Company Inputs

Current Available Cash/AR $ 5,000,000

Current Burn Rate $ 500,000

Due On Signing
Warrant coverage (assumes full drawdown) 10.0%
Warrant $ $ 500,000
Price per share $ 1.00
# of Preferred Series Shares 500,000

Shares outstanding (before warrant issuance) 50,000,000

Warrant represents this % ownership 1.0%

Other Costs Transaction Fees $ 30,000

Commitment Fee

Deal Terms

Venture Debt Loan $ 5,000,000

Interest Rate 11.0%

Interest Only Period 0 months

Repayment term (principal + Int) 36 months
Monthly Facility Fee for Undrawn Portion of Loan 0.000%

Financial Covenants:
Quick Ratio -
Minimum Available Cash / AR: $ -

Assumptions
Amount Drawn Down (model assumes one tranche) $ 5,000,000
Drawdown Month Month 6
Treasury Rate 1.0%
Burn Rate Step 1: # of Months Current Burn Held Constant 12
Burn Rate Step 2: Afterwhich # of Months to CFBE 6

Burn Scenarios (1=Upside, 2=Base Case,

Burn Scenarios:
3=Worst Case) 2
Change Cases By: 25%
True Cost of Debt Calculation Financial Covenants Check Checks whether company will default on financial convenant before they otherwise would have run o
It does NOT check whether a company will default on their financial covenant before reaching CFP.
Net Interest Paid $ 770,833 Quick Ratio NA
Cost of Warrants $ 372,426 Minimum Cash Balance NA
Fees $ 30,000
Total Cost $ 1,173,260

Additional Runway from Debt 13 Months

Effective Cost of Capital 17%

Debt Balance Remaining at Cash Out $ 2,500,000

1 2 3 4 5 6 7 8 9 10 11 12
Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21
Monthly Burn Scenario 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000

Cash Available Assuming No Debt 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - -
Cash Available with Debt EoM 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 7,289,444 6,610,046 5,931,805 5,254,722 4,578,796 3,904,027 3,230,416

Drawdown - - - - - 5,000,000 - - - - - -
Debt Balance - - - - - 5,000,000 4,861,111 4,722,222 4,583,333 4,444,444 4,305,556 4,166,667
Principal Payment - - - - - (138,889) (138,889) (138,889) (138,889) (138,889) (138,889) (138,889)
Ending Debt Balance - - - - - 4,861,111 4,722,222 4,583,333 4,444,444 4,305,556 4,166,667 4,027,778

Interest Only Bubble - - - - - - - - - - - -

Interest Expense - - - - - (45,833) (44,560) (43,287) (42,014) (40,741) (39,468) (38,194)
CD Interest Received on Incremental Cash - - - - - 4,167 4,051 3,935 3,819 3,704 3,588 3,472
Facility Fee - - - - - - - - - - - -
Transaction Costs / Commitment Fee - - - - - (30,000) - - - - - -

Cumulative Net Interest Due - - - - - (41,667) (82,176) (121,528) (159,722) (196,759) (232,639) (267,361)

Bank IRR
Bank Cash Flow - - - - - (4,815,278) 183,449 182,176 180,903 179,630 178,356 177,083
Bank "CF" With Warrants - - - - - (4,442,851) 183,449 182,176 180,903 179,630 178,356 177,083
Bank IRR (just cash flow) 12%
Bank IRR (with warrants) 19%

1) Company Cost of Capital - Straight Calculation

Total Cash Flow - - - - - 4,789,444 (179,398) (178,241) (177,083) (175,926) (174,769) (173,611)
Drawdown - - - - - 5,000,000 - - - - - -
Transaction Costs - - - - - (30,000) - - - - - -
Company Principal Payments - - - - - (138,889) (138,889) (138,889) (138,889) (138,889) (138,889) (138,889)
Company Net Interest Payments - - - - - (41,667) (40,509) (39,352) (38,194) (37,037) (35,880) (34,722)
Cost of Capital 12% (this cost of capital for the company excludes the warrant)

2) Company Cost of Capital - Based on Available Debt at Cash Out

Total Cash Flow - - - - - - - - - - 3,904,028 (173,611)
Effective Drawdown - - - - - - - - - - 4,305,556 -
Transaction Costs - - - - - - - - - - (30,000) -
Company Principal Payments - - - - - - - - - - (138,889) (138,889)
Company Net Interest Payments - - - - - - - - - - (232,639) (34,722)
Cost of Capital 17% (this cost of capital for the company excludes the warrant)
Black Scholes
Share Price $ 1.00
Strike Price $ 1.00
Expiration 10
Risk-free Interest Rate 1.0%
Volatility 70%

d1 1.1520
d2 -1.0616

Call Value $ 0.74

Warrants Value $ 372,426.46