P & L by Year

Source Year 1 Year 2 Year 3 Year 4

Revenue
Product Revenue P&L By Qtr $ 5,480,000 94% $ 7,696,500 83% ### 85% ### 83%
Support Revenue P&L By Qtr $ 376,774 6% $ 1,562,283 17% $ 3,896,902 15% $ 9,425,563 17%
Total Revenue $ 5,856,774 100% $ 9,258,783 100% ### 100% ### 100%

COGS
Product COGS P&L By Qtr $ 2,126,750 36% $ 3,207,800 35% $ 8,674,563 33% ### 27%
Support COGS P&L By Qtr $ 112,932 2% $ 489,993 5% $ 1,108,495 4% $ 2,151,242 4%
Total COGS $ 2,239,682 38% $ 3,697,793 40% $ 9,783,057 38% ### 31%

Gross Margin
Product GM $ 3,353,250 57% $ 4,488,700 48% ### 52% ### 56%
Support GM $ 263,842 5% $ 1,072,289 12% $ 2,788,407 11% $ 7,274,321 13%
Total GM $ 3,617,092 62% $ 5,560,989 60% ### 62% ### 69%

Expenses
Engineering P&L By Qtr $ 1,452,125 25% $ 3,049,700 33% $ 4,791,825 18% $ 8,039,863 15%
Marketing P&L By Qtr $ 719,375 12% $ 1,763,950 19% $ 3,073,163 12% $ 4,564,950 8%
Sales P&L By Qtr $ 1,257,400 21% $ 2,754,645 30% $ 4,802,890 18% $ 9,542,560 17%
G&A P&L By Qtr $ 982,000 17% $ 1,930,000 21% $ 2,743,200 11% $ 4,396,300 8%
Operating Exp. $ 4,410,900 75% $ 9,498,295 103% ### 59% ### 48%

Operating Profit $ (793,808) -14% ### -43% $ 890,767 3% ### 21%

P & L by Year Page 1

 P & L by Quarter Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Revenue
Product Revenue Sales Plan $ - $ 700,000 $1,680,000 $3,100,000 $ 1,245,000 $ 1,542,000 $ 2,119,500 $2,790,000
Support Revenue Sales Plan $ - $ 31,500 $ 105,525 $ 239,749 $ 283,786 $ 338,987 $ 417,415 $ 522,094
Total Revenue $ - $ 731,500 $1,785,525 $3,339,749 $ 1,528,786 $ 1,880,987 $ 2,536,915 $3,312,094

COGS
Product COGS COGS $ 102,688 $ 331,375 $ 644,063 $1,048,625 $ 593,363 $ 667,025 $ 849,938 $1,097,475
Support COGS COGS $ 23,000 $ 24,750 $ 28,863 $ 36,319 $ 90,353 $ 118,495 $ 124,527 $ 156,618
Total COGS $ 125,688 $ 356,125 $ 672,925 $1,084,944 $ 683,716 $ 785,520 $ 974,465 $1,254,093

Gross Margin
Product GM $(102,688) $ 368,625 $1,035,938 $2,051,375 $ 651,638 $ 874,975 $ 1,269,563 $1,692,525
Support GM $ (23,000) $ 6,750 $ 76,663 $ 203,429 $ 193,433 $ 220,492 $ 292,888 $ 365,477
Total GM $(125,688) $ 375,375 $1,112,600 $2,254,804 $ 845,070 $ 1,095,467 $ 1,562,450 $2,058,002

Expenses
Engineering Expenses $ 225,000 $ 309,125 $ 416,938 $ 501,063 $ 624,638 $ 724,638 $ 807,788 $ 892,638
Marketing Expenses $ 132,813 $ 157,813 $ 179,375 $ 249,375 $ 310,125 $ 413,375 $ 445,613 $ 594,838
Sales Expenses $ 146,188 $ 226,500 $ 388,900 $ 495,813 $ 520,850 $ 658,885 $ 710,085 $ 864,825
G&A Expenses $ 213,013 $ 221,013 $ 269,988 $ 277,988 $ 461,313 $ 469,638 $ 495,513 $ 503,538
Operating Exp. $ 717,013 $ 914,450 $1,255,200 $1,524,238 $ 1,916,925 $ 2,266,535 $ 2,458,998 $2,855,838

Operating Profit $(842,700) $(539,075) $ (142,600) $ 730,567 ### ### $ (896,547) $ (797,836)

Margins
Operating Profit % #DIV/0! -74% -8% 22% -70% -62% -35% -24%

Product Gross Margin % #DIV/0! 53% 62% 66% 52% 57% 60% 61%
Support Gross Margin % #DIV/0! 21% 73% 85% 68% 65% 70% 70%

P & L by Qtr Page 2

 P & L by Quarter Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Total Gross Margin % #DIV/0! 51% 62% 68% 55% 58% 62% 62%

P & L by Qtr Page 3

 P & L by Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4
Revenue
Product Revenue $3,632,000 $4,296,000 $6,020,000 $8,240,000 $ 9,072,000 $10,960,000 $12,080,000 $13,840,000
Support Revenue $ 659,430 $ 819,778 $1,049,689 $1,368,005 $ 1,707,845 $ 2,115,652 $ 2,553,470 $ 3,048,596
Total Revenue $4,291,430 $5,115,778 $7,069,689 $9,608,005 $10,779,845 $13,075,652 $14,633,470 $16,888,596

COGS
Product COGS $1,464,975 $1,738,275 $2,372,325 $3,098,988 $ 3,236,925 $ 3,656,125 $ 3,942,725 $ 4,369,713
Support COGS $ 210,072 $ 247,156 $ 301,804 $ 349,463 $ 445,668 $ 500,599 $ 571,697 $ 633,279
Total COGS $1,675,047 $1,985,431 $2,674,129 $3,448,450 $ 3,682,593 $ 4,156,724 $ 4,514,422 $ 5,002,991

Gross Margin
Product GM $2,167,025 $2,557,725 $3,647,675 $5,141,013 $ 5,835,075 $ 7,303,875 $ 8,137,275 $ 9,470,288
Support GM $ 449,357 $ 572,622 $ 747,886 $1,018,542 $ 1,262,177 $ 1,615,054 $ 1,981,773 $ 2,415,317
Total GM $2,616,382 $3,130,347 $4,395,561 $6,159,555 $ 7,097,252 $ 8,918,929 $10,119,048 $11,885,605

Expenses
Engineering $ 979,188 $1,128,125 $1,259,050 $1,425,463 $ 1,594,425 $ 1,883,500 $ 2,155,813 $ 2,406,125
Marketing $ 606,563 $ 785,600 $ 749,900 $ 931,100 $ 923,738 $ 1,181,313 $ 1,125,675 $ 1,334,225
Sales $ 916,460 $1,076,505 $1,297,975 $1,511,950 $ 1,848,785 $ 2,207,925 $ 2,568,150 $ 2,917,700
G&A $ 610,263 $ 620,488 $ 751,263 $ 761,188 $ 999,763 $ 1,066,888 $ 1,098,788 $ 1,230,863
Operating Exp. $3,112,473 $3,610,718 $4,058,188 $4,629,700 $ 5,366,710 $ 6,339,625 $ 6,948,425 $ 7,888,913

Operating Profit $ (496,090) $ (480,370) $ 337,373 $1,529,855 $ 1,730,542 $ 2,579,304 $ 3,170,623 $ 3,996,692

Margins
Operating Profit % -12% -9% 5% 16% 16% 20% 22% 24%

Product Gross Margin % 60% 60% 61% 62% 64% 67% 67% 68%
Support Gross Margin % 68% 70% 71% 74% 74% 76% 78% 79%

P & L by Qtr Page 4

 P & L by Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4
Total Gross Margin % 61% 61% 62% 64% 66% 68% 69% 70%

P & L by Qtr Page 5

 Sales Plan Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Unit Sales
Model 1 - 70 168 310 150 180 225 300
Model 2 - - - - 10 16 36 45
Model 3 - - - - - - - -
Total Units - 70 168 310 160 196 261 345

Sales Price
Model 1 $ 10,000 $ 10,000 $ 10,000 $ 7,500 $ 7,500 $ 7,500 $ 7,500
Model 2 $ 12,000 $ 12,000 $ 12,000 $ 12,000
Model 3

Product Revenue
Model 1 $ - $700,000 ### $3,100,000 $1,125,000 $1,350,000 $1,687,500 $2,250,000
Model 2 $ - $ - $ - $ - $ 120,000 $ 192,000 $ 432,000 $ 540,000
Model 3 $ - $ - $ - $ - $ - $ - $ - $ -
Total Product Revenue $ - $700,000 ### $3,100,000 $1,245,000 $1,542,000 $2,119,500 $2,790,000

Support Revenue
Total Installed Base $ - $700,000 ### $5,480,000 $6,725,000 $8,267,000 ### ###
Supported Base (retention) $ - $700,000 ### $5,327,750 $6,306,363 $7,533,044 $9,275,892 ###
Support Revenue $ - $ 31,500 $105,525 $ 239,749 $ 283,786 $ 338,987 $ 417,415 $ 522,094

Revenue
Sales Revenue $ - $700,000 ### $3,100,000 $1,245,000 $1,542,000 $2,119,500 $2,790,000
Support Revenue $ - $ 31,500 $105,525 $ 239,749 $ 283,786 $ 338,987 $ 417,415 $ 522,094

Sales Plan Page 6

 Sales Plan Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4
Unit Sales
Model 1 500 600 800 1,000 1,200 1,200 1,200 1,200
Model 2 60 60 90 160 240 320 400 500
Model 3 2 6 20 40 72 150 180 240
Total Units 562 666 910 1,200 1,512 1,670 1,780 1,940

Sales Price
Model 1 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000
Model 2 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000
Model 3 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000

Product Revenue
Model 1 $ 3,000,000 $ 3,600,000 $ 4,800,000 $ 6,000,000 $ 6,000,000 $ 6,000,000 $ 6,000,000 $ 6,000,000
Model 2 $ 600,000 $ 600,000 $ 900,000 $ 1,600,000 $ 1,920,000 $ 2,560,000 $ 3,200,000 $ 4,000,000
Model 3 $ 32,000 $ 96,000 $ 320,000 $ 640,000 $ 1,152,000 $ 2,400,000 $ 2,880,000 $ 3,840,000
Total Product Revenue $ 3,632,000 $ 4,296,000 $ 6,020,000 $ 8,240,000 $ 9,072,000 $10,960,000 $12,080,000 $13,840,000

Support Revenue
Total Installed Base $16,808,500 $21,104,500 $27,124,500 $35,364,500 $44,436,500 $55,396,500 $67,476,500 $81,316,500
Supported Base (retention) $14,653,993 $18,217,293 $23,326,428 $30,400,107 $37,952,102 $47,014,497 $56,743,772 $67,746,583
Support Revenue $ 659,430 $ 819,778 $ 1,049,689 $ 1,368,005 $ 1,707,845 $ 2,115,652 $ 2,553,470 $ 3,048,596

Revenue
Sales Revenue $ 3,632,000 $ 4,296,000 $ 6,020,000 $ 8,240,000 $ 9,072,000 $10,960,000 $12,080,000 $13,840,000
Support Revenue $ 659,430 $ 819,778 $ 1,049,689 $ 1,368,005 $ 1,707,845 $ 2,115,652 $ 2,553,470 $ 3,048,596

Sales Plan Page 7

Cost of Goods Sold Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Unit Sales
Model 1 Sales Plan 70 168 310 150 180 225 300
Model 2 Sales Plan 10 16 36 45
Model 3 Sales Plan
Total Units - 70 168 310 160 196 261 345

Total Installed Units - 70 238 548 708 904 1,165 1,510

Sales Price
Model 1 Sales Plan $0 $10,000 $10,000 $10,000 $8,000 $8,000 $8,000 $8,000
Model 2 Sales Plan $0 $0 $0 $0 $12,000 $12,000 $12,000 $12,000
Model 3 Sales Plan $0 $0 $0 $0 $0 $0 $0 $0

Product COGS Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Variable COGS per Unit
Model 1 $ - $ 3,000 $ 3,000 $ 2,750 $ 2,750 $ 2,500 $ 2,500 $ 2,500
Model 2 20.0% $ - $ - $ - $ - $ 2,400 $ 2,400 $ 2,400 $ 2,400
Model 3 17.5% $ - $ - $ - $ - $ - $ - $ - $ -

Variable COGS
Model 1 $ - $210,000 $504,000 $ 852,500 $ 412,500 $ 450,000 $ 562,500 $ 750,000
Model 2 $ - $ - $ - $ - $ 24,000 $ 38,400 $ 86,400 $ 108,000
Model 3 $ - $ - $ - $ - $ - $ - $ - $ -
Total Variable Costs $ - $210,000 $504,000 $ 852,500 $ 436,500 $ 488,400 $ 648,900 $ 858,000

Mfg Staffing Plan

VP Mfg 1 1 1 1 1 1 1 1
Supervisor (Tech/Mgr) 10 1 1 1 1 1 1 1 1
Technician (units/mth) 60 1 2 3 6 3 4 5 6
Purch/Admin - - - - 1 1 1 2
Total MFG Staff 3 4 5 8 6 7 8 10

Mfg Staffing Cost

$ 150,000 $ 43,125 $ 43,125 $ 43,125 $ 43,125 $ 43,875 $ 44,625 $ 45,375 $ 46,125
 $ 90,000 $ 25,875 $ 25,875 $ 25,875 $ 25,875 $ 26,325 $ 26,775 $ 27,225 $ 27,675
$ 65,000 $ 18,688 $ 37,375 $ 56,063 $ 112,125 $ 57,038 $ 77,350 $ 98,313 $ 119,925
$ 50,000 $ - $ - $ - $ - $ 14,625 $ 14,875 $ 15,125 $ 30,750
$ 87,688 $106,375 $125,063 $ 181,125 $ 141,863 $ 163,625 $ 186,038 $ 224,475

Product COGS
Salaries & Benefits from above $ 87,688 $106,375 $125,063 $ 181,125 $ 141,863 $ 163,625 $ 186,038 $ 224,475
Variable Costs from above $ - $210,000 $504,000 $ 852,500 $ 436,500 $ 488,400 $ 648,900 $ 858,000
Facilities $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000
Total Product COGS $102,688 $331,375 $644,063 ### $ 593,363 $ 667,025 $ 849,938 $1,097,475

Total Supported Base Sales Plan $0 $700,000 ### $5,327,750 $6,306,363 $7,533,044 $9,275,892 $11,602,098

Support COGS Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Support Staffing Plan
VP Support 1 1 1 1
Manager - - - - - - - -
Support Staff 1 1 1 1 1 2 2 3
Other/Admin - - - - 1 1 1 1
Total Support Staff 1 1 1 1 3 4 4 5

Support Staffing COGS

VP Support $ 135,000 $ - $ - $ - $ - $ 39,488 $ 40,163 $ 40,838 $ 41,513
Manager $ 100,000 $ - $ - $ - $ - $ - $ - $ - $ -
Support Staff $ 80,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,400 $ 47,600 $ 48,400 $ 73,800
Other/Admin $ 40,000 $ - $ - $ - $ - $ 11,700 $ 11,900 $ 12,100 $ 12,300
Total Support Staff $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 74,588 $ 99,663 $ 101,338 $ 127,613

Support COGS
Salaries & Benefits $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 74,588 $ 99,663 $ 101,338 $ 127,613
Warranty Costs per year 1.00% $ - $ 1,750 $ 5,863 $ 13,319 $ 15,766 $ 18,833 $ 23,190 $ 29,005
Other $ - $ - $ - $ - $ - $ - $ - $ -
Total Support COGS $ 23,000 $ 24,750 $ 28,863 $ 36,319 $ 90,353 $ 118,495 $ 124,527 $ 156,618

Cost of Goods Sold

Product COGS $102,688 $331,375 $644,063 $1,048,625 $593,363 $667,025 $849,938 $1,097,475
Support COGS $23,000 $24,750 $28,863 $36,319 $90,353 $118,495 $124,527 $156,618
Total COGS $125,688 $356,125 $672,925 ### $ 683,716 $ 785,520 $ 974,465 $1,254,093
 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

500 600 800 1,000 1,200 1,200 1,200 1,200

60 60 90 160 240 320 400 500
2 6 20 40 72 150 180 240
562 666 910 1,200 1,512 1,670 1,780 1,940

2,072 2,738 3,648 4,848 6,360 8,030 9,810 11,750

$6,000 $6,000 $6,000 $6,000 $5,000 $5,000 $5,000 $5,000

$10,000 $10,000 $10,000 $10,000 $8,000 $8,000 $8,000 $8,000
$16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

$ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 1,500 $ 1,500 $ 1,500 $ 1,500

$ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 1,600 $ 1,600 $ 1,600 $ 1,600
$ 2,800 $ 2,800 $ 2,800 $ 2,800 $ 2,800 $ 2,800 $ 2,800 $ 2,800

$1,000,000 $1,200,000 $1,600,000 $2,000,000 $1,800,000 $1,800,000 $1,800,000 $1,800,000

$ 120,000 $ 120,000 $ 180,000 $ 320,000 $ 384,000 $ 512,000 $ 640,000 $ 800,000
$ 5,600 $ 16,800 $ 56,000 $ 112,000 $ 201,600 $ 420,000 $ 504,000 $ 672,000
$1,125,600 $1,336,800 $1,836,000 $2,432,000 $2,385,600 $2,732,000 $2,944,000 $3,272,000

1 1 1 1 1 1 1 1
1 1 2 2 3 3 3 3
10 12 16 21 26 28 30 33
2 3 4 5 6 7 8 9
14 17 23 29 36 39 42 46

$ 46,875 $ 47,625 $ 48,375 $ 49,125 $ 49,875 $ 50,625 $ 51,375 $ 52,125

$ 28,125 $ 28,575 $ 58,050 $ 58,950 $ 89,775 $ 91,125 $ 92,475 $ 93,825
$ 203,125 $ 247,650 $ 335,400 $ 447,038 $ 561,925 $ 614,250 $ 667,875 $ 745,388
$ 31,250 $ 47,625 $ 64,500 $ 81,875 $ 99,750 $ 118,125 $ 137,000 $ 156,375
$ 309,375 $ 371,475 $ 506,325 $ 636,988 $ 801,325 $ 874,125 $ 948,725 $1,047,713

$ 309,375 $ 371,475 $ 506,325 $ 636,988 $ 801,325 $ 874,125 $ 948,725 $1,047,713

$1,125,600 $1,336,800 $1,836,000 $2,432,000 $2,385,600 $2,732,000 $2,944,000 $3,272,000
$ 30,000 $ 30,000 $ 30,000 $ 30,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
$1,464,975 $1,738,275 $2,372,325 $3,098,988 $3,236,925 $3,656,125 $3,942,725 $4,369,713

$14,653,993 $18,217,293 $23,326,428 $30,400,107 $37,952,102 $47,014,497 $56,743,772 $67,746,583

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

1 1 1 1 1 1 1 1
1 1 1 1 2 2 2 2
3 4 5 6 7 8 9 10
2 2 3 3 4 4 5 5
7 8 10 11 14 15 17 18

$ 42,188 $ 42,863 $ 43,538 $ 44,213 $ 44,888 $ 45,563 $ 46,238 $ 46,913

$ 31,250 $ 31,750 $ 32,250 $ 32,750 $ 66,500 $ 67,500 $ 68,500 $ 69,500
$ 75,000 $ 101,600 $ 129,000 $ 157,200 $ 186,200 $ 216,000 $ 246,600 $ 278,000
$ 25,000 $ 25,400 $ 38,700 $ 39,300 $ 53,200 $ 54,000 $ 68,500 $ 69,500
$ 173,438 $ 201,613 $ 243,488 $ 273,463 $ 350,788 $ 383,063 $ 429,838 $ 463,913

$ 173,438 $ 201,613 $ 243,488 $ 273,463 $ 350,788 $ 383,063 $ 429,838 $ 463,913

$ 36,635 $ 45,543 $ 58,316 $ 76,000 $ 94,880 $ 117,536 $ 141,859 $ 169,366
$ - $ - $ - $ - $ - $ - $ - $ -
$ 210,072 $ 247,156 $ 301,804 $ 349,463 $ 445,668 $ 500,599 $ 571,697 $ 633,279
 $1,464,975 $1,738,275 $2,372,325 $3,098,988 $3,236,925 $3,656,125 $3,942,725 $4,369,713
$210,072 $247,156 $301,804 $349,463 $445,668 $500,599 $571,697 $633,279
$1,675,047 $1,985,431 $2,674,129 $3,448,450 $3,682,593 $4,156,724 $4,514,422 $5,002,991
Staffing Plan Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

Engineering
CTO Input 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
VP Engineering Input 1 1 1 1 1 1 1 1 1 1 1 1
Project Manager Input 1 1 2 2 2 2 2 2 2 3 3 3 3 4 4 4
Programmer Input 4 6 8 10 12 14 16 18 20 22 24 27 30 35 40 45
Tech Writer Input - 1 1 2 2 3 3 3 3 3 4 4 4 4 5 5
Other Input - - - - - - - - - - - - - - - -
Total Eng 6 9 12 15 18 21 23 25 27 30 33 36 39 45 51 56

Marketing
VP Marketing Input 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Product Manager Input 1 1 1 1 2 2 3 3 4 4 5 5 6 6 7 7
Mar-Com Input - - 1 1 1 1 2 2 2 3 3 3 4 4 5 5
Other Input 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4
Total Mktg 3 3 4 4 6 6 8 8 10 11 12 12 15 15 17 17

Sales
VP Sales Input 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Regional Sales Input 1 2 4 5 6 8 8 10 10 12 14 16 20 24 28 32
Sales Support 1 for 1 1 2 4 5 6 8 8 10 10 12 14 16 20 24 28 32
Sales Admin Input 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8
Total Sales 4 6 11 13 16 20 21 25 26 30 35 39 48 56 65 73

General & Admin

CEO Input 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
VP Finance Input 1 1 1 1 1 1 1 1 1 1 1 1
Accounting Input 1 1 2 2 3 3 3 3 4 4 4 4 5 5 6 6
MIS Input 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4
HR/Other Input 1 1 2 2 3 3 4 4 5 5 6 6 8 10 12 14
Total G&A 4 4 6 6 10 10 11 11 14 14 15 15 19 21 24 26

TOTAL EMPLOYEES 17 22 33 38 50 57 63 69 77 85 95 102 121 137 157 172

Annual Rev/Emp (000) Calculated $0 $133 $216 $352 $122 $132 $161 $192 $223 $241 $298 $377 $356 $382 $373 $393

Staffing Plan Page 14

 Departmental Expenses Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Engineering
Salaries & Benefits Staffing Plan $184,000 $250,125 $ 334,938 $ 401,063 $ 501,638 $ 578,638 $ 639,788 $ 702,638
Tech Supplies (PP/PM) $ 2,000 input/formula $ 36,000 $ 54,000 $ 72,000 $ 90,000 $ 108,000 $ 126,000 $ 138,000 $ 150,000
Misc / Other input $ 5,000 $ 5,000 $ 10,000 $ 10,000 $ 15,000 $ 20,000 $ 30,000 $ 40,000
Total Engineering To P&L $225,000 $309,125 $ 416,938 $ 501,063 $ 624,638 $ 724,638 $ 807,788 $ 892,638

Marketing
Salaries & Benefits Staffing Plan $107,813 $107,813 $ 129,375 $ 129,375 $ 190,125 $ 193,375 $ 255,613 $ 259,838
Literature / PR input $ 5,000 $ 5,000 $ 10,000 $ 10,000 $ 20,000 $ 20,000 $ 40,000 $ 60,000
Trade Shows input $ - $ 25,000 $ - $ 50,000 $ - $ 75,000 $ - $ 100,000
Misc / Other input $ 20,000 $ 20,000 $ 40,000 $ 60,000 $ 100,000 $ 125,000 $ 150,000 $ 175,000
Total Marketing To P&L $132,813 $157,813 $ 179,375 $ 249,375 $ 310,125 $ 413,375 $ 445,613 $ 594,838

Sales
Salaries & Benefits Staffing Plan $122,188 $172,500 $ 287,500 $ 337,813 $ 409,500 $ 520,625 $ 544,500 $ 661,125
Travel (PP/PM) $ 3,000 input/formula $ 9,000 $ 18,000 $ 36,000 $ 45,000 $ 54,000 $ 72,000 $ 72,000 $ 90,000
Commission (% Rev) 3.00% input/formula $ - $ 21,000 $ 50,400 $ 93,000 $ 37,350 $ 46,260 $ 63,585 $ 83,700
Misc / Other input $ 15,000 $ 15,000 $ 15,000 $ 20,000 $ 20,000 $ 20,000 $ 30,000 $ 30,000
Total Sales To P&L $146,188 $226,500 $ 388,900 $ 495,813 $ 520,850 $ 658,885 $ 710,085 $ 864,825

General & Admin

Salaries & Benefits Staffing Plan $107,813 $107,813 $ 145,188 $ 145,188 $ 241,313 $ 245,438 $ 267,713 $ 272,138
Legal / Audit $ 30,000 $ 30,000 $ 30,000 $ 30,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
Rent See Below $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
Tel & Internet (PP/PM) $ 200 input/formula $ 10,200 $ 13,200 $ 19,800 $ 22,800 $ 30,000 $ 34,200 $ 37,800 $ 41,400
Misc / Other input $ 15,000 $ 20,000 $ 25,000 $ 30,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000
Total G&A To P&L $213,013 $221,013 $ 269,988 $ 277,988 $ 461,313 $ 469,638 $ 495,513 $ 503,538

Total Operating Expense $717,013 $914,450 $1,255,200 $1,524,238 $1,916,925 $2,266,535 $2,458,998 $2,855,838

Expenses Page 15
 Departmental Expenses Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4
Engineering
Salaries & Benefits $ 767,188 $ 873,125 $ 961,050 $1,059,463 $1,160,425 $1,363,500 $1,549,813 $1,720,125
Tech Supplies (PP/PM) $ 162,000 $ 180,000 $ 198,000 $ 216,000 $ 234,000 $ 270,000 $ 306,000 $ 336,000
Misc / Other $ 50,000 $ 75,000 $ 100,000 $ 150,000 $ 200,000 $ 250,000 $ 300,000 $ 350,000
Total Engineering $ 979,188 $1,128,125 $1,259,050 $1,425,463 $1,594,425 $1,883,500 $2,155,813 $2,406,125

Marketing
Salaries & Benefits $ 326,563 $ 355,600 $ 399,900 $ 406,100 $ 503,738 $ 511,313 $ 585,675 $ 594,225
Literature / PR $ 80,000 $ 80,000 $ 100,000 $ 100,000 $ 120,000 $ 120,000 $ 140,000 $ 140,000
Trade Shows $ - $ 125,000 $ - $ 150,000 $ - $ 200,000 $ - $ 250,000
Misc / Other $ 200,000 $ 225,000 $ 250,000 $ 275,000 $ 300,000 $ 350,000 $ 400,000 $ 350,000
Total Marketing $ 606,563 $ 785,600 $ 749,900 $ 931,100 $ 923,738 $1,181,313 $1,125,675 $1,334,225

Sales
Salaries & Benefits $ 687,500 $ 809,625 $ 951,375 $1,080,750 $1,346,625 $1,603,125 $1,883,750 $2,154,500
Travel (PP/PM) $ 90,000 $ 108,000 $ 126,000 $ 144,000 $ 180,000 $ 216,000 $ 252,000 $ 288,000
Commission (% Rev) $ 108,960 $ 128,880 $ 180,600 $ 247,200 $ 272,160 $ 328,800 $ 362,400 $ 415,200
Misc / Other $ 30,000 $ 30,000 $ 40,000 $ 40,000 $ 50,000 $ 60,000 $ 70,000 $ 60,000
Total Sales $ 916,460 $1,076,505 $1,297,975 $1,511,950 $1,848,785 $2,207,925 $2,568,150 $2,917,700

General & Admin

Salaries & Benefits $ 339,063 $ 344,488 $ 369,263 $ 374,988 $ 467,163 $ 514,688 $ 587,388 $ 637,663
Legal / Audit $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
Rent $ 100,000 $ 100,000 $ 200,000 $ 200,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000
Tel & Internet (PP/PM) $ 46,200 $ 51,000 $ 57,000 $ 61,200 $ 72,600 $ 82,200 $ 31,400 $ 103,200
Misc / Other $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 60,000 $ 70,000 $ 80,000 $ 90,000
Total G&A $ 610,263 $ 620,488 $ 751,263 $ 761,188 $ 999,763 $1,066,888 $1,098,788 $1,230,863

Total Operating Expense $3,112,473 $3,610,718 $4,058,188 $4,629,700 $5,366,710 $6,339,625 $6,948,425 $7,888,913

Expenses Page 16
 Source Beginning Q1 Q2 Q3
Balance Year 1 Year 1 Year 1
Assets
Current Assets
Cash $5,000,000 $4,127,556 $ 2,825,638 $ 1,544,694
Accts Receivable (days out) 90 $ - $ - $ 700,000 $ 1,680,000
Inventory (days sales) 45 $ - $ 51,344 $ 165,688 $ 322,031
Total Current Assets $5,000,000 $4,178,900 $ 3,691,325 $ 3,546,725

Long Term Assets

Computer Eq ($ PP) $ 3,000 $ - $ 51,000 $ 15,000 $ 33,000
Other Capital Equipment from below $ - $ 25,000 $ 50,000 $ 75,000
Total Long Term Assets $ - $ 76,000 $ 65,000 $ 108,000

TOTAL ASSETS $5,000,000 $4,254,900 $ 3,756,325 $ 3,654,725

Liabilities
Current Liabilities
Accounts Payable (days out) 45 $ - $ 97,600 $ 138,100 $ 179,100
Short Term Loans $ - $ - $ - $ -
Total Current Liabilities $ - $ 97,600 $ 138,100 $ 179,100

Long Term Liabilities

Long Term Loans $ - $ - $ - $ -
Total Long Term Liabilities $ - $ - $ - $ -

TOTAL LIABILITIES $ - $ 97,600 $ 138,100 $ 179,100

Equity & Retained Earnings

Shareholders Equity from below $5,000,000 $5,000,000 $ 5,000,000 $ 5,000,000
Retained Earnings $ - $ - $ - $ -
Current Earnings P&L $ - $ (842,700) ### ###
Total Current Liabilities $5,000,000 $4,157,300 $ 3,618,225 $ 3,475,625

TOTAL Equity & Liabilities $5,000,000 $4,254,900 $ 3,756,325 $ 3,654,725

$ - $ - $ -
INPUT
INVESTMENTS RECVD Input $5,000,000 $ - $ - $ -

Other Capital Equipment Input $ - $ 25,000 $ 25,000 $ 25,000

CASH FLOW NOTES

Total Assets MUST equal Total Liabilities Plus Shareholders Equity.
Any differences MUST be reflected in a change ot the cash balance
CASH is the plug number to get the formula to balance
Of course, this assumes that all your other balances are correct
 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Year 1 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3

$ 5,722,279 $ 6,693,831 $ 5,230,987 $ 3,629,946 $12,092,199 $10,480,388 $ 9,167,228

$ 3,100,000 $ 1,245,000 $ 1,542,000 $ 2,119,500 $ 2,790,000 $ 3,632,000 $ 4,296,000
$ 524,313 $ 296,681 $ 333,513 $ 424,969 $ 548,738 $ 732,488 $ 869,138
$ 9,346,592 $ 8,235,512 $ 7,106,499 $ 6,174,415 $15,430,936 $14,844,876 $14,332,366

$ 15,000 $ 36,000 $ 21,000 $ 18,000 $ 18,000 $ 24,000 $ 24,000

$ 100,000 $ 150,000 $ 200,000 $ 250,000 $ 300,000 $ 400,000 $ 550,000
$ 115,000 $ 186,000 $ 221,000 $ 268,000 $ 318,000 $ 424,000 $ 574,000

$ 9,461,592 $ 8,421,512 $ 7,327,499 $ 6,442,415 $15,748,936 $15,268,876 $14,906,366

$ 255,400 $ 287,175 $ 364,230 $ 375,693 $ 480,050 $ 496,080 $ 613,940

$ - $ - $ - $ - $ - $ - $ -
$ 255,400 $ 287,175 $ 364,230 $ 375,693 $ 480,050 $ 496,080 $ 613,940

$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -

$ 255,400 $ 287,175 $ 364,230 $ 375,693 $ 480,050 $ 496,080 $ 613,940

$10,000,000 $10,000,000 $10,000,000 $10,000,000 $20,000,000 $20,000,000 $20,000,000

$ - $ (793,808) $ (793,808) $ (793,808) $ (793,808) $(4,731,114) $(4,731,114)
$ (793,808) $(1,071,855) $(2,242,923) $(3,139,470) $(3,937,306) $ (496,090) $ (976,460)
$ 9,206,192 $ 8,134,337 $ 6,963,269 $ 6,066,722 $15,268,886 $14,772,796 $14,292,426

$ 9,461,592 $ 8,421,512 $ 7,327,499 $ 6,442,415 $15,748,936 $15,268,876 $14,906,366

$ - $ - $ - $ - $ - $ - $ -

$ 5,000,000 $ - $ - $ - $10,000,000 $ - $ -

$ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 100,000 $ 150,000

 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

$ 7,331,937 $ 6,203,360 $ 6,787,113 $ 7,106,937 $ 8,499,659 $10,158,158

$ 6,020,000 $ 8,240,000 $ 9,072,000 $10,960,000 $12,080,000 $13,840,000
$ 1,186,163 $ 1,549,494 $ 1,618,463 $ 1,828,063 $ 1,971,363 $ 2,184,856
$14,538,099 $15,992,854 $17,477,575 $19,894,999 $22,551,022 $26,183,014

$ 30,000 $ 21,000 $ 57,000 $ 48,000 $ 60,000 $ 45,000

$ 750,000 $ 1,000,000 $ 1,300,000 $ 1,700,000 $ 2,200,000 $ 2,800,000
$ 780,000 $ 1,021,000 $ 1,357,000 $ 1,748,000 $ 2,260,000 $ 2,845,000

$15,318,099 $17,013,854 $18,834,575 $21,642,999 $24,811,022 $29,028,014

$ 688,300 $ 854,200 $ 944,380 $ 1,173,500 $ 1,170,900 $ 1,391,200

$ - $ - $ - $ - $ - $ -
$ 688,300 $ 854,200 $ 944,380 $ 1,173,500 $ 1,170,900 $ 1,391,200

$ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ -

$ 688,300 $ 854,200 $ 944,380 $ 1,173,500 $ 1,170,900 $ 1,391,200

$20,000,000 $20,000,000 $20,000,000 $20,000,000 $20,000,000 $20,000,000

$(4,731,114) $(4,731,114) $(3,840,346) $(3,840,346) $(3,840,346) $(3,840,346)
$ (639,087) $ 890,767 $ 1,730,542 $ 4,309,845 $ 7,480,468 $11,477,161
$14,629,799 $16,159,654 $17,890,195 $20,469,499 $23,640,122 $27,636,814

$15,318,099 $17,013,854 $18,834,575 $21,642,999 $24,811,022 $29,028,014

$ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ -

$ 200,000 $ 250,000 $ 300,000 $ 400,000 $ 500,000 $ 600,000

 Statement of Cash Flows Beginning Q1 Q2 Q3 Q4 Q1 Q2 Q3
Balance Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2
OPERATIONS
Net Income $0 ($842,700) ($539,075) ($142,600) $730,567 ($1,071,855) ($1,171,068) ($896,547)
Change in A/R $0 $0 ($700,000) ($980,000) ($1,420,000) $1,855,000 ($297,000) ($577,500)
Change in A/P $0 $97,600 $40,500 $41,000 $76,300 $31,775 $77,055 $11,463
Change in Inventory $0 ($51,344) ($114,344) ($156,344) ($202,281) $227,631 ($36,831) ($91,456)
Cash from/to Operations $0 ($796,444) ($1,312,919) ($1,237,944) ($815,414) $1,042,552 ($1,427,844) ($1,554,041)

INVESTMENTS
Capital Expenses $0 ($76,000) $11,000 ($43,000) ($7,000) ($71,000) ($35,000) ($47,000)

Capex and Cash Flow Page 20

 Statement of Cash Flows Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Year 2 Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4
OPERATIONS
Net Income ($797,836) ($496,090) ($480,370) $337,373 $1,529,855 $1,730,542 $2,579,304 $3,170,623
Change in A/R ($670,500) ($842,000) ($664,000) ($1,724,000) ($2,220,000) ($832,000) ($1,888,000) ($1,120,000)
Change in A/P $104,358 $16,030 $117,860 $74,360 $165,900 $90,180 $229,120 ($2,600)
Change in Inventory ($123,769) ($183,750) ($136,650) ($317,025) ($363,331) ($68,969) ($209,600) ($143,300)
Cash from/to Operations ($1,487,747) ($1,505,810) ($1,163,160) ($1,629,292) ($887,577) $919,753 $710,824 $1,904,723

INVESTMENTS
Capital Expenses ($50,000) ($106,000) ($150,000) ($206,000) ($241,000) ($336,000) ($391,000) ($512,000)

Capex and Cash Flow Page 21

Assets as of xx/xx/xx
Current Assets
Cash $25,000
Accts Receivable $100,000
Inventory $50,000
Total Current Assets $175,000

Long Term Assets

Computer Equipment $100,000
Other Capital Equipment $125,000
Total Long Term Assets $225,000

TOTAL ASSETS $400,000

Liabilities
Current Liabilities
Accounts Payable $50,000
Short Term Loans $0
Total Current Liabilities $50,000

Long Term Liabilities

Long Term Loans $0
Total Long Term Liabilities $0

TOTAL LIABILITIES $50,000

Equity & Retained Earnings

Shareholders Equity $500,000
Retained Earnings $0
Current Earnings ($150,000)
Total Current Liabilities $350,000

TOTAL Equity & Liabilities $400,000