Loose Cigarette Vending Machine (Manufactured in South Africa) presents Loose Cigarette Vending Machine (Manufactured in South Africa) Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential We at Loose Vending have created a unique vending machine that dispenses single (loose) cigarettes. Start-up Entrepreneurs SMME BEE Stakeholders: Hassan Moolla Hoosain Khan Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential OBJECTIVE To offer consumers a method of purchasing a single cigarette in controlled environments. To offer retailers a no-fuss controlled device to vend single cigarettes. To offer tobacco product suppliers the opportunity to increase sales and retailer loyalty. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential IS IT LEGAL? As per the tobacco act, the sale of a single cigarette stick is prohibited by law due to the absence of a health warning and the sale of cigarettes to minors (under 16’s). We have placed warnings against the sale of cigarettes to minors as well as health warnings on the machines thus adhering to the law. Use of a vending machine for the sale of single cigarette sticks is hereby the only legal way to sell loose cigarettes. We also advise that you place your machine in areas where under 16’s are prohibited. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential TECHNICAL SPECIFICATIONS Holds 740 loose cigarettes Mechanical operation – no electricity required Straight 6 adjustable coin mechanism – ability to set your own prices Can be counter-top or wall mounted – uses rawl bolts for added security Sturdy and can take a beating Has a fitted lighter Multiple security features to protect the product. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential APPLICATION Due to the versatility and practicality of the loose cigarette vending machine, it can be placed in any location that attracts high foot traffic. Examples of these are: Bars Clubs Factories Colleges Petrol stations Taxi ranks Smoking sections etc. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential POTENTIAL REVENUE Sale of loose cigarettes: The average cost per loose cigarette is R1. The average selling price is R2. Therefore the average profit earned per loose cigarette is R1. Our customers generally sell between 40-250 cigarettes per day depending on the amount of foot traffic at the machine’s locale. Therefore an average of 145 cigarettes are sold per day. If we divide 740 (no. of loose cigarettes the machine holds) by 145 (average sold per day) we have an average of 5 days before needing to refill the machine. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential Conservatively we will increase the number of days before refilling to 7 i.e. once a week. On 740 loose cigarettes the profit earned is R740. If we refill once a week, the monthly profitability is R740 X 4 = R2960. In 2 months profitability will then be R5920. Therefore in 2 months a customer would have covered the cost of the machine as well as have made a neat profit. This proves a significant return on investment. Rental of advertising space: Good exposure can be gained in areas of high foot traffic, you could use this you advantage by allowing businesses to advertise on the your machine for a nominated fee. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential ADVANTAGES User-friendly and easy to operate. Excellent return on investment. Eye-catching and attracts customers. Sturdy and well built. The machine is weatherproof and thus versatile. The operation is mechanical and no electricity is required. It allows businesses to focus on selling higher profitability products. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential Coin mechanisms for foreign currencies are available on request. Adjustable coin mechanism allows owners to set their own prices. Minimal maintenance is required. The machine can be custom branded – place your logos, company name etc. on the machine for added business exposure. The machine is easy to resell. Over the counter sales of loose cigarettes open the door to theft by employees. The use of the machine deters theft. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential DISADVANTAGES The machine is susceptible to vandalism. SERVICE AND SUPPORT After sales service and support will be provided by Loose Vending. This will include help with failure to dispense cigarettes, jammed coin mechanisms etc. All machines are sold with a limited one year warranty from the date of purchase – subject to terms and conditions. Vandalised machines however will not be covered by the warranty. For your convenience, please email support@loosevending.co.za with any support requests that you may have. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential RECOMMENDATIONS FOR PRODUCT USE Find a suitable location to mount your machine (areas with high foot traffic). Try to mount the machine in a monitored location so as to avoid vandalism. Either you or a trusted employee should manage the machine. See to it that the machine is never empty. Use the machine yourself once monthly to ensure that all is functioning correctly. Document your income and expense. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential Publicise the convenience of your machine. Don’t forget to publicise the rental of advertising space on your machine. Keep our contact details on hand for any support queries you may have. Loose Vending - 9 September 2010 - Confidential

Loose Vending - 9 September 2010 - Confidential DISCLAIMER The logos, visuals, marketing material, concept, components and machine are subjected to the copyright of Loose Vending and patent pending. Loose Vending - 9 September 2010 - Confidential

CONTACT DETAILS Contact person: Hassan Moolla or Hoosain Khan Tel: 082 666 6619 Email: info@loosevending.co.za Support email: support@loosevending.co.za Website: www.loosevending.co.za Loose Vending - 9 September 2010 - Confidential