EZ-ZACK Q and A for a Sincerely Interested Party

Q: What is the Corporate Structure? S/C Corporation or LLC?

A: Currently it is Panamor Business Group. Inc. is a C-Corporation for taxation purposes.  However, the IRS period for 2553 filing has not yet passed and S-election status is still available.

 The product will likely be controlled by a subsidiary entity.  That entity is not yet established, so C-status or S-status are both options, depending upon optimal tax options.

Q: Need to understand the structure of the license agreement. Best would be to receive a copy (again, subject to NDA/Non-Compete). Want to understand duration, geographic scope, whether it applies to improvements, what the royalty structure is, etc.

A: Subject to a protective document, Panamor has no objection to releasing a copy of our existing agreement to a sincerely interested party.  Basically, the agreement grants and transfers full licensee rights to the patents, manufacturing, sales and marketing, and distribution in world markets, except Sweden.

Q: Need to see a business plan or at least some pro-forma projections for the next 3-5 years and a use of proceeds for the $500K requested.

A: A business plan, in draft status, has been prepared.  The plan is currently under review and improvement, especially regarding sales and marketing strategies.  Subject to a protective document, Panamor has no objection to releasing a copy to a sincerely interested party.  The plan includes funding projections and Return on Investment.

Q: Is there a PPM or other offering that has been structured or is this completely open? Is the company open to an equity investment as well as or in lieu of debt?

A: No PPM (Private Placement Memorandum) has been prepared.  The company is open to equity investment and debt arrangements, or a combination.

Q: Do you have a sample of the product and if so, can you ship us one if we pay the freight?

A: Subject to a protective document, Panamor will gladly provide a sample product for any sincerely interested party to review and use.

Q: Would the company contemplate a public offering?

A: Of course we'd want to grow the business a bit first, but we have done this and are doing this with other types of consumer products. Current plans and projections do not reach this decision.  As the question infers, the company (and product success) must be proven and grown first.  However, the current Board of Directors has no firm objection to the possibility of an IPO, or other public offering opportunity, at the proper time.

Q: We'd recommend starting of with direct response first, then when sales ramp up, to retail. Would there be any objection to this?

A: As mentioned earlier, the sales and marketing plans are currently undergoing careful review; specifically to address questions such as the one posed by the interested party.  Currently the plan calls for a multi-pronged approach, using both direct sales and exploring retail options.  If a sincerely interested party can bring specific assets to bear and provide expertise, Panamor has no objection to concentrating upon direct sales before expanding retail opportunities.

Q: Do you have bios for the managers and shareholders?

A: Yes; they are available in the simple (two-page) brochure and within other documentation. That information can be easily provided.

Q: What are the sales in Sweden and how is it being sold there?

A: The inventor and a few select retailers have sold approximately 75,000 units over the decade the product has existed. The inventor has retailers in Sweden, Norway, Finland, Denmark, UK, Estonia, Latvia, Germany, Spain, Portugal and Japan. The inventor’s cooperation partner, a separate company in Sweden, wasn’t able to handle the management of these and therefore the sale to a majority of these has dwindled. However Panamor has been in contact with them and they are interested to place new orders with Panamor. We have developed a sales agent in Europe who is already in contact with the existing retailers / sales locations.

Q: What are the plans if any to protect the IP in the states?

A: Currently there is a patent issue pending, which is under investigation.  The original inventor filed for US patent protection, but received a rejection letter.  He did not initially pursue appeal of that rejection.  A subsequent review reveals that the patent examiner may have been wrong.  The inventor has given Panamor oral permission to pursue appeal of the rejection.  Since oral permission is not sufficient, Panamor is working to secure written consent; after which Panamor intends to pursue the issue.  Written consent involves gathering many documents, which process is currently underway.

Beyond that existing issue, Research and Development is underway for several attachments / accessories that will improve the product and enhance sales. Panamor intends to protect each such development under US laws.

Q: There was also a hanging device on the web site. What is the deal with this? Does Panamor also have the license to this?

A: Yes.  However, Panamor is also exploring an alternate design that may improve the product.

Q: Why 'Panamor?'

A: Panamor was chosen by Mr. Engstrom (a marketing expert) as the name of the company that owns EZ-Zack and the Tidymaker products. There is a branding concept behind the name, which incorporates areas of the world marketplace.  It was also chosen because it was easy to own as a domain. It could have been any name.

MORE Q AND A - Concerning an Investor's Interest (These questions came from an investor.)

Q:    What is the total amount they are looking for?

A: Panamor Business Group, Inc. seeks a minimum investment of $500,000.  Panamor is open to equity investment, lending options, or a combination.

Q:    What security is available for the loan/investment?

A: Panamor offers a major equity ownership (up to 33%) as well as liens against equipment and property.  An option may include a lien against cash flow, depending upon the investment or loan.

Q:    Do they only want to obtain loan then pay back and investor is out?

A: Panamor is open to negotiations and options, and does not insist upon exit of the investor after Return on Investment.  An equity investor can expect initial returns from proceeds.

Q:    What are the long term (if any) prospects for an investor?

A: The long term is immense – if the project is successful.  The business model aims at 117 million households in North America alone. They own the manufacture and sale rights to the products worldwide – excluding Sweden, home of the inventor.

Q:    What do you mean when you say outright ownership of territories?

A: Panamor expects to offer exclusive licensee marketing rights to certain territories around the world.  The licensee for each such territory will have broad discretion to market products within the exclusive territory.  There will be restrictions; primarily upon the product – licensees cannot alter the product.  However, they can market the product to their unique territorial customers and social norms. 

As the original seeder for Panamor, you can have first dibbs on any of the territories for EZ-Zack – Africa, Middle East, Asia, South America – even Europe is up for grabs.

Q:     When does the deal need to be closed?

A: The product is ready to be manufactured now. They got this far with the legal work and now need that small ‘kick-start’ to get it running – kind of like the tiny match that starts a forest fire!