❖XPstore

AwesomeDealsDeluxe

Preliminary Lender & Investor Diligence Response

Proposed $100,000 Working Capital / Inventory Financing Facility

16% annualized interest  •  Interest-only monthly payments  •  12-month term  •  Balloon repayment at maturity

❖  EXECUTIVE SUMMARY

XPstore is a hybrid local game store (LGS), live-commerce operation, and e-commerce collectibles business focused primarily on trading card games (TCGs), sealed product, singles, events, and community-driven monetization. The business operates both physically in Flowery Branch and nationally through online marketplaces and streaming/live-sales channels.

The company’s operating model is not dependent solely on walk-in retail. Revenue is diversified across multiple channels:

  • Brick-and-mortar retail
  • TCGplayer
  • eBay
  • Whatnot livestream sales
  • Direct online sales
  • Event revenue
  • Community / webcam tournaments
  • Singles acquisition and resale
  • Distributor allocation advantages
  • Emerging direct manufacturer relationships

The proposed $100,000 facility is intended primarily for high-turn inventory acquisition and expansion of inventory depth in proven fast-moving categories with historically strong liquidity.

❖  USE OF PROCEEDS

What is the exact use of proceeds for this loan?

Primary use of proceeds:

  • Purchase of high-turn sealed TCG inventory
  • Opportunistic allocation buys
  • Singles inventory acquisition
  • Inventory depth expansion for proven fast-selling SKUs
  • Release-cycle inventory positioning
  • Supplemental working capital buffer for rapid inventory turns

The financing is intended specifically for revenue-generating inventory rather than fixed assets, buildouts, or payroll expansion.

❖  INVENTORY STRATEGY

What inventory specifically will be purchased?

Primary focus:

  • Pokémon sealed product
  • Pokémon ETBs
  • Pokémon booster boxes
  • Pokémon specialty collections
  • Pokémon booster bundles
  • Pokémon singles
  • Union Arena
  • Gundam TCG
  • One Piece
  • Disney Lorcana
  • Digimon
  • UVS / Universus
  • Upper Deck products
  • Specialty allocations
  • Rare / distributor-direct opportunities

Strategic expansion categories:

  • RumbleRama LIVE / larger events (total cost $1,500–$2,500; expected revenue ~$12,500)
  • VeeFriends
  • Kayou
  • Direct manufacturer relationships

Size of first order?

Expected first deployment:

  • Approximately $50,000–$70,000 deployed immediately into fast-turn inventory
  • Remaining capital retained for rolling replenishment, allocation opportunities, and liquidity management

How quickly is that inventory expected to sell?

  • Primary inventory: estimated 30–60 day average turn
  • Premium / high-demand releases: can move substantially faster
  • Singles: often same-week to 30-day liquidity depending on category
  • Release-event inventory: frequently sold during launch windows

Historically strongest turns are tied to:

  • Organized Play release cycles
  • Allocation drops
  • Event weekends
  • Livestream sales

What expected gross margin is on the funded inventory?

Target blended gross margins:

  • Sealed product: ~30–40%
  • Singles: ~25–40%
  • Distributor-direct / AIR product: 35–45%+

Projected blended margin on financed inventory: approximately 25–35% gross. Some internally modeled scenarios were based around ~30% gross profit turns.

How liquid is the inventory?

Primary inventory is considered highly liquid within the collectibles industry. Liquidation channels include:

  • TCGplayer
  • eBay
  • Whatnot
  • In-store
  • Discord / community sales
  • Livestreams
  • Vendor / event liquidation

High-demand Pokémon sealed inventory can typically be liquidated near market value quickly.

How much inventory is over 90 / 180 days old?

No formal aging report is currently available. Operationally:

  • Focus is intentionally weighted toward modern fast-turn inventory
  • Older stagnant inventory is monitored and discounted as needed

❖  INVENTORY PROFILE OVERVIEW

XPstore operates primarily in high-turn collectible retail inventory with active secondary-market demand and multiple sales channels. The business model prioritizes:

  • Fast-turn inventory
  • Allocation-based purchasing
  • Limited speculative long-term holds
  • Strong sell-through velocity on new releases
  • Multi-channel liquidation capability

Estimated Inventory Aging Breakdown

Aging Bucket Est. % of Inventory Notes
0–30 Days 55–65% Current releases, restocks, and high-demand inventory
31–60 Days 10–15% Standard operational inventory rotation
61–90 Days 5–10% Slower-moving or specialty inventory
90–180 Days 5% Older sealed inventory, accessories, or niche products
180+ Days 5% Strategic hold inventory or discontinued items

Inventory Movement Overview

Most inventory is designed to move within:

  • 7–14 days through online and retail channels
  • 1–3 days (processing window) for event / live-sale inventory

Even slower-moving inventory generally retains recoverable value due to active secondary-market demand and broad resale channels.

Inventory Liquidity Assessment

Inventory Category Liquidity
Core retail inventory Extremely High
Singles / collectibles High
Specialty inventory Medium–High
Accessories / supplies Medium
Legacy inventory Medium–Low

What inventory moves fastest?

All primary inventory — with 900 sq ft, we don’t sit on anything.

Is there an option to buy more of that, or are you at the distributor’s mercy?

Partially allocation-based, but the company has several advantages:

  • Authorized distributor relationships
  • Upper Deck AIR designation
  • Direct manufacturer opportunities
  • Established allocation history
  • Event / store status advantages
  • Ability to source through secondary wholesale channels

Some products remain distributor-allocation dependent.

What inventory tends to get stuck?

Higher-risk inventory categories:

  • Overprinted lower-demand sets
  • Niche anime TCGs
  • Slower legacy inventory

Management actively avoids deep over-positioning in slower categories.

If you had to liquidate inventory quickly, what % of cost could realistically be recovered?

Estimated liquidation recovery:

  • Primary inventory: 85–100%+ of cost
  • Singles inventory: variable
  • Broader mixed inventory: ~70–85% blended recovery in an accelerated liquidation scenario

❖  SALES & PROFITABILITY

Please send financials.

Financials folder: https://drive.google.com/drive/folders/1Cdb3i585aM9IMhfB1I425v_rut_FdVyI?usp=drive_link

Monthly revenue for the last 12 months

See above; additional reporting available at https://venturesmarketing.org/xp/

Gross margins by category

Category Estimated Gross Margin
Pokémon sealed 15–30%
Pokémon singles 25–50%+
Accessories 30–50%
Events High margin
Livestream sales Higher blended margins
Distributor-direct inventory Higher than standard distro

EBITDA / operating cash flow

Formal EBITDA schedule pending finalized accounting package. Operationally:

  • Business is cash-flow active
  • Inventory turns generate recurring reinvestment cycles
  • Financing request is growth-oriented rather than emergency restructuring capital

Seasonality trends

Strongest periods:

  • Holiday season
  • Major releases
  • Tax return season
  • Summer conventions / events
  • High-profile TCG launches

Additional spikes:

  • Livestream events
  • Tournament weekends
  • Release-day allocations

❖  STORE DEPENDENCY & OPERATIONS

How dependent is the business on the physical store?

The store is strategically important, but the business is materially diversified online. We were offline for four years previously — it’s in our DNA.

Revenue sources include:

  • eBay
  • TCGplayer
  • Whatnot
  • Direct online sales
  • Discord / community sales
  • Livestreaming
  • Webcam tournaments

% of sales: brick-and-mortar vs online

Online 15–25%
Offline 75–85%

Average daily foot traffic

40–50+ orders per day, with 75–85% of those being in person.

The store supports:

  • Daily retail traffic
  • Weekly organized play
  • Tournament attendance
  • Release events
  • Webcam / community crossover traffic

Average ticket size

Varies materially by category. Estimated:

  • Walk-in retail: moderate average ticket
  • Online / live-commerce: substantially higher average transaction values

Local customer base strength and repeat customer percentage

Strong repeat-customer community. Return customer rate is 64%.

Indicators:

  • Active Discord communities
  • Recurring event attendance
  • Weekly organized play
  • Community-driven retention
  • Local / regional reputation

❖  STORE HEALTH

How healthy is the store operation?

Operational strengths:

  • Diversified revenue
  • Strong community engagement
  • National sales reach
  • High-liquidity inventory categories
  • Multiple supplier relationships
  • Strong growth trajectory
  • Event ecosystem
  • Established online reputation

Primary operational risks:

  • Allocation volatility
  • TCG market softening
  • Inventory timing
  • Cash-flow management during aggressive scaling

❖  LEASE & OCCUPANCY

Current rent $2,300 / month with CAM
Lease term 2-year lease; 11 months remaining on current term
Renewal options See above
Landlord / occupancy No issues

❖  SUPPLY CHAIN & SOURCING

How do you source inventory?

  • Authorized distributors
  • Direct manufacturer programs
  • Secondary wholesale
  • Customer trade-ins
  • Singles acquisition
  • Events / vendor relationships

Are you an authorized distributor account?

Yes — we hold several authorized distributor accounts, but we are not ourselves a distributor.

Relevant relationships / programs include:

  • WPN
  • Upper Deck AIR
  • Upper Deck Direct Dealer
  • Bandai sanctioned / pilot relationships

Who are the top suppliers?

All US-based distributors and direct relationships.

Are allocations stable or at risk?

Allocation-based industries inherently carry volatility risk. However, current positioning appears stronger than average due to:

  • Store / community activity
  • Organized play support
  • Online presence
  • Pilot / event participation
  • Direct dealer status

Any supplier concentration issues?

Pokémon and major distributors remain important concentration points. Management is actively diversifying categories and supplier relationships.

❖  INVENTORY MANAGEMENT

How do you track and manage inventory?

  • POS / inventory systems
  • TCGplayer integrations
  • Collectr integrations
  • Marketplace tracking
  • Manual review processes

What systems and software do you use?

  • Shopify
  • TCGplayer
  • eBay
  • Whatnot
  • Collectr
  • Discord / community systems

How is inventory valued?

Generally market / value-based, using:

  • TCGplayer market pricing
  • Cost basis tracking
  • Marketplace comparable pricing

What is your inventory turnover?

Fast-moving inventory can turn within 1–14 days, sometimes faster on premium releases.

Average days inventory sits before sale

Estimated blended average: approximately 5–14 days overall, depending on category.

Which categories turn fastest / slowest?

Fastest:

  • Pokémon / primary inventory
  • Singles
  • Limited allocations
  • Event-supported releases

Slowest:

  • Niche TCGs
  • Accessories
  • Overprinted sets

Historical inventory write-downs or losses

No major disclosed inventory impairment history currently available.

❖  DEBT & LIABILITIES

Existing debt Shopify Capital — $50,889.95
UCC liens already filed None
Overdue taxes / vendors None
Personal financial stmt To be provided

❖  COLLATERAL & SECURITY

What collateral protections can be provided?

  • Inventory
  • Business assets
  • Personal guarantee

Is inventory insured?

Yes — $1M per incident / $2M aggregate.

Are you willing to personally guarantee the loan?

Yes.

❖  RISK ANALYSIS

What are the biggest operational risks?

Primary risks: minimal when purchasing is executed properly.

What happens if Pokémon demand slows materially?

We sell substantially more than Pokémon, and percentage-wise it shrinks proportionally — we are not dependent on it.

What happens if distributor allocations are reduced?

Potential impacts:

  • Lower inventory access
  • Margin compression
  • Reduced growth velocity

Mitigating factors:

  • Multiple suppliers
  • Secondary sourcing
  • Direct relationships
  • Singles ecosystem
  • Community-driven demand

What products have historically lost the most value?

Generally:

  • Overprinted sets
  • Non-supported TCGs
  • Speculative inventory
  • Accessories

❖  MANAGEMENT

Have you operated through downturns before?

Yes. Management has experience operating through:

  • TCG market cycles
  • Allocation fluctuations
  • Platform shifts
  • E-commerce volatility

How much owner capital is currently invested in the business?

To be provided.

Are you taking distributions while seeking financing?

No.

What are you paying yourself?

Nothing from this business yet.

❖  ADDITIONAL DILIGENCE QUESTIONS

What inventory are you most worried about getting stuck with?

Lower-liquidity concerns:

  • Niche TCG inventory
  • Slower anime properties
  • Accessories
  • Overprinted sets

How much inventory today is worth less than your cost?

Formal analysis pending. Industry reality: some percentage of aged inventory in any TCG business typically falls below acquisition cost over time.

What would cause this business to struggle materially?

Primary downside scenarios:

  • Severe Pokémon contraction
  • Allocation collapse
  • Significant consumer discretionary pullback
  • Excessive inventory expansion without matching turns
  • Cash-flow compression

What happens if this loan is not made?

The business likely continues operating and growing organically, but:

  • Growth velocity slows
  • Allocation opportunities may be missed
  • Inventory depth remains more constrained
  • Ability to capitalize on high-turn releases becomes limited
  • Scaling pace reduces materially versus financed growth scenario

 

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