for my fellow business people on the board, interesting read from the Wall Street Transcript:

CHARLES A. LESSER has been Chief Financial Officer of True Religion Apparel, Inc., since September 2003. Mr. Lesser was Interim President and Chief Financial Officer of Alpha Virtual, Inc. (now known as Veridicom International 'VRDI'), a software and technology company. From 1997 to 2002, he was Chief Financial Officer of CBCom, Inc., an Internet company. Previously, Mr. Lesser was Chief Financial Officer of Weider Sporting Goods, Inc., a manufacturer and distributor of health and fitness products. He holds an MBA from the University of the Witwatersrand in South Africa and a BA in Economics from the University of Pittsburgh, Pennsylvania.

TWST: Would you begin with a brief history and an overview of True Religion Apparel?

Mr. Lesser: True Religion Apparel, Inc., came into being through a merger with a public shell company in June 2003. Jeffrey Lubell had founded a company called Guru Denim, Inc., in order to manufacture and distribute premium denim jeans in November 2002. Needing to raise working capital, he was introduced to investment bankers who offered a public shell as well as $1.2 million in private placement equity capital. My background includes being CFO of both public and private small cap companies and I joined the public entity in July 2003. The company has since grown into a leading brand in the premium denim market both in the United States and abroad.

TWST: Denim jeans does not seem to be an area without competition. What was the rationale for going into this marketplace?

Mr. Lesser:

Mr. Lubell had been a textile salesperson for over 20 years and I have never seen

Mr. Lubell wearing anything other denim jeans. He lives his passion, which is denim jeans, and both Jeff and his wife Kym, a talented designer, believe that there is a place for denim jeans, and especially premium denim, in every person's wardrobe. The company is pleased to be a part of a clothing trend wherein denim jeans are accepted as 'business casual' wear and in a broad range of social occasions. I know that there are many people who can only associate denim jeans with Levi's or with Lee or Wrangler, fine companies that make denim jeans worn by people who work in a variety of blue collar occupations. The reality, however, is that premium denim is widely accepted. President Bush's daughter was photographed wearing a pair of True Religion Brand Jeans on November 2, election day, and appeared with the rest of the first family on CNN, on the front page of The New York Times, etc. True Religion is in a competitive market segment, but in a segment of the apparel market which is growing as both men and women substitute premium denim jeans for the trousers, khakis and grey flannels that they wore in the past.

Also, our segment of the market is filled with the new 'affluent consumer' who seeks name brands, aspires to be a part of an elite group, who associates with the products that are enjoyed by that particular market segment, and who is prepared to pay a premium price for a well-made, quality product.

TWST: What is the market that you are after with the product?

Mr. Lesser: We are in the premium jeans business. It is a very competitive market. We believe that we have been successful for a number of reasons. We think we truly have a good product, although there are other companies out in the marketplace, quite obviously, that also have a good product. But in the jeans business, fit is everything, and certainly in the United States, it is really a women's business. Women are very much interested in how they look in their jeans and how they feel in their jeans. I think we have been fortunate because we have a good product that we have been able to attract customers who want to really look and feel good wearing True Religion jeans. Our jeans sell at $172. Our jeans are sold in the better department stores, with our largest US customer being Nieman Marcus, and in the better boutiques in this country and around the world. Our market in the United States is about 80% women and 20% men, and our female customer can be anywhere from a teenager who might be using her money or her parents' credit card all the way up to a fortyish woman who certainly still has a slim figure because these are low-rise, well fitting, what one would say are sexy jeans, not unlike some of our competition. We're after what marketers call the newly affluent consumer. This consumer has a family household income of $100,000 and up. The consumer buys not necessarily what they need but really what they want. We consider True Religion to be an aspirational brand. Nobody needs to buy premium jeans, but they want to, because they know that it's a good product, not unlike other branded luxury good products. They drive in their BMWs which they've chosen to buy, And they buy a pair of True Religion jeans or Coach handbags, any other high-end product that they want to buy. The new consumer feels that they can buy whatever they want; it doesn't always have to be an expensive pair of jeans with an expensive top. It could be an expensive pair of jeans with, frankly, a $10 T-shirt. So our target is what we call this newly affluent consumer who wants to buy a pair of premium jeans because she wants to look and feel good or she has seen a particular celebrity wearing these jeans and wants to look just as good. In the USA, women predominate the high end market.

We have men as customers. We also have women who would go in and buy the gift for their husband, boyfriend, etc. Internationally, I think in Europe, in certain countries, men buy more expensive clothes. Certainly in Japan, another one of our large markets, our market is 60% women, 40% men.

TWST: Who are you competing with in this space?

Mr. Lesser: There are a series of US brands that we compete against. The largest company is Seven For All Mankind. They are four or five years old with revenues of $200 million. Citizens of Humanity, Paper, Denim and Cloth and a number of other smaller companies sell premium jeans. There are a couple of European brands, including Miss Sixty. And new brands spring up all the time. We are slightly more expensive than some of these others and considered slightly more fashion forward. The competition tends to sell around the $140, $150 range; we are at about the $170 to $200 range. But many other companies that consider themselves to be in the premium denim market would be one of our competitors.

TWST: As you look at the competitive environment, you mentioned fit as one of the things that sets you apart. What else?

Mr. Lesser: To some extent, and I know it is very difficult to talk about, there is a question of trying to look a little different. I think one of the reasons we have been successful is that many of the True Religion jeans have a vintaged look, many are worn or torn in just the right places. Some of them have tears, some of them are a little more destroyed, meaning some of the thighs and knees are essentially ripped up. I hear people making jokes saying, 'You pay more for more holes in the jeans.' Our jeans can distinguish themselves from the competition with twisted seams, flap pockets, colored thread, etc. In addition we have corduroys in more than 30 colors, both dark for winter and light for summer. Seven for All Mankind started with essentially the low-cut, low-rise, very sexy jeans. That's become somewhat of the standard and many of the other companies followed, including True Religion. All the companies in the premium market are looking for ways to distinguish themselves and I think we do that by having a more fashionable look. We consider ourselves fashionable, and of course, we take the risk that not everybody is going to feel comfortable wearing our jeans. We also have more basic low-rise jeans.

TWST: So a little broader spread of product.

Mr. Lesser: Right, broader spread of product. We have patchwork jeans, which although we are not selling big volumes, they sell out as soon as they get into the store, because they are different. We have a product called Woodstock, which again is sort of earthy, and it's called Woodstock because it is reminiscent of the rock concert at Woodstock, New York.

It has some pieces of fabric that have been sewn on and it has a little more of an earthy sort of country look. And they just sell magnificently. We also do corduroys, and we do corduroys in 30 or 40 different colors, and no other company has the range of corduroys that we have, with the corduroys cut in the same silhouette as the jeans, the exact same style, the exact same fit, they are just done in corduroy. And we have lighter, more fashion colors for summer, for instance, peach and apple. And we have the darker colors for winter, gray, olive, and khaki, black, etc. The corduroys are selling well. I think, by and large, our strategy has been to take two or three very distinct silhouettes or bodies, a straight leg, a boot cut, a flare, and try to use different fabrics and washes to create a different look.

TWST: As you look at your distribution at this point, is it as broad as you would like it to be?

Mr. Lesser: Our distribution is not as broad in the United States as we'd like it to be. Obviously, we know that there are huge gaps in the center of the country that we are not filling. Certainly, we've got both coasts well filled. Also, we believe that our department store customers, Niemans, Saks Nordstrom and Bloomingdales will both grow in numbers of doors and in the range of product which they buy from True Religion. We think that that's going to dramatically change the distribution, and it's also going to dramatically change the mix, probably the department store sales will grow to 35% of our USA business.

TWST: Versus what today?

Mr. Lesser: Versus under 20%.

TWST: Do you risk diluting the brand image as you do that?

Mr. Lesser: Yes, there's always that risk, except we just think that we are still a very small company and are missing distribution in many places in the U.S. We think that competition like Seven, and certainly Citizens of Humanity, has grown through the department stores. Getting the brand known in this channel, high-end department stores, is when sales numbers begin to grow. I think this is our year, frankly, to build the brand name. One finds True Religion easily in New York or Los Angeles, San Francisco, etc. but there are many US cities where True Religion is less well-known. So I think we have an opportunity to really brand the company this year, and to get the name out, so that it's certainly much more widely known. So I'm not worried about that yet, about diluting the brand.

TWST: Do you have the production capability that you need to do that?

Mr. Lesser: We have the production capability right now. We have three contractors here at Los Angeles, plus we have another one about an hour outside of Mexico City.

We have the capability to do a little over $100 million right now, without trying to put on another factory.

TWST: So you can meet potential demand?

Mr. Lesser: We believe we can meet potential demand.

TWST: Do you have the staff you need to get out to this broader market?

Mr. Lesser: In the United States, we have a contract sales force which has a staff of about 10, with showrooms in New York, Dallas and Los Angeles. And that's an excellent question because I think they'll need to probably staff up a little bit to service and to roll out into our department stores, and we'll be telling them to do that. We also go to all of the major trade shows. We go with the sales team to all of the major apparel shows, both men's and women's here in the United States. International sales represent 45% of our business. We have distributors in every major country in Europe, in Canada, in Australia, in South Africa, in Mexico and in the Middle East. And each distributor buys the goods, they take possession, they carry their own inventory, they collect their own money, and in exchange for that, we give them a 25% discount off of the wholesale price. They pay us cash and they are essentially running their own business in their respective markets. I think that's probably another one of our key success factors. We chose very carefully. We have a distributor force internationally, which essentially is very similar and often superior to some of our competition. Our distributor in Germany, for instance, distributes Juicy Couture, Seven for All Mankind, Von Dutch and True Religion. We think that's pretty good company to be in and that is a similar situation in many of the other countries. They are all distributing high end, very successful, very well known brands in each of these countries. W believe think that we will grow internationally this year, just like we think we are going to grow in the United States.

TWST: From a financial point of view, do you have the resources to support all this?

Mr. Lesser: We have thought about raising capital. We have a factoring line in place, which we are not using yet, which allows to borrow 85% of all of our US receivables. We also get paid upfront from our distributors. So we think a combination of being profitable, of getting paid from our international distributors, and of being able to borrow should allow us to not have to raise any equity capital. It is always nice to have a little cash hoard sitting on your balance sheet, certainly as a public company, and we are going to consider that down the road. I worry that the market will think that we will dilute the shareholders and hurt earnings per share.

We are going to try to do without raising equity capital.

TWST: When you talk to your investors at this point, what is the key question or concern that you are hearing?

Mr. Lesser: Tell me about 2006, every single time.

TWST: What's the answer?

Mr. Lesser: The answer is, number one, continue with and broaden the True Religion product line. We are already into jackets, and jackets are selling very, very well. We have a kid's line and are expecting the jeans into new fabrics ' cotton, velour, etc. Number two, we've been approached by any number of well-known companies asking, 'Would you design a jean line for us?' We are seriously contemplating a second mid- priced jean line not under the name of True Religion, but a jean line that would be more in the middle market department stores, that would sell perhaps at $80- $85. Although that marketplace is also competitive, as any other marketplace is, we believe that there is a trend going on in those middle market department stores looking for hot successful brands as opposed to private label brands. So we are investigating whether we can create another brand without ruining the market for True Religion. But if we can use our expertise in the denim business to design a very competitive, lower priced jean, under a new name, and create another hot brand, we believe we could be equally successful similar to Ralph Lauren or any of the other successful designers who have brands at different price points. We have got to proceed very slowly and meticulously to try to develop something and try to see if we can create a unique product, because we think that brand could be equally as big as True Religion, if not larger. The third opportunity is licensing, which we yet to explore. We put off licensing to 2006, because in 2005 our goal is to focus in increasing brand recognition. Our strategy for 2004 was get it on the shelves, for 2005 is to brand the product, for 2006 it is to expand the product.

TWST: Is there anything else we should touch on?

Mr. Lesser: Do you talk about the numbers at all?

TWST: What are people expecting?

Mr. Lesser: We put out guidance, and I need to be cautious in terms of what I say. We put out guidance that says the company would grow from $27 million to $55 million, which is 100%, and that earnings per share will grow from $0.18 to $0.20 to $0.42 to $0.46. We think those estimates are realistic and in fact conservative, and as the year progresses, we will put out additional guidance as we get a better view. We've already seen results on some of the trade shows so far. We've had two shows in New York that we've attended, we had two shows in Europe that we have attended, the Pitti and the Bread and Butter. Our European sales are definitely on track for what we are projecting, and the United States as well. We are going to go to MAGIC on the 14th of February, and we are going to Coterie in New York at the end of February. Our sales order backlog continues to increase even though we've had a very good January. We are hoping meet or beat our current estimates, and we are going to keep communicating with our shareholders and let them know what's going on.

TWST: Increasingly important in this environment.

Mr. Lesser: Yes. We are on new ground as a Bulletin Board listed company. The first sellside analyst report was recently published and we will do our first real earnings conference call later this month. We are going to remain cautious, but continue to communicate as often as necessary to tell our story, a story which we think has been a real success for our customers and our shareholders.

TWST: Thank you. (TJM)

CHARLES A. LESSER

CFO