USE OF PROCEEDS

We estimate that we will receive net proceeds of approximately $8,248,000 from the sale of the 2,000,000 shares of common stock and 2,000,000 purchase warrants being offered by us, at an initial public offering price of $5.00 per share and $.05 per warrant, after deducting $1,212,000 for underwriting discounts and commissions and our underwriter's non-accountable expense allowance and estimated expenses of approximately $640,000. If our underwriter exercises its over-allotment option in full, we will receive an additional $1,333,200 from the sale of an additional 300,000 shares of our common stock and 300,000 purchase warrants, after deducting $181,800 for underwriting discounts and commissions and our underwriter's non-accountable expense allowance.

The following table describes the expected allocation of the net proceeds of the offering, assuming that our underwriter does not exercise its over-allotment option:

                                                                APPLICATION OF       PERCENTAGE OF
                                                                 NET PROCEEDS        NET PROCEEDS
                                                              ------------------   -----------------
Working capital and general corporate purposes (including
  opening new stores and expanding our catalog and gift
  operations)...............................................      $7,748,000              93.9%
Developing our franchise operations infrastructure..........         500,000               6.1
                                                                  ----------             -----
          Total.............................................      $8,248,000             100.0%
                                                                  ==========             =====

We believe that the net proceeds of the offering will be sufficient to fund the opening of between 10 and 30 new stores. We will have significant discretion in the use of the net proceeds of the offering. Investors will be relying on the judgment of our management regarding the application of the proceeds of the offering.

Until we use the net proceeds as discussed above, we intend to invest the net proceeds from the offering in short term direct obligations of the United States or Federal agencies, in each case with maturities of less than one year, short term certificates of deposit or other time deposits with banks or corporate bonds with a Moody's or Standard & Poor's investment grade rating. We expect that the proceeds from the offering will provide us with sufficient capital for at least the next 18 months.