establishing our own factory sales force. With regard to international sales, except for "opportunity sales," we will not launch our formal effort until we have adequately penetrated the domestic market. However, we will explore licensing our technology abroad.     In the beginning, DAY will team with a limited number of sales reps and wholesalers who have proven abilities in successfully introducing new electronic products. At first, the emphasis will be on developing market penetration in a few carefully chosen regions near our manufacturing facility. The reason for this approach is to properly identify effective pricing techniques and marketing strategies. Information gathered will be used to fine tune stocking requirements, manufacturing rate requirements, etc. for general North American distribution. In short, we want to be sure we are walking with a firm and steady tread before we begin to run.     It is particularly important that we work with good sales reps. To this end, we have contacted a number of people knowledgeable in the field (retailers, several small manufacturers of retail products and two major wholesalers) for recommendations. We have received a number and plan to hold interviews soon. We also plan an aggressive campaign of marketing at consumer electronics and related trade shows. To this end, we have designed and built an attractive display booth that will effectively demonstrate both products in operation. We plan to attend up to ten trade shows in the next six months and will use them as a showcase around which to meet potential sales reps, wholesalers and customers. In addition, this will be our opportunity to introduce our products to the consumer electronics industry press. To this end, we have hired an experienced media consultant to work with us in developing a press package. She has already arranged for several articles about the Kinet-O-Scroll to appear in several popular electronics magazines.     DAY INTERNATIONAL, INC. anticipates expanding the principal sales areas toward the end of the first year of operation. As part of doing this, we hope our higher manufacturing volume will allow us to lower prices as well as to improve our products based on feedback from buyers. In subsequent years, DAY will continue to use sales reps and wholesalers as our main sales force, since they provide many advantages over employee salespeople. The principal advantage, of course, is that these people are paid a commission (sales reps) or fixed percentage (wholesalers) of each sale, but receive no salary.     Wholesalers have been included in the overall merchandising effort because they offer an established way to get our product onto the retailers shelves. Many have been in business for years and offer retailers local delivery, computerized ordering and other valuable services. They are expected to play a supportive role to our sales reps, who will have the primary responsibility to call on retailers, write orders, etc. Many of these orders will be forwarded to the wholesaler to be filled (depending on the territory and our contractual relationship with the wholesaler), while others will be processed directly by DAY. It is important that the sales reps and the distributors work as a team. The representatives will be brought on early enough to have a strong voice in distributor selection. G. Company Facilities     DAY INTERNATIONAL, INC. presently occupies a leased facility of slightly over 1,800 square feet at a very reasonable rental. We use this for both manufacturing and offices. We rent an additional 150 square feet of storage space nearby. There is no concern for the continuation of the lease on our principal location, as it contains three yearly options to renew at the same rate, plus a percentage increase equal to the yearly increase in the consumer price index. The existing space is adequate to support production of at least 400 Kinet-O-Scrolls per month. Nearby space is available for expansion at reasonable rates when we need it. An adequate work force of assembly workers and shipping room personnel is available. We expect to pay between $4.50 and $8.00 per hour to hourly employees, depending on their duties.     Several additions to the corporations existing manufacturing equipment are required. Assuming, however, that the Kinet-O-Scroll production rate does not exceed 400 units per month, these