There are 380 bike brands in the U.S., do we need another?

Yes, if it goes where others have been slow in responding to: Demand for sustainable business practices Value driven pricing for category with most growth opportunity – urban/city bikes New models of distribution !!!!!!!!!!!

Kind Bicycles based in Madison, WI delivers We have developed functional, affordable, easy to buy, ride and maintain urban/city bikes We are removing obstacles related to selling on-line, delivered direct to customer We engage in sustainable social and environmental manufacturing practices Founder Wayne Thompson has 11 years of experience at the executive level in the bicycle industry Ran the largest bicycle logistics and distribution network in the US importing, handling and delivering 6 million bikes annually, one third of the industry total

We have developed functional, affordable, easy to buy, ride and maintain urban/city bikes

We are removing obstacles related to selling on-line, delivered direct to customer

We engage in sustainable social and environmental manufacturing practices

Founder Wayne Thompson has 11 years of experience at the executive level in the bicycle industry

Ran the largest bicycle logistics and distribution network in the US importing, handling and delivering 6 million bikes annually, one third of the industry total

Investment and Return Your $80,000 investment allows us to purchase our first order of bikes, complete our website to handle ecommerce transactions, buy liability insurance and travel to Asia for the first production run. After the initial seeding, we plan to be completely self-sufficient, not relying on outside capital to continue to grow the business. We plan to sell 175 units in 90 days and have a break even of 128 bikes and are cash flow positive from the outset. We pay you an 8% dividend annually on your $80,000. Your initial investment is paid back in full years three through five. You retain 40% equity in Kind after year five.

The Bike Industry The Numbers (in the U.S.) 18 million bikes sold/year for $3.5 Billion Top ten brands sell 88% of units and 84% of dollars 40 Million participants 90% of all bikes are sold for less than $750 Mass Market, Independent Bicycle Dealer (IBD), Sporting Goods Stores and Other (Catalog, non-sports retailers, on-line) Industry share by channel The Brands IBD dominated by Trek, Specialized and Giant with 30% of sales – Avg. sales price = $445 Mass Dominated by Pacific Cycle, Dynacraft, Huffy and Kent. Avg. sales price $77.

The Numbers (in the U.S.)

18 million bikes sold/year for $3.5 Billion

Top ten brands sell 88% of units and 84% of dollars

40 Million participants

90% of all bikes are sold for less than $750

Mass Market, Independent Bicycle Dealer (IBD), Sporting Goods

Stores and Other (Catalog, non-sports retailers, on-line)

The Brands

IBD dominated by Trek, Specialized and Giant with 30% of sales – Avg. sales price = $445

Mass Dominated by Pacific Cycle, Dynacraft, Huffy and Kent. Avg. sales price $77.

Industry Challenges Unit sales have not grown over past 30 years. Peaked in 1977 at 22 million. Dollar sales slowly growing mainly due to raw material costs, not profitability Participation not growing, peaked in 1993 at 53 million. Industry at-large focuses on already engaged customer that makes up many small, fragmented counter-cultures IBD has lost 30% of dealers in last 7 years Adversarial relationship between suppliers and their retailers Low barrier to entry, global over-capacity Extremely competitive; features for price point in IBD; lowest price in mass No positive correlation between increased gas prices and bike sales (sales dropped) though participation did spike Production in low cost regions with no focus on social and environmental sustainability Obsolesance and inventory issues plague industry No value priced bikes in IBD, ill suited bikes in mass. No channel filling gap.

Unit sales have not grown over past 30 years. Peaked in 1977 at 22 million.

Dollar sales slowly growing mainly due to raw material costs, not profitability

Participation not growing, peaked in 1993 at 53 million.

Industry at-large focuses on already engaged customer that makes up many small, fragmented counter-cultures

IBD has lost 30% of dealers in last 7 years

Adversarial relationship between suppliers and their retailers

Low barrier to entry, global over-capacity

Extremely competitive; features for price point in IBD; lowest price in mass

No positive correlation between increased gas prices and bike sales (sales dropped) though participation did spike

Production in low cost regions with no focus on social and environmental sustainability

Obsolesance and inventory issues plague industry

No value priced bikes in IBD, ill suited bikes in mass. No channel filling gap.

The Urban Category Marked fastest growing category, main growth will come from cannibalizing other sales with small amount organic Made up of many styles of bikes that have utilitarian features – comfort, city, single speeds, townies, some cruisers Currently ~4 million bikes, $700 million annually; 35% of IBD and 15% of mass Biggest opportunity in units should be in the mass market or at least mass market pricing based on share Industry responding slowly to urban/city bike trend IBD developing higher priced models at a time when bike sales >$750 are dropping Mass slow to respond due to pressure to keep price point low and out of touch buyers Growth in cycling is directly correlated to amount of bicycle infrastructure in place, i.e. safer places/routes, as much as right product at right price

Marked fastest growing category, main growth will come from cannibalizing other sales with small amount organic

Made up of many styles of bikes that have utilitarian features – comfort, city, single speeds, townies, some cruisers

Currently ~4 million bikes, $700 million annually; 35% of IBD and 15% of mass

Biggest opportunity in units should be in the mass market or at least mass market pricing based on share

Industry responding slowly to urban/city bike trend

IBD developing higher priced models at a time when bike sales >$750 are dropping

Mass slow to respond due to pressure to keep price point low and out of touch buyers

Growth in cycling is directly correlated to amount of bicycle infrastructure in place, i.e. safer places/routes, as much as right product at right price

The On-line Market Fastest growing retail channel YOY = 20%. ’08 $204 billion from $175 billion in ’07 (Forrester) Sporting goods sales expected to triple over next 5 years (no data for bike and accessory sales) No major brands (inside top 50) offering direct to consumer sales On-line bike sales account for ~1.5% of total dollars and have not grown Industry ignoring fastest growing retail channel, Why? Brands afraid of alienating customer base Perceived challenges with shipping, assembly and notion that bike has to be tried to be sold Investment by brands in current selling model Feeling of loss of personal service A handful smaller brands are selling on-line catering to racing/enthusiast market and other niche markets

Fastest growing retail channel YOY = 20%. ’08 $204 billion from $175 billion in ’07 (Forrester)

Sporting goods sales expected to triple over next 5 years (no data for bike and accessory sales)

No major brands (inside top 50) offering direct to consumer sales

On-line bike sales account for ~1.5% of total dollars and have not grown

Industry ignoring fastest growing retail channel, Why?

Brands afraid of alienating customer base

Perceived challenges with shipping, assembly and notion that bike has to be tried to be sold

Investment by brands in current selling model

Feeling of loss of personal service

A handful smaller brands are selling on-line catering to racing/enthusiast market and other niche markets

The Bicycle Customer At least 85% of bike buyers are non-enthusiasts Non-enthusiast can be defined as someone who uses bike as a form of transportation (5% of all cyclists) or occasionally uses for recreation Enthusiasts account for 15% of unit sales Ride more than twice per week for recreation Licensed racers make up .5% of bike buyers Hardcore commuters, customized bikes Non-enthusiasts see bike shops as intimidating places to shop and are value driven, not as interested in features 17 percent of all bikes are sold in IBD but account for 49% of total dollars. This results in most marketing efforts going to small percentage of buyers and half the dollars 75% of bicycle consumers that account for 50% of dollars are ignored by marketing programs Industry sees key to growth by reaching out to 120 million non-cyclists

At least 85% of bike buyers are non-enthusiasts

Non-enthusiast can be defined as someone who uses bike as a form of transportation (5% of all cyclists) or occasionally uses for recreation

Enthusiasts account for 15% of unit sales

Ride more than twice per week for recreation

Licensed racers make up .5% of bike buyers

Hardcore commuters, customized bikes

Non-enthusiasts see bike shops as intimidating places to shop and are value driven, not as interested in features

17 percent of all bikes are sold in IBD but account for 49% of total dollars.

This results in most marketing efforts going to small percentage of buyers and half the dollars

75% of bicycle consumers that account for 50% of dollars are ignored by marketing programs

Industry sees key to growth by reaching out to 120 million non-cyclists

Kind Strategy Adopt strategies that the industry has ignored: Enter the category where bike sales are increasing and expected to increase long-term and engage anyone that is a potential customer Take advantage of distribution opportunities the industry has not sought, but consumers want Bring value, function and affordability to the market where there is none currently Offer durable, easy to buy, ride and maintain bicycles made in a sustainable manner Create and maintain a focused, efficient and sustainable supply chain

Adopt strategies that the industry has ignored:

Enter the category where bike sales are increasing and expected to increase long-term and engage anyone that is a potential customer

Take advantage of distribution opportunities the industry has not sought, but consumers want

Bring value, function and affordability to the market where there is none currently

Offer durable, easy to buy, ride and maintain bicycles made in a sustainable manner

Create and maintain a focused, efficient and sustainable supply chain

Kind’s Bikes We see urban bikes being similar to introduction of mountain bikes with fast growth and long term viability Ironically, urban bike growth should come at expense of lower-mid range mountain bike sales as MTB’s are not well suited for the riding that most do with them – on pavement Kind will introduce its first model (shown right) into the enthusiast market This will enable us to become profitable from the outset eliminating ongoing funding for future growth While keeping a model for the enthusiast market, we also plan to move down market to affordable urban bikes in the $225 to $295 range eventually offering one for ~$159

We see urban bikes being similar to introduction of mountain bikes with fast growth and long term viability

Ironically, urban bike growth should come at expense of lower-mid range mountain bike sales as MTB’s are not well suited for the riding that most do with them – on pavement

Kind will introduce its first model (shown right) into the enthusiast market

This will enable us to become profitable from the outset eliminating ongoing funding for future growth

While keeping a model for the enthusiast market, we also plan to move down market to affordable urban bikes in the $225 to $295 range eventually offering one for ~$159

New Distribution With on-line sales increasing 20% annually this channel is untapped for bicycles and completely untouched in the affordable urban market Kind will sell on-line, direct to customer through our website, kindbike.com Kind avoids barriers that have prevented other brands for selling on line no existing dealer base offer free shipping and easy assembly Offers a site where bikes can be researched and bought Presumption that a bike needs to be bought in person is becoming less of an issue with wired customers Kind will import bikes in condensed packing boxes after initial order Bikes will go through final assembly in the US and be shipped out almost 100% assembled (attach front wheel, adjust bars and saddle = you are ready to ride)

With on-line sales increasing 20% annually this channel is untapped for bicycles and completely untouched in the affordable urban market

Kind will sell on-line, direct to customer through our website, kindbike.com

Kind avoids barriers that have prevented other brands for selling on line

no existing dealer base

offer free shipping and easy assembly

Offers a site where bikes can be researched and bought

Presumption that a bike needs to be bought in person is becoming less of an issue with wired customers

Kind will import bikes in condensed packing boxes after initial order

Bikes will go through final assembly in the US and be shipped out almost 100% assembled (attach front wheel, adjust bars and saddle = you are ready to ride)

Value, Affordability and Pricing By selling direct we eliminate highest cost component in supply chain – the independent dealers need for 40% gross margin This allows Kind to keep prices low and competitive and appeal to a broader market by creating recognized value for enthusiasts and non-enthusiasts alike. We sell quality bikes at affordable prices with maintaining a sustainable margin for long term viability We feel that bicycles need to be priced appropriately compared to other consumer goods if organic growth in the industry is to happen We maintain our position on sustainability regardless of the cost of our bikes

By selling direct we eliminate highest cost component in supply chain – the independent dealers need for 40% gross margin

This allows Kind to keep prices low and competitive and appeal to a broader market by creating recognized value for enthusiasts and non-enthusiasts alike.

We sell quality bikes at affordable prices with maintaining a sustainable margin for long term viability

We feel that bicycles need to be priced appropriately compared to other consumer goods if organic growth in the industry is to happen

We maintain our position on sustainability regardless of the cost of our bikes

Supply Chain Control purchasing by relying on forecasts developed by Kind based on consumer interest through website and our market intelligence With a manageable inventory, selling direct allows for a consistent cash flow as bikes are paid for at time of purchase Simple line saves on development costs Thompson’s logistics expertise allows for best in class service at costs on par or below other bike brands Kind will engage in focused perpetual product development We will refine our models if better suited components, materials and designs become available. Eliminates model year obsolescence that plagues the industry. Will stay away from introducing new models and price points that are not core to our mission. Specify components with low lead times assuring complete product speed to market

Control purchasing by relying on forecasts developed by Kind based on consumer interest through website and our market intelligence

With a manageable inventory, selling direct allows for a consistent cash flow as bikes are paid for at time of purchase

Simple line saves on development costs

Thompson’s logistics expertise allows for best in class service at costs on par or below other bike brands

Kind will engage in focused perpetual product development

We will refine our models if better suited components, materials and designs become available.

Eliminates model year obsolescence that plagues the industry.

Will stay away from introducing new models and price points that are not core to our mission.

Specify components with low lead times assuring complete product speed to market

Kind Customers Specific customer attributes include: Cyclists looking for affordable, versatile, easy to buy/ride/maintain bikes, values improving sustainability issues Riders upgrading from a non-specific urban bike to something that is more practical Non-cyclists looking for alternative transportation or something practical to start riding on Enthusiasts who own one or more category-specific bikes and are looking for transportation Customers who want the convenience of ordering online and having a bicycle delivered to their home or local shop We target 99.7% of active cycling participants as well as 120 million non-cyclists Customers must be wired and comfortable researching and buying products on-line. We believe on-line demand from this group is large enough to support our business model based on consumer feedback and lack of current competition in this space.

Specific customer attributes include:

Cyclists looking for affordable, versatile, easy to buy/ride/maintain bikes, values improving sustainability issues

Riders upgrading from a non-specific urban bike to something that is more practical

Non-cyclists looking for alternative transportation or something practical to start riding on

Enthusiasts who own one or more category-specific bikes and are looking for transportation

Customers who want the convenience of ordering online and having a bicycle delivered to their home or local shop

We target 99.7% of active cycling participants as well as 120 million non-cyclists

Customers must be wired and comfortable researching and buying products on-line.

We believe on-line demand from this group is large enough to support our business model based on consumer feedback and lack of current competition in this space.

Marketing and Growth Marketing Target cyclists in places they seek information about commuting bike reviews etc. on-line Target non-cyclists in traditional and on-line media dedicated to urban living and lifestyle In both cases, focus on grass roots approach consisting of social marketing, SEO and minimal paid advertising Interactive media – social networking sites, online pulications blogs etc. have and will continue to play an important role in getting the word out about Kind. Growth In addition to organic growth, Kind plans to sell through any of the existing on-line retail channels: Established ecommerce stores, mass merchants, sporting goods stores and select IBD’s A drop ship program will allow Kind to ship non-exclusive product to any retailers’ customer that ordered it. Our non-exclusivity to any specific channel will allow us to shift up or down in the market as conditions change Select international markets will be added to our sales efforts in 2010

Marketing

Target cyclists in places they seek information about commuting bike reviews etc. on-line

Target non-cyclists in traditional and on-line media dedicated to urban living and lifestyle

In both cases, focus on grass roots approach consisting of social marketing, SEO and minimal paid advertising

Interactive media – social networking sites, online pulications blogs etc. have and will continue to play an important role in getting the word out about Kind.

Growth

In addition to organic growth, Kind plans to sell through any of the existing on-line retail channels:

Established ecommerce stores, mass merchants, sporting goods stores and select IBD’s

A drop ship program will allow Kind to ship non-exclusive product to any retailers’ customer that ordered it.

Our non-exclusivity to any specific channel will allow us to shift up or down in the market as conditions change

Select international markets will be added to our sales efforts in 2010

Operations Founder Wayne Thompson spent nine years at the executive level at the largest bicycle importer into the U.S., Pacific Cycle Last role was VP, eBusiness Past role included running logistics and distribution for 6 million bikes annually Staffing would require only Thompson during initial orders but require final assembly and customer service and positions once the volume hit 300 and 1000 units respectively annually. Warehousing to be in Madison, WI initially, moving to Chicago when 600 units in inventory is realized Sourcing will be done initially at The ShenZhen Bo-An Company in Boan, S. China. We have the option to source in Taiwan for the European market Kind has other potential assembly factories in the European Union for both European and N. American markets Warranty will be lifetime on frame backed by 5 years from vendor and 1 year on all non-consumable parts and accessories Assembly and component vendors assume responsibility for defective product Free returns for defective product

Founder Wayne Thompson spent nine years at the executive level at the largest bicycle importer into the U.S., Pacific Cycle

Last role was VP, eBusiness

Past role included running logistics and distribution for 6 million bikes annually

Staffing would require only Thompson during initial orders but require final assembly and customer service and positions once the volume hit 300 and 1000 units respectively annually.

Warehousing to be in Madison, WI initially, moving to Chicago when 600 units in inventory is realized

Sourcing will be done initially at The ShenZhen Bo-An Company in Boan, S. China.

We have the option to source in Taiwan for the European market

Kind has other potential assembly factories in the European Union for both European and N. American markets

Warranty will be lifetime on frame backed by 5 years from vendor and 1 year on all non-consumable parts and accessories

Assembly and component vendors assume responsibility for defective product

Free returns for defective product

Vendor compliance, Sustainability and Philanthropy, All of our activities will be posted on our website as we believe in full transparency into our operations Our assembly factory follows self-mandated guidelines concerning social and environmental responsibility above those required by Chinese law Employees are given access to, and required to wear proper protective clothing and equipment when producing Kind bicycles Pay at least government minimum wage and paid overtime Limit workday/week hours according to local regulation of legal working age Effluent not dumped directly into sewer system or disposed in unsafe manner Start recycling program for factory waste Engage vendor to install air exchange systems to capture toxic fumes from manufacturing process Educate and encourage vendors to switch over to clean burning generator fuel We hope to spur change by stressing social and environmental sustainability throughout our supply chain Philanthropy: One percent of Kind’s sales will be donated to local social and environmental causes where our bike are made and sold.

All of our activities will be posted on our website as we believe in full transparency into our operations

Our assembly factory follows self-mandated guidelines concerning social and environmental responsibility above those required by Chinese law

Employees are given access to, and required to wear proper protective clothing and equipment when producing Kind bicycles

Pay at least government minimum wage and paid overtime

Limit workday/week hours according to local regulation

of legal working age

Effluent not dumped directly into sewer system or disposed in unsafe manner

Start recycling program for factory waste

Engage vendor to install air exchange systems to capture toxic fumes from manufacturing process

Educate and encourage vendors to switch over to clean burning generator fuel

We hope to spur change by stressing social and environmental sustainability throughout our supply chain

Philanthropy: One percent of Kind’s sales will be donated to local social and environmental causes where our bike are made and sold.

For a consolidated 5-year cash flow forecast please see the next page For a more detailed view on Kind Bicycles, please visit kindbike.com to see our open source business plan, or go to slideshare.net and search: kind bicycles business plan or link here: http://tinyurl.com/cvc6pr For further information please email Wayne Thompson at info@kindbike.com Financials, Contact Information

For a consolidated 5-year cash flow forecast please see the next page

For a more detailed view on Kind Bicycles, please visit kindbike.com to see our open source business plan, or go to slideshare.net and search: kind bicycles business plan or link here: http://tinyurl.com/cvc6pr

For further information please email Wayne Thompson at info@kindbike.com

Cash Flow Forecast – 5 year $ 339,960 $ 138,957 $ 81,139 $ 41,319 $ 33,911 Net Income 523,015 213,779 124,830 63,568 52,171 Pre-Tax Net Income $ 820,887 $ 452,127 $ 282,236 $ 168,030 $ 120,311 Ending Cash Balance 452,127 282,236 168,030 120,311 0 Plus: Beginning Cash Balance 368,760 169,890 114,206 47,719 120,311 Net Cash Flow 28,800 30,934 33,067 6,400 6,400 TOTAL NON-OP OUTFLOWS 2,133 4,267 6,400 6,400 6,400 Dividends 26,667 26,667 26,667 0 0 Capital Repayment NON OPERATING OUTFLOWS 2,278,028 1,271,118 858,911 616,356 270,814 TOTAL FUNDS OUT 2,617,988 1,410,075 940,050 657,675 384,725 TOTAL FUNDS IN 80,000 Capital Contribution 2,617,988 1,410,075 940,050 657,675 304,725 Revenues Collected INFLOW $2,617,988 $1,410,075 $940,050 $657,675 $304,725 Sales Amounts 9,113 4,725 3,150 2,205 795 Sales (In Units) 2013 2012 2011 2010 2009