Golf Grip Manufacturer

PROGRIP

P.O. Box 4567
Atlanta, Georgia 30314

ProGrip's mission is to develop and actively seek out innovative and advanced technologies that can be marketed and sold to the approximately $150 billion global wholesale sporting goods industry, to become a premier provider of quality and unique athletic products, and to establish a strong reputation for offering creative solutions to the needs of athletes and sports enthusiasts.

• EXECUTIVE SUMMARY
• COMPANY OVERVIEW
• MARKET OPPORTUNITY
• COMPETITIVE ANALYSIS
• PRODUCT & POSITIONING
• MARKETING STRATEGY
• MANUFACTURING & DISTRIBUTION
• MANAGEMENT
• THE OFFERING

Executive Summary

The Opportunity

ProGrip develops and actively seeks out innovative and advanced technologies that are marketed and sold to the $150 billion global wholesale sporting goods market. Its first line of products, the Impress golf grip line, provides an elegant design that solves the serious and unmet problems a golfer experiences when his or her club makes impact with the ball (or the ground). Specifically, the revolutionary design that ProGrip exclusively owns significantly reduces harmful shock and vibration for the user while preserving the "feel" of the club. For the approximately 27 million U.S. golfers, this results in greater comfort and swing control, a reduction in the risk of repetitive stress injuries, less fatigue, and more rounds of golf played for more years. As a community, golfers are extremely passionate about the sport and are very receptive to innovative technologies that promise to improve their performance or enjoyment of the game. The Impress grip provides a level performance that meets or exceeds that provided by other anti-vibration devices and, in addition, provides many other advantages, including customization, a greater degree of style selectivity and durability, and easy, noninvasive installation.

This is a unique and superior investment opportunity for the following reasons:

• Large, Established, and Identifiable Market. 26.7 million Americans currently play golf (66 million worldwide). Approximately 51 percent of U.S. players are "core" golfers, accounting for 88 percent of the 586 million rounds of golf played annually. Of this core segment, over 46 percent are "avid" golfers, defined as those who annually play at least 25 rounds. Although avid golfers comprise the smallest player segment (25%), they account for over 50 percent of all golf-related spending. ProGrip will initially be targeting this core golfer segment, with particular focus paid to avid golfers.
• Expected Market Growth. This market is expected to grow due to increasing interest from nontraditional golfers (i.e., juniors and women) and two population trends 1) the aging of Baby Boomers, and 2) the emergence of the Echo Boom generation (those born between 1977 and 1995).
• Frequency of Golf Injuries. 87 percent of golfers reporting golf-related injuries suffer from maladies of the hand, wrist, or elbow. Many of these injuries are caused by harmful shock and vibration and may be prevented with the appropriate equipment—such as the proper grip.
• Proven Need for a Vibration Solution. In a random sample of over 150 golfers, 73 percent of respondents claimed that shock and vibration reduced both their enjoyment and performance of the game. Of those golfers using anti-vibration devices, 75 percent to 98 percent feel that the devices are not effective. Only 7 percent of golfers claimed that their grips are effective at reducing shock and vibration.
• Underserved Market. The vast majority of research and development to date has focused only on the club head and the shaft. The third part of the club, the grip, has been virtually ignored and has undergone very little change or innovation.
• Technology-Focused Consumers. The rapid evolution of technology in the golf equipment industry accelerates the rate at which golfers purchase new clubs and other equipment, and it has also created a market that is very accepting of new technologies. 83 percent of respondents in our survey said they are interested in a new anti-vibration grip technology.
• Proven Science Behind the Product. The Impress grip design is a descendant of a hammer grip technology that decreases repetitive stress injuries and fatigue as well as increases productivity of its users. That technology is currently the basis for several premium hammers on the market that are generating over $30 million of annual sales. Dr. Dennis Williams, a plasma-physicist, the Chief Scientist for Atlanta-based SuperTech, Inc., and a minority shareholder of ProGrip, developed both the hammer and golf grip technologies.
• Disruptive Technology. In a survey conducted by the company, the Impress grip was rated up to 87 percent better than two competing grips in all observed categories. 96 percent rated it to be equal or superior in performance to the Comfort grip made by Baker/GolfLife, currently the market leader in golf grips.
• Relationship with Golfworld International. After trying a prototype of the Impress grip, Golfworld CEO John Danko provided ProGrip with valuable resources for its product and market research and pledged to publish a paper on the Impress grip design in Golfworld Magazine, the industry's largest technical journal with over 125,000 subscribers.
• Initial Seed Funding Secured. ProGrip has received a $100,000 funding commitment from the PGOT CORP® Ludington Fund, Ltd. Additionally, to date the shareholders of the company have personally invested over $15,000 towards the venture.
• Mitigated Risks. ProGrip has researched the market, operational, and product risks associated with the Impress grip and has taken many steps to mitigate them, including conducting extensive market and product surveys, building a strong Board of Advisors, and establishing important relationships with such firms as Freightways, Golfworld, Morgan Field & Rice, Advance Elastic Corporation, Jones & Puch, Calypso, and Dow Chemical. Each of these firms is a leader in its respective market. These steps, as well as others that will be implemented, will help to insure the long-term success of the company and an attractive financial return for ProGrip's shareholders.

Product and Benefits

The revolutionary new design of ProGrip's premium golf grips—the Impress grip line—has several unique advantages over other products currently on the market, including:

• Effectiveness—The Impress grip was rated 87 percent more effective than a standard grip at reducing shock and vibration while maintaining the balance and "feel" of the club and control of the swing.
• Versatility—The ability to create an anti-vibration grip with conventional manufacturing methods, using any commercially viable materials, and for any type of club (graphite or steel, wood or iron).
• Convenience—The grip is noninvasive to the club and it is installed like other slip-on grips.
• Value—While the Impress grip will be priced at a premium to most other golf grips, it offers consumers a less expensive alternative to other (non-grip) anti-vibration solutions. Consumer research shows that golfers are willing to pay a premium price for the benefits offered by the Impress grip.
• Customization—ProGrip introduces a new concept in grip design—Precise Shock Reduction (PSR). Golfers can now select a grip with the degree of anti-vibration quality that best suits their game, setting a new standard in customization that will precisely meet the needs of individual golfers.

The Market

ProGrip's primary market for the Impress golf grip is the approximately 35 million core golfers worldwide (13.7 million in the U.S.), who purchase grips through original equipment manufacturers (OEMs), distributors, mail-order houses, golf pro shops, and specialty golf retailers. In 2000, worldwide golf grip sales represented approximately $350 million. While the golf equipment market as a whole has contracted since 1997, the golf grip market has exhibited moderate growth due to golfers delaying new club purchases and instead purchasing grips in the aftermarket (the re-grip market) to replace older and worn grips on existing clubs.

In addition to the golf grip technology, ProGrip is in negotiations with Georgia State University to license a related grip technology developed by Dr. Williams that can be utilized for other sports instruments such as baseball bats and tennis racquets. These and other potential uses for the technology are expected to bring the total worldwide market for the Impress grip to over $500 million and represent approximately $43 million in sales for ProGrip by 2006. Beyond that, ProGrip will continue to acquire and develop innovative solutions for athletes and sports enthusiasts in the $150 billion global sports equipment market.

Competitive Strategy/Barriers to Entry

Due to the extremely competitive nature of the golf equipment market, ProGrip recognizes the vital need to create sustainable competitive advantages. This will be accomplished through the following:

• Securing intellectual property protection for the company's proprietary technology and trademarks.
• Outsourcing all phases of manufacturing, warehousing, and distribution to maintain flexibility in design and production, eliminate the need for extensive fixed assets, and leverage excess capacity.
• Bringing aggressive and innovative sales and marketing techniques to the mature and conservative golf grip market, thereby quickly establishing the ProGrip and Impress grip brands as well as building a sense of community among ProGrip's customers.
• Rapid rollout of new technology-based sports and leisure products into profitable markets.

Financial Summary and Offering

Set forth below is a summary of our projected financial information. The summary financial projections for the years ended December 31, 2002 through 2006 were derived from our financial projections.

As a result of ProGrip's unique technology and the attractiveness of the golf grip market, the company will reach positive cash flow in fiscal year 2004. ProGrip is seeking $750,000 in capital commitments to fund the company's initial launch. In return, the investor(s) will receive ownership of ProGrip in the form of preferred stock with a very attractive projected return on his or her original investment in five years. This return will be realized most likely from an acquisition of ProGrip by a large sports equipment company or through an IPO.

Company Overview

Market Opportunity

Competitive Analysis

Product & Positioning

Marketing Strategy

Manufacturing & Distribution

Management

The Offering