Multisensory Fitness Inc

SMARTfit Inc. A California Corporation

Developer of SMARTfittm Functional and Brain Fitness Training Games

BUSINESS PLAN November 2016

Innovative Brain/Body Technology for Medical, Educational, Sports, Fitness, and Recreational applications

www.smartfitinc.com Catherine B. Lamberti, Founder and CEO Bill Kehoe, CFO/COO

© 2016 SMARTfit Inc. – All Rights Reserved PROHIBITION AND DISCLAIMER VERY IMPORTANT – PLEASE READ BEFORE PROCEEDING This Business Plan is the property of SMARTfit Inc. (the “Company”) and constitutes the essence of its business venture. It is the product of the expenditure of considerable effort and resources. Many of the ideas contained herein derive value from the fact that they are not generally known within our industry and are, as such, trade secrets and confidential information. Out of commercial necessity, the Company must provide copies of this Business Plan to potential investors, professionals and other persons and is therefore vulnerable to the unauthorized disclosure to the public of the information contained herein. To protect its interests, the Company carefully controls, limits and records the distribution of the information contained in this Business Plan. Accordingly, this Business Plan is provided in strict confidence and may only be used for the limited purpose for which it is disclosed and must be returned upon request. It is expected that the recipient of this Business Plan will take such care that an owner of such information would reasonably be expected to employ for its own benefit.

The recipient of this Business Plan must also understand that it includes material nonpublic information and that federal securities laws and regulations prohibit the recipient and any person over which the recipient has direct or indirect control to, directly or indirectly, effect (or cause the effecting of) any transactions in the Company's securities, including without limitation, any hedging or similar transaction that may have the same economic effect as a short sale of common stock, from the date of receipt until at least three (3) trading days following the public announcement or disclosure of such material nonpublic information. This Business Plan is protected by copyright that is enforceable in the United States and other countries, by treaty. All rights promulgated under copyright law and regulations pursuant thereto are expressly reserved. Without limitation, any full or partial disclosure, copying, dissemination, reproduction or reduction to writing of any kind of this Business Plan is strictly prohibited unless expressly authorized in writing by an authorized signatory of the Company. Any unauthorized copies hereof shall become the property of the Company and must be delivered to the Company forthwith upon request. While the Company believes that the information is current and correct as of the date of this Business Plan, it makes no representations or warranties as to the accuracy of the information contained herein. Similarly, the Company assumes no obligations to provide to the recipient of this Business Plan updated information subsequent to the date of this Business Plan. All financial projections provided for herein are provided solely for the purpose of illustrating a possible financial scenario. They are not, under any circumstances, to be construed as the Company's representation or warranty as to the likely financial scenario, merely a possible one and one that would be dependent upon many factors outside of the control of the Company. Neither this Business Plan nor anything provided for herein constitutes an offer of securities, or should be construed to constitute an offer of securities, by the Company to any party. Any offer of securities, if ever made, will be made in accordance with all applicable securities laws. By accepting a copy of this Business Plan, you hereby accept and acknowledge these terms and conditions. If you have received this document electronically and do not accept these terms please delete this document and all possible copies of it that may reside in email systems and backup archives associated with your computer system.

Table of Contents SMARTfit Functional and Brain Fitness Training Games ...... 6 The Company ...... 6 The Products ...... 6 The Concept...... 6 The Technology ...... 7 Benefits to Facilities ...... 8 Benefits to End Users ...... 8 Key Differentiators – What Makes SMARTfit Products Exceptional ...... 9 A Compelling Business Opportunity for the Times ...... 9 Six Reasons Why Customers Buy our Products: ...... 11 Executive Officers, Directors and Celebrity Endorsements ...... 12 Officers and Directors ...... 12 Celebrity and Professional Endorsements ...... 14 The Market, the Product and Marketing Plan ...... 15 Our Markets ...... 15 Focus on the following markets: ...... 16 Health and Fitness Clubs ...... 16 Family oriented non-profits and community centers ...... 17 Education and after-school programs...... 17 Early Childhood Education/Day Care ...... 18 Sports Performance ...... 18 Occupational Therapy and Sensory Integration ...... 19 Physical Therapy ...... 19 Home Market ...... 20 Boomers and Seniors ...... 20 International ...... 20 The Opportunity ...... 20 High growth potential ...... 20 Five-Year Priorities: ...... 21 Background...... 21 Historical results ...... 22 Option to Prepare the Company for a Partial or Full Merger or Acquisition or Private Equity Transaction .... 23 Competitive Position and Barriers to Competition ...... 23

Product Lines ...... 24 Marketing, Sales and Customer Support ...... 26 Research and Development 28 CE and UL Marks ...... 28 Full integration with Android and Apple standards ...... 29 Manufacturing and Distribution ...... 29 Manufacturing Operations and Projected Employment ...... 29 U.S. Distribution ...... 29 International Distribution ...... 30 Financials 30

“Physical inactivity is a pandemic … [with] far-reaching health, economic, environmental, and social consequences.” – The Lancet, world-renowned medical journal

“SMARTfit merges exercise and performance like nothing else on the market. I hear ‘mind/body’ all the time in the fitness world, but it wasn’t until I saw this technology in action that I realized what mind/body could be for athletes and others of all ages. SMARTfit is the real mind/body training tool and I am thrilled to take an active role in programming for this cutting-edge company.” – Gunnar Peterson, Celebrity Personal Trainer; Spokesperson, Program Development and Market Entry Strategist for SMARTfit, Inc.

“When I first saw SMARTfit, I knew right away that I was looking at the future—it offered everything in one system. As a pro athlete, I learned that traditional training methods only utilize half of our performance faculties, while cognitive training is the best way to increase mental speed on the field. SMARTfit provides elite athletes with an innovative method to break through performance plateaus and develop their vital underlying reaction and motor skills. More importantly, it facilitates efficient, on-the-spot mental processing, which is not only great for sports, but all high-pressure professions, such as business, military and policing. This platform is limitless."

– Lawrence Jackson, former NFL defensive end and SMARTfit Inc. President and Director of Sciences

“I am extremely optimistic that SMARTfit will prove to be an exceptionally effective tool that combines cognitive and motor training in unique, endless combinations to address a multitude of indications within the athletic and medical realms.”

– Charles Y. Liu, MD, PhD, Professor of Clinical Neurological Surgery, Neurology and Biomedical Engineering, USC Keck School of Medicine and Viterbi School of Engineering; Director, USC Neurorestoration Center

Safe Harbor Statement under the Private Litigation Reform Act of 1995. Forward-looking statements in this business plan do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Such statements may relate, among other things, to expected financial and operating results, the expected acceptance of the company's products, the usefulness and benefits of the company's products generally and the acceptance of the company's products and the company's ability to achieve its goals, plans and objectives. The risks and uncertainties that may affect forward-looking statements include among others: difficulties providing products that meet the needs of customers, difficulty in developing new products, difficulty in relationships with vendors and distributors, difficulty in introducing products in the marketplace and gaining their acceptance, difficulty facing the intense competition present both in the computer game industry and in the fitness and health industry, our company's inexperience in operating internationally, and difficulty managing rapid growth. For more detailed information regarding the risks and uncertainties of our business, please review carefully the “Risk Factors” in the PPM.

SMARTfit Functional and Brain Fitness Training Games Neurons That Fire Together, Wire Together The Company Oxnard, CA-based SMARTfit Inc. (“Company”), formerly Multisensory Fitness Inc., was formed in May 2013 to develop, design, manufacture and distribute high-intensity cognitive training equipment that cultivates a multi-sensory stimulating experience through digitized, LED-focused target games. Our mission is to reignite the joy of exercise by transforming exercise into play. We are dedicated to delivering high-quality, durable fitness systems that revitalize our customer’s businesses and the wellness of their clients. The Products Branded as “SMARTfit”, each entry in our product line shifts the emphasis of training from developing motor skills to enhancing the relationship between the brain and body using target games as the ignition to spark rewiring of the brain and neurological system. Unlike other gamified cognitive development systems, SMARTfit does not simulate play or activity. Rather, it uses actual human touch and sports/playground equipment to trigger intricate target systems that require and foster a high level of cognitive processing and elevated physical fitness to achieve progressive steps in game play. In short, SMARTfit is not a “Virtual” or “Augmented” reality training system—SMARTfit’s system is, quite simply, reality. As a result, SMARTfit is an ideal training system for any sports or fitness environment, as athletes of all walks of life seek to develop cognitive agility and speed of thought. Early adopter locations include sports performance centers, fitness centers, schools for children of all ages, medical rehabilitation clinics, and senior centers. The Concept

SMARTfit has based its technology on extensive research surrounding the work of Donald Hebb, who developed the 2011 Nobel Prize-winning “Hebbian Theory,” which proved that “neurons that fire together wire together.” SMARTfit’s gamified training systems combine the use of the hands, feet, eyes, ears, and vestibular system with real-time cognitive decision-making to consistently facilitate the “rewiring” outlined by Hebb in his studies. The games are not only 6

highly engaging and entertaining, but also cognitively demanding, while providing a superb high- intensity workout (HIT).

Our time- and score-based games, tied into the mental challenge, take players outside of their comfort zones. These multisensory activities are scientifically designed to spark a desire to engage at a high level of participation, which sends an instruction to the brain to rewire itself to meet the challenge. In addition, systems can be scaled to meet the athletic and cognitive level of the player(s) by customizing the color, numeric and alpha images of the targets, which provide brain games concurrently with cardio, strength and speed/agility training. This places the participant in a truly functional training space that parallels sports and other real-world activities and results in achieving a level of efficiency at a speed that outpaces anything on the market.

SMARTfit strives to capitalize on three basic economic and social trends: (i) the establishment of gamification to facilitate increased user output through data-driven competition; (ii) the impact of exercise on cognitive health in every segment of the population, including athletes, young children and seniors; and (iii) recent advances in neuro-imaging technology that revealed and confirmed the effectiveness of targeted physical exercise on neuroplasticity and neurogenesis.

Feedback from early adopters in a variety of fields has shown that SMARTfit systems introduce an unmatched mix of unique variables that accelerate the neurogenesis process. These highly innovative practices, combined with the entertaining, gamified environment of SMARTfit, offer a unique solution for facilities seeking solutions for anything from inactivity to the development of elite athletes.

Our objective is to utilize SMARTfit technology to build a profitable enterprise by capitalizing on the emerging opportunity that surrounds this paradigm shift in training, which utilizes computer technology to provide an enjoyable and exceedingly beneficial alternative to conventional exercise. The Company’s line of SMARTfit High Intensity Cognitive Training systems offers solutions for numerous markets, including sports performance training, elite athlete development, early child development, personal training, physical, adapted and special education, senior fitness, and medical rehabilitation facilities. The Technology

SMARTfit Functional and Brain Fitness programs introduce users to a competitive, gamified environment that drives them to improved neurological efficiency through nearly 100 brain-body related exercises. The Company's innovative products and programs deliver a joint physical, cognitive and neurological fitness experience unequaled on the market today.

For further insight and understanding into how the technology works, view our scientific white papers and digital media programming at: www.smartfitinc.com

Benefits to Facilities SMARTfit technology delivers significant benefits to schools and fitness clubs, including:  User-friendly technology engages everyone – regardless of age and ability  Gamified play environment increases user interest and output by establishing varying levels of competition  Instant feedback facilitates repetitive use  Rapid results and benefits through accelerated curriculums that help to shorten the learning curve  High user retention rate and friendly interface attracts new participation  A fun, social environment that leads to the development of a community within the facility  Team-centered games that build camaraderie, particularly among athletes and youths Benefits to End Users

Mental/Cognitive Benefits – Improved Brain Plasticity • Neural - Proprioception, Vestibular Control, Hand-Eye-Foot Coordination, Neuroplasticity, Motor Skills Coordination, Peripheral Vision, and Reaction Skills. • Cognitive - Attention, Focus, Memory, Problem-Solving, Speed, Accuracy, Reaction Timing, Decision Making Under Pressure, Zone Training.

Physical Benefits • Fitness - Cardiovascular, Strength, Aerobic, Anaerobic, Functional, Core Strength, Balance, Flexibility, Range of Motion. • Sports - Throwing, Catching, Kicking, Tracking, Conditioning, Accuracy, Placement, Footwork, Ball Speed and Control, Quickness, Speed, Agility.

Social and Behavioral Benefits • Team Building, Cooperation, Inclusion, Competition (with self and against others), Social Development, Goal Setting, Peer Respect, Confidence, Self-Esteem, FUN!

Key Differentiators – What Makes SMARTfit Products Exceptional

The following key components differentiate SMARTfit products from any other product on the market, giving it a competitive advantage in the cognitive development space:  SMARTfit’s gamified modules require exertion of the full body, which uniquely rewires neurons and improves cognitive function.  Real contact and resistance (not simulated as in most other products) promotes proprioception, the most critical of the senses that enables us to know and manage our bodies in space.  Robust and sturdy design – Systems are constructed to endure long-term physical contact.  Speed of game play can be adjusted to the players' ages, skills, and agility and fitness levels, making SMARTfit effective for everyone from toddlers to seniors to high performance athletes.  Progressive programming is available for individual and group/team participation.  This team play encourages social interaction and extensively develops teamwork.  SMARTfit products leverage the basic human desire for play, social engagement and team building to encourage increased output with benefits visible in countless daily tasks/interactions.

SMARTfit’s product lines are competitively priced starting at under $3500, can be used in a wide variety of mainstream situations, and will pay for themselves in a matter of months. A Compelling Business Opportunity for the Times

Social trend towards a sedentary lifestyle

Leading medical researchers say that, “Sitting is the new smoking.” Inactivity has now been rated the #1 cause of preventable death. This is largely due to insufficient physical activity, a sedentary lifestyle, an increase in the use of “passive” modes of high-density transportation, and other environmental and social factors. Outdoor play and recreation are increasingly replaced with technology that promotes sedentary behavior. Additionally, a rising fear of predators discourages unsupervised outdoor activity for children and fuels the move to create new protective play environments that are often lacking in physical activity. Public health authorities continue to report alarming trends towards inactivity and the resultant increase of dangerous conditions such as adult and childhood obesity, Type 2 diabetes, dementia, cardiovascular disease, depression, and sensory/motor issues, frequently starting as early as infancy.

Need for a more engaging and functional approach to exercise and learning

Both adults and children increasingly require treatment for a record high number of neurologically-based conditions attributable to insufficient brain and body stimulation, an obvious consequence of inactivity. According to Dr. Robert Melilo, author of Disconnected Kids, 9

“We are experiencing an alarming escalation in the number of children who cannot fully function in this world because they don’t have fully functioning brains."

Developing elite athletes to outthink the competition

More than ever, the sports universe is focused on how athletes train mentally, not just physically. Today’s athletes are in need of far more than virtual-reality simulators or motion-based training programs to speed up how their brains function on game day. Elite athletes need a high-intensity training experience that mimics the athlete’s physical and mental state on the field of play, which ultimately facilitates performance at an extremely high level on game day.

Keeping Baby Boomers in motion

A massive increase in healthcare costs is forthcoming as the Baby Boom generation reaches retirement age, potentially succumbing to a more inactive lifestyle. Consequently, service providers and institutions are actively seeking effective solutions to the anticipated rising health care costs, for which SMARTfit technology is perfectly suited. AARP recently released a fascinating brain health research study, which was based on 1,200 online interviews conducted in August 2014. Key findings include:

o Maintaining a healthy lifestyle is important to all consumers (99% find it at least somewhat important). After heart health (selected by 51% of the respondents), brain health (37%) is the second most important component in maintaining a healthy lifestyle. o To this end, 50% of consumers are very or extremely willing to spend money on tools and resources to maintain or improve brain health. o Brain training is a relatively well-known concept among consumers, with 52% awareness. o Consumers are likely to engage in brain training to support living a more enjoyable, self-managed life (91%). o Across brain training programs, consumers are primarily aware of Lumosity (51%) and Mind Games (35%), neither of which engage the whole body.

Dynamic solutions for child care and early childhood development

While all demographic groups are adversely affected by sedentary lifestyles, perhaps the most alarming statistics relate to increasingly poor health conditions directly attributable to inactivity in children. 10

What’s more, an estimated 19% of school children are diagnosed with some form of autism spectrum disorder, a figure too high to treat these children as exceptions. Clearly, a mainstream solution such as SMARTfit technology is required.

Methods of testing and treating concussion and traumatic brain injury

The Company is currently speaking with numerous research universities who plan to incorporate SMARTfit systems into their recommendations for both diagnosis and treatment of various brain injuries and diseases. While these conversations are still in the early stage, the potential represents a big opportunity for the company.

"SMARTfit is the most advanced system I have come across for concussion diagnosis, management, and recovery. The biggest opportunities are for those that need their brain to move the fastest." Dr. Neil Alpiner M.D., Beaumont Health System Six Reasons Why Customers Buy our Products:

 Delivers Quick Results – Instant score breakout allows users to track in-game success.  Sustains Use Over Time – This instant feedback motivates volume of play, and when supported by curriculum over a period of time, leads to targeted cognitive growth and enhanced physical fitness.  Return on Investment – Fitness clubs profit when membership is retained and expanded by attracting families and tech-savvy users who seek a new way to exercise.  Unparalleled Health Benefits - Provides physiological, neurological and behavioral gains, as demonstrated by independent scientific research.  Fun and Social – The gamified environment facilitates repeat use and attracts new users.  Can Be Used by Everyone – Use not dependent on age or ability (just ask our sales team!).

Our products and systems cultivate an environment that allow people to do what they want to do – have FUN, be competitive with self and others, meet people and interact socially, and feel and look good without tedious, uninviting work! The Pittsfield, MA School District was among our earliest customers, purchasing 8 of the first 60 systems installed. Pittsfield PEP Grant Manager Linda Avalle affirmed, "Our students' engagement and enthusiasm for PE has never been higher, our teachers are enjoying the versatile curriculum afforded by the new SMARTfit technology, and our principals and the superintendent are excited to have a solution that improves student fitness and health while also incorporating brain games”

Executive Officers, Directors and Celebrity Endorsements Officers and Directors

Catherine Lamberti, Board Chair and Chief Executive Officer – SPAR Foodliners (CFO), Founder and Inventor – Solutions Plus (AUS), SuperSprings Inc. (US), Sportwall Intl. Inc. (US), Exercise Technology Inc. (US), Multisensory Technologies Inc. (US), SMARTfit Inc, which have generated combined sales of over $60m. Cathi is the mastermind behind the creation of SMARTfit technology which is the culmination of 25 years creating, manufacturing and distributing gamified fitness and training products in this category. Her systems are built to last inspite of the rigorous treatment they endure on a daily basis with systems installed as early as 2003 still functioning well and early customers remain avid endorsers and users. SMARTfit presents an opportunity that exceeds anything Lamberti has produced before with the timing of new technology coinciding with 6 market opportunities currently ready to engage.

Jim Manley, Board Member, Chief Technical Officer – PALCO Labs, Secosys, Valley Center, 3S, Respironics, Span Instruments, CDI, Liston Scientific, MTI. Since completing his MSEE, Jim has designed blood warmers, SIDS detectors, male sterilizers, eye surgical equipment, invivo and invitro blood gas analyzers, cataract surgery systems, gas platform scales and meters to compliment the gas scales, a male quadriplegic semen extractor, traffic inductor detectors, water control and many other products. He is an analog designer at heart, but enjoys programming in the small micro-controller environment as well. He designs and lays out all his own PC boards using PCAD and programs in assembly language and C.

Jim is a co-founder, major shareholder, and board member of SMARTfit Inc and is the mastermind behind the engineering platform technology. He has personally developed all the electronics, operating and software that is already installed in close to 200 test facilities . With over 200,000 lines of code, thousands of algorithms, some as long as 900 lines and one 17,000 lines long, and a suite of electronic boards, Jim has designed the SMARTfit technology to fit into our 7 product lines yet be managed with simplicity at a manufacturing level.

William Kehoe, Interim Chief Operating and Chief Financial Officer (full time Board Member and COO/CFO) – CPA at Plante Moran, MBA from The University of Notre Dame, COO/CFO Beanstalk, COO/CFO Saban Brands. Accomplished C-Level Executive with more than 20 years of progressive strategic, operational and financial management. Over 15 years of working closely with boards of directors and executive leadership teams. Extensive experience in global, competitive and growth-driven environments including entertainment, branding, marketing services, licensing, manufacturing and professional services. Deep knowledge of M&A transactions across multiple industries and geographies including identifying targets, due diligence, negotiating and executing deal terms and integrating operations. Proven track record of excelling in entrepreneurial environments while working closely within Generally Accepted Accounting Principles, International Financial Reporting Standards and Security Exchange Commission reporting requirements. Demonstrated ability to exceed goals; established history of delivering valuable operational and financial advice and results. 12

Lawrence Jackson, Board Member, President and Director of Sciences – Retired National Football League (NFL) defensive end, drafted by the Seattle Seahawks in the first round of the 2008 NFL Draft. Jackson played college football at USC, where he took courses in occupational therapy and developed a keen interest in cognitive health and the effects of the brain in performance. Subsequent to suffering a concussion on the field, which fueled his interest in cognitive health, Jackson has spent his post-football career pursuing the latest brain research findings and seeking solutions for strengthening the myelin sheath that protects neurons. As an entrepreneur, Mr. Jackson offered to join the company to focus on bringing together the finest team of researchers, practitioners and scientists to validate SMARTfit’s technology. He is planning a series of studies which will be conducted with leaders from USC.

Gunnar Peterson, Board Member, Spokesperson, Program Development and Market Entry Strategist - A Beverly Hills-based personal trainer and custom gym developer, Peterson’s clients include celebrities, professional athletes, and everyday people. He is widely recognized for his expertise in functional training and his commitment to developing and implementing innovative fitness techniques. He has trained athletes from the NBA, NHL, NFL, MLB, USTA, men’s and women’s professional boxing and various NCAA sports. Peterson serves on the advisory board for Fitness magazine, writes a regular column for Muscle and Fitness, contributes to Clean Eating and is regularly featured in numerous other high-profile, national publications and television shows. He is certified by the National Strength and Conditioning Association and is a graduate of Duke University. For more information, visit: gunnarpeterson.com.

Frauke Wittmer-Grant, Company Secretary – Exercise Technology Inc., Sportwall Intl. Inc., Raytheon Systems Company, Amber Engineering. Frauke has worked with the team for 15 years in sales, marketing and customer service. She is now the Company secretary and assists in the area of business development. Frauke holds MBA and a master’s degrees in Finance.

Julio Martinez, Operations and Customer Service – Formerly with Exercise Technology Inc., Sportwall Intl. Inc., SuperSprings Inc. Julio joined the original team in 2000 and quickly earned the position of factory foreman heading up a team of 50 employees. Six years ago, he took over operations and customer service of ETI as a start-up and has since joined MFI as head of operations since its merger with ETI. Julio’s depth of experience and hands-on commitment to excellence has had a spectacular effect on the Company's ability to perform at a very high level of efficiency under the severe constraints of a start-up. He knows how to cut costs without compromising quality. Both staff and customers love and respect him and go out of their way to match his level of kindness and excellence. Julio has been highly involved with the creation of the new SMARTFIT technology.

Amy Buchanan, Marketing Director and Senior Trainer – Amy Buchanan is a creative director and fitness professional. She received her Associate's Degree from Santa Barbara City College where she studied studio and theater art, physical fitness and film production. After graduating from SBCC Amy moved to Los Angeles where she worked in film and television production. Graduated Magna Cum Laude from California State University Channel Islands with her

Bachelor’s Degree in Studio Art and a Certificate in Digital Media Art. At CSUCI she studied studio art, digital media art and social entrepreneurship

Amy graduated Magna Cum Laude from California State University Channel Islands with her Bachelor’s Degree in Studio Art and a Certificate in Digital Media Art. At CSUCI she studied studio art, digital media art and social entrepreneurship. While enrolled at CSUCI she also studied fine art in the summer of 2008 at the Paris American Academy in Paris France. She also received her Personal Training Certification from the American College of Sports Medicine in 2010. In the fitness and wellness industry, Amy has worked with Focus Physical Therapy, The Spine and Orthopedic Center, as an integrative therapist with Cottage Hospital’s Center for Cognitive Fitness and a personal trainer at the Santa Barbara Athletic Club. Celebrity and Professional Endorsements

Gunnar Peterson – Celebrity personal trainer “SMARTfit merges exercise and performance like nothing else on the market. I hear ‘mind/body’ all the time in the fitness world, but it wasn’t until I saw this technology in action that I realized what mind/body could be for athletes and others of all ages. SMARTfit is the real mind/body training tool and I am thrilled to take an active role in programming for this cutting-edge company.”

Dr. Charles Y. Liu, MD, PhD – Professor of Neurosurgery, Neurology, and Biomedical Engineering, USC; Director, USC Neurorestoration Center “Thanks so much for sharing this amazingly interesting technology with me. I am a bioengineer- neurosurgeon who directs the USC Neurorestoration Center. The primary goal of our Center is to develop transformative technologies to restore function to the nervous system. Human nervous system functions invariably involve a combination of cognitive and motor components. I am extremely intrigued and optimistic that SMARTfit will prove to be an exceptionally effective and important tool that combines cognitive and motor training in unique and endless combinations to address a multitude of indications within the athletic and medical realms. I look forward to working closely with you to quantify and document these benefits, optimally integrating them within neurorestoration/athletic training continuum.” Dr. Liu has received numerous research awards and made a large number of visitorships/invited lectures throughout the world. He also serves as Associate Editor of the esteemed journal, World Neurosurgery. He is a principal neurosurgical consultant for the NCAA USC Trojans Athletics Department. In addition, he serves on the Executive Committee of the Congress of Neurological Surgeons. At Rancho Los Amigos, Dr. Liu is Chair of the Department of Neurosurgery and is developing cutting-edge programs in restorative neurosurgery, collaborating with scientists at Caltech and USC, among others.

Lawrence Jackson - Retired NFL Defensive End

“When I saw SMARTfit, I knew right away that I was looking at the future—it offered everything in one system. As a pro athlete, I learned that traditional training methods tapped only half of our performance faculties and saw cognitive training as a way to increase mental speed on the field. I view SMARTfit as a way for elite athletes to break through performance plateaus and develop the vital underlying reaction and motor skills for sports. More importantly, it helps to develop efficient on-the-spot mental processing which is great for sports as well as all high-pressure professions such as business, military and policing. This platform is limitless.”

Dr Chris Powers, PhD, PT, FACSM, FAPTA – USC Professor, Director, Biokinesiology Program, Co-Director, Biomechanics Research Lab

“SMARTfit takes the focus of the player off the mechanics and moves it to the external, forcing the brain to solve two problems at the same time. It solves the big missing part in rehab because we want carry-over onto the field. SMARTfit is a great tool to test if that is happening. Further studies will help us to measure its full effectiveness.”

Augustine Okosun, Center, International Player, NBA D League

“After my first session on SMARTfit, I knew something had changed and that was proven that weekend when I made every free throw. Over the next four games, I made 12 for 12 free throws and my free throw average shot up from 50% to 70%.

“My perception of the game seemed to slow down and my timing, reaction skills and balance improved dramatically. Since then, my games have improved tremendously thanks to SMARTfit. I look forward to reporting back in four months on how SMARTfit training has actually produced sustained results. See you in December.” The Market, the Product and Marketing Plan

Our new product lines are sold in schools, sports performance centers, health clubs, corporate fitness centers, hotels, resorts, hospitals, wellness centers, and physical therapy clinics, as well as the consumer market segment, including home users in households with children. Our Markets

Current Markets in US alone: • 130,000 Schools and Colleges: • All K-8 grade classrooms 15

• Middle schools and high schools • Colleges – multiple per facility for fitness, recreation, sports performance • 6,000 City Parks and Rec. Departments – dozens per city • 34,000 Health & Fitness Clubs – multiple per facility for child care, youth fitness, personal training (multiple systems), small group X, sports performance training. • 700 Military Bases – multiple per facility for child and youth services, education and MWR • 6,700 YMCAs, JCC’s and Boys and Girls Clubs – multiple per facility for group exercise for all demographics, day care, sports performance • 50,000 Hotels and Resorts – child care and youth entertainment • Cruise ships – 1.6m U.S. children take cruises each year - multiple per ship • 26,482 Fire Stations - for speed, agility and brain training • 648 Police Academies • 2,500 Family Entertainment Centers • 7,500 Sports Performance Training Facilities – multiple per location • 11,000 Senior Centers – one or two per location • 105,000 Occupational Therapists – one or two per location • 250 Children’s Hospitals – multiple per facility in classrooms, waiting rooms and rehab rooms • 25,000 Hospitals that treat children – multiple per facility for waiting rooms and rehab rooms • 185,000 Physical Therapists – one to two per facility • 385,000 Licensed Pre-school/Day Care Facilities – one per facility • 35,000,000 Households with Children – specific application for families with children with aspiring athletes and families with children with ASD/dyslexia/ADHD who can afford these systems. Focus on the following markets:

The Company anticipates major growth in multiple markets that address at-risk populations, in addition to the mainstream opportunities. Due to the size of the opportunities and scope of diverse branding needs, the company plans to open all markets simultaneously with four separate sales and marketing divisions for advanced development in each market: education, medical, fitness, and sports performance. While product branding will be consistent with the needs of each market, all systems will ship from the same factory, thereby enabling the Company to maximize production efficiency and costs.

Health and Fitness Clubs (personal training, group fitness and child care applications) – As recently as 2015, there were more than 34,000 health facilities in the U.S. with 54 million members surpassing 5 billion gym visits per year, resulting in industry revenues of $24.2 billion, according to the International Health, Racquet and 16

Sportsclub Association (IHRSA). Gunnar Peterson will be working with the Company to design specific business packages for the club market that will include the choice of product suite and programs specific to their needs, space and budget.

Family oriented non-profits and community centers – YMCA operates over 2,700 clubs serving 9 million youth and 13 million adults each year in the U.S., and over 45 million people in 119 countries worldwide. There are upwards of 350 Jewish Community Centers (JCC) and camp sites in the U.S. and Canada, according to the JCC Association. Boys and Girls Clubs of America reports over 4,000 independent locations, while there are over 6,000 local and regional parks and recreation centers nationwide.

“I cannot begin to express the level of excitement your SMARTfit products have created at the Summit Family Fitness Center in Temple, Texas. The addition of these products have been the focal point in changing the personality of this facility from one kids did not enjoy visiting to what is now a fully-rounded facility for the entire family and one that kids eagerly have embraced.” Moms, kids, dads, and grandparents all see, enjoy and truly appreciate what your products have done to address concerns about youth fitness by simply creating a welcoming environment that actively promotes kids to play!” Ron Germann, Manager, Summit Family Fitness Center, Temple, Texas

Education and after-school programs – The majority of SMARTfit Technology’s 2014 and 2015 sales came through education-related channels, as school and youth center administrators recognize the extensive benefits for children and teens, particularly the introduction of enjoyable exercise habits. Education includes teacher-led training programs for physical education, adapted physical education, and special education.

In 2015, there were more than 130,000 educational institutions in the United States, including 124,000 elementary and secondary schools, as reported by the National Center for Education Statistics (NCES). The education market has demonstrated stable growth, despite fluctuations in the U.S. economy, as evidenced by annual federal budget increases for education appropriation. These increases are anticipated to continue, according to NCES’ Projections of Education Statistics to 2016.

The Company recognizes what a valuable market this is, not simply in terms of corporate sales, but also to incite greater social change relating to childhood obesity. SMARTfit’s passionate team deeply believes this technology can alter how children view exercise, and play a significant role in developing a generation of youths who choose to exercise daily.

Early Childhood Education/Day Care – Early Childhood Education is a multibillion dollar market with 385,000 for-profit, non-profit and government-run facilities. This market appears to be poised for substantial growth in the U.S., with a growing political recognition of the importance of early childhood education to the learning process. This is a new market for the company and one that is receiving significant activity as the company has just released its new SMARTfit Play Pod and Mini systems designed to combine physical exercise with early academic learning. Target games can now incorporate words, pictures, and numbers up to 999. This is a game changer for early childhood education, as the systems are capable of teaching significant components of the pre-school and early elementary common core curriculum during exercise and game play.

Sports Performance (Professional teams, high school and collegiate programs, athletic training centers) – In today’s hyper-competitive sports climate, athletes are doing everything they can to perform at the highest level, but so many athletes aren’t exercising the strongest muscle in their body: the brain. SMARTfit systems deliver a high-intensity experience that mimics an athlete’s physical and mental state on the field of play, which facilitates the ability to perform at an equally high level on game day.

Within sports performance, there exists an abundance of sub-markets, including professional teams, high school and collegiate programs, sports performance centers, cross-fit gymnasiums, and even national health and fitness franchises. The sports technology business is booming internationally, as athletic organizations and facilities are focused squarely on tech developments to advance training regimes. SMARTfit’s Sports Tech division has developed strategies and curriculums that lead to greater cognitive performance on the field of play, and elevated performance, for all sports across the board.

It isn’t only performance experts flocking to this space— investors have spent more than $1 billion on sports- related startups in 2015. Additionally, there is a substantial financial commitment from parents and institutions toward improving sports performance nationwide. With unique solutions that go beyond strength and conditioning to enhance cognitive speed, agility, sensory, and neurological performance by engaging the brain, the Company is well positioned for significant sales in this market.

Occupational Therapy and Sensory Integration Training - The SMARTfit Trainer and Play Pods have become an essential element in sensory integration treatment and practice in over a dozen facilities over the past year. They are being used to incorporate a variety of ocular motor, visual perceptual, vestibular, proprioceptive, postural control, and muscle strengthening/endurance activities in an engaging manner. Clients ask to use the state-of-the-art systems during their sessions, and they are constantly motivated to improve their scores and overall performance.

“SMARTfit gives a three-dimensional element to developmental interventions and allows us to work on sensory integration in new and exciting ways. Using the various games, our clients are able to work on a variety of skills. Their reaction times and accuracy to hit the targets greatly improve over consecutive trials, demonstrating motor learning and quickened motor responses. We are able to work on static and dynamic postural responses, balance, and proximal stability crucial for participation in playground games and Physical Education classes. Furthermore, the numbers and letters games allow our therapists to address sequencing, letter and number identification, visual discrimination, and visual tracking/scanning abilities, essential for school readiness.

“In general, the SMARTfit Trainer is one of the best comprehensive activities to address all aspects of sensory integration treatment and our clients have seen wonderful results that translate to their academic, personal, and social lives.” Kimberly Koretoff, OTD, OTR/L, CAS, OT4Kids and Therapeutic Learning Center, Santa Monica, CA.

Physical Therapy - Although SMARTfit technology is a new introduction to the field of physical therapy, PT facilities are already finding it to be an incredible adjunct to progressive resistance training and manual therapy, in treating a full spectrum of patients. The multiple programs offered by SMARTfit allow high-level performance training of athletes, ranging from high school to professional sports, to improve speed, neuromuscular coordination, endurance, plyometric and strength training in multi-planar motion patterns. This promotes overall hip and scapular core control and quickens patients’ reaction time required for high-level performance. SMARTfit training is also being incorporated into Total Joint and Stroke Rehabilitation protocols. The programming options include standing reach exercises and other activities that improve reaction time and dynamic balance on both stable and unstable surfaces for geriatric patient populations. Higher-level stroke patients benefit from the many SMARTfit programs focused on improving cognition and motion.

“As a Physical Therapist who has always searched for the most evidence-based treatment, I can honestly say this product is one of the best I have seen at combining all of the facets of improving coordination of movement, strength, speed and neuromuscular control into one product.” Mary Rozina PT, DPT, Rozina and Smith Physical Therapy Inc., Upland, CA.

Home Market - Driven by the need for and financial commitment to solutions for sensory disorders from ADHD/ADD and dyslexia to autism spectrum disorders, the Company’s technology is expected to have significant appeal to middle- and upper-income families faced with these issues. Over 2,000,000 people are active on Facebook forums related to Autism. An additional proven home market is families with children who are aspiring athletes and who play sports.

Boomers and Seniors – According to the U.S. Census Bureau, more than 20 percent of U.S. residents are projected to be aged 65 and over by 2030, making this one of the world’s fastest- growing markets. In a 2011 study, seniors rated “staying sharp” as their number 1 concern, with “physical health” as their third highest priority. SMARTfit combines both motor and cognitive solutions into one.

International - The overseas market includes of all the above categories and is estimated to be twice the size of the U.S. market.

The Opportunity

With our technology, value added curriculum, and creative applications, we believe that we are building a profitable enterprise, with annual revenues anticipated to exceed $330 million with EBITDA margins over 20% in five years by growing our core markets, opening secondary markets, and launching a high-end consumer product line. See Addendum for Summary Financials. High growth potential

The Company plans to achieve accelerated growth with three approaches:

 Maintain and build on its current customer base and strategy: The Company currently sells commercial solutions priced at an average of $20,000 and enjoys 50% margins. While competition for budget exists, SMARTfit systems are unmatched in their ability to serve larger groups. For example, one $20,000 system can serve groups of 20 - 40 individuals depending on how it is used by the trainer. There is no other product capable of providing a highly charged workout for this many individuals in a single class.  Open new and untapped markets by appointing master distributors in all markets: The Company’s two- level pricing strategy allows for both master distributors and their dealers to obtain industry standard margins.

 Introduce a consumer version priced at under $1,000 in next five years: With an investment in additional software, injection molds and large production runs, the Company plans to launch a portable target system that is driven by a smartphone application. Five-Year Priorities:

We aim to achieve over $330 million in annual revenue with a target of over 20% EBITDA margins by Year 5. While the market size is significantly larger than the market-share the company plans to carve out, management has the option to decide to leverage its first-to-market advantage by going for a large share of the market.

2016/2017:

 Attract a high-level executive team with the combined expertise to launch an aggressive growth strategy.  Complete market-specific product lines.  Conduct at least 4 scientific studies.  Implement marketing campaign to launch 4 markets; education, medical, fitness, and sports performance.  Scale manufacturing.  Expand the Research and Development facility. Establish presence in West Los Angeles.  Launch six product lines each branded to suit identified markets.

2018 and beyond

 Continue to scale the business.  Identify the best investment banking relationships to further fund the scaling of the company.  Expand manufacturing capability to meet demand and increase gross margin.  Initiate internet connectivity of all systems. Launch of SMARTfit into the consumer products/home market.  Continue to cut costs and scale the business.  Launch an internet marketplace for the trading of games and curriculum. Background

To date, the Company installed more than 150 of its first-generation electronic systems, earning over $2.6m in revenue, which made a substantial contribution to covering the Company’s overhead during the R & D phase. While these systems utilized an early version of the new SMARTfit technology, they were housed in an early-model product manufactured by Exercise Technology (ETI), a company that was acquired in early 2014.

The new SMARTfit line of products, fully designed and manufactured by the Company, and featuring a new modern look and easy assembly, was officially launched in early March 2015 at the International Health, Racquet and Sportsclub Association (IHRSA) annual convention. A 21

second launch for the international market occurred on March 25th by Fitness Solutions, our new distributor for China. A short initial production run was released through 2015 to learn from the customer base what features were needed to meet the needs of larger buyers. This run produced $600k in sales during 2015 and provided the specifications for SMARTfit Rev 2.

In April 2015, SMARTfit engineers commenced with the redesign of SMARTfit Rev 2 to include these features for mass appeal. This project was successfully completed and the company began shipping SMARTfit Rev 2 in May 2016. Historical results

In 2014, the Company placed all of its focus on sales of one product line designed for physical exercise in schools located in cold regions, as this was the positioning inherited from ETI following its merger in January 2014. This helped the company to achieve $1m in revenue and test its electronics in an existing, but outdated product line. In March 2015, the Company launched SMARTfit, its own product line, into the mainstream fitness industry and has established the following new business opportunities: 1. Master distributorship with Fitness Solutions China – currently with 6 offices and generating $120m in annual revenue. 2. Selected to supply the equipment for 200 facilities involving a joint venture with YMCA of USA and the Dept. of Health and Human Services to offer action-based learning for inner-city youths. First system installed in May 2016. 3. In conversation with LA UP to provide solutions to 100+ preschools in Los Angeles. They are waiting for the release of SMARTfit for education. 4. Gopher Sports began carrying our product lines in the largest catalogue/online for education and sports. Shipped first systems to new distributors in China, Germany, Turkey, France, Denmark, and Singapore 5. Released SMARTfit Rev 2 in May 2016 and announced four new product lines. 6. Received multiple celebrity endorsements from key influencers in our major markets. 7. Launched SMARTfit in China at FIBO trade show in partnership with Fitness Solutions. 8. In process of forming a strong board of directors. 9. Raised first $300,000 seed funding. 10. Release of SMARTfit for Education 11. Planned supply of multiple systems to USC for research purposes. 12. Have initial interest to supply systems to 26,000 skilled nursing facilities. 13. Orders received from Boys & Girls clubs, Goodwill program for adults with delays, University of Buffalo to study SMARTfit on Seniors with cognitive impairments, four autism treatment centers, three senior programs, multiple K-12 PE programs and multiple sports performance centers. 22

14. Planned introduction of education systems to Miami School district to pilot systems in 2017 (3rd largest school district). Option to Prepare the Company for a Partial or Full Merger or Acquisition or Private Equity Transaction

The Company’s product lines are highly attractive to major corporations serving the recreation, medical, sports and fitness industries because SMARTfit is an industry innovator, and there is little or no competition in this sector. The Company’s potential for exceptional growth in four major markets makes it an appealing candidate for an IPO with mid-level underwriters. Competitive Position and Barriers to Competition There are companies offering target-based products that develop reaction skills, but none that actually engage cognitive processing. Our touch sensitive systems are unique in that they can withstand the full impact of a medicine ball or the delicate touch of a senior. Companies offering target/touch applications include Dynavision in the high-end medical market, and Neos, Pavigym, and FitLight for recreational and fitness applications. While we do compete on budget, once SMARTfit is understood by the customer, there really is no competition in the area of cognitive speed training. Each one of SMARTfit’s targets is driven by its own computer. These products drive their targets with a mechanical on/off switch.

Important competitive factors include price, product quality and performance, warranties and customer service. SMARTfit has a policy of premium, commercial-grade quality and exceptional customer service. We believe that our reputation for high performance, dependability, and exceptional customer service constitutes a competitive advantage.

As we approach the mainstream consumer markets with lower price points, we face new factors for mindful observation. Primarily, we perceive the need to properly differentiate our products from the consumer products offered by Nintendo and Microsoft, thus maintaining higher price points even when we enter the consumer market.

◦ Nintendo Wii Fit – Wii Fit is, at this time, a major competitor in the consumer products sector. It has been very successful in this space but it has significant limitations in a clinical environment, as it uses a great deal of simulated movements and waving of wands to trigger game play. SMARTfit technology features real (not virtual) touch, real ball play, real running, real reaction skills for real moving objects. Wii has successfully opened the market to the idea of gamification for fitness. SMARTfit technology takes this to a new, more effective and interactive level while adding the critical factor of real contact with real sports/play equipment verses simulated contact. ◦ Innovators – A potential risk is the possibility of Nintendo attempting to produce and market a competitive product in the consumer sector. We will address this with the following steps: 23

 We will be the first to market.  Our products are positioned for professional use in a niche market, a notch above the consumer market that Nintendo focuses on consumer.  We have created our own operating system to run SMARTfit technology, which is unique and very difficult to copy. It also includes a five-year development plan to keep SMARTfit on the leading edge as an industry leader for years to come.  There is great strength in our SMARTfit algorithms – thus, we believe this will provide significant obstacles to anyone that attempts to match our algorithms. Product Lines

We have developed a new product concept in the health and fitness industry by supplying copyrighted curricula and programming that focuses on using our products to motivate people of all ages and abilities to become active while engaging in mentally stimulating activities. In support of our product lines, we offer extensive online programming, and a video channel geared to provide instructors with a quick method to learn how to implement our products. Specific curricula and programming materials include:

 Fitness for children, teens and adults  Physical Education (PE) for K-12  Adapted PE  Boomer and Senior Programming  After-school Programming  Occupational and Physical Therapy Programming  Medical Rehabilitation  Sports Performance Programming  Baseball  Soccer  Basketball  Football  Volleyball  Tennis  Lacrosse  Hockey

These copyrighted curricula and program materials support the following product offerings: SMARTfit Multi-station Trainer The SMARTfit Trainer is an interactive training system designed for use by large groups in training centers, gymnasiums, general purpose rooms, courtyards, aerobic rooms, and racquetball, tennis and basketball courts. The Training Station is 8 feet high by 4 feet wide and contains 9 targets and a scoreboard. Participants obtain a full-body workout by triggering targets with balls, 24

noodles, hands or batons while earning points for accuracy, skill, speed, cardiovascular stamina and team cooperation. The SMARTfit Trainer can be used as a fitness tool for all ages and levels of athletic ability. A single server can drive up to 6 stations, with each station accommodating up to 10 players in a team. SMARTfit ProTrainer The SMARTfit Pro-Trainer is an interactive multi- station gamified training system designed for athletes, teams, and groups. It provides sport- specific training for football, basketball, baseball, soccer, lacrosse, hockey and volleyball. This is a modular, high impact training system featuring:  Up to six 8' by 4' panels joined together, each with 9 targets, to form a large interactive wall with multi-colored with alpha-numeric targets, multiple scoreboards and a time clock.  The system can identify a strike within two inches of accuracy for the purpose of scoring for accuracy, placement and speed.  Dozens of games for 1-2 players or teams are designed to emphasize and teach a wide variety of cardiovascular, speed, agility, strength, and cognitive performance skills needed for any major sports. Games include Rally Wall, Chase the Targets, Lights Out, Goal Shooting, Chasing Bases, Math Games, Tic Tac Toe, and KwikBall. SMARTfit Play Pods The SMARTfit Play Pods are an interactive solution for the school and day care markets. They provide a group play forum for children aged 12 months to early teens, and can operate effectively in supervised or unsupervised spaces. SMARTfit Performance Pods SMARTfit Performance Pods comprise primarily the same technology, but are designed to operate wirelessly by placing the pods in within 100’ of the CPU. They are used by sports performance trainers, personal trainers, and both occupational and physical therapists. SMARTfit Single and Mini Unique to the SMARTfit Single and Mini is their ability to utilize the wired or wireless SMARTfit Performance Pods to extend the interactive areas, enabling a 360-degree playing space. SMARTfit Single The SMARTfit Single: 8’H x 4’W incorporates 9 LED multi-colored, alphanumeric targets, and a CPU including a sound system, time clock, scoreboard and push-button user interface. 25

SMARTfit Combo The SMARTfit Combo consists of the SMARTfit Single combined with an option of 2-6 wireless pods to create a 360-degree playing area. The system can operate as a single, as pods alone, and as a combined training space with both the Single and the Pods working together. SMARTfit Mini The SMARTfit Mini: 4’ x 4’ incorporates 5 LED multi-colored, alphanumeric targets, and a CPU including a sound system, time clock, scoreboard, and push-button user interface. Marketing, Sales and Customer Support Marketing Focus  Trade Shows – Official launch of SMARTfit is planned in March 2017 at the IHRSA fitness industry convention in Los Angeles, followed by the launch into sports at the NIRSA (Intramural Sports) convention in April 2017. Additional trade shows are planned for specific markets.  Integrated content marketing, digital video content, an informational blog, infographics, press releases, an active website, and innovative social media practices, all of which contain specific benefit messages directed to different markets.

 Progressive digital marketing strategies including SEO, reputation marketing and E-mail marketing, including video email, all directed at targeted vertical markets, such as physical therapists, occupational therapists, personal trainers, health & fitness clubs, sports performance facilities, schools, and early childhood programs.

 Live event cultivation and product promotion to trade organizations and at trade shows, through engaging demonstrations.

Sales Focus

 Direct to key accounts including major health clubs, early childhood education and sports performance chains, and regions not covered by dealers and distributors.

 Existing U.S. fitness dealer network (currently covering 25 states) and international distributor network (currently covering 7 countries).

 New vertical market reps and dealers specializing in medical fitness & rehab and sports performance. 26

Support Focus  Regular releases of programming by Gunnar Peterson to endure maximum retention of use by systems in the field.  Webinar trainings by specialists in each field designed to train all kinds of practitioners on the use of SMARTfit.  New game packets released regularly via downloads – will create recurring revenue stream.  Online video channel and downloadable instruction manuals, drills, exercises.  All customers receive complimentary membership to SMARTfit Club and access to training staff on phone, webinars, and blog.

Research and Development

Two important principles are driving SMARTfit’s research and development efforts.

The first is to listen closely to our customers, especially early adopters, to verify the robustness of products, validate features, ascertain the priority of requested enhancements, and continuously evolve programs and capabilities that stimulate continuous use by players. Accordingly, our research and development projects are focused on hardware and software enhancements that deliver improvements in all of these areas.

The second principle is to strive to design and build products from a common hardware and software platform. Thus, all of our product lines have a significant level of common configurations and content, which simplifies engineering, manufacturing, and support across all product lines.

The array of products offered by our Company derives from proprietary common hardware elements including:

 Display boards

 Motherboards

 Audio boards

 RFID boards

 Target boards and sensors

 LED and LCD targets

 Power supplies

Fabricated subsystems are designed to be assembled in various configurations for each of the products using cabling harnesses and connectors that are unique to each product configuration. The hardware subsystems themselves provide a spectrum of capabilities, which enable Internet connectivity, the delivery of real-time sound feedback, scoring and score memory, pay-for-play options, and real-time interaction with the sensors arrayed over the product playing surfaces. CE and UL Marks The Technology has just passed CE and UL certification and the technical documentation is being obtained from component vendors. Upon pending completion, SMARTfit will be issued with approval to post the CE and UL mark on its systems.

Full integration with Android and Apple standards

We expect to enable SMARTfit products to fully integrate the latest of the following features:  Cloud-based servicing and updating  User performance tracking and online multiplayer competition through web and app  Wi-Fi and Bluetooth connectivity and control integration with smart tablets and phones  Custom audio integration through use of smart phones & MP3 players

Manufacturing and Distribution

SMARTfit currently operates a 3,000-sq. ft. R&D and final-assembly test factory, receiving tested sub-assemblies from suppliers, which are integrated in batches according to orders on hand.

The Company single-sources component parts including steel, plastics, and electronics, from local suppliers and final assembly and testing takes place prior to shipping. Our Company attempts to reduce the risk of sole source suppliers by maintaining varying levels of inventory. However, the loss of a significant supplier, or delays or disruptions in the delivery of components or materials, or increases in material costs, could have a material adverse effect on our operations.

The company plans to move some component manufacturing to Hong Kong as soon as volumes and cash flow can support the move. It is anticipated we will enjoy up to a 30% reduction in manufacturing costs on fast-moving product lines. Manufacturing Operations and Projected Employment

Location: Oxnard, CA.

All manufacturing of electronic and non-electronic components are manufactured by local sub- contractors. Final assembly takes place in the Company's Oxnard facility, along with testing and distribution. Electronic boards are currently manufactured in Denver, Colorado; however, the plan is to source some of these directly from China once the Company is funded with more working capital.

The Company plans to take occupation of large premises close to the labor force in Oxnard by the end of 2016. This will be a state-of-the-art facility designed to enable the Company to scale its manufacturing capability quickly. U.S. Distribution

In the United States, our products are sold through authorized dealers, our own sales force, and independent sales representatives.

Dealer sales represent 30% of the Company revenue and are expected to increase significantly as the company transitions to a two-step distribution plan.

International Distribution

Distributors in the following territories have signed up:

China, Columbia, Australia, France, Denmark, Germany, Turkey, Singapore, and Israel. The most engaged distributor is Fitness Solutions of China, a tier one distributor of American made fitness equipment including Precor. Precor have spent a year preparing for the launch of SMARTfit in China and have about ten test sites.

Financials

See next Page.

SMARTfit Inc. A California Corporation

Developer of SMARTfittm Functional and Brain Fitness Training Games

ADDENDUM – FIVE-YEAR SUMMARY FINANCIALS November 2016

Innovative Brain/Body Technology for Medical, Educational, Sports, Fitness, and Recreational applications

www.smartfitinc.com Catherine B. Lamberti, Founder and CEO

Cell: 805-895-6035

SMARTfit, Inc. 2016 Five-Year Financial Outlook

The financial projections included herein are based on industry and competitive research, historical performance and management assumptions. Detailed monthly analysis of revenue, cost of sales and operating expenses have been completed and support the summary below. These projections are predicated on raising seed funding of $2.5M. It is expected that another round of financing or debt may be necessary specifically to fund working capital, including inventory and receivables. The current plan will be expanded to include assumptions on cash flow required to fund working capital and capital investment. While the projections below have been developed with diligence and thoughtfulness, the actual results will likely vary from these projections.

SMARTFit Inc., Financials Annual Summary Projections Fiscal Year ending December FPE 12/31/2017 FPE 12/31/2018 FPE 12/31/2019 FPE 12/31/2020 FPE 12/31/2021 TOTAL 5 Years Dollars Dollars Dollars Dollars Dollars Dollars % of Rev. Profit & Loss Statement Sales $ 2,875,000 $ 11,839,289 $ 42,069,533 $ 136,135,425 $ 336,834,600 $ 529,753,846 100.0% Cost Of Sales $ 1,809,375 $ 5,724,018 $ 23,866,605 $ 76,442,213 $ 194,488,104 302,330,314 57.1% Gross Profit 1,065,625 6,115,270 18,202,928 59,693,212 142,346,496 227,423,532 42.9%

Total Opex (excl Depr & Amort) 1,542,313 5,571,495 14,476,439 32,545,683 63,740,520 117,876,450 22.3%

EBITDA (476,688) 543,775 3,726,489 27,147,529 78,605,976 109,547,081 20.7%