Investor Information

September 5, 2008

If you are one of our long-time customers we thank you for your continued business. If you a newer member of our customer base we appreciate the opportunity to serve your needs. As you may know, Back 40 Group of companies has been in business since 1996 when it began on Herm and Linda’s Ohio farm.

In 2002 we moved to our Missouri farm and brought the business with us. In both locations we have operated in the poorest county in the state. We love the sparseness of population, the beautiful scenery and the people. It became apparent to us that our area was losing population and there were no jobs for young people completing school. We decided to take action. We wanted to provide good job opportunities and also be true to our mission: “To provide information and products that will help People live in Harmony with all Creation.”

We realized that the job was too large for us to do alone, so in 2005 we re-incorporated and set ourselves on the road to becoming a public company with employee ownership. Now, in addition to Back 40 Books (soon to become Back 40 General Store) we also operate Back 40 Internet Innovators (web development for others), Back 40 Forums, Back 40 Classifieds, Pleasant Valley Productions (Video, Audio production, DVD, CD manufacturing), Fluffy Cat Records (Independent Label), and Back 40 Internet Radio Broadcast Services (KWBC.fm).

In 2006 we had our first “public offering” to family and friends at .02¢ per share. Late in 2007 we registered a Regulation “D” offering of $900,000.00. We have $350,000.00 of that issue presently available at .12¢ per share. Generally folks don’t have a chance to get into a growing company at this level, where the risk has been reduced and the upside is considerable.

We have recently received Missouri State approval of a $459,000.00 1% interest Interim Loan to help us move to the next level: Expanding our labor force, increasing inventory and purchasing land for our new building. This means we will pay $9,000.00 interest on our 2 year loan.

Right now we are in fast forward. At the first of the year our ranking out of 25 million web sites in the world was 854,000. September 5th our Back40Books ranking is 90,086 world wide and 38,617 in the U.S. The forum is performing in a similar manner: After just 3 months on the web it is ranked 199,807, up 382% in three months. Our store sales are up 200% over last year and our total income per month is running 5 months ahead of projections.

Now, we are eager to sell the remaining shares in the present issue. Some time next year we will be mounting another $2,000,000.00 issue tentatively priced at 50¢ per share. If that holds true*, a $5,000 investment in Back 40 could be worth $20,835.00. The following year we plan a $10,000,000.00 issue (probably an IPO) at $2.50 per share. If that holds true a $5,000 investment now would be worth $104,152.50 by 2011. Please note that these shares will not be easily traded until we file our IPO 2011. Even though we are doing very well in this uncertain economy we will delay our IPO if the market is not ready to fully value our shares.

If this sounds interesting to you, please get in touch with me. You can not make any investment with us without receiving our Offering Circular and speaking with me personally. Investment in Back 40 Group requires a $5,000 minimum but you can invest as little as $1000 in The Ozark Investor’s Group, LLC, our business development fund.

We expect this issue to close out quickly and, with our present rate of growth, this will most likely be your last chance to purchase our stock at this low price. As an added benefit ALL back 40 investors receive 20% discount on orders, even those with our already low prices. And lastly, as an insider, you will get all the latest information as part of our continuing Web-log communications. Thank you for your time, interest and patronage.

Herman P. Beck

Contact: Herman Beck, CEO, Back 40 Group, Incorporated
Phone toll-free: 866.284.9844, 9am - 7pm Central time
or E-Mail: CEO@Back40Group.com

* Safe harbor for Forward-Looking Statements:

Except for statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Back 40 Group, Incorporated has little or no control. Investment in a small business can be risky. You should not invest any funds in this offering unless you can afford to lose your entire investment.




KWBC.fm Nears Launch

Nearly all of our musical selections have now been optimized and are currently being installed in our database program. Schedules are being finalized and our DJ's are ready to get on the air.
BJ Hall is our lead on-air personality and our station manager. She is a dyed in the wool bluegrass lover and regularly attends concerts throughout the area. You can count on B's lively commentary and her stories about the many recording artists she has had the honor to co-DJ with or interview. Prior to joining KWBC she was the manager of KUNQ-FM, a 35,000 watt giant that was the number one station in southern Missouri and northern Arkansas.

Big Changes at Back 40

When the last newsletter when out to you in early February we were just about to have our public hearing on our CDBG Interim Loan request. The hearing was held and our plans received a warm welcome from the City Administration and citizens present. We have now completed our application for a $450,000.00 two year loan at a very attractive 1% interest rate. These monies will be used to hire additional employees and move our operations to the next level of growth. We have now received official word of the approval of our application and should be able to access our new credit line in the next 30 days.



The Company has taken a giant step forward in hiring Mr. Tomas Kohler as the Company's new Chief Technology Officer. Tom, who is 43 years old comes to us with an extraordinary level of expertise. From 1993 through 2001 Tom was employed by Larson Glastron Boats beginning as a technical writer and advancing to the Systems & Network Administrator before leaving to work with Best Buy, Inc. where he managed the Customer Service Department for the national chain.
Desiring to move back to his home area Tom and his wife Jeanne set up a computer store in a nearby small town. With his background and training he was looking for more challenge and interviewed for a job with our Company. In the short time Tom has been aboard he has set up three new web sites, upgraded our Back 40 store with customer reviews, a weblog, item recommendations, optimized our site for search engines and is presently in the process of inserting video descriptions of our products on the site and setting up Live Chat to communicate with our customers while they shop.
During his tenure here he has improved our web store Alexa ratings from 2,188,278th most popular web site in the world in February to the 170,991st most popular this week. During that same time our page views per visit increased from 5.4 to 12.3.
The above traffic ranking is where we stood in February 2008. The meaningful information here is that we moved past 1,023,300 other websites over a three month period! During the week that the ratings were made we passed another 200,000 sites in popularity. For perspective there are over 25 million web sites in the world. In addition, our page views per visit increased from an average of 6.2 to 8, an increase of 22% over a 3 month period. But this is just the start. Here are our current (4/18/08) rankings:
As you can see in section 2 our in-week average is 170,991. To break into the top 100,000 is to be among the most popular websites in the world. In section 3 you can see that our page views per visit have risen from 7.4 to 12, a very high figure, far above most websites. So, the big question is what is this doing to our sales? People generally visit web stores several times before actually placing an order. We are presently seeing our orders increasing about 15% each week. Are we satisfied? Heavens no! Tom and I want to break the 100,000 barrier and be a leader in our industry.

How do we plan to do that? By setting up a section where customers can review our products and post their opinions where other visitors can read them. We have integrated video commercials of our more complicated products such as Market Farm Forms. Click HERE to watch it. Studies show up to a 50% increase in product sales with the addition of video descriptions. We have also will soon implement our live chat feature that will notify us when someone may need help. For example, if they seem to be spending a long time on the check-out page they may need some assistance. We can pop up a message that will ask them if they need help and they can either click it off or type a question to be answered at once.


Tom is also setting up automated instant downloads of our music artist's work and working new features into the web site itself. Take a trip to the Homepage and check out the new box at the upper right corner where you can read some of the stories we are sharing with our customers.

In addition we would like to call your attention to our new product videos: Again, when you visit our homepage and look for "Market Farm Forms" or "Flower Fairies" you will find a button to "Play Video" Click it and you will see a short video about this product. Not only will we be adding many more of these to our own site, we are working with our hosting company to produce these services for other web stores as well which will add a substantial amount to our bottom line.

Finally, we are going to set up a "market place" where folks can advertise farm products, tools, breeding stock they have for sale, or post a request for something they need. This feature will increase visits to our store and bring in additional advertising income, too.

Well, this update has become way too long already. Even though we will be hiring and training several new people and integrating many new features over the next few months I will endeavor to get the next update out in a more timely manner. As always, if you wish to leave a comment you can and if you have other questions e-mail me at CEO@Back40Books.com
Remember, if you visit your store you will receive a 20% discount when you enter the "B40G" code in the PROMO box at the upper right corner of the shopping cart. Also, if you do not already belong to the "Back40Books" e-mail list go to the homepage and enter your e-mail address at the box on the left side of the page, just above the Product Index.
Herm
Herman P. Beck
CEO

Fall Update # 1

Miscellaneous Ramblings to Catch Us Up: This summer has been quite busy, especially since my last report in late August. We have just received word that the Smith Heirs have reached an agreement (among all 15 heirs) to sign off on the property sale. Now, in the midst of chaos in the financial markets, we have begun the process of acquiring funds for the initial land purchase. We will keep you updated as we progress.

Our operations at the Ohio Farm Science Review were a huge success: We had three day sales of nearly $9,000.00 (a new record), taped 15 presentations, and we were located in the main speaker's tent. We are in the process now of editing the presentations and preparing the DVD's.


Pleasant Valley Productions division has completed shooting a "Rustic Trellises" DVD with nationally known author Jim Long. The editing has been completed and we are in the process of authoring the DVD. It will be available for the Holiday Market as a "stand alone DVD or inserted in his book How to Build Rustic Trellises and Gates.

We continue to edge closer to becoming "Back 40 General Store" with the completion of our new logo by Graphic Artist Michael Schad:
Michael has supplied us with several versions of the logo suitable for store signage, web use, letterheads and invoices and in color as well as black and white. We would love to hear your comments: leave one at the end of this article.

Management is also happy to report that we have added another magazine to our list of affilliates: WREN, the monthly magazine of the Wyoming Rural Electric Coop. We have been receiving a good response to our first reviews. Additionally, our first in-print review for Progressive Farmer will appear in the December issue and we are also providing them with direct links to many "Christmas" books, DVD's and music on our site as well.

We have also added a new artist to Fluffy Cat Records: Jozua K. from the Netherlands. Jozua is an electrical engineer who creates original works and does all mixing and arrangement in his own studio. We are classifying his work as "Easy Listening and "Smooth Jazz" and plan on marketing these as instant downloads as well as on CD. Soon, we will send you a link so that you can hear some of his great music! Also, Michael Schad is presently working on our new "Fluffy Cat" logo.

Back 40 has added 10 new investors since we have started our Regulation "D" stock sales and are been pleased with the reception. Bea Hall and myself are preparing to shoot a short "Pitch" video about our company to place on several web sites aimed at Angel and qualified investors.

That's all for today. Next time I will give you a report of our sales at the Small Farm Today Conference in Columbia, Missouri, details of our first outside DVD manufacturing job and other information as well.

Herm