PAPERMOON'S MISSION STATEMENT

Our mission is to extend our position as a leading operator in the design, manufacture and supply of quality licensed and non-licensed products.

Papermoon will use its technologically advanced production facilities to take a product from Concept and Design through to Manufacture and Distribution. Our Manufacturing facilities are contracted for both Australian Companies requiring production as well as for International export.

Papermoon prides itself in maintaining high quality-controlled standards. We adhere to ethical business practices, and have established solid relationships with many of our Customers and Suppliers. Papermoon is very pleased to have created an International network of Business Partners, who are able to assist us with our business interests, and help us keep our Customers' interests at heart. At Papermoon, we believe that our creativity and quality, in our concepts and products are essential to our success. We also believe that innovation in all areas of our business is a means to attaining and sustaining leadership in our Industry.

Our fundamental goal is that Papermoon will continue to supply quality products and services to our existing customers and extending values to the market by increasing and maintaining their commercial relationships.

Papermoon was founded as a greeting card and stationery company fourteen years ago in New South Wales, Australia. We dealt purely with greeting cards as well as note and paper products. Papermoon then moved into the Novelties arena and acquired Crystal Craft Industries of Queensland, Australia in March 2001.

Crystal Craft has been in existence for over thirty years as a manufacturer and supplier of Promotional and Gift product lines. Historically, Crystal Craft has licensed major characters and created and distributed merchandise featuring these characters. Crystal Craft has also obtained licensing rights to international sporting events (Sydney Olympic Games 2000 and most recently Rugby World Cup 2003), television shows and motion pictures (The Simpsons and Jurassic Park), as well as trade exhibitions and has created merchandise relating to all of these.

PAPERMOON TODAY

Papermoon is separated into distinct divisions. These divisions include the following:

• Toys and Novelty
• New Product Development
• Agency Development
• Licensed Products
• Promotion and Manufacturing

1. Toys and Novelty

This makes up the core of Papermoon's business today. Papermoon's products are sold Nationwide in Australia to all large retailers. In addition, Papermoon distributes through various agencies as well as our in-house Sales Representatives.


2. New Product Development

This is an extremely important and innovative function within Papermoon today. We are always on the lookout for new and exciting brands and products. Papermoon launched the Necessary Objects range in February 2002. Necessary Objects has been developed by, and is exclusive to the Papermoon Group. Necessary Objects is a range of merchandise aimed at the 'Tweens' Target Market, girls aged between 6 and 16. The Necessary Objects range has been marketed as must have items, and has proved incredibly successful thus far.

3. Agency Development

This has always been a priority for the Papermoon Group. Papermoon is always on the lookout to develop relationships with varied companies and offer our vast resources to serve as agents or distributors for these companies. Papermoon currently serves as the agent and sole distributor for Tomato watches.

4. Licensed Products

These have been the cornerstones of the Papermoon Group since its inception. Papermoon has exclusive licensing rights to produce and distribute merchandise for the Rugby World Cup 2003 and the Cricket World Cup 2003.

In addition, Papermoon is the sole Retail Distributor for the leading Australian Infomercial company, Guthy-Renker.

5. Promotions and Manufacturing Promotional and Manufacturing capabilities have always been a strength of Papermoon. We have always prided ourselves on the Promotional materials we have supplied to large Multi-National Clients. Papermoon supplies various Theme Parks (Sea World, Dream World and Warner Bros. Movie World) in Australia with promotional goods. Papermoon has unique in-house abilities, it has it's own in-house art department and manages its own tooling through our tool shop and toolmakers. We have a vast number of resources and manage our own Injection moulding machines, as well as printing and decorating our own Products. Papermoon has become an extremely important player in the International Market and has recently started exporting our goods to several countries within Europe and North America.

PAPERMOON IN THE FUTURE

Since its inception fourteen years ago, Papermoon has grown steadily and is continually expanding. We foresee acquiring many more high profile licenses in the future, and attaining even more visibility in the Australian and International markets. Papermoon is extremely optimistic about all our future endeavors. The recent acquisition of the distribution rights of Tomato watches has launched us into an entirely new market.

We have a great amount of faith in our staff and believe that our people are the most valuable resource we have. Our people are the reason Papermoon constantly evolves, and we firmly believe that it will continue to do so.

IN SUMMARY

Papermoon is a completely vertically integrated company. We have the capacity to develop innovative concepts quickly. Papermoon is also able to distribute the resulting products successfully. In short, Papermoon has become an industry leader in the Toy, Gift, Specialty, and Corporate markets.