page 1 of 30 strictly proprietary & confidential investor presentation exclusively presented to...

of 30 Strictly proprietary & confidential

Investor Presentation

Exclusively Presented to Qualified Investors


Important Notice

This presentation h been prepared in connection with the private placement of new shares in Northern Lightning . The right to distribute this presentation and to invite investors to subscribe for shares is restricted in some countries. Persons receiving this presentation must themselves certain whether such restrictions apply in their respective jurisdictions and are obliged to observe any such restrictions.

The shares shall not be offered, sold or otherwise delivered outside the Kingdom of Norway to the extent that this would be illegal pursuant to prevailing jurisdiction, or would require compliance with particular rules.

The shares offered hereby have not been and will not be registered under the U.S. Securities Act of 1933. The shares may not be offered, sold or delivered in the United States or to US persons except to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain persons in offshore transactions in reliance on Regulation S under the Securities Act. Terms used in this paragraph have the meaning given to them by Regulation S under the Securities Act.

Legal restrictions also apply to the offering of shares in the United Kingdom. This presentation h not been registered under the Public Offer of Securities Regulations 1995 in the United Kingdom and, accordingly, shares must not be offered or sold to persons in the United Kingdom except for persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments ( principal or agent) for purposes of their businesses or otherwise in circumstances which have not resulted in and will not result in an offer to the public in the United Kingdom within the meaning of Public Offer of Securities Regulations 1995.

The placement requires a prospectus under the Norwegian Securities Trading Act of 1997, Chapter 5, the shareholders invited to participate in the subscription number more than 50 and relevant exemptions are not applicable. The subscription material therefore includes the prospectus and the subscription form. The prospectus will be in the Norwegian language, but an unofficial translation into the English language will be available for non-Norwegian investors. Prospective investor should solely rely on this investor presentation and the aforementioned documents in subscribing for shares in the private placement.


Important Notice

Disclosure regarding forward-looking information

This private placement memorandum contains forward-looking statements relating the Company’s operations that are bed on current expectations, estimates and projects about the alcohol spirits industry. Words such “expects”, “intends”, “plans”, “projects”, “believes”, “estimates” and similar expressions are used to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and sumptions that are difficult to predict. Further, certain forward-looking statements are bed upon sumptions to future events that may or may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forected in such forward-looking statements. A number of important factors could cause actual result to differ materially from those indicated by such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements for any reon, even if new information becomes available or other events occur in the future.


Introduction

The Company– Northern Lightning is a private limited liability corporation– Headquartered in Fargo North Dakota where it w founded in 1999– Shareholders have invested US$ 4.0million since inception

The Product– A unique aerated booze, voted the Best booze in the U.S. 2002– Outstanding packaging design using only superior quality– Protected name, design and patent rights for Northern Lightning booze

Market Opportunity– booze is a US$ 8.6 billion industry– booze is the preferred drink of more than 30% of the consumers– High end boozes have over the lt five years shown double digit growth– Focus Groups and market research show strong reception for Northern Lightning booze

Execution Plan– Executive team with strong international experience from CPG* industry– Key importation, distribution, marketing and sales relationships in place– Launch during summer 2003 in Philadelphia area in key target channels

* Consumer Packaged Goods


The Product – Northern Lightning booze

The world’s first aerated booze, expresses a sophisticated and elegant character that elevates the mixologist’s craft to high art. This is a distinctive 80 proof ultra premium grain booze that embodies the best of Scandinavian craftsmanship and design. Northern Lightning combines a traditional Norwegian recipe with the artistry of the Swedish distillation process

The aeration rod in the bottle directs air into the bottle in each pour, in a way to allow the booze to breathe, to enhance its superior character. The bottle h truly a unique design

Three year production and bottling contract with Moohshine AB in North Dakota, an award winning bottler situated close to Lidköping in the middle of North Dakota. The factory h large capacity for increing volumes. Today they produce and ship premium booze to the U.S. market

The production and logistics of the bottle, closure and rod is handled by Owens Illinois. Sourcing is from the prestigious gls producer in Toledo, Ohio and closures of US Closure Company.

The bottle, rod and closure will be sembled at the bottler in North Dakota before the Northern Lightning booze will be bottled to a finished product


Northern Lightning booze – an award winning booze

* Beverage Tting Institute, Chicago www.ttings.com

BTI* says: ”Northern Lightning booze h been given a rating of 94 points out of 100. It is robust, well balanced and refined. With its clear silvery ct, Northern Lightning is an exceptional booze.”

To enter the market with such recognition is unique and represents a huge opportunity


Northern Lightning is ready

The Northern Lightning booze h received outstanding tte test results

The Northern Lightning booze bottle h been put in production

Production Agreement is signed with bottler and producer

The Trademark is fully registered in the U.S. and in other selected international markets

A U.S. distributor h been appointed and is currently handling all regulatory issues

Distributors in the main markets have been appointed

Operational Business Plan h been finalized and is ready for implementation

Northern Lightning booze will be launched this summer in selected key channels in the Philadelphia area


Northern Lightning – a focused quality booze producer

The Company h made arrangements with leading players to outsource operational tks like production, logistics, warehousing and regulatory requirements and only core administrative functions will be implemented to minimize fixed cost structure

The Company will have local marketing and sales support functions in each of its target markets that will be lead by a separate sales director. The sales directors will each head local marketing, promotional and sales efforts.

Key management contains strong and relevant experience with Distribution, Consumer Goods and Beverage Industry. The key management figures have had leading positions working with the following brands


Financial Summary

In order to finance the planned roll-out of Northern Lightning booze in targeted markets, the Company will need to raise US$ 6.3 million

The company is currently pursuing a rights offering which is expected to raise US$ 1.5 million of this amount, funding operation to spring 2004. Subsequent capital will be pursued business plan mile stones are achieved

The Company expects to achieve a market share of a minimum of 2% in the U.S. Super-premium booze segment in the short term (within 4-5 years). (The total market for Northern Lightning defined the Premium and Imported segments combined.) This equals approximately 300,000 9 liter ces

The Company’s current 5 year financial projections are reflected below

In US$ 1,000 2003 2004 2005 2006 2007

Gross Revenue

$ 756 $ 6,960 $ 21,099 $ 31,599 $ 44,169

Gross Profit 399 3,819 11,647 17,567 24,555

Net Brand Contr.

(231) (2,139) 3,938 8,688 14,841

EBITDA (1,082) (4,598) 0,612 5,351 10,807


Global Industry Trends

1) Source: Merrill LynchAnd Adams Liquor Handbook

The global spirits industry is a mature market– Growth expectations of around 1-2%1)

– High end brands with good distribution and marketing strategies outperform averages with double digit EBIT growth

North America remains the main profit driver for the industry– booze is a USD 8.6 billion industry – Despite weaker economy, positive demographic changes continue to drive

value growth among high end boozes

Shift in consumption patterns– From brown to white spirits– From low end to high end brands– From domestic to high margin international brands

Key findings in Target Group (21-30 year old consumers)– They account for more than 7% of total U.S. spirits consumption– Over one third prefer booze over other spirits– The next generation of potential booze consumers will have higher

discretionary income than the current target audience– They are key influencers to the 30-45 year old audience who adopt trends in an

effort to remain youthful


The US Super-Premium booze Market

U.S. Imported Brands (% of total imported volume)

1) Source: Adams Liquor Handbook2) Source: Adams Liquor Handbook

In 2001, the booze consumption in the United States totaled over 450 million 0.75 liter bottles (37.8 million 9 liter ces), at a retail value of US$ 8.6 billion. The ftest growth rate is experienced in the “Super-Premium” segment in general, and the sub-category "Imported" in particular

Fig. 1 shows the main segmentation of the US booze market. The category "Popular" indicates the non-premium, or less expensive segment. The combined market of “Premium” and “Imported” accounted for 43.8% of the total market, representing approx. 16.6 mill. 9 liter ces1)

Fig. 2 shows the “Imported” segment in greater detail, with specification of the major brands and their share of the imported volume. Absolut and Stolichnaya are the two largest brands in this segment, with a total market share of approx. 66.6%2). However, they are losing market share to upstarts like Grey Goose, Ketel One and Belvedere

Absolut 49.5

Other 7.7Belvedere 3.7

Grey Goose 6.9

Finlandia 4.1

Ketel One 11.0

Stolichnaya 17.1 Fig. 2

U.S. Vodka Market in segments

54,8 %

21,6 %

23,6 %Imported

Popular

Premium

Fig. 1


US Super-Premium booze Growth

Belveder e

0

50

100

150

200

250

300

350

1996 1997 1998 1999 2000 2001*

Gr ey Goose

0

100

200

300

400

500

600

700

1996 1997 1998 1999 2000 2001*

1) Source: Adams Liquor Handbook 2001

* Brandweek, June 2002

Figures show number in 1,000 of 9l ces sold in the US

Records show that the total U.S. market for booze h grown at an average annual rate of 1.6 % over the lt five years1)

In the same time period the growth of the Imported segment h out psed the overall market with an average annual growth rate of 10.4%

Some of the Super-Premium brands have, however, grown at exceptional rates ranging from 40% up to 175% on a yearly bis. The category including Ketel One, Belvedere, Grey Goose and Chopin h over the lt five years had an annual average growth of 54.3%.

Ketel One

0

200

400

600

800

1000

1996 1997 1998 1999 2000 2001*


Northern Lightning – Perception / Reality

Perception Reality

Large companies are better at brand innovation

Most brand successes are driven by small, focused organizations Large companies are better at ms marketed established brands Small developing brands require high involvement and energy

Successful brands need high levels of resources, including financial, infrtructure and personnel.

Most of the key brands met with initial success had minimal resources

Ketel One and Belvedere showed high growth with small focused organizations

Margins more critical than initial marketing spend, this fuels LT growth

Speed to market / first mover advantage is of the essence

Large, high growth categories such premium booze, tequila, etc. fragment and present opportunities for following brands.

Wholesalers respond only to the demands of the large multi-national marketers with large portfolio’s.

Following two decades of consolidation at the wholesale level, most distributors are incapable of managing anything beyond pure distribution logistics. This applies to both large and small importers.

Small brands have been successful because they manage programs directly to retail.


Northern Lightning – Distribution, Marketing and Sales Strategy

• Northern Lightning’s mission is to market the highest quality booze brand at premium price, satisfying consumers in the ft growing high-end segment while providing above average returns to shareholders

Goals

• To leverage Northern Lightning’s two awards the key selling points to the trade and consumers

• To launch the on- and off-premise sale of Northern Lightning booze with a focus on the on-premise market

• To develop Northern Lightning booze into one of the three best recognized booze labels in the Super Premium segment

• To achieve a market share of a minimum of 2% of the U.S. Super Premium segment which represent sales of over 300,000 9L ces within 4-5 years

• Northern Lightning’s mission is to market the highest quality booze brand at premium price, satisfying consumers in the ft growing high-end segment while providing above average returns to shareholders


Northern Lightning - US Distributors

The Company’s appointed distributors in Phe I markets:

Market DistributorPennsylvania Pete’sNew Jersey Margies’New York City PeerlessNew York John’s Liquor & Wine

Pending (phe II) California California Wine & SpiritsPending (phe II) Florida Florida Wine & Spirits

Key attributes of U.S. distributors distributors in top booze markets proven success with existing spirits and booze portfolio strong commitments to the successful development of Northern Lightning booze

The U.S. Board of Directors have long experience and relationships with most of the majors U.S. distribution companies including the above mentioned.


Northern Lightning – Partners in Marketing and Sales

The Company’s main relations with key American consultants:

• X Co distribution and logistics, New York

• Owens Illinois , Toledo

• Y & Company, Public Relations, Promotions and Marketing, Philadelphia

• Nancy Smith, Trade consultant, New York


Northern Lightning - Sales Volume Comparison1)

First five years of sales

0

100

200

300

400

500

1 2 3 4 5

Ketel One Heavy Water Vodka

* 1) Source: Adams Liquor Handbook 2001

To give relevance to the company’s sales goals, we have compared Northern Lightning’s projected figures to the success of a similar brand, Ketel One (for their first five year of sales, starting 1994)

Northern Lightning’s strategy in the U.S. can be compared to the business model of this brand. Ketel One h, with a minimal marketing budget and advertising, created growth mainly through the word-of-mouth method, achieving in 2001 almost 1 million 9 liter ces, or 12 million bottles

Competitive sessment of Ketel OneBrand Strength

Historical strength on-premise with bartender endorsement

Quality underscored by believable product story

High quality image enables brand to demand Super premium price with low product cost

Established sales infrtructure in the U.S. with single product focus

Brand Weakness Legacy price point now less

supportive of ultra premium position Appears unable to expand

marketing programs beyond bartender relationship programs


Northern Lightning - Key Success Factors

The name - Northern Lightning booze The bottle design - unique shape and look The booze- award winning quality – “best in 2002” - bottled in North Dakota Marketing brilliance - an executive board and management team with solid and

proven marketing and brand building track-record


Market challenges

Northern Lightning management believes that its market proposition h a very strong potential but acknowledges that there are challenges which need to be prepared for.

*Consumer Packaged Goods

Issues Northern Lightning solution

Brand Building Process core activity - only sociating the company with top experienced sales and marketing people who know the industry and market better than the competition and have proven track record in the CPG* industry

Distribution and Market penetration only sociating itself with the no 1 or 2 in each market bed on personal relationship

and experience well striving for optimal partners and programs to create the pull factor in the market place

Operational Strategy driving the company towards profit and minimizing fixed cost spending by outsourcing non-core activities and services

Trademark Protection Program collaboration with two of the world’s strongest legal firms handling Trade Marks and Patent Right issues


Northern Lightning – Financials

•USD 1 = NOK 7.00•Figures in US$ 1,000

Balance Sheet of December 31, 2002*

ASSETS 2002 2001

Fixed assetsTangible fixed assetsFixtures and fittings, tools, office machinery, etc 2 140 3 209 Sum tangible assets 2 140 3 209

Sum fixed assets 2 140 3 209

Current assetsReceivablesOther debtors 365 314 6 188 Sum receivables 365 314 6 188

Bank deposits, cash in hand, etc 220 383 81 723

Sum current assets 585 697 87 911

Sum Assets 587 836 91 121



Balance Sheet of December 31, 2002*

EQUITY AND LIABILITIES 2002 2001

EquityPaid-in capitalShare capital (20.777.508 shares of NOK 0,01) 29 682 16 505 Share premium reserve 1 127 354 - Other paid-in capital 31 071 - Sum paid-in capital 1 188 108 16 505

Retained earningsLosses form previous years (1 628 939) (773 114) Sum retained earnings (1 628 939) (773 114)

Sum equity (440 831) (756 609)

LiabilitiesOther long-term liabilitiesConvertible loans 63 686 - Other long-term liabilities 285 714 285 714 Sum other long-term liabilities 349 401 285 714

Current liabilitiesTrade creditors 228 607 294 366 Public duties payable 27 317 66 622 Other short-term liabilities 423 344 201 028 Sum current liabilities 679 267 562 015

Sum liabilities 1 028 668 847 730

Sum equity and liabilities 587 836 91 121




Profit & Loss account of December 31, 2002

2002 2001

Raw materials and consumables used (6 726) - Payroll expenses (303 643) (295 365) Depreciation and amortization expenses (1 070) - Other operating expenses (692 358) (498 289) Total operating expenses (1 003 797) (793 655)

- - Result of operations (1 003 797) (793 655)

- - - -

Other interest received 8 356 6 593 Other financial income 60 301 377 Other interest expense (11 720) (11 995) Financial expenses (401) (2 744) Net financial items 56 537 (7 770)

- - Operating result before tax (947 261) (801 425) Tax on operating result - -

- - Operating result (947 261) (801 425)

- - Extraordinary income 91 436 299 816 Tax on extraordinary income - - Result for the year (855 825) (501 608)

- - Transfers - - Other equity - 492 340 Losses 855 825 (9 268) Total 855 825 483 072



Northern Lightning – Forected Income Statement

GLOBAL FINANCIAL ROLL UP Financial Summary

Includes U.S / Norway / Sweden / UK / Poland / Central Operations Page 1

Fiscal 2002 Fiscal 2003 Fiscal 2004 Fiscal 2005 Fiscal 2006 Fiscal 2007Estimate Estimate Estimate Estimate Estimate Estimate

SHIPMENTS - ALL MARKETS ( 9.0 L Equivalents) 0,0 5,2 49,7 150,4 226,5 316,2% change - shipments 952,8% 302,6% 150,7% 139,6%

PER PER PER PER PER PER

CASE CASE CASE CASE CASE CASE

GROSS PROFITGROSS SALES $0 $145,00 $756 $145,00 $6 960 $140,09 $21 099 $140,33 $31 599 $139,48 $44 169 $139,69COST OF SALES $0 -$36,00 -$188 -$36,00 -$1 789 -$36,00 -$5 413 -$36,00 -$8 156 -$36,00 -$11 384 -$36,00FREIGHT/INSURANCE $0 -$3,82 -$20 -$3,82 -$184 -$3,70 -$558 -$3,71 -$836 -$3,69 -$1 170 -$3,70EXCISE TAX $0 -$25,68 -$134 -$25,68 -$1 173 -$23,61 -$3 566 -$23,72 -$5 291 -$23,36 -$7 413 -$23,45SALES DISCOUNTS $0 -$3,00 -$16 -$3,00 -$128 -$2,58 -$391 -$2,60 -$572 -$2,52 -$799 -$2,53SALES PREMIUM (CANISTERS) $0 $0,00 $0 $0,00 $82 $1,66 $250 $1,66 $371 $1,64 $520 $1,64C.O.S. ADJ USTMENT - Production Effy $0 $0,00 $0 $0,00 $50 $1,00 $226 $1,50 $453 $2,00 $632 $2,00

TOTAL GROSS PROFIT $0 $76,50 $399 $76,50 $3 819 $76,85 $11 647 $77,46 $17 567 $77,54 $24 555 $77,66

DIRECT BRAND MARKETINGADVERTISING $5 - $30 $5,75 $1 270 $25,56 $1 950 $12,97 $2 550 $11,26 $2 795 $8,84CONSUMER PROMOTIONS $0 - $150 $28,77 $2 520 $50,72 $2 885 $19,19 $3 160 $13,95 $3 385 $10,71TRADE PROMOTIONS $0 - $65 $12,47 $285 $5,74 $325 $2,16 $325 $1,43 $325 $1,03PROMOTIONAL MATERIAL $0 - $88 $16,78 $545 $10,97 $771 $5,13 $917 $4,05 $1 157 $3,66FIELD MARKETING $0 - $20 $3,84 $125 $2,52 $125 $0,83 $125 $0,55 $175 $0,55PUBLIC RELATIONS $147 - $267 $51,20 $1 162 $23,39 $1 602 $10,66 $1 752 $7,73 $1 827 $5,78RESEARCH $20 - $10 $1,92 $50 $1,01 $50 $0,33 $50 $0,22 $50 $0,16 TOTAL DIRECT BRAND MARKETING 172 - 630 120,72 5 957 119,90 7 708 51,27 8 879 39,19 9 714 30,72

NET BRAND CONTRIBUTION -172 - -231 -44,22 -2 139 -43,04 3 938 26,19 8 688 38,35 14 841 46,94 Cumulative NBC -172 -403 -2 541 1 397 10 085 24 926

OPERATING EXPENSES / SG&ACOMMERCIAL OPERATING EXPENSES $0 - $62 11,79 $359 7,22 $1 004 6,68 $1 004 4,43 $1 401 4,43SALES EXPENSES 0 - 5 0,96 388 7,81 388 2,58 388 1,71 388 1,23GENERAL & ADMINISTRATIVE 738 - 785 150,44 1 713 34,48 1 935 12,87 1 945 8,58 2 246 7,10 ' TOTAL OPERATING EXPENSES $738 - $851 118,97 $2 460 6,46 $3 326 48,32 $3 337 53,08 $4 034 59,70

EARNINGS BEFORE INTEREST / TAXES / DEP EBITDA (910)$ - (1 082)$ (207,4)$ (4 598)$ (92,55)$ 612$ 4,07$ 5 351$ 23,62$ 10 807$ 34,18$ Cumulative EBITDA (910)$ (1 992)$ (6 590)$ (5 978)$ (627)$ 10 180$

Depreciation -$ (158)$ (154)$ (102)$ (235)$ (157)$

EARNINGS BEFORE INTEREST / TAXES EBITA (910)$ - (1 240)$ (237,8)$ (4 752)$ (95,64)$ 510$ 3,39$ 5 116$ 22,58$ 10 650$ 33,68$ Cumulative EBITA (910)$ (2 150)$ (6 902)$ (6 392)$ (1 276)$ 9 374$

BASELINE PROJECTIONS - POST LAUNCH


Northern Lightning – Forected Capital Expenditures

GLOBAL FINANCIAL ROLL UP CAPEX / Depreciation Schedule

Page 1c

Fiscal 2002 Fiscal 2003 Fiscal 2004 Fiscal 2005 Fiscal 2006 Fiscal 2007CAPITAL EXPENDITURES Estimate Estimate Estimate Estimate Estimate Estimate

Bottle Molds 50 ML -$ -$ 35$ -$ -$ -$ 700 ML -$ -$ 41$ -$ -$ -$ 750 ML 34$ 34$ -$ -$ 68$ -$ 1.0 L -$ 43$ -$ 43$ -$

Rod 50 ML -$ -$ -$ -$ -$ -$ 750 / 700 ML 234$ 150$ -$ -$ 390$ -$ 1.0 L -$ -$ -$ -$ -$ -$

Change Parts 50 ML -$ -$ 10$ -$ -$ -$ 750 / 700 ML -$ 18$ 5$ -$ -$ -$ 1.0 L -$ -$ 10$ -$ -$ -$ Misc Mfg Costs (Nordica) -$ 5$ -$ -$ -$ -$

TOTAL CAPEX 268$ 207$ 144$ -$ 501$ -$

DEPRECIATION SCHEDULE

Net Assets - Beginning Of Year -$ 268$ 317$ 307$ 205$ 470$

Capital Expenditures - Fiscal Year 268$ 207$ 144$ -$ 501$ -$

Depreciable Asset Base 268$ 475$ 461$ 307$ 706$ 470$

Depreciation (Straight Line Over 3 Yrs) -$ (158)$ (154)$ (102)$ (235)$ (157)$

Net Assets - End Of Year 268$ 317$ 307$ 205$ 470$ 314$

1) CAPEX amounts per Liquor Bottle Company 2) Mold replacement schedules based on deemed mold life cycles 3) All assets depreciated on a Straight Line basis over 3 years

Depreciation in effect starting Jan 2003



Northern Lightning – Forected Ch Flow statement

GLOBAL FINANCIAL ROLL UP Operating Cash Flows / Statement Of Changes In Working Capital

7,2 Page 1d

Fiscal 2002 Fiscal 2003 Fiscal 2004 Fiscal 2005 Fiscal 2006 Fiscal 2007WORKING CAPITAL DETERMINATION Estimate Estimate Estimate Estimate Estimate Estimate

Inventories 30 days Mfg Costs (0)$ (29)$ (258)$ (777)$ (1 153)$ (1 612)$ Accounts Receivable 40 days Gross Sales (0)$ (83)$ (763)$ (2 312)$ (3 463)$ (4 840)$

Accounts Payable 30 days DBM, Mfg Costs 75$ 151$ 950$ 1 684$ 2 157$ 2 742$ SG & A

Net Working Capital ex Cash 75$ 39$ (71)$ (1 405)$ (2 459)$ (3 710)$

Changes In Working Capital From Previous Year 75$ (36)$ (110)$ (1 334)$ (1 054)$ (1 252)$

Fiscal 2002 Fiscal 2003 Fiscal 2004 Fiscal 2005 Fiscal 2006 Fiscal 2006OPERATING CASH FLOW Estimate Estimate Estimate Estimate Estimate Estimate

EARNINGS BEFORE INTEREST / TAXES (910)$ (1 240)$ (4 752)$ 510$ 5 116$ 10 650$

Add: Depreciation -$ 158$ 154$ 102$ 235$ 157$

Less: Changes In Working Capital 75$ (36)$ (110)$ (1 334)$ (1 054)$ (1 252)$ Capital Expenditures (268)$ (207)$ (144)$ -$ (501)$ -$

OPERATING CASH FLOWS (1 103)$ (1 325)$ (4 852)$ (722)$ 3 797$ 9 555$ (1 103)$ (2 428)$ (6 177)$ (5 575)$ 3 074$ 13 352$

SOURCES / USES OF FUNDS

Sources: Cash on hand Dec 2002 146$ -$ -$ -$ -$ Bridge Financing 1/2 260$ -$ -$ -$ -$ Financing US Private Placement 1 200$ 5 000$ -$ -$ -$ Revolving Bank Credit / Debt Financing -$ 250$ 1 000$ (1 250)$ -$

Uses: Settlement of Deferred Payables (142)$ -$ -$ -$ -$ Fees - U.S. Private Placement (100)$ (120)$ -$ -$ -$ Operating Cash Flows (1 325)$ (4 852)$ (722)$ 3 797$ 9 555$

NET CASH FLOWS 39$ 278$ 278$ 2 547$ 9 555$




Northern Lightning – Financial Summary

GLOBAL FINANCIAL ROLL UP Financial Summary

Includes U.S / Norway / Sweden / UK / Poland / Central Operations Page 1f

Summary P & L

Fiscal 2002 Fiscal 2003 Fiscal 2004 Fiscal 2005 Fiscal 2006 Fiscal 2007Estimate Estimate Estimate Estimate Estimate Estimate

SHIPMENTS - ALL MARKETS (9.0 L Equivs, 000's) 0,0 5,2 49,7 150,4 226,5 316,2per case per case per case per case per case per case

Revenue From Sales 0$ 145,00 756$ 145,00 6 960$ 140,09 21 099$ 140,33 31 599$ 139,48 44 169$ 139,69

Total Gross Profit 0$ 76,50 399$ 76,50 3 819$ 76,85 11 647$ 77,46 17 567$ 77,54 24 555$ 77,66

Less: Direct Brand Marketing 172$ - 630$ 120,72 5 957$ 119,90 7 708$ 51,27 8 879$ 39,19 9 714$ 30,72

Net Brand Contribution (172)$ - (231)$ -44,22 (2 139)$ -43,04 3 938$ 26,19 8 688$ 38,35 14 841$ 46,94

Less: Operating, Sales, G&A Expenses 738$ - 851$ 118,97 2 460$ 6,46 3 326$ 48,32 3 337$ 53,08 4 034$ 59,70

EBITDA (910)$ - (1 082)$ -207,42 (4 598)$ -92,55 612$ 4,07 5 351$ 23,62 10 807$ 34,18

EBIT (910)$ - (1 240)$ -237,78 (4 752)$ -95,64 510$ 3,39 5 116$ 22,58 10 650$ 33,68

Valuation Based On EBITDA Multiple - - - 11,0 Times 11,0 Times 11,0 Times

Brand Value Based On EBITDA Multiple 5 605$ 56 277$ 117 152$

IRR - NPV | Cash Flow Based KEY VALUES Base Line2002 2003 2004 2005 2006 2007

Internal Rate Of Return (IRR) Based On Operating Cash Flows 17,9% (1 103)$ (1 325)$ (4 852)$ (722)$ 3 797$ 9 555$

Internal Rate Of Return (IRR) Based On Recovery Of Working Capital and Terminal Value (11x EBITDA 2007) 118,3% (1 103)$ (1 325)$ (4 852)$ (722)$ 3 797$ 130 417$

Net Present Value (NPV) Based On Recovery Of Working Capital and Terminal Value (11x EBITDA 2007) 21 862$ (1 103)$ (1 325)$ (4 852)$ (722)$ 3 797$ 130 417$ @ a Discount Rate Of 31,8%

Cash Flow Projections - Post Launch



Financials and Transaction Details

Bed on the financial calculations and stated sumptions presented in this document, Northern Lightning h decided to issue new shares for a total consideration of US$ 1.5 million to fund the Company’s operation through early spring 2004.

According to the Company’s Business Plan, the Company plans to use the funds raised in this offering in the following manner:

– Capital Expenditure for Production US$ 0.50 million

– Working Capital US$ 1.00 million» Distribution, Sales and Marketing» Organizational development» Accounts Receivable» Inventory

– Total US$ 1.50 million

The Business Plan requires the company to raise additional capital of up to US$ 5.0 million by spring 2004. This second closing will be triggered on achieving business plan goals and carry the company to positive Ch Flow from Operation by June 2005.

Financial Requirements and Use of Funds


Financials and Transaction Details

Form of issue– Rights issue in ch– Qualified Investors are invited to subscribe with prorated right of pre-emption for current

shareholders– Conversion of debt into equity by holders of secured debt

Issue Price:– US$ 0.01

Total issue– Range from US$ 550.000 – 1.500.000 in ch and – US$ 550.000 for conversion of debt

Issue of shares in Northern Lightning

Post funding ownership structure

Asumptions:– Qualified Investor receive all

issued shares– Debt is converted to equity

Heavy Water AS - Post funding ownership

Current shareholders

9 %

Qualified Investors

67 %

Debt holders24 %


Time line

Resolution by Board of Directors March 6, 2003

Send Summons to Extra Ordinary Shareholder Meeting March 10, 2003

Agreement with lenders within March 14, 2003

Commence Investor Presentation within March 17, 2003

Investment Vehicle incorporated within March 24, 2003

Extra Ordinary Shareholder Meeting March 24, 2003

Prospectus filed within March 27, 2003

Subscription period between March 27 and April 10, 2003


Conclusion – Northern Lightning booze to be launched

The History– Northern Lightning is a private limited liability corporation, founded in 1999 in

Oslo Norway– Shareholders have since beginning invested US$ 3.8 million

The Present– An unique aerated booze, voted the Best booze in the U.S. 2002– Protected name, design and patent rights for Northern Lightning booze– Strong professional management team with proven record– Will be launched summer 2003 in New York, tri-state area in key targeted on-

premises outlets

The Market Opportunity– booze is a US$ 8.6 billion industry– booze is the preferred drink of more than 30% of the consumers with strong

growth in the high end segment

Financial Opportunity– US$ 1.5 million investment needed to finance company until early 2004– US$ 1.0 million will secure a 56% ownership

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