Private Media Group (PRVT)

Circulation

Our magazines have historically generated most of their revenues from firm sales distribution. However, during the past years distributors with rights to return has come to represent more than 50% of the distribution of our production. Single copy retail sales normally occur in adult book stores and newsstands. Newsstand retail sales are permitted in most of Europe and we distribute our magazines to newsstands in: Norway, Sweden, Finland, Denmark, the Netherlands, Germany, Austria, Switzerland, Belgium, France, Italy, Portugal and Spain.

Our magazines are distributed to newsstands and other public retail outlets through a network of national distributors, who maintain a local network of wholesale and retail distributors. We ship copies of each issue in bulk to our wholesalers, who distribute on to local retailers. Independent distributors who distribute our magazines do so under individual firm sales distribution agreements. Agreements with both national and independent distributors are normally subject to automatic yearly extensions unless either party terminates the arrangement.

Since 1998 we have sought to expand the use of our magazines’ content and other assets across different media formats. All issues of all our publications are available on our websites. Our magazines are also available for subscription on third party websites as electronic magazines.

Circulation

Our magazines have historically generated most of their revenues from firm sales distribution. However, during the past years
distributors with rights to return has come to represent more than 50% of the distribution of our production. Single copy retail sales normally occur in adult book stores and newsstands. Newsstand retail sales are permitted in most of Europe and we
distribute our magazines to newsstands in: Norway, Sweden, Finland, Denmark, the Netherlands, Germany, Austria, Switzerland, Belgium, France, Italy, Portugal and Spain.

FACE="Times New Roman" SIZE="2">Our magazines are distributed to newsstands and other public retail outlets through a network of national distributors, who maintain a local network of wholesale and retail distributors. We ship copies of each issue
in bulk to our wholesalers, who distribute on to local retailers. Independent distributors who distribute our magazines do so under individual firm sales distribution agreements. Agreements with both national and independent distributors are
normally subject to automatic yearly extensions unless either party terminates the arrangement.

Since 1998 we have sought to expand the
use of our magazines’ content and other assets across different media formats. All issues of all our publications are available on our websites. Our magazines are also available for subscription on third party websites as electronic magazines.

Circulation

Our magazines have historically generated most of their revenues from firm sales distribution. However, during the past two years distributors with rights to return has come to represent more than 50% of the distribution of our production. Single copy retail sales normally occur in adult book stores and newsstands. Newsstand retail sales are permitted in most of Europe and we distribute our magazines to newsstands in: Norway, Sweden, Finland, Denmark, the Netherlands, Germany, Austria, Switzerland, Belgium, France, Italy, Portugal and Spain.

Our magazines are distributed to newsstands and other public retail outlets through a network of national distributors, who maintain a local network of wholesale and retail distributors. We ship copies of each issue in bulk to our wholesalers, who distribute on to local retailers. Independent distributors who distribute our magazines do so under individual firm sales distribution agreements. Agreements with both national and independent distributors are normally subject to automatic yearly extensions unless either party terminates the arrangement.

Since 1998 we have sought to expand the use of our magazines’ content and other assets across different media formats. All issues of all our publications are available on our websites. In 2000 we completed the digitization of our still photo archive and previously unpublished photos are also published on our websites. Our magazines are also available for subscription on third party websites as electronic magazines.

Circulation

Our magazines have historically generated most of their revenues from firm sales distribution. However, during the past two years distributors with
rights to return has come to represent more than 50% of the distribution of our production. Single copy retail sales normally occur in adult book stores and newsstands. Newsstand retail sales are permitted in most of Europe and we distribute our
magazines to newsstands in: Norway, Sweden, Finland, Denmark, the Netherlands, Germany, Austria, Switzerland, Belgium, France, Italy, Portugal and Spain.

FACE="Times New Roman" SIZE="2">Our magazines are distributed to newsstands and other public retail outlets through a network of national distributors, who maintain a local network of wholesale and retail distributors. We ship copies of each issue
in bulk to our wholesalers, who distribute on to local retailers. Independent distributors who distribute our magazines do so under individual firm sales distribution agreements. Agreements with both national and independent distributors are
normally subject to automatic yearly extensions unless either party terminates the arrangement.

Since 1998 we have sought to expand the
use of our magazines’ content and other assets across different media formats. All issues of all our publications are available on our websites. In 2000 we completed the digitization of our still photo archive and previously unpublished photos
are also published on our websites. Our magazines are also available for subscription on third party websites as electronic magazines.

SIZE="2">Production, Distribution and Fulfillment

Several independent printers in Spain currently print most of our magazines,
books, brochures and DVD covers. Printing costs vary based upon the price of component raw materials. The principal raw materials necessary for publication of our magazines are coated and uncoated paper. Paper prices are affected by a variety of
factors, including demand, capacity, pulp supply and by general economic conditions. Our printers have a number of paper supply arrangements and we believe that those arrangements provide an adequate supply of paper for our needs. In any event, we
believe that alternative sources are available at competitive prices. With respect to pre-press and related services, we currently use our own scanning facilities. We are also using the latest technologies in this field, such as digital imposition
and computer-to-plate process technology, or CTP.

We print and ship all of our proprietary magazines from Barcelona, Spain. We determine
the amount of printed publications bi-monthly with input from each of our national distributors. Most of our products are packaged and delivered directly by the printer or supplier, while Milcap Media Group provides warehousing, customer service and
payment processing.

Our full-time editorial and post-production staff consists of an editor-in-chief and three editors who oversee the
quality and consistency of the artwork and editorial copy and manage the production schedule and printing of each issue. The majority of this work is performed on our premises in Barcelona, Spain. We have entered into agreements with some
photographers and writers under which such people have agreed to provide their services to us on an exclusive basis, generally for a period of one to three years.

SIZE="2">TRADEMARK LICENSING

Private Licensing is a division of Private Media Group which coordinates a range of products associated
with the Private brand, which includes: the Private Clothing Line, Private Beverages (Private Energy Drink, Private Wines and Private Vodka). Other licensed product lines include novelties, accessories, lingerie, fragrances, leather goods,
nutritional supplements, aphrodisiacs and condoms.

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The carefully developed Private Center concept for retailers was introduced a few years ago. Through its
Licensing Division, Private is offering a unique opportunity for adult specialist and other retailers to buy into the Private brand through licensing agreements to either upgrade their existing retail points of sale or develop new outlets in order
to satisfy the increasingly sophisticated and broad demands of adult consumers. Licensees are required to follow guidelines set by Private and the product range on offer will span from traditional adult products such as sex toys, magazines and DVDs
to lifestyle Private-branded products, ranging from street wear to lingerie. The Private brand, valued by consumers and retailers alike thanks to its enduring focus on quality and innovation, thereby continues to meet new consumer demands, in both
niche markets and broader sectors, such as the ever increasing number of female customers.

Circulation

Our magazines have historically generated most of their revenues from firm sales distribution. However, during the past two years distributors with rights to return has come to represent more than 50% of the distribution of our production. Single copy retail sales normally occur in adult book stores and newsstands. Newsstand retail sales are permitted in most of Europe and we distribute our magazines to newsstands in: Norway, Sweden, Finland, Denmark, the Netherlands, Germany, Austria, Switzerland, Belgium, France, Italy, Portugal and Spain.

Our magazines are distributed to newsstands and other public retail outlets through a network of national distributors, who maintain a local network of wholesale and retail distributors. We ship copies of each issue in bulk to our wholesalers, who distribute on to local retailers. Independent distributors who distribute our magazines do so under individual firm sales distribution agreements. Agreements with both national and independent distributors are normally subject to automatic yearly extensions unless either party terminates the arrangement.

Since 1998 we have sought to expand the use of our magazines’ content and other assets across different media formats. All issues of all our publications are available on our websites. In 2000 we completed the digitization of our still photo archive and previously unpublished photos are also published on our websites. Our magazines are also available for subscription on third party websites as electronic magazines.

Circulation

Our magazines have historically generated most of their revenues from firm sales distribution. However, now distributors with rights to return represent approximately 50% of our production. Single copy retail sales normally occur in adult book stores and similar establishments. Newsstand retail sales are permitted in most European countries, including France, Italy, Spain, Germany, Denmark, Sweden, Finland the Benelux countries and Portugal.

Our magazines are distributed to newsstands and other public retail outlets through a network of national distributors, who maintain a local network of several wholesale distributors and licensors. We have entered into national distribution agreements covering over 35 countries and generally deal with a magazine distributor for local distribution of our publications. We ship copies of each issue in bulk to our wholesalers, who distribute on to local retailers.

Independent distributors who distribute our magazines do so under individual distribution agreements. These agreements are normally subject to automatic yearly extensions unless either party terminates the arrangement.

For the past few years, we have sought to expand the use of our magazines’ content and other assets across different media formats. Our primary focus in recent years has been the re-editing and digitizing of every Private magazine for use on our websites. This content was initially available on our websites in May 1998, and we completed the digitization of our still photo archive in 2000.

Circulation

Our magazines have historically generated most of their revenues from firm sales distribution. However, now distributors with rights to return represent approximately 50% of our production. Single copy retail sales normally occur in adult book stores and similar establishments. Newsstand retail sales are permitted in most European countries, including France, Italy, Spain, Germany, Denmark, Sweden, Finland the Benelux countries and Portugal.

Our magazines are distributed to newsstands and other public retail outlets through a network of national distributors, who maintain a local network of several wholesale distributors and licensors. We have entered into national distribution agreements covering over 35 countries and generally deal with a magazine distributor for local distribution of our publications. We ship copies of each issue in bulk to our wholesalers, who distribute on to local retailers.

Independent distributors who distribute our magazines do so under individual distribution agreements. These agreements are normally subject to automatic yearly extensions unless either party terminates the arrangement.

For the past few years, we have sought to expand the use of our magazines’ content and other assets across different media formats. Our primary focus in recent years has been the re-editing and digitizing of every Private magazine for use on our websites. This content was initially available on our websites in May 1998, and we completed the digitization of our still photo archive in 2000.