Rest Magazine

transcript

I N T R O D U C T I O N

This project is owned by W2B Publishing LLC (Partnership), which is a

partnership that was formed on June 17, 2008 between Msrs Michael

Wollner, Ray Wyman Jr and Gary Bedian (Partners) with offices located

at 345 South Figueroa Street, Suite 101, Los Angeles, California 90071.

The Partners acquired angel funding with the goal to begin work on forming

a market driven luxury lifestyles publishing corporation that generates

revenue from advertising, affiliate luxury travel packaging, and traditional

and non-traditional trade publishing services.

THE BUSINESS

The Partners will form PEN MEDIA, INC., a California Corporation

(Corporation) with its primary offices located in Buena Park, CA – the

current location of WollnerStudios, Inc.

REST MAGAZINE™

The Partners have already begun production of the

first publication, called “Rest Magazine.”

REST MAGAZINE™ is a modern, niche travel lifestyle monthly publication

that features upscale boutique hotels, resorts, spas and restaurants. Its

mission will be to narrate the art of rest and relaxation for a well-heeled

audience of ‘global nomads’ that enjoys every aspect of the world we unfold

in our pages: from the Americas, to Europe, and parts of Arabia and Asia.

V I S U A L C O N C E P T

REST Magazine’s visual language will be simple and contemporary. It will stand out in any newsstand environment amongst the standard myriad of colors and pictures. REST Magazine will be the oasis of magazines. The place to go for some real R&R and a new relevant but yet original experience. An experience as unique as the things we write about.

V I S U A L C O N C E P T

T H E A N T I - C O V E R

I N I T I A L L A Y O U T C O N C E P T

S T R A T E G Y

It is well-known that newspapers and news magazines are in trouble and that Internet advertising is experiencing phenomenal growth. However, a very different picture is forming for specialty magazines, aka “Niche Magazines.” Later, we will demonstrate how current advertising spending is supporting print consumer ‘niche’ magazines. We will also show how our strategy will build a ‘revenue-driven’ niche marketing publishing corporation supported by key three strategies:

S T R A T E G Y

1. Ascertain well-defined Niche audiences.

S T R A T E G Y

2. Create quality publications.

S T R A T E G Y

2. Create quality publications.

3. Build robust Internet functionality that encourages high reader/advertiser interaction.

S T R A T E G Y

A ‘revenue-driven’ niche marketing publishing corporation is another way

of saying that the Partners have their attention fixed on how the

Corporation will earn positive revenue quickly and efficiently. The key is

reader/advertiser interaction – communication and exchange between our

two most important audiences.

S T R A T E G Y

P R O C E S S

The Partners intend to prepare the private placement offering after the creation of a full business plan, printing of a full-sized sample copy of REST magazine and the launching of a semi-operational demonstration website. We will test the magazine during the industry-wide 2008 Lodging Conference that will be held in Scottsdale, Arizona held in mid-September. The Partners expect to release about 1,200 copies of the sample copy of REST to potential advertisers (hotel executives and owners) and other opinion leaders.

A G R O W T H M A R K E T

NATIONAL REAL ESTATE INVESTOR magazine recently conducted a survey of 244 prominent developer/owners regarding what they expect from BOUTIQUE HOTELS properties.

55% said that they expect BOUTIQUE HOTELS will become a new major segment in the Lodging and Hospitality industry.

24% said that they expect BOUTIQUE HOTELS will replace an existing hotelsegment.

17% said they expect no changes at all.

4% had no opinion.

"There are about 4.5 million hotel rooms in the U.S. !Boutique hotels account for 1% of the supply [but] demand is a multiple of that figure. There is potential for boutique hotels to account for 3% to 5% of all hotel supply over the next 10 or 15 years."

Michael Depatie, CEO, Kimpton Hotels

"... the message is short and simple - customization, personalization, exclusivity; only the best will do for this breed of consumer."

Mark Penn, author, "Microtrends: The Small Forces Behind Tomorrow's Big Changes"

O U R M A R K E T

REST MAGAZINE audience has 49.3 million people aged 28 to 39 and extends to other generations where appreciation and patronization of Boutique Hotels and luxury services is occurring with greater frequency.

O U R M A R K E T

Our audience has a total buying power of $1.4 trillion

Our audience spends 12% more on entertainment and leisure time than the typical American consumer .

O U R M A R K E T

Much of our audience has already or is just now entering their peak income-earning years.

This is the audience that will dominate the business tourism segment for the foreseeable future.

O U R M A R K E T

In 2006, our audience spent:

$22,300 on wines and spirits.$21,700 on spas and home spa services, personal trainers and massages.

$91,100 on jewelry.$61,200 on hotels and resorts.

O U R M A R K E T

G e n X" 49.3 million people are included in GenX and they

are aged 28 to 39.

" GenX contains 35% fewer people than the Baby Boomers Generation and is!32% smaller than ‘Generation Y’ or the ‘Echo Boom’ generation.

" GenX has a total buying power of $1.4 trillion.

" 81% of GenX are employed full or part time.

" On average, GenX spends 12% more on entertainment than the!typical American consumer (Reynolds, 2004).

" GenX is just now entering its peak income-earning years and now dominate the business tourism segment.

O U R M A R K E T

" uGen resembles GenX in terms of its income and spending habits (especially on the high end).

" uGen also helps bridge the gap between GenX and other generations (Boomers, GenY)

" uGen extends our reach to late Boomers (aged 50 to 60) and GenY (aged 40 to 49).

" uGen Theory also postulates that the higher the economic/education values are, the more impact tech change has had on their lifestyle; mainly because they are more like to be first or ‘near first’ adopters.

" On average, GenX spends 12% more on entertainment than the!typical American consumer (Reynolds, 2004).

O U R M A R K E T

U G e n

T H E N I C H E S T R A T E G Y

A WELL-DEFINED NICHE.

We will cater to well-heeled 'global nomads' whose interest is upscale travel to all parts of the world where they feel safe and excitement; people who love to surround themselves with excitement, intrigue and style.

A QUALITY PUBLICATION and EXCELLENT CONTENT

The magazine will be well-planned, well-written, well-edited and well-designed. Each issue will be an expression of excellence and exclusivity; our own brand of sophistication and refinement. Think of other historical 'photogenic' publications such as National Geographic, LOOK and LIFE. REST will evoke that kind of attention.

Robust Internet functionality that encourages high reader/advertiser interaction.

Traditional publishing and the Internet will complement each other. REST will have a website that will be community driven and revenue-seeking: community media, virtual publishing, personalized content, affiliate marketing - whatever we can do to build a total experience on and offline.

P U B L I S H I N G T R E N D S

CIRCULATION IS UP

According to Publishing Trends, MediaFinder® and the National Directory of Magazines, the circulation for luxury lifestyle magazines has grown steadily 28% since a decline in 2001.

PRODUCTION IS UP

According to MediaFinder®, the second-largest category for new magazine launches in 2007 was the luxury category, with 36 new magazines, cutting across many different subject classifications. The top spot was held by regional lifestyle magazines.

"We've seen tremendous growth in niche publications, including affluent publications, with new titles such as X-ology, covering technology and affluent lifestyle... which features luxury homes and travel..."

Deborah Striplin, Editorial Director of The Standard Periodical Directory.

REVENUES ARE UP

$1.16B Advertising Revenue for Magazines servicing the Hotel and Resort consumer in 2007 And for the 4th consecutive year, Internet advertising revenues post record results with $21.2B, up 26% over 2006 revenues.

Consumer advertisers lead the way in 2007; leisure ad spend was in third as a subcategory within the Consumer figures at 13% of total.

V A L U A T I O N

The assessed start valuation of W2B Publishing LLC is based upon several aspects of the project and requires some examination of revenue potential (from advertising) and the scope of this project:

V A L U A T I O N

First is earning potential of the magazine, so let’s take a look at the value of our advertising space. This calculation is based upon the market value of our targeted audience: upscale consumers (American and later European) who have visited boutique hotels and are homeowners, managers and business owners with a minimum household income of $150,000 USD).

1.V A L U A T I O N

Our planned distribution also has affect on value. In its first year, 80,000 copies of the magazine will be distributed via direct drop to upscale businesses and other locations, and direct-mail drop to selected homeowners. We also are planning an aggressive direct mail and online advertising campaign to gain ‘opt-in’ free subscriptions.

2.V A L U A T I O N

American magazines in this ‘class’ (demographic and distribution scope) will generate between $110 CPM (per thousand) to $246 CPM (Modern Luxury Media). Initially, we see $103 CPM; $130 CPM for premium positions.

The result will be $4.3M in GROSS revenues in the first full year of publication; $1.13M EBITDA (gross NET after pre-production, production, distribution, printing, sales commissions, owner payroll and ed/prod payroll, but not GA and administrative payroll).

3.V A L U A T I O N

Then, there is the online component. The partnership has acquired software that will allow the magazine to launch a fully operational ‘virtual magazine’ – a ‘flash-like’ replica of the published magazine that will allow subscribers/browsers to access the pub and submit ‘safe’ orders for information from advertisers and experience multimedia events direct from any portion of the content. We will also allow visitors to rate boutique hotels and restaurants (similar to TripAdvisor.com) – see “concept” for a more complete description.

4.V A L U A T I O N

Next, is the historical valuation of other publications in our class. Note the recent sales and public valuation of other magazines: Brentwood Magazine (2005) a small local lifestyle, sold for $500,000; Orange Coast Magazine (2007) a larger regional luxury lifestyle, reportedly sold for $18M; and Modern Luxury Media (2007) a network of 25 luxury magazines distributed throughout the U.S., was sold for $250M to Clarity Partners LP in May 2007. We are confident that a $1M launch valuation is compatible with historical valuations and commensurate with the earning potential of this magazine.

5.V A L U A T I O N

Moreover, depending upon the formula you wish to use (multiple of revenue or CAPM), the valuation of REST MAGAZINE could be as low as $5M or high as $20M. Please also note that we are planning a $5.5M initial private placement offering.

5b.V A L U A T I O N

Finally, we have a “million dollar team.” One of the owners is a published author, experienced publisher and a proven editor; another is an award-winning and proven professional in design and production; and the third has extensive experience and connections within the hotel industry.

6.V A L U A T I O N

Finally, this valuation is also based an initial infusion of $100,000 (USD) from Angel financers in Europe. This capital will work alongside the sweat equity and considerable personal investment that the three partners – Michael Wollner, Ray Wyman, and Gary Bedian (W2B Publishing, LLC) – have already and will continue to make toward successful launch and implementation.

O R G A N I Z A T I O N

MANAGEMENT - THE EXECUTIVE BOARD

Members of the Executive Board will be chiefly responsible for the day-to-day operations of the Corporation. Note that the positions of CEO, COO, CFO will be determined by a vote of the Board of Directors.

" Michael Wollner, chief creative director and co-publisher.

" Ray Wyman Jr., chief editorial director and co-publisher.

" Gary Bedian, chief business development director in charge of distribution

and venture capital.

MICHAEL K. WOLLNER

Michael is the founder and creative director of WollnerStudios, Inc. He has over 30 years of experience from such high-profile agencies like DDB Needham Worldwide, Ogilvy, Benton & Bowles and DMB&B. He brings a combination of excellent creative and marketing ideas across a broad spectrum of consumer and b2b categories with his international experience. He is a passionate exponent of ideas based design, advocating the delivery of creatively executed, single-minded solutions working across all communication levels.For more information visit www.wollnerstudios.com

RAY WYMAN JR.

Ray Wyman, Jr. is a career writer and has been heavily involved in the publishing field for more than 30 years. He began his career in publishing as an assistant pressman for a regional newspaper in 1976. He has spent the rest of his life amassing experience in all aspects of publishing: from concept to production and from prepress to distribution.For more information visit www.wollnerstudios.com

GARY H. BEDIAN

Gary Bedian is a highly skilled professional executive manager specializing in commercial real estate development and hotel management. He currently manages assets and investment portfolios representing more than $1.5 billion in capitalization. His work includes representing owner-management for commercial real estate development, sellers and buyers for hotels, resorts and condominiums.For more information visit www.gbedian.com

BOARD OF DIRECTORS

The Partners and Angel funders will form the board and will rotate the

Chair between them. New members will be included on the board as the

portfolio of investors develops.

ADVISORY BOARD

The advisory board will consist of people from the boutique hotel, spa, restaurant and publishing industry.

Rest Magazine

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