INVESTMENT BUSINESS PLAN

Confidentiality Agreement

The undersigned reader of CARSWIPE’S Business Plan hereby acknowledges that the information provided is
completely confidential and therefore the reader agrees not to disclose anything found in the business plan
without the express written consent of CARSWIPE..

It is also acknowledged by the reader that the information to be furnished in this business plan is in all aspects
confidential in nature, other than information that is in the public domain through other means and that any
disclosure or use of the same by the reader may cause serious harm and or damage to CARSWIPE...

Upon request this business plan document will be immediately returned to CARSWIPE.

This is a business plan. It does not imply an offer of any securities.

__________________________________________________

Signature

__________________________________________________

Printed Name

1
 Overview

CarSwipe is a mobile application that utilizes the techniques of gamification within the car
buying process. In addition, it is important to note that dealer partnerships enhance the
quality of listings with verification. Ultimately, this interrelation leads to an experience that
is the best in car buying.

2
 Table of Contents

Overview............................................................................................................................... 1
Executive Summary ............................................................................................................... 4
Product & Service Summary ................................................................................................................. 5
Market Summary ................................................................................................................................. 5
Three Year Objectives........................................................................................................................... 6
Keys to Success .................................................................................................................................... 6
Mission Statement ............................................................................................................................... 6
Financing Summary .............................................................................................................................. 6

Product & Services ................................................................................................................ 7

Service Description ............................................................................................................................... 7

Industry Overview ................................................................................................................. 8

Market Needs ...................................................................................................................................... 8
Market Trends ..................................................................................................................................... 8
Market Growth .................................................................................................................................... 8
Market Segmentation........................................................................................................................... 9

Strategy & Implementation Summary .................................................................................. 10

Management Team ............................................................................................................................ 11
SWOT Analysis ................................................................................................................................... 13

Competitive Comparison ..................................................................................................... 14

Marketing Plan .................................................................................................................... 15
Promotion Strategy ............................................................................................................................ 15

Financial Projections............................................................................................................ 16
Financial Highlights ............................................................................................................................ 17
Financial Indicators ............................................................................................................................ 17
Revenue Forecast ............................................................................................................................... 18
Projected Profit and Loss .................................................................................................................... 19
Projected Cash Flow ........................................................................................................................... 20
Projected Balance Sheet ..................................................................................................................... 23
Sensitivity Analysis ............................................................................................................................. 24

Appendix............................................................................................................................. 26

3
 Table of Figures
Figure 1: Organizational Chart ............................................................................................................................ 12
Figure 2: Post-Financing Expenses ...................................................................................................................... 16
Figure 3: Financial Highlights .............................................................................................................................. 17
Figure 4: Financial Indicators .............................................................................................................................. 18
Figure 5: Revenue Forecast................................................................................................................................. 19
Figure 6: Profit & Loss ......................................................................................................................................... 20
Figure 7: Cash Flow ............................................................................................................................................. 21
Figure 8: Wages & Payroll ................................................................................................................................... 22
Figure 9: Balance Sheet....................................................................................................................................... 23
Figure 10: Scenario Analysis ............................................................................................................................... 24
Figure 11: Break-Even Analysis ........................................................................................................................... 25
Figure 12: 12 Month Profit & Loss ...................................................................................................................... 26
Figure 13: 12 Month Cash Flow Statement ........................................................................................................ 27

4
 Executive Summary
Carswipe, the company, is a mobile application that targets the untapped mobile shopping market for
automobiles. There is no company in the market which has effectively accommodated the unique
preferences of mobile users. Carswipe is a mobile application entirely focused around mobile users that
makes the car buying process simpler and more effective for consumers and generates a steady stream
of local and qualified leads for car dealerships. The company is seeking an equity investment of
$2,000,000 to be applied towards the commercialization of the mobile application. The following
business plan presents the existing void in the mobile automotive shopping market, the solution that
CarSwipe delivers, and its approach to generating a profitable exit within five years.

Product & Service Summary

Carswipe delivers value for car buyers and sellers. Car sellers generate a steady and reliable stream of
qualified local leads verified from their mobile device. Car buyers receive a simplified mobile shopping
experience on their mobile device which is easier to use, more user friendly, and effective than any
existing alternative in the mobile space. Although Carswipe will be generating revenue from auto
dealerships, it must create value for car buyers in order to consistently generate qualified leads for
privately owned and franchise dealerships.

Market Summary

Despite the technological advancements introduced in recent years, there has been a forecast by
Sales (in millions)

PricewaterhouseCoopers for the number of automobiles sold within the United States to remain relatively
unchanged 1 . In part, this is due to an expectation of slow autonomous car adoption. Furthermore,
expected economic factors such as increased interest rates and slow GDP growth contribute to this trend
as well.

Even though the trend showcases an unchanged number of total sales, it is expected that younger
automotive buyers will begin to have an increasing share of this demand. As a result, there should be
growth in the demand of millennials despite the relatively modest changes in overall demand. Globally, it
is worth noting that expansion in the number of automobiles sold is expected. So, it would be possible to
eventually expand to larger markets after successful deployment within the United States is attained.

1
PricewaterhouseCoopers Study, http://www.strategyand.pwc.com/perspectives/2016-auto-industry-trends

5
Three Year Objectives

Carswipe has the following three year objectives:

• Scale to an estimated X number of users in the first year and grow at least by 100% per year.
• Acquire at least X number of dealerships to purchase leads or subscribe to the monthly service.
• Maintain a profit margin comparable to the mobile application market of 20% or higher.
• Have a presence of inventory and dealerships within all fifty US states and Canadian
providences.
• Perform extensive consumer level marketing to ensure consistent mobile app adoption.
• Form strategic partnerships with dealership marketing companies and others in the retail
vertical.

Keys to Success

Carswipe has identified the following as keys to success:

• Consistently research and improve the user experience for car shopping on mobile devices.
• Be the leading option for car shopping on mobile devices within the United States.
• Generate higher quality leads for car dealerships by user authentication from the mobile device.
• Generate more targeted leads for car dealerships by the application’s GPS targeting techniques.
• Consistently have a robust, diverse, and steady inventory of cars to view on the mobile app.
• Stay ahead of market trends such as the introduction of Internet based car buying.

Mission Statement

The mission of Carswipe is become the leader in mobile car shopping by consistently researching and
implementing ways to optimize the car buying experience for anyone with a mobile device.

Financing Summary

CarSwipe is seeking an investment of $2,000,000 at a valuation of $13,333,333 of preferred equity with

the target exit strategy of a strategic acquisition within five years. The owners have already invested
$50,000 in order to complete the research, design, development, and hosting of the mobile application.
Therefore, the use of funds will be applied for commercialization and scaling of the application. The
complete set of financial projections and their assumptions have been listed in the appropriate Financial
Projections section of the business plan.

6
Product & Services

Product & Service Description

Carswipe serves both consumers and car dealerships more effectively than any existing alternative. There
are presently no options that have been entirely engineered around mobile consumers, most existing
market players have merely adapted their existing desktop and web applications – creating an inferior
mobile experience. The fact that Carswipe has been entirely engineered around mobile applications
generates several unique selling propositions for both consumers and car dealerships.

Consumers

• Easier to Use: The existing options for mobile consumers consist of adjusted version of desktop
and web applications. The fact that Carswipe is specifically engineered for mobile devices and the
consumer preferences for mobile devices makes it substantially easier to use than any existing
alternative.

• Geo-Targeted: Existing alternates search based on the consumer’s zip code. In some areas, the
same zip code may still mean a commute of several hours and there is no method of determining
the proximity relative to the user. The mobile application uses the GPS of smartphones to show
cars within the closest proximity to the buyer.

• Verified car listings: Many existing options for car buyers do not have verified listings; there is no
method of filtering the quality of the cars. This is highly problematic because individuals not
dealing with an authorized dealer can be duped from any myriad of scams. Carswipe is safer to
use than any alternative that has less efficient filtering and quality control procedures.

Car Dealerships

• Verified User Information: Mobile devices authenticate users more effectively than desktop
applications. Moreover, they deliver users within a closer proximity to the car seller, meaning that
the leads are more likely to show-up at the dealership given that they do not need to commute a
great distance.

• Flexible Pricing Model: Dealerships may either pay-per-lead or pay a monthly subscription fee in
order to receive an unlimited amount of leads. This pricing model enables the company to be
affordable for smaller dealerships that prefer performance based marketing strategies and also
larger dealerships with large inventory which would prefer a flat monthly rate rather than
incurring unsustainable monthly expenses.

7
 Industry Overview

Market Needs

Car dealerships continually search for methods to increase sales. While technology has made an impact
in the sales plan of many dealers, there is still a disconnect between many millennials. In part, the
disconnect can be due to an overwhelming number of options that are available. In order to combat this
issue, an engaging application was created to bridge this disconnect.

CarSwipe allows car dealerships to connect with this lucrative target group in a verified process. Rather
than attempting to connect with all potential buyers, CarSwipe has been able to create a unique
approach that is tailored to a younger generation.

Market Trends

Forecasted Automotive Sales

Despite the technological advancements introduced in recent

Sales (in millions)

years, there has been a forecast by PricewaterhouseCoopers for

the number of automobiles sold within the United States to
remain relatively unchanged 2 . In part, this is due to an
expectation of slow autonomous car adoption. Furthermore,
expected economic factors such as increased interest rates and
slow GDP growth contribute to this trend as well.

Even though the trend showcases an unchanged number of

total sales, it is expected that younger automotive buyers will
begin to have an increasing share of this demand. As a result,
there should be growth in the demand of millennials despite the
relatively modest changes in overall demand. Globally, it is worth noting that expansion in the number of
automobiles sold is expected. So, it would be possible to eventually expand to larger markets after
successful deployment within the United States is attained.

Market Growth

In North America, there is an expectation for the continued growth rates in smartphone ownership within
the foreseeable future. While the potential customers able to utilize CarSwipe would likely increase, there
is uncertainty regarding the extent to relation of these trends.

2
PricewaterhouseCoopers Study, http://www.strategyand.pwc.com/perspectives/2016-auto-industry-trends

8
Although some may think proportionate user
growth could be expected, CarSwipe believes that
this assumption may underestimate the extent to
which younger user would be inclined to review
the product. Instead, it would be recommended
to analyze the trend based on the assumption
that user growth among new smartphone users
will exceed proportional relationships that may
have been present in earlier time periods. Of
course, continual adjustment to this analysis
should be completed on a regular basis in order to
update stakeholders in the operation of
CarSwipe.

Market Segmentation

Car Buyers

There are many segments of car buyers in the United States and abroad, which may be further segmented
in to used car buyers, and within that, millennial used car buyers. However, Carswipe may be used by
anyone in the market for a car. Given the rate of smartphone penetration over the past ten years, nearly
all consumers across every demographic in North America owns a smartphone and regularly downloads
mobile applications. Therefore, Carswipe may be used by 73% of people in North America. It marketing
efforts will target mobile users through in-app marketing and behavioral search marketing – targeting
consumers that have expressed an interest in purchasing a new car, as well as display advertisement
promoting the application download on content websites that provide information about used cars.

Automotive Dealerships

In general, there are two types of car dealerships in the market. The first are franchise dealers, which
represent car manufacturers. According to a report that NADA published for 2015, there are
approximately 17540 franchised automotive dealerships in the United States. The second group is
considered independent dealers, which are not associated with a particular manufacturer. According to a
report by IBIS World Industry Research published May 2016, there are 128,850 independent used car
dealerships representing a total of $106 B worth of sales. Both market segments are profitable for
Carswipe and it will target both through a combination of business development and strategic
partnerships.

9
Strategy & Implementation Summary

The strategy of Carswipe may be segmented into three primary activities including conversions for
consumers, conversions for dealers, and research & development. The dealership conversion efforts will
primarily consist of business development through personal selling and having account managers to
represent clients by geographic area and size. The consumer level conversion will primarily be done
through in-app marketing, mobile application search optimization, display marketing on car related
websites, and behavioral targeting of consumers who have expressed an interest in car buying based on
their search behavior.

The third component of the business strategy focuses on the mobile application development. The
technology will be regularly refined in order to adapt to the dynamic mobile landscape. The preferences
and behavior of mobile consumers has been known to be dynamic based upon the hardware capabilities
and application preferences. For instance, larger screens, more accessible mobile plans, and more
powerful processes make many mobile phones a substitute for activities that would otherwise be done
on a PC. Hence, the mobile application market will continue to transform and staying relevant means
adapting to consistently be ahead of the curve for consumer preferences.

10
Management Team

John Doe – Chief Executive Officer

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Susan Miller – Chief Operating Officer

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Kevin Jones -Chief Financial Officer

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Adrian Wilcourt – Legal Compliance

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11
Organizational Chart

Adrian
Board/Investors
Wilcourt/Legal

John Doe/CEO

Susan Kevin
Miller/COO Jones/CFO

Marketing
Sales Director Accounting
Director

Sales Reps Collections

FIGURE 1: ORGANIZATIONAL CHART

12
SWOT Analysis

Strengths

• Functional application that has been positively received by users.

• Efficient and time-saving application for consumers as well as car dealers.
• Management team that has a technical background and understanding of the automotive industry.
• High profit margin business model that is very lean and scalable.
• Enterprise level clients that are more stable than consumer mobile applications.
• The swiping business model has proven to be highly successful with Millennial consumers.

Weaknesses

• Desire funding for extensive promotional activities in order to enhance the user base.
• Need sales agents to promote the product to automotive dealers.
• Competitors that have a strong brand reputation that the company must build.
• The company most move quickly in order to close-out prospective competitors in the market.
• The company may work with individuals attempting to sell their car directly.
• Continual improvement upon the underlying algorithms could lead to a social component.
• Underlying data could be collected from the application and sold in order for car manufacturers.

Opportunities

• The dealership marketing services market has grown substantially in the past decade.
• The existing options on the market are not aligned with modern selection techniques.
• Many dealerships are highly competitive and always in need of more qualified leads.
• The pay per lead and monthly payment model is flexible for dealerships.

Threats

• New and existing competitors could enhance their products to compete more directly.
• Dealerships may be deterred from the expense associated with the application.
• Consumers may choose to utilize ride-sharing services rather than purchasing automobiles.

13
Competitive Comparison

Within the automotive industry, there are numerous competitors that attempt to promote cars with print,
desktop, and mobile platforms. While many claim to be unique, they tend to follow a business structure that
relies on unverified listings that can be promoted for a specified fee structure. With that being noted, there
are three examples listed below that showcase major classes of competitors.

• Wyper: This is a mobile application that has an interface that is similar to CarSwipe. With this
application, the underlying search results are powered by a company known as AU.TO. Since the
underlying results are unverified and customer leads have been anonymized, revenue appears to be
primarily generated from the advertisements displayed. The estimated number of downloads on
Android devices is between one and five thousand. At the moment, this is the most significant
application that utilizes a swipe interface.

• Cars.com: This entity provides a traditional search method on both a mobile and a desktop platform.
With this service, revenue is generated primarily from dealerships and individuals that are
attempting to sell their vehicles. The estimated number of downloads on Android devices is between
one and five million. While this is an example of a successful platform, it is relatively undifferentiated
with many other applications that perform similar services.

• TrueCar: This entity provides an option for consumers to search for automobiles on both a mobile
and a desktop platform. The main mantra of this company is to provide transparent information for
consumers in order to avoid traditional haggling techniques. This service receives revenue from
certified dealers, automobile manufacturers, and third-party service providers. The estimated
number of downloads on Android devices is between one and five million. Given the success of this
application, it is interesting to note that there does not seem to be any other platforms that has
garnered success through price transparency.

In contrast, CarSwipe is an application that utilizes verified listings from car dealers and entertains buyers
with a convenient and entertaining format. Ultimately, the goal of this application is to be the #1 car buying
and selling mobile resource.

14
Marketing Plan

The marketing efforts of CarSwipe may be divided into two segments including enterprise dealership clients
and individual retail consumers. The enterprise dealership clients may be acquired through the formation of
strategic partnerships with dealership marketing agencies and other synergistic companies. A business
development team will also represent the company when approaching new dealerships to offer leads to be
generated.

Promotion Strategy

Targeted Marketing

This application will be promoted primarily through advertisements within social media applications that
allow efficient customer acquisitions to occur. While the focus on individual services may vary, it is important
to keep in mind the ideal target market. In this case, it happens to be millennials that are interested in
purchasing automobiles.

Public Relations

In order to build a positive brand image, public relation activities are quite important. In essence, expenses
will be incurred by the company in order to satisfy potential customer complaints as well as questions
regarding the services offered by CarSwipe. Simply put, these will be operational expenses that may or may
not require the utilization of full-time help.

Direct Sales

Hiring sales representatives will contribute towards the success of CarSwipe by enabling direct selling aimed
at convincing car dealerships to pay for high-quality leads that could lead to higher dealership sales. While
the representative responsibilities will include a variety of sales tactics, it is important for them to remember
that their goal is to add value to both dealers and consumers. By understanding this motive, it will lead these
salespeople to showcase principles of integrity and a motivational attitude.

15
Financial Projections

The following set of financial projections provide a three-year projection period based on an initial investment of
$2,000,000 at a valuation of $10,000,000 offering 20% of preferred equity. Given the estimates set-forth in the
financial projections this would deliver a payback period within five years and a return on equity in excess of 81%.
For the valuation, a EBITDA multiple of 13.3 based on the industry standard for Internet Businesses of similar
comparable acquisition of consumer facing mobile applications with stable enterprise client with a discount rate
of 7.0%. In actuality, the multiple from a strategic acquirer could be as high as 40 times earnings.

Startup Expenses Startup Liabilities

Sales & Marketing 6,500 Liabilities and Capital
Conferences & Seminars 350 Current Borrowing -
Legal and Professional Fees 1,250 Long-Term Liabilities -
Travel 500 Accounts Payable -
Professional Services 2,500 Other Current Liabilities -
Office Rental & Expenses 3,500
Insurance 800
Startup Investments
Hosting & Utilities 450 Planned Investment
Misc Startup Expenses 2,300 Owner -
Total Startup Expenses $18,150 Investor 2,000,000
Total Planned Investment $2,000,000
Startup Assets
Working Capital (Cash On Hand) 1,924,350
Startup Funding
Deposits & Fees 2,500 Total Liabilities -
Software Development 50,000 Total Planned Investment 2,000,000
Furniture & Supplies 5,000 Total Funding $2,000,000
Total Startup Assets $1,981,850
Total Requirements
Total Startup Expenses 18,150
Total Startup Assets 1,981,850
Total Requirements $2,000,000

FIGURE 2: POST-FINANCING EXPENSES

Public Comparables (COMPS) Company Valuation

Year 1 Year 2 Year 3
Financial Performance
Revenue 32,306,613 73,041,038 235,978,737
EBITDA 826,525 3,352,774 14,096,291
Internet Business & Services
Revenue Multiple 2.7 2.7 2.7
EBIT Multiple 13.3 13.3 13.3
Risk Discount Factor 7.0% 6.0% 6.0%
Company Valuation $ 10,238,661 $ 41,979,411 $ 176,496,841

16
Financial Highlights

The financial highlights are how the company is projected to perform over the course of the next twelve months
and three to five years. The projections are based on comparable facilities based on estimated revenue range
and size, along with geographic location. We have assumed that for at least the first six-months of post-money
financing that expenses may be greater than revenues while the company invests into growth.

Financial Highlights ($000)

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 Year 2 Year 3
Revenue 288 403 564 789 1104 1546 2165 2814 3658 4756 6183 8038 32307 73041 235979
Gross Margin 13 18 26 36 50 71 99 128 167 217 282 367 1475 4214 15170
Operating Expense 25 25 25 25 25 25 25 25 25 25 25 25 305 433 520
EBITDA (40) (35) (28) (17) (3) 17 45 75 114 164 229 314 834 3361 14104
Net Profit (41) (36) (28) (18) (4) 17 45 74 113 163 228 313 827 3353 14096

Gross Margin/Revenue 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 6% 6%
EBITDA/Revenue -14% -9% -5% -2% 0% 1% 2% 3% 3% 3% 4% 4% 3% 5% 6%
Net Profit/Revenue -14% -9% -5% -2% 0% 1% 2% 3% 3% 3% 4% 4% 3% 5% 6%

Net Cash Flow (40) (35) (28) (17) (3) 17 45 75 114 164 229 314 834 3361 14104
Cash Balance - Ending 1884 1849 1821 1804 1801 1818 1864 1939 2053 2216 2445 2759 2759 6119 20224

FIGURE 3: FINANCIAL HIGHLIGHTS

Projected Operating Highlights By Year ($000) Projected Revenues By Year ($000)

250000 250000
Revenue
200000 200000

150000 Gross Margin 150000

100000 100000
EBITDA
50000 50000

0 Net Profit 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
25000 16000
14000
20000
Net Cash Flow 12000

15000 10000
8000
10000 6000
Cash Balance 4000
5000
2000
0
Financial Indicators 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

17
The company believes that it can reach an increasing net profit margin due to economies of scale. Through
investments in capital expenditures, it may decrease its general and administrative expenses. Financial
indicators are based upon the performance of comparable companies in the same asset class, revenue
range and age both from publicly available information and our internal database of research.

Financial Indicators
Year 1 Year 2 Year 3
Profitability %'s:
Gross Margin 5% 6% 6%
Net Profit Margin 3% 5% 6%
EBITDA to Revenue 3% 5% 6%
Return on Assets 81% 77% 76%
Return on Equity 81% 77% 76%

FIGURE 4: FINANCIAL INDICATORS

Financial Ratios
7%

6%

5%

4%

3%

2%

1%

0%
Year 1 Year 2 Year 3

Gross Margin Net Profit Margin EBITDA to Revenue

Revenue Forecast

18
 Revenue Forecast
Year 1 Year 2 Year 3
Revenue Forecast
Lead Sales $ 4,213,906 $ 16,855,624 $ 67,422,496
Subscriptions $ 28,092,707 $ 56,185,414 $ 168,556,241
Total Revenue $ 4,213,906 $ 16,855,624 $ 67,422,496

Direct Cost of Revenue

Lead Sales $ 3,581,820 $ 14,327,280 $ 57,309,122
Subscriptions $ 27,249,926 $ 54,499,851 $ 163,499,553
Subtotal Cost of Revenue $ 3,581,820 $ 14,327,280 $ 57,309,122

FIGURE 5: REVENUE FORECAST

Revenue By Year
250000

200000

150000

100000

50000

0
Year 1 Year 2 Year 3

Year 1 Revenue Monthly

9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Projected Profit and Loss

19
The profit and loss assume that the company will have margins at a comparable level to companies within
its industry. While management might not have incurred exactly for future operating expenses, they have
been assumed to reasonable reach comparable profit margins to industry comparables. The management
will operate with minimal expenditures to focus on R&D and commercialization expenses until the
company has sufficient income to support dividend distribution.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Revenue $ 32,306,613 $ 73,041,038 $ 235,978,737
Subtotal Cost of Revenue $ 30,831,746 $ 68,827,132 $ 220,808,675
Total Cost of Revenue $ 30,831,746 $ 68,827,132 $ 220,808,675

Gross Margin $ 1,474,867 $ 4,213,906 $ 15,170,062

Gross Margin/Revenue 5% 6% 6%

Expenses
Sales & Marketing 78,000 93,600 112,320
Conferences & Seminars 4,200 5,040 6,048
Legal and Professional Fees 15,000 18,000 21,600
Travel 6,000 7,200 8,640
Professional Services 30,000 36,000 43,200
Office Rental & Expenses 42,000 120,000 144,000
Insurance 9,600 9,600 11,520
Hosting & Utilities 5,400 6,480 7,776
Total Operating Expenses $ 184,800 $ 289,440 $ 347,328
Wages & Payroll $ 335,685 $ 419,835 $ 545,786
Depreciation, Amortization & Taxes $ 7,857 $ 7,857 $ 7,857
Net Income $ 826,525 $ 3,352,774 $ 14,096,291
Net Income/Revenue 3% 5% 6%

FIGURE 6: PROFIT & LOSS

Projected Cash Flow

20
 Pro Forma Cash Flow
Year 1 Year 2 Year 3
Beginning Cash Balance $ 1,924,350 $ 2,758,732 $ 6,119,363
Cash Inflows
Income from Sales $ 32,306,613 $ 73,041,038 $ 235,978,737
Accounts Receivable $ - $ - $ -
Total Cash Inflows $ 32,306,613 $ 73,041,038 $ 235,978,737

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ -
Cost of Sales $ 30,831,746 $ 68,827,132 $ 220,808,675

Operating Activities
Salaries and Wages $ 335,685 $ 419,835 $ 545,786
Fixed Business Expenses $ 304,800 $ 433,440 $ 520,128
Taxes $ - $ - $ -

Financing Activities
Loan Payments $ - $ - $ -
Line of Credit Interest $ - $ - $ -
Line of Credit Repayments $ - $ - $ -
Dividends Paid $ - $ - $ -

Total Cash Outflows $ 31,472,230.69 $ 69,680,406.60 $ 221,874,588.76

Cash Flow $ 834,382.11 $ 3,360,631.02 $ 14,104,148.16
Operating Cash Balance $ 2,758,732.11 $ 6,119,363.12 $ 20,223,511.28
Ending Cash Balance $ 2,758,732.11 $ 6,119,363.12 $ 20,223,511.28

FIGURE 7: CASH FLOW

Year 1 Cash
3,000,000

2,500,000 Net Cash Flows

2,000,000

1,500,000

1,000,000

500,000
Cash Balance

-
Month Month Month Month Month Month Month Month Month Month Month Month
(500,000) 1 2 3 4 5 6 7 8 9 10 11 12

21
Wages & Payroll

Most expenses will be allocated towards development and sales. The employees will be paid competitive
wages so that the company can acquire and retain top talent and compete with large competitors. As the
company grows, it may work in options and bonuses into the salaries, but will focus on a straight full-time
salary with benefits for employees.

Personnel Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Personnel Count
Sr. Developer 1 2 4 8 16
Developers 6 9 14 16 19
Sales 8 10 12 14 17
Administrative 1 1 1 2 2
Management 0 2 2 2 2

Total Personnel 16 24 32 42 56

Personnel Wage
Sr. Developer $ 100,000 $ 200,000 $ 400,000 $ 800,000 $ 1,600,000
Developers $ 450,000 $ 675,000 $ 1,012,500 $ 1,215,000 $ 1,458,000
Sales $ 280,000 $ 336,000 $ 403,200 $ 483,840 $ 580,608
Administrative $ 35,000 $ 42,000 $ 50,400 $ 60,480 $ 72,576
Management $ - $ 172,000 $ 172,000 $ 172,000 $ 172,000

Personnel Costs
Employer Expenses $ 34,600 $ 44,980 $ 89,960 $ 269,880 $ 809,640
Total Payroll $ 974,163 $ 1,591,863 $ 2,301,749 $ 3,233,467 $ 5,022,423

FIGURE 8: WAGES & PAYROLL

22
Projected Balance Sheet

The projected balance sheet assumes that there are no dividend draws and all cash flow is re-invested
back into the company at the end of the year. The balance sheet does not assume any line of credits or
account receivables that are outstanding at the end of the year and that the company will have paid off
all liabilities. Likewise, it assumes that all accounts will pay within thirty-days and there will be no
delinquency of payments.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash $ 2,758,732 $ 6,119,363 $ 20,223,511
Other Current Assets $ 18,150 $ 18,150 $ 18,150
Total Current Assets $ 2,776,882 $ 6,137,513 $ 20,241,661

Long-term Assets
Long-term Assets $ 57,500 $ 57,500 $ 57,500
Accumulated Depreciation $ 7,857 $ 15,714 $ 23,571
Total Long-term Assets $ 49,643 $ 41,786 $ 33,929
Total Assets $ 2,826,524 $ 6,179,298 $ 20,275,589

Liabilities and Capital

Current Liabilities
Accounts Payable $ - $ - $ -
Current Borowing $ - $ - $ -
Other Current Liabilities $ - $ - $ -
Subtotal Current Liabilities $ - $ - $ -

Long-term Liabilities $ - $ - $ -
Total Liabilities $ - $ - $ -

Common Stock $ 2,000,000 $ 2,000,000 $ 2,000,000

Retained Earnings $ 826,525 $ 4,179,299 $ 18,275,590
Total Capital $ 2,826,525 $ 6,179,299 $ 20,275,590
Total Liabilities and Capital $ 2,826,524 $ 6,179,298 $ 20,275,589

FIGURE 9: BALANCE SHEET

23
Sensitivity Analysis

Best Case Scenario (Revenue Increase by 15%)

Year 1 Year 2 Year 3
Revenue $ 4,845,992 $ 19,383,968 $ 77,535,871
Cost of Goods Sold $ 4,119,093 $ 16,476,373 $ 65,905,490
Gross Margin $ 726,899 $ 2,907,595 $ 11,630,381
Gross Margin/Revenue 15% 15% 15%
Operating Expenses $ 304,800 $ 433,440 $ 520,128
EBIT $ 422,099 $ 2,474,155 $ 11,110,253
EBIT/Revenue 9% 13% 14%

Worst Case Scenario (Revenue Decrease by 15%)

Year 1 Year 2 Year 3
Revenue $ 3,581,820 $ 14,327,280 $ 57,309,122
Cost of Goods Sold $ 3,044,547 $ 12,178,188 $ 48,712,754
Gross Margin $ 537,273 $ 2,149,092 $ 8,596,368
Gross Margin Revenue 15% 15% 15%
Operating Expenses $ 304,800 $ 433,440 $ 520,128
EBIT $ 232,473 $ 1,715,652 $ 8,076,240
EBIT/Revenue 6% 12% 14%

FIGURE 10: SCENARIO ANALYSIS

Revenue
$90,000,000

$80,000,000
Best Case
$70,000,000

$60,000,000
Most Likely
$50,000,000

$40,000,000

$30,000,000 Worst Case

$20,000,000

$10,000,000

$-
Year 1 Year 2 Year 3

24
Break-Even Analysis

Annual Users NET REVENUE FIXED COST VARIABLE COST TOTAL COST TOTAL PROFIT
- $0 $548,000 $0 $548,000 -$548,000
500 $175,000 $548,000 $5,250 $553,250 -$378,250
1,000 $350,000 $548,000 $10,500 $558,500 -$208,500
1,500 $525,000 $548,000 $15,750 $563,750 -$38,750
2,000 $700,000 $548,000 $21,000 $569,000 $131,000
2,500 $875,000 $548,000 $26,250 $574,250 $300,750
3,000 $1,050,000 $548,000 $31,500 $579,500 $470,500
3,500 $1,225,000 $548,000 $36,750 $584,750 $640,250
4,000 $1,400,000 $548,000 $42,000 $590,000 $810,000
4,500 $1,575,000 $548,000 $47,250 $595,250 $979,750
5,000 $1,750,000 $548,000 $52,500 $600,500 $1,149,500
5,500 $1,925,000 $548,000 $57,750 $605,750 $1,319,250
6,000 $2,100,000 $548,000 $63,000 $611,000 $1,489,000
6,500 $2,275,000 $548,000 $68,250 $616,250 $1,658,750
7,000 $2,450,000 $548,000 $73,500 $621,500 $1,828,500
7,500 $2,625,000 $548,000 $78,750 $626,750 $1,998,250
8,000 $2,800,000 $548,000 $84,000 $632,000 $2,168,000

FIGURE 11: BREAK-EVEN ANALYSIS

Breakeven Analysis

$3,000,000

$2,500,000
COST-VOLUME-PROFIT

$2,000,000

$1,500,000

$1,000,000

$500,000

$0
0

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500

7000

7500

8000
500

NET UNITS

25
Appendix

Year 1 Profit & 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
Revenue $ 287,500 $ 402,500 $ 563,500 $ 788,900 $ 1,104,460 $ 1,546,244 $ 2,164,742 $ 2,814,164 $ 3,658,413 $ 4,755,937 $ 6,182,718 $ 8,037,534
Subtotal Cost of Revenue $ 274,375 $ 384,125 $ 537,775 $ 752,885 $ 1,054,039 $ 1,475,655 $ 2,065,916 $ 2,685,691 $ 3,491,399 $ 4,538,818 $ 5,900,464 $ 7,670,603
Total Cost of Revenue $ 274,375 $ 384,125 $ 537,775 $ 752,885 $ 1,054,039 $ 1,475,655 $ 2,065,916 $ 2,685,691 $ 3,491,399 $ 4,538,818 $ 5,900,464 $ 7,670,603

Gross Margin $ 13,125 $ 18,375 $ 25,725 $ 36,015 $ 50,421 $ 70,589 $ 98,825 $ 128,473 $ 167,015 $ 217,119 $ 282,255 $ 366,931
Gross Margin/Revenue 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%

Expenses
Sales & Marketing $ 6,500 $ 6,500 $ 6,500 $ 6,500 $ 6,500 $ 6,500 $ 6,500 $ 6,500 $ 6,500 $ 6,500 $ 6,500 $ 6,500
Conferences & Seminars $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350
Legal and Professional Fees $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250
Travel $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500
Professional Services $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500
Office Rental & Expenses $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500
Insurance $ 800 $ 800 $ 800 $ 800 $ 800 $ 800 $ 800 $ 800 $ 800 $ 800 $ 800 $ 800
Hosting & Utilities $ 450 $ 450 $ 450 $ 450 $ 450 $ 450 $ 450 $ 450 $ 450 $ 450 $ 450 $ 450
Total Operating Expenses $ 25,400 $ 25,400 $ 25,400 $ 25,400 $ 25,400 $ 25,400 $ 25,400 $ 25,400 $ 25,400 $ 25,400 $ 25,400 $ 25,400

EBIT $ (12,275) $ (7,025) $ 325 $ 10,615 $ 25,021 $ 45,189 $ 73,425 $ 103,073 $ 141,615 $ 191,719 $ 256,855 $ 341,531
EBIT/Revenue -4% -2% 0% 1% 2% 3% 3% 4% 4% 4% 4% 4%

FIGURE 12: 12 MONTH PROFIT & LOSS

26
 Year 1 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

Revenue
$ 287,500.0 $ 402,500.0 $ 563,500.0 $ 788,900.0 $ 1,104,460.0 $ 1,546,244.0 $ 2,164,741.6 $ 2,814,164.1 $ 3,658,413.3 $ 4,755,937.3 $ 6,182,718.5 $ 8,037,534.0
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Other Current Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 287,500.0 $ 402,500.0 $ 563,500.0 $ 788,900.0 $ 1,104,460.0 $ 1,546,244.0 $ 2,164,741.6 $ 2,814,164.1 $ 3,658,413.3 $ 4,755,937.3 $ 6,182,718.5 $ 8,037,534.0

Expenditures

Expenditures from Operations

$ 327,748.8 $ 437,498.8 $ 591,148.8 $ 806,258.8 $ 1,107,412.8 $ 1,529,028.4 $ 2,119,290.2 $ 2,739,065.1 $ 3,544,772.5 $ 4,592,192.2 $ 5,953,837.7 $ 7,723,976.9
Subtotal Spent on Operations
$ 327,748.8 $ 437,498.8 $ 591,148.8 $ 806,258.8 $ 1,107,412.8 $ 1,529,028.4 $ 2,119,290.2 $ 2,739,065.1 $ 3,544,772.5 $ 4,592,192.2 $ 5,953,837.7 $ 7,723,976.9

Additional Cash Spent

Current Borrowing Repay

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 327,748.8 $ 437,498.8 $ 591,148.8 $ 806,258.8 $ 1,107,412.8 $ 1,529,028.4 $ 2,119,290.2 $ 2,739,065.1 $ 3,544,772.5 $ 4,592,192.2 $ 5,953,837.7 $ 7,723,976.9

Net Cash Flow

$ (40,248.8) $ (34,998.8) $ (27,648.8) $ (17,358.8) $ (2,952.8) $ 17,215.7 $ 45,451.4 $ 75,099.0 $ 113,640.8 $ 163,745.1 $ 228,880.8 $ 313,557.2
Cash Balance
$ 1,884,101.3 $ 1,849,102.5 $ 1,821,453.8 $ 1,804,095.0 $ 1,801,142.3 $ 1,818,357.9 $ 1,863,809.3 $ 1,938,908.3 $ 2,052,549.0 $ 2,216,294.2 $ 2,445,175.0 $ 2,758,732.1

FIGURE 13: 12 MONTH CASH FLOW STATEMENT

27