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“BECOMING THE LARGEST TICKET BROKERAGE COMPANY IN THE USA” 506c OFFERING JOIN THE NES TEAM!

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Page 1: NES powerpoint 01 final 8rKDS - Amazon Web Services€¦ · Forrester Research estimated secondary ticket sales will grow 12% annually ! The top 20% of online ticket sellers will

“BECOMING THE LARGEST TICKET BROKERAGE COMPANY IN THE USA”

506c OFFERING

JOIN THE NES TEAM!

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This Presentation includes and is based, inter alia, on forward-­looking information andstatements that are subject to risks and uncertainties that could cause actual results to differ.These statements and this Presentation are based on current expectations, estimates andprojections, which generally are identifiable by statements containing words such as“expects”, “believes”, “estimates” or similar expressions.

Important factors that could cause actual results to differ materially from those expectationsinclude, among others, general economic and industry conditions in markets which areexpected to be major markets for equities.com.

Although equities.com believes that its expectations and the Presentation are based uponreasonable assumptions, it can give no assurance that those expectations will be achieved orthat the actual results will be as set out in the Presentation.

equities.com is making no representation or warranty, expressed or implied, as to theaccuracy, reliability or completeness of the Presentation, and neither equities.com nor any ofits directors, officers or employees will have any liability to you or any other persons resultingfrom your use of the information contained herein. This Presentation was prepared uponspecial request and the information contained within will not be updated in this Presentation.The following slides should be read and considered in connection with other informationprovided by the company.

Not  for  public  distributionFORWARD  LOOKING  STATEMENTS

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“NES  is  a  Nevada  company”

“The  Ticket  Brokerage  industry  is  experiencing  explosive  growth  through  2017.    The  industry  is  a  $6.5  billion  dollar  industry  with  major  growth  opportunities”

National  Entertainment  Specialists,  Inc.

“We  were formed  for  the  purpose  of  executing  a  classic  “buy  and  build”  

Roll-­up  acquisition  strategy”

What we

are?

What are we doing?

What about our

industry?

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WHAT  IS  A  TICKET  BROKERING  COMPANY  AND  WHAT  DO  THEY  DO?

Ticket  broker  companies  are  in  the  business  of  buying  and  reselling  tickets  primarily  for  sporting  and  entertainment  events.    This  highly  fragmented  industry  consists  of  approximately  1,000  U.S.  entities,  many  of  which  cater  to  a  limited  metropolitan  or  geographic  clientele.    

Most  ticket  brokers  are  small  businesses  averaging  8  to  16  employees,  and  reporting  annual  sales  from  $2  to  $25  million  a  year.The  online  ticket  industry  is  poised  to  experience  an  estimated  140%  growth  by  2020.    This  is  driven  by  the  evolution  of  mobile  ticketing,  increases  in  disposable  income,  sports  betting,  and  the  construction  and  upgrade  of  the  live  event  infrastructure.  

A  broker  typically  buys  tickets  from  many  diverse  sources,  including  online  and  physical  box  offices,  individual  ticket  holders,  venues,  artists,  players,  teams,  and  other  brokers.    Upon  acquiring  tickets,  brokers  then  sell  their  inventory  to  individual  fans,  corporations,  and  to  other  brokers.    

Typically,  brokers  charge  high  rates  for  premium  tickets  and  for  tickets  to  sold-­out  events.    Many  tickets  are  sold  for  two  or  three  times  face  value.  On  average,  brokers  realize  gross  margins  of  25%  to  35%  percent  on  sales.    

THE  FRAGMENTED  TICKET  BROKERING  INDUSTRY  HAS  EXPERIENCED  EXPONENTIAL  GROWTH  OVER  THE  LAST  10  YEARS  MAKING  IT  A:    

$6.5  BILLION  A  YEAR  INDUSTRY

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What  is  a  “Roll-­up”  business  acquisition  strategy?

A “Roll-up” is a technique used by investors and companies where multiple small companies in the same market are acquired and merged.

• Principal aim is to reduce costs through economies of scale• Increases the valuation multiples a business can command as it acquires

greater scale• Rationalizes competition in crowded and fragmented markets, where there

are often many small participants but room for only a few to succeed

• An investor faced with an opportunity to invest in two competing companies may reduce risk by simply investing in both and merging them. Roll-ups are often part of the consolidation process as new market sectors begin to mature

• Builds a full-capability company, when it would be too costly or time consuming to develop the missing pieces through internal expansion

• Blending companies into 1 often makes the combined company much more attractive for investment, mergers and acquisitions or an initial public offering

• Kraft Foods is a very early example of a rollup in the dairy industry• Waste Management was the most notable rollup made during the 1970’s and

1980’s. It’s acquisition of 133 small-time haulers quickly made it into the largest waste disposal company in the United States

• AutoNation was also a successful rollup effort in the car dealership space spearheaded by Wayne Huizenga founder of Waste Management

What does a “Roll-up” do?

What is objectives and effects of a

“Roll-up”?

How is a “Roll-up” strategy beneficial to an investor and

the Company?

Examples of successful Roll-up

strategies

Why  is  it  so  valuable  to  the  growth  and  valuation  of  the  stock  of  a  company?

The characteristics that can make a rollup attractive is when there are many small players in a fragmented markets or where technology can play an essential role in revitalizing industries with small margins but where technology can impact growth and profits

What is a few of the characteristics that

make a Roll-up attractive?

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WHY  A  CONSOLIDATION  OR  “ROLL-­UP”  STRATEGY  IN  THE  TICKET  BROKERAGE  INDUSTRY?

ü The U.S. primary ticket market for live music and sporting events is an annual $22 billion market, and is largely transacted online

ü The U.S. secondary ticket market is highly fragmented and ripe for consolidation

ü Forrester Research estimated secondary ticket sales will grow 12% annually

ü The top 20% of online ticket sellers will do approximately 80% of the business

ü Top tier brokers include: StubHub – a formal Ticket Exchange, TicketsNow, TicketLiquidator, CoasttoCoast, the TicketCo and a handful of others

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More  on  why  a  “Roll-­up”  strategy  is  a  good  company  business  strategy  and  a  good  investment

Another reason why companies do Roll-ups is because of the higher earnings multiple that can be achieved in businesses. Due to the larger scale in comparison to smaller mom and pop operations. Those smaller operations are vulnerable to changing markets and poor access to capital markets

A Roll-up strategy is a solid long term

solution for companies

A recent roll-up is Valeant Pharmaceuticals International that used more than $30 billion to acquire over 100 companies

The scale of a Roll-up strategy can be

immense

NES  HAS  IDENTIFIED  THE  PERFECT  MARKET  SEGMENT  TO  INITIATE  A  SUCCESSFUL  

“ROLL-­UP”  BUSINESS  MODEL

THE  TICKET  BROKERAGE  INDUSTRY!

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What  has  NES  done  and  what  does  it  intend  on  doing?

NES has spent the last 3 years seeking an aggregation of highly successful, regional, non-competing companies in the

secondary ticket sales and special events markets

NES located successful companies whose combined annual revenues are over $82 million dollars

NES, through 3rd party Investment Banking firms performed an extensive due diligence on each of the companies

NES has entered into Letters of Intent to acquire 4 companies. Additionally there are 4 more successful companies which are

waiting for the second round of acquisitions.

The strategic objective is to consolidate within the industry and create the largest public Secondary Ticket Brokerage Company in the United States with the opportunity to eventually move

into the international markets

What was NES’s top priority

What did NES’s efforts on seeking

companies achieve?

What was the next step NES took?

What was the result of the

negotiations with the companies?

What is NES’s strategic

objective?

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NES  CONSOLIDATION  BUSINESS  MODEL

Acquisition Pipeline: The Company believes a revenue base ranging from $300 to $400 million can be acquired under favorable terms in the next 3 to 5 years

Increased use of technology in the acquired companies

Organic growth and enhancing profit margins through operating improvements

Acquisition of select ticket and event management companies

Build volume and margins by establishing national positions in specializing local ticket inventories, increasing online marketing and special events management to build volume and margins. Key elements include:

NATIONAL ENTERTAINMENT SPECIALISTS will create shareholder value by increasing market share through:

Inventory acquisition, control and management: A key acquisition criterion will be identifying and acquiring companies that provide access to high value inventory: sold-out concerts and major sporting events, which often bring margins of 35% or greater.

Internet search engine optimization and marketing: As internet marketing strategy, search engine optimization considers how search engines work and what people search for and can greatly improve online visibility.

POS platform: Ticket Evolution Inc. is a new broker owned ticket exchange founded by the owners of Golden Tickets in Dallas Texas. Ticket Evolution enables an internal inventory ticket exchange for NES subsidiaries, thereby greatly reducing the 15% to 25% fees from tickets purchased through current private exchanges.

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Following  the  completion  of  the  506c  Offering  .  .  .What  will  NES  do  next?

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This  is  what  NES  is  going  to  do!

Engage a highly successful professional marketing firm with over 40 years of business history driving accredited and institutional investors from their own marketing database to the NES capital raises. Also their investor marketing campaign should allow NES to secure the required number of shareholders necessary to trade on the Nasdaq stock exchange as a public company.

Investor  Marketing  Campaign

Engage a Seattle based broker dealer who is going to provide their full proprietary marketing program to raise an additional $10,000,000 in equity from their own professional network of qualified investors. The firm is standing by for this Offering to conclude.

Raise  additional  capital

A NYC based institution has give solid indications that they will participate in the open market equity raise. In addition, they are interested in debt/mezzanine financing which is their niche market.

Debt  and  Mezzanine  Financing

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THE 506c 2 TIER OFFERING

 Minimum  Investment

 $14,000

 Number  of  Shares  Per  Unit

 8,000  Price  Per  Share

 $1.75

NES is seeking through its 506c Private Placement Offering

Tier 1 - $994,000 in Pre-IPO Equity Capital

Following completion of our initial Tier 1 Capital raise NES will then begin it’s Tier 2 Round to capitalize acquisitions of its 4 Leading Ticket Brokerage Companies Aggregating combined revenues of over $83mm.

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THE 506c 2 TIER OFFERING

Under rule 144 all shares of common stock held in a fully reporting company will require a minimum hold of 6 months from the purchase date of the stock

Tier 2 - $30,000,000 in Pre-IPO Equity Capital

 Minimum  Investment

 $24,500

 Number  of  Shares  Per  Unit

 7,000  Price  Per  Share

 $3.50

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Total Pre-IPO Offering Capital Raise

$49,994,000

T

Tier 1 Total Offering Amount $ 994,000

Tier 2 Total Offering Amount $30,000,000

Institutional Mezzanine Funding Round $19,000,000

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NES’s  ACQUISITION  PIPELINE

The Company has developed a pipeline of targeted ticket brokerage companies that are ready for acquisition.

After acquiring the platform companies, NES will implement an operating strategy to leverage the infrastructure across its newly acquired subsidiaries to improve certain key metrics, including:

üInventory management

üIncreased margins from selling internal inventory

üand increased volume from SEO and other internet marketing technologies.

The Management of NES have developed extensive relationships in the secondary ticket market with ticket brokers and developing technology companies servicing the industry.

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Important  financial  information  on  the  first  round  of  acquisitions  in  the  NES  pipeline

2016  First  Round  Acquisition  Companies  estimated  EBITDA/Cash  Flow

2016 First Round Acquisition Companies

estimated Gross Revenues

NES First Round Acquisition Price for each

company

The chart below outlines:

ü 2016 estimated gross revenues of companies in 1st round

ü 2016 estimated EBITDA/Cash Flow

ü NES’s acquisition pricing for each company

ü Cash and stock for the acquisition

Cash  portion  of  acquisition  price

Stock  amount  and  stock  pricing  of  the  stock  portion  of  the  acquisition  price

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Important  financial  information  on  the  second round  of  acquisitions  in  the  NES  pipeline

2016  Second  Round  Acquisition  Companies  estimated  EBITDA/Cash  Flow

2016 Second Round Acquisition Companies

estimated Gross Revenues

NES Second Round Acquisition Price for each

company

The chart below outlines:

ü 2016 estimated gross revenues of companies in 2nd round

ü 2016 estimated EBITDA/Cash Flow

ü NES’s acquisition pricing for each company

ü Cash and stock for the acquisition

Cash  portion  of  acquisition  price

Stock  amount  and  stock  pricing  of  the  stock  portion  of  the  acquisition  price

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Combined  first  and  second  round  of  acquisitions  projected financial  information

Estimated  Combined  

EBITDA/Cash  Flow  for  Years  2017  – 2021

Estimated Combined Gross

Revenues for Years 2017 - 2021

Estimated Profit Margin for Years

2017 - 2021

The chart below outlines:

ü First and second round estimated combined gross revenues years 2017 - 2021

ü First and second round estimated combined EBITDA/Cash Flow years 2017 - 2021

ü Estimated growth rate for period 2017 - 2021

ü Estimated Profit Margin for period 2017 - 2021

ü Anticipated Shares Outstanding for period 2017 - 2021

Estimated  Growth  Rate  for  Years  2017  -­

2021

Anticipated  Shares  

Outstanding  for  period  2017  -­ 2021

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308,436425,628

489,480

687,984791,196MARKET  CAPITALIZATION

PROJECTED  POTENTIAL

NOW….  LET’S  REVIEW  THE  POST  FUNDING  PROJECTED  NES“MARKET  CAPITALIZATION”  POTENTIAL  OR  “ENTERPRISE   VALUE”  

National Entertainment Specialists Inc. (NES) is an online event-­‐‑ticket retailer. The industry's leading competitionconsists mainly of privately owned companies and subsidiaries of large, multifaceted firms -­‐‑ the two market leadersbeing TickMaster.com owned by Live Nation Entertainment, Inc. (NYSE -­‐‑ LYV) and StubHub.com owned by Ebay.com(NASDAQ -­‐‑ EBAY). The industry composition creates a challenge in estimating appropriate earnings multiplecomparable. However, LYV and EBAY trade at market cap/EBITDA of around 9.5 and 11.8 respectively. Because both ofthese are mature firms in the later stages of their growth cycles, an earnings multiple for NES can be conservativelyestimated at 12x.

Post-­Funding  Valuation  -­ EBITDA  Multiple

This chart and projections are for illustrative purposes only and are what, in management’s opinion is a potential results fromconsolidations and operations. It is not guaranteed and should not be construed as the only outcome. Most likely, the futureoutcome will be different than these projections.

All value’s are in $ in 000’s

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NES  INTEGRATION  PROCESSü Board  of  Directors – Responsible  for  ultimate   oversight,  control  and  approval  of  Integration  Process.

ü Executive  Committee – Develops  and  approves  Integration  Plan,   identifies  and  assigns  resources,  sets  priorities,  monitors  Integration  Plan  Execution,  reports  to  Board  of  Directors

ü Integration  Task  Force  (ITF) – Implements  NES’s  Integration  Plan,  Assigns  team  members  to  Integration  Projects,  Monitors  and  Reports  progress  of  Integration  Plan

ü Executive  Committee – Develops  and  approves  Integration  Plan,   identifies  and  assigns  resources,  sets  priorities,  monitors  Integration  Plan  Execution,  reports  to  Board  of  Directors

ü Integration  Projects ü Financial  Systems,  Standards,  and  Reporting,  Professional  Services

ü Ticket  Broker  Systems:  Ticket  Evolution,  SEO,  Web  Development,  PPC

ü Ticket  Evolution  Point  of  Sale  Internal  Exchange

ü Ticket  Broker  Systems  Project  Team – Specifies,  Designs,  and  Implements  NES’s  Ticket  Broker  Systems,  including   Ticket  Platform,  SEO,  Web  Development  and  PPC

ü Ticket  Evolution  External  Exchange

ü Financial  Systems  Team – Specifies,  Designs,  and  Implements  NES’s  Financial   Systems,  Standards,  and  Reporting,  and  coordinates  Professional  Services  for  the  Company  and  its  subs

ü Members:  Designated  financial  personnel  from  subsidiaries

ü Members:  Assigned  by  ITF  – with  at  least  one  member  from  each  NES  subsidiary

ü Ticket  Evolution  Point  of  Sale  Internal  Exchange  Project  Team – Specifies,  Designs,  and  Implements  NES  Point  of  Sale  Internal  Exchange via  Ticket  Evolution   Exchange

ü Members:  Assigned  by  ITF  – with  at  least  one  member  from  each  NES  subsidiary

ü Ticket  Evolution  External  Exchange  Project  Team – Specifies,  Designs,  and  Implements  NES’s  utilization   of  Ticket  Evolution  External  Exchange

ü Members:  Assigned  by  ITF  – with  at  least  one  member  from  each  NES  subsidiary

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NES  MANAGEMENT  TEAM

David ClarkInvestor Relations

Stephen L. ParryDirector/President

Gary J. ClarkChairman/CEO

Dave J. ShufflerExecutive Control

Committee

Mark Shaver Director/COO

Learn  more  about  these  seasoned  professionals  ¯

Ram Silverman Executive Control

Committee

Matthew D. Hill Executive Control

Committee

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Gary J. Clark - Chairman and CEO

Mr. Clark spent 10 years in Consumer Products sales with a major InternationalCompany in a field management capacity. Mr. Clark was the founder ofInternational Capital Exchange Inc. Mr. Clark worked with the 4th largestsecurities firm in Hong Kong via US satellite office.

Mr. Clark established program at this time to bring qualified Chinese companies totrade on the US stock Exchanges in which he arranged up to $200,000,000 inbusiness funding.

Mr. Clark spent 25 years as a corporate Vice-President with securities firms suchas Sutro & Co., Paine Webber, and Bateman , Eichler , Hill Richards.

Mr. Clark managed more than $250,000,000 in assets working with PIPE funds,hedge funds, and small equity funds. Mr. Clark is also the founder NationalEntertainment Specialists, Inc. Mr. Clark created the business model to addressthe private ticket brokerage industry and the acquisition opportunities within theindustry.

Mr. Clark recognized that the $6.5 billion-dollar industry represented majoracquisition leverage because the industry is greatly fragmented andundercapitalized making it ripe for consolidation with value.

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Stephen L. Parry - Director and President

Since founding Golden Tickets in 1988, Mr. Parry delivers the strategic andoperational direction for the business in the dynamic ticket brokerage market.Mr. Parry and his Partner opened Golden Sports Tours one year later. Hismarketing experience, personal relationships and deal skills have helped thebusiness grow over the last 28 years to $13 million gross sales.

Mr. Parry’s expertise includes corporate sponsorships, internet and mediacampaigns as well as an intimate appreciation for the demand and supplysophistication for large events.

In 1994, Mr. Parry led an effort together with 50 other ticket brokers to form theNational Association of Ticket Brokers (NATB), with the aim of improvingbusiness standards and enhancing the status of the industry.

Mr. Parry has helped to strategically maneuver the NATB through the majorchanges in the Secondary Ticketing Marketplace. In

Mr. Parry and his partner founded Ticket Evolution in 2010. Currently, (TE) has125 ticket broker investors and currently powers all the transactions made byCheap Tickets and other major Platforms.

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Mark Shaver - Director and COO

Mr. Shaver holds both a B.S. degree in Computer Science and an M.B.A. from theUniversity of Missouri-Columbia.

Prior to founding his wholly owned Ticket Brokerage,, Mr. Shaver started workingin the ticket industry in 2002 and became a partner in a ticket brokeragecompany that year prior.

Mr. Shaver is also a former owner of www.gocleancredit.com, which was soldso that he could concentrate on his own operation

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David Clark - Investor Relations

Since graduating Magna Cum Laude from Fresno State University, Mr. Clark hasspent over forty years on Wall Street and the Commodity Markets. Mr. Clark hasworked with Wall Street, with firms such as Lehman Brothers, Bear Stearns,Merrill Lynch, and L.F. Rothschild.

Mr. Clark has held various titles throughout his career, such as President of anAlternative Investment Platform for Peregrine Financial Group and President ofAsset Management at Sytek, a foreign currency hedge fund at the Chicago Boardof Trade. In addition to representing Wall Street firms, Mr. Clark also worked atthe Chicago Board of Trade.

Mr. Clark’s duties and responsibilities included working with hedge fund managersfor foreign exchange currencies and working in Commodities for PeregrineFinancial Group, responsible for establishing an offshore presence.

For three years, Mr. Clark worked in Nassau Bahamas and served as Director ofthe Alternative Investment Division in which he worked with offshore banks andinstitutions to bring a platform of qualified CTAs to their attention

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Dave J. Shuffler, Executive Control Committee

As co-founder, President and CEO of Shuffler Hill Inc. DBA The Kind Tickets, Mr.Shuffler was instrumental in helping build the Kind Tickets from a two-manoperation selling tickets part time through classified ads, to the largest ticketagency in Orange County, CA. The Kind Tickets has established a nationwideonline presence with up to $6 million in annual sales.

Mr. Shuffler has been a trailblazer in the secondary ticket market providing hisexperience in customer service and marketing, in an industry that lacked theseconcepts. For the past 20 years, Mr. Shuffler has been co-responsible for all day-to-day operations of the business, specifically developing the Kind Tickets visionand business plan, marketing and branding the business. Mr. Shuffler has alsobeen directly responsible for hiring, training, managing and motivatingemployees, acquiring and managing ticket inventory, and developing partnershipsthat allow direct access to ticket inventory of several NFL teams and otherprimary sources.

With over 28 years’ experience in taking smaller companies to the next level, Mr.Shuffler helped take Coastal Safe and Security from a mom and pop businessselling and installing safes on a local level to a major manufacturer landing largenational chain accounts such as Target and Kmart department stores and nationalfast food chains such as El Pollo Loco and Taco Bell. Mr. Shuffler alsospearheaded the development and marketing of a new security division for TheKnow Company, immediately landing Bank of America as the first national chainaccount. This was significant because The Know Company traditionally only dealtwith local fire departments and municipalities

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Matthew D. Hill, Executive Control Committee

As co-founder, Vice President & COO of Shuffler Hill Inc. DBA The Kind Tickets,Mr. Hill in conjunction with Mr. Shuffler was instrumental in helping build The KindTickets. With over 25 years of experience as an entrepreneur, 20 of these yearshave been spent breaking through the street image of the secondary ticketindustry and setting the trend for the current industry standard.

Mr. Hill has been co-responsible for all day-to-day operations of the business i.e.,developing the Company’s infrastructure and vision, negotiating contracts withadvertisers and vendors, Haranguing and managing the webmaster, executingoffice and equipment leases, obtaining legal, accounting and insurance services,managing cash flow, building banking relationships, managing inventory andcompany budget.

Over the past 20 years, Mr. Hill has developed personal relationships with ticketsuppliers and contacts with several primary venues allowing seamless andsometimes exclusive acquisition of ticket inventory. Mr. Hill not only has a knackfor managing money but the foresight to see financial trends and act accordingly.With Mr. Hill’s passion for developing and managing companies and his 25 yearsof preparation, he continues to be a leader and trend setter in the secondaryticket industry.

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Ram Silverman, Executive Control Committee

Mr. Silverman, with the help of a $20,000 loan, co-founded GoldenTickets. Within 3 years, Golden Tickets had become a leader in the secondaryticket market growing the business from $1,000,000 in annual sales to$4,000,000. Since then, annual sales have grown to $11,000,000-$13,000,000yearly on a consistent basis. In 1990, with the help of Mr. Silverman’s businesspartner, Steve Parry, they started a new Sports Tour business called GoldenSports Tours which provides sports packages to all major events. This wasmostly driven by the need of large companies to have access to comprehensivesports packages to be used as incentives for either new customers or employees.Golden Sports Tours has also become a main supplier of these packages to travelagents all across the US.

In 1994, Golden Tickets was one of 50 founding members to participate instarting a trade organization called the National Association of Ticket Brokers(NATB). This association has grown from 50 brokers to well over 200 brokers in18 years. In 2003, Mr. Silverman and his partner built a hospitality housespecifically for the Masters Golf Tournament, a specialty of Golden Tickets calledthe 1018 Club. They opened their doors specifically to Fortune 500 companiesand individuals alike to bring a superior level of hospitality to those attending thetournament.

Mr. Silverman has dedicated the past 28 years building Golden Tickets and afterall these years still has the passion to continually try and figure out new ways togrow Golden Tickets and all of the other business ventures he is involved with.

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