UFOC

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Sample UFOC

FRANCHISE OFFERING CIRCULAR

AUSSIE PET MOBILE, INC.

{A California Corporation)

34189 Pacific Coast Highway

Dana Point, California 92629

(949) 234-0680

www.aussiepetmobile.com

We offer a Franchise to operate a specified number of Aussie Pet Mobile® Franchise Businesses within the Protected Areas specified using the "Aussie Pet Mobile®" Marks under one of four Franchise Programs providing mobile pet grooming services. Under our "Bronze Program", you will operate 1 Franchise Business, under our "Silver Program", you will operate 2 Franchise Businesses, under our "Gold Program", you will operate 3 Franchise Businesses, and under our "Platinum Program" you will operate 6 Franchise Businesses. The Franchise Fee for each program is:

Bronze Program: Silver Program:

Gold Program:

Platinum Program:

You receive 1 Franchise Business and pay a Franchise Fee of $35,000.

You receive 2 Franchise Businesses and pay a Franchise Fee of $60,000. (equal to $30,000 x 2)

You receive 3 Franchise Businesses and pay a Franchise Fee of $75,000 (equal to $25,000x3).

You receive 6 Franchise Businesses, 1 of which is free of any Franchise Fee. The Franchise Fee under this program is $125,000 ($25,000 x 5).

If you are a Franchisee in Good Standing purchasing 1 or more additional Franchise Businesses within the Protected Area(s) already designated to you by us, then you must pay our then-current charge for the Designated Equipment.

If you are a Franchisee in Good Standing purchasing 1 or more additional Franchise Businesses within Protected Area(s) not already designated on your Development Schedule by us, then you must pay the then-current Franchise Fee for your program and our then-current charge for the Designated Equipment.

You must also purchase the Designated Equipment Package for $25,000 per Franchise Business, plus applicable sales tax and shipping.

Bronze Program participants must pay an initial training fee of $1,000.00.

Silver, Gold and Platinum program participants must purchase and use the Aussie Customer Management System ("ACMS"). The cost of the system is $1,500.

The estimated initial investment required under the Bronze Program ranges from $83,238 to $80,488.

Aussie Pet Mobile, Inc. Offering Circular 9/4^062/1/06 California

The estimated initial investment required under the Silver Program ranges from $141,988 to $144,488.

The estimated initial investment required under the Gold Program ranges from $188,988 to $191,488.

The estimated initial investment required under the Platinum Program ranges from $238,988 to $241,488.

Under the Silver, Gold and Platinum Programs, the estimated initial investment required for an additional individual franchise within a Protected Area already designated by us ranges from $48,238 to $50,038.

Under the Silver, Gold and Platinum Programs, the estimated initial investment required for an additional individual franchise within a Protected Area not already designated by us ranges from $73,238 to $75,038.

Risk Factors:

THE FRANCHISE AGREEMENT CONTAINS A MANDATORY BINDING ARBITRATION CLAUSE GOVERNING NEARLY ALL DISPUTES BETWEEN YOU AND US, AND ALSO PROVIDES FOR A FACE-TO-FACE MEETING AND MEDIATION TO SETTLE DISPUTES. THE FACE-TO-FACE MEETING, MEDIATION, BINDING ARBITRATION (AND ANY LITIGATION) AND ANY ARBITRATION APPEAL WILL TAKE PLACE NEAR OUR THEN-CURRENT HEADQUARTERS, AND THAT MAY COST YOU MORE THAN IF THOSE PROCEEDINGS TOOK PLACE NEAR YOUR RESIDENCE OR BUSINESS. COSTS OF THE FACE-TO-FACE MEETING, MEDIATION, ARBITRATION AND ANY ARBITRATION APPEAL MAY BE GREATER THAN IN LITIGATION. YOU AND WE WILL GENERALLY BEAR EACH OF OUR OWN COSTS IN ANY DISPUTE, BUT THE ARBITRATOR CAN ASSESS COSTS (BUT NOT ATTORNEY'S FEES) AGAINST A LOSING PARTY. THE FRANCHISE AGREEMENT PROVIDES THAT THE LAW OF THE STATE WHERE THE LARGEST GEOGRAPHIC PORTION OF YOUR PROTECTED AREA IS LOCATED GOVERNS THE AGREEMENT. BY AGREEING TO ARBITRATE, YOU WAIVE YOUR RIGHTS TO A JURY TRIAL, AS WELL AS TO A TRIAL BEFORE A JUDGE IN A COURT OF LAW, YOU GENERALLY WAIVE YOUR RIGHT TO APPEAL AN ARBITRATION AWARD (EXCEPT TO A 3 ARBITRATOR APPEAL PANEL) AND MAY BE GIVING UP RIGHTS TO PRE-TRIAL DISCOVERY, AS WELL AS GIVING UP RIGHTS REGARDING CLASS ACTIONS. THE FRANCHISE AGREEMENT ALSO CONTAINS A LIMITATION ON THE TYPES AND AMOUNTS OF DAMAGES RECOVERABLE BY YOU OR US, REQUIRES YOU TO GIVE US NOTICE OF, AND OPPORTUNITY TO CURE, DEFAULTS BY US AND PROVIDES FOR A PERIOD OF TIME IN WHICH YOU OR WE CAN BRING CLAIMS WHICH MAY BE SHORTER THAN THAT PROVIDED BY APPLICABLE LAW.

THE POSSIBLE SUCCESS OF YOUR AUSSIE PET MOBILE® FRANCHISE MAY BE DEPENDENT ON THE LOCATION OR AREA YOU CHOOSE, THE LOCAL MARKET FOR THE PRODUCTS AND SERVICES OFFERED, COMPETITION AND OTHER FACTORS. THIS BUSINESS MAY BE SEASONAL AND YOUR RESULTS MAY DEPEND ON THE WEATHER IN YOUR TERRITORY. THESE FACTORS, ALONG WITH YOUR OWN BUSINESS ABILITY IN OPERATING YOUR AUSSIE PET MOBILE* FRANCHISE BUSINESSES AND THE EXTENT

Aussie Pet Mobile, Inc. Offering Circular 9W0S2/1/O6 California

TO WHICH YOU FOLLOW THE AUSSIE PET MOBILE® SYSTEM, TOGETHER WITH YOUR FINANCIAL AND OTHER RESOURCES, ARE THE THINGS MOST LIKELY TO DETERMINE YOUR POSSIBLE SUCCESS. THERE ARE NO ASSURANCES THAT YOU WILL BE SUCCESSFUL AND THIS IS A SPECULATIVE INVESTMENT.

YOUR OBLIGATION TO PAY ROYALTIES, MARKETING CONTRIBUTIONS AND OTHER AMOUNTS AND ALL OTHER OBLIGATIONS OF YOURS WHICH SURVIVE THE TRANSFER, REPURCHASE, EXPIRATION OR TERMINATION OF THE FRANCHISE AGREEMENT, WILL CONTINUE UNTIL THEY ARE SATISFIED IN FULL OR BY THEIR NATURE EXPIRE. IF YOUR OBLIGATIONS AND/OR RIGHTS UNDER THE FRANCHISE AGREEMENT HAVE BEEN TERMINATED BY REASON OF A DEFAULT, WE WILL NOT RELEASE OR DISCHARGE YOU FROM, AND WE WILL REQUIRE YOU TO PAY, AND PERFORM, EACH OF YOUR OBLIGATIONS UNDER THE AGREEMENT, INCLUDING YOUR OBLIGATIONS TO PAY PERCENTAGE ROYALTIES, MARKETING CONTRIBUTIONS AND OTHER AMOUNTS THEN DUE.

WE MAY TERMINATE YOUR FRANCHISE AGREEMENT IF YOU DEFAULT ON OTHER AGREEMENTS RELATED TO THE FRANCHISE BUSINESS WITH US OR OTHERS.

THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

Information comparing franchisors is available. Call the state administrators listed in Exhibit E or your public library for sources of information.

Registration of this franchise with the state does not mean that the state recommends it or has verified the information in this offering circular. If you learn that anything in this offering circular is untrue, contact the Federal Trade Commission and the appropriate state authority listed in Exhibit E.

Registration of this franchise in California does not constitute approval, recommendation, or endorsement by the Commissioner of Corporations.

Effective Date: Ma~~y 18, 2005, ao am~~ende~~d S~~epte~~mber 6, 2005~~________________

Aussie Pet Mobile, Inc. California

Offering Circular

9/4/052/1/06

ITEM

TABLE OF CONTENTS

PAGE

1. FRANCHISOR, ITS PREDECESSORS

AND AFFILIATES 1

2. BUSINESS EXPERIENCE 3

3. LITIGATION 5

4. BANKRUPTCY 910

5. INITIAL FRANCHISE FEE 910

6. OTHER FEES 4513

7. INITIAL INVESTMENT 4618

8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES 2527

9. FRANCHISEE'S OBLIGATIONS 2628

10. FINANCING 2730

11. FRANCHISOR'S OBLIGATIONS 2730

12. TERRITORY 3943

13. TRADEMARKS 4246

14. PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION 4347

15. OBLIGATION TO PARTICIPATE IN THE

ACTUAL OPERATION OF THE FRANCHISE BUSINESS 4347

16. RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL 4448

17. RENEWAL, TERMINATION, TRANSFER AND

DISPUTE RESOLUTION 4448

18. PUBLIC FIGURES §256

19. EARNINGS CLAIMS &256

20. LIST OF OUTLETS §358

Aussie Pet Mobile, Inc. Offering Circular 9/4/052/1/06 California

ITEM PAGE

21. FINANCIAL STATEMENTS §761

22. CONTRACTS ?61

23. RECEIPT 5761 EXHIBITS

A. FINANCIAL STATEMENTS

B. FRANCHISE AGREEMENT WITH ADDENDA

C. STATEMENT OF PROSPECTIVE AREA DEVELOPER/FRANCHISEE

D. CONFIDENTIALITY AGREEMENT AND ACKNOWLEDGMENT OF OPPORTUNITY TO EXAMINE MANUALS

E. LIST OF STATE ADMINISTRATORS AND AGENTS FOR SERVICE OF PROCESS

F. STATE ADDENDUM TO OFFERING CIRCULAR

G. LIST OF FRANCHISE BROKERS H-1. LIST OF CURRENT FRANCHISEES H-2. LIST OF FORMER FRANCHISEES

I. CONSENT TO TRANSFER

J. EARNINGS CLAIM

K. RECEIPT

Aussie Pet Mobile, Inc. Offering Circular 9/4TO2/1/06 California

1. THE FRANCHISOR. ITS PREDECESSORS AND AFFILIATES

The Franchisor. Business Form. Names. Address

To simplify the language in this Offering Circular, "we", "us" or "our" means Aussie Pet Mobile, Inc. (the Franchisor). We were incorporated in the State of California on February 22, 1999, and have offered franchises since October, 1999. Our principal place of business is 34189 Pacific Coast Highway, Dana Point, California 92629. We have 1 predecessor and 1 subsidiary. We do not offer franchises in any other line of business. We operate §-4 company-owned units in South Orange County, California.

"You" "your" or "Franchisee" means the person who buys the Franchise. If a corporation or partnership buys the Franchise, "you" includes your owners, as appropriate.

Our agent in this state authorized to receive service of process is in Exhibit E.

Our Business Activities and the Franchises to be Offered in this State

We have developed methods of marketing and operating mobile businesses providing pet grooming services, as well as marketing and servicing franchises for the operation of these businesses (the "System"). These services include bathing and grooming domestic pets including dogs and cats. These services are provided from a Sprinter Van (defined in footnote 6 of Item 7 below) purchased by you and customized by us with a Designated Equipment Package also purchased by you.

This Offering Circular describes the Aussie Pet Mobile® Franchises we offer in this state.

We offer, and award, to qualified applicants, a Franchise to operate a specified number of Aussie Pet Mobile® Franchise Businesses within the Protected Areas specified using the "Aussie Pet Mobile Marks. You may select one of four Franchise Programs and sign a single Franchise Agreement covering each of the Franchise Businesses purchased by you under the Program you select. Each Franchise Business is operated in a pre-determined Protected Area made up of one or more zip codes. Under our "Bronze Program", you will operate 1 Franchise Business. Under our "Silver Program", you will operate 2 Franchise Businesses. Under our "Gold Program", you will operate 3 Franchise Businesses, and under our "Platinum Program" you will operate 6 Franchise Businesses. Please see Exhibit B for a copy of the current form of Aussie Pet Mobile® Franchise Agreement.

We may also offer and award a Franchise allowing you to operate an additional Franchise Business within a Protected Area already assigned to you, in our Business Judgment.

The Aussie Pet Mobile® System is characterized by certain trademarks, trade dress, designs for certain equipment, training and marketing concepts, the Manual, distinctive color schemes and uniforms, specialized products and confidential information.

We believe that the market for mobile pet grooming is developing. The primary market for Aussie Pet Mobile services are pet owners looking for convenient, efficient pet grooming. If we award you a Franchise, you will compete with other businesses offering services similar to those offered by an Aussie Pet Mobile Business, including veterinarians, pet stores and grooming services and other fixed locations and mobile pet groomers.

Aussie Pet Mobile, Inc. UFOC 9/W53/1/06 California

Franchisees may be subject to general business, employment and motor vehicle laws and regulations. You should consult with your attorney and local, state and federal government agencies before buying your Aussie Pet Mobile® Franchise or any business to determine all legal requirements and consider their effects on you and cost of compliance. It is your sole responsibility, to investigate, satisfy and remain in compliance with all local, state and federal laws, since they vary from place to place and can change over time.

Prior Business Experience, Predecessors and Other Information

The Aussie Pet Mobile concept was created in 1996 by our President and Chief Executive Officer, Ian Moses, to satisfy the demand for mobile pet grooming services in Sydney, Australia. Mr. Moses' aim was to offer a convenient, affordable, reliable and efficient service to pet owners to maintain their pet's best well being. The Australian franchisor and our predecessor, Pet Mobile Pty. Ltd., which was incorporated in the State of New South Wales, Australia, has been offering franchises in Australia for mobile pet care services since December, 1996. The principal address of Pet Mobile Pty. Ltd. is 20 Narrabeen Park Parade, Warriewood, New South Wales 2110, Australia. You should note that Mr. Moses has sold his interest in Pet Mobile Pty. Ltd.

We have a subsidiary Aussie Pet Mobile International, Inc. ("APM International"). APM International is a Nevada corporation incorporated on June 26, 2003. The principal business address of APM International is the same as ours. APM International offers and sells pet grooming master franchises internationally, but not in the United States. APM International has offered pet grooming master franchises internationally since 2003 and does not offer franchises in any other line of business. As of the date of this Offering Circular, APM International has A- Master Franchisees in Mexico, Japan and Canada.

This Offering Circular sets forth the terms on which we currently offer Aussie Pet Mobile® Franchises in this state. We may have offered Aussie Pet Mobile® Franchises individually or under Area Development or multi-unit Agreements in the past (some of which still exist), or may currently offer Aussie Pet Mobile® Franchises in other states or countries, on economic and/or other terms which differ from those offered by this Offering Circular and there may be instances where we have varied, or will vary, the terms on which we offer Franchises to suit the circumstances of a particular transaction. We strongly urge vou to carefully review all documents with independent advisors who can provide legal, business and/or economic guidance, such as a lawyer and/or accountant, and compare this offering to any prior Agreement and Offering Circular if renewal or replacement of an existing Franchise Agreement is involved.

We retain the right, in our Business Judgment, to award, or not award, an Aussie Pet Mobile® Franchise to you, regardless of the stage of the franchise award process, costs expended by you or otherwise.

You should understand that every detail of your Aussie Pet Mobile® Franchise will be important not only to you, but to us and to all Aussie Pet Mobile® Franchisees in order to: (a) maintain high and uniform operating standards based on the Aussie Pet Mobile® core operating values; (b) increase the demand for the products and services sold by Aussie Pet Mobile® Franchises; and (c) maintain a reputation for offering uniform and high quality products and services, ethical business practices and integrity. A fundamental requirement of vour joining and remaining part of the Aussie Pet Mobile® System will be vour commitment to the operation of vour Aussie Pet Mobile® Franchise Businesses consistent with the then-current Aussie Pet Mobile® System Standards. During the term of the Franchise

Aussie Pet Mobile, Inc. UFOC 9MVOS3/1/06 California

Agreement, you must, at all times, develop and operate your Aussie Pet Mobile® Franchise Businesses in compliance with all Aussie Pet Mobile® System Standards, as we may modify in the future.

You should also understand the following business realities: An Aussie Pet Mobile® Business involves substantial risks, which are inherent and cannot be eliminated. Any volume, profit and possible success are primarily dependent on your ability and efforts as an independent business operator, as well as the degree to which you follow the Aussie Pet Mobile® System. Among other things, you will be responsible for an aggressive, proactive local marketing effort using the techniques of the Aussie Pet Mobile® System. Finally, entry into any business venture unavoidably involves some irreducible risk of loss or failure. The purchase of an Aussie Pet Mobile® Franchise for anv other) franchise is a speculative investment, and significant investment beyond that outlined in this Offering Circular mav be required to succeed. There are no guarantees of success and the most important factors in the success of anv Aussie Pet Mobile® Franchise Business, including yours, are vour personal business, marketing. management, judgment and other skills and vour willingness to work hard and diligently follow the Aussie Pet Mobile® System Standards. Additionally, this business may be seasonal and you're your results may depend on the weather in your Protected Areas

2. BUSINESS EXPERIENCE

President and Chief Executive Officer and Director Ian Moses

Mr. Moses has been our President and Chief Executive Officer and Director since our inception in 1999. Ian Moses has integrated 30 years of international business ownership experience with a partial CPA qualification in Accounting Stage 1 and Commercial Law Stage 1 to form Aussie Pet Mobile, Inc. Raised in New Zealand, he attended Auckland University, and went on to head up several successful businesses.

Before establishing the U.S. offices for Aussie Pet Mobile, Inc., Mr. Moses was the owner of Pet Mobile Pty. Ltd., in Australia, and was responsible for the management of the Pet Mobile Franchise System from its conception in 1996 to 1999. From 1993 to 1996, Mr. Moses was the owner of Sunsafe Weathaspans Pty. Ltd., an Australian business involved in marketing sun shelter structures.

Executive Vice President of Franchise Sales and Director David Louv

David Louy joined us as Executive Vice President of Franchise Sales in March 2001 and became a Director in August 2001.

From October 1993 until March 2001, Mr. Louy served as Vice President and Franchise Director of The Closet Factory Franchise Corporation and of The Closet Factory, Inc., in Los Angeles, California.

From January 1991 to October 1993, Mr. Louy served as Regional Director and Director of Franchise Sales for O.P.E.N, of California, Inc.

Mr. Louy has a Bachelor of Science from Ohio State University.

Director Daniel M. Kotvnski

Daniel Kotynski has been a Director since May 2005. From November 2002 through the present he has been a managing partner of Concentric Equity Partners in Hinsdale, Illinois. Mr. Kotynski is also

Aussie Pet Mobile, Inc. UFOC 9/4/053/1/06 California

the Chairman of Liberty Fitness Holdings, LLC, a franchisor of women's 30-minute workout clubs in CarlsbadAustin, ~~Californio~~Texas, where he has served on the board from June 2004 through the present. From May, 1996 through November, 2002, he managed a $200 million portfolio of equity, mezzanine and senior debt instruments for Steelcase, Inc. of Grand Rapids, Michigan. He also served as an investor and Chief Financial Officer of the TLC Group, Inc., a nationwide third party logistics provider of turnkey distribution solutions from 1993 to 1996. His initial equity experience was with Golden Thoma Cressey Rauner, Inc. a leading private equity group in Chicago, Illinois.

Mr. Kotynski has a Bachelor of Science from DePaul University and an MBA from Northwestern University. He is also a certified public accountant.

Chief Financial Officer Troy D. Dunkel. CPA. MBT

Troy became our Chief Financial Officer in June 2005. From January 2004 to June 2005, he was our Vice President of Finance. From June 1999 to January 2004, he was Vice President Finance and Administration for Pipeline Software, Inc., located in Newport Beach, California. From January 1996 to June 1999, Mr. Dunkel was ~~Sen~~iorTax Consultant, M&A/Core Consulting Group for PricewaterhouseCoopers in Los Angeles, California.

Mr. Dunkel has a Bachelor of Science in Business Administration from University of California, Riverside and earned a Masters in Taxation from Golden Gate University.

Vice President of Franchise Operations Brad Smith

Brad Smith became our Vice President of Franchise Operations in May 2004. From 2001 until May 2004, he served as our Director of Franchise Operations. Before joining us, Mr. Smith was an In-Flight Supervisor for Delta Airlines in Los Angeles, California from 1994 to 2001.

Mr. Smith has a degree in Business Administration from the University of TAFE in Queensland, Australia.

Vice President of Advertising and Training Vivienne Mcintosh

Vivienne Mcintosh has been with us as our Advertising Manager since our inception in 1999. She became our Vice President of Advertising and Training in May 2004. As Vice President of Advertising and Training she organizes all corporate collateral advertising, approves franchisee advertising requests, supervises all franchisee graphics, serves as the liaison with the public relations firm, organizes the biennial franchisee convention, assists with web site design and manages the corporate owned groomshop and training center.

Franchise Brokers

We may use franchise brokers in certain markets to sell franchises. A complete listing of all Franchise Brokers representing us is attached as Exhibit "G".

Aussie Pet Mobile, Inc. UFOC Q/4/OS3/1/06 California

3. LITIGATION

You should note that when Mr. Moses owned the Australian company, Pet Mobile Pty. Ltd., neither Mr. Moses nor the company was the subject of any litigation, whether by Franchisees or otherwise. Please see Exhibit G for disclosure of litigation involving franchise brokers.

Completed Litigation

Sunsafe Weathaspans Ptv Limited, et a/. (Plaintiffs), v. Moses Consulting and Marketing Ptv Limited. Ian Warwick Moses, et ai, (Defendants) (Federal Court of Australia, New South Wales District Registry, General Division (No. NG 689/1997, Filed August 27, 1997)

This case was brought by a purchaser of Sunsafe Weathaspans, a business formerly owned by Mr. Moses and not connected with the Franchisor. In May, 1996, the Plaintiffs bought the business from Defendants for $600,000 (Australian) (approximately US $308,400), financing a portion of the purchase price. The Plaintiffs never paid the financed portion and claimed that the Defendants made misrepresentations with respect to the business, including sales figures achieved by that business' licensees, and that such acts constituted misleading or deceptive conduct in violation of the Australian Trade Practices Act, and a violation of the sale agreement. Plaintiffs claimed damages of at least $300,000 (Australian) (approximately US $154,200). Moses Consulting and Marketing Pty Limited and Mr. Moses denied the allegations and sued Plaintiffs for $120,000 (Australian) (approximately US $61,680), the unpaid balance owed on the note.

Plaintiffs filed a Notice of Offer to Compromise their claim (in other words, offered to settle the case) for the sum of $200,000 (Australian) (approximately US $102,800), only two-third of the amount originally demanded, plus costs, which Defendants rejected. Plaintiffs amended their claim to add additional Defendants, including Plaintiffs' own former accountants and attorneys, with negative comments from the judge.

Mr. Moses engaged PricewaterhouseCoopers to prepare a report on the fair market value of the business sold. PricewaterhouseCoopers opined that the fair market value of the business on the date of sale was between $535,000 (Australian) and $620,000 (Australian), a range covering the actual amount for which the business was sold.

Separately Plaintiffs' own former accountants and attorneys engaged the Australian accounting firm of GCA Gower and Co. to prepare a report on the capitalized value of the business sold. GCA Gower and Co. opined that the capitalized value of the business sold was between $617,100 (Australian) and $1,384,200 (Australian), a range substantially in excess of the actual amount for which the business was sold. GCA Gower and Co. further concluded that, since the acquisition price of $600,000 (Australian) agreed upon by Plaintiffs was less than the value of the business at the time of sale, no loss was suffered by Plaintiffs.

Three weeks before trial, Plaintiffs requested a Settlement Conference with all Defendants and offered to settle the case for $600,000 (Australian) (approximately US $308,400), which offer was completely rejected by the Defendants.

Two days before trial, Plaintiffs again approached Defendants to settle, this time for $50,000 (Australian) (approximately US $25,700) more than 90% less than their demand of 3 weeks earlier. As a result the case settled with a mutual waiver of all claims.

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California

Defendants collectively made a commercial decision to settle, since settlement costs were less than 20% of trial costs.

Plaintiffs collected no amounts from their former accountants and attorneys and were, in fact, required to pay $10,000 (Australian) (approximately US $5,140) to their former attorneys. Moses Consulting and Marketing Pty Limited agreed to pay Plaintiffs $50,000 (Australian) (approximately US $25,700) far less than its anticipated costs of trial, and agreed to waive collection of the note owed to it. The net cash received by Plaintiffs from all Defendants (including Moses Consulting and Marketing Pty Limited and Mr. Moses) was $40,000 (Australian) (approximately US $20,560), less than 7% of their demand of only a few weeks earlier.

(All currency conversions are given as of the time of settlement.)

Aussie Pet Mobile. Inc. vs. James Anderson and Lighthouse Human Capital. LLC. (Franchise Mediation and Arbitration, Orange County, California, Filed April 18, 2003)

In July, 2002, we sent Mr. Anderson a Notice of Default and Termination of Agreements, due to his commission of several defaults of his Franchise Agreement. In exchange for a release from certain monetary obligations of his and in consideration of our agreement to make certain payments on his behalf on termination, Mr. Anderson agreed to maintain strict confidentiality about his relationship with us and our employees. Additionally, he promised not to defame us or take any actions that would injure our Marks, proprietary trade dress and trade secrets.

Mr. Anderson has since published communications in public forums attacking our (and our employees') integrity, ethics and good name.

On June 2, 2003, Mr. Anderson agreed to a stipulation for injunction and the injunction was ordered by the arbitrator. Under the injunction, Mr. Anderson is prohibited from communicating in any way regarding us, our business, our franchisees, the System or his and our relationship. The injunction was confirmed by the Superior Court of the State of California as a judgment and permanent injunction against Mr. Anderson and he remains subject to its terms.

Sadhna and Madhu Ram vs. Aussie Pet Mobile. Inc.. David Louv. Matthew Stevens, et al.. (County of Sacramento, Superior Court, #03AS00709, Filed February 7, 2003)

The plaintiffs, former franchisees of ours, alleged they were provided with verbal earnings claims, were not provided with a disclosure document, and that defendants made numerous oral and written misrepresentations.

The plaintiffs' complaint against us, our Executive Vice President Franchise Sales, and a franchise broker, alleged the defendants offered and sold a franchise in violation of the California Franchise Investment Law, and committed fraud and deceit and unfair business practices.

The plaintiffs requested restitution of $200,000, damages of $200,000, punitive damages of an unspecified amount, interest, costs of the suit, and rescission of the Franchise Agreement.

We filed a cross-complaint against the Rams for breach of the franchise agreement and for fraud and other violations of law in their abandonment of the franchised business. The plaintiffs signed a

Aussie Pet Mobile, Inc. UFOC 9WO&3/1/06 6

California

Receipt and Statement of Prospective Franchisee acknowledging that they did receive a disclosure document and that they did receive any earnings claims.

The Rams had ordered and paid for two Equipment Packages, including Trailers, of which they did not take delivery. Those orders were canceled and, in full settlement of all claims, which were denied, the company paid the Rams $50,000, representing a partial refund for the undelivered equipment. The action was settled November 10, 2004, with payment to the plaintiffs by us of $50,000.

Robert Leahy vs. Aussie Pet Mobile. Inc. (San Diego Superior Court for the State of California, Case. No. GIC 842710, filed February 14, 2005)

In about September 2004, we terminated the franchise agreement of Mr. Leahy for his abandonment of the franchised business, including his failure and refusal to take delivery of his second and third units, inctuding the Trailers that he had ordered, his refusal to permit inspection of his equipment, about which there were employee complaints that the air conditioning in the Trailer had been disconnected, and customer complaints that the Trailer was dirty and unhygienic, and other defaults of the franchise agreement.

Mr. Leahy filed an action, which alleged that we had possession of his Trailers (that he refused to take delivery of), and refused to deliver them to him, though he admitted in the Complaint that he did not demand delivery of them. He alleged that this conduct constituted unlawful possession of his personal property, conversion, a violation of the Unfair Competition Law (Business & Professions Code §§ 17200 et seq.), and a violation of the antitrust laws of the State of California (the Cartwright Act Business and Professions Code §§ 16720 and 16727, claiming that it was unlawful for us to require our franchisees to purchase a grooming trailer from us.

Mr. Leahy had ordered and paid for two Equipment Packages, including Trailers, of which he did not take delivery. Those orders were canceled and, in full settlement of all claims, which were denied, the company agreed to pay Mr. Leahy $5,000 upon execution of a settlement agreement and $2,500 per month for 24 months, representing a partial refund for the undelivered equipment. The action was settled on May 31, 2005.

In the Matter of: Aussie Pet Mobile. Inc. and Ian Moses (Administrative Proceeding before the Securities Commissioner of Maryland; Case No. 2004-0162)

On August 19, 2005, Aussie Pet Mobile, Inc. ("we") and Mr. Moses received from the Division of Securities, Office of the Attorney General of Maryland {the "Division") an Order to Show Cause (dated August 2, 2005) claiming that we and/or Mr. Moses violated portions of the Maryland Franchise Law. These allegations relate to a single franchise transaction and apparently were based upon a complaint by a former Franchisee whose franchise was terminated. The three counts in the Order to Show Cause included allegations that, with respect to this single Franchisee, (1) we and/or Mr. Moses offered and sold one franchise without providing the prospective Franchisee with a copy of the offering prospectus required under the Maryland Franchise Law, (2) we and/or Mr. Moses made material misrepresentations of facts and/or omissions of material facts in the form of unsubstantiated net income projections and representations about a database projecting fees for dog grooming services, without disclosing the source for those projections, and (3) a broker gave information regarding the potential net income the franchisee could expect and we and/or Mr. Moses provided information about the average price he could charge for services, but did not prepare or deliver an earnings claim, as

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required by UFOC Guidelines. In a Consent Order dated January 25, 2006 by the Division, Mr. Moses was dismissed from the proceeding. The Statement of Facts in the Consent Order recites our delivery of an offering circular to a prospective franchisee on July 9, 2002 and our failure to re-disclose that prospect with a subsequent amended UFOC dated July 25 2002, before the prospect executed Franchise Agreements in August 2002. The Division concluded that: (i) we violated Maryland Franchise Law by: (1) offering and selling a franchise to a Maryland resident without giving the prospective franchisee a copy of the form of UFOC required under the Maryland Franchise Law; and (2) making unsubstantiated income projections about our franchise offering. While the Consent Order contained no monetary sanctions, it has required us to permanently cease and desist from the offer and sale of franchises in violation of the Maryland Franchise Law and includes our representation that since August 2002 all prospects in Maryland have received a UFOC in the form required under Maryland Law.

Pending Litigation

Christopher Kline vs. Aussie Pet Mobile. Inc. (Franchise Meditation and Arbitration, Orange County, California, Filed February 13, 2004)

Christopher Kline, a former franchisee, filed a demand for arbitration against us alleging that, in the offer and sale of an Aussie Pet Mobile® franchise to him, APMI or its representative made unlawful earnings claims. Mr. Kline executed a Statement of Prospective Franchisee and a franchise agreement in which, in many places, he expressly warranted to us that nobody had made any such claims to him. We would not have allowed him to become an Aussie Pet Mobile® franchisee if we had believed that any such claims were made to him. After only two months of operation in Houston, Texas, Kline took a corporate position with a company in Mississippi and abandoned his franchised business.

The legal claims of the demand include breach of contract and the covenant of good faith and fair dealing, unjust enrichment, intentional misrepresentation, negligent misrepresentation, promissory estoppel, violation of the California Franchise Investment Law and violation of the Texas Deceptive Trade Practices Act. Mr. Kline's demand seeks damages in excess of $135,000. APMI and Mr. Kline entered into a Settlement Agreement and Mutual General Release on August 22, 2005. In addition to the releases granted by each party, Mr. Kline affirms in the Agreement that, upon investigation, previous claims by him relating to alleged intentional misrepresentations and false representations by APMI lack merit and are withdrawn from arbitration. The Agreement also provides for i) the payment of $19,500 to Mr. Kline, ii) installment payments to Regions Bank, a creditor of Mr. Kline's, totaling $48,000 and representing a refund on undelivered equipment, and iii) payment by APMI of certain costs related to the mediation process. Mr. Kline's franchise agreements are effectively terminated by the agreement, and he must de-identify equipment retained by him and otherwise comply fully with specific post-termination provisions of the franchise agreement, including return of APMI intellectual property.

The Settlement Agreement is expressly contingent upon the delivery to APMI of an executed release by Regions Bank. If the release is not received and the arbitration proceeds, we will defend vigorously and expect to file a counter-demand for the damages and unpaid royalties caused by Kline's failure to perform his agreement and abandonment of the franchised business, alleging fraud, breach of contract, violation of the implied covenant of good faith and fair dealing, unfair competition, misappropriation of trade secrets and other causes of action.

Aussie Pet Mobile. Inc. vs. Paul and Janet Devov (Franchise Arbitration and Mediation Services, Orange County, CA, Case No. 06A0201, Filed February 17, 2006)

Aussie Pet Mobile, Inc. UFOC W053/1/06 8

California

Respondents are franchisees of ours. In February 2006, Respondents stopped payment on their check for monthly amounts due and through their attorney, notified us they were rescinding the Franchise Agreement (the "Agreement") and demanded payment of restitution and damages. We have filed a demand for arbitration for breach of contract based on Respondents nonpayment of amounts due and refusal to perform their obligations under the Agreement. We are seeking damages according to proof, and an order: (i) requiring Respondents to make restitution; (ii) forbidding the Respondent from commencing litigation against us in violation of the Dispute Avoidance and Resolution provisions of the Agreement; (iii) declaring us released from all claims against us based on a previous release granted by the Respondents when they were given a discount on the exchange of equipment; and (iv) attorneys' fees and costs.

The Respondents have filed a counterclaim alleging we made material misrepresentations and/or omissions that fraudulently induced Respondents to sign the Agreement and that we have breached the Agreement and denying each of our claims. Respondents are seeking damages in excess of $300,000, attorneys' fees and costs, rescission of the Agreement and dismissal of our demand for arbitration. Arbitration has not yet been scheduled.

Aussie Pet Mobile. Inc. vs. Mohammed Hasan Mahmood and Neopoint Inc. (Franchise Arbitration and Mediation Services, Orange County, CA, Case No. 06A0202, Filed February 17, 2006)

Respondents are former franchisees of ours. We terminated the Respondents' Franchise Agreement (the "Agreement") due to their default on several material provisions of the Agreement, including: (i) failure to take delivery of the Designated Equipment or develop, Development Units Nos. 2 and 3 according to the development schedule; and (ii) abandonment of the Aussie Pet Mobile Franchise Business by failing to operate the business since March 2005. We are seeking damages according to proof, and an order: (i) declaring Respondents in breach of the Agreement and relieving us of our duties under the Agreement; (ii) compelling the Respondents to cease interference with our contractual and other economic relationships; (iii) requiring Respondents to make restitution; (iv) requiring Respondents to pay all amounts due, including unpaid royalties and payments, future lost royalties, damages, and attorney's fees; (v) forbidding the Respondent from commencing litigation against us in violation of the Dispute Avoidance and Resolution provisions of the Agreement; and (vi) declaring us released from all claims against us based on a release granted by the Respondents when the Agreement was transferred to a business entity. Arbitration has not yet been scheduled.

~~In the Matter of: Auss~~i~~e P~~o~~t Mob~~ile, I~~nc. and~~ I~~an Moses~~ ~~(Adm~~i~~nistrat~~i~~ve Proceed~~i~~ng before the Secur~~iti~~es Comm~~issi~~oner of Mary~~l~~and; Case No. 2004 0162)~~

~~On August 10, 2005, Auss~~i~~o Pot Mob~~il~~e, Inc. ("wo") and Mr, Moses r~~ecei~~ved from the D~~ivisi~~on of S~~e~~curities, Offic~~e ~~of the Attorney Gen~~e~~ral of Mary~~land (the ~~"Div~~isi~~on") an Order to Show Cause (dated Augu~~s~~t 2, 2005) c~~laimi~~ng that w~~o ~~and/or Mr. Mos~~e~~s v~~iolate~~d port~~ions ~~of t~~he Maryl~~and Franchise Law, wh~~i~~ch a~~ll~~egat~~i~~ons w~~o ~~and Mr. Moses~~ i~~ntend to contest.~~These all~~egat~~i~~ons r~~el~~ate to a s~~i~~ngle franchi~~s~~e transact~~i~~on and~~ a~~pparent~~l~~y are bas~~e~~d upon~~ a ~~comp~~lai~~nt by~~ a ~~form~~e~~r Franch~~i~~see who~~s~~o franch~~ise ~~has boon terminated. Th~~o ~~throe counts~~ i~~n th~~e Orde~~r to Show Cause~~ i~~nclud~~e all~~egat~~i~~ons that, with rospoct to thi~~s s~~ing~~le ~~Franch~~is~~ee,(1) w~~e ~~and/or Mr. Mo~~ses ~~offered and so~~l~~d on~~o ~~franch~~i~~se w~~i~~thout prov~~i~~ding tho prosp~~ective ~~Franch~~isee wi~~th a copy of t~~ho ~~offer~~i~~ng prosp~~e~~ctu~~s require~~d u~~n~~der the Mary~~l~~and F~~ranchise ~~Law, (2) we and/or Mr. Moses mado m~~ate~~ria~~l mi~~srepresentat~~i~~ons of facts~~ a~~nd/or om~~issi~~ons of mat~~erial fa~~cts~~ i~~n th~~e ~~form of unsubstant~~i~~ated n~~ot i~~ncome project~~i~~ons~~ a~~nd r~~eprese~~ntat~~i~~ons about~~ a ~~database project~~i~~ng foes for dog grooming services, w~~i~~thout d~~i~~sclosing th~~e ~~source for those proj~~e~~ction~~s~~, and (3) a broker gav~~e i~~nform~~ati~~on r~~ega~~rding tho pot~~ential not i~~ncome th~~e ~~fronch~~i~~soo oou~~l~~d expect and w~~o ~~and/or Mr.~~ Moses ~~provid~~ed i~~nformation~~ about the ~~average pr~~ice ho ~~cou~~l~~d charg~~e ~~for~~ s~~ervic~~es, ~~but d~~i~~d not pr~~e~~par~~e ~~or del~~i~~ver an earnings cla~~i~~m, os requ~~i~~red by UFOC Gu~~ideli~~nes. The Order to Show Cause r~~e~~quires Auss~~io

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California

Pe~~t Mob~~ile, Inc. a~~nd Mr. Mo~~ses to s~~how c~~ause a~~s to wh~~y a final order s~~hou~~ld not bo ontoro~~d against thorn d~~irectin~~g th~~em t~~o p~~e~~rma~~nentl~~y c~~oaso a~~nd d~~esist fr~~om th~~e ~~off~~er and sal~~e of franchises in v~~i~~olat~~i~~on of tho Mary~~l~~and Franchise Low. Auso~~i~~o Pot Mob~~ile, I~~nc. and Mr. Mos~~os do~~ny th~~at a~~ny misrepresentat~~i~~ons woro~~ made ~~by th~~e~~m and~~ intend to reques~~t a h~~eari~~ng and to dofond tho matter v~~i~~gorous~~ly.

You should note that the following action does not directly involve Aussie Pet Mobile, Inc. The action involves one of our Directors and his relationship with another company.

Stevens, et al. v. Concentric Equity Partners, Daniel Kotvnski. et al. (San Diego County Superior Court, Case. No. GIC 845861, filed April 14, 2005)

Mr. Stevens, a former executive with Liberty Fitness Holdings, LLC, makes various accusations concerning the circumstances of his departure from the company as well as his employment by, and investment in, the company. Among other things, Mr. Stevens' complains of breach of contract, common law fraud and deceit, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and intentional interference with his contract. He seeks unspecified damages of over $1.0 million against Mr. Kotynski and other defendants. The case is currently in the pretrial stage.

Neither we nor any person listed in Item 2 of the UFOC is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., or suspending or expelling such persons from membership in such association or exchange.

Other than these J~9 actions, no litigation is required to be disclosed in this Offering Circular.

4. BANKRUPTCY

No person previously identified in Items 1 or 2 of this Offering Circular has been involved as a debtor in proceedings under the U.S. Bankruptcy Code required to be disclosed in this Item.

5. INITIAL FRANCHISE FEE

The programs we currently offer are:

Bronze Program: You receive 1 Franchise Business and pay a Franchise Fee of $35,000.

Silver Program: You receive 2 Franchise Businesses and pay a Franchise Fee of $60,000. (equal to $30,000 x2), representing a discount of $10,000.

Gold Program: You receive 3 Franchise Businesses and pay a Franchise Fee of $75,000 (equal to $25,000 x 3), representing a discount of $30,000.

Platinum Program: You receive 6 Franchise Businesses, 1 of which is free of any Franchise Fee. The Franchise Fee under this program is $125,000 ($25,000 x 5), representing a discount of $85,000.

The Franchise Fee is uniform as to all Franchises currently being offered in this state, is entirely non-refundable, and is fullv earned bv us on signing the Franchise Agreement. You must pay the Franchise Fee when you sign the Franchise Agreement. The initial Franchise Fee becomes part of our general funds and there is no limit on its use.

Aussie Pet Mobile, Inc. UFOC 9/4^3/1/06 California

You must also purchase a Designated Equipment Package for each Franchise Business under your Agreement. A Designated Equipment Package includes the equipment described in the Fourth Schedule to the Franchise Agreement for each Franchise Business you purchase. We will install the Designated Equipment Package in the Sprinter Van you purchase from our authorized supplier to create a Customized Vehicle. The Designated Equipment Package Fee is due before attending training, is fully earned by us on signing the Franchise Agreement and is entirely non-refundable. The Designated Equipment Package Fee becomes part of our general funds and there is no limit on its use.

Under the Bronze Program, you must pay a Designated Equipment Package Fee to cover the cost of the Aussie Pet Mobile® Designated Equipment Package for your Franchise Businesses, before attending training.

Under the Silver Program, you must pay a Designated Equipment Package Fee to cover the cost of the Aussie Pet Mobile® Designated Equipment Packages for both Franchise Businesses, before attending training.

Under the Gold and Platinum Programs you must pay a Designated Equipment Package Fee to cover the cost of the Aussie Pet Mobile® Designated Equipment Packages for Franchise Businesses 1, 2 and 3 on your Development Schedule before attending training.

If you have purchased the Platinum Program, you must pay a Designated Equipment Package Fee for the cost of the Aussie Pet Mobile® Designated Equipment Package for the 4^th, 5^th and 6^thFranchise Businesses as follows:

4^th Franchise Business - at least 60 days before the date set on your Development Schedule for delivery and opening of the 4^th Franchise Business.

5^th Franchise Business - at least 60 days before the date set on your Development Schedule for delivery and opening of the 5^th Franchise Business.

6^th Franchise Business - at least 60 days before the date set on your Development Schedule for delivery and opening of the 6^th Franchise Business.

Each Designated Equipment Package Fee for Franchise Businesses 4, 5 and 6, is fully earned by us on payment and is entirely non-refundable.

The fees for the Designated Equipment Package become part of our general funds and there is no limit on their use.

The Designated Equipment Package is $25,000 per Franchise Business, plus applicable sales tax and shipping, however we reserve the right to offer a used and/or refurbished Designated Equipment Package (if available) at a reduced cost.

Under a Franchise Agreement the amount of the Franchise Fees plus Designated Equipment Package Fees will range from $25,000 to $200,000.

If you are a Franchisee in Good Standing, we may allow you to purchase 1 or more additional Franchise Business within or outside of your current Protected Area(s) at our then-current Franchise Fee and our then-current charge for the Designated Equipment Package. If the additional Franchise Businesses are within your Protected Area(s) there is no Franchise Fee but you must pay the then-current charge for the Designated Equipment Package.

Aussie Pet Mobile, Inc. UFOC 9/4^053/1/06 California

You must purchase one Sprinter Van according to our specifications and only from our authorized supplier(s) for each Franchise Business awarded under your Agreement. If you are a participant under the Silver, Gold or Platinum Program, you may deliver any of the Sprinter Vans to us for installation of the Designated Equipment Package at any time, but no later than the delivery schedule described in Section 5.5 of the Franchise Agreement. No matter when you elect to deliver any Sprinter Van to us for customization, you must place each Customized Vehicle into operation within 15 Business Days from taking delivery of the Customized Vehicle from us.

Silver, Gold and Platinum program participants must purchase and use the Aussie Customer Management System ("ACMS"). The cost of the system is $1,500 and is payable on signing the franchise agreement. Please see Item 11 for more information.

Under the Bronze Program, you must pay us an initial training fee of $1,000.00 before attending training.

Aussie Pet Mobile, Inc. UFOC 8/4^0§3/1/06 California

12 |

6. OTHER FEES

Name of Fee⁽¹⁾

Amount

Due Date

Remarks

Royalty

The greater of (a) 8% of monthly Gross Volume'²' or (b) a minimum royalty of $547566.

3rd business day of each month for the preceding month.

Minimum royalty subject to inflation adjustment.

Percentage and minimum royalties are due for the earlier of the first month in which each of your Aussie Pet Mobile® Franchise Businesses (a) begins operations or (b) is required to begin operations. Once you've reached over $15,000 in Gross Volume in a month, we will reduce your monthly royalty fee to 5% with no minimum royalty requirement for any month during which you reach this level, if your Gross Volume falls to $15,000.00 or below during any subsequent month, you will no longer be eligible for the reduction and your royalty fees will return to the standard rates.

Aussie Pet Mobile, Inc. UFOC 9/4/653/1/06

Name of Fee⁽¹⁾

Amount

Due Date

remarks

Marketing Fund Contributions

The greater of (a) 4% of monthly Gross Volume'²' or (b)a minimum contribution of $274-283 for each of your Aussie Pet Mobile® Franchise Businesses.

3rd business day of each month for the preceding month.

Minimum contribution subject to inflation adjustment.

Percentage and minimum marketing fund contributions are due for the earlier of the first month in which each of your Aussie Pet Mobile® Franchise Businesses (a) begins operations or (b) is required to begin operations.

Once you've reached over $15,000.00 in Gross Volume in a month, we will reduce your monthly Marketing Fund Contribution to 3% of Gross Volume with no minimum requirement for any month during which you reach this level. If your Gross Volume level falls to $15,000.00 or below during any subsequent month, you will no longer be eligible for the reduction and your Marketing Fund Contributions will return to the standard rates.

Interest on Late Payments

Interest is highest legal rate for open business credit not to exceed 1.5% per month.

Payable on demand.

Interest on all amounts owed us. Subject to inflation adjustment.

Aussie Pet Mobile, Inc. UFOC 9A/Q&3/1/06 14

California

NameofFee⁽¹⁾	Amount	Due Date	Remarks
Successor Franchise Fee	An amount equal to 1/3 of the franchise fee paid by you under the original franchise agreement. If you acquired your Franchise by transfer, you will pay the amount of the successor franchise fee specified in the Agreement you assumed.	At the time we award the successor franchise.	Fee to obtain a new franchise at the end of an existing term. Subject to inflation adjustment.
Franchise Marketing Groups ("FMG")	Determined by FMG.	Determined by FMG.	You must join and participate in FMG. Amount subject to change by FMG. Amount of fee is unknown since no Franchise Marketing Groups have been established.
Transfer Fee	10% of consideration you receive for transfer {with a cap of $15,000 per protected area subject to inflation adjustment).	On notification of proposed transfer.	Fee to transfer the franchised business. If we do not approve the transfer, we will return the fee less our expenses for review and consideration of the transfer.
Commission or Compensation to Sales Consultants (transfer of Franchise)	Amount Varies.	Before completion of transfer	If you utilize the services of any of our sales consultants (including outside agencies and brokers) to completing the transfer you must reimburse us an amount equal to any commission or other sales compensation we must pay to these persons.
Management Fees⁽³⁾(only on default by you)	$250 per day plus expenses. We estimate expenses will range from $75 to $150 per day.	Deducted from funds of your Businesses	Expenses include compensation, other costs, travel and living expenses of appointed manager. Subject to inflation adjustment.

Aussie Pet Mobile, Inc. UFOC 9/4^053/1/06 California

The original documents were scanned as an image. The original file can be downloaded at the link above.

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