have our trucks delivering what they need within hours. We’re the only company in Las Vegas that provides casinos this service, which makes us invaluable to them. Competitive Pricing – Manufacturers are eager to break into the Las Vegas market, however they lack a local sales force. They have discovered that Global Industry Products is the ideal vehicle to bring their products to market. In order to work with Global Industry Products, our manufacturers have been extremely aggressive with their pricing, resulting in lower prices on over 90% of the supplies our customers order. Local Representation – Providing our customers with a local sales staff who understands their day to day needs is a top priority for our customers. Our sales representatives have many years experience in the Hotel/Casino industry. Global Industry Products is the only local company in Las Vegas providing all the supplies our customers use in the Casino Cage. We are depended on more as trusted consultants than as sales people. Page 6 GIP Corporation Testimonials “Your management team has proven to us its knowledge and skill in the casino market by becoming one of our fastest growing distributors. Because of our mutual success and respect we will rely on Global Industry Products to be our exclusive nationwide distributor for the casino industry as we together continue to grow this business partnership.” - Bill Moore, Ampac - National Account Manager “We carefully evaluated other vendors and found Global Industry Products to be the most cost effective. We were able to decrease our costs significantly last year because of them. GIP makes it so easy; they have all the products we order in the cage in one place. They provide us with outstanding customer service, and always come through when we need them.” - Gia Gemma, Mandalay Bay - Cage Department “I’ve been working with Sean McCrory for over a year now and it’s just a peace of mind. I do not worry about prices, his prices are consistently competitive, and I do not worry about delivery, my orders are delivered on same day or next business day, always.” - Vanusa Kung, Flamingo Las Vegas – Cage Department “Sean at GIP has always overly provided for the needs of MGM Grand and NYNY Hotel Casino. He is always in communication about sales and discounts on our recurring products. He overly accommodates any RUSH orders, and communicates the lead times efficiently and effectively. I look forward to working and continuing to order with GIP, and with Sean as our main contact.” Leesa Patterson, Senior Buyer - MGM Grand – NYNY Hotel Casino “I have worked with Planet Hollywood for over nine (9) years and one of my biggest challenges is to provide good quality and low cost merchandise to my department due to my budget and the economy. Global Industry Products has always provided me with great service, great quality, and great prices. I was very happy to hear that Global Industry Products will now also be able to supply me with all the products System Supply once provided me!” – Connie Camacho, Administrative Assistant Casino Cage/Credit – Planet Hollywood Resort & Casino GIP Corporation Page 7 Corporate Strategy Global Industry Products has adopted and improved upon the strategies of Corporate Express. Corporate Express was one of the most successful office supply companies in world and was founded in 1986 as a regional office products retailer with eleven employees located in one small building. Upon implementing an innovative program of tactical procurement solutions, the company grew rapidly. In 1994, Corporate Express became a public company with reported revenues of $621 million.1 In 1994, purchases by corporations with more than 100 employees accounted for $30 billion of the annual office-supplies market. And by selling directly to those customers instead of operating superstores catering to walkins, Jirka Rysavy, founder of Corporate Express, was certain he could generate better returns on capital. "I figured I could cover all of the United States from 20 warehouses," he says. "Office Depot would need 2,000 superstores." He also figured that a big corporate supplier could cover the country with $40 million to $50 million in inventory, a small fraction of what a network of retail superstores would require. Most office-supply companies, including Trick & Murray before it was merged into Corporate Express, give customers a catalog of 15,000 to 25,000 items from which to order. That requires the supplier to maintain a broad inventory, which is costly both because of that inventory's size and because it moves slowly. (The industry standard turnover is about four to eight times a year.) Because most suppliers are small, few of them have the scale to buy much more than half their items directly from manufacturers. Most of their inventory comes from wholesalers, who pass along a hefty markup. Corporate Express brought a far more focused merchandising strategy to its new Seattle operation. What the company calls its "in-stock catalog" lists about 5,000 items, not the traditional 25,000. Customers could get everything they needed, but the variety within any category was somewhat circumscribed: perhaps the staplers did not come in emerald green, or you couldn't get them from every manufacturer that made them. Global Industry Products also uses an in-stock catalog practice with a focused inventory selection design specifically for the casino industry. If a customer asks for a product that Global Industry Products does not carry, the company's computer system automatically suggests a suitable alternative from the in-stock catalog. About 85% of Corporate Express's sales came from its in-stock catalog and for Global Industry Products, in-stock sales account for close to 95% of sales. Many good things flow from that focused strategy. Global Industry Products generates huge sales volumes from just 5,000 products, enabling Global 1 http://en.wikipedia.org/wiki/Corporate_Express Page 8 GIP Corporation Industry Products to negotiate bulk purchases directly from the manufacturers. The company thereby gains about a 10% cost advantage (even after passing savings on to customers) against competitors who must buy primarily from wholesalers. With higher fill rates and lower prices than those of competitors, Global Industry Products will grow through continued double-digit increases in sales. The timing for Global Industry Products’ expansion is excellent. An opportunity has recently emerged after Staples’ hostile takeover of Corporate Express, previously the largest supplier of banking and office products to the casino industry. Since the buyout, they discontinued carrying many of the items needed by the casino industry. Using its unique marketing approach, Global Industry Products has quickly filled the void left by the withdrawal of Corporate Express. As Corporate Express did, Global Industry Products will also gain several big advantages in its inventory. With most orders coming from its in-stock catalog, the company is able to deliver about 99% of all orders by the next business day, a percentage that's far higher than the industry norm and a key element to satisfying customers. Global Industry Products single software solution unifies business processes across the entire enterprise. With a single, integrated platform for Customer Relationship Management (CRM), Accounting/Enterprise Resource Planning (ERP) and e-Commerce, we automate key business functions across all departments, including sales, marketing, service, finance, inventory, order fulfillment, purchasing, and employee management. Global Industry Products’ employees do not have to re-enter data in different systems, which would normally result in inconsistent or inaccurate data, or wait for batch updates. Instead, all of Global Industry Products’ employees view and share accurate data in real time, leading to greater collaboration among departments and increased productivity across our entire business. Global Industry Products uses an on-demand Accounting / ERP solution that supports all back-office operations. This internet based solution allows Employees, Vendors, Customers and Partners to share information in real time, whether it is locally or around the world. Global Industry Products’ Accounting / ERP software system components are tightly integrated, giving access to real-time information. Global Industry Products proprietary software interface provides the following key benefits: Internet- based solutions providing on-demand access anytime, anywhere. Make better decisions by giving each employee real-time information. GIP Corporation Page 9 Use one powerful solution that’s easy to use, and flexible enough to support all our business processes. Eliminate IT costs and concerns associated with maintaining and upgrading separate applications. Increase collaboration and improve relationships with partners, customers and vendors. Given today’s need to work closely with customers, suppliers, and partners through an extended enterprise, Global Industry Products offers self service portals that enhance both customer and vendor collaboration. In addition, proactive notification of partner-specific events accelerates process cycles and improves responsiveness, resulting in increased productivity. Having open lines of communications with our customers is crucial. Global Industry Products Customer Center strengthens our customer relationships and reduces paper usage by providing password-protected access to important online tools and information. Customers can find answers to questions, complete financial transactions, submit support issues, or query their online knowledge base—anytime and anywhere. The entire Global Industry Products business runs in real time. Employees can move faster and smarter. Customers are served better. Orders can be filled and tracked more quickly and easily, with inventory levels updated in real time. And with full visibility into inventory by sales reps for order promising and by planners for purchasing, we maintain lower inventory levels, analyze inventory costs and collaborate with vendors more effectively. Close cooperation with vendors eliminates inefficiencies, resulting in reduced costs and increased margins. Global Industry Products purchasing and vendor management tools streamline the requisition process and extend collaboration with our vendors. Global Industry Products integrated software manages the entire procurement process, while also giving our vendors access to such key data as inventory reordering points and transaction histories. The Global Industry Products’ website has a password-protected customer center that allows each of our customers to login and review all their orders and issues. Customers can log in and view every order they have ever placed along with its shipping status. Customers can also request returns, repeat past orders, view quotes, and make payments. Page 10 GIP Corporation Global Industry Products has made a commitment to being green. Global Industry Products’ highly integrated management style allows our company to greatly reduce paper usage. Global Industry Products employees create purchase requisitions with an online form that eliminates paper-based forms and their associated errors. Once completed, requisitions are automatically routed for approval. Once received at our facility, items are logged into the system as having matched the original purchase order. With proper receipt and purchase order matching, Global Industry Products accounts payable department is notified that payment should be made to the provider. Payment can be handled with a check, via online banking, or using Electronic Funds Transfer (EFT). Global Industry Products has also streamlined the entire fulfillment process, allowing sales representatives to convert estimates into orders with just one click. Sales representatives can also track order fulfillment along each step of the way. And with shipping integration, customers get a real-time view into shipping statuses. Smoother order fulfillment, in turn, reduces delivery times and increases customer satisfaction. Global Industry Products is also proud to introduce our new green product initiative. All the major casinos in Las Vegas have a “Green Team”. Global Industry Products receives requests every week for green products, everything from trash liners to copy paper, and we are currently developing relationships with major manufacturers Domtar and TCP, who are on the forefront of the green explosion. These manufacturers are anxious to penetrate the Las Vegas market, and are being extremely aggressive with their pricing. Going green also gives Global Industry Products an additional competitive edge. Global Industry Products has two new “Anchor Products”. One is lighting, and the other is air filters. TCP is our main manufacturer for lighting products. Global Industry Products is able to offer compact fluorescents, cold cathode, and LED lighting. This type of lighting reduces a customer’s cost dramatically by lowering the amount of energy they use, and by reducing the amount of times they have to change out their light bulbs. Global Industry Products is currently in negotiations with a manufacturer in China who produces T-5 Retrofit Kits. The T5 Retrofit upgrade provides a cost effective solution to upgrade conventional luminaries to the latest T5 system. This system upgrades T8, T10 and T12 fluorescent lamp fixtures with an easy snap-in installation and provides immediate benefits including a short payback period and an energy savings of up to 60% per fixture, along with a better quality of lighting. We are currently testing the kits in 3 casinos. Magnetic ballasts commonly used for the T12 lamp operation will begin to be phased out on July 1, 2010, when manufacturing for commercial and industrial applications becomes prohibited by U.S. Department of Energy (DOE) ballast efficiency regulations. This means that literally millions of GIP Corporation Page 11 existing T12 fluorescent lighting sockets will have to be upgraded in the near future. Global Industry Products is positioning itself to dominate this market. Global Industry Products has approached ten major Casinos with our permanent air filter solution and all ten have shown a great interest. Two casinos are currently testing our permanent filters, with Golden Nugget being the first to give us feedback. Their normal scheduled filter change is every month. After one month Global Industry Products permanent filters, without cleaning, still provided air flow efficiency that matched a brand new disposable filter. Their Vice President of Facilities is ecstatic! Global Industry Products Patent Pending Product Global Industry Products is currently conducting field tests at the engineering and maintenance department of a major Las Vegas Casino, of a new Global Industry Products’ invented, patent-pending surface preparation and cleaning product. The item, The Buffalo Sponge, is a revolutionary new product that does the job of several products already on the market, centralized all in one affordable item. The Buffalo Sponge can abrade and prepare most surfaces, and is resistant to solvents and chemical degreasers. It inhibits evaporation, which allows the Buffalo Sponge to retain more solvent and remain moist far longer than other abrading or wiping products currently available on the open market. The Buffalo Sponge is shaping up to be the best surface preparation, surface finishing and cleaning product item available on the market today. Global Industry Products Green Product Lines Global Industry Products is a distributor of TCP lighting products. As the leader in energy efficient lighting, TCP manufactures the most compact fluorescent lamps (CFL) in the industry and offers one of the largest number of ENERGY STAR approved products, distributing them throughout North America and abroad. TCP's CFLs use 75% less energy and last an average ten times longer than old-fashioned incandescent light bulbs. As a result, consumers can save from $30 to $108 over the life of the lamp and reduce their carbon dioxide emissions by more than 450 pounds. TCP estimates the 800,000 CFLs it manufactures per day will account for a reduction of carbon dioxide by 180,000 tons every day, or the equivalent of 360 million pounds of emissions from power plants, which will dramatically decrease the amount of harmful greenhouse gas emissions linked to global climate change. Global Industry Products is a distributor of Domtar EarthChoice paper products. Domtar is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world, based on production capacity. Domtar had revenues of $6.4 billion in 2008. Page 12 GIP Corporation Domtar EarthChoice office paper is an everyday, dependable paper for all office printing and copying. It's engineered to run smoothly on a wide variety of printing equipment and guaranteed on all highspeed copiers and laser and inkjet printers. Domtar EarthChoice office paper is a multifunction paper that meets the global forest management standards of the Forest Stewardship Council (FSC) and is endorsed by Rainforest Alliance. By purchasing Domtar EarthChoice office paper, environmentally and socially responsible companies and consumers can do their part to protect the environment by ensuring sustainable forests. The EarthChoice product is better than a recycled product, at a lower price point. Global Industry Products' dedication to providing our customers with the best quality, low cost paper rolls has allowed Global Industry Products to become a Master Reseller of paper roll goods and products across the United States. Global Industry Products beats the competition. Management believes that Global Industry Products ' distribution model to market to the casino industry is unique. Management is not aware of any other distribution company that operates similarly to Global Industry Products ' horizontal business model. Global Industry Products ' competitive advantage with the casino industry is that it permits a casino to purchase products for its different business segments from a single distributer and that Global Industry Products ' e-Commerce site permits easy tracking of orders and payment. Additionally, Global Industry Products ' understanding of the different segments of a casino's business permits the Company to recognize and to take advantage of product needs that cross business segment lines. Management believes that once Global Industry Products can demonstrate to casino purchase agents its wide range of products for distribution and the ease and cost savings in purchasing from a single distributer, the casinos will purchase a broader range of products from Global Industry Products. Furthermore, as the demand for certain products increase, Global Industry Products should be able to negotiate better prices for such products. Global Industry Products ' primary competition in the casino market comes from distribution companies that are designed vertically on individual business segment lines. Such companies can sometimes offer better pricing on products within that business segment and generally have a relationship with the casino for selling products germane to that business segment. Although Global Industry Products does not believe that such distributers can compete for casino business on a long term basis, Global Industry Products GIP Corporation Page 13 believes that based upon their existing relationships, they will be able to maintain existing relationships for a period of time. Global Industry Products also intends to compete for business from companies in one or more business segments of the casino industry. Global Industry Products will need to compete for such business based upon its ease of use and its desire to build a relationship with the potential customer. Furthermore, Global Industry Products Management believes that the Company can obtain preferred pricing on certain anchor products used in the industry segment which should also assist it in effectively competing. As Global Industry Products expands the territory in which it distributes goods and intends initially to focus on geographic areas that contain casinos. Global Industry Products believes that it should be able to approach such potential casinos customers and generate business from such customers for the same reasons that the Company has been successful in attracting casino business in Las Vegas. In its new territory, Global Industry Products will also seek to distribute products to businesses within a casino business segment Global Industry Products increases revenues with e-Commerce. Global Industry Products provides a single platform for B2B and B2C eCommerce with built-in handling for all key processes from eBay integration, Amazon.com-like up-sell and cross-sell personalization and sophisticated B2C promotional tools to secure registration, negotiated contract price enforcement and extended enterprise partner management for B2B. eCommerce operations seamlessly interact with back-office inventory, warehousing and shipping, in addition to front-office customer interactions, enabling Global Industry Products management to have the complete visibility needed to compete and grow Global Industry Products’ top line revenue while managing costs with an eye to profitability. Global Industry Products website capabilities include secure shopping cart functionality, integrated real-time credit card processing with multi-level fraud protection, coupons, cross-selling and more. Global Industry Products selectively offers customers the option of paying via credit card, or being invoiced, with all credit terms managed within the system. Global Industry Products improves efficiencies by understanding the Customer. Global Industry Products founders know what casinos want, and when they want it. Through many years of research, they discovered workflow process paradigms that point the way to strategic standardizations. Combined with ample warehousing, this allows casinos to receive “just in time” product delivery, eliminating high inventory costs. Such a winning combination gives Global Industry Products tremendous competitive advantages, including customized product lines, wholesale pricing, localized on-site sales support, emergency supply services, automated ordering, history reporting, and industry statistics. Page 14 GIP Corporation By meticulously understanding how products flow through an industry, Global Industry Products is able to offer improved efficiencies in purchasing processes. With enhanced efficiencies, customers increase profit margins by reducing operational costs. The improved efficiencies logically lead to increased standardization in the industry. A major competitive advantage is Global Industry Products’strategy to focus on the casino industry, which allows for horizontal expansion along the product needs of the industry, not the product line. As a building block of the Global Industry Products business model, our casino industry focus provides a strong advantage over any possible competition. Global Industry Products maintained growth is achieved through a process management system. Definable components within a business process are evaluated at the results level and managed independently. Global Industry Products uses key success factors to determine if the company is meeting its objectives. The key success factors are set at the department or process levels as performance goals. Global Industry Products also uses key performance indicators to monitor daily, weekly and monthly activity levels. By dividing Global Industry Products’ business model into self managed components such as outside sales, inside sales, sourcing, customer support, sales support, warehouse and systems, Global Industry Products senior management is able to monitor results without micromanaging. Although this may seem fundamental at first, the ability for any company to maintain rapid growth is its ability to adapt at the process level without disrupting the other business components. More importantly, Global Industry Products’ management embraces this at an early development stage, ensuring a faster growth cycle. “I’ve always been good at story problems. I have the ability to identify key elements from the big picture and isolate those elements into solvable solutions.” – Chester Wright III, President. An example is the normal problem that many businesses have with ensuring that the information gathered about the customer is captured and maintained accurately and in a timely manner. This problem is further increased as more sales representatives are physically located away from a central office location. Global Industry Products solves this problem by having the sales representative call an 800 number after every customer meeting, leaving detailed information about the appointment. After testing, Global Industry Products management added additional functionality to streaming the information gathering process and also added a check and balance system which ensures the information is acted upon. After testing, the final implemented solution is: GIP Corporation All sales representatives must call immediately after every sales meeting. Page 15 A script is used stating location, customer contact and time of meeting. Describing what items and service were discussed. What action is required for each item, i.e. an estimate or sample. What and when a follow-up is required for each item. This message is transcribed and sent to sales support. Sales support keys-in the information into the company’s CRM system. Sales support also performs required actions, such as providing an estimate and schedules a follow-up for the sales representative. Global Industry Products continues to grow by expanding our customer base. We utilize two models to expand our growth. By expanding products lines, we are able to maximize our customer relationships. Global Industry Products has successfully imported our first container of private label products from China -- disposable latex, and vinyl gloves. Following our business plan, we’ve captured approximately 30% of the disposable glove business in the Las Vegas Casino industry. Global Industry Products used a conservative approach to determine the viability of the glove product line. By using U.S. based importers, we had to sacrifice profit margin to secure significant market share and to warrant importation of our own container product. Now that our shipment from China has arrived, our margins are very significant. Also, by expanding our customer base, we are able to extend our success nationwide. Global Industry Products works to acquire relationships, not only with casinos and hotels nationwide, but also with large corporations such as John Hopkins Research Facility and AEG Worldwide, one of the leading sports and entertainment presenters in the world, servicing stadiums and theaters owned by AEG. We have also sourced such companies as Aftermath, a national crime scene and tragedy clean-up specialist, who needed our products and appreciates our competitive pricing. Global Industry Products continues to meet its sales goals and is in the process of expanding operations. Each sale will help lead to additional product lines, ultimately giving Global Industry Products unprecedented purchasing power and industry clout. Page 16 GIP Corporation Global Industry Products’ Customers Global Industry Products representatives are currently selling products to most of the major Las Vegas casinos including: Aliante Station California Hotel & Casino Excalibur Barcelona Cannery Casino Fiesta Henderson Barleys Casino Circus Circus Fitzgeralds Bellagio Eastside Cannery Flamingo Binion's Horseshoe El Cortez Four Queens Boulder Station Ellis Island Fremont Caesars Palace Eureka Casino Gold Strike Golden Nugget Monte Carlo Saddle West Hacienda New York New York Sahara Harrah's Laughlin Orleans Santa Fe Station Jerry's Nugget Paris Las Vegas South Point Klondike Sunset Planet Hollywood Stratosphere Las Vegas Hilton Ramos Suds Sunset Station Luxor Rampart Treasure Island Mandalay Bay Resort Regency Tuscany Mermaids River Palms Resort Venetian MGM Grand Riviera Casino Wynn Some of Global Industry Products non-casino customers include: Staples Center Cantare Foods Anderson Dairy Susies Deals Home Depot Stadium Rebel Oil Company Sunflower Markets Glaziers Food San Diego Police Depart Federal Building Services Inc Johns Hopkins University Hospital Washoe County School District GIP Corporation Page 17 Federal Building Service Flextronics Heritage Park Zoo San Diego Sports Arena Spacecraft Components Corp. California Institution for Women Marketing and Sales Growth Strategy Global Industry Products has chosen a product model that is simple but in demand. The Company has proven that with our expertise of focusing on industry specific consumable products, this is a very successful model and can grow rapidly. Based on our current research and product mix, we KNOW that there are 25 to 30 million dollars in annual revenue potential available in the Las Vegas area alone. The Company also put rapid growth systems in place and documented our process. Management believes strongly in growth through planning for growth. The Company started this by investing in the Netsuite enterprise solution software and our in house programming staff. We encourage all of our investors to visit us and see what we have on the drawing board to automate our internal functions. Global Industry Products has developed a strong customer base in Las Vegas to leverage this growth as an expansion platform for the rest of the country. We currently have in place an inside sales team already selling our product line nationally. Management believes that every successful company grows through duplication and multiplication. Global Industry Products has been putting together a strong model which will then be multiplied throughout the country. The Company has completed all of its developmental objectives in 2010. In 2010 Global Industry Products expanded its product line and price point and in November 2010 Global Industry Products established its first direct sales force operating outside the Las Vegas area. The first two zones that the Company has expanded into are San Diego County, and San Bernardino / Los Angeles Counties. There are over 30 casinos in these areas, and Global Industry Products is currently selling products to several of them. This Southern California sales force will also market products to related industries in California such as Manufacturing, Hotel, Health Care, and Law Enforcement. This will further expand upon Global Industry Products current sales such as the Company’s sales of trash liners to Staples Center and Home Depot Center in California. Our new expanded product line will allow us to service all these industries. Page 18 GIP Corporation 2011 Expansion Continuing Global Industry Products 's unprecedented growth, Global Industry Products has recently expanded into the Southern California market. We've extended our reach into San Diego, CA where we now provide our products and services to local hotels and casinos, as well as entertainment venues such as The Staples Center, Home Depot Center, San Diego Sports Arena, and Valley View Casino Center. Global Industry Products has also begun to work with San Diego Parks & Recreation, as well as the San Diego Police Department. Branching out to work with non-casino based industries such as city and state government has allowed Global Industry Products to diversify our operations. Where once we worked predominately with only casinos, Global Industry Products can now attest to being solely a customer specific industry, allowing us the opportunity to shift our focus to provide products and services to a 50% casino based customer demographic and a 50% non-casino based customer demographic. As Global Industry Products achieves successful results in Southern California, we will expand to Northern California, Oregon, Washington, Arizona, and ultimately the entire nation. Global Industry Products will continue to expand nationally, region by region, using local distribution centers to ship products to customers. The Company has identified six national regions for the placement of distribution points and begun initial expansion in 2010 by placing an outside sales staff in Southern California. Southern California has been chosen due to its close proximity to Las Vegas and its large number of Indian casinos, as well as additional businesses in which to increase Global Industry Products’ target industry beyond casinos. As Global Industry Products grows it sales staff nationwide, the Company will initially outsource to regional distribution centers and then establish the Company’s own distribution centers according to regional sales growth. The use of outsource distribution centers has grown significantly with the increased growth of internet sales and just in time distribution methods. The Company has been in contact with numerous distribution groups which rent warehouse space and perform shipping and receiving services. The cost savings associated with shipping from these outsourced distribution centers offsets the fees associated with these outsourcing costs. In 2011, Global Industry Products will continue to expand nationally and improve its distribution systems. Global Industry Products has expanded its proven business model nationally and into other industries. The ability to duplicate strategic paradigms and economies of scale for these other markets gives Global Industry Products tremendous upside potential. Global Industry Products’ Warehouse Process Flow is one example of the Company preparing itself for rapid expansion. By planning and documenting internal processes, the Company can pinpoint areas of improvement and GIP Corporation Page 19 automation. Also, proper documentation allows for cross-training and performance checks and balance. Global Industry Products’ Warehouse Process Flow The current economic market conditions bring major opportunities for Global Industry Products. Casinos, as well as other industries are pressured to cut costs and reduce inventory. The strong relationships built by management have resulted in faster than anticipated expansion. Purchasing agents have frequently asked Global Industry Products to save them costs by carrying additional product lines. These requests have required a staffing increase to handle the additional work load associated with locating acceptable vendors, who provide the required pricing and exclusive relationship. Page 20 GIP Corporation Relationship Marketing Global Industry Products utilizes relationship marketing to develop customers from leads to committed buyers. Rather than focus only on pushing product, Global Industry Products learns about the processes of organizations and attempts to provide complete end-to-end solutions that can decrease or eliminate repetitive procedures. By offering more holistic, personalized approaches and working together with companies, customers are more willing to buy from Global Industry Products regardless of price. Global Industry Products has had great success in developing strong relationships throughout MGM/Mirage properties and with their Corporate Purchasing Agents. Casinos That Are Currently Under The MGM/Mirage Corporate Umbrella In Las Vegas Buyers from every MGM/Mirage property in Las Vegas contact us on a regular basis to order their supplies. With the opening of City Center, Global Industry Products was asked to provide products in time for their grand opening. In 2009, Global Industry Products met with the directors of 5 MGM/Mirage properties; New York New York, Excalibur, Monte Carlo, Luxor, and Mirage. The meeting was setup by the Director of Finance from MGM/Mirage Corporate, Brandee Wade. They were looking for a more efficient way to transport currency and paperwork from one department to another throughout a property. Working with one of our top manufacturers, Ampac, we were able to design a Triple Pouch tamper evident bag that fit their needs exactly. This was a corporate-wide project and required bids from 3 different vendors. Having an exclusive relationship with the largest tamper evident bag manufacturer in the country allowed us to come out on top. Global Industry Products was able to provide MGM with a high quality product at a lower price. The relationships Global Industry Products enjoy with MGM/Mirage allows us to introduce new product lines, move into new departments, and deal directly with the decision makers. GIP Corporation Page 21 The Station Casinos franchise includes eight major gaming and entertainment complexes and five smaller casinos. The company operates the two most valued brands in the Las Vegas local's market. A typical "Station" offers a full complement of gaming options, including 2,000-3,000 gaming devices, a full array of table games, a race and sports book, several hundred guest rooms, several full-service restaurants, fast-food outlets, movie theaters, and live entertainment. There are six buyers at Station Casinos’ corporate offices located at the Red Rock Hotel Casino, their flagship property. Hotel / Casinos are comparable to a small city. The engineering department consists of carpenters, painters, plumbers, electricians, heating and cooling experts, handymen, maintenance and more. The Food and Beverage department consists of all the restaurants, bars, food outlets, and room service. There are also Hospitality, Grounds Keeping, and Casino departments. Traditionally, most Hotel / Casinos assign several buyers to one property, sometimes 2-3 buyers for the Food and Beverage department alone. A single buyer purchases thousands of products for their assigned property in a single week. Dealing with multiple vendors for every product can become a logistical nightmare for them. Global Industry Products currently has over 20,000 products available for immediate delivery. Having such a wide variety of products allows a Station buyer to find what they need from just one vendor. We are considered a preferred vendor with Station because of our outstanding customer service, low pricing, and wide variety of products. Our sales staff personally visits Station’s corporate offices on a regular basis. They go out of their way to drop off demos, or to pick up samples. Up until now we have worked almost exclusively with casino bank supplies. The corporate buyers have told Global Industry Products that they are excited and looking forward to Global Industry Products expanding into their other departments as well. Global Industry Products currently sells supplies to every Station Casino property in the Las Vegas area. We mainly provide plastic tamper evident Page 22 GIP Corporation bags, calculator paper, office supplies, and a wide variety of miscellaneous products to their Casino Cage department. This is only the tip of the iceberg for Station Casinos. Last year they spent over $100,000 on latex gloves. This type of product is referred to as an “Anchor Product”. Thanks to management’s relationship with Adenna Gloves, a new and trusted supplier, Global Industry Products is currently in negotiations to win the bid on this contract. Management is bringing on new suppliers everyday to increase the amount of anchor products we can offer. Imagine how many light bulbs, batteries, trash liners, shampoo bottles, soap bars, and air filters just one Station Casino property uses in a single month, then multiply that by thirteen. These numbers become staggering when sales are projected for all casinos in the US, (over 500) and over 10,000 major hotels nationwide. The Station Casino franchise is a good model for projecting revenues for the rest of the country. Most of the casinos outside the Las Vegas and Atlantic City areas are comparable to a Station Casino in size. Our sales team started working with Station Casinos in just one department, building relationships and forming alliances. Global Industry Products is now perfectly positioned to take over as the main supplier for many of these anchor products. Global Industry Products has modeled this strategy with MGM/Mirage, Harrah’s Entertainment, Boyd Gaming and many independent casinos such as Planet Hollywood, Las Vegas Hilton, and the Venetian. We’re confident that the same strategic approach will yield great success throughout the rest of the country. To insure a smooth opening, Aliante relied upon Global Industry Products to provide all the necessary supplies for the Cage, Count Room, and Slot departments. On the day of their grand opening, the Cage realized that they had miscalculated the number of large currency bags they needed for the opening. They called and our emergency service department delivered what they needed within one hour. That is the type of service that Global Industry Products is becoming famous for in Las Vegas. GIP Corporation Page 23 Mission Statement OUR COMPANY We will provide superior products, customer service and sales support, one customer at a time. We will embrace the needs of our customers and strive to impress them each time they reach for one of our products, whether it is the first time or the one millionth time they call upon us. The employees of Global Industry Product are committed to ensuring that our customers are our #1 priority and pledge to give them personalized customer service. Global Industry Products began with reaching out to our local casinos here in Las Vegas. We knew we needed to impress these prestigious customers and, in order to do so, we dedicated our products, our pricing and ourselves to them. Today we are even more committed to maintaining the relationships built with our local casinos and continuing to earn their business by expanding our product base to meet their needs. Acknowledging that our products and service are superior, we have broadened our horizon and now offer our products and ourselves to industries across the United States. We have now expanded the industries we serve to include; Casinos, Hotels, Medical & Research Facilities, Restaurants, Stadiums, Industrial Plants and Theme and Amusement Parks, to name a few. We welcome the opportunity, and are excited, when our customers come to us asking to provide them with a product that we don’t currently carry, as it gives us the opportunity to earn their business again. It also tells us that they enjoy doing business with us and would rather give us this challenge than go elsewhere. We are known to our customers as the “One Stop Shop,” and they are confident that, when they need something, we will have it, we will price it right and they will receive the same exceptional customer service they have grown accustomed to, because that is our ongoing commitment to them. We have given ourselves a challenging and inspiring mission: To step up and go beyond what other companies are doing for their customers. We are driven by pride. We take pride in our company and pride in ourselves, to ensure that our customers are impressed and excited each and every time they come to us for business needs. Management Prepared Financials Management anticipates GIP's growth in Order Dollar Volume will continue to increase in 2011 with projected growth to approximately $500,000 in monthly Order Volume by middle of 2011 and to over $1,000,000 in monthly Page 24 GIP Corporation sales by December, 2011. Management further projects that its current anticipated sales order growth will yield a positive monthly net income before the middle of 2011. Based upon GIP's historical growth pattern and Management's view of GIP's prospects, Management projects that GIP's 2011 sales order dollar value will exceed $7,500,000. The following two (2) graphs have been prepared by Management based upon historical financial data. As indicated by the following Total Order Dollar Volume graph, Global Industry Products has increased sales volume nearly every quarter, increasing from about approximately $40,000 to approximately $600,000. Total Sales Orders $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 Qtr 1 2009 Qtr 2 2009 Qtr 3 2009 Qtr 4 2009 Qtr 1 2010 Qtr 2 2010 Qtr 3 2010 Qtr 4 2010 Management further projects that its current anticipated sales order growth will yield a positive monthly net income by the middle of 2011. Based upon Global Industry Products’ historical growth pattern and Management's view of future prospects, Management projects that Global Industry Products sales order dollar value will exceed $7,500,000 in 2011. Due to Global Industry Products’ anticipated expansion of the territory which it will service, Management believes that sales order dollar volume will more than double in 2011. Furthermore, if Global Industry Products is able successfully to expand its business to regions outside of Nevada and California during 2011 and 2012 and is able adequately to plan and manage such expansion, its business model would permit enormous growth. Management believes that in such event, Global Industry Products might be able triple or quadruple its business volume in that two (2) year period. However, there can be no assurance GIP Corporation Page 25 that such an expansion would be successful or that even if successful, such an expansion who accomplish the projected potential growth. The following graph represents GIP's historical success in diversifying its customer and product base by proportionally increasing the number of monthly sales orders, which it received. The graph shows an increase from approximately forty (40) sales orders in the first quarter of 2009 to approximately thirteen hundred sales orders (1300) in the fourth quarter of 2010. GIP meet its sales orders goal objective in 2010 and projects that the number of sales orders received by GIP will double in 2011. Number of Orders 1400 1200 1000 800 600 400 200 0 Qtr 1 2009 Qtr 2 2009 Qtr 3 2009 Qtr 4 2009 Qtr 1 2010 Qtr 2 2010 Qtr 3 2010 Qtr 4 2010 This document may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this document, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. The Company further cautions that the important factors identified in the foregoing projections or other forward-looking statements or data contained herein to reach conclusions or make any investment decisions. These financial projections are not intended to serve as an indicator of the company’s future operations or financial performance or serve as a guide for investing in the Company. Page 26 GIP Corporation Global Industry Products, Corp. Income Statement ($) Actual 2010 Projected 2011 Projected 2012 Revenue 1,610,508 7,769,023 27,078,995 Cost of Goods Sold 1,187,778 5,834,182 20,485,476 422,730 26% 1,934,841 25% 6,593,419 24% 583,658 648,657 1,232,315 77% 1,097,206 756,589 1,853,793 14% 2,054,675 1,069,667 3,124,342 12% Gross Margin % of Revenue Expenses Marketing/Sales Administration Total Expenses % of Revenue Other Expenses 21,249 Net Income* (828,571) 860,950 3,469,177 EBITDA (522,387) 884,280 3,550,494 *Income calculated before Taxes The 2010 tax expense is an unrealized gain and represents a 35% Tax rate. Global Industry Products began operations on March 15, 2009 and these financial statements are management prepared using the Company’s accounting software. Global Industry Products’ EBITDA results for 2011 is projected to be $884,280 . Management expects this growth to continue into 2012 and 2013 with a projected EBITDA for the year ending June 2013 to be in excess of $7,500,000. GIP Corporation Page 27 Global Industry Products, Corp. Projected Balance Sheet ($) Actual 2010 Projected June 2011 Projected June 2012 180,692 369,439 263,994 41,040 779,346 1,130,947 1,263,225 1,074,846 3,469,018 1,640,084 2,148,720 2,293,894 6,082,698 Net Fixed Assets 59,423 304,361 659,860 Other Assets 48,127 - - TOTAL ASSETS 962,715 3,773,379 6,742,558 LIABILITIES Accounts Payable Wages Payable Other Liabilities TOTAL LIABILITIES 116,282 12,097 51,217 179,596 584,702 39,852 84,074 708,628 1,407,024 95,193 184,296 1,686,513 2,154,891 (1,371,772) 783,119 3,931,000 (866,249) 3,064,751 3,931,000 1,125,045 5,056,045 962,715 3,773,379 6,742,558 ASSETS Current Assets Cash Inventory Net Accounts Rec. Other Current Total Current Assets Stock Retained Earnings Total Equity LIABILITIES & EQUITY Page 28 GIP Corporation Management Global Industry Products’ founders are experienced in casinos, business development and public offerings. Chester I. Wright III, 50 (President, Chairman of the Board): Chester Wright has served as a Vice President of Finance, CFO, and General Partner for a number of corporations, including Legal iGaming, Inc., SimpleSearch.com, Southern Ventures, Mideast Credit Corporation and American Brokers. Mr. Wright has extensive experience in accounting, strategic planning, operational management, financial analysis and negotiations. Mr. Wright has written strategic business plans, conducted financial audits, managed multi-million dollar accounts and taken corporations public. As CFO of Southern Ventures, Mr. Wright managed the company’s SEC communications, resulting in Southern Ventures’ successful public registration. In 1999, Mr. Wright joined SimpleSearch.com as its Vice President of Finance where he reduced company operating overhead by more than half, rewrote the company’s business plan and restructured its revenue models. Further, during his time with Simplesearch.com, Mr. Wright successfully raised capital and negotiated a merger agreement. In 2001 Mr. Wright joined Legal iGaming as the Director of Finance. Mr. Wright managed day to day operations and was instrumental in expanding Legal iGaming’s patent portfolio from 6 patents to 16, including inventing a new method patent family for the company. Mr. Wright has been an invited speaker at regional conventions and has been published in the fields of negotiation and finance. Alexander Montanarella, 57 (Board Member): Alexander Montanarella is currently the Director of Casino/Hotel Cage at the Las Vegas Hilton Hotel and Casino. Mr. Montanarella oversees all aspects involved with the day to day operations of the casino/hotel cage, credit and collections departments. Mr. Montanarella is a senior veteran of the Las Vegas Hilton with over 22 years of experience in the casino industry. Mr. Montanarella is known as an industry superstar who started his career as a Cage Shift Supervisor and quickly rose through the ranks to be a director in charge of numerous casinos, managing hundreds of people and orchestrating the varied tasks of casino operations. Arkady Zalan, 60 (Director of Systems Development): Arkady (Ari) Zalan has over 35 years of diversified experience including international business development and operation management for US companies in Eastern Europe and the former USSR. Mr. Zalan’s extensive management skills include establishing of proper contacts with local communities, governments, international organizations, and financial institutions operating in the region. Total worth of projects under his management has come to $5.5 million annually. He also worked as a high-level product development specialist for a number of US and foreign hi-tech companies. Mr. Zalan has a Ph.D. in Computer Science from Computer Research Institute, Minsk, Belarus. and a MS in Applied Mathematics from Belarus State University in Belarus. GIP Corporation Page 29 James Villanueva, 59 (Sourcing Manager): James Villanueva has over 20 years of experience in business development, procedure protocol, procurement and negotiations. Mr. Villanueva was the General Manager for System Supply for 8 years with responsibilities including pricing proposals, bid responses, procurement, direct vendor negotiation and client pricing proposals. Mr. Villanueva also has experience working as a District Manager and Marketing Manager at Anacomp and has assisted with the improvements of the audit performance results by 92%, while achieving sales and marketing goals in the top third of the region and second best standing in branch history. Mr. Villanueva has a Bachelor of Arts degree in both Psychology and Philosophy from Cal State University Chico. Jeanne Oldham Tracy, 49 (Inside Sales Manager): Jeanne Oldham Tracy has over 13 year experience in Call Center Sales Management with 80% of this experience being in business to business outbound sales. Ms. Tracy was the Call Center Manager for the Western Region of the US and Canada for George S May and was directly responsible for increasing call center sales by 20% and introducing new sales techniques and training processes that reduced attrition by 65%. Ms. Tracy was recognized for her positive impact on increasing sales and for her strong skills to build and utilize sales reports and phone system data to analyze trends and produce statistical reports. Page 30 GIP Corporation