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FinSmart

Business Plan

FinSmart Solutions

646-524-2121

123 Anywhere

New York, NY
Confidentiality Agreement

The undersigned reader of FinSmarts 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 FinSmart.

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 FinSmart.

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

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

Applicable Law

This contract shall be governed by the laws in the country of Australia.

__________________________________________________

Signature

__________________________________________________

Printed Name

FinSmart | Business Plan Page 2


Overview

Most financial software today only performs based organization functions. It is incapable
of providing insight and requires human instruction and analysis to improve cash flow.
However, most of this analysis is standard and most of the human instruction may be easily
automated.

FinSmart is a freemium SaaS that synchronizes with a clients existing accounting, ERP, and
CRM systems and applies machine learning algorithms programmed by industry
professionals to help its users predict, improve, and automate business processes that
impact cash flow using linear predictive modeling directly resulting in faster, more
efficient growth.

FinSmart | Business Plan Page 3


Table of Contents

Executive Summary ............................................................................................................... 5


Product Summary................................................................................................................................. 5
Market Summary ................................................................................................................................. 5
Three Year Objectives........................................................................................................................... 6
Keys to Success .................................................................................................................................... 6
Financing Summary .............................................................................................................................. 6

FinSmart A Better FinTech Solution ..................................................................................... 7


Industry Overview ................................................................................................................. 7
Market Needs ...................................................................................................................................... 8
Market Trends ..................................................................................................................................... 9
Market Segmentation........................................................................................................................... 9

Strategy & Implementation Summary .................................................................................... 9


Management Team ............................................................................................................................ 10
Organizational Chart .......................................................................................................................... 11
SWOT Analysis ................................................................................................................................... 12

Competitive Comparison ..................................................................................................... 13


Marketing Plan .................................................................................................................... 14
Promotion Strategy ............................................................................................................................ 14

Financial Forecasts .............................................................................................................. 15


Use of Funds ...................................................................................................................................... 15
Financial Highlights ............................................................................................................................ 16
Financial Indicators ............................................................................................................................ 17
Revenue Forecast ............................................................................................................................... 18
Projected Profit and Loss .................................................................................................................... 19
Projected Cash Flow ........................................................................................................................... 20
Projected Balance Sheet ..................................................................................................................... 21
Sensitivity Analysis ............................................................................................................................. 22
Break-Even Analysis ........................................................................................................................... 23
Wages & Payroll ................................................................................................................................. 24

Appendix............................................................................................................................. 25

FinSmart | Business Plan Page 4


Executive Summary
FinSmart is a FinTech software as a service that utilizes machine learning and big data to automate several
routine processes to save companies time, and formulates solutions to potential problems that saves
company money by making more informed decisions about their cash flow in-house. The following
business plan outlines the five year growth strategy of FinSmart, the problems it solves in the market,
and the projected financial performance based on its current business model.

Product Summary

FinSmart is a software that seamlessly integrates with a companys accounting, CRM, and ERP systems to
provide actionable insights to improve their cash flow by consolidating the independent data sources with
pre-built algorithms that detect potential problems or opportunities that will help a company to automate
trivial workflows and/or propose solutions to complex problems in a similar fashion of an in-house
financial consultant. Some of the main solutions that FinSmart provides with its proprietary algorithms
includes:

Receive payments faster by reducing the collections period.


Increase profit by identifying opportunities to increase cash flow and streamline operations.
Mitigate potential risks by applying predictive analytics and proposing solutions for each event.
Improve customer relationships by having more actionable insight across data sources.

Market Summary

It is well recognized that most small businesses fail, but research by the US Small Business Advocacy
suggests that 25% of companies fail due to cash flow problems, it is an internationally recognized problem.
However, this problem is a trickle down effect that begins across the CRM, accounting management, or
ERP systems and could results from a customer segment, group of vendors, or simply mismanagement.
FinSmart detects these problems before they occur, when the trends begin to emerge, its system provides
a solution to mitigate risk and increase efficiency. Research by Inc. Magazine and PNC bank outlines some
common reasons cash flow problems exist, all of which can be detected and mitigated with Automatgic.ai:

1. Mismanagement of the collections process or no collections process


2. Low sales somewhere along the CRM pipeline
3. Abnormally high overhead expenses relative to sales
4. Uncertainty about future cash flow (inability to properly forecast) for planning

FinSmart | Business Plan Page 5


Three Year Objectives

FinSmart has identified the following three year objectives:

Introduce the Beta version of the software into the market.


Attend financial industry trade shows and conventions.
Support integration with all major accounting, CRM, and ERP platforms.
Introduce predictive learning modules from other users on the platform.
Expand globally and have a presence in every developed country.

Keys to Success

FinSmart has identified the following keys to success:

The use of linear predictive modeling for workflow automation.


Detection of early indicators and warning signs of cash flow problems.
Applicability to every SME country, regardless of the industry.
User generated workflow modules that allow virtually unlimited content.
A platform the improves with more usage, creating customer loyalty.
A management team with experience and resources in every major global market.

Financing Summary

Startup Assets Startup Liabilities


Cash on Hand 1,000,000 Liabilities and Capital
Total Startup Assets $1,000,000 Current Borrowing -
Long-Term Liabilities -
Startup Expenses Accounts Payable -
Startup Sales & Marketing 15,000 Other Current Liabilities -
Professional Services 12,000
Other Startup Expenses 12,000
Startup Investments
Total Startup Expenses $39,000 Planned Investment
Owner -
Total Requirements Investor 1,039,000
Total Startup Expenses 39,000 Total Planned Investment $1,039,000
Total Startup Assets 1,000,000
Total Requirements $1,039,000 Startup Funding
Total Liabilities -
Total Planned Investment 1,039,000
Total Funding $1,039,000

FinSmart | Business Plan Page 6


FinSmart A Better FinTech Solution

Automatic.ai performs three primary functions. The primary value to users is its ability to synchronize data
across platforms they already use to determine ways to increase cash flow. The system retrieves data
across these platforms, combined with in-house data the client may upload from offline storage to store
the data and run machine learning algorithms to make recommendations and build-self learning workflow
automation tools.

Workflow Automation

The workflow automation analyzes the tasks that a company performs in the system, learning from
common processes, and then requests to allow the system to create a workflow. In addition to the
machine learning generated workflows, standard workflows exist and will continue to be developed.

Cash Flow Insights & Recommendations

Linear predictive models analyze data across multiple sources from sales to collections to form projections
based on historical data. This can indicate trends of seasonality, collections issues, and other events based
on the history of the company that may impact future cash flows. This is critical to companies as it can
help them to better manage their capital expenditures and financing to avoid liquidity issues.

Pre-defined workflow automation tools will be available on the website developed by FinSmart, along
with the opportunity to allow developers and other professionals to create their own workflow
automation tools and sell it on the marketplace.

Industry Overview

FinSmart | Business Plan Page 7


Software publishers, often considered indispensable to downstream industries, remain profitable despite
the increasing prevalence of software piracy, ongoing litigation, high research and development costs and
an expensive workforce. During the past five years, publishers focused on strategic acquisitions and
product development, with large software publishers eagerly buying smaller ones with specialties in
growing niches. As technological developments require companies to participate in an increasingly diverse
array of platforms, acquisition activity within this industry will grow. Industry operators are expected to
adopt SaaS sales models, stabilizing cash flows.

Market Needs

There is often a disconnect between cash flow analysts detecting problematic trends and other individuals
where these problems may stem from. For instance, cash flow may be reduced from a series of bad
accounts, but how these accounts are generated requires CRM interaction or may even be a vendor issues
if the product is defective. Cash flow problems are a trickle down effect and require seamless integration
with other data sources to determine and solve the root cause some common reasons this occurs and
use cases of how FinSmart will solve the problem:

1. Problem: Mismanagement of the collections process or no collections process.


Solution: Automatically reports suggestions to structure and streamline account collections.

2. Problem: Low sales somewhere along the CRM pipeline


Solution: Detects trends in the CRM to help identify the most profitable customers.

3. Problem: Abnormally high overhead expenses relative to sales


Solution: Automatically analyzes future cash flow to help companies manage future expenses

4. Problem: Uncertainty about future cash flow (inability to properly forecast) for planning
Solution: Advanced probability models project cash flow in a real-time basis with minimal effort

FinSmart | Business Plan Page 8


Market Trends

Companies are beginning to embrace software as a method of replacing or reducing their in-house team.
Accounting software has reduced the need of an account team, just as inventory management software
reduced warehouse staff. FinSmart will capitalize on this growing receptivity towards technology in the
SME sector to help minimize the need for outside consultants and financial analysts. Moreover, it will be
more efficient since the technology monitors financial activity and searches for potential problems in real-
time.

Market Segmentation

The pricing strategy and estimated market segmentation base been broken into three categories including
small business (1 5 employees), mid-size business (6 10 employees), and enterprise (11 20
employees). Larger companies are likely to already have an in-house financial team that performs this
function, but SME companies cannot afford this and may not even be aware of the need for it until its too
late.

Strategy & Implementation Summary

The strategy of FinSmart is to enter the market are a freemium software provider and work to register as
many free accounts as possible with limited functions. Once users spend time learning the software and
upload their data, then see the value of it, they will likely subscribe. Licenses will be sold based on the
functions available and usage limitations to maximize the amount charged for each member type.

As the member base grows, FinSmart will introduce new features including new workflow automation
tools and programmed suggestions into the system to help companies more efficiently based on
information gathered from its international network of debt collectors and finance professionals.

FinSmart | Business Plan Page 9


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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FinSmart | Business Plan Page 10


Organizational Chart

Adrian
Board/Investors
Wilcourt/Legal

John Doe/CEO

Susan Kevin
Miller/COO Jones/CFO

Marketing
Sales Director Accounting
Director

Sales Reps Collections

FinSmart | Business Plan Page 11


SWOT Analysis

Strengths

The software has been developed by industry professionals and insight learned from the best
international cash flow management practices internationally.
The gross margins are extremely high given that only AWS fees for usage apply.
The business can be sold directly to companies with remote sales staff and public relations.
The software can and will receive ongoing improvements over time.
The technology is already ready for commercialization and only needs funding.
The business model has already been validated; the first user base is ready to run the system.

Weaknesses

Market education is required for a moderately sophisticated financial product for SME.
Some customers may be confused at first of how this is different than their accounting system
and the company will need to educate them.
The company will need to have hours that accommodate western time zones where the largest
markets area and later have regional sales teams to represent it.

Opportunities

Financial technology is one of the most stable software categories with enterprise customers
paying a monthly fee and complex algorithms that are challenging to replicate.
SMEs are growing more receptive to replacing human functions with machines both on the
workflow sides and the data analysis aspects.

Threats

There is a threat that Quickbooks or other large accounting providers will add similar functions to
their software, but this is highly unlikely, they would be likely to purchase the software instead.
SMEs are often very cash flow restricted and cannot always afford to adapt new technology, but
this is not the instance will all companies to any degree.

FinSmart | Business Plan Page 12


Competitive Comparison

Most software presently on the market is complementary to FinSmart, the system retrieves data across
these independent software providers (E.g. Salesforce, QuickBooks, Oracle), and then runs analysis and
workflow automation where it counts -the cash flows. Hence, the primary competitors are the same as
for the first online accounting system, the humans that it will replace.

Financial Consultant/Management Accountant

Per data from the US Bureau of Labor Statistics, there are approx.. 249,400 financial consultants in the United
States and 1,246,540 accountants. This figure may be estimated for any developed country by taking the total
population of these professionals relative to the total US population and multiplying that figure to the
population of any developed country. Most SME companies hire these professionals on an hourly basis and
thus, could be replaced with the programmatic advice through the software.

Financial Analysts

Per data from the US Bureau of Labor Statistics, there are 277,600 financial analysts in the United States.
If these individuals are employed within a company, it is likely that they will not be using the FinSmart
software because they already perform these functions regularly in-house. However, future versions of
the software may grow sophisticate enough to aid the decisions of a financial analyst, or streamline
workflow so that if a company uses more than one analyst, this number could be reduced.

Competitive edge and advantage

Not only is FinSmart significantly cheaper than using an outside consultant, the cost of one month
subscription is often less than their hourly fee, it is also more efficient. Many consultants and outside
assistants know very little about a company and are often not properly informed when making
recommendations. This is solved because the software perfectly curates recommendations based on a
companys unique data sets across departments.

Moreover, the software providers real-time analysis to spot threats and make recommendations with
email notifications and alerts. Most outside professionals are hired on an as-needed or annual basis and
even financial analysts only prepare bi-annual or quarterly reports, which may often be too late.

FinSmart | Business Plan Page 13


Marketing Plan

Like other enterprise software, the focus of FinSmart is business development including inbound sales,
account managers, trade shows, and conventions attendance. Eventually, regional sales offices may be
introduced for each country to accommodate time zones and cultural dynamics.

Business Development

Sales teams will be hired to contact targeted companies and schedule a demo for the FinSmart technology.
Once the demo is scheduled, they will then be offered a free account and later receive emails and follow-
ups with their account manager to upgrade their license to a level based on the number of employees
they have.

Trade Shows/Conventions

Financial and other industry trade shows will be attended to gain mass awareness very quickly and form
relationships with potential affiliates, software users, and possibly distribution partners (I.e. third-party
vendors responsible for selling the software in a given region).

Strategic Partners

Affiliate relationships will be formed with financial consulting groups and other software providers such
as accounting and CRM software to promote the technology of FinSmart. However, this will likely take
place at a later stage once the company has established a positive reputation and user base.

Promotion Strategy

An enterprise software product is not heavily promoted due to it generally being sold at first through a
business development team especially for a product that requires market education and explanation at
first. Eventually, more promotions will take place online once people are familiar with FinSmart and similar
technologies that will inevitably enter the market.

FinSmart | Business Plan Page 14


Digital Marketing

The digital marketing efforts will include display advertisements on select media websites (I.e. CFO
Magazine, Harvard Business Review, Bloomberg, Fast Company, TechCrunch) consumed by small business
owners and finance professionals. Marketing will also take place on Google AdWords for people searching
for financial analysis and forecasting software.

Public Relations/Content Marketing

The public relations and content marketing will be unpaid and paid placements in the publications listed
above and others including niche blogs and content distribution networks. The website will eventually
feature a blog that includes helpful articles designed to drive traffic to the FinSmart website such as How
to Project Cash Flow or How to Better Manage Cash Flow, as to distinguish itself as a leader in the
financial technology space.

Financial Forecasts

Use of Funds

Startup Assets Startup Liabilities


Cash on Hand 1,000,000 Liabilities and Capital
Total Startup Assets $1,000,000 Current Borrowing -
Long-Term Liabilities -
Startup Expenses Accounts Payable -
Startup Sales & Marketing 15,000 Other Current Liabilities -
Professional Services 12,000
Other Startup Expenses 12,000
Startup Investments
Total Startup Expenses $39,000 Planned Investment
Owner -
Total Requirements Investor 1,039,000
Total Startup Expenses 39,000 Total Planned Investment $1,039,000
Total Startup Assets 1,000,000
Total Requirements $1,039,000 Startup Funding
Total Liabilities -
Total Planned Investment 1,039,000
Total Funding $1,039,000

FinSmart | Business Plan Page 15


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 Year 4 Year 5
Revenue 2 3 5 6 9 13 22 33 49 69 95 131 437 16992 135894 203841 244609
Gross Margin 1 2 3 3 5 7 12 18 27 38 52 72 240 8300 67320 100980 121176
Operating Expense 24 14 14 45 45 45 54 54 54 62 67 74 548 1105 23238 1371 1439
EBITDA (98) (87) (86) (41) (40) (37) (42) (35) (27) (24) (15) (2) (308) 7195 44082 99609 119737
Net Profit (98) (87) (86) (41) (40) (37) (42) (35) (27) (24) (15) (2) (308) 7195 44082 99609 119737

Gross Margin/Revenue 55% 55% 55% 55% 55% 55% 55% 55% 55% 55% 55% 55% 55% 49% 50% 50% 50%
EBITDA/Revenue -6302% -2801% -1849% -647% -445% -284% -192% -106% -54% -34% -15% -2% -70% 42% 32% 49% 49%
Net Profit/Revenue -6302% -2801% -1849% -647% -445% -284% -192% -106% -54% -34% -15% -2% -70% 42% 32% 49% 49%

Net Cash Flow (98) (87) (86) (41) (40) (37) (42) (35) (27) (24) (15) (2) (533) 7195 44082 99609 119737
Cash Balance - Ending 2402 2316 2230 2189 2149 2112 2070 2035 2008 1984 1970 1967 1967 9163 53245 152854 272591

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


300000 300000

250000 250000
Revenue
200000 200000
Gross Margin
150000
150000
100000 EBITDA
100000
50000
Net Profit 50000
0
Year Year Year Year Year 0
(50000) 1 2 3 4 5 Year 1 Year 2 Year 3 Year 4 Year 5

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
300000 140000

250000 120000

Net Cash Flow 100000


200000
80000
150000
60000
100000
40000
Cash Balance
50000
20000
0 0
Year Year Year Year Year Year 1 Year 2 Year 3 Year 4 Year 5
(50000) 1 2 3 4 5 (20000)

FinSmart | Business Plan Page 16


Financial Indicators

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 55% 49% 50%
Net Profit Margin -70% 42% 32%
EBITDA to Revenue -70% 42% 32%
Return on Assets -61% 93% 85%
Return on Equity -39% 90% 85%

Financial Indicators
100%

80%
Gross Margin

60%

40% Net Profit Margin

20%

0% EBITDA to Revenue
Year 1 Year 2 Year 3
-20%

-40% Return on Assets

-60%

-80%

FinSmart | Business Plan Page 17


Revenue Forecast

Revenue Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue Forecast
PPC 161,064 748,650 1,423,347 2,135,021 2,562,025
SEO 275,784 11,017,969 97,362,827 146,044,241 175,253,089
Affiliates - 5,225,106 37,107,509 55,661,264 66,793,517
Total Revenue $ 436,848 $ 16,991,725 $ 135,893,684 $ 203,840,526 $ 244,608,631

Direct Cost of Revenue


PPC 72,479 336,892 640,506 960,759 1,152,911
SEO 124,103 4,958,086 43,813,272 65,719,909 78,863,890
Affiliates - 3,396,319 24,119,881 36,179,822 43,415,786
Subtotal Cost of Revenue $ 196,581 $ 8,691,297 $ 68,573,660 $ 102,860,490 $ 123,432,587

Revenue By Year
300000

250000

200000

150000

100000

50000

0
Year 1 Year 2 Year 3 Year 4 Year 5

Year 1 Revenue Monthly


140,000

120,000

100,000

80,000

60,000

40,000

20,000

-
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

FinSmart | Business Plan Page 18


Projected Profit and Loss

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 Year 4 Year 5
Sales Revenue
PPC 161,064 748,650 1,423,347 2,135,021 2,562,025
SEO 275,784 11,017,969 97,362,827 146,044,241 175,253,089
Affiliates - 5,225,106 37,107,509 55,661,264 66,793,517

Revenue 436,848 16,991,725 135,893,684 203,840,526 244,608,631


Subtotal Cost of Revenue 196,581 8,691,297 68,573,660 102,860,490 123,432,587
Total Cost of Revenue $ 196,581 $ 8,691,297 $ 68,573,660 $ 102,860,490 $ 123,432,587

Gross Margin $ 240,266 $ 8,300,428 $ 67,320,024 $ 100,980,036 $ 121,176,044


Gross Margin/Revenue 55% 49% 50% 50% 50%

Expenses
Wages & Salaries 438,000 895,163 679,468 1,034,775 1,086,514
Software Development 40,000 - 815,362 - -
Tech & Customer Support 70,000 210,000 6,794,684 336,000 352,800
Contingency Budget - - 14,948,305 - -
Total Operating Expenses $ 548,000 $ 1,105,163 $ 23,237,820 $ 1,370,775 $ 1,439,314
Wages & Payroll - - - - -
Depreciation, Amortization & Taxes - - - - -

Net Income $ (307,734) $ 7,195,265 $ 44,082,204 $ 99,609,261 $ 119,736,730


Net Income/Revenue -70% 42% 32% 49% 49%

FinSmart | Business Plan Page 19


Projected Cash Flow

Pro Forma Cash Flow


Year 1 Year 2 Year 3 Year 4 Year 5
Beginning Cash Balance $ 2,500,000 $ 1,967,266 $ 9,162,531 $ 53,244,736 $ 152,853,997
Cash Inflows
Income from Sales $ 436,848 $ 16,991,725 $ 135,893,684 $ 203,840,526 $ -
Accounts Receivable $ - $ - $ - $ - $ -
Total Cash Inflows $ 436,848 $ 16,991,725 $ 135,893,684 $ 203,840,526 $ 244,608,631

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ - $ - $ -
Cost of Sales $ 196,581 $ 8,691,297 $ 68,573,660 $ 102,860,490 $ 123,432,587

Operating Activities
Salaries and Wages $ 225,000 $ - $ - $ - $ -
Fixed Business Expenses $ 548,000 $ 1,105,163 $ 23,237,820 $ 1,370,775 $ 1,439,314
Taxes $ - $ - $ - $ - $ -

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

Total Cash Outflows $ 969,581.49 $ 9,796,459.95 $ 91,811,479.62 $ 104,231,264.50 $ 124,871,901.15


Cash Flow $ (532,733.73) $ 7,195,265.12 $ 44,082,204.34 $ 99,609,261.44 $ 119,736,729.98
Operating Cash Balance $ 1,967,266.27 $ 9,162,531.39 $ 53,244,735.73 $ 152,853,997.17 $ 272,590,727.16
Ending Cash Balance $ 1,967,266.27 $ 9,162,531.39 $ 53,244,735.73 $ 152,853,997.17 $ 272,590,727.16

Year 1 Cash
3,000,000

2,500,000

2,000,000
Net Cash Flows

1,500,000

1,000,000

Cash Balance
500,000

-
Month 3
Month 1

Month 2

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

(500,000)

FinSmart | Business Plan Page 20


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 Year 4 Year 5
Assets
Current Assets
Cash $ 1,967,266 $ 9,162,531 $ 53,244,736 $ 152,853,997 $ 272,590,727
Other Current Assets $ - $ - $ - $ - $ -
Total Current Assets $ 1,967,266 $ 9,162,531 $ 53,244,736 $ 152,853,997 $ 272,590,727

Long-term Assets
Long-term Assets $ - $ - $ - $ - $ -
Accumulated Depreciation $ - $ - $ - $ - $ -
Total Long-term Assets $ - $ - $ - $ - $ -
Total Assets $ 1,967,266 $ 9,162,531 $ 53,244,735 $ 152,853,996 $ 272,590,726

Liabilities and Capital


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

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

Common Stock $ 1,967,266 $ 1,967,266 $ 1,967,266 $ 1,967,266 $ 1,967,266


Retained Earnings $ - $ 7,195,265 $ 51,277,469 $ 150,886,731 $ 270,623,461
Total Capital $ 1,967,266 $ 9,162,531 $ 53,244,735 $ 152,853,997 $ 272,590,727
Total Liabilities and Capital $ 1,967,266 $ 9,162,531 $ 53,244,735 $ 152,853,996 $ 272,590,726

FinSmart | Business Plan Page 21


Sensitivity Analysis

Best Case Scenario (Revenue Increase by 15% )


Year 1 Year 2 Year 3 Year 4 Year 5
Revenue $ 502,375 $ 19,540,484 $ 156,277,737 $ 234,416,605 $ 281,299,926
Cost of Goods Sold $ 226,069 $ 9,994,992 $ 78,859,709 $ 118,289,563 $ 141,947,476
Gross Margin $ 276,306 $ 9,545,492 $ 77,418,028 $ 116,127,042 $ 139,352,450
Gross Margin/Revenue 55% 49% 50% 50% 50%
Operating Expenses $ 548,000 $ 1,105,163 $ 23,237,820 $ 1,370,775 $ 1,439,314
EBIT $ (271,694) $ 8,440,329 $ 54,180,208 $ 114,756,267 $ 137,913,137
EBIT/Revenue -54% 43% 35% 49% 49%

Worst Case Scenario (Revenue Decrease by 15% )


Year 1 Year 2 Year 3 Year 4 Year 5
Revenue $ 371,321 $ 14,442,966 $ 115,509,631 $ 173,264,447 $ 207,917,336
Cost of Goods Sold $ 167,094 $ 7,387,603 $ 58,287,611 $ 87,431,416 $ 104,917,699
Gross Margin $ 204,226 $ 7,055,363 $ 57,222,021 $ 85,833,031 $ 102,999,637
Gross Margin Revenue 55% 49% 50% 50% 50%
Operating Expenses $ 548,000 $ 1,105,163 $ 23,237,820 $ 1,370,775 $ 1,439,314
EBIT $ (343,774) $ 5,950,201 $ 33,984,201 $ 84,462,256 $ 101,560,323
EBIT/Revenue -93% 41% 29% 49% 49%

Financial Ratios
7%

6%

5%

4%

3%

2%

1%

0%
Year 1 Year 2 Year 3

Gross Margin Net Profit Margin EBITDA to Revenue

FinSmart | Business Plan Page 22


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

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

FinSmart | Business Plan Page 23


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

FinSmart | Business Plan Page 24


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
Sales Revenue
PPC 1,550 3,099 4,649 6,198 7,748 9,297 12,694 16,090 19,486 22,882 26,279 31,093
SEO - - - 151 1,163 3,846 8,970 17,265 29,430 46,279 69,166 99,514
Mid-Size - - - - - - - - - - - -
Enterprise - - - - - - - - - - - -

Revenue 1,550 3,099 4,649 6,349 8,911 13,144 21,663 33,355 48,916 69,161 95,444 130,607
Subtotal Cost of Revenue 697 1,395 2,092 2,857 4,010 5,915 9,748 15,010 22,012 31,122 42,950 58,773
Total Cost of Revenue $ 697 $ 1,395 $ 2,092 $ 2,857 $ 4,010 $ 5,915 $ 9,748 $ 15,010 $ 22,012 $ 31,122 $ 42,950 $ 58,773

Gross Margin $ 852 $ 1,704 $ 2,557 $ 3,492 $ 4,901 $ 7,229 $ 11,915 $ 18,345 $ 26,904 $ 38,039 $ 52,494 $ 71,834
Gross Margin/Revenue 55% 55% 55% 55% 55% 55% 55% 55% 55% 55% 55% 55%

Expenses
Wages & Salaries - - - 41,063 41,063 41,063 46,538 46,538 46,538 54,750 60,225 60,225
Software Development 20,000 10,000 10,000 - - - - - - - - -
Tech & Customer Support 3,500 3,500 3,500 3,500 3,500 3,500 7,000 7,000 7,000 7,000 7,000 14,000
Contingency Budget - - - - - - - - - - - -
Total Operating Expenses $ 23,500 $ 13,500 $ 13,500 $ 44,563 $ 44,563 $ 44,563 $ 53,538 $ 53,538 $ 53,538 $ 61,750 $ 67,225 $ 74,225

EBIT $ (22,648) $ (11,796) $ (10,943) $ (41,071) $ (39,661) $ (37,334) $ (41,623) $ (35,192) $ (26,634) $ (23,711) $ (14,731) $ (2,391)
EBIT/Revenue -1462% -381% -235% -647% -445% -284% -192% -106% -54% -34% -15% -2%

FinSmart | Business Plan Page 25


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
$ 1,549.5 $ 3,099.1 $ 4,648.6 $ 6,349.0 $ 8,911.0 $ 13,143.6 $ 21,663.2 $ 33,355.2 $ 48,915.8 $ 69,161.1 $ 95,444.4 $ 130,607.0
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Sale of Other Current Assets


$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 1,549.5 $ 3,099.1 $ 4,648.6 $ 6,349.0 $ 8,911.0 $ 13,143.6 $ 21,663.2 $ 33,355.2 $ 48,915.8 $ 69,161.1 $ 95,444.4 $ 130,607.0

Expenditures

Expenditures from Operations


$ 99,197.3 $ 89,894.6 $ 90,591.9 $ 47,419.6 $ 48,572.4 $ 50,477.1 $ 63,286.0 $ 68,547.3 $ 75,549.6 $ 92,872.5 $ 110,175.0 $ 132,998.2
Subtotal Spent on Operations
$ 99,197.3 $ 89,894.6 $ 90,591.9 $ 47,419.6 $ 48,572.4 $ 50,477.1 $ 63,286.0 $ 68,547.3 $ 75,549.6 $ 92,872.5 $ 110,175.0 $ 132,998.2

Additional Cash Spent

Current Borrowing Repay


$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 99,197.3 $ 89,894.6 $ 90,591.9 $ 47,419.6 $ 48,572.4 $ 50,477.1 $ 63,286.0 $ 68,547.3 $ 75,549.6 $ 92,872.5 $ 110,175.0 $ 132,998.2

Net Cash Flow


$ (97,647.8) $ (86,795.5) $ (85,943.3) $ (41,070.5) $ (39,661.5) $ (37,333.5) $ (41,622.7) $ (35,192.1) $ (26,633.8) $ (23,711.4) $ (14,730.6) $ (2,391.1)
Cash Balance
$ 2,402,352.2 $ 2,315,556.7 $ 2,229,613.5 $ 2,188,543.0 $ 2,148,881.5 $ 2,111,548.0 $ 2,069,925.3 $ 2,034,733.1 $ 2,008,099.3 $ 1,984,388.0 $ 1,969,657.4 $ 1,967,266.3

FinSmart | Business Plan Page 26