Investment Opportunity

INVESTMENT

Series 1 Non-Voting Units

Name: Development of a 5-star Hotel & Resort in Cartagena/Colombia

Number of units: 5,000

Price per unit: $1,200

Annual dividend: 12%

Redemption: Greater of market price and the issue price per unit at end of the fourth year

VISION

BUILD A UNIQUE, LUXURIOUS BEACH RESORT & SPA IN CARTAGENA THE ONLY 5-STAR ALL-INCLUSIVE WITH ADULTS ONLY AND FAMILY SECTIONS BUILT AROUND A MASSIVE BLUE WATER LAGOON

MARKET OPPORTUNITY

CARTAGENA is an emerging mass market tourist destination, reminiscent of the Mayan Riviera & Punta Cana in their early development

THE PROBLEM

Successful vacation destinations offer a full range of hotel typesCartagena falls short on luxury all-inclusives. There

are only two all-inclusive hotels in Cartagena and none of the hotels planned and under construction have been designated as all-inclusive.

All-Inclusive vacationers search for new destinations and a “different experience”Cartagena & its historic center fill the first need but

current and new hotel developments are not meeting the differentiation need

OUR PRODUCT 5-star All-Inclusive Resort & Spa

Massive Lagoon with a Blue Water, White Sand Beach – the only one in Cartagena

Two hotels in one...Adults Only and Families

Luxurious Villas & Rooms in and around the lagoon. None less than 60 m2

Gourmet Dining – 6 dining venues, providing a unique, high quality culinary experience

Variety of Pools

Entertainment that dazzles

First class Spa & Sport complex

Child’s Play - multi sensory nursery, unique outdoor play facilities and the highest quality childcare

CONCEPT

Hotel design taken from two concepts: Villas in the water (Maldives) Man-made blue water lagoon

THE MASTER PLAN

VILLA SUITES

HOTEL TOWER

Hotel Cost

Capital Cost – US$100millionLand $16,000,000Construction Costs $44,000,000Furniture & Fixtures $11,000,000Professional Fees & Services $ 7,000,000Working Capital $15,000,000Capitalized interest $ 7,000,000

SOURCE OF FUNDS

• Crowdfunding $ 6,000,000

• Debt Financing $ 45,000,000

• Sale of Real Estate $ 57,000,000

• Total $108,000,000

NOTE: $6,000,000 of the Sale of Real Estate proceeds will be used to redeem the Series 1 Units and $2,000,000 will be used for working capital.

TRACTION

PROMOTER: Alberto Araujo, part of team that built two hotels

DEVELOPER: Fernando Araujo & Prodegi, led the design and construction of hotels in Cartagena & Panama

ARCHITECT: Carlos Ott, known for award-winning designs

HOTEL MANAGEMENT COMPANY: Karisma, offers a unique, luxurious product and complete distribution system

REAL ESTATE COMPANY: Araujo y Segovia, one of the largest real estate companies in Colombia will lead the marketing and selling of real estate to Colombian investors

LAND: 91 hectares prime, spectacular beach front real estate

KARISMA HOTELS & RESORTS

Brands El Dorado Spa Resorts & Hotels - Adults Only Azul Hotels - Adults & Families Gourmet Inclusive® Experience

Hotel operations in Colombia, Mexico, Jamaica, and Europe

Knows Colombia

Supported by an extensive Tour Operator Network

Centralized marketing, sales, call centre, social networking

MARKETING

Winter primary marketsNortheast & Midwest USACanadaColombia

Summer primary marketsUK & EuropeSouthern USASouth AmericaColombia

GROWTH STRATEGY

Core Tour Operators: will add origin markets

Specialty tour operators: new origin markets

Piggyback on expected airline flight frequencies and continuous promotions

COMPETITION

In Cartagena All-inclusive Hotels:

Decameron Baru Occidental Grand Cartagena

4 and 5 Star EP Hotels

Other vacation destinations 4 and 5 Star All-inclusive Mexico: primarily Cancun/Riviera Maya Dominican Republic: primarily Punta Cana Cuba Caribbean

SWOT analysis

STRENGTHS Hotel Concept 2 hotels in one Experienced Team Cartagena & its historic center Reliable year round warm

weather Karisma

OPPORTUNITIES Develop extra land

WEAKNESSES Colombia’s reputation

THREATS Lack of airlift to

Cartagena Hotel capacity

REVENUE MODEL

Several channels of distribution in play:Tour operatorsOnline travel agenciesTravel agency networksDirect salesConvention organizers

Rates for each depend on commitment and volume

REVENUE MODELBase Room Rates AIPPPN Mix US$ COP$

(all-inclusive per person per night)

HOTEL ROOMS

Tour Operators $100 35% $35 Online Travel

Agencies $120 35% $42 Groups and

Conventions $160 10% $16 Atolones Direct Sales $160 20% $32

$125 $312,500 $310,000

VILLAS

Tour Operators $140 25% $35 Online Travel

Agencies $170 40% $68 Groups and

Conventions $220 10% $22 Atolones Direct Sales $220 25% $55

$180 $450,000

$450,000 VILLA SUITESTour Operators $175 15% $26

Online Travel Agencies $210 45% $95

Groups and Conventions $280 10% $28

Atolones Direct Sales $280 30% $84 $233 $581,875

$580,000

Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 -

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Summary Income Projection

SalesEBITDAIncome After Tax

US$m

illions

FINANCIALS – in COP$MILLIONS

  Year 1 Year 2 Year 3 Year 4 Year 5 Year 10

Sales $120,117 $131,023 $142,644 $155,446 $168,199 $229,980Direct costs 30,592 33,617 36,869 40,474 44,117 58,611Direct profit 89,525 97,406 105,775 114,972 124,081 171,369

Operating exp. 44,094 47,437 50,985 54,861 58,747 78,032Asset

Replacement4,204 5,241 5,706 6,218 6,728 9,199

Mgmt Fees 8,842 9,625 10,521 11,511 12,488 17,491EBITDA 32,385 35,103 38,563 42,382 46,118 66,647

Depreciation 12,275 12,275 12,275 12,275 12,275 12,275Non operating 14,065 13,712 13,034 12,224 11,401 8,121Income Before

Tax6,045 9,117 13,253 17,883 22,443 46,251

Cree tax 544 820 1,192 1,609 2019 4,162Income After

Tax5,501  8,297  12,061  16,274  20,424  42,089 

Net Margin 5% 6% 8% 10% 12% 18%Occupancy 65% 68% 71% 74% 77% 80%

ADR per Person 444,692 462,840 480,979 500,218 520,226 691,623

FINANCIALS – in US$000’S

 Year 1 Year 2 Year 3 Year 4 Year 5 Year 10

Sales $44,620 $47,714 $50,926 $54,409 $57,721 $71,489

Direct costs 11,364 12,242 13,163 14,167 15,140 18,219

Direct profit 33,256 35,472 37,763 40,242 42,581 53,270

Operating exp. 16,379 17,275 18,203 19,202 20,160 24,256

Asset Replacement

1,562 1,909 2,037 2,177 2,309 2,860

Management Fees

3,285 3,505 3,756 4,029 4,286 5,437

EBITDA 12,030 12,783 13,768 14,834 15,826 20,717

Depreciation 4,560 4,470 4,382 4,296 4,212 3,816

Non-Operating 5,225 4,993 4,653 4,279 3,912 2,524

Income Before Tax

2,246 3,320 4,732 6,259 7,702 14,377

Cree Tax 202 299 426 563 693 1,294

Income After Tax 

2,043  3,021  4,306  5,696  7,009  13,083 

Net Margin 5% 6% 8% 10% 12% 18%

Occupancy 65% 68% 71% 74% 77% 80%

ADR per Person 165 168 172 175 179 215

OUR DEVELOPMENT TEAM

The Architect: Carlos Ott

The Developer: Fernando Araujo

Founder: Leo Desrochers

Founder: Alberto Araujo

OUR BOARD

LEO DESROCHERSALBERTO ARAUJO

JUAN JAIME FLOREZ CAMILLO CAVIEDES

KEYS TO SUCCESS

Product Differentiation; value for money

Karisma’s 5-star management and their distribution system

An outstanding service ethic from top to bottom

Cartagena’s growing appeal

INVESTMENT

Series 1 Non-Voting Units

Name: Development of a 5-star Hotel & Resort in Cartagena/Colombia

Number of units: 5,000

Price per unit: $1,200

Annual dividend: 12%

Redemption: Greater of market price and the issue price per unit at end of the fourth year

USE OF CROWDFUNDS

Land Purchase – payments 1 & 2 US$5,323,000

Startup Funds 367,000Design Work 180,000

General Working Capital 130,000