Table A Peanut Butter Sales, 1988 (in millions)

Retail Estimated Wholesale

Sales Gross Margin Value
Super Market $738 25% $553.5
Specialty and Other 222 50 111
Total $960 $664.5
Table B

Dollars/ Market Estimated Ad Dollars Ad Dollars/

Manufacturer Share 1998 Sales Sales
(%) (millions) (millions) (%)
JIF (Procter & Gamble) 22 $146 $13.5 9.2
Skippy (Best Foods, CPC International) 21 140 11.1 8.0
Peter Pan (Swift) 13 86 8.8 10.2
Private Label/Generic Natural/Special 44 293 1.6 N.A.
Exhibit 1: New Product Introductions, 1998

% of Total
Type Definition Introductions
New Concept New concept for category. Requires significant spending. 13%
Brand Extension Transfer of brand name from one product category to
another. 2%
Line Extension New flavors, colors, sizes added to existing product lines. 66%
Upgrade/Replacement "New" product replaces existing item. Retains same UPC,
distribution channel and shelf space. 19%

Totals 100%

Source:
Joint Industry Task Force on new Product Introductions and Deletions, "Managing the
Process of Introducing and Deleting Products in the Grocery and Drug Industry,
"Grocery Manufacturers of America, Inc., Washington, D.C., 1990.
Exhibit 2: Average Cost of New Product Introductions, 1998

Typical Manufacturer Costs

Per SKUa Introduction $5,125,900

Introduction of Four Related SKUs $20,503,600

Of which:
Consumer Advertising and Promotion 46%
Trade Deals and Allowances 16%
R&D and Market Analysis 18%
Other 20%

Typical Broker Costs

Per SKU Introduction $10,747

Introduction, Four Related SKUs $28,282

Typical Wholesaler Costs

Per SKU Introduction $388

Introduction, Four Related SKUs $1,390

Typical Retailer Costs

Per SKU Introduction $623

Introduction, Four Related SKUs $2,492

Source: Joint Industry Task Force on new Product Introductions and Deletions,
"Managing the Process of Introducing and Deleting Products in the Grocery and Drug
Industry," Grocery Manufacturers of America, Inc., Washington, D.C., 1990.

a
SKU: Stock Keeping Unit. A separately identified item category offered for sale. For
example, the Trombly's product line included 17 SKUs: 6 peanut butter SKUs (four
flavors, creamy and chunky), 1 peanut sauce SKU, and 10 candy SKUs.
Exhibit 3-Alternative Media Costs and Delivery

Adult U.S. Women Adult U.S. Men

National
Equivalent Percent Cost per Percent Cost per
Medium Ad Unit Cost (000) Viewing 1000 Viewing 1000
Night Network TV 30 sec. $ 89.3 11.3% $8.67 8.9% $12.23
Day Network TV 30 sec. 14.3 5.0 3.33 1.5 11.92
Sports Network TV 30 sec. 43.3 2.7 17.36 5.0 10.72
Late Night Network TV 30 sec. 17.7 2.9 6.55 2.6 8.14
Early Network News 30 sec. 39.1 8.0 5.36 7.1 6.74
General Magazines 1 pg. 48.1 15.4 3.44 13.2 4.45
Women's Magazines 1 pg. 48.9 21.9 2.45 4.8 12.34
Newspapers 1 pg. 2,190.8 40.7 59.20 45.1 59.20
Network Radio 60 sec. 2.4 1.2 2.25 1.3 2.25
Outdoor (Billboards, etc.) 100 showings 104.3 52.6 2.18 56.4 2.26

Source: Sissors, Jack Z. and Lincoln Bumba (1988), Advertising Media Planning, Third Edition, Lincolnshire,
IL: NTC Publishing, p.296.
Exhibit 7-Comparative Gross Margins

Branded PBF PBF

Per # Peanut Butter Generic Creamy/Chunky Flavored
Retail Price $2.12 $1.40 $2.89 $6.38a
Grocery GM % 24% 15% 24-29% 35%
Grocery GM $ 0.51 0.21 0.77 2.23

Wholesale Price 1.61 1.19 2.12 4.15

Distributor GM % 26 26
Distributor GM $ 0.55 1.08

Broker Commission @ 5% 0.08 0.15

Manufacturer price 1.61 1.19 1.49 2.92

COGS 1.22 1.01 1.24 1.55

Manufacturer GM 0.39 0.18 0.25 1.37

Manufacturer GM % 24 15 17 47

a
@ $2.99 per 7.5 oz. jar.
Exhibit 8: PBF Product Mix and Projected Gross Margins

Peanut Butter Peanut Butter

Creamy & Chunky Flavored Peanut Sauce Chocolates

Actual 1989 % of sales 28% 58% 14%

Projected % of sales 20 42 10 28%
Projected % of gross margin 24 45 45 65

In July 1989, chunky and creamy peanut butters accounted for approximately 28% of PBF /
Trombly's sales; flavored products were 58%. Peanut sauce was 14%. Candy products were not yet
authorized for sale in most of the supermarkets, but were projected at 28% of company sales for
1989 and 1990. Most of the candy sales would be made in July for delivery in the fourth quarter of
the year.
Exhibit 9: Comparative Balance Sheets

1985 1986 1987 1988

ASSETS
Cash $8,063 -$17,169 -$33,683 -$25,691
Accts. Receivables 1,104 2,024 54,082 85,193
Inventory 12,834 22,767 32,979 128,850
Prepaid Expenses 458 0 0 664
Total Current Assets $22,459 $7,622 $53,378 $189,016

Prop. Plant Equip at Cost $22,476 $37,234 $80,442 $118,701

Less: Depreciation -4,000 -7,000 -13,645 -13,645
$18,476 $30,234 $66,797 $105,056

Deposits $0 $0 $8,000 $8,000

Corp. Trademarks 2,300 2,300 1,789 1,789
Capitalized Marketing 0 0 10,901 110,698

Total Assets $43,235 $40,156 $140,865 $414,559

LIABILITIES

Acct. Payables $16,305 $55,808 $83,812 $233,431

Note Payable 0 900 958 958
Note Payable-Bank 0 0 65,000 69,000
Current Mat. Lt. Debt 0 0 0 5,000
Accruals 13,201 20,014 42,492 51,815
Total Current Liabilities $29,506 $76,722 $192,262 $360,204

Bank Notes-Equipment $0 $0 $0 $78,933

Convertible Subordinated 0 0 30,000 4,000
Due Stockholders 14,200 73,426 223,426 218,426
Total Liabilities $43,706 $150,148 $445,688 $1,057,563

STOCKHOLDERS EQUITY

Capital $98,000 $98,000 $98,000 $98,000

Retained Earnings -98,471 -207,992 -402,823 -741,004
-$471 -$109,992 -$304,823 -$643,004
Total Liability and Equity $43,235 $40,156 $140,865 $414,559
Exhibit 10: Comparative Income Statements

1985 1986 1987 1988

Net Revenue $192,979 $225,329 $308,693 $448,083

Cost of Sales
Materials $83,963 $98,532 $129,592 $143,502
Freight In 0 0 432 3,855
Direct Labor 0 0 40,494 85,169
Total Cost of Sales $83,963 $98,532 $170,518 $232,526

Gross Profit $109,016 $126,797 $138,175 $215,557

G&A Expense $47,108 $100,261 $153,645 $303,576

Marketing Expense $133,848 $136,328 $163,335 $250,319

Operating Income (Loss) -$71,940 -$109,792 -$178,805 -$338,338

Exhibit 11: Profit and Loss Projections 1989

Actual Actual Actual Actual Actual Actual Actual

Jan-89 Feb-89 Mar-89 Apr-89 May-89 Jun-89 Jul-89 Aug-89 Sep-89 Oct-89 Nov-89 Dec-89 1989 Y/E %
Wholesale Revenue $23,000 $8,000 $23,000 $32,000 $21,000 $23,000 $15,100 $55,000 $100,000 $175,000 $200,000 $180,000 $855,100
Mail Order Revnue - Tins 5,600 0 0 0 0 0 0 0 0 0 0 0 100
Store Revenue 7,000 1,000 11,000 11,000 11,000 11,000 12,000 11,000 10,000 10,000 0 0 104,000
Total Revnue $35,600 $18,000 $34,000 $43,000 $92,000 $34,000 $27,100 $66,000 $110,000 $185,000 $200,000 $180,000 $964,700 100.00%
Cost of Sales
Wholesale Revenue $16,500 $11,632 $20,000 $25,000 $21,500 $20,800 $7,550 $27,500 $46,000 $80,500 $92,000 $82,800 $451,782
Mail Order Tins 1,960 0 0 0 0 0 0 0 0 0 0 0 1,960
Additional Overhead 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 0 0 0 0 28,000

Total Cost of Sales $21,960 $15,132 $23,500 $28,500 $25,000 $24,300 $11,050 $31,000 $46,000 $80,500 $92,000 $82,800 $481,742 49.94%

Gross Profit $13,640 $2,868 $10,500 $14,500 $7,000 $9,700 $16,050 $35,000 $64,000 $104,500 $108,000 $97,200 $482,958 50.06%
Gross Margin 38.31% 15.93% 30.88% 33.72% 21.88% 28.53% 59.23% 53.03% 48.18% 56.49% 54.00% 54.00% 50.06%

Marketing and Selling

Salaries $5,900 $6,900 $8,600 $8,600 $8,600 $8,600 $8,600 $8,600 $9,500 $9,500 $9,500 $9,500 $102,400
Sales Commissions 5,270 1,300 1,600 1,000 2,100 1,300 1,510 5,500 10,000 17,500 20,000 18,000 85,080
Advertising 0 0 0 0 0 0 0 0 0 0 8,000 10,000 18,000
Promotion 5,700 4,200 13,500 7,500 4,300 3,700 5,000 5,000 7,000 7,000 7,000 7,000 76,900
Store Expenses 8,300 9,800 11,000 7,000 10,000 10,000 11,000 11,000 10,000 10,000 0 0 98,100
Other 6,300 3,000 1,500 2,500 1,500 3,500 1,500 2,000 3,000 3,000 3,000 3,000 33,800

Total Marketing $31,470 $25,200 $36,200 $26,600 $26,500 $27,100 $27,610 $32,100 $39,500 $47,000 $47,500 $47,500 $414,280 42.94%

General & Admin

Salaries $7,100 $7,100 $6,800 $6,800 $7,100 $7,100 $7,100 $7,100 $9,000 $9,000 $9,000 $9,000 $92,200
Consulting 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 42,000
Interest 3,400 2,450 1,583 3,500 3,500 3,700 3,800 3,500 2,500 2,500 2,500 2,500 35,433
Rent 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 12,900
Other 5,600 3,000 3,500 3,700 5,000 5,000 5,000 5,000 5,000 6,000 6,000 6,000 58,800
Total G&A $20,675 $17,125 $16,458 $18,575 $20,175 $20,375 $20,475 $20,175 $21,075 $22,075 $22,075 $22,075 $241,333 25.02%

Total Expenses $52,145 $42,325 $52,658 $45,175 $46,675 $47,475 $48,085 $52,275 $60,575 $69,075 $69,575 $69,575 $655,613 67.96%

Net Profit/Loss -$38,505 -$39,457 -$42,158 -$30,675 -$39,675 -$37,775 -$32,035 -$17,275 $3,425 $35,425 $38,425 $27,625 -$172,655 -17.90%
Exhibit 12: Cash Flow Projections 1989

Actual Actual Actual Actual Actual Actual Actual

Jan-89 Feb-89 Mar-89 Apr-89 May-89 Jun-89 Jul-89 Aug-89 Sep-89 Oct-89 Nov-89 Dec-89 Total

MONTHLY SALES
Wholesalea $23,000 $8,000 $23,000 $32,000 $21,000 $23,000 $15,100 $55,000 $100,000 $175,000 $200,000 $180,000 $855,100
Mail Order-Tins 5,600 0 0 0 0 0 0 0 0 0 0 0 5,600
Store 7,000 10,000 11,000 11,000 11,000 11,000 12,000 11,000 10,000 10,000 0 0 104,000

Cash from Salesb $52,048 $33,540 $23,270 $24,700 $33,003 $34,530 $33,895 $29,840 $57,124 $101,950 $156,500 $191,000
Beg. Cash from Ops -14,000 -16,621 -33,956 -75,121 -107,821 -121,540 -140,742 -162,268 -187,658 -206,886 -208,151 -176,848
Total Cash $38,048 $16,919 -$10,686 -$50,421 -$74,818 -$87,010 -$106,847 -$132,428 -$130,534 -$104,936 -$51,651 $14,152

COST OF SALES
Wholesale $6,945 6,600 13,000 25,000 14,222 10,755 9,890 12,464 29,091 53,125 80,625 88,713
Additional Overhead 3,500 3,500 3,500 0 0 3,500 3,500 0 0 0 0 0
Gross Cash Available $27,603 $6,819 -$27,186 -$75,421 -$89,040 -$101,265 -$120,338 -$144,892 -$159,625 -$158,061 $132,276 $74,561

Marketing and Selling

Salaries $5,900 $5,900 $6,100 $8,600 $8,600 $8,600 $8,600 $8,600 $3,500 $9,500 $9,500 $9,500
Commission 10% 5,270 4,000 1,560 0 0 2,200 2,353 2,190 1,884 4,712 9,195 15,650
Advertising 0 0 0 0 0 0 0 0 0 0 0 0
Promotion 5,700 5,000 13,400 7,500 4,300 3,700 5,000 5,000 7,000 7,000 7,000 7,000
Store Expenses 8,300 9,800 11,000 7,000 10,000 10,000 11,000 11,000 10,000 10,000 0 0
Other 6,300 3,000 1,500 0 0 1,500 1,500 2,000 3,000 3,000 3,000 3,000
Total M&S $31,470 $27,700 $33,560 $23,100 $22,900 $26,000 $28,453 $28,790 $31,384 $34,212 $28,695 $35,150

General & Admin.

Salaries $7,100 $7,100 $6,800 $6,800 $7,100 $7,100 $7,100 $9,000 $9,000 $9,000 $9,000 $9,000
Consulting 0 0 0 0 0 0 0 0 0 0 0 0
Interestc 935 1,200 2,800 2,500 2,500 2,302 2,302 2,302 2,302 2,302 2,302 2,302
Rent 1,100 1,075 1,075 0 0 1,075 1,075 1,075 1,075 1,075 1,075 1,075
Other 3,619 3,700 3,700 0 0 3,000 3,000 3,500 3,500 3,500 3,500 3,500
Total G&A $12,754 $13,075 $14,375 $9,300 $9,600 $13,477 $13,477 $13,977 $15,877 $15,877 $15,877 $15,877
Total Expenses $44,224 $40,775 $47,935 $32,400 $32,500 $39,477 $41,930 $42,767 $47,261 $50,089 $44,572 $51,027

Cummulative Cash from

Ops -$16,621 -$33,956 -$75,121 -$107,821 -$121,540 $140,742 -$162,268 -$187,658 -$206,886 -$208,151 -$176,848 -$125,588

Monthly Cash Generated

from Ops -$2,621 -$17,335 -$41,165 -$32,700 -$13,719 -$19,202 -$21,525 -$25,390 -$19,228 -$1,264 $31,303 $51,260 -$111,588

a
Expected wholesale sales level based on proposed distribution system
b
Cash From Sales are:
Wholesales: 5% collected in current month, 70% collected 2nd month, 24% collected 3rd month, 1% bad debt
Mail Order: 75% collected in current month, 25% collected in 2nd month
Store: 100% collected in current month
c
Interest Calculations: Equipment Loan of $100,000 @ 12.5% and Working Capital Loan balance outstanding @ 12.5%
Exhibit 13: Sources and Uses of Funds 1989

Actual Actual Actual Actual Actual Actual Actual

Sources: Jan-89 Feb-89 Mar-89 Apr-89 May-89 Jun-89 Jul-89 Aug-89 Sep-89 Oct-89 Nov-89 Dec-89

Ending Cash Position $0 -$2,305 -$20,557 -$5,888 -$36,255 -$51,641 -$60,000 -$70,790 $37,847 $8,758 $33,326 $35,463
Monthly Cash From Ops -16,621 -17,335 -41,165 -32,700 -13,719 -19,202 -21,525 -25,390 -19,228 -1,264 31,303 51,260
Working Capital Loans 0 0 0 0 0 0 0 0 0 0 0 0 0
Capital Source 0 0 13,750 0 0 12,500 25,000 0 100,000 150,000 0 0 301,250
Other Loans 25,000 12,500 43,750 25,000 0 0 0 62,500 0 0 0 -50,000 118,750

Total Sources $8,379 -$7,140 -$4,222 -$13,588 -$49,974 -$58,343 -$56,535 -$33,681 $42,924 $157,493 $64,629 $36,723

USES:
Equip. Debt Payment (5) $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $20,000
LC Loan Payment 0 0 0 0 0 0 0 0 0 0 0 0 0
Working Cap. Loan Pymt. 0 0 0 0 0 0 0 0 0 0 0 0 0
Past A/P & Accrual Pymt. 9,017 10,500 0 21,000 0 0 10,000 0 30,000 120,000 25,000 0 225,517
New Sales Incentives 0 1,250 0 0 0 0 2,589 2,500 2,500 2,500 2,500 2,500 16,339

Total Uses $10,684 $13,417 $1,667 $22,667 $1,667 $1,667 $14,255 $4,167 $34,167 $124,167 $29,167 $4,167

Ending Cumulative Cash Balance -$2,305 -$20,557 -$5,888 -$36,255 -$51,641 -$60,010 -$70,790 -$37,847 $8,758 $33,326 $35,463 $32,556
Exhibit 14: Profit and Loss Projections 1990

Jan-90 Feb-90 Mar-90 Apr-90 May-90 Jun-90 Jul-90 Aug-90 Sep-90 Oct-90 Nov-90 Dec-90 1990 Y/E

Wholesale Revenue $150,000 $170,000 $200,000 $225,000 $240,000 $260,000 $265,000 $270,000 $350,000 $400,000 $375,000 $375,000 $3,280,000
Store Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Revenue $150,000 $170,000 $200,000 $225,000 $240,000 $260,000 $265,000 $270,000 $350,000 $400,000 $375,000 $375,000 $3,280,000

Cost of Sales
Wholesale $69,000 $78,200 $92,000 $103,500 $110,400 $119,600 $121,900 $124,200 $161,000 $184,000 $172,500 $172,500 $1,508,800
Additional Overhead 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Cost of Sales $69,000 $78,200 $92,000 $103,500 $110,400 $119,600 $121,900 $124,200 $161,000 $184,000 $172,500 $172,500 $1,508,000

Gross Profit $81,000 $91,800 $108,000 $121,500 $129,600 $140,400 $143,100 $145,800 $189,000 $216,000 $202,500 $202,500 $1,771,200
Gross Margin 54.00% 54.00% 54.00% 54.00% 54.00% 54.00% 54.00% 54.00% 54.00% 54.00% 54.00% 54.00% 54.00%

Marketing & Selling

Salaries $9,500 $9,500 $9,500 $13,000 $13,000 $13,000 $13,000 $15,000 $15,000 $15,000 $18,000 $18,000 $161,500
Sales Commissions 15,000 17,000 20,000 22,500 24,000 26,000 26,500 27,000 35,000 40,000 37,500 37,500 328,000
Advertising 10,000 10,000 12,000 15,000 15,000 15,000 18,000 18,000 30,000 30,000 30,000 30,000 233,000
Promotion 10,000 10,000 15,000 15,000 15,000 15,000 20,000 20,000 20,000 30,000 30,000 30,000 230,000
Other 4,000 4,000 4,000 5,000 5,000 5,000 6,000 6,000 6,000 6,000 6,000 7,000 64,000
Total Marketing $48,500 $50,500 $60,500 $70,500 $72,000 $74,000 $83,500 $86,000 $106,000 $121,000 $121,500 $122,500 $1,016,500

General & Admin

Salaries $11,000 $11,000 $13,000 $13,000 $13,000 $13,000 $13,000 $16,000 $16,000 $16,000 $20,000 $20,000 $175,000
Consulting 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000
Interest 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 30,000
Rent 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 12,900
Other 6,000 6,000 6,000 7,000 7,000 7,000 8,000 8,000 8,000 8,000 8,000 8,000 87,000
Total G&A $25,575 $25,575 $27,575 $28,575 $28,575 $28,575 $29,575 $32,575 $32,575 $32,575 $36,575 $36,575 $364,900

Total Expenses $74,075 $76,075 $88,075 $99,075 $100,575 $102,575 $113,075 $118,575 $138,575 $153,575 $158,075 $159,075 $1,381,400

Net Profit/Loss $6,925 $15,725 $19,925 $22,425 $29,025 $37,825 $30,025 $27,225 $50,425 $62,425 $44,425 $43,425 $389,800
Cumulative Profit/Loss $6,925 $22,650 $42,575 $64,000 $94,025 $131,850 $161,875 $189,100 $239,525 $301,950 $346,375 $389,800
 %

100.00%

46.00%

54.00%

4.92%
10.00%
7.10%
7.01%
1.95%
30.99%

5.34%
1.83%
0.91%
0.39%
2.65%
11.13%

42.12%

11.88%
Exhibit 15: Cash flow Projections 1990

Jan-90 Feb-90 Mar-90 Apr-90 May-90 Jun-90 Jul-90 Aug-90 Sep-90 Oct-90 Nov-90 Dec-90

MONTHLY SALES
Wholesalea $150,000 $170,000 $200,000 $225,000 $240,000 $260,000 $265,000 $270,000 $350,000 $400,000 $375,000 $375,000
Mail Order-Tins 0 0 0 0 0 0 0 0 0 0 0 0
Store 0 0 0 0 0 0 0 0 0 0 0 0

Cash from Salesb $181,500 $156,700 $165,000 $192,050 $217,500 $235,000 $252,850 $261,400 $270,100 $329,800 $382,750 $377,250
Beg. Cash from Ops 0 16,568 17,248 7,239 3,841 11,615 30,684 46,293 60,681 77,123 101,931 151,408
Total Cash $181,500 $173,268 $182,248 $199,289 $221,341 $246,615 $283,534 $307,693 $330,781 $406,923 $484,681 $528,658

COST OF SALES
Wholesale $86,955 $78,785 $88,045 $101,998 $113,415 $117,075 $124,635 $127,620 $133,413 $163,875 $179,188 $173,438
Additional Overhead 0 0 0 0 0 0 0 0 0 0 0 0
Gross Cash Available $94,545 $94,483 $94,203 $97,291 $107,926 $129,540 $158,899 $180,073 $197,369 $243,048 $305,494 $355,220

Marketing and Selling

Salaries $9,500 $9,500 $9,500 $13,000 $13,000 $13,000 $13,000 $15,000 $15,000 $15,000 $18,000 $18,000
Commission 10% 19,100 18,150 15,670 16,500 19,205 21,750 23,500 25,285 26,140 27,010 32,980 38,275
Advertising 10,000 10,000 15,000 15,000 15,000 15,000 20,000 20,000 20,000 30,000 30,000 30,000
Promotion 10,000 10,000 15,000 15,000 15,000 15,000 20,000 20,000 20,000 30,000 30,000 30,000
Store Expenses 0 0 0 0 0 0 0 0 0 0 0 0
Other 4,000 4,000 4,000 5,000 5,000 5,000 6,000 6,000 6,000 6,000 6,000 7,000
Total M&S $52,600 $51,650 $59,170 $64,500 $67,205 $69,750 $82,500 $86,285 $87,140 $108,010 $116,980 $123,275

General & Admin.

Salaries $11,000 $11,000 $13,000 $13,000 $13,000 $13,000 $13,000 $16,000 $16,000 $16,000 $20,000 $20,000
Consulting 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Interestc 2,302 2,510 2,719 2,875 3,031 3,031 3,031 3,031 3,031 3,031 3,031 3,031
Rent 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075 1,075
Other 6,000 6,000 6,000 7,000 7,000 7,000 8,000 8,000 8,000 8,000 8,000 8,000
Total G&A $25,377 $25,585 $27,794 $28,950 $29,106 $29,106 $30,106 $33,106 $33,106 $33,106 $37,106 $37,106

Total Expenses $77,977 $77,235 $86,964 $93,450 $96,311 $98,856 $112,606 $119,391 $120,246 $141,116 $154,086 $160,381
Cummulative Cash from Ops $16,568 $17,248 $7,239 $3,841 $11,615 $30,684 $46,293 $60,681 $77,123 $101,931 $151,406 $194,839

Monthly Cash Generated from Ops $16,568 $680 -$10,009 -$3,398 $7,774 $19,069 $15,609 $14,389 $16,441 $24,809 $49,476 $43,431

a
Expected wholesales sales level based on proposed distribution system
b
Cash from Sales are:
Wholesales: 5% collected in current month, 70% collected 2nd month, 24% collected 3rd month, 1% bad debt
Mail Order: 75% collected in current month, 25% collected in 2nd month
Store: 100% collected in current month
c
Interest Calculations: Equipment Loan of $100,000 @ 12.5% and Working Capital Loan balance outstanding @ 12.5%
$3,280,000
$0.00
$0.00
Exhibit 16- Sources and Uses of Funds 1990

Jan-90 Feb-90 Mar-90 Apr-90 May-90 Jun-90 Jul-90 Aug-90 Sep-90 Oct-90 Nov-90 Dec-90

Ending Cash Position $32,556 $32,457 $36,470 $29,795 $19,731 $20,838 $23,240 $27,182 $29,904 $34,679 $47,821 $85,630
Monthly Cash From Operations 16,568 680 -10,009 -3,398 7,774 19,069 15,609 14,389 16,441 24,809 49,476 43,431
Working Capital Loans 0 20,000 20,000 15,000 15,000 0 0 0 0 0 0 0 70,000
Capital Source 0 0 0 0 0 0 0 0 0 0 0 0
Other Loans 0 0 0 0 0 0 0 0 0 0 0 0

Total Sources $49,124 $53,137 $46,462 $41,397 $42,504 $39,907 $38,849 $41,571 $46,345 $59,487 $97,297 $129,062

USES:
Equip. Debt Payment (5) $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $20,000
LC Loan Payment 0 0 0 0 0 0 0 0 0 0 0 0
Working Capital Loan Pymt. 0 0 0 0 0 0 0 0 0 0 0 0
Past A/P & Accrual Pymt. 0 0 0 0 0 0 0 0 0 0 0 0
New Sales Incentives 15,000 15,000 15,000 20,000 20,000 15,000 10,000 10,000 10,000 10,000 10,000 10,000 160,000

Total Uses $16,667 $16,667 $16,667 $21,667 $21,667 $16,667 $11,667 $11,667 $11,667 $11,667 $11,667 $1,167

Ending Cumulative Cash Balance $32,457 $36,470 $29,795 $19,731 $20,838 $23,240 $27,182 $29,904 $34,679 $47,821 $85,630 $117,395