DREWRYS LTD. USA BUSINESS PLAN

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Bernadette Lewis
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1 DREWRYS LTD. USA BUSINESS PLAN I. EXECUTIVE SUMMARY Drewrys Ltd. USA, (hereinafter "Business") an Indiana "C" Corporation located at 1164 E. Victoria St., South Bend, Indiana 46614, poised for rapid growth in the brewing industry. The Business seeks funding to take advantage of a window of opportunity for introducing a new Drewrys beer product, which has the potential to dominate the market. Our "phase one" plan of producing and selling beer through a contract (outsource) arrangement is already operational, and we are selling beer in several states throughout the Midwest. Phase two will include opening a local presence in South Bend, with on-site brewing. Mission Statement. Our mission is to revive the well-known Drewrys brand and restore it to its former glory as one of the largest and most dominant brands in the Midwest, and to expand production to include other vintage and new brands.this will include establishing a facility in South Bend, Indiana, which will include a tasting room/tavern, and a Drewrys Museum. Business Description. The Business is organized as a "C" Corporation formed and authorized under the laws of the state of Indiana, and is led by Francis Manzo, who serves as the Business' President; and Dan Blacharski, who serves as the Business' Vice President of Marketing. New Product. The Business has developed a Drewrys beer product which has already been released into the marketplace. Drewrys' first product, Drewrys Classic Lager, is described as follows: Drewrys lager beer is a premium lager, styled after the traditional 1960s recipe. Brewed in the European tradition, Drewrys has a rich, full flavor, no bitter aftertaste it's the way lager is supposed to be made. Drewrys has received positive reviews on online beer review sites, by the media, and at beer festivals throughout Indiana and Illinois. The Business has a window of opportunity to expand its distribution, leverage the value of the brand name, and gain a significant piece of the market share. Funding Request. The total funding request is for a $100, capital investment in return for a 20% equity ownership interest in the Business and a corresponding percentage of seats on the Board of Directors. The funding proceeds will be used to continue Drewrys' contract brewing operation, additional marketing and public relations, staffing, and plant and equipment for the South Bend location. Drewrys currently has a $10,000 deposit with our contract (outsource)

2 brewer in Wisconsin for production of six-pack cans (currently in production). An additional $10,000 deposit will be used to produce 12-pack bottles. Break-Even. The Business is looking for equity funding. Financial projections forecast a breakeven point in Our break-even point will be reached sooner rather than later. This is because Drewrys is already operational and selling product, and there is no immediate need for large capital expenditures for brewing tanks, since we are using an outsourced arrangement for production. II. BUSINESS SUMMARY Drewrys was originally founded in 1877 in Winnipeg, coming to South Bend, Indiana after the close of Prohibition in The new Drewrys owns the trademark and possesses the original recipe, but is a start-up business that has the advantage of a well-known brand. Drewrys lager beer is a premium lager, styled after the traditional 1960s recipe. Brewed in the European tradition, Drewrys has a rich, full flavor, no bitter aftertaste - it's the way lager is supposed to be made. Industry Overview. The brewing industry in the United States currently generates $100 billion in annual sales. We note that the "craft beer" segment enjoys about 7.8% of that total. Though small, the craft beer market is popular and growing rapidly. Drewrys' position enjoys the best of both worlds. Most craft brewers do not offer lagers, instead opting for heavier and hoppier specialized varieties such as IPAs, porters and stouts. Drewrys lager will be our flagship brand and best seller. At the same time, we will appeal to the craft beer market with additional craft varieties of Drewrys. Seasonal Factors. The Business would only be influenced by the seasonal factors that affect our customers. Since the demand for our services crosses many different businesses and industries, seasonal fluctuations are expected to be limited to the typical down turn in the dull period months are not affected by the annual holiday schedules. Position in the Industry. Drewrys will leverage its highly recognizable and positive brand name to gain distribution, position in the marketplace and shelf space with retailers. The "nostalgic" aspect of marketing is a major part of our initial push especially in areas in Indiana, Michigan, Wisconsin and Illinois where the beer is remembered fondly. In addition, Drewrys will target the younger market, positioning itself as a "retro" session beer, while also introducing secondary Drewrys-branded specialty beers like India Pale Ale. Our grass-roots approach includes attendance at special beer events like the Chicago Beer Festival and the Blue Chip Brewfest (held at the Blue Chip Casino in Michigan City). These events are well-attended, and we have enjoyed tremendous success in building awareness and adding to our fanbase. While beer festivals often attract lovers of highly specialized craft beers, Drewrys as a "session beer" enjoys great attention at these events as a welcome respite from the heavier, hoppier fare typically on offer. Our nostalgic play will also be expanded with the development of the South Bend based

3 facility, which will include a small Drewrys Museum, featuring our growing collection of Drewrys historic memorabilia. Legal Issues. The promoters have secured the required patents and trademarks for the products and processes of the business in accordance with the statutory requirements. Location. Drewrys Ltd. USA currently brews on a contract basis under an outsource arrangement with Minhas Brewery of Monroe, Wisconsin, and as such does not presently own its own brewing equipment. Offices are located in the homes of Francis Manzo in McHenry, Ill. and Dan Blacharski in South Bend, Ind. Short-term plans include supplementing the contract brew with our own 10-barrel brewing facility in South Bend. III. MARKETING SUMMARY Target Markets. Drewrys enjoys widespread name recognition throughout the United States, but primarily in the Midwest and Great Lakes region. The main target markets for the business include: Present distribution: Drewrys currently has a distribution network and retail presence in Indiana, Illinois, Michigan, and Wisconsin. Short-term additions: Drewrys is currently in talks with additional distributors in Minnesota, Iowa, Ohio, and Kentucky. Other additions: Drewrys will also reach out to distributors in Missouri and Pennsylvania. All of the above represent a substantial portion of Drewrys' historic distribution footprint. By year-end 2015 we anticipate a distribution network that will encompass ten states. Competition. Customer choice of services in this industry is based on Early feedback from customers indicate that one of the primary decisions to purchase Drewrys is the name recognition and the historical aspect. Once tasted, the decision to keep purchasing is based on the quality of flavor, which is perceived as superior to standard mass-produced lagers while still offering a lighter drinking experience. Drewrys will initially compete against more established national brands like Pabst (which also has a "retro" campaign). Our advantage over Pabst in our defined market is the fact that Drewrys has a long history in the Midwest, especially in northern Indiana and the Chicago area, dating back to the 1930s and it is remembered fondly by many. During those early years, Drewrys held its own against Pabst, Old Milwaukee, Old Style, and other wellrecognized session beers. With our later release of other varieties of beer (such as IPA and other craft brands), Drewrys will compete against smaller brewpubs and microbreweries in the area. Many such establishments lack the name recognition of Drewrys, which will give us an advantage.

4 Services. The Business intends to provide exceptional, personalized service to our retailers and distributors, as well as maintaining a strong personal connection with the consumers. This will be the crucial factor in building and protecting the Business's brand within the community. The Business intends to handle customer concerns and issues with a customer oriented focus with the intent of providing timely resolution and preventing the loss of customers. IV. STRATEGY AND IMPLEMENTATION SUMMARY Company Goals and Objectives. Drewrys intends to continue building its distribution network throughout the Midwest in order to expand distribution. Long-term, we will look at building coast-to-coast footprint. Anecdotally, we have received many comments from as far away as California and Florida from fans, many of whom have moved away from the Midwest, who would like to have access to Drewrys in their own communities. To further this goal, we have joined the National Beer Wholesalers Association. Short-term production goals are to achieve production of 1,000 barrels per month by December, We will also build our own brewing facility in South Bend, which will include a small tasting room and Drewrys Museum to capitalize on the historic aspect of the brand. Marketing Strategy Drewrys has a close relationship with marketing firm Ugly Dog Media. Smaller microbreweries tend to be "purists" and eschew advertising and marketing, under the philosophy of "if we brew it, they will come." We disagree with that strategy, and have orchestrated an active and very successful grass-roots marketing campaign. This campaign includes: 1. Media outreach and placement. We have been very successful in getting print and broadcast placement in newspapers and television news outlets throughout our initial four-state distribution area. 2. Organic social media. Drewrys has a vibrant and organically-grown social media footprint with active participants. 3. Special events. Drewrys regularly participates in special events, including the Chicago Beer Festival, Blue Chip Festival in Michigan City, Indiana, Zoo Brew in South Bend, Indiana, Harley-Davidson Bike Night in South Bend, and others as they become available and known to us. 4. Distributor events. Wholesale beer distributors often have their own retail trade shows to promote their brands to their retail accounts. We recently attended such an event in Peoria, Illinois with great success, and will continue doing so. In addition, we attend sales meetings with new distributors for a "kickoff," to give the sales staff at each distributor the information they need to sell Drewrys to their retail accounts.

5 5. Radio campaign. We have launched a successful radio campaign in southwestern Michigan (station WIRX and WSJM) that has yielded positive results. We will duplicate this initiative in other regions as budget allows. V. FINANCIAL PLAN The Funding Request in this Business Plan outline the major start-up costs associated with this business. Other costs include repair and maintenance, sales and production expenses. Initial funding is kept low, as during the first year to two years larger-scale lager production will be outsourced to Minhas Brewing in Monroe, Wisconsin, while we build out our smaller in-house system to produce craft style beers. This avoids a large amount of up-front capital expenditure and monthly operational costs. Our long-term plan will be to bring all production in-house when organic growth allows. A separate five-year financial projection is available on request. Our five-year plan bases production on anticipated demand, early excitement and buy-in that we have already seen, and a comparative study of the beer market today and Drewrys' market presence in the past. Based on these factors, we anticipate 2015 production at ending at 1,000 barrels per month, yielding an annualized EBITDA of approximately $131,000. This will ramp to a five-year projection of 300,000 barrels (still short of Drewrys' historical peak of 1.3 million barrels) and very conservative), which would yield an annual EBITDA of $6.8 million. A more detailed five-year plan and projection follows. Valuation: Current valuation is set at $500,000. This is based on market value of the brand and trademark. Justification for the figure comes from research on the part of company principal Dan Blacharski, who is also part of World Accelerator (World Media Group). World Accelerator was founded by Blacharski's colleague Gary Millin, founder of Mail.com and owner of several hundred high profile, brandable domain names including Lawyer.com and Doctor.com. Both are brand experts, and Blacharski has written extensively on the subject of branding and brand value. Millin's World Accelerator's own proposition is based on profiting from estimating the brand value of generic and brand names. Based on this expertise and industry insight, we feel comfortable offering this conservative pre-funding valuation. ASSUMPTIONS: Financial projections are based on gross profit calculated based on contract brewing figures. While Drewrys' plan calls for bringing the entire brewing operation in-house toward the end of the five year plan, we base figures on the contract numbers which are more conservative. Inhouse brewing will require more capital expenditure, but will result in lower production costs so profits in the fifth and potentially fourth years may be higher than reported here. We choose to report on this basis so as to keep estimates conservative.

6 Most states have a three-tier system, which means the brewer sells to a distributor, who sells to retailers, who sells to consumers. Gross profit is measured based on industry-standard markup averages common to the industry's three-tier system. Average gross profit per barrel (revenue less production costs) is $ Production Volume: The old Drewrys produced more than 1.5 million barrels per year. While many "craft" beer producers offer significantly smaller numbers (by definition, "microbrewer" is a brewery producing 15,000 barrels a year or less), we position Drewrys long-term as a competitor in the macrobrew market. While the craft brewers take pride in offering specialized beers, this still occupies less than 10% of the market. We have a foot in both worlds, offering our premium lager to the mass market, while still appealing to the craft market with a secondary stream of craft style beers. As such, we feel comfortable based on market analysis, past performance of the old Drewrys company, and the widespread name recognition that has already been established, of conservatively reaching a volume of 300,000 barrels per year by our fifth year of operation, giving us a projected annual gross profit (before operational expenses) in year 5 of $9.4 million. Five Year Projection Fifth year gross profit projections of $6.8 million based on above justification will ramp quickly based on early results as follows:

2016 FINANCIAL REVIEW

2016 FINANCIAL REVIEW In addition to activity, strategy, goals, and challenges, survey respondents also provided financial information from 2014 and 2015. Select results are provided below: 2015 2014 A/P