Income Statement Year 1 Year 2 Year 3

Revenue

Gross Revenue $ 2,000,000.00 $ 3,000,000 $ 4,000,000

Refunds (160,000) (240,000) (320,000)
Discounts (200,000) (300,000) (400,000)
Net Revenue $ 1,640,000 $ 2,460,000 $ 3,280,000

Cost of Goods Sold

Product $ 574,000 $ 861,000 $ 1,148,000
Fulfillment 82,000 246,000 328,000
Merchant Services 82,000 123,000 164,000
Total COGS $ 738,000 $ 1,230,000 $ 1,640,000

Gross Margin $ 902,000 $ 1,230,000 $ 1,640,000

GM % 55% 50% 50%

Operating Expenses
Personnel $ 328,000 $ 492,000 $ 656,000
Marketing 164,000 246,000 328,000
Other 82,000 123,000 164,000
Depreciation 40,000 90,000 146,000
Total OPEX $ 614,000 $ 951,000 $ 1,294,000

Operating Income $ 288,000 $ 279,000 $ 346,000

Interest $ 192,000 $ 240,000 $ 168,000

NI Before Taxes $ 96,000 $ 39,000 $ 178,000

Taxes $ 19,200 $ 7,800 $ 35,600

Net Income $ 76,800 $ 31,200 $ 142,400

NI % 5% 1% 4%

EBITDA $ 328,000 $ 369,000 $ 492,000

ASSUMPTIONS (Live Case)

Revenue
New Customers $ 50,000 75,000 100,000
AOV $ 40 $ 40 $ 40
Refunds (as % of rev) 8% 8% 8%
Discounts 10% 10% 10%
 0 0 0
COGS 0 0 0
Product 35% 35% 35%
Fulfillment 5% 10% 10%
Merchant Services 5% 5% 5%
0 0 0
Operating Expenses 0 0 0
Personnel 20% 20% 20%
Marketing 10% 10% 10%
Other 5% 5% 5%
Tax Rate 20% 20% 20%

Scenario 1 (Lower Case)

Revenue
New Customers 50,000 75,000 100,000
AOV $ 40 $ 40 $ 40
Refunds (as % of rev) 8% 8% 8%
Discounts 10% 10% 10%

COGS
Product 35% 35% 35%
Fulfillment 5% 10% 10%
Merchant Services 5% 5% 5%

Operating Expenses
Personnel 20% 20% 20%
Marketing 10% 10% 10%
Other 5% 5% 5%
Tax Rate 20% 20% 20%

Scenario 2 (Upper Case)

Revenue
New Customers 100,000 200,000 300,000
AOV $ 45 $ 45 $ 45
Refunds (as % of rev) 8% 8% 8%
Discounts 10% 10% 10%

COGS
Product 35% 35% 35%
Fulfillment 5% 10% 10%
Merchant Services 5% 5% 5%
Operating Expenses
Personnel 20% 20% 20%
Marketing 10% 10% 10%
Other 5% 5% 5%
Tax Rate 25% 25% 25%
 Year 4

Scenario 1

$ 6,000,000
(480,000)
(600,000)
$ 4,920,000

$ 1,722,000
492,000
246,000
$ 2,460,000

$ 2,460,000
50%

$ 984,000
492,000
246,000
121,000
$ 1,843,000

$ 617,000

$ 96,000

$ 521,000

$ 104,200

$ 416,800
8%

$ 738,000

150,000
$ 40
8%
10%
 0
0
35%
10%
5%
0
0
20%
10%
5%
20%

150,000
$ 40
8%
10%

35%
10%
5%

20%
10%
5%
20%

400,000
$ 45
8%
10%

35%
10%
5%
20%
10%
5%
25%
Income Statement Year 1 Year 2 Year 3

Revenue

Gross Revenue $ 3,750,000 $ 5,000,000 $ 7,500,000

Refunds (187,500) (250,000) (375,000)
Discounts (375,000) (500,000) (750,000)
Net Revenue $ 3,187,500 $ 4,250,000 $ 6,375,000

Cost of Goods Sold

Product $ 1,115,625 $ 1,487,500 $ 2,231,250
Fulfillment 159,375 212,500 318,750
Merchant Services 95,625 127,500 191,250
Total COGS $ 1,370,625 $ 1,827,500 $ 2,741,250

Gross Margin $ 1,816,875 $ 2,422,500 $ 3,633,750

GM % 57% 57% 57%

Operating Expenses
Personnel $ 637,500 $ 850,000 $ 1,275,000
Marketing 318,750 425,000 637,500
Other 159,375 212,500 318,750
Depreciation 31,667 65,000 103,333
Total OPEX $ 1,147,292 $ 1,552,500 $ 2,334,583

Operating Income $ 669,583 $ 870,000 $ 1,299,167

Interest $ 192,000 $ 240,000 $ 168,000

NI Before Taxes $ 477,583 $ 630,000 $ 1,131,167

Taxes $ 100,292 $ 132,300 $ 237,545

Net Income $ 377,291 $ 497,700 $ 893,622

NI % 12% 12% 14%

EBITDA $ 701,250 $ 935,000 $ 1,402,500

ASSUMPTIONS

Revenue
New Customers $ 75,000 $ 100,000 $ 150,000
AOV $ 50 $ 50 $ 50
Refunds (as % of rev) 5% 5% 5%
Discounts 10% 10% 10%
COGS
Product 35% 35% 35%
Fulfillment 5% 5% 5%
Merchant Services 3% 3% 3%

Operating Expenses
Personnel 20% 20% 20%
Marketing 10% 10% 10%
Other 5% 5% 5%
Tax Rate 21% 21% 21%
 Year 4

$ 12,500,000
(625,000)
(1,250,000)
$ 10,625,000

$ 3,718,750
531,250
318,750
$ 4,568,750

$ 6,056,250
57%

$ 2,125,000
1,062,500
531,250
86,667
$ 3,805,417

$ 2,250,833

$ 96,000

$ 2,154,833

$ 452,515

$ 1,702,318
16%

$ 2,337,500

$ 250,000
$ 50
5%
10%
35%
5%
3%

20%
10%
5%
21%
Capex & Depreciation Useful Life (Years) Year 1 Year 2

Capex
Servers 5 $ 75,000
Custom Software 2 $ 50,000 $ 100,000
Forklift 6
Total Capex $ 125,000 $ 100,000

Depreciation
Servers $ 15,000 $ 15,000
Custom Software $ 25,000 $ 75,000
Forklift
Total D&A $ 40,000 $ 90,000
 Year 3 Year 4

$ 100,000
$ 30,000
$ 130,000 $ -

$ 15,000 $ 15,000
$ 125,000 $ 100,000
$ 5,000 $ 5,000
$ 145,000 $ 120,000
Balance Sheet Dec 31, Year 0 Year 1
Historicals
ASSETS

Cash $ 4,250,000 $ 4,089,791

Accounts Receivable $ 120,000 159,375
Total Current Assets 4,370,000 4,249,166

Fixed Assets $ 40,000 165,000

Accumulated Depreciation $ (10,000) (50,000)
Net Fixed Assets 30,000 115,000

Total Assets 4,400,000 4,364,166

LIABILITIES

Accounts Payable $ 75,000 191,250

Deferred Revenue $ 25,000 95,625
Total Current Assets 100,000 286,875

Long Term Debt $ 3,000,000 $ 2,400,000

Total Liabilities 3,100,000 2,686,875

EQUITY

Common Stock $ 50,000 $ 50,000

Retained Earnings $ 1,250,000 $ 1,627,291
Total Shareholders Equity 1,300,000 1,677,291

Liabilities & Shareholders Equity 4,400,000 4,364,166

Balance Check - -

ASSUMPTIONS

Net Revenue $ 3,187,500

AR (% of revenue) 5%
AP 6%
Deferred Rev 3%

Net Borrowing
Debt Payments $ 600,000
Interest Rate 8%
Interest Payments $ 192,000
 Year 2 Year 3 Year 4

$ 5,304,991 $ 5,632,363 $ 7,149,681

212,500 318,750 531,250
5,517,491 5,951,113 7,680,931

265,000 395,000 395,000

(140,000) (285,000) (405,000)
125,000 110,000 (10,000)

5,642,491 6,061,113 7,670,931

255,000 382,500 637,500

212,500 510,000 1,062,500
467,500 892,500 1,700,000

$ 3,000,000 $ 2,100,000 $ 1,200,000

3,467,500 2,992,500 2,900,000

$ 50,000 $ 50,000 $ 50,000

$ 2,124,991 $ 3,018,613 $ 4,720,931
2,174,991 3,068,613 4,770,931

5,642,491 6,061,113 7,670,931

- - -

$ 4,250,000 $ 6,375,000 $ 10,625,000

5% 5% 5%
6% 6% 6%
5% 8% 10%

$ 1,500,000
$ 900,000 $ 900,000 $ 900,000
8% 8% 8%
$ 240,000 $ 168,000 $ 96,000
Cash Flow Statement Year 1 Year 2 Year 3

Net Income $ 377,291 $ 497,700 $ 893,622

Operating Activities
Depreciation 40,000 90,000 145,000
Chg in AR (39,375) (53,125) (106,250)
Chg in AP 116,250 63,750 127,500
Chg in Def Rev 70,625 116,875 297,500
Operating Cash Flow $ 564,791 $ 715,200 $ 1,357,372

Investing Activities
Capex 125,000 100,000 130,000

Free Cash Flow $ 439,791 $ 615,200 $ 1,227,372

Financing Activities
Debt Repayment (600,000) (900,000) (900,000)
Net Borrowings - 1,500,000 -
NCF from Financing (600,000) 600,000 (900,000)

Net Cash Flow $ (160,209) $ 1,215,200 $ 327,372

 Year 4

$ 1,702,318

120,000
(212,500)
255,000
552,500
$ 2,417,318

$ 2,417,318

(900,000)
-
(900,000)

$ 1,517,318