1. Group 18 Macro-Market Assessment Bristol, Cuozzo, Holz, Lyman, Patibandla, Sexton

2. Macro Market Size Macro trends indicate a huge potential for Shoe Skins beyond Children’s Shoes Market size in Volume Sales: Growing at CAGR of 5.1% during year 2001-06 Expected to grow at 6.4% during year 2006-11 Children’s market represents 22% of overall US footwear market Both Children’s and Women’s footwear market is expected to grow at a faster rate compared to Men’s market

3. Macro Market Size Market size in Value Sales: Growing at 3.2% during year 2005-06 Expected to grow at 1.9% during year 2006-11 Children’s market represents 13% of overall US footwear market Both Children’s and Women’s footwear market is expected to grow at a faster rate compared to Men’s market

4. Political Trends Regulatory Environment U.S. Consumer Product Safety Commission imposes strict regulations on children’s products around materials, potential for choking hazards, etc… Cons Requires increased vigilance around product design and manufacturing standards. Cons Requires increased vigilance around product design and manufacturing standards. Pros None obvious Pros None obvious

5. Economic Trends Economic Down Turn US economy is expected to be contracted by 3% in 2009 with a slow recovery of 1.5% in 2010. Cons Less spending on fashion goods Cons Less spending on fashion goods Pros Potential for increased spending on affordable fashion goods Reusable nature of shoe skins reduces TCO for shoe system Pros Potential for increased spending on affordable fashion goods Reusable nature of shoe skins reduces TCO for shoe system

6. Social Trends Going Green Continuous focus on saving the planet by “Green Initiatives” in the US as well as around the world. Cons Less spending on disposable goods Cons Less spending on disposable goods Pros Redirecting the spending towards environmentally friendly products i.e., reusable shoes skins Pros Redirecting the spending towards environmentally friendly products i.e., reusable shoes skins

7. Social Trends Rising Obesity in the USA Increasing focus on ways to combat childhood obesity. Cons None obvious Cons None obvious Pros Opportunity for sport related tie-ins Potential growth for exercise related equipment Demand for more athletic shoes Pros Opportunity for sport related tie-ins Potential growth for exercise related equipment Demand for more athletic shoes

8. Technological Trends Increased online shopping Many retailers continue to respond to the increased online shopping trend by providing both online and retail stores. Cons Competition from a wide range of vendors Questionable usage of online shopping by target customers Cons Competition from a wide range of vendors Questionable usage of online shopping by target customers Pros Access to wide customer base Feasibility to effectively use online marketing Expand offerings through online presence Pros Access to wide customer base Feasibility to effectively use online marketing Expand offerings through online presence

9. Technological Trends Online Social Networking Growing online social networking services continue focus on building effective virtual communities with friends, families and businesses. Cons None identified Cons None identified Pros Access to virtual communities through friends and families Effective marketing Instant connection between buyers and sellers of similar interests Pros Access to virtual communities through friends and families Effective marketing Instant connection between buyers and sellers of similar interests

10. Macro Market Summary Overall Assessment: Favorable Easy access to large customer base Opportunity for effective/focused marketing Favorable social trends to re-usable and fitness related products

11. Appendix

12. Shoe Skins is a unique system that makes footwear fun by allowing children to easily change the look of the their shoes any time they want. The Shoe Skin SystemWeb site mock-up

13. The Shoe Skins system comprises a base model casual shoe (or line of shoes) plus a removable “skin,” such as those available for laptops and cell phones. The skin will affix to a special surface on the shoe. Shoe Skins will be sold separately in many different colors and patterns and contain robust potential for licensing opportunities.