ELAYAWAY RESEARCH BRIEFING

JULY 2010

Emerging Growth Research, LLC
Investment Highlights

eLayaway, Inc. (ELAY)
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eLayaway, Inc. is the leading, sole provider of a new, revolutionary electronic layaway payment system that is based on the Company’s patent pending technology. The eLayaway® solution faces a very large market opportunity, with the potential to capitalize on a very meaningful part of nearly all electronic and Brick & Mortar transactions. The Census Bureau estimates eCommerce retail sales were about $136 billion in 2007, with the much larger “Brick & Mortar” retail segment representing a very significant $3.9 trillion. Within these markets, and at this stage in its growth trajectory, the Company estimates its actual addressable online eCommerce market size is in excess of $1.2 billion, with an addressable Brick & Mortar segment conservatively estimated at more than $58 billion. We believe eLayaway® has the potential to tap the same vast eCommerce market place and be as widely recognized and respected as PayPal™ for all budget conscious consumers. Experts predict 30% of Americans will turn to online alternative payment options instead of using a credit card by 2012. The current economic environment and credit crisis, coupled with the ubiquitous presence of the Internet in the world of commerce, has created the “right time” for eLayaway®. There are currently only about 17.7 million common shares of eLayaway® issued and outstanding.

Company Report: eLayaway, Inc.
ELAY.OB Rating: BUY Joseph Noel joe@joenoelstocks.com Emerging Growth Research, LLC San Francisco, California 925-922-2560 Analyst Certification I, Joseph Noel, hereby certify (1) that the views expressed in this research Company report accurately reflect my personal views about any or all of the subject securities or issues reflected in this Company report, and (2) no part of my compensation was, is, or will be directly or indirectly related to specific recommendations or views expressed in this Company report.

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Please see important disclosures, including analyst certification

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ELAYAWAY RESEARCH BRIEFING

ELAYAWAY (ELAY)
SUMMARY Headquartered in Tallahassee, FL, eLayaway, Inc. is the sole provider of a new proprietary online payment system that allows consumers to prepay for items using a monthly payment schedule that best fits their needs and budget. eLayaway® is a modern, digital age version of the former “tried and true” layaway business concept in which consumer-directed partial payments are made over time for goods and services that are then released to the buyer once all payments are complete. The eLayaway® payment system enables consumers to actually “pull the trigger” and say “yes” to buying, while giving merchants access to millions of credit-conscious shoppers who were either previously unreachable or looking for alternatives to traditional credit cards. The Company’s payment solution addresses the multibillion dollar online eCommerce market and, soon, eLayaway will introduce the “Brick & Mortar” version of its eLayaway® technology for the much larger in-store retail market.

EXECUTIVE SUMMARY

to items that may not be immediately affordable based on budget constraints. At present, eLayaway® has approximately 700 merchants in its retailer network and over 90,000 individual registered users, figures we expect will increase significantly over the near term as the Company’s brand and reputation continue to grow and penetrate new markets. The Company currently sells its system for use as an online scheduled payment option, mainly for use by merchants within the checkout section of their corporate websites. Importantly, eLayaway® is also getting ready to launch a “Brick & Mortar” version of its automated payment system that can be used by merchants in actual physical store locations, malls, kiosks and even within a customer’s home during sales calls in order to initiate the eLayaway® payment system. eLayaway® is now in pilot testing within the Brick & Mortar industry and we anticipate entrance into this market this summer will greatly increase the Company’s growth trajectory.

The Company eLayaway, Inc. (“eLayaway,” “ELAY” or the “Company”) is the sole provider of a new, revolutionary, patent pending online payment system that allows consumers to pay for products and services using an automated and affordable periodic payment system based on the traditional concept of layaway, while empowering merchants to grow their customer base and sales. As the leading provider of electronic/Internet-based layaway payment processing technology, the eLayaway® payment system was conceived to provide additional payment options to consumers and merchants alike, thereby increasing sales for merchants and providing consumers with access
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Introduction eLayaway® is a revolutionary re-introduction of a time-tested concept, namely the notion of periodic layaway installment payments for a particular item desired by a customer. The idea of purchase by layaway is not new. The concept of layaway, or purchasing an item without paying the entire cost at once, is a time-proven concept born of the Great Depression of the 1930s. The way layaway works is rather than paying the full price at purchase to receive an item, or taking the item home and then repaying the debt incurred to purchase the article, as is done in most installment plans, the layaway customer does not receive the item until it is completely paid for through a series of scheduled prepayments. Today, while the payments industry exists and is used by some merchants in-house to execute online and in-person “Brick & Mortar” sales, the idea of an outsourced automated, online layaway service is new. While quite a few merchants are aware of and know what layaway is, only now are they starting to see the value of this process again, as eLayaway® has automated and simplified the traditional notion of layaway to fit today’s world of ecommerce. Specifically, eLayaway®’s automated payment system has done away with some of the most inconvenient aspects of the traditional layaway programs of the past, such as requiring the customer return to the store periodically in order to make the required installment payments and, for merchants, having to set aside and store an item until its been fully paid for, thereby taking up limited and expensive retail storage space. In fact, while the traditional concept of layaway was once quite popular among retailers and customers alike, many of America’s largest retailers have simply chosen to end their traditional layaway programs due to storage costs and the manual complexities involved in managing the system.

Dominance of Electronic Payment Systems in Today’s World of Commerce In certain regards, we believe eLayaway® may be liked to the very popular and widely known PayPal™ technology as a comprehensive solution for centralized payment processing, but with an important difference. While most consumers and merchants alike are familiar with PayPal™ for processing full payment for goods and services upfront, eLayaway® facilitates partial payments made over a selected period of time. Based on the very large market opportunity the eLayaway® solution faces, with the potential to be part of a very meaningful percentage of nearly all electronic and Brick & Mortar transactions, we believe eLayaway® has the potential to be as widely recognized and respected as PayPal™. Regarding the importance of online payment processing in today’s world of commerce, dominated in many instances by the Internet, the industry’s leading payment processing companies accounted for more than 73% of all transactions in 2007. Furthermore, the online alternative payment industry in particular is growing by an average of 60% per year. In fact, PayPal™, the premier upfront payment source, became a powerful alternative to eBay®’s Billpoint (acquired by eBay® in 2002 for $43.5 million) resulting in eBay® also buying the superior PayPal™ solution for $1.5 billion in 2002. We believe eLayaway® has the potential to tap the same vast eCommerce marketplace and be equal in brand name recognition and size to PayPal™ for all budget conscious consumers. Economic Trends The current economic environment, coupled with the ubiquitous presence of the Internet in the world of commerce, has created the “right time” for eLayaway®. At this time, many credit card issuers are dramatically increasing their credit and lending standards as well as upping fees, thereby limiting

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ELAYAWAY RESEARCH BRIEFING

the number of new qualified cardholders, reducing existing credit lines, charging what many consider to be predatory interest rates and/or canceling accounts altogether. With the recent and continued tightening of the credit markets and the economic downturn, fewer and fewer cash strapped consumers are finding they have access to the credit limits they once had even just a few years ago. Consequently, many retailers and merchants have seen dwindling sales levels and are in need of identifying effective, innovative and proactive solutions to revive and maintain sales levels while helping customers afford the products and services they desire. In fact, experts predict 30% of Americans will turn to online alternative payment options instead of using a credit card by 2012. eLayaway® has entered the retail market to fulfill this demand by providing a unique and efficient non-predatory, non-credit scheduled payment option that modernizes the extended prepayment model of traditional layaway plans. Additionally, because an item is received only when full payment has been made, purchases made with the eLayaway® payment plan do not place any additional debt burdens on the buyer. We believe the eLayaway payment option is both a viable alternative to paying with plastic credit cards as well as the right replacement for the deficiencies being left in the marketplace by the credit card industry’s pull back. As a debtfree payment option, eLayaway® also provides a means for buyers to continue to make important purchases while avoiding incurring any additional, unwanted debt.
Market Size
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were eCommerce related, or about $136 billion. The vast majority, about 96.6% or a very significant $3.9 trillion, were Brick & Mortar sales at actual retail locations and store fronts. Regarding eLayaway®’s addressable market, the Company currently estimates its addressable online eCommerce market to be in the neighborhood of $60 billion and, conservatively from here, estimates that at this stage in its growth process it is facing a current conversion rate that leads the Company to actually be able to address an online eCommerce market size in excess of $1.2 billion. While eLayaway® is currently penetrating and capturing sales in the eCommerce market, it is the Brick & Mortar retail market in particular that represents the largest potential for the Company, worth significantly more than the online marketplace that eLayaway® has successfully serviced to date. The Company’s addressable Brick & Mortar retail market is conservatively determined to be roughly in excess of $58 billion. Importantly, the Company plans to launch its entrance into the Brick & Mortar market segment during the summer of 2010. In total, we estimate the current addressable market for the eLayaway® solution is as listed below. It is worth noting that for the Company’s three divisions, eLayawaySPORTS™, eLayawayTRAVEL™ and eLayawayHEALTH™, the addressable market dollar figures listed below are extremely conservative and only reflect the Company’s modest efforts to date to market to and penetrate each of these much larger and significant sectors. Merchant Addressable Market by Segment · · · · · Online retail: $1,200,000,000 Brick & Mortar Retail: $58,100,000,000 Sports: $26,000,000 Travel: $141,000,000 Health: $50,000,000

The retail market in the United States is large and retail consumption of all forms is a very significant contributor to the nation’s GDP (gross domestic product), accounting for up to twothirds of GDP by some estimates. For 2007, the Census Bureau of the Department of Commerce estimates total retail sales were over $4.0 trillion dollars. Of this amount, approximately 3.4%
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Total: $59,500,000,000

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Importance to Customers The Company’s eLayaway® modified payment schedule makes purchasing the goods and services customer desire even more attractive to potential buyers and, in many cases, enables them to actually “pull the trigger” and say “yes” to buying, knowing they will not have to come up with the larger total sum price all at once. Importance to Merchants Likewise for merchants, and equally as important, by increasing consumer access to the good and services they desire, merchants have more opportunities to increase sales and grow their business. For merchants in today’s economy, this could mean the difference for struggling companies in their survival, in enabling them to maintain cash flows and/or affording them the opportunity to keep their employment levels - due in large or small part to their implementation of the eLayaway® solution. eLayaway®’s patent-pending payment system allows merchants and retailers to expand their consumer base to include millions of creditconscious shoppers. THE COMPANY

goods and services that are then released/rendered to the buyer once all payments have been made in full. Specifically, the eLayaway® concept is an online payment option that allows consumers to pay for items they want by selecting a monthly payment schedule at checkout that best fits their financial situation, thereby making the purchase more affordable and easier to budget. Likewise, merchants offering the eLayaway® solution are able to extend their customer reach and increase sales by offering an automated layaway payment plan that appeals to cost and budget conscious consumers who otherwise might be inclined to postpone or entirely forego the purchase they desire.

eLayaway, Inc. (“eLayaway,” “ELAY” or the “Company”) is the sole provider of a revolutionary new online payment system that allows consumers to pay for products and services using an automated, manageable periodic payment system based on the traditional concept of layaway. eLayaway® is a modern, digital age version of the former “tried and true” layaway business concept in which consumerdirected partial payments are made over time for
Emerging Growth Research, LLC

At present, the eLayaway® payment option is offered online by approximately 700 merchants, either through their own corporate websites or via eLayaway®’s own online store, called the eLayawayMALL™. The Company operates its own online eLayawayMALL™ which offers many of the most popular name brand consumer products, payable with eLayaway®, through the Company’s affiliate relationships with some of the most highly recognized stores in the retail world. As of June 2010, eLayaway® had over 90,000 individual members signed up for the Company’s online layaway payment option. The Company sells its patent-pending payment system directly to merchants and as a preinstalled component of a larger technology platform that is then sold as a complete package to merchants and retailers for use on their websites as part of the payment-and-checkout process.

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ELAYAWAY RESEARCH BRIEFING

In addition to its online offering, the Company is getting ready to expand into the “Brick & Mortar” retail segment using its latest proprietary technology and system automation, with a rollout of eLayaway® scheduled for this summer. The Brick & Mortar retail market, comprised of merchants located in actual stores and physical retail settings, represents the largest market potential for eLayaway®, with annual sales in the multiple trillions of dollars in the United States alone. In addition to its widespread and growing online presence through its merchant network of retailers, eLayaway® operates three divisions, each of which is tailored to their specific target market. The Company’s wholly-owned brands include: eLayawaySPORTS.com, where fans can purchase season tickets and other sports related items on layaway; eLayawayTRAVEL.com that allows users to make payments toward the purchase of cruises and other travel related expenses; and eLayawayHEALTH.com, designed to make medical treatments easier to afford by allowing customers to make regular, automatic installment payments towards the full purchase price or down payment of qualified medical procedures. Going forward in 2010 and beyond, the Company anticipates pursuing many new opportunities and markets where eLayaway® can add value, including international markets. eLayaway, Inc. is headquartered in Tallahassee, Florida. INDUSTRY TRENDS Consumer Economics For the first time since the Great Depression of the 1930s, the national personal savings rate in the United States has reached negative levels. This fact, coupled with overwhelming consumer debt and the reality that Americans are living 10 to 20 years longer than prior generations, pretells the notion that the next several decades will
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likely prove financially difficult for many families and households. U.S. Consumer Debt Over the Past Decade

Dollars in Billions Many believe banks and credit card companies are partly to blame for America’s current economic predicament, given their aggressive marketing tactics and minimum payment strategies have made it relatively easy for consumers to overspend and, later, to have to overpay via excessive interest rates and fees for money borrowed. While recent pressure from federal regulators has required many credit card companies to double their minimum payment requirements from 2% to 4% of the balance, in order to help incentivize consumers to lower the overall amount of their debt levels, many customers are now living on a very tight budget and are finding it difficult to adjust. Thus, with the days of “cheap and easy” money likely gone forever, as exemplified by 1.0% and 2.0% mortgages, many American consumers are experiencing the true cost of credit and are reining in their spending habits accordingly. Credit Conditions Are Tight The true cost of credit today is significantly higher for many consumers than it was even just

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a few years ago. This fact is perhaps best exemplified by the new “reality” that all banks have drastically tightened their credit qualifications for individual customers and businesses alike, as a result of the historically high rate of defaults and delinquencies that have come about in the current debt crisis, and as solidified by the recent sub-prime market crash. Credit companies have decreased credit limits, cancelled accounts altogether and/or substantially increased credit card rates and fees (up to 29.99% on some credit cards!). This effect has left fewer and fewer consumers with access to adequate credit. The fall of the real estate market has also had the effect of slowing spending from home equity accounts, as a significant percentage of mortgages are now close to, or even exceed, the current market value of the mortgaged property. This situation has served to take money out of the consumer’s pockets and transform a once rather free-spending population into a much more financially conservative, budget-restrictive base of consumers. Each of these forces continues to make it difficult for many consumers to manage both the small and large purchases that in prior years would have easily been bought on credit, through extended equity lines and/or by incurring additional debt. The result of this increase in the cost of money and the simultaneous decrease in the supply of readily available funds has curtailed spending, or impacted the decision by the consumer to simply postpone or forego the purchase altogether. The Market Case for eLayaway® Tensions in the current economic climate, the drastically tightened credit environment and dwindling/disappearing home equity lines have all served to create a financial storm for the consumer that is greatly limiting access to available credit and causing a major decline in consumer buying power. As a result, many households are reevaluating their spending habits
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to reflect tighter budgets. Part of this process for many would-be consumers includes the new reality of postponing or altogether forgoing the purchase of certain goods and services that, if only made more affordable, could otherwise potentially be acquired. To this end, new, effective payment options are necessary to improve the financial health of the typical consumer and enable them to continue to make the purchases they desire. Speaking to the other side of this coin, as consumers reevaluate and rein-in their spending habits, merchants are experiencing a decrease in sales and seeing their revenue streams decline. Under these circumstances, smart merchants will seek consumer-friendly payment alternatives to keep sales flowing. This situation has caused millions of consumers and merchants alike to seek out alternatives like eLayaway®. In fact, experts predict 30% of Americans will turn to online alternative payment options instead of using a credit card by 2012. eLayaway has entered the retail market to fulfill this demand by providing a unique and efficient non-predatory, non-credit, debt-free scheduled payment option that modernizes the extended prepayment model of traditional layaway plans. MARKET SIZE Online Retail Market There are approximately 1,000,000 e-retail merchants in the United States alone which are made up of small, medium and enterprise level businesses that operate either individually or in networks based on their technology platform. Specifically, there are currently about 300 online retailers, each of whom generate more than $20,000,000 in total annual sales volume. This merchant segment represents 50% of all online transactions. At this time, many of these enterprise level merchants are experiencing an increase in the denial rates of their own branded credit programs, given the ongoing consumer credit crisis.

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Additionally, there are over 900,000 small business merchants, each of whom generate less than $20,000,000 in total annual sales volume that operate in the eCommerce marketplace. Importantly, the market for small business merchants is growing by an average of 30% per year. These merchants have traditionally struggled to offer additional credit-based payment options that extend beyond traditional credit card services. We firmly believe implementation of the eLayaway® solution can help each of these retailers turn such denials into active sales, something they have never been able to do before, given the customer is actually ready to buy a selected item and is just looking to somehow complete the purchase process. The Company estimates its current addressable market in the online eCommerce retail segment is over $1.2 billion. Brick & Mortar Retailing Brick & Mortar retailers consist of merchants that have an actual physical store location. In 2007, annual Brick & Mortar retail sales in the United States alone represented a very significant nearly $4.0 trillion dollars, comprised of millions of merchants. This merchant segment would likely benefit significantly from realizing the great value the eLayaway® online technology provides as a method to assist in making their Brick & Mortar businesses grow and capture more sales. As the popularity of layaway has grown in the past year, many retailers such as Sears®, Kmart®, Burlington Coat Factory® and TJ Maxx® have experienced significant increases in layaway sales. In fact, the Burlington Coat Factory® stated that 5.0% of their 2008 sales were attributable to layaway. With the July 2009 FTC Consumer Alert discussing the concept of layaway, the option of layaway has been acknowledged as a viable alternative to other traditional payment methods, including credit cards and the incurrence of debt.

As eLayaway®’s largest potential market, worth significantly more than the online marketplace that eLayaway® has successfully serviced to date, the Company’s addressable Brick & Mortar retail market is conservatively estimated to be in excess of $58 billion. THE eLAYAWAY® PAYMENT OFFERING The eLayaway® concept is an automated online payment system that allows consumers to pay for products and services using manageable periodic payments that make purchasing an item affordable and more easy to budget than having to pay the complete purchase price at once. For merchants, in an economy where affordability rules and accessibility to funds are scarce, eLayaway® provides retailers with access to consumers who were either previously unreachable or looking for alternatives to traditional credit card purchasing in order to be able to buy. eLayaway® is building an extensive merchant and individual user network that is very much in the growth stage at present and expanding every month. The Company’s payment solution is currently offered by approximately 700 qualified merchants representing millions of products, with over 90,000 registered member customers. Importantly, over 45% of customers who make a first purchase with eLayaway® make a second purchase using eLayaway® shortly thereafter. Going forward, we anticipate both the number of merchants and individual users will increase meaningfully throughout the remainder of this year and into 2011 as eLayaway® continues to gain recognition and enters the “Brick & Mortar” retail industry.

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ELAYAWAY RESEARCH BRIEFING

Where eLayaway is Offered Online Websites

eLayawayMALL™ on behalf of a merchant and report back to them on volume and dollar sale amounts. In this regard, eLayaway® has been able to offer use of its eLayawayMALL™ website as an easy-to-use pilot program of sorts that has already convinced several Big Box retailers to incorporate eLayaway® into their own corporate websites. Regarding merchants who currently offer eLayaway® on their own corporate websites, customers are able to locate these retailers by visiting the Company’s website to view a store directory that lists all the merchants who currently offer the eLayaway® payment plan in the checkout section of their respective corporate websites.

Currently, the eLayaway® payment plan is offered by qualified merchants on their corporate websites in addition to the Company’s own online mall, called the eLayawayMALL™. The eLayawayMALL™ The eLayawayMALL™ is the Company’s owned and operated online store and marketplace that offers many of the most popular name brand consumer products, payable with eLayaway®, through the Company’s affiliate relationships with some of the most highly recognized stores on the Internet. Product orders sold in the eLayawayMALL™ are fulfilled by existing merchants and affiliates. Within the eLayawayMALL™, all items for sale come with the eLayaway® payment option at checkout. The eLayawayMALL™ has also been a powerful marketing tool for the Company for merchants wishing to test the effectiveness of the concept of electronic layaway. Specifically, prior to signing up for eLayaway® and actually purchasing the Company’s automated payment system for their own use, merchants can offer a select group of their products for sale on the Company’s mall website in order to see “how well they sell.” The Company is able to track sales from the
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Brick & Mortar Retail Locations The Brick & Mortar retail segment represents the largest potential market for eLayaway® with annual sales in the multiple trillions of dollars in the United States alone. In fact, annual Brick & Mortar retail sales in 2007 for the United States represented a very significant nearly $4.0 trillion dollars, with millions of retailers and merchants operating in this sector. The Brick & Mortar retail market is comprised of merchants located in actual stores, malls and physical retail settings. eLayaway® has developed an automated layaway payment solution for the Brick & Mortar market, aptly named “eLayawayANYWHERE™,” that is currently in beta testing mode with several Brick

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& Mortar merchants in their actual storefront locations. It is worth noting that beta testing is going well and proceeding quickly to the next phase of an actual controlled launch among a select group of merchants, followed quickly thereafter with rollout to an even larger group of retailers. By adding Brick & Mortar capabilities to its existing online technology, the Company estimates it could easily expand its market by ten fold. This system allows Brick & Mortar merchants to use eLayaway® as a management tool to sign-up a particular in-store customer and initiate the eLayaway® payment plan for a buyer looking to make a purchase. Specifically, sales associates will be able to set up an eLayaway® payment plan using a virtual terminal within their store, and the appropriate information given to them by the customer, in order to fill out and complete a form on their computer screen. If a customer does not have all the necessary information at hand while in the store, such as their bank account number, the system will forward an email onto them at home after they leave the merchant’s location. They can then complete the registration process at home and begin payments using eLayaway® for the item they found while at the store and submit the information online. Then, just like its online version, the eLayawayANYWHERE™ system for Brick & Mortar merchants will automatically draft payments from a customer’s bank account. Once all payments are complete, eLayaway® will submit the payment in full to the merchant and the consumer will then be able to return to the store and pick up the item. With eLayawayANYWHERE™, merchants of all types will be able to create and manage the eLayaway® process anywhere, including physical retail locations, kiosks or at the actual home of the consumer during a sales call. Furthermore, eLayawayANYWHERE™ makes the Company’s automated layaway process available to all merchants, regardless of whether or not they have an Internet sales presence on their corporate website.
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Regarding competition, we are not aware at present of any existing layaway management systems offered today. Rather, any such layaway systems in use today by Brick & Mortar retailers appear to be strictly proprietary or specific to an individual firm, and are typically of a “low technology” format. eLayaway® Customers eLayaway®’s primary market consists of individual consumers contemplating purchases that are just beyond their financial means. Normally, such a consumer may opt to use a credit card for such a purchase, thereby incurring additional debt. However, as more and more consumers find themselves facing growing debt and higher interest rates, the eLayaway® payment option will prove to be an attractive, affordable alternative. Consumers will also find eLayaway® to be a convenient method to purchase seasonal items such as holiday gifts, jewelry, travel, lawn equipment and other large ticket items such as appliances and televisions. The Company’s core group of targeted eLayaway® users includes several consumer groups discussed below. Current Layaway Users Consumers already familiar with the traditional concept of layaway are clearly a target audience for the eLayaway® solution, as many have already signed up to use the Company’s payment offering. The National Retail Federation estimates that layaway purchases made up 2.0% of all 2008 retail sales nationally. (This was prior to the radical change in the U.S. economy). This places the value of the layaway market at more than $200 million annually. Furthermore, Walmart Stores, Inc. reported in 2007 that layaway made up 6.0% of their retail sales (approximately $18 million). These figures indicate that while the existing layaway market is in a relative state of disarray, after certain major retailers cancelled their layaway programs due to cost and

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complexities with running the program in-house, the concept of layaway purchasing is a significant market and a viable alternative payment option with the potential for continued long-term growth, especially in light of the current state of the economy. We believe the Company’s unique online layaway process could position eLayaway® to secure a significant portion of this re-emerging market, just as PayPal™ has done in its applicable segment of the online payments segment. Unlike PayPal™, however, which only plays in the online payments sector, eLayaway® is also developing an outsourced automated layaway solution for the much larger Brick & Mortar retail industry, for merchants with actual store front locations. Credit Challenged Segment The credit challenged market, consisting of over 100 million consumers domestically in the United States alone, is the Company’s largest target market. Almost 50% of all Americans over the age of 18 years are “credit challenged,” defined as individuals having no available credit -to having a negative credit rating. We believe consumers with such credit issues will find eLayaway® to be a more affordable and responsible way to pay for goods and services, while affording them the opportunity to rebuild their credit standing via the Company’s eLayawayADVANTAGE™ membership program. This consumer group is generally very familiar with the concept of layaway and is proving to be ready adapters of the eLayaway® solution. Debt-Free Lifestyle Segment As more consumers learn or continue to experience the pitfalls of excessive debt, pioneers and public speakers such as Dave Ramsey and the well known Suze Orman are increasing their following of interested listeners as a result of
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advocating and educating consumers on the benefits of a debt-free lifestyle. These commentators have an audience that ranges in the millions of people as they are televised on national networks. eLayaway®’s methodology of purchasing without debt makes this consumer segment a perfect target group for the Company’s prepayment solution. How eLayaway® Works for Customers The eLayaway® automatic payment option is designed to be fast and easy to use as part of the checkout process for an online purchase. The eLayaway® Process for customers is depicted below:

To become eligible to use eLayaway®, customers must first register with eLayaway, Inc. either by visiting the Company’s website directly, or by registering during the check-out process on a participating merchant’s website, in which case registration simply becomes part of the payment process. At registration, customers submit personal identification information and select the active bank account they wish to use for automatic payment deductions. One a customer has finished selecting the online purchases they wish to make, they are directed to proceed to checkout. It is during the online checkout process that customers are presented with the opportunity to choose either to pay in full or choose payment by a layaway plan. By selecting “eLayaway® Now” at checkout, an intuitive online calculator is activated that allows customers to determine the dollar amount of their monthly payments by breaking down their order’s purchase price into three to 13 monthly or biweekly payments that fit their budget.

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ELAYAWAY RESEARCH BRIEFING

Like traditional layaway programs, with eLayaway®, customers are choosing to make payments over time for items they have identified with the merchant. Payments are automatically deducted by eLayaway® from the consumer’s bank account via Automated Clearing House (“ACH”) on a schedule that is set by the consumer at the time of purchase. During the collection process, as payments are being made, the growing balance is securely held in an account in trust for the customer with HSBC, eLayaway, Inc.’s banking partner. The Company’s relationship with HSBC also enables merchants to gain individual access into a bank sponsored website where they can easily monitor the accruing of customer funds from a transaction with eLayaway®. Like traditional layaway programs of the past, delivery of the product or service happens once payments are complete. Thus, once an order has been paid in full, the funds are released to the merchant, who in turn releases the item and ships it directly to the customer and/or enables the customer to access the service for which they have paid. Customers are able to cancel any purchase at any time for a full refund, with the exception of a $25 cancellation fee and the initial 1.9% transaction fee. Membership Cost The Company offers customers two types of membership: Standard and Advantage. Standard membership is free and enables use of the automated layaway payment process at authorized merchants for a transaction fee of 1.9% of the total purchase price. Advantage membership costs $8.95 per month to use the system, with no transaction fees charged on the first $1,000 of purchases and no cancellation fees should the consumer decide to cancel their purchase altogether. Additionally, qualified purchases by eLayawayADVANTAGE™ members are also reported to PRBC® where their payment history
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is recorded and reported to FICO®, helping to improve their FICO® Expansion Score. (Credit agencies use FICO® software to generate FICO® scores which are used to compile credit reports on customers that are then sold to all kinds of potential lenders.) Importantly, a customer’s FICO® Expansion Score can actually improve by successfully completing a qualified eLayaway® payment schedule. This gives consumers an additional reason to use the eLayaway® payment system, as the opportunity to potentially improve their alternative credit score while making purchases is actually a very helpful and relevant feature to millions of individuals looking to build or recover their credit profile in this relatively adverse economic environment. Benefits to Customers The goal of eLayaway® is to make the products and services consumers want to buy available, more affordable and easier to pay for through a series of structured prepayments that are made over an extended period of time. The benefits of using eLayaway® to customers are outlined below: · eLayaway®’s modified payment schedule makes purchasing items even more attractive to potential buyers and, in many cases, enables them to actually “pull the trigger” and say “yes” to buying, knowing they will not have to come up with the larger total sum price all at once. · Flexible payment schedules are set by the customer to best fit their budget. · Unlike traditional credit purchases, customers do not pay interest charges or credit card fees on any eLayaway® transaction. In fact, eLayaway® purchases are made at a much lower fee of 1.9% as opposed to the often much higher annual percentage rates (“APR”) charged by credit card companies on outstanding balances.

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· Customers incur no additional debt or burden to their credit position as a result of eLayaway® purchases, given all products and services are paid for in full prior to receipt. · By using eLayaway® to make payments, consumers can conserve their existing credit lines for other needs. · eLayaway® does not require any personal credit checks, minimum credit scores or other such financial requirements. · Qualified purchases by eLayawayADVANTAGE™ members are reported to PRBC® and can help improve their FICO® Expansion Score, putting them on the road to a better credit rating and the extended benefits this can bring to one’s financial profile. eLayaway® Merchants The Company markets its layaway payment processing and management services to online merchants and, in the very near future, to the Brick & Mortar retail industry as well. To date, the Company has developed a merchant network of over 700 online merchants, a figure that is expected to grow very meaningfully going forward in 2010 and beyond. The Company sells its offering both directly to the smaller and midsized merchant markets as well as part of a larger technology package offering that is typically sold to larger enterprise level merchants. Specifically, for larger merchants, eLayaway® has teamed-up with several eCommerce partners to integrate and preinstall the eLayaway® technology in a complete payment-and-checkout package that is then sold as a technology platform to merchants and retailers. As part of this package, merchants interested in the eLayaway® component can “optin” to using the Company’s technology offering. eLayaway® enables merchants to generate additional revenue from selling products and services to shoppers who otherwise could not
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afford to buy them or who might hesitate to make a purchase based on cost considerations. Large, Well Known Merchants The Company has strategically focused many of its marketing and partnership efforts on merchants that are known as the premier players in their respective industries such as Big-Box retail stores, well known cruise lines and all major professional sports leagues. To date, the Company has made significant progress in these areas by contracting with several National Football League teams who now use the eLayaway® payment service. The Company has also established pilot programs with other professional sports leagues and international travel companies. Small- and Mid-Sized Merchants Although small- to medium-sized merchants are responsible for approximately 50% of the dollars transacted online, they comprise 99% of the total online merchant base. These merchants are much quicker to establish new business strategies, such as implementation of the eLayaway® payment process, than their larger more bureaucratic retail counterparts. With these smaller businesses in particular attempting to stay solvent throughout this economic downturn, there remains a high demand in this market for alternative payment options. eLayaway® provides retailers with just such an effective alternative and, perhaps even an advantage as well, to help them mitigate revenue loss and cart-abandonment while simultaneously growing revenues. How eLayaway® Works – for Merchants & Retailers Before joining the eLayaway network, all merchants are thoroughly screened in order to assure they meet the Company’s strict quality standards. Qualified merchants then sign up with eLayaway, Inc. to offer layaway payment options

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to their customers. The eLayaway Merchants:
®

Process

for

Retailers

&

enables the customer to access the service for which they have paid. Since order fulfillment can occur directly from a merchant’s warehouse or even from their distributor, items purchased through eLayaway® do not need to be kept and stored, thereby saving the retailer a considerable expense as opposed to the traditional layaway programs of the past where items were held at the store by seller until final pick-up by the buyer. Membership Cost

Merchants are able to integrate the eLayaway® payment option into their online checkout process by visiting the Company’s website and signing-up to open an account by entering their business information. After signing-up with eLayaway®, merchants are able to directly integrate the eLayaway® payment technology into the online checkout section of their website. At this point, customers shopping online will then be able to choose the option of paying for an item using the eLayaway® structured payment plan. Once a customer has chosen the eLayaway® payment option and completed all accompanying information, this data is sent to the Company for processing. Merchants use the eLayaway® Merchant Control Center to manage their past and present orders, generate reports and view analytics. During the time payments are actually being made, eLayaway® manages the payment collection process and any supporting services with a customer on behalf of its merchant clientele. Thus, eLayaway® automatically deducts payments from a customer’s bank account and holds the funds in an account in trust while they accrue to the total purchase price amount. Once a customer has completed the final payment and the order has been paid in full, the funds are released from the account in trust to the merchant, who then in turn fulfills the order and ships the item directly to the customer and/or
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Unlike most credit cards and other payment processors, eLayaway® does not charge merchants a transaction fee. Rather, all merchants are charged a monthly flat-rate service fee of $9.99 (about $120 per year) that includes listing in the eLayaway Merchant Network, listing in eLayaway’s exclusive search engine and free eLayaway® order processing for the first $2,000 in sales. After the first $2,000 per month in sales using eLayaway®, merchants are then charged an additional flat-rate monthly processing fee that increases only modestly according to the actual amount of eLayaway® sales made. Benefits to Merchants Affordability has become increasingly important to consumers over just the past few years. With the ongoing tightening of the credit markets and the economic downturn, fewer and fewer consumers are finding they have access to the credit limits they once had and, as such, retailers must use innovative and proactive solutions to help customers afford the products and services they desire. In fact, the Company has noted that merchants report seeing a decrease in shopping cart abandonment and an increase in sales after adding eLayaway® to their payment options. The benefits to merchants and retailers of offering the eLayaway payment option to their customers are listed below: · eLayaway® allows merchants to offer their

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cost conscious customers a unique alternative payment plan that sets them apart from the competition. · By using and promoting eLayaway® to consumers, merchants can expand their own market reach, and therefore revenues and profits, to include millions of creditconscious shoppers who were either previously unreachable or looking for alternatives to traditional credit card purchasing. · eLayaway® enables merchants to reacquire layaway minded consumers who were dissatisfied when prior traditional layaway methods were discontinued due to various cost and logistics inefficiencies. · Merchants are able to collect 100% of the asking-price for their goods and services. · Merchants benefit from increased traffic to their websites generated from the growing membership base of eLayaway® and visits to the Company’s online mall. BUSINESS DIVISIONS While the Company focuses widely on tapping all merchant and retail sales in general, it has also established three specific business divisions to address the opportunities in the sports, travel and health related industries in particular. eLayawaySPORTS™

and sell merchandise, seat licenses, sponsorships and other products and services using eLayaway®. Sports organizations are able to offer eLayaway® partial pre-payment plans to provide fans with an easier and more responsible way to purchase tickets. Some of the sports teams that have deployed eLayaway® to date include the New Orleans Saints (“Saints”) of the National Football League (“NFL”) who were able to sell over $300,000 in season tickets in less than 6 weeks; the Minnesota Vikings (NFL); the Jacksonville Jaguars (NFL); and the Detroit Redwings (National Hockey League). The Company has received an extraordinary amount of interest from the sports world in its program and is working with other professional sports teams, sports leagues, speedways and college athletic programs to deploy the eLayaway® solution. The Market for Sports Regarding the market for eLayawaySPORTS™, the professional sports teams and organizations industry is estimated to generate over $6.4 billion in annual revenue from admission fees alone. The entire sports industry’s admissions revenues are easily thought to be even higher, as this figure does not include non-team sports such as golf, tennis, auto racing or any collegiate sports. The Company estimates eLayaway®’s addressable market in the sports industry to be approximately $26 million. Furthermore, it is estimated that sports related sales make up only about 30% of all ticket sales. The Company believes other ticket sales including events, conferences, theater and music concerts, among others, represent exciting new markets with much potential for the eLayaway® solution going forward.

eLayawaySPORTS™ was developed as a division of eLayaway, Inc. to allow sports organizations to sell tickets, renew season tickets
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eLayawayTRAVEL™ Healthcare is perhaps the most diversified industry of the eLayaway® market segments. With hundreds of thousands of doctors throughout the United States, there is a considerable amount of opportunity for eLayawayHEALTH™ in the health care industry. As the economy continues to struggle, the cost of insurance and deductibles are consistently rising and, as a result, many Americans are looking for new ways to pay for healthcare without having to go into additional debt. eLayawayHEALTH™ was established to make medical treatments easier to afford by allowing customers to make regular automatic installments that fit their budget towards the full purchase price or down payment of qualified medical procedures. Once paid in full, customers are able to receive treatment without the need to incur any debt. To use eLayawayHEALTH™, consumers must first consult with a participating provider about specific eLayawayHEALTH™ payment terms available for their particular procedure, and sign up to be an eLayawayHEALTH™ member with their provider or at eLayawayHEALTH.com. To begin making eLayaway® payments toward their procedure, users then procure and accept an actual price quote from the participating provider and choose the payment schedule to match their budget requirements. The medical procedure may begin once payments have been made in full. The Market for Healthcare Regarding the market for eLayawayHEALTH™, in January 2008, over six million Americans created Health Care Savings Accounts and High Deductible Health Care Plans, which let people save pretax money in accounts and spend the cash on health care products and services, in order to cope with the current economy. Today, this figure is believed to be much higher. We believe these circumstances and the current

The travel industry offers a natural fit for the eLayaway® prepayment option as vacations typically require a good deal of planning, well in advance of the actual travel date, and can be a costly proposition if the entire expense has to be paid up-front all at once. Within the cruise industry, for example, the average price per person for a seven day cruise is approximately $1,100, and typically people interested in taking a cruise plan their vacation months, if not more than a year, in advance. The Company is currently working to integrate Carnival Cruise Lines (“CCL”) into eLayawayTRAVEL™ in order to make it possible for members to book CCL cruises and purchase gift certificates using the eLayaway® payment plan. The Market for Travel Regarding the market for eLayawayTRAVEL™, Marketwatch.com stated that the 2007 online travel industry was a $40 billion market. We believe for eLayaway®, securing just a small piece of this industry could lead to profitable returns. The Company estimates eLayaway®’s addressable market in the travel industry to be approximately $141 million at present. eLayawayHEALTH™

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economic environment present an ideal time for the launch of eLayawayHEALTH™ into the healthcare industry. The Company estimates very conservatively that the current addressable market for eLayawayHEALTH™ is well over $50 million and set to grow significantly going forward. BUSINESS MODEL

integration into one such eCommerce platform gives eLayaway® access to a very large merchant base, often in the many thousands of retailers with online sales capabilities and websites. This venue has provided the Company with steady growth and eLayaway® continues to attract attention from many of the world’s top e-retailers and traditional Big Box retailers seeking alternative payment solutions that increase shopping cart conversion into actual revenue. eLayaway® is currently pre-installed with these eCommerce partners:

The Company also has a direct marketing program targeted to its potential merchant customers. STRATEGIC GROWTH & PARTNERSHIPS eLayaway ’s approach to becoming a billion dollar integrated payment brand is focused in part on forming strategic partnerships with leading eCommerce and payment brand enabling platforms. These eCommerce companies provide, for example, the online software that enables customer shopping carts at checkout and other online checkout options that allow merchants to run the sales process on their websites. By contracting with these eCommerce “payment docking station” partners, eLayaway® is actively integrating with many Internet retailers and is also currently being courted by major eCommerce and Brick & Mortar platforms to provide payment processing services to their multitude of small-and medium-sized merchants. Once integrated into an eCommerce platform, the eLayaway® option is presented to the merchant as part of a larger technology package and service offering, and the merchant can simply choose to “opt-in” to using eLayaway®. Thus,
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®

REVENUE STREAMS eLayaway® has multiple revenue streams from diverse sources of income, as discussed below. Merchant Subscription Fees The Company’s primary source of revenue is generated by the subscription and transaction fees merchants pay to integrate and use the eLayaway® system. All merchants are charged a monthly service fee of $9.99 to offer eLayaway® to their consumers. This monthly subscription fee applies to the first $2,000 per month in eLayaway® orders and entitles merchants to incorporate the eLayaway® payment option in their own checkout websites as well as inclusion in the eLayawayMALL™. After the first $2,000 per month in eLayaway® orders, merchants are then charged an additional monthly processing fee that increases from $20 to a maximum amount of $150, according to monthly eLayaway® sales. Thus, the most a

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merchant would pay per month is $159.99 which, is most cases, is still much lower than would be paid to credit card companies in transaction fees in order to be able to accept an issuer’s card. In exchange for these fees, eLayaway® merchants received access to the eLayaway® payment option, limited marketing support, as well as inclusion in the eLayaway® merchant directory and search engine. Merchant subscription fees represent a recurring monthly revenue stream to the Company. As eLayaway®’s merchant network grows, this important revenue stream will continue to increase in size and momentum. Consumer Purchase Transaction Fees eLayaway®’s secondary source of revenue is derived from a percentage charge on each consumer transaction that is purchased using eLayaway®. While basic membership is free, upon making a purchase, members are charged a modest, one-time upfront 1.9% transaction fee on the total purchase amount before tax. Thus, for every $100 transacted through eLayaway®, the Company receives $1.90 from the end customer. The Company charges this one-time fee for each purchase processed through the eLayaway® plan in return for managing the online layaway payment system. These non-refundable fees are added to the consumers’ checkout balance and are charged on the first scheduled payment. For this reason, these fees are fully recognized by the Company as revenue upon execution of the transaction. Cancellation Fees Although eLayaway® prefers that customers follow through with their commitment to the merchants, some sort of cost incentive such as a cancellation fee helps ensure that customers are adequately incentivized to complete their purchase. For this reason, eLayaway® also charges a $25 cancellation fee or 10% of the
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purchase order, whichever is less, for customers who elect to cancel their order at anytime during the payment plan. In most cases, the $25 fee is greater than the amount of money eLayaway® would have collected had the consumer completed the transaction, granting eLayaway, Inc. an additional revenue stream. eLayawayADVANTAGE™ Membership Fee The eLayawayADVANTAGE™ membership is an upgraded version of the Company’s basic membership and offers consumers the option of reporting their use of eLayaway® to Payment Recording Builds Credit (“PRBC®”) in order to build their alternative credit score. PRBC® is an independent third party that collects, manages and reports consumer credit performance to the Fair Isaac Corporation (“FICO®”) for use in their FICO® Expansion Score. This offering makes eLayaway® a powerful tool for consumers interested in improving their credit worthiness. Consumers pay $8.95 per month to become an Advantage member, which also includes other benefits such as free transactions and periodic discounts on products from participating eLayaway® merchants. “The Float” - Interest Earned While consumers make their payments, the funds collected during the layaway process are held in an account in trust at HSBC in an eLayaway® sponsored bank account while they accrue to the total purchase price amount. Interest earned on the held funds becomes revenue and operating capital funding for eLayaway®. The Company estimates such funds held in the account in trust could potentially easily reach several hundred million dollars by the end of next year. eLayawayMALL™ Commissions The eLayawayMALL™ is the Company’s online marketplace which contains a variety of quality

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products from numerous well-known merchants. eLayaway® earns commissions on every product sold through the mall, payable to the Company by its member merchants. Advertising Revenue The Company also has the potential to implement an advertising program on the eLayawayMALL™ website. This revenue stream would be in addition to other revenue categories the Company already receives. Given the Company is in a position to know where each customer is in the process of buying a particular item through eLayaway®, the Company’s advertising model would have the unique ability to present the buyer with ads for products or services that complement that future purchase, thereby potentially increasing sales and providing a very targeted, very powerful marketing tool. Scheduled for 2011, merchants interested in advertising throughout eLayaway.com will be able to purchase advertising space on the website itself and/or throughout eLayaway®’s monthly consumer newsletter and quarterly merchant releases.

of individual users. Total Shares Outstanding At present, there are approximately 17.7 million common shares of eLayaway issued and outstanding.

CAPITALIZATION

The Company is on track to close growth capital this year for product development, working capital and general corporate purposes. Specifically, the Company anticipates using any new funds for marketing efforts directed at growing its base of both merchants and the public
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ELAYAWAY RESEARCH BRIEFING DISCLOSURES

Analyst and Other Important Disclosures Analyst Certification - I, Joseph Noel, hereby certify (1) that the views expressed in this research Company report accurately reflect my personal views about any or all of the subject securities or issuers referred to in this Company report and (2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this Company report. Analyst: Joseph Noel is a 29-year veteran in the investment and technology industries. Joe was recently a senior analyst at Pacific Growth Equities, LLC, where he tracked the communications equipment/services and advanced industrial sectors. Prior to Pacific Growth, he covered both the telecommunications equipment and services industries at Hambrecht & Quist and was employed by Gartner/Dataquest as a communications industry analyst. Before becoming an analyst, Mr. Noel received solid industry experience at a number of telecommunications carriers, including MCI, where he was responsible for the frame relay product marketing launch; and British Telecom, where he was involved in strategic planning for the Company’s Internet access service. He was also employed by various Bell Operating Companies in both marketing and technical roles for nearly ten years. Mr. Noel received his MBA in finance from Wake Forest University, and holds a BS in business and economics. A four-time Wall Street Journal All-Star Analyst, Joe specializes in emerging growth companies in the communications, Internet and advanced industrial equipment sectors. The coverage analyst uses a relative rating system in which stocks are rated as: BUY, SELL or HOLD.
BUY - the stock is expected to outperform the unweighted expected total return of the sector over a 12-month investment horizon. SELL - the stock is expected to under perform the unweighted expected total return of the sector over a-12 month time horizon HOLD - the stock is expected to perform in line with the unweighted expected total return of the sector over a 12-month investment horizon.

Information, opinions, or recommendations contained in this research report are submitted solely for informational purposes. The information used in statements of fact made has been obtained from sources considered reliable, but we neither guarantee nor represent their completeness or accuracy. Such information and the opinions expressed are subject to change without notice. This research report is not intended as an offering or a solicitation of any offer to buy or sell the securities mentioned or discussed. The firm, its principles, or the assigned analyst may or may not own or trade shares, options, or warrants of this covered Company. Emerging Growth Research, LLC, has received, or will receive compensation for the production of this report and other related services from the Company. Additionally, the analyst responsible for the production of this report may own common stock or warrants in the subject Company or companies. This report should be considered a paid promotional piece and the author may or may not liquidate shares. The views expressed in this Company research report accurately reflect the analyst’s personal views about any or all of the subject securities or issuers referred to in this Company report, and no part of the analyst’s or the firm’s compensation was, or will be directly or indirectly related to the specific recommendation or views expressed in this report. Opinions expressed herein reflect the opinion of Emerging Growth Research, LLC and are subject to change without notice. We claim no responsibility to update the information contained in this report. Investors should consider the suitability of any particular investment based on their ability to accept certain levels of risk, and should not rely solely on this report for information pertaining to the Company covered. The material in this document is intended for general circulation only and the recommendations contained herein do not take into account the specific objectives, financial situation, or particular needs of any particular person. An investor should consult his/her investment representative regarding the suitability of this investment and take into account any specific investment objectives, financial situation, or particular needs before he or she makes a commitment to purchase the shares of this or any other Company's stock. No part of this document may be reproduced in any manner.

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