. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties.

IT IS ILLEGAL AND STRICTLY PROHIBITED TO

DISTRIBUTE, PUBLISH, OFFER FOR SELE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS PRODUCT IN HARD COPY OR
DIGITAL FORM. ALL OFFENDERS WISUED IN A COURT OF LAW.

Vanguard REIT, Inc.

Daniel L. Case, Sr.
4101 East Louisiana Avenue
Suite 300
Denver, CO 80246

Phone: 480.612.4297 Fax: 303.781.4311

Email: Dan@VanguardREIT.Com Website: www.VanguardREIT.Com
LAW.
OFLAW.

Executive Summary
COURTOF
INAACOURT

Management: Business Description: Vanguard REIT, Inc. is under contract to

acquire one hundred percent (100%) ownership interest in
Vanguard REIT, Inc. Chapman House, Inc. (“Rehab”) at 14511 and 14512 Carfax
CEO Daniel L. Case
SUEDIN

Drive and the Business operations of Chapman House, Inc.:

Richard A. Block Operating in Orange County as a 44-bed state licensed, CARF
BESUED

Timothy Chapman (Commission on Accreditation of Rehabilitation Facilities)

Bradley Malawy accredited, probation and parole approved premier social-model
AUTOMATICALLYBE

Robert H. Myers Jr. detox and recovery center for adults. This facility is currently
Kevin Knight privately owned and operated by Tim and Esther Chapman,
WILLAUTOMATICALLY

Kevin D. Curran whom have treated addictions for over 30 years. The sale
Donna L. Michaelsen includes the Chapman House name and goodwill, all business
Matthew T. Longs, Jr. interests in Orange County (i.e., insurance contracts),
specialized, copy-written workbooks, clinical organization, adult
Chapman Rehab, LLC??? treatment service marks and related websites:
CEO Timothy Chapman www.chapmanrehab.com and www.detox2day.com. The terms
Richard A. Block and conditions of the purchase and sale are as follows:
Bradley Malawy
OFFENDERSWILL

Chris Geiger Purchase Price: $20,000,000

??????? Down Payment/Equity: $ 9,000,000
ALLOFFENDERS

??????? Purchase Money Mortgage: $11,000,000

Industry: The Rehab purchase and sale includes the real estate commonly
known as 14511 and 14512 Carfax Drive, the Business
Vanguard REIT, Inc. operations of Chapman House, Inc., State Licensing, Accounts
Real Estate Investment Trust
reserved.ALL

Receivables and Client Placement Agreements with “TO BE

NAMED CHAPMAN REHAB PLACEMENT CO, LLC and
Chapman Rehab, LLC.
rightsreserved.

American Addiction Centers, Inc. The Client Placement

Mid Agreements provided for a guaranteed one hundred percent
(100%) occupancy for the next 60 months at the full month per
Number of Employees: #? bed rate of $??,???.00. The Rehab, its operating structures and
Allrights

the external rehab management agreement are all designed to

Future Auditor: provide for the segregation of qualifying and non-qualifying
Kim Fenimore, Sterling Consulting
2010.All

income under the IRS REIT tax code. Whereas, the Rehab is
Corporation leased to an interrelated company named ???????? that
Inc.2010.

operates the day to day functions of the Rehab for the sole
Law Firm(s): To Be Named purpose of maximizing profits by reducing the income tax
BiztreeInc.

liabilities. Moreover, these structure provide for a guaranteed

Amount of Financing Sought:
CopyrightBiztree

annual Net Operating Income in excess of $2,030,920 the first

$12,000,000 year, $2,424,620 the second year and $2,577,659 the third year.

Current Investors: $10,500,012

©Copyright

$1,993,716 - The Vanguard Trust Company Background: Chapman Rehab, LLC has been
$1,993,716 - The Rosenquist Trust operating addiction treatment for 34 years. We provide treatment
$3,000,006 - Timothy Chapman to those suffering from issues of addiction, and co-existing
$1,000,008 - Kevin Knight
©

disorders. We are a CARF Accredited detox, addiction recovery

VRI Executive Summary Page 1 of 3

. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties. IT IS ILLEGAL AND STRICTLY PROHIBITED TO
DISTRIBUTE, PUBLISH, OFFER FOR SELE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS PRODUCT IN HARD COPY OR
DIGITAL FORM. ALL OFFENDERS WISUED IN A COURT OF LAW.

services and mental health residential treatment. Only 1% of

rehabs in the United States are CARF accredited.

Products/Services: Convey to the investor that the company

and product truly fill an unmet need in the marketplace. The
characteristics that set the product and company apart from the
competition need to be identified (competitive advantage).

Technologies/Special Know-how: In this section, highlight

whatever aspects of your product that may be protected by
current IP or patent law. Provide evidence of how your offerings
are different and will be able to develop a barrier to entry for
potential competitors.

Markets: Provide a clear description of your target market, and

any market segments that may exist within that market. Include
potential market size and growth rate. Also, mention your
revenue model in this section.

Distribution Channels: Chapman House, Inc. enjoys the luxury Client Placement agreements with “TO
BE NAMED CHAPMAN REHAB PLACEMENT CO, LLC and American Addiction Centers, Inc. which
guarantees one hundred percent (100%) occupancy at the full monthly rate of $??,??? per bed for 60
months. Additional, we have an Online presence that ???????????????????????????????????

Competition: There are currently no other luxury inpatient drug and alcohol treatment centers. Although
there are numerous drug and alcohol treatment programs that focus primarily on detox, not
simultaneously on pharmacotherapy or advanced behavioral therapy, their accommodations and activities
are minimal and are not on the same luxury level as the Chapman House, Inc. facility.

The clients that seek the level of care and services that Chapman House, Inc. provides are typically not
concerned with geographical location and are driven solely by bed space availability. Upscale facilities
that offer luxury care and effective cure services, such as ours, routinely operate at or near one hundred
percent (100%) occupancy and nearly all rehabs, including the non-luxury and/or economy facilities,
operate with an average waiting list of over 28 days.

The industry standard charges for the luxury care and service levels that Chapman House, Inc. provides
range from $40,000 to $80,000 per month. Chapman House, Inc. charges a rate up to $40,900 a month
per bed for the Chapman facility, which positions Chapman to be extremely competitive in terms of both
price and quality.

Financial Projections (Not audited):

FIVE YEAR PROJECTIONS & PRO-FORMA DATA

TWENTY-TWO (22) BEDS

Description Year 1 Year 2 Year 3 Year 4 Year 5

Revenue at 22 Beds $ 3,613,500 $ 4,015,000 $ 4,215,750 $ 4,215,750 $ 4,416,500
Cost of Goods Sold 0 0 0 0 0
Gross Profit $ 3,613,500 $ 4,015,000 $ 4,215,750 $ 4,215,750 $ 4,416,500
**Operating Costs $ 1,216,774 $ 1,213,599 $ 1,250,007 $ 1,287,508 $ 1,326,133
*Finance & Admin @ 8% $ 105,806 $ 108,981 $ 112,250 $ 115,618 $ 119,086
*Sales & Marketing $ 260,000 $ 267,800 $ 275,834 $ 284,109 $ 292,632

VRI Executive Summary Page 2 of 3

. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties. IT IS ILLEGAL AND STRICTLY PROHIBITED TO
DISTRIBUTE, PUBLISH, OFFER FOR SELE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS PRODUCT IN HARD COPY OR
DIGITAL FORM. ALL OFFENDERS WISUED IN A COURT OF LAW.

Total Expenses $ 1,582,580 $ 1,590,380 $ 1,638,091 $ 1,687,234 $ 1,737,851

Net Income Before Tax $ 2,030,920 $ 2,424,620 $ 2,577,659 $ 2,528,516 $ 2,678,649
Less Income Tax 0 0 0 0 0

$12,000,000 Debt Service @ $

5% Interest $ 600,000 $ 600,000 $ 600,000 600,000 $ 600,000
$
Net Income $ 2,030,920 $ 2,424,620 $ 2,577,659 2,528,516 $ 2,678,649
$
Income After Debt Service $ 1,430,920 $ 1,824,620 $ 1,977,659 1,928,516 $ 2,078,649

*Reflects 3% COLA each

year
**Reflects 3% COLAs and cost allocation for 22 beds, only

VRI Executive Summary Page 3 of 3