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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 ..........................................................................................................4
Table: Start-up .........................................................................................................................5
Chart: Start-up .........................................................................................................................5
3.0 Services................................................................................................................................................5
4.0 Market Analysis Summary..................................................................................................................6
4.1 Target Market Segment Strategy.............................................................................................6
4.2 Service Business Analysis........................................................................................................6
4.2.1 Competition and Buying Patterns................................................................................7
5.0 Strategy and Implementation Summary ............................................................................................7
5.1 Competitive Edge ......................................................................................................................7
5.2 Marketing Strategy.....................................................................................................................8
5.3 Sales Strategy............................................................................................................................8
5.3.1 Sales Forecast ..............................................................................................................8
Chart: Sales Monthly......................................................................................................9
Chart: Sales by Year......................................................................................................9
Table: Sales Forecast.................................................................................................10
5.4 Milestones ................................................................................................................................11
Table: Milestones..................................................................................................................11
Chart: Milestones ..................................................................................................................11
6.0 Personnel Plan ..................................................................................................................................12
Table: Personnel ...................................................................................................................12
6.1 Management Team Gaps .......................................................................................................12
7.0 Financial Plan ....................................................................................................................................13
7.1 Break-even Analysis................................................................................................................13
Table: Break-even Analysis .................................................................................................13
Chart: Break-even Analysis .................................................................................................13
7.2 Projected Profit and Loss .......................................................................................................14
Chart: Profit Monthly .............................................................................................................14
Chart: Profit Yearly................................................................................................................14
Chart: Gross Margin Monthly ...............................................................................................15
Chart: Gross Margin Yearly..................................................................................................15
Table: Profit and Loss ..........................................................................................................16
7.3 Projected Cash Flow...............................................................................................................17
Table: Cash Flow..................................................................................................................17
Chart: Cash ...........................................................................................................................18
7.4 Projected Balance Sheet ........................................................................................................19
Table: Balance Sheet ...........................................................................................................19
7.5 Business Ratios .......................................................................................................................20
Table: Ratios .........................................................................................................................21
Page 1

Table of Contents
Table: Sales Forecast ...............................................................................................................................1
Table: Personnel ........................................................................................................................................2
Table: General Assumptions ....................................................................................................................3
Table: Profit and Loss ...............................................................................................................................4
Table: Cash Flow .......................................................................................................................................5
Table: Balance Sheet ................................................................................................................................6

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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 ac claimed "DremWhyrks"
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 highquality, 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.
Interfac e design and software enhancement.
Cohesive, talented development team with years of experience shipping products
together.
Proven trac k record: DremWhyrks 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 DremWhyrks project at Axiomatic. The
DremWhyrks 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 obstac les
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 contrac ts 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.

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Gaming Futures, LLC

1.1 Objectives
Gaming Futures' objectives are as follows:

Ac hieve sales goal of $200,000 during first year of operation.

Ac hieve 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 interac tive 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:

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Gaming Futures, LLC

Bill Kerl
Diane Huber
Marcus Hathcoc k
Jillian Daley
Jeremy Lang

2.2 Company Locations and Facilities

Gaming Futures is loc ated 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 foc used primarily on equipment and office spac e.
William, Diane, Marcus, Jillian, and Jeremy will eac h invest $35,000. In addition, Gaming
Futures will secure a $100,000 long term loan.

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Gaming Futures, LLC

Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$124,300
$150,700
$275,000

$90,000
$60,700
$0
$60,700
$150,700

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$100,000
$0
$0
$100,000

Capital
Planned Investment
Bill Kerl
Diane Huber
Marcus Hathcock

$35,000
$35,000
$35,000

Jillian Daley
Jeremy Lang
Additional Investment Requirement

$35,000
$35,000
$0

Total Planned Investment

Loss at Start-up (Start-up Expenses)
Total Capital

$175,000
($124,300)
$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
Stationery etc.
Brochures
Insurance
Rent
Expensed Equipment
Total Start-up Expenses

$1,000
$400
$400
$1,000
$1,500
$120,000
$124,300

Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets

$60,700
$20,000
$70,000
$150,700

Total Requirements

$275,000

3.0 Services
Gaming Futures' c ohesive, 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.
Interfac e design and software enhancement.
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Gaming Futures, LLC

On time and on budget shipping.

4.0 Market Analysis Summary

Ac cording 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 expec ted 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 oc curred in past platform transitions.
Ac cording to DFC Intelligence, the industry should experience another year of record sales in
2002.
The interac tive 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 ac count 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 attac ks,
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 fac ing the interac tive
entertainment industry.
Sales of the total U.S. interac tive 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 expec ted to rise rapidly, development and marketing
costs are also soaring.

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 marketplac e for dominance, a number of service firms will emerge to
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Gaming Futures, LLC

fill the demand for quality developers that are nec essary 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 proc ess.

4.2.1 Competition and Buying Patterns

The interac tive 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 aspec t 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 trac k records with products with similar play devices that were foc used 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 contrac t. Over 80% of the interac tive 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 contrac ts in the interac tive game
industry. Because of the unique cultural aspec t of the interac tive gaming community,
companies spec ialize in gaming devices or user groups in order to gain advantage in the
proposal proc ess.
The team's trac k record is the most important pivotal issue when competing for outsourcing
contrac ts. A firm that has an intac t team that has ac hieved past project goals has an
advantage in the bidding proc ess. 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
sc hedule 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.

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.

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Gaming Futures, LLC

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 c reated for these presentations.
William and Diane have begun the proc ess 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 contrac ts with the following
companies:

Clear Mountain Productions

Weaver Farm, Inc.

The company will continue to aggressively pursue new contrac ts.

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

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Gaming Futures, LLC

Table: Sales Forecast
Sales Forecast
Sales
Projects
Other
Total Sales
Direct Cost of Sales
Projects
Other
Subtotal Direct Cost of Sales

Year 1

Year 2

Year 3

$279,000
$0
$279,000

$380,000
$0
$380,000

$644,000
$0
$644,000

Year 1
$0
$0
$0

Year 2
$0
$0
$0

Year 3
$0
$0
$0

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Gaming Futures, LLC

5.4 Milestones
The ac companying table lists important program milestones, with dates and managers in
charge, and budgets for eac h. The milestone sc hedule 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.-ac tual analysis, and we will hold monthly follow-up meetings to disc uss
the variance and course corrections.

Table: Milestones
Milestones
Milestone
Office Setup
Equipment/Network Setup
Marketing CD
Face to Face Selling
Totals

Start Date
5/1/2002
5/1/2002
3/1/2002
4/1/2001

End Date
5/20/2002
5/20/2002
4/1/2002
6/1/2002

Budget
$5,000
$100,000
$2,000
$2,000
$109,000

Manager
William Kerl
Jeremy Lang
Diane Huber
All

Department
Admin
Admin
Web
Web

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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
DremWhyrks 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 DremWhyrks, Mighty Quinn, and Fire Mountain.
Marcus Hathcoc k- Programmer/GamePlay
Marcus is a software engineer who has 5 years experience implementing interfac es and
gameplay; most of this time was spent working on the DremWhyrks series at Axiomatic.
Jillian Daley- Senior Software Engineer
With 11 years programming experience building games, tools, and technologies, she's been
involved in all aspec ts of several full 3D sims including Penthesilea and the DremWhyrks 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 DremWhyrks series, Mighty Quinn,
Fire Mountain, and Storm Warnings.

Table: Personnel
Personnel Plan
Bill Kerl
Diane Huber

Year 1
$27,000
$27,000

Year 2
$42,000
$42,000

Year 3
$50,000
$50,000

Marcus Hathcock
Jillian Daley
Jeremy Lang

$27,000
$27,000
$27,000

$42,000
$42,000
$42,000

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

President
Total People

$0
5

$0
5

$120,000
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 foc us will be on
production. The management of the company's resources and dec isions on how to effectively
grow the firm will demand an individual with extensive management expertise as well as
experience in the interac tive gaming industry. This is critical vac ancy 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
Estimated Monthly Fixed Cost

0%
$16,971

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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.

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Gaming Futures, LLC

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Gaming Futures, LLC

Table: Profit and Loss
Pro Forma Profit and Loss
Year 1
$279,000
$0

Year 2
$380,000
$0

Year 3
$644,000
$0

$0
$0

$0
$0

$0
$0

Gross Margin
Gross Margin %

$279,000
100.00%

$380,000
100.00%

$644,000
100.00%

Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other

$135,000
$12,000
$9,996
$0
$4,800
$3,600
$18,000
$20,250
$0

$210,000
$15,000
$10,000
$0
$4,800
$3,600
$18,000
$31,500
$0

$370,000
$20,000
$10,000
$0
$4,800
$3,600
$18,000
$55,500
$0

Total Operating Expenses

$203,646

$292,900

$481,900

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

$75,354
$85,350
$8,960
$19,918

$87,100
$97,100
$7,080
$24,006

$162,100
$172,100
$5,080
$47,106

Net Profit
Net Profit/Sales

$46,476
16.66%

$56,014
14.74%

$109,914
17.07%

Sales
Direct Cost of Sales
Other Production Expenses
Total Cost of Sales

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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 from Operations

Cash Sales
Cash from Receivables

$69,750
$142,750

$95,000
$260,927

$161,000
$420,075

Subtotal Cash from Operations

$212,500

$355,927

$581,075

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

$0
$0
$0
$0
$0
$0
$0
$212,500

$0
$0
$0
$0
$0
$0
$0
$355,927

$0
$0
$0
$0
$0
$0
$0
$581,075

Year 1

Year 2

Year 3

$135,000
$73,476
$208,476

$210,000
$109,491
$319,491

$370,000
$149,968
$519,968

$0
$0
$0
$19,200

$0
$0
$0
$20,000

$0
$0
$0
$20,000

$0
$0
$0

$0
$0
$0

$0
$0
$0

Subtotal Cash Spent

$227,676

$339,491

$539,968

Net Cash Flow

Cash Balance

($15,176)
$45,524

$16,435
$61,959

$41,107
$103,066

Cash Received

Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends

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Gaming Futures, LLC

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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

Current Assets
Cash
Accounts Receivable
Other Current Assets
Total Current Assets

$45,524
$66,500
$20,000
$132,024

$61,959
$90,573
$20,000
$172,533

$103,066
$153,498
$20,000
$276,564

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

$70,000
$9,996
$60,004
$192,028

$70,000
$19,996
$50,004
$222,537

$70,000
$29,996
$40,004
$316,568

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities

$14,052
$0
$0

$8,547
$0
$0

$12,665
$0
$0

Subtotal Current Liabilities

$14,052

$8,547

$12,665

Long-term Liabilities
Total Liabilities

$80,800
$94,852

$60,800
$69,347

$40,800
$53,465

Assets

Liabilities and Capital

Current Liabilities

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

$175,000

$175,000

$175,000

($124,300)
$46,476
$97,176

($77,824)
$56,014
$153,190

($21,810)
$109,914
$263,104

$192,028

$222,537

$316,568

$97,176

$153,190

$263,104

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Gaming Futures, LLC

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
n.a.

Year 2
36.20%

Year 3
69.47%

Industry Profile
10.40%

34.63%
10.42%
68.75%
31.25%
100.00%

40.70%
8.99%
77.53%
22.47%
100.00%

48.49%
6.32%
87.36%
12.64%
100.00%

24.10%
42.90%
71.10%
28.90%
100.00%

7.32%
42.08%
49.39%
50.61%

3.84%
27.32%
31.16%
68.84%

4.00%
12.89%
16.89%
83.11%

47.80%
19.10%
66.90%
33.10%

100.00%
100.00%
83.34%
4.30%
27.01%

100.00%
100.00%
85.26%
3.95%
22.92%

100.00%
100.00%
82.93%
3.11%
25.17%

100.00%
0.00%
82.10%
1.20%
2.00%

Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth

9.40
9.40
49.39%
68.32%

20.19
20.19
31.16%
52.24%

21.84
21.84
16.89%
59.68%

1.30
1.03
66.90%
3.10%

Pre-tax Return on Assets

34.58%

35.96%

49.60%

9.30%

Sales Growth
Percent of Total Assets
Accounts Receivable
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes

Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

Return on Equity

16.66%
47.83%

14.74%
36.57%

17.07%
41.78%

n.a
n.a

Activity Ratios
Accounts Receivable Turnover
Collection Days

3.15
55

3.15
101

3.15
92

n.a
n.a

Accounts Payable Turnover

Payment Days
Total Asset Turnover

6.23
27
1.45

12.17
40
1.71

12.17
25
2.03

n.a
n.a
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

$117,972
8.41

$163,986
12.30

$263,900
31.91

n.a
n.a

Additional Ratios
Assets to Sales
Current Debt/Total Assets

0.69
7%

0.59
4%

0.49
4%

n.a
n.a

Acid Test
Sales/Net Worth
Dividend Payout

4.66
2.87
0.00

9.59
2.48
0.00

9.72
2.45
0.00

n.a
n.a
n.a

Liquidity Ratios
Net Working Capital
Interest Coverage

Page 21

Appendix
Table: Sales Forecast
Sales Forecast
Sales
Projects
Other
Total Sales
Direct Cost of Sales
Projects
Other
Subtotal 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

0%

$0

$0

$10,000

$15,000

$17,000

$24,000

$28,000

$30,000

$30,000

$35,000

$40,000

$50,000

0%

$0
$0

$0
$0

$0
$10,000

$0
$15,000

$0
$17,000

$0
$24,000

$0
$28,000

$0
$30,000

$0
$30,000

$0
$35,000

$0
$40,000

$0
$50,000

Month 1
$0
$0
$0

Month 2
$0
$0
$0

Month 3
$0
$0
$0

Month 4
$0
$0
$0

Month 5
$0
$0
$0

Month 6
$0
$0
$0

Month 7
$0
$0
$0

Month 8
$0
$0
$0

Month 9
$0
$0
$0

Month 10
$0
$0
$0

Month 11
$0
$0
$0

Month 12
$0
$0
$0

Page 1

Appendix
Table: Personnel
Personnel Plan
Bill Kerl
Diane Huber

0%
0%

Month 1
$0
$0

Month 2
$0
$0

Month 3
$0
$0

Month 4
$3,000
$3,000

Month 5
$3,000
$3,000

Month 6
$3,000
$3,000

Month 7
$3,000
$3,000

Month 8
$3,000
$3,000

Month 9
$3,000
$3,000

Month 10
$3,000
$3,000

Month 11
$3,000
$3,000

Month 12
$3,000
$3,000

Marcus Hathcock
Jillian Daley
Jeremy Lang

0%
0%
0%

$0
$0
$0

$0
$0
$0

$0
$0
$0

$3,000
$3,000
$3,000

$3,000
$3,000
$3,000

$3,000
$3,000
$3,000

$3,000
$3,000
$3,000

$3,000
$3,000
$3,000

$3,000
$3,000
$3,000

$3,000
$3,000
$3,000

$3,000
$3,000
$3,000

$3,000
$3,000
$3,000

President
Total People

0%

$0
5

$0
5

$0
5

$0
5

$0
5

$0
5

$0
5

$0
5

$0
5

$0
5

$0
5

$0
5

$0

$0

$0

$15,000

$15,000

$15,000

$15,000

$15,000

$15,000

$15,000

$15,000

$15,000

Total Payroll

Page 2

Appendix
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate

Month 1
1
10.00%

Month 2
2
10.00%

Month 3
3
10.00%

Month 4
4
10.00%

Month 5
5
10.00%

Month 6
6
10.00%

Month 7
7
10.00%

Month 8
8
10.00%

Month 9
9
10.00%

Month 10
10
10.00%

Month 11
11
10.00%

Month 12
12
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
Other

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

Page 3

Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Month 1
$0
$0

Month 2
$0
$0

Month 3
$10,000
$0

Month 4
$15,000
$0

Month 5
$17,000
$0

Month 6
$24,000
$0

Month 7
$28,000
$0

Month 8
$30,000
$0

Month 9
$30,000
$0

Month 10
$35,000
$0

Month 11
$40,000
$0

Month 12
$50,000
$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

$0
0.00%

$0
0.00%

$10,000
100.00%

$15,000
100.00%

$17,000
100.00%

$24,000
100.00%

$28,000
100.00%

$30,000
100.00%

$30,000
100.00%

$35,000
100.00%

$40,000
100.00%

$50,000
100.00%

Sales
Direct Cost of Sales

Gross Margin
Gross Margin %

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

Expenses
Depreciation
Leased Equipment

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$833
$0

$833
$0

$833
$0

$833
$0

$833
$0

$833
$0

$833
$0

$833
$0

$833
$0

$833
$0

$833
$0

$833
$0

Utilities
Insurance
Rent

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$400
$300
$1,500

$0

$0

$0

$2,250

$2,250

$2,250

$2,250

$2,250

$2,250

$2,250

$2,250

$2,250

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$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
Interest Expense

($3,200)
$820

($3,200)
$807

$6,800
$793

($5,450)
$780

($3,450)
$767

$3,550
$753

$7,550
$740

$9,550
$727

$9,550
$713

$14,550
$700

$19,550
$687

$29,550
$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

($3,397)
0.00%

($3,388)
0.00%

$3,622
36.22%

($4,944)
-32.96%

($3,535)
-20.79%

$1,375
5.73%

$4,184
14.94%

$5,593
18.64%

$5,603
18.68%

$9,112
26.03%

$12,621
31.55%

$19,631
39.26%

Payroll Taxes
Other
Total Operating Expenses

Net Profit
Net Profit/Sales

15%

Page 4

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 from Operations

Cash Sales
Cash from Receivables

$0
$0

$0
$0

$2,500
$0

$3,750
$250

$4,250
$7,625

$6,000
$11,300

$7,000
$12,925

$7,500
$18,100

$7,500
$21,050

$8,750
$22,500

$10,000
$22,625

$12,500
$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

Cash Received

Additional Cash Received

Sales Tax, VAT, HST/GST Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing

New Other Liabilities (interest-free)

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

New Long-term Liabilities

Sales of Other Current Assets

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$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

Subtotal Cash Received

$0
$0

$0
$0

$0
$2,500

$0
$4,000

$0
$11,875

$0
$17,300

$0
$19,925

$0
$25,600

$0
$28,550

$0
$31,250

$0
$32,625

$0
$38,875

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 Spending
Bill Payments

$0
$85

$0
$2,564

$0
$2,654

$15,000
$5,498

$15,000
$4,131

$15,000
$4,771

$15,000
$6,832

$15,000
$8,003

$15,000
$8,573

$15,000
$8,614

$15,000
$10,105

$15,000
$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

Other Liabilities Principal Repayment

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Long-term Liabilities Principal Repayment

Expenditures

0.00%

Expenditures from Operations

$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

Dividends

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$1,685

$4,164

$4,254

$22,098

$20,731

$21,371

$23,432

$24,603

$25,173

$25,214

$26,705

$28,245

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

Subtotal Cash Spent

Page 5

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting Balances

Current Assets
Cash
Accounts Receivable

$60,700
$0

$59,015
$0

$54,851
$0

$53,096
$7,500

$34,999
$18,500

$26,143
$23,625

$22,071
$30,325

$18,564
$38,400

$19,562
$42,800

$22,938
$44,250

$28,974
$48,000

$34,894
$55,375

$45,524
$66,500

Other Current Assets

Total Current Assets

$20,000
$80,700

$20,000
$79,015

$20,000
$74,851

$20,000
$80,596

$20,000
$73,499

$20,000
$69,768

$20,000
$72,396

$20,000
$76,964

$20,000
$82,362

$20,000
$87,188

$20,000
$96,974

$20,000
$110,269

$20,000
$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

$0

$833

$1,666

$2,499

$3,332

$4,165

$4,998

$5,831

$6,664

$7,497

$8,330

$9,163

$9,996

$70,000
$150,700

$69,167
$148,182

$68,334
$143,185

$67,501
$148,097

$66,668
$140,167

$65,835
$135,603

$65,002
$137,398

$64,169
$141,133

$63,336
$145,698

$62,503
$149,691

$61,670
$158,644

$60,837
$171,106

$60,004
$192,028

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
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
Other Current Liabilities

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$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
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

$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

($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)

$0
$50,700

($3,397)
$47,303

($6,785)
$43,915

($3,163)
$47,537

($8,107)
$42,593

($11,642)
$39,058

($10,268)
$40,432

($6,084)
$44,616

($490)
$50,210

$5,112
$55,812

$14,224
$64,924

$26,845
$77,545

$46,476
$97,176

$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

$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

Page 6