FNSACC604A

Martin Bui (372770317)

1 EXECUTIVE SUMMARY
This report is a due diligence into the viability and formation of an entity in Australia to sell the device known as Buzz Power. Also contained within this report, is a due diligence in regards to the entity itself, as well as members of the respective entity, with respect and compliance to the Corporations Act 2001 and other legal precedents that are relative to the nature of this company.

FNSACC604A

Martin Bui (372770317)

2 BUSINESS ANALYSIS & IMPLEMENTATION

2.1 Introduction
This section of the report will concern on the structural and financial side of the business, such as associated costs as well as possible avenues for capital raising.

2.2 Business Structure

The company will be utilising under a large proprietary entity, which is outlined within the Corporations Act 2001, S 45A(1), S 45A(3)*. The business structure will consist of; 3 Directors, 1 Chief Counsel, 1 Chief Financial Officer and 40 personnel managing daily operations (e.g. Sales).

*Refer to Appendix 01

2.3 Expenditures
The table below outlines the projected expenditures the company can expect to occur during the initial start-up stage. The numbers quoted are of a preliminary nature, and are applicable for a fiscal year, unless stated otherwise. 20x3 Particular Rent Salaries Licensing Fees Advertising & Marketing Shipping & Freight Miscellaneous Accountancy & Consultation Total Cost $4,750,000 $15,750,000 $3,000 $500,000 $2,575,000 $1,550,000 $800,000 $25,928,000

Below is the expected costs associated for the year thereafter our initial start-up.

FNSACC604A

Martin Bui (372770317)

20x4 Particular Rent Salaries Licensing Fees Advertising & Marketing Shipping & Freight Miscellaneous Accountancy & Consultation Total Cost $4,750,000 $15,750,000 $3,000 $525,000 $2,575,000 $1,750,000 $800,000 $26,203,000

Projections indicate that most of our expenses will stay consistent to the amounts in the former fiscal year, give or take a threshold of 5%.

2.4 Investment & Funding Model

Primary funding will be sourced as credit from financial institutions, and subsequent second round of funding will be sourced from various private investors. As referred in Figure 1; the graph depicts the model for capital raising with the exclusion of any credit loans from financial institutions.

James

Investor #1

Investor #2

Investor #3

20% 40%

20%

20%
Figure 1

FNSACC604A

Martin Bui (372770317)

As suggested by the model, initial private investors will be permitted a maximum minority holding of 20% whilst you will be retain a majority holding of 40%. This being the case, that, in the advent of any hostile takeover eventuating, the proposed model will provide an added benefit of insurance against such occurrence. Simultaneously, this model will also permit a fair opposition for investors in any business decisions regarding managerial and/or executive employees.

To ensure a future-proof model, a share buy-back* option will also be offered to the all initial investors, in the future event of the company becoming public. This option will offer a compensation package to all initial investors as a result of the dilution of holdings through further capital raised from the public.

*Refer to Appendix 02