AMERELITE SOLUTIONS, INC.
COMPANY OVERVIEW
AmerElite Solutions, Inc. (AMEL) introduces CollagenFusion(TM) by Collesense(TM), a product line that contains the next generation, anti-aging ingredient - Collamin_G?. It is an anti-aging, anti-wrinkle solution that delivers ingredients native to the skin, in the form of nanomolecules that support the body's natural process of collagen regeneration AmerElite is intently focused on the successful development, production, distribution and sales of the Collesense(TM) brand. We are confident in the enormous potential of our revolutionary Anti-Wrinkle CollagenFusion(TM) product line and we are committed to its successful distribution to customers all over the world.
Based in Phoenix, Arizona, our dedicated team is responsible for the research and development, production, distribution, marketing and sales of our entire product line. We control the products from manufacturing to the sale to the consumer, insuring that the customer receives the high quality product originally conceived and designed, while maximizing profits.
AmerElite Solutions, Inc. is a Nevada corporation currently being quoted on www.pinksheets.com on an unsolicited basis under the symbol AMEL. We have applied to the NASD and upon approval, we will be able to quote our stock on a solicited basis. By December 2006, it is our intention to seek approval from the NASD to be piggyback qualified and to be fully trading. By January 2007 it is our intention to engage a CPA firm to prepare audited financial statements. Our Company Internet site is www.amerelitesolutions.com and our product Internet site is www.collagenfusion.com
The CollagenFusion(TM) System by Collesense(TM) combines next generation science with nature to form a product line that works on the surface and below the skin to return our skin to a youthful state. Collamin_G(TM), the master ingredient in the CollagenFusion(TM) System, was invented by Dr. Ladislav Pataki, PhD., CSc. - the highest-ranking sports scientist to defect to the United States. Dr. Pataki is currently the Director of Research and Development for AmerElite. It is a revolutionary formula that delivers nanomolecules and is designed to treat connective tissue related conditions such as skin (wrinkles), joints, tendons, and bones. Connective tissue is made of two proteins - elastin and collagen. Collamin_G(TM) is an anti-wrinkle ingredient that was invented to provide nourishment to the body to support its natural process of collagen reproduction that slows down as we get older. Wrinkles are the result of the collagen tissue deterioration in the skin.
Nanotechnology has allowed Dr. Pataki to develop a product that is able to penetrate the pores of the skin with ingredients that are native to the human body. Due to physical properties, normal absorption of collagen into the skin is scientifically impossible. The problem is that collagen molecules form a cluster, similar to a cotton ball. This cluster is much larger than the pores of the skin that prevents the collagen molecule cluster from penetrating the skin. Many times this will leave a film that covers wrinkles or moisturizes the skin, but does not deal with the source of the problem, which lies below the skin.
Dr. Pataki has developed a formula of ingredients native to the skin that stimulates the skin's own collagen molecules. These nanomolecules are able to penetrate the pores in the skin one by one. The elements of Collamin_G? are approximately 200-500 times smaller than the pores of the skin, which means that approximately 200-500 nanosized molecules penetrate the skin through a single pore at one time. This allows a rapid transfer of essential elements through the epidermis in order to work with the body at the source of the wrinkles.
In addition to the rapid and effective absorption of the nanomolecules, the CollagenFusion(TM) Systems' success is based on providing ingredients that are native to the skin. These essential elements provide the proper nutrients the body requires to support the natural process of collagen genesis. The collagen molecules provide strength to the skin and the strength of these molecules determines the elasticity of the skin. As our skin loses its elasticity, wrinkles begin to form. The collagen molecules are made from three horizontal threads that are braided together. These threads are 'glued' together to form a strong tissue. Due to aging and other nutritional deficiencies, we start to lose the "glue" and the collagen chains begin to weaken. This is when the skin begins to lose its elasticity and wrinkles begin to form. Collamin_G? contains nutritional elements that our bodies use to strengthen the collagen tissue, and support the body's natural process of collagen regeneration.
Statistics show that in 2003, nearly 90 million American consumers use, or have used products or procedures in an attempt to reduce the visible signs of aging (National Consumers League). The anti-aging market is booming. In 2004, Anti-Aging product sales totaled over $20 billion and are expected to grow to over $30 billion in 2009 (Freedonia Group).
AmerElite Solutions, Inc. has developed a comprehensive direct-response advertising and promotion strategy. AmerElite will roll out a national campaign starting with infomercials to build awareness in the public's eye. Outside agencies, i.e. professional experts will be used to produce all of our infomercials, television and radio ads, and print advertising. Through our public relations company, we will remain in constant contact with newspapers and journals that seek stories about our industries.
The CollagenFusion(TM) product line will also be promoted through high profile, user -friendly web sites, direct mail, newspapers, radio, television and kiosks in regional malls. The objective of this aggressive advertising is to educate and excite consumers from our target markets. We believe the direct-response ad campaign will be the most effective vehicle to establish our projected market share.
The primary market for our CollagenFusion(TM) product line is the Baby Boomer generation. This market accounts for an estimated 78 million Americans between the ages of 42 and 60 years old (US Census Bureau). This group has been called the most educated generation in the history of our country. 77% of the spending in this country is done by people 50 years and older (Yankelovich Research). This generation has a sense of entitlement that they're going to stay young and live forever. They are willing and able to pay for products that provides anti-aging benefits.
Our secondary market is known as Gen X. This generation represents 44 million people who are just beginning to turn 40, also known as the 'ME' generation (Yankelovich Research). This group is devoting more time and money to skincare and seeking facial treatments at a younger age. The benefits of the CollagenFusion(TM) line can be marketed to this generation as both repairing products and as preventative products.
Combined, Gen X and the Baby Boomers account for 42% of the population in the United States. The combined annual buying power is 1.7 trillion dollars (Yankelovich Research). Our primary sales objective is not to compete with other anti-wrinkle products on the shelves of drug stores, super markets or mass merchandise/discount stores. Our aggressive advertising campaign will reach potential customers initially through a series of infomercials designed to build awareness of the uniqueness and value of stimulating the body to repair and strengthen its collagen molecules.
With all the products available today, there is no single company or brand that holds a large part of the growing anti-aging market. We don't see the competition as any one product or group of products but moreover the entire category. The anti-aging market is thriving and according to one group, sales will continue to rise over the next 10-15 years (NPD). This long term growth gives the company a fantastic opportunity to not only convert consumers who are currently using anti-wrinkle products, but to build a consumer franchise with the millions of baby boomers and Gen Xers positioned to enter the market over the next few years. As consumers decide they want to reduce and remove the signs of aging, we believe our product line based on next generation science that provides nutrients to support the body's natural process of collagen regeneration will make sense to the educated consumer.
We will develop, manufacture, warehouse, distribute and sell CollagenFusion(TM) direct to the consumer. As our market penetration matures, we will place the CollagenFusion(TM) product line in super regional malls throughout the country on carts and kiosks in the main traffic area of each mall. We know of no other anti-aging/anti-wrinkle product that is being presented to the public in this manner. The consumer will be able to purchase the product by telephone, Internet or at the local mall. Our advertising campaign will feature CollagenFusion(TM) infomercials, regular TV spots and radio. We believe this kind of exposure will provide us with a unique competitive advantage.
The CollagenFusion(TM) product line offers a daily system designed to work with the body's natural systems to replenish, renew and return the skin to a youthful state. Each and every product in the CollagenFusion(TM) family of products will include our revolutionary anti-wrinkle ingredient Collamin_G(TM). Initially, the CollagenFusion(TM) System will consist of six items. It includes Cleansing Milk, a gentle Face Scrub, Serum_G(TM) (our magic bullet), a Daily Moisturizer, an Eye Balm and a Night Cream. Products that are in the development stage include a facial mask, toner, body lotion and body wash. With daily use, the consumer should see a dramatic reduction in the appearance of wrinkles, tighter skin and a fresh new face.
With a revolutionary, next-generation anti-wrinkle product line, an established primary market with sales projected to grow over the next 10-15 years and a profitable direct-response advertising campaign, AmerElite Solutions, Inc. is positioned for a successful and profitable future.
FOCUS GROUPS
We commissioned several focus groups of twelve individuals to analyze the six products that make up the CollagenFusion(TM) System. The group consisted of sales representatives from several fine line cosmetic companies, aestheticians, and consumers to try each of the products and provide their feedback on the following - absorption, fragrance, texture and color. The final products that make up the CollagenFusion(TM) System were all given overall excellent ratings by these professionals and consumers.
MARKETING PLAN
The goal of this marketing analysis and plan is to outline the strategies, tactics and programs that will educate our potential customers to the level that they will want to make a purchase. Our Advertising Consultants helped us to determine what market penetration we could expect from the amount of advertising dollars that we are willing to invest based on the information within their market analysis.
The average life expectancy in 1900 was 47 years (Alliance for Aging Research). By 2000, life expectancy had risen to over 77 years (CDC). Total population has grown to over 296 million (US Census Bureau). Along with this growth and life expectancy change, the public has become much more aware of the condition of their bodies. Concern for our physical appearance now takes center stage in our daily routine. Today the Anti-Aging market is booming. In 2004, Anti-Aging product sales totaled over $20 billion (Freedonia Group). As the Baby Boomers are entering their 50's, the high-end cosmetic industry is growing at double-digit rates. Since 2003, nearly 90 million American consumers use or have used, products or procedures in an attempt to reduce the visible signs of aging (National Consumers League, May 2004). This growth includes topical cosmetic applications, cosmetic injections, and cosmetic surgery. Consumers are hungry for products that make them look and feel young and are going to great length and expense to preserve a youthful appearance. With new technologies and discoveries in the cosmetic and health care industry, this generation of Baby Boomers doesn't expect to look and feel their age. They have a sense of entitlement that they're going to stay young forever. They are willing and able to pay for products that provides anti-aging benefits. As the President of L'OR?AL Paris,
Carol Hamilton states, "now you have a whole generation who basically believes that they never have to see a wrinkle. This is a powerful movement in the beauty industry."
Our direct response plan fits within the overall business plan of controlling all aspects of the Coll?sense? line of products, from research and development, to manufacturing, warehousing, distribution and direct sales to the customer. We will start with infomercials broadcaster over nationwide cable channels. This will be followed by regular TV ads to reinforce the message, plus radio and print ads to broaden the base of potential customers and to build product recognition. At each stage, the consumer will be invited to call an 800 number to place an order. Once a targeted level of penetration is achieved, we will add additional distribution and sales through a network of carts in regional malls selling the Collesense? line of anti-aging/anti-wrinkle products. Our commercial message will be updated approximately every 6 months to keep the message fresh. We are continually testing our product line to provide exciting new items to bring to the public.
The CollagenFusion(TM) product line will be introduced as a system. Five of the products have been selected to form a kit and be featured as the CollagenFusion(TM) System for skin therapy. This kit will be offered at a special price if purchased during the introductory time frame. Those five products are Cleansing Milk, Facial Scrub, Serum_G(TM) (our magic bullet), an Eye Balm and a Daytime Moisturizer. An additional product is a Night Cream. Other products such as, Mask, Toner, Hand Soap, Shower Gel and a Body Lotion will be introduced at a later date. While infomercials will be the main thrust of our marketing plan we will also use heavy regular TV advertising along with radio and print.
We have put together a complete team of companies with world-class ability and a proven track record to write, produce and direct the production of our new infomercial; design brochures, newsletters, direct mail, media kits and ad layout and design; research the proper product positioning to create result-oriented media placement, obtain the absolute best time periods and the best rates and placement of advertising and to manufacture the highest quality beauty products on a timely basis. We have contracted with the following companies:
Admark Communications, Inc.
AdMark Communications - a full service advertising agency specializing in broadcast media, founded in 1975 by Kevin O' Shaughnessy, has annual billings over 3 million dollars. AdMark builds and maintains personal relationships with our local, regional and national accounts. AdMark's research media and creative techniques are contemporary, effective and always budget conscience.
Kevin O'Shaughnessy is a consultant for AmerElite and has put together the team of Marcum Media and Gordon Creative Associates to write, produce and direct the infomercial and place the advertising. Marcum Media is doing the advertising placement. Admark will be responsible for the review of the cost and placement of all advertising by Marcum Media and will report directly our management. (See Admark Communications, Inc.'s Contract - Exhibit B)
Marcum Media, L.L.C.
Marcum Media L.L.C. was founded by Nancy Marcum, a pioneer in the direct response industry since 1984. Marcum Media provides full service Marketing and Media Management to entrepreneurs in the infomercial industry. Marcum has knowledge of product positioning, infomercial production, product selection, telemarketing and fulfillment. This experience in the infomercial industry helps her understand buyer behavior and creates results-oriented media placement. Throughout the past two decades, Nancy and her team have tested thousands of infomercials. Marcum Media has long-standing relationships with national cable networks and broadcast stations and is able to vie for the absolute best time periods and the best rates. In 1984, Nancy Marcum formed Media Arts International and two years later sold the company to a New York Stock Exchange Company and continued to operate the Company as its CEO for 5 years. Nancy Marcum has managed many major accounts throughout her career with numerous accounts having annual budgets between $30,000,000 to $50,000,000. Nancy Marcum has also written a book, Do you want to make a million?, Turn your big idea into a fortune with the power of infomercial marketing. See www.marcummedia.com for additional information. (See Marcum Media, L.L.C.'s Contract - Exhibit C)
Creative Intuition
Creative Intuition is a graphic design and marketing communications studio. They create extraordinary results for their clients by providing a superior level of service and by becoming a trusted partner for their creative marketing needs. Creative Intuition was founded by Dorothy Wolden in 1998. After working as an in-house designer for large corporations and as a creative director for a successful marketing firm she started her own firm. She saw a gap in the services provided to small and mid sized businesses. Companies had to pay high prices for good designs or settle for mediocre designs because of budget constraints. Based on her extensive background in graphic design and marketing communications, she felt she could offer these companies the perfect solution - great design without breaking the bank. See www.cistudio.com for additional information. Creative Intuition will help us with our corporate identity and design, and our print and packaging items, such as catalogs, brochures, newsletters, direct mail, media kits, ad layout and design. (See Creative Intuition's Contract - Exhibit D)
SA Laboratories
SA Laboratories is a manufacturer of a full line of beauty products. Currently they supply products for the Starwood Hotel chain and many other major companies. SA Laboratories has a state of the art, fully automated manufacturing plant located in Phoenix Arizona capable of manufacturing in excess of 50,000 units per day. SA Laboratories will manufacture a Cleansing milk, Face scrub, Daily moisturizer, Eye Balm and Night Cream. Based on our specifications, SA Labs will purchase all ingredients except the Collamin_G(TM), which we will supply, and SA Labs will blend these products as part of the manufacturing process. SA Laboratories has provided a written quote and needs 6-8 weeks lead time to obtain the ingredients and manufacture the products. SA requires 50% payment with the order and 50% payment upon completion and requires a minimum order quantity of each product being ordered. (See SA Laboratories' Policy Requirements and Proposals - Exhibit E)
Inpulse Response Group, Inc.
Inpulse a Phoenix based company is one of the top call centers in the country. They have 3 locations with over 500 seats with nearly 1,000 employees. Inpulse will provide direct marketing response services for the development, administration and implementation of AmerElite's Direct Response Marketing Campaign. Inpulse has already developed a sales script for their sales representative to use in the selling of the CollagenFusion products. Inpulse will receive inbound telephone calls generated by AmerElite's advertising and promote and sell the CollagenFusion products. Inpulse will also generate outbound telephone calls to AmerElite's customers' list to promote and sell the CollagenFusion Products. Inpulse has already setup a format to transfer customer information to PMA, the fulfillment center. (See Inpulse Response Group's Agreement - Exhibit F)
Professional Marketing Associates
Professional Marketing Associates (PMA) a Phoenix based full service fulfillment center that was established 18 years ago and services more than fifty companies. PMA will ship all orders received from the infomercials or taken from our Internet site. PMA will also provide customer service support for all orders shipped. PMA has already established electronic communications to receive customer orders from the call center, Inpulse. Once PMA charges the customer's credit card they will process and ship the customer's order. (See Professional Marketing Associates' Agreement - Exhibit G)
ADVERTISING
We have developed a comprehensive direct-response advertising and promotion strategy, which will be implemented. We have contracted outside professional experts, i.e., agencies, to produce our infomercials, television, and radio and print ads. Through our Public Relations Agency we will remain in constant contact with web sites, newspapers and journals that seek stories about our industry.
Our target market is directed primarily at the 78 million strong Baby Boomer segment of the population (US Census Bureau). Every 8 seconds a boomer turns 50 (AARP). People 50+ years old have 57% of the national wealth (Yankelovich Group) and as a group, people age 50-60 have an annual buying power of over 1 trillion dollars (BusinessWeek online). They've also been tabbed the most educated generation in the history of the country. Our infomercials will be designed to educate the customer about the efficacy and uniqueness of our products. An educated customer becomes a loyal customer. We will also promote our products through high profile, user friendly web sites, through direct mail, newspapers, radio, television and carts in regional malls. The objective of this aggressive advertising is to educate and excite consumers from our target markets. We believe the direct-response ad campaign will be the most cost-effective vehicle to establish our projected market share.
Print ads vary in price based on frequency and size. They also vary from market to market. We will depend more on frequency than size. In the average market with a mid-term contract, the price will be approximately $3000 to $4000 per ad per week.
We will build a mailing list based on the response we get from our infomercials. We will add to those lists from direct mail professionals. Our goal is to reach a list of 50,000. Once we have sufficient numbers on the list we will begin a monthly direct mail information and advertising newsletter.
Radio pricing strategy not only varies from market to market but also from station to station. Time of day, length of ad, frequency of ad and length of contract all play a part in the costs. We understand all aspects of placing ads and will take the up most care in the selection of when and where to run radio ads.
Television, with its aspects of sight and sound is still the best way to reach the public. Regular 30 second ads will allow us to run ads more frequently and on more than one station at a time. The beginning of every ad campaign, in each new marketplace we enter, will begin with infomercials. We believe this is the best way to educate and excite the consumer.
Using our aggressive approach of reaching our target audience through infomercials broadcasted on nationwide cable television we believe we can reach most of the public in a very short period of time.
As with any good advertising campaign, our program has flexibility, and we are able to make adjustments as they are needed. This advertising program is based on tried and true principals and we believe this approach will lead AmerElite Solutions Inc. to a successful future.
DISTRIBUTION METHOD
Initially, we have signed a contract with a Professional Marketing Associates (PMA) a Phoenix based fulfillment center to ship orders received from the infomercials or taken from our Internet site. PMA will also provide customer service support for all orders shipped. PMA has already established electronic communications with Inpulse Response Group to receive the customer orders from the call center. PMA is also electronically connected to TransFirst for credit card processing. Once PMA charges the customer's credit card they process and ship the order. As the second phase of the marketing plan is initiated we will sell directly to licensed distributors running carts in major regional malls across the country.
RESEARCH & DEVELOPMENT
Our Research and Development is based in California. The head of Research and Development for the Company is Dr. Ladislav Pataki, PhD., CSc., ISASc. Dr. Pataki earned his PhD. from Komenski University in Bratislava, Czechoslovakia in 1971. He earned his science degree in 1977 as a Candidate of Science in theory and methodology of Sports Sciences. In 1985, he earned his Independent Science of Academia of Sciences of SSR.
Dr. Pataki has performed three years of research and testing on Collamin_G(TM). A personal injury to a knee ligament led Dr. Pataki to research why the ligament stretched. Due to a common biotechnical reason, he found that there were nutrient deficiencies weakening the connective tissue. This same weakening of collagen or connective tissue is what causes our skin to sag and wrinkles to form. Through intensive research and development he discovered the product known as Collamin_G(TM). Dr. Pataki is constantly working to improve current products and develop new products for the Company.
NEW PRODUCT DEVELOPMENT
Dr. Ladislav Pataki, Director of Research and Development and the creator of Collamin_G(TM), has been creating new products and formulas for the last 10 years. Three years ago, Dr. Pataki developed Collamin_G(TM).
We plan to introduce Dr. Pataki's innovative formula through CollagenFusion(TM) products for the entire body. The next generation discovery, Collamin_G(TM), will be added to several new products such as a shower gel, body lotion and body wash to distribute Collamin_G to the whole body. In addition, it will be added to a facial mask, facial toner and facial cleanser for additional toning of the face. He will continue to develop a process for absorption so that Collamin_G(TM) can be used in treating connective tissue conditions throughout the body. These include products to treat cartilage deterioration in the joints, weakened ligaments and tendons, deteriorated discs in the spine and knees and any other parts of the body where weakened connective tissue may cause discomfort or potential injury.
We are totally committed to the Research and Development necessary to ensure continuous flow of new and improved products to the marketplace. Dr. Pataki and his team's number one goal is to continue to develop new, natural products that will help people reach their individual health and wellness goals.
NEAR TERM RETURN
AmerElite Solutions is requesting a minimum investment of $300,000 from the issuance of debt or the sale of its common stock and has a "near term return".
AmerElite purchased the anti-wrinkle product, Collamin_G and has spent nearly a year in the development of the CollagenFusion line of cosmetic products. During this time AmerElite has invested in excess of $500,000 from the purchase, market research and development of the CollagenFusion product line. AmerElite has the necessary contracts in place to be selling CollagenFusion products within 45 to 60 days from the time it has funds available to purchase the inventory.
To facilitate our direct marketing and advertising program, AmerElite has spent nearly $200,000 in the production of a professional quality infomercial to be aired nationally on various cable networks. For infomercial production AmerElite has contracted with Marcum Media of Phoenix, Arizona. Marcum Media is owned by Nancy Marcum who has 23 years experience in the infomercial business. We will also take advantage of this experience for the purchase of the media time in the absolute best time periods and for the best possible rates.
Once the infomercial is aired, Direct Response Television callers will be directed to one of the largest call centers in the country, Inpulse Response Group located in Phoenix, Arizona with whom AmerElite has a contract. Inpulse already has their employees fully trained to handle the calls on this CollagenFusion infomercial.
AmerElite has signed a fulfillment contract with Professional Marketing Associates (PMA) to fill the orders, ship the products, and provide customer service support to the customers. PMA has already established electronic communications with Inpulse to receive the customer orders from the call center. PMA is also electronically connected to TransFirst, AmerElite's credit card processor. Once PMA charges the customer's credit card they process and ship the order.
Upon receipt of the credit card information by TransFirst, it is processed through the banking system and receipts will be deposited in AmerElite's bank account at Bank of America within 48 hours.
AmerElite has spent nearly $300,000 in the purchase of Collamin_G and the development of an exclusive anti-wrinkle line of CollagenFusion products, which includes the Collamin_G. AmerElite has a written agreement with its manufacturer, SA Laboratories, which includes price quotes on all products to be manufactured.
In addition, AmerElite has written quotations from its three other suppliers to provide the product container, the shipping containers and the labels. Each supplier does have a minimum order quantity and requires a payment of 50% with the Purchase Order and will provide the delivery of the materials within 45 days.
To get this process started AmerElite has to issue purchase orders with checks in the amount of 50% of the order to its manufacturer and suppliers. The products will be manufactured within 45 days and delivered to the fulfillment center. As the products are being manufactured Marcum Media will be scheduling times to run the infomercials that will coincide with delivery of the product to the fulfillment center. With all on these contracts in place AmerElite will be able to sell its products and receive funds within 45 to 60 days of funding.