Status Update Communication

Hello, Dai Yan,

We have an urgent message about your account. We have seen that you locations have not achieved a break even balance to date. We feel that it may be in the best interest of the investment to sell one of your locations which is performing poorly, Otto Plaza. This salon's customer base has not responded to the normal marketing activities well. This has caused us to test different channels of marketing to see what will work in that area. What we have found to be the best way to market the salon is hanging flyers on the doors of the local residents.

Currently the combined bank balance is $55,893. We believe it will take an additional capital contribution of no less than $22,000 in order to get your locations to the point where they are breaking even. Breaking even is where the income coming in supports the expenses of the location. We need to act quickly to know if we should close the poor performing location in order to save the stronger location (Sweetwater). We need to know if you are able and willing to make a capital contribution. If you are, please notify us as soon as possible. If not, we will be selling the Otto Plaza location and using the proceeds to help the Sweetwater location to get to profitability. We are meeting with our legal counsel tomorrow to review your file and determine if we can purchase another salon at a later date. We believe we could get to the 10 full time jobs with only the 1 salon. This is not a guarantee, but it is possible.

Please let us know by 10/23/15 whether or not you will be able to provide additional capital to support the investment. We are happy to discuss this with you as well.

Sabrina

Comments (2)

  1. Sabrina Wall :

    Nihao Dai Yan,

    Our legal counsel has advised us that we can keep one location open and as long as we get to the 10 jobs we can still complete the investment objectives. The negative impact of this will be on the value of the investment at the end of the term. We have several years to work on improving the value. They also told us that we can use profits from the one location to reinvest in an additional location later in the process. They indicated that so long as the profits were not being refunded and were being used for eligible expenses, we would comply with that rule in the visa process. Please let us know how you would like to proceed.

    Sabrina

  2. Sabrina Wall :

    Meeting scheduled with Dai Yan on Tuesday the 27th at 9am EST.

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