AMERICAN RETAIL ALLIANCE CORP. IPO

We will receive up to $3,000,000 if all of the shares of common stock offered 
by us at $1.50 per share are purchased. We cannot guarantee that we will sell 
any or all of the shares being offered by us.  This is a best efforts offering 
with no minimum offering amount. 

The table below estimates our use of proceeds, in order of priority, given the 
varying levels of success of the offering. 

Offered Shares  Offering Proceeds   Net Offering    Principal Uses of Net Proceeds [2] 
      Sold                           Proceeds [1]   
                                                                  Inventory:    $135,000
                                                    Marketing & Advertising:    $405,000
 500,000 shares                                             Working Capital:     $54,590
     (25%)           $750,000          $704,590                  Repay Debt:    $110,000
                                                                  Inventory:    $297,500
                                                    Marketing & Advertising:    $892,500
1,000,000 shares                                            Working Capital:    $154,590
     (50%)          $1,500,000        $1,454,590                 Repay Debt:    $110,000
                                                                  Inventory:    $460,000
                                                    Marketing & Advertising:  $1,380,000
1,500,000 shares                                            Working Capital:    $254,590
     (75%)          $2,250,000        $2,204,590                 Repay Debt:    $110,000
                                                                  Inventory:    $622,500
                                                    Marketing & Advertising:  $1,867,500
2,000,000 shares                                            Working Capital:    $354,590
   (maximum)        $3,000,000        $2,954,590                 Repay Debt:    $110,000

[1] Includes estimated offering costs of $45,410 which must be paid regardless
of how much is raised. The estimated offering costs include the SEC filing fee
of $409.20; Legal fees and expenses of $15,000; Accounting fees and expenses of
$25,000; and miscellaneous costs of $5,000. Working capital will be used to pay
general and administrative expenses, legal expenses, accounting expenses and
estimated public company reporting costs of $50,000 for the next twelve months.
 
[2] Our anticipated post-offering burn rate of approximately $25,000 per
month includes our anticipated public company reporting costs of $50,000 per
year.  Those expenses may increase if we are able to grow our operations and
marketing activities.  Marketing expenses primarily include costs associated
with advertising and some travel and entertainment expenses and development,
preparation and printing of marketing materials. Funds projected above allocated
to the hiring of employees and independent contractors, are those who would be
engaged to help conduct our business operations, and exclude compensation that
would be paid to our officers. The funds from this offering will not be used to
pay our officers for any services related to activities undertaken to further
the success of this offering, whether provided prior to, during, or subsequent
to the offering.  None of the proceeds will be used to reimburse our presidnet
for any  expenses that  he may have  contributed to the Company.
 
The Company currently does not maintain inventory as all inventory is held by
either our customers or our clients. In addition to sale of products for which
our clients hold the ownership rights, we have started to sell products which
for which we rather than some independent third party have the ownership rights.
We call these products our proprietary products. The Company will use a portion
of proceeds to stock inventory for a line of proprietary products which the
company will contract manufacture. A portion of proceeds will be used to repay
debt of $100,000 issued November 7th, 2011. The note matures twelve months from
date of note at an interest rate of eight percent per annum. Payment is due and
payable at the term end of note. The term of the note was recently extended
twelve months to November 7, 2013.

Companies in the consumer products and wholesale and retail distribution 
markets continue to face intense competition, slow growth, rising costs and 
a fragile economic environment.  The sector is highly dependent on household 
income to drive sales and is price sensitive to economic issues such as rising 
input commodity prices, energy costs, interest rates, unemployment, a 
weakening dollar and consumer confidence levels. 

The company competes in a market which requires becoming an approved vendor 
of record to the nation’s largest retail chain stores.  The process is costly, 
time consuming and in many instances requires a prior relationship.  There are 
significant barriers to entry including a vendor approval process which 
requires carrying sufficient product liability insurance; past experience as 
a retail vendor; a D&B rating; membership in EDI (Electronic Data Interchange) 
and; Vendor approval of customer’s supplier network which assures proper
computer qualifications for transmitting information back and forth.  The 
retailer may also require a vendor to offer multiple sku’s (market ready 
products). 

Many of our competitors have substantially greater financial, marketing, 
personnel and other resources than we do. 

The major competitors are: 

·    Media Funding Solutions – Provides funding for retail advertising 
     campaigns.  

·    Idea Village Products Corp. – Markets “As Seen on TV” products to 
     leading discount retailers, major drug stores and specialty retailers in
     the U.S.  

·    Product Placement & Promotions, LLC – Provides product branding, 
     promotion and placement services.  

·    National Product Placement - Provides product placement services.  

We compete with based upon: 

·    Product review - The Company has expertise in package design, contract 
     manufacturing, chain store sales programs, broker services and mail order 
     and catalog sales.  

·    Barriers to entry – The Company can reduce the time and expense a client 
     would incur to bring their product to market at retail chain stores. The 
     Company’s established vendor accounts enable more speedy product placement 
     at the retail level as well as the ability to launch a test market to a 
     smaller demographic within the retail chain store infrastructure.  Because 
     the Company represents the client’s products, the company is the approved 
     vendor of record for those products.  The client cannot sell those product 
     under a separate vendor  relationship with the same  customer unless the 
     products are discontinued and the client establishes a new vendor 
     relationship with that customer.