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 Table of Contents

1.0 Executive Summary.....................................................................................................................1

Chart: Highlights...........................................................................................................................2
1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Company Locations and Facilities.......................................................................................3
2.3 Start-up Summary....................................................................................................................3
Table: Start-up Funding.............................................................................................................3
Table: Start-up..............................................................................................................................4
Chart: Start-up..............................................................................................................................4
3.0 Services.............................................................................................................................................5
4.0 Market Analysis Summary.........................................................................................................5
4.1 Target Market Segment Strategy.......................................................................................5
4.2 Service Business Analysis......................................................................................................6
4.2.1 Competition and Buying Patterns...............................................................................6
5.0 Strategy and Implementation Summary.............................................................................6
5.1 Competitive Edge......................................................................................................................7
5.2 Marketing Strategy...................................................................................................................7
5.3 Sales Strategy............................................................................................................................7
5.3.1 Sales Forecast....................................................................................................................7
Chart: Sales Monthly...............................................................................................................8
Chart: Sales by Year................................................................................................................8
Table: Sales Forecast..............................................................................................................9
5.4 Milestones....................................................................................................................................9
5.4 Milestones....................................................................................................................................9
Table: Milestones..........................................................................................................................9
Chart: Milestones........................................................................................................................10
6.0 Personnel Plan..............................................................................................................................11
Table: Personnel..........................................................................................................................11
6.1 Management Team Gaps.....................................................................................................11
7.0 Financial Plan................................................................................................................................12
7.1 Break-even Analysis...............................................................................................................12
Table: Break-even Analysis....................................................................................................12
Chart: Break-even Analysis....................................................................................................12
7.2 Projected Profit and Loss.....................................................................................................13
Chart: Profit Monthly.................................................................................................................13
Chart: Profit Yearly.....................................................................................................................13
Chart: Gross Margin Monthly.................................................................................................14
Chart: Gross Margin Yearly.....................................................................................................14
Table: Profit and Loss................................................................................................................15
7.3 Projected Cash Flow...............................................................................................................16
7.3 Projected Cash Flow...............................................................................................................16
Table: Cash Flow.........................................................................................................................16

Page
 Table of Contents

Chart: Cash...................................................................................................................................17
7.4 Projected Balance Sheet......................................................................................................18
Table: Balance Sheet.................................................................................................................18
7.5 Business Ratios........................................................................................................................18
7.5 Business Ratios........................................................................................................................18
Table: Ratios.................................................................................................................................19
Table: Sales Forecast..........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................7
Table: Balance Sheet...........................................................................................................................7

Page
 Gaming Futures, LLC

1.0 Executive Summary

Gaming Futures, LLC, provides Windows® application development/support, PlayStation2®

development, XBox® development, 2D and 3D art and visual effects, and project guidance.
Gaming Futures is a game development studio formed by veterans of Modicum On-Line and
Axiomatic InterRational. As developers of the best-selling and critically acclaimed
"DreæmWhyrks" series, Gaming Futures' talented core team members have produced five titles
together, and have individual experience with dozens more. Gaming Futures is committed to
creating high-quality, innovative, successful games and software.

We offer the following:

 Game concepts and development for PC, PS2®, XBox®, Pocket PC®.
 Game platform ports: PC/PS2/XBox/Game Boy®.
 2D and 3D art, programming, libraries to spec.
 Interface design and software enhancement.
 Cohesive, talented development team with years of experience shipping products together.
 Proven track record: DreæmWhyrks series has over 3 million units sold to date.
 On time and on budget shipping.

The company is forming out of the ashes of Axiomatic InterRational which shut down last
June. Gaming Futures is the core group of the last DreæmWhyrks project at Axiomatic. The
DreæmWhyrks line has shipped over 3 million units. The production team has four years of
successful product development as a team. Individually, the group has over 30 years of
experience and has contributed to over 40 software products.

Bill Kerl, Project Manager for Gaming Futures, believes the company is well positioned to be a
valuable resource to gaming companies that are seeking cost-effective ways to implement a
gaming design mission that will meet projected completion dates. One of the greatest obstacles
is the ability of the production team to perform without wasted effort and resources. Gaming
Futures has a documented history of completing its projects under budget and on time.

Currently, the company has been successful in acquiring three contracts with the following
companies:

 Clear Mountain Productions

 Weaver Farm, Inc.

Note: Windows®, PlayStation2®, PS2®, Xbox®, Pocket PC® , and Game Boy® are registered
trademarks of their respective corporations.

Page 1
 Gaming Futures, LLC

Chart: Highlights

Highlights
$700,000

$600,000

$500,000
Sales
$400,000
Gross Margin
$300,000 Net Profit

$200,000

$100,000

$0
Year 1 Year 2 Year 3

1.1 Objectives

Gaming Futures' objectives are as follows:

 Achieve sales goal of $200,000 during first year of operation.

 Achieve a customer base of 40 companies.
 Increase sales by 15% during the second year of operation.

1.2 Mission

The mission of Gaming Futures is to provide the highest quality service through the
development of innovative, exciting products to the interactive entertainment industry.

2.0 Company Summary

Gaming Futures, LLC, is a game development studio providing Windows application

development/support, PS2 development, XBox development, 2D and 3D art and visual effects,
and project guidance. The company will be organized as a Limited Liability Corporation.

2.1 Company Ownership

Gaming Futures, LLC is owned by its team of developers:

 Bill Kerl
 Diane Huber
 Marcus Hathcock
 Jillian Daley
 Jeremy Lang

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 Gaming Futures, LLC

2.2 Company Locations and Facilities

Gaming Futures is located in a 3,000 square foot office space in the Northwest Industrial Park
in northwest Madison.

2.3 Start-up Summary

The start-up expense for the Gaming Futures is focused primarily on equipment and office
space. William, Diane, Marcus, Jillian, and Jeremy will each invest $35,000. In addition, Gaming
Futures will secure a $100,000 long term loan.

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $124,300
Start-up Assets to Fund $150,700
Total Funding Required $275,000

Assets
Non-cash Assets from Start-up $90,000
Cash Requirements from Start-up $60,700
Additional Cash Raised $0
Cash Balance on Starting Date $60,700
Total Assets $150,700

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $100,000

Capital

Planned Investment
Bill Kerl $35,000
Diane Huber $35,000
Marcus Hathcock $35,000
Jillian Daley $35,000
Jeremy Lang $35,000
Additional Investment Requirement $0
Total Planned Investment $175,000

Loss at Start-up (Start-up Expenses) ($124,300)

Total Capital $50,700

Total Capital and Liabilities $150,700

Total Funding $275,000

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 Gaming Futures, LLC

Table: Start-up
Start-up

Requirements

Start-up Expenses
Legal $1,000
Stationery etc. $400
Brochures $400
Insurance $1,000
Rent $1,500
Expensed Equipment $120,000
Total Start-up Expenses $124,300

Start-up Assets
Cash Required $60,700
Other Current Assets $20,000
Long-term Assets $70,000
Total Assets $150,700

Total Requirements $275,000

Chart: Start-up

Start-up

$180,000

$160,000

$140,000

$120,000

$100,000

$80,000

$60,000

$40,000

$20,000

$0
Expenses Assets Investment Loans

Page 4
 Gaming Futures, LLC

3.0 Services

Gaming Futures' cohesive, talented development team offer their clients:

 Game concepts and development for PC, PS2, Xbox, Pocket PC

 Game platform ports: PC/PS2/Xbox/Game Boy
 2D and 3D art, programming, libraries to spec.
 Interface design and software enhancement.
 On time and on budget shipping.

4.0 Market Analysis Summary

According to a new report from DFC Intelligence, recent sales indicate that the video game
market is poised for impressive growth. The report forecasts that annual unit sales of video
games and PC games in the U.S. is expected to grow over 40% from 2001 to 2006. The
successful introduction of four new game systems in 2000 and 2001 meant that the industry
was able to avoid the major downturn in sales that has occurred in past platform transitions.
According to DFC Intelligence, the industry should experience another year of record sales in
2002.

The interactive games industry is a major economic force. With an estimated global value of
some $10 to $20 billion, the industry rivals Hollywood in revenues and is now recognized as a
propulsive force behind the creation of markets for information and communication
technologies. Games account for nearly one-third of consumer software sales in North America.

4.1 Target Market Segment Strategy

Not only was the video game market not slowed by a softening economy or the terrorist
attacks, but 2001 turned out to be the best year ever for the U.S. video game industry. The
total U.S. video game industry grew from $6.6 billion in 2000 to $9.4 billion in 2001. The
previous all-time record was $6.9 billion in 1999.

DFC estimates that by 2006 the three leading games systems, the Sony PlayStation2, the
Microsoft Xbox and the Nintendo GameCube, should have combined U.S. sales of over 60
million units. The report forecasts strong sales for all three systems. There are currently 3,000
gaming companies that are producing games for one or more of the leading gaming systems.
While strong market growth is predicted, there are also many challenges facing the interactive
entertainment industry.

Sales of the total U.S. interactive entertainment software market, which includes PC
entertainment and video game software, approached $6 billion in 2001 versus $5.4 billion in
2000, DFC found. Console and portable software sales rose 8.3 percent in unit sales, compared
to 2000, while PC entertainment software experienced a unit increase of 3.8 percent. The main
challenge is that while unit sales are expected to rise rapidly, development and marketing costs
are also soaring.

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 Gaming Futures, LLC

4.2 Service Business Analysis

Companies are combating development costs by outsourcing segments of the development

project. Currently, it is estimated that 30% of project work is outsourced. There are a number
of advantages to this strategy.

By outsourcing, companies can take advantage of a tremendous gaming experience base

without paying the personnel price tag to retain the talent on payroll. By negotiating a price for
the outsourcing, companies can also cap development cost. More importantly, as few larger
companies compete in the marketplace for dominance, a number of service firms will emerge to
fill the demand for quality developers that are necessary for specific projects, much like the rest
of software industry. It is estimated that product development in the software industry can save
upwards to 30% of development costs by outsourcing key elements of the development
process.

4.2.1 Competition and Buying Patterns

The interactive game industry is based on the hype that is created by core players. The ability
to create product that satisfies the gaming demands of core players is a critical consideration
when outsourcing opportunities emerge. This unique cultural aspect of the industry influences
how companies outsource. Technological expertise is secondary to the ability to create a
product that the target group will immediately be comfortable with. Companies are looking for
production track records with products with similar play devices that were focused on similar
target users. Typically, a selected group of firms are asked to submit proposals for the
outsourcing assignment much like an ad campaign. The firm with the best ideas and the best
talent to implement the idea gets the contract. Over 80% of the interactive game companies
have outsourced segments of game development. This represents a client base of 400
companies.

Currently there are 100+ firms that compete for outsourcing contracts in the interactive game
industry. Because of the unique cultural aspect of the interactive gaming community,
companies specialize in gaming devices or user groups in order to gain advantage in the
proposal process.

The team's track record is the most important pivotal issue when competing for outsourcing
contracts. A firm that has an intact team that has achieved past project goals has an advantage
in the bidding process. Production companies are looking for assurances that deadlines will be
met and the quality will be there. The production of a game is on a tight schedule and any
missed deadline will ripple effect over the entire project, and could result in missed revenues
and increased expenses.

5.0 Strategy and Implementation Summary

Gaming Futures' developers, William Kerl and Diane Huber, have extensive connections
throughout the gaming industry. They will be responsible for marketing the company's services
to potential customers.

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 Gaming Futures, LLC

5.1 Competitive Edge

The competitive advantage of Gaming Futures is always bringing in a project before the
projected deadline. As noted in the Market Analysis Summary, one of the greatest challenges
will be production costs. Nowhere is this more critical than with outsourced projects. If a
company can produce by deadline, they will get more work.

5.2 Marketing Strategy

William Kerl and Diane Huber will approach the 120 production companies that are currently
producing video games. A marketing CD has been created for these presentations.

William and Diane have begun the process of presenting their company's services to gaming
production companies. The team has created a presentation program that will be the
centerpiece of the marketing program.

Currently, the company has been successful in acquiring three contracts with the following
companies:

 Clear Mountain Productions

 Weaver Farm, Inc.

The company will continue to aggressively pursue new contracts.

5.3 Sales Strategy

Gaming Futures anticipates that sales will start during the third month. The first two months of
operation will have flat sales. After that point, sales will increase.

5.3.1 Sales Forecast

The following is the sales forecast for three years. The owners have agreed not to take a salary
for the first three months of the operation, and during this phase all five owners will be involved
in sales.

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 Gaming Futures, LLC

Chart: Sales Monthly

Sales Monthly
$50,000

$45,000

$40,000

$35,000

$30,000
Projects
$25,000
Other
$20,000

$15,000

$10,000

$5,000

$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

Chart: Sales by Year

Sales by Year

$700,000

$600,000

$500,000
Projects
$400,000
Other
$300,000

$200,000

$100,000

$0
Year 1 Year 2 Year 3

Page 8
 Gaming Futures, LLC

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Projects $279,000 $380,000 $644,000
Other $0 $0 $0
Total Sales $279,000 $380,000 $644,000

Direct Cost of Sales Year 1 Year 2 Year 3

Projects $0 $0 $0
Other $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0

5.4 Milestones

The accompanying table lists important program milestones, with dates and managers in
charge, and budgets for each. The milestone schedule indicates our emphasis on planning for
implementation.

What the table doesn't show is the commitment behind it. Our business plan includes complete
provisions for plan-vs.-actual analysis, and we will hold monthly follow-up meetings to discuss
the variance and course corrections.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Office Setup 5/1/2002 5/20/2002 $5,000 William Kerl Admin
Equipment/Network Setup 5/1/2002 5/20/2002 $100,000 Jeremy Lang Admin
Marketing CD 3/1/2002 4/1/2002 $2,000 Diane Huber Web
Face to Face Selling 4/1/2001 6/1/2002 $2,000 All Web
Totals $109,000

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 Gaming Futures, LLC

Chart: Milestones

Milestones

Office Setup

Equipment/Network Setup

Marketing CD

Face to Face Selling

Q2 `01 Q3 Q4 Q1 `02 Q2

Page 10
 Gaming Futures, LLC

6.0 Personnel Plan

Gaming Futures staff is as follows:

Bill Kerl- Producer/New Business

Starting out with games in 1993 programming on the 3DO, then programming and producing
DreæmWhyrks games since 1995, Bill is driven to get things out. Planning for success is the
most important part of any project.

Diane Huber - Lead Engineer

Diane has been programming computers for over 25 years and has been making great games
for the last 15 years, including DreæmWhyrks, Mighty Quinn, and Fire Mountain.

Marcus Hathcock- Programmer/GamePlay

Marcus is a software engineer who has 5 years experience implementing interfaces and
gameplay; most of this time was spent working on the DreæmWhyrks series at Axiomatic.

Jillian Daley- Senior Software Engineer

With 11 years programming experience building games, tools, and technologies, she's been
involved in all aspects of several full 3D sims including Penthesilea and the DreæmWhyrks
series.

Jeremy Lang- Software Engineer

Jeremy has specialized in using artificial intelligence to simulate physical events. For the past
six years Jeremy's projects at Axiomatic have included the DreæmWhyrks series, Mighty Quinn,
Fire Mountain, and Storm Warnings.

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Bill Kerl $27,000 $42,000 $50,000
Diane Huber $27,000 $42,000 $50,000
Marcus Hathcock $27,000 $42,000 $50,000
Jillian Daley $27,000 $42,000 $50,000
Jeremy Lang $27,000 $42,000 $50,000
President $0 $0 $120,000
Total People 5 5 6

Total Payroll $135,000 $210,000 $370,000

6.1 Management Team Gaps

Currently, the firm doesn't have a corporate leader to manage the anticipated growth of the
company during its third year of operation and beyond. As sales grow, the focus will be on
production. The management of the company's resources and decisions on how to effectively
grow the firm will demand an individual with extensive management expertise as well as
experience in the interactive gaming industry. This is critical vacancy will be addressed during
the third year. The firm will hire a President to fill this role.

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 Gaming Futures, LLC

7.0 Financial Plan

The following is the financial plan for Gaming Futures. The various topic tables display annual
figures for the first three years. Monthly figures for the first year are presented in the appendix.

7.1 Break-even Analysis

The following table and chart show our Break-even Analysis.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $16,971

Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $16,971

Chart: Break-even Analysis

Break-even Analysis
$16,000

$12,000

$8,000

$4,000

$0

($4,000)

($8,000)

($12,000)

($16,000)
$0 $6,000 $12,000 $18,000 $24,000 $30,000
$3,000 $9,000 $15,000 $21,000 $27,000 $33,000

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 Gaming Futures, LLC

7.2 Projected Profit and Loss

The following table and charts highlight the projected profit and loss for three years.

Chart: Profit Monthly

Profit Monthly

$18,000

$15,000

$12,000

$9,000

$6,000

$3,000

$0

($3,000)

Month 1 Month 3 Month 5 Month 7 Month 9 Month 11

Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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 Gaming Futures, LLC

Chart: Profit Yearly

Profit Yearly

$100,000

$80,000

$60,000

$40,000

$20,000

$0
Year 1 Year 2 Year 3

Chart: Gross Margin Monthly

Gross Margin Monthly

$50,000

$45,000

$40,000

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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 Gaming Futures, LLC

Chart: Gross Margin Yearly

Gross Margin Yearly

$700,000

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0
Year 1 Year 2 Year 3

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 Gaming Futures, LLC

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $279,000 $380,000 $644,000
Direct Cost of Sales $0 $0 $0
Other Production Expenses $0 $0 $0
Total Cost of Sales $0 $0 $0

Gross Margin $279,000 $380,000 $644,000

Gross Margin % 100.00% 100.00% 100.00%

Expenses
Payroll $135,000 $210,000 $370,000
Sales and Marketing and Other Expenses $12,000 $15,000 $20,000
Depreciation $9,996 $10,000 $10,000
Leased Equipment $0 $0 $0
Utilities $4,800 $4,800 $4,800
Insurance $3,600 $3,600 $3,600
Rent $18,000 $18,000 $18,000
Payroll Taxes $20,250 $31,500 $55,500
Other $0 $0 $0

Total Operating Expenses $203,646 $292,900 $481,900

Profit Before Interest and Taxes $75,354 $87,100 $162,100

EBITDA $85,350 $97,100 $172,100
Interest Expense $8,960 $7,080 $5,080
Taxes Incurred $19,918 $24,006 $47,106

Net Profit $46,476 $56,014 $109,914

Net Profit/Sales 16.66% 14.74% 17.07%

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 Gaming Futures, LLC

7.3 Projected Cash Flow

The following table and chart highlights the projected cash flow for three years.

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $69,750 $95,000 $161,000
Cash from Receivables $142,750 $260,927 $420,075
Subtotal Cash from Operations $212,500 $355,927 $581,075

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $212,500 $355,927 $581,075

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $135,000 $210,000 $370,000
Bill Payments $73,476 $109,491 $149,968
Subtotal Spent on Operations $208,476 $319,491 $519,968

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $19,200 $20,000 $20,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $227,676 $339,491 $539,968

Net Cash Flow ($15,176) $16,435 $41,107

Cash Balance $45,524 $61,959 $103,066

Page 17
 Month
2
Gaming Futures, LLC

MonthMonth
1
Chart: Cash

Cash
$60,000

$50,000

$40,000

$30,000
Net Cash Flow
$20,000
Cash Balance
$10,000

$0

($10,000)

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 Gaming Futures, LLC

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $45,524 $61,959 $103,066
Accounts Receivable $66,500 $90,573 $153,498
Other Current Assets $20,000 $20,000 $20,000
Total Current Assets $132,024 $172,533 $276,564

Long-term Assets
Long-term Assets $70,000 $70,000 $70,000
Accumulated Depreciation $9,996 $19,996 $29,996
Total Long-term Assets $60,004 $50,004 $40,004
Total Assets $192,028 $222,537 $316,568

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $14,052 $8,547 $12,665
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $14,052 $8,547 $12,665

Long-term Liabilities $80,800 $60,800 $40,800

Total Liabilities $94,852 $69,347 $53,465

Paid-in Capital $175,000 $175,000 $175,000

Retained Earnings ($124,300) ($77,824) ($21,810)
Earnings $46,476 $56,014 $109,914
Total Capital $97,176 $153,190 $263,104
Total Liabilities and Capital $192,028 $222,537 $316,568

Net Worth $97,176 $153,190 $263,104

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 7371, Computer Programming Services, are shown
for comparison.

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 Gaming Futures, LLC

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 36.20% 69.47% 10.40%

Percent of Total Assets

Accounts Receivable 34.63% 40.70% 48.49% 24.10%
Other Current Assets 10.42% 8.99% 6.32% 42.90%
Total Current Assets 68.75% 77.53% 87.36% 71.10%
Long-term Assets 31.25% 22.47% 12.64% 28.90%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 7.32% 3.84% 4.00% 47.80%

Long-term Liabilities 42.08% 27.32% 12.89% 19.10%
Total Liabilities 49.39% 31.16% 16.89% 66.90%
Net Worth 50.61% 68.84% 83.11% 33.10%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 83.34% 85.26% 82.93% 82.10%
Advertising Expenses 4.30% 3.95% 3.11% 1.20%
Profit Before Interest and Taxes 27.01% 22.92% 25.17% 2.00%

Main Ratios
Current 9.40 20.19 21.84 1.30
Quick 9.40 20.19 21.84 1.03
Total Debt to Total Assets 49.39% 31.16% 16.89% 66.90%
Pre-tax Return on Net Worth 68.32% 52.24% 59.68% 3.10%
Pre-tax Return on Assets 34.58% 35.96% 49.60% 9.30%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 16.66% 14.74% 17.07% n.a
Return on Equity 47.83% 36.57% 41.78% n.a

Activity Ratios
Accounts Receivable Turnover 3.15 3.15 3.15 n.a
Collection Days 55 101 92 n.a
Accounts Payable Turnover 6.23 12.17 12.17 n.a
Payment Days 27 40 25 n.a
Total Asset Turnover 1.45 1.71 2.03 n.a

Debt Ratios
Debt to Net Worth 0.98 0.45 0.20 n.a
Current Liab. to Liab. 0.15 0.12 0.24 n.a

Liquidity Ratios
Net Working Capital $117,972 $163,986 $263,900 n.a
Interest Coverage 8.41 12.30 31.91 n.a

Additional Ratios
Assets to Sales 0.69 0.59 0.49 n.a
Current Debt/Total Assets 7% 4% 4% n.a
Acid Test 4.66 9.59 9.72 n.a
Sales/Net Worth 2.87 2.48 2.45 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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 Appendix

Table: Sales Forecast

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Projects 0% $0 $0 $10,000 $15,000 $17,000 $24,000 $28,000 $30,000 $30,000 $35,000 $40,000 $50,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $0 $0 $10,000 $15,000 $17,000 $24,000 $28,000 $30,000 $30,000 $35,000 $40,000 $50,000

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Projects $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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 Appendix

Table: Personnel

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Bill Kerl 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Diane Huber 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Marcus Hathcock 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Jillian Daley 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Jeremy Lang 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
President 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 5 5 5 5 5 5 5 5 5 5 5 5

Total Payroll $0 $0 $0 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000

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 Appendix

Table: General Assumptions

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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Table: Profit and Loss

Pro Forma Profit and Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $0 $0 $10,000 $15,000 $17,000 $24,000 $28,000 $30,000 $30,000 $35,000 $40,000 $50,000
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Gross Margin $0 $0 $10,000 $15,000 $17,000 $24,000 $28,000 $30,000 $30,000 $35,000 $40,000 $50,000
Gross Margin % 0.00% 0.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Expenses
Payroll $0 $0 $0 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Sales and Marketing and Other $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Expenses
Depreciation $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Insurance $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Rent $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Payroll Taxes 15% $0 $0 $0 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $4,033 $4,033 $4,033 $21,283 $21,283 $21,283 $21,283 $21,283 $21,283 $21,283 $21,283 $21,283

Profit Before Interest and Taxes ($4,033) ($4,033) $5,967 ($6,283) ($4,283) $2,717 $6,717 $8,717 $8,717 $13,717 $18,717 $28,717
EBITDA ($3,200) ($3,200) $6,800 ($5,450) ($3,450) $3,550 $7,550 $9,550 $9,550 $14,550 $19,550 $29,550
Interest Expense $820 $807 $793 $780 $767 $753 $740 $727 $713 $700 $687 $673
Taxes Incurred ($1,456) ($1,452) $1,552 ($2,119) ($1,515) $589 $1,793 $2,397 $2,401 $3,905 $5,409 $8,413

Net Profit ($3,397) ($3,388) $3,622 ($4,944) ($3,535) $1,375 $4,184 $5,593 $5,603 $9,112 $12,621 $19,631
Net Profit/Sales 0.00% 0.00% 36.22% -32.96% -20.79% 5.73% 14.94% 18.64% 18.68% 26.03% 31.55% 39.26%

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 Appendix

Table: Cash Flow

Pro Forma Cash Flow

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received

Cash from Operations

Cash Sales $0 $0 $2,500 $3,750 $4,250 $6,000 $7,000 $7,500 $7,500 $8,750 $10,000 $12,500
Cash from Receivables $0 $0 $0 $250 $7,625 $11,300 $12,925 $18,100 $21,050 $22,500 $22,625 $26,375
Subtotal Cash from Operations $0 $0 $2,500 $4,000 $11,875 $17,300 $19,925 $25,600 $28,550 $31,250 $32,625 $38,875

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $2,500 $4,000 $11,875 $17,300 $19,925 $25,600 $28,550 $31,250 $32,625 $38,875

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending $0 $0 $0 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Bill Payments $85 $2,564 $2,654 $5,498 $4,131 $4,771 $6,832 $8,003 $8,573 $8,614 $10,105 $11,645
Subtotal Spent on Operations $85 $2,564 $2,654 $20,498 $19,131 $19,771 $21,832 $23,003 $23,573 $23,614 $25,105 $26,645

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $1,685 $4,164 $4,254 $22,098 $20,731 $21,371 $23,432 $24,603 $25,173 $25,214 $26,705 $28,245

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 Appendix
Net Cash Flow ($1,685) ($4,164) ($1,754) ($18,098) ($8,856) ($4,071) ($3,507) $997 $3,377 $6,036 $5,920 $10,630
Cash Balance $59,015 $54,851 $53,096 $34,999 $26,143 $22,071 $18,564 $19,562 $22,938 $28,974 $34,894 $45,524

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Table: Balance Sheet

Pro Forma Balance Sheet

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances

Current Assets
Cash $60,700 $59,015 $54,851 $53,096 $34,999 $26,143 $22,071 $18,564 $19,562 $22,938 $28,974 $34,894 $45,524
Accounts Receivable $0 $0 $0 $7,500 $18,500 $23,625 $30,325 $38,400 $42,800 $44,250 $48,000 $55,375 $66,500
Other Current Assets $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Total Current Assets $80,700 $79,015 $74,851 $80,596 $73,499 $69,768 $72,396 $76,964 $82,362 $87,188 $96,974 $110,269 $132,024

Long-term Assets
Long-term Assets $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000
Accumulated Depreciation $0 $833 $1,666 $2,499 $3,332 $4,165 $4,998 $5,831 $6,664 $7,497 $8,330 $9,163 $9,996
Total Long-term Assets $70,000 $69,167 $68,334 $67,501 $66,668 $65,835 $65,002 $64,169 $63,336 $62,503 $61,670 $60,837 $60,004
Total Assets $150,700 $148,182 $143,185 $148,097 $140,167 $135,603 $137,398 $141,133 $145,698 $149,691 $158,644 $171,106 $192,028

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities
Accounts Payable $0 $2,479 $2,470 $5,361 $3,974 $4,545 $6,566 $7,717 $8,288 $8,279 $9,720 $11,161 $14,052
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $2,479 $2,470 $5,361 $3,974 $4,545 $6,566 $7,717 $8,288 $8,279 $9,720 $11,161 $14,052

Long-term Liabilities $100,000 $98,400 $96,800 $95,200 $93,600 $92,000 $90,400 $88,800 $87,200 $85,600 $84,000 $82,400 $80,800
Total Liabilities $100,000 $100,879 $99,270 $100,561 $97,574 $96,545 $96,966 $96,517 $95,488 $93,879 $93,720 $93,561 $94,852

Paid-in Capital $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000
Retained Earnings ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300)
Earnings $0 ($3,397) ($6,785) ($3,163) ($8,107) ($11,642) ($10,268) ($6,084) ($490) $5,112 $14,224 $26,845 $46,476
Total Capital $50,700 $47,303 $43,915 $47,537 $42,593 $39,058 $40,432 $44,616 $50,210 $55,812 $64,924 $77,545 $97,176
Total Liabilities and Capital $150,700 $148,182 $143,185 $148,097 $140,167 $135,603 $137,398 $141,133 $145,698 $149,691 $158,644 $171,106 $192,028

Net Worth $50,700 $47,303 $43,915 $47,537 $42,593 $39,058 $40,432 $44,616 $50,210 $55,812 $64,924 $77,545 $97,176

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Page 1