Abseiling Trade Magazine

Business Plan

Active, Inc.

212-222-2222

123 Anywhere

New York, NY, 10011

 Confidentiality Agreement

The undersigned reader of ACTIVES 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 ACTIVE.

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 ACTIVE.

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

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

__________________________________________________

Signature

__________________________________________________

Printed Name

Active | Business Plan Page 2

 Overview

Industrial Abseiling is the process of using workingmen to access tall structures for repair,
design, and other public or private services. The free, digital based Abseiling magazine will
be created and targeted for industrial purposes, selling advertisement space to industry
verticals. The following business plan outlines the business model and financial plan.

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 Table of Contents

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

Service Summary.................................................................................................................................. 6
Market Summary ................................................................................................................................. 6
Three Year Objectives........................................................................................................................... 6
Keys to Success .................................................................................................................................... 7
Mission Statement ............................................................................................................................... 7
Financing Summary .............................................................................................................................. 7

Products & Services ............................................................................................................... 8

Product Description.............................................................................................................................. 8

Industry Overview ................................................................................................................. 8

Market Needs ...................................................................................................................................... 9
Market Trends ..................................................................................................................................... 9
Market Segmentation........................................................................................................................... 9
Competitive Analysis ............................................................................................................................ 9

Strategy & Implementation Summary .................................................................................. 11

Management Team ............................................................................................................................ 12
SWOT Analysis ................................................................................................................................... 14

Marketing Plan .................................................................................................................... 15

Financial Forecasts .............................................................................................................. 16
Use of Funds ...................................................................................................................................... 16
Financial Highlights ............................................................................................................................ 17
Financial Indicators ............................................................................................................................ 18
Revenue Forecast ............................................................................................................................... 19
Projected Profit and Loss .................................................................................................................... 20
Projected Cash Flow ........................................................................................................................... 21
Projected Balance Sheet ..................................................................................................................... 22
Sensitivity Analysis ............................................................................................................................. 24

Appendix............................................................................................................................. 26

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 Table of Figures

Figure 1: Organizational Chart .................................................................................................................... 12

Figure 2: Post-Financing Expenses .............................................................................................................. 16
Figure 3: Financial Highlights ...................................................................................................................... 17
Figure 4: Financial Indicators ...................................................................................................................... 18
Figure 5: Revenue Forecast ......................................................................................................................... 19
Figure 6: Profit & Loss ................................................................................................................................. 20
Figure 7: Cash Flow ..................................................................................................................................... 21
Figure 8: Wages & Payroll ........................................................................................................................... 22
Figure 9: Balance Sheet............................................................................................................................... 23
Figure 10: Scenario Analysis........................................................................................................................ 24
Figure 11: Break-Even Analysis ................................................................................................................... 25
Figure 12: 12 Month Profit & Loss .............................................................................................................. 26
Figure 13: 12 Month Cash Flow Statement ................................................................................................ 27

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Executive Summary

Abseiling is the controlled descent of a vertical drop, such as a rock face or building, using a rope. The
application for industrial purposes is often used to reach high levels with a flat surface that require
attention to detail. This is applied for window cleaning, building repair, advertisement placement, and
construction. The magazine will be tailored to this industry and provide placement space for companies
that tailor products and services to this industry.

Service Summary

A new industry magazine will be downloadable every month, in addition to a blog and video content. The
magazine includes industry events, general news and information that impact the industry, new
technologies and techniques and other relevant information. It will be based on the general company
website with access to other media and other industry related information. Membership is free for
subscribers, but advertising space will be charged at a premium compared to standard magazines ranging
from $3,500 - $6,500.

Market Summary

The primary market is trade and other industry professionals that seek to learn more about the industry.
The prospective market is estimated to be at least 70,000 based on subscribers to industry related
memberships. This constitutes an estimated 20.0% of the total potential reader base, totaling 350,000.
We have assigned each reader an annual value attributed to $120 using a comparable readership
distribution and advertising revenue per user from comparable competitors, creating a potential $42.0 M
industry. The market is mature and expected to continue with stability, but without substantial growth.

Three Year Objectives

The magazine has the following objectives:

Acquire a reader base of at least 20,000 within the first 12 months.

Consistently find, publish, and promote relevant industry information.
Develop a strategic partnership with relevant industry organizations.
Grow revenue by expanding publication size and expanding into new verticals.
Hire and manage a sales team to promote advertisement placement.

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Keys to Success

The magazine has the following keys to success:

Ensuring that content is produced in a manner that is enticing to visitors.

The website provides stable access and its servers are capable of managing excessive use.
The trade professionals are receptive to a new publication in the market.
Advertisers see the value in getting direct exposure to their target market.

Mission Statement

The mission of the magazine is to provide industry trade professionals access to the latest market
information, tips, and techniques that help them perform better in the market. It does this by delivering
a monthly publication that contains relevant industry information, events, and strategies designed to be
value added and entertaining.

Financing Summary

The company has accounted for a total investment of $60,000 that will be directly invested into the company.
Half of the investment will be used to cover start-up related expenses and legal fees, the remainder will be
reserved for future operating expenses during the start-up period with low revenue.

Post Financing Expenses Post Financing Liabilities

Legal & Professional $1,100 Liabilities and Capital
Company Registration $3,300 Current Borrowing $0
Utilities $250 Long-Term Liabilities $0
Other Startup Expenses $25,000 Accounts Payable $0
Cash on Hand $30,350 Other Current Liabilities $0
Total Startup Expenses $60,000
Post Financing Investments
Total Requirements Planned Investment
Total Startup Expenses $60,000 Owner $60,000
Total Startup Assets - Investor -
Total Requirements $60,000 Total Planned Investment $60,000
Post Financing Funding
Total Liabilities $0
Total Planned Investment 60,000
Total Funding $60,000

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Products & Services

Product Description

The company will consist of a website with on-site advertisements that create continual ads from the blog
and video, in addition to downloading the monthly magazine. The advertisements space is the primary
product that the company is selling, which may be provided in PPC/PPM form on the company website
and sold directly to other firms. By selling advertisement space directly like LinkedIn, as opposed to most
small blogs on the Google AdSense network, the company will generate 10 20x more money than most
blogs because the revenue per click is 10 20x higher.

The advertisements sold provide a very wide distribution of prices that enable it to be an attractive option
for any advertiser. The PPC digital ads on the blog will be prices at a lower amount and enable us to
digitally track their performance with a back-end integration system. The digital advertisements will be
synchronized with outside websites to enable performance tracking, which will make the ads a greater
return on investment.

Industry Overview

Advertising spending in the United States is expected to increase by 4.9 percent to almost 166 billion U.S.
dollars in 2012, compared to 158.3 in 2011, according to eMarketer. Television will continue collecting
the largest part of the expenditure but online advertising is catching up and is projected to record the
highest growth rate among all media 16.6 percent. The table below has been derived from Statista, the
study was based on the total estimated value of the advertising industry by channel in the United States.

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Market Needs

The main market need is for niche distributors to get access to relevant trade professionals. The current
process does not enable them to have the same channels to target the consumer market. However, it
targets channels in other areas that are more expensive, such as B2B sales and lead generation. Therefore,
the market is in need of an advertising source that is effective and inexpensive.

Market Trends

The market for digital advertisements continues to decline, but the overall demand for trade publications
is increasing within it. Niche trade publications continue to be accessed relative to the industry size. As
the market continues to grow, the trade publication market will increase. The overall market for Abseiling
is growing, but the market is in a mature state.

Market Segmentation

The market segment is specifically geared towards companies that seek to establish themselves in the
market. This will include suppliers for industry related products, training and development events,
industry membership program promotion and a variety of other activities. The segment is tailored around
middle market companies and large enterprises that can afford the additional coverage.

Competitive Analysis

There are several similar magazines already competing in the market that have been analyzed in order to
determine their revenue estimations, magazine structure, and business page. Because all of the companies are
private, assumptions must be determined based on such factors as age of URL, website traffic, average trade
magazine advertisement rates, and assume their business model is not an outlier. All website traffic estimation
was applied using SEM Rush, a search engine performance analysis tool. The companys age has been
forecasted based upon the achieve data available on its website compared with domain registration records
to determine the age of the domain.

Windows Cleaning Magazine (http://www.windowcleaningmagazine.co.uk/) (Age: 4 Years): This website

receives an estimated 401 visitors per month from organic search traffic from the United Kingdom and 10 15
per month from the United States. These organic visitations are estimated to account for 20% of web traffic to
generate an estimated 2,000 monthly website views. The company offers free .PDF or software based access

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to its monthly magazines with approximately 12 15 advertisements per 28-page publication that are half-
page full color at an estimated range of $1,200 - $3,000 totaling $23,000 in monthly estimated magazine
revenue.

KHL (http://www.khl.com/) (Age: 18 Years 10 Months): This company provides trade magazines specializing
in the global construction industry, but providing a total of 25 trade magazines and newsletters in the related
industry. It generates an estimated 950 visitors per month, with a total estimated site traffic of 4,750 per
month, including SEO and recurring visitations. However, according to its website, the company receives
63,899 total views per month with 25,000 newsletters being distributed weekly. The rates for advertisement
placement in KHL related materials range, but are available in a media kit accessible here. The combined
advertisements across the newsletter, blog, and magazines are estimated to generate approximately $204,000
in revenue per month.

The American Window Cleaner Magazine (http://www.awcmag.com/) (Age: 16 Years 10 Months): Unlike
Windows Cleaning Magazine in the UK, this company generates most of its website views from visitors in the
United States and receives an estimated 80 views per month from organic traffic, or 400 views per month in
total. The companys advertisement rates range from 1/9 page add as low as $250 for less than two to $1,625
for a full page advertisement in color. The actual magazine on the website was not found to be accessible, as
the company sells current and archived magazines for $15.00 per publication. It is likely that given this company
in unsustainable on advertisement revenue, that it is not very profitable.

Rock and Ice (http://www.rockandice.com/) (Age: 18 Years 10 Months): This company receives an estimated
68,000 monthly website visitors. With the exception of the classifieds, which are entirely comprised of
advertisements, approximately half of the sixty-eight-page publication is comprised of full-page, full-color
advertisements. The remainder of the pages typically (at least 50%) have at least one 1/6 full-color
advertisement. The company also has a full-content website available for climbing enthusiasts, from which it
is also forecasted to generate a substantial amount of revenue. This company only have magazines available
for digital viewing using Issue, a website that supports free magazine publication on its website and the site of
third-parties. Because some advertisements are for products that the company sells on-site, it is difficult to
determine actual advertising revenue if it were exclusively being sold by a third-party. However, the estimate
based on current advertisements and comparable industry prices is approximately $380,00 in revenue per
month.

DPM Climbing (http://www.dpmclimbing.com/issues) (Age 4 Years 8 Months): This website is predominately

a retailer for rock climbing related products and accessories. However, it does publish a 40 58-page quarterly
magazine that is mostly comprised of high quality rock climbing photos and advertisements. Approximately
75% of the content in this magazine is dedicated advertising space, most of which the company features for
sale on its website. The site does not actually generate substantial enough traffic to determine the amount of

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its visitors, but it is estimated to be below 3,000 views per month. The company is using a flash based content
magazine viewing software and its quarterly publications are unavailable for download. Given that the
magazines are a non-core function of this website, and it has little traffic, it is estimate to generate
approximately $85,000 in revenue per quarter.

Strategy & Implementation Summary

The strategy of the magazine will take place in three phases consisting of the initial launch, the acquisition
of users, and the retention of members. Keeping a strong membership base will be the primary focus of
the company. With a strong value proposition, the price per advertisement slot will rapidly increase and
become more in demand. Creating great content will attract new members with less promotion,
therefore, making their lifetime value higher and making the company more scalable.

Phase I Magazine Launch

The product launch is designed to create an immediate awareness in the market, which will alert the
market of its entry through authoritative sources. This will associate future promotions with brand recall
and build trust with the brand before they interact with it in other areas.

Public Relations: The public relations segment will target all media channels through the use of news
publication sources. This will focus on other relevant trade publications and industry membership
programs.

E-mail Lists: E-mail lists of industry members will be acquired and send a free subscription to the trade
publication directly to their e-mail. This will take place after the public relations, so that the industry is
aware of the company before they receive an e-mail of it.

Phase II Product Growth

Direct Advertising: The direct advertising channel will include promotion in other relevant trade
publications that readers in the same industry may enjoy. This will help to get the same exposure to a
targeted audience that the company seeks to acquire.

Strategic Partnerships: The magazine will work to establish strong relationships with the industry trade
publications and non-competing companies in the same industry. This will provide the company the
opportunity to get rapid exposure to the new market without considerable effort

Phase III User Retention

Customer Relationship Management (CRM): The CRM component is designed that users consistently
stay engaged when downloading the magazine. It is important that users are retained as the niche market
will require strong customer loyalty to succeed. Customer relationship management is a key way that the
company will grow as it captures new customers.

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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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Organizational Chart

Adrian
Board/Investors
Wilcourt/Legal

John Doe/CEO

Susan Kevin
Miller/COO Jones/CFO

Marketing
Sales Director Accounting
Director

Sales Reps Collections

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SWOT Analysis

Strengths

Existing company that may lend resources for the development promotion of content.
Management team with a background in the magazine publication sector.
Void in the market for industrial niche, only available for windows.
Highly loyal and easily targeted customer base lowering customer acquisition cost.

Weaknesses
The magazine still needs to be drafted for publication.
There is no definite probability that the magazine will be adopted.
The magazine has a limited market base compared to general trade publications.
The start-up capital is relatively low, requiring a bootstrap operation.

Opportunities
There magazine has the potential to be the leader within its niche.
There are many locations that the magazine may scale into.
There is the potential for the magazine to increase in size and placement price.
The costs are low to manage companies, resulting in high industry profit margins.

Threats
It would be relatively easy for competitors to add competing magazines.
The market is at risk for overall decline in the magazine publishing industry.
The cost to entry is relatively low, encouraging others to enter as they see profitability.

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Marketing Plan

The marketing plan takes place in three phases for the initial launch, the company growth and its ongoing
performance. This will be a dissemination of targeted promotional activities and events that will increase
the demand and user retention at various stages. The first stage is the initial product launch, in which
attention will be focused around attracting users in various stages of the companys performance. The
second stage is the mass marketing for the company that enables disseminated message through paid
promotions. Finally, the company will focus on promotions and techniques to retain new users.

Phase I Magazine Launch

The product launch is designed to create an immediate awareness in the market, which will alert the
market of its entry through authoritative sources. This will associate future promotions with brand recall
and build trust with the brand before they interact with it in other areas.

Public Relations: The public relations segment will target all media channels through the use of news
publication sources. This will focus on other relevant trade publications and industry membership
programs.

E-mail Lists: E-mail lists of industry members will be acquired and send a free subscription to the trade
publication directly to their e-mail. This will take place after the public relations, so that the industry is
aware of the company before they receive an e-mail of it.

Phase II Product Growth

Direct Advertising: The direct advertising channel will include promotion in other relevant trade
publications that readers in the same industry may enjoy. This will help to get the same exposure to a
targeted audience that the company seeks to acquire.

Strategic Partnerships: The magazine will work to establish strong relationships with the industry trade
publications and non-competing companies in the same industry. This will provide the company the
opportunity to get rapid exposure to the new market without considerable effort.

Phase III User Retention

Customer Relationship Management (CRM): The CRM component is designed that users consistently stay
engaged when downloading the magazine. It is important that users are retained as the niche market will
require strong customer loyalty to succeed. Customer relationship management is a key way that the
company will grow as it captures new customers.

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Financial Forecasts

Use of Funds

The company has allocated $60,000 in start-up capital, some of which will be reserved to finance monthly
expenditures during the initial user acquisition. While the first magazine is being developed, a start-up period
will also be initiated where pre-registered users are notified about the release of the magazine so that the first
publication may immediately generate downloads and acquire data for advertising sales.

Post Financing Expenses Post Financing Liabilities

Legal & Professional $1,100 Liabilities and Capital
Company Registration $3,300 Current Borrowing $0
Utilities $250 Long-Term Liabilities $0
Other Startup Expenses $25,000 Accounts Payable $0
Cash on Hand $30,350 Other Current Liabilities $0
Total Startup Expenses $60,000
Post Financing Investments
Total Requirements Planned Investment
Total Startup Expenses $60,000 Owner $60,000
Total Startup Assets - Investor -
Total Requirements $60,000 Total Planned Investment $60,000
Post Financing Funding
Total Liabilities $0
Total Planned Investment 60,000
Total Funding $60,000

Startup Expenses
$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0
Legal & Professional Company Registration Utilities Other Startup Expenses

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 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
Revenue 17 21 25 30 36 43 52 62 74 89 89 98 635 1080 1500
Gross Margin 17 20 24 29 35 42 50 60 72 86 86 95 616 1048 1455
Operating Expense 10 10 10 10 10 10 10 10 10 10 10 10 117 374 524
EBITDA (11) (8) (4) 1 7 14 22 32 44 59 59 68 283 458 716
Net Profit (11) (8) (4) 1 7 14 18 26 35 47 47 54 227 362 556

Gross Margin/Revenue 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97%
EBITDA/Revenue -64% -37% -15% 4% 20% 32% 43% 52% 60% 66% 66% 69% 45% 42% 48%
Net Profit/Revenue -64% -37% -15% 4% 20% 32% 35% 42% 48% 53% 53% 55% 36% 34% 37%

Net Cash Flow (11) (7) (3) 2 8 15 24 34 27 61 61 33 244 283 446

Cash Balance - Ending 20 13 10 12 20 35 59 92 119 180 241 274 274 827 1273

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

1600 1600
1400 1400
1200 Revenue 1200
1000 1000
800 Gross Margin 800
600 600
400 EBITDA 400
200 200
0 Net Profit 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
1400 600

1200 500
1000
400
800
Net Cash Flow 300
600
200
400

200 100
Cash Balance
0 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

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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 97% 97% 97%
Net Profit Margin 36% 34% 37%
EBITDA to Revenue 45% 42% 48%
Return on Assets 75% 42% 43%
Return on Equity 79% 67% 59%

Financial Ratios
7%

6%

5%

4%

3%

2%

1%

0%
Year 1 Year 2 Year 3

Gross Margin Net Profit Margin EBITDA to Revenue

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Revenue Forecast

Revenue Forecast
Year 1 Year 2 Year 3
Revenue Forecast
Advertising Sales $ 635,030 $ 1,080,000 $ 1,500,000
Total Revenue $ 635,030 $ 1,080,000 $ 1,500,000

Direct Cost of Revenue

General COGS $ 19,051 $ 32,400 $ 45,000
Other $ - $ - $ -
Subtotal Cost of Revenue $ 19,051 $ 32,400 $ 45,000

Revenue By Year
1600
1400
1200
1000
800
600
400
200
0
Year 1 Year 2 Year 3

Chart Title
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

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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
Revenue $ 635,030 $ 1,080,000 $ 1,500,000
Subtotal Cost of Revenue $ 19,051 $ 32,400 $ 45,000
Total Cost of Revenue $ 19,051 $ 32,400 $ 45,000

Gross Margin $ 615,979 $ 1,047,600 $ 1,455,000

Gross Margin/Revenue 97% 97% 97%

Expenses
Rental Fees $ 41,600 $ 39,600 $ 55,440
Bank Fees/Money Transfer Fees $ 27,600 $ 120 $ 168
Superannuation 9.5% $ 19,200 $ 319,200 $ 446,880
Website Hosting/Admin $ 600 $ 180 $ 252
Accounting/Legal $ 9,000 $ 1,200 $ 1,680
Transportation $ 1,200 $ 11,880 $ 16,632
Other SG&A $ 18,000 $ 1,800 $ 2,520
Total Operating Expenses $ 117,200 $ 373,980 $ 523,572
Wages & Payroll $ 215,300 $ 215,300 $ 215,300
Depreciation, Amortization & Taxes $ 56,696 $ 96,290 $ 160,498
Net Income $ 226,783 $ 362,030 $ 555,630
Net Income/Revenue 36% 34% 37%

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Projected Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Beginning Cash Balance $ 30,350 $ 274,279 $ 827,347
Cash Inflows
Income from Sales $ 635,030 $ 1,080,000 $ 1,500,000
Accounts Receivable $ - $ - $ -
Total Cash Inflows $ 635,030 $ 1,080,000 $ 1,500,000

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ -
Cost of Sales $ 19,051 $ 32,400 $ 45,000

Operating Activities
Salaries and Wages $ 215,300 $ 215,300 $ 215,300
Fixed Business Expenses $ 117,200 $ 373,980 $ 523,572
Taxes $ 56,696 $ 90,507 $ 138,908

Financing Activities
Loan Payments $ - $ - $ -
Line of Credit Interest $ - $ 5,783 $ 21,590
Line of Credit Repayments $ - $ - $ -
Dividends Paid $ - $ - $ 150,000.00

Total Cash Outflows $ 391,100.91 $ 796,810.13 $ 1,053,869.77

Cash Flow $ 243,929.09 $ 283,189.87 $ 446,130.23
Operating Cash Balance $ 274,279.09 $ 827,346.68 $ 1,273,476.91
Ending Cash Balance $ 274,279.09 $ 827,346.68 $ 1,273,476.91

Year 1 Cash
3,000,000

2,500,000 Net Cash Flows

2,000,000

1,500,000

1,000,000

500,000
Cash Balance

-
Month Month Month Month Month Month Month Month Month Month Month Month
(500,000) 1 2 3 4 5 6 7 8 9 10 11 12

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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
Assets
Current Assets
Cash $ 274,279 $ 827,347 $ 1,273,477
Other Current Assets $ 29,650 $ 29,650 $ 29,650
Total Current Assets $ 303,929 $ 856,997 $ 1,303,127

Long-term Assets
Long-term Assets $ - $ - $ -
Accumulated Depreciation $ - $ - $ -
Total Long-term Assets $ - $ - $ -
Total Assets $ 303,929 $ 856,996 $ 1,303,126

Liabilities and Capital

Current Liabilities
Accounts Payable $ 17,146 $ 46,306 $ 86,806
Current Borowing $ - $ - $ -
Other Current Liabilities $ - $ 269,878 $ 269,878
Subtotal Current Liabilities $ 17,146 $ 316,184 $ 356,684

Long-term Liabilities $ 17,146 $ 316,184 $ 356,684

Total Liabilities $ 17,146 $ 316,184 $ 356,684

Common Stock $ 60,000 $ 60,000 $ 60,000

Retained Earnings $ 226,783 $ 588,813 $ 1,144,443
Total Capital $ 286,783 $ 540,813 $ 946,443
Total Liabilities and Capital $ 303,929 $ 856,996 $ 1,303,126

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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

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Sensitivity Analysis

Best Case Scenario (Revenue Increase by 15%)

Year 1 Year 2 Year 3
Revenue $ 730,285 $ 1,242,000 $ 1,725,000
Cost of Goods Sold $ 21,909 $ 37,260 $ 51,750
Gross Margin $ 708,376 $ 1,204,740 $ 1,673,250
Gross Margin/Revenue 97% 97% 97%
Operating Expenses $ 117,200 $ 373,980 $ 523,572
EBIT $ 591,176 $ 830,760 $ 1,149,678
EBIT/Revenue 81% 67% 67%

Worst Case Scenario (Revenue Decrease by 15%)

Year 1 Year 2 Year 3
Revenue $ 539,776 $ 918,000 $ 1,275,000
Cost of Goods Sold $ 16,193 $ 27,540 $ 38,250
Gross Margin $ 523,582 $ 890,460 $ 1,236,750
Gross Margin Revenue 97% 97% 97%
Operating Expenses $ 117,200 $ 373,980 $ 523,572
EBIT $ 406,382 $ 516,480 $ 713,178
EBIT/Revenue 75% 56% 56%

Revenue
$90,000,000

$80,000,000
Best Case
$70,000,000

$60,000,000

Most Likely
$50,000,000

$40,000,000

$30,000,000 Worst Case

$20,000,000

$10,000,000

$-
Year 1 Year 2 Year 3

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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

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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
Revenue $ 17,250 $ 20,700 $ 24,840 $ 29,808 $ 35,770 $ 42,924 $ 51,508 $ 61,840 $ 74,172 $ 89,006 $ 89,006 $ 98,206
Subtotal Cost of Revenue $ 518 $ 621 $ 745 $ 894 $ 1,073 $ 1,288 $ 1,545 $ 1,855 $ 2,225 $ 2,670 $ 2,670 $ 2,946
Total Cost of Revenue $ 518 $ 621 $ 745 $ 894 $ 1,073 $ 1,288 $ 1,545 $ 1,855 $ 2,225 $ 2,670 $ 2,670 $ 2,946

Gross Margin $ 16,733 $ 20,079 $ 24,095 $ 28,914 $ 34,697 $ 41,636 $ 49,963 $ 59,985 $ 71,947 $ 86,336 $ 86,336 $ 95,260
Gross Margin/Revenue 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97%

Expenses
Rental Fees $ 3,467 $ 3,467 $ 3,467 $ 3,467 $ 3,467 $ 3,467 $ 3,467 $ 3,467 $ 3,467 $ 3,467 $ 3,467 $ 3,467
Bank Fees/Money Transfer Fees $ 2,300 $ 2,300 $ 2,300 $ 2,300 $ 2,300 $ 2,300 $ 2,300 $ 2,300 $ 2,300 $ 2,300 $ 2,300 $ 2,300
Superannuation 9.5% $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600
Website Hosting/Admin $ 50 $ 50 $ 50 $ 50 $ 50 $ 50 $ 50 $ 50 $ 50 $ 50 $ 50 $ 50
Accounting/Legal $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750
Transportation $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100
Other SG&A $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500
Total Operating Expenses $ 9,767 $ 9,767 $ 9,767 $ 9,767 $ 9,767 $ 9,767 $ 9,767 $ 9,767 $ 9,767 $ 9,767 $ 9,767 $ 9,767
Wages & Payroll $ 17,942 $ 17,942 $ 17,942 $ 17,942 $ 17,942 $ 17,942 $ 17,942 $ 17,942 $ 17,942 $ 17,942 $ 17,942 $ 17,942
EBITDA $ (10,976) $ (7,629) $ (3,614) $ 1,205 $ 6,989 $ 13,928 $ 22,254 $ 32,276 $ 44,239 $ 58,627 $ 58,627 $ 67,551
EBITDA/Revenue -64% -37% -15% 4% 20% 32% 43% 52% 60% 66% 66% 69%

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 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
$ 17,250.0 $ 20,700.0 $ 24,840.0 $ 29,808.0 $ 35,770.0 $ 42,924.0 $ 51,508.0 $ 61,840.0 $ 74,172.0 $ 89,006.0 $ 89,006.0 $ 98,206.0
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Other Current Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 17,250.0 $ 20,700.0 $ 24,840.0 $ 29,808.0 $ 35,770.0 $ 42,924.0 $ 51,508.0 $ 61,840.0 $ 74,172.0 $ 89,006.0 $ 89,006.0 $ 98,206.0

Expenditures

Expenditures from Operations

$ 27,760.1 $ 27,770.4 $ 27,782.9 $ 27,797.8 $ 27,815.6 $ 27,837.1 $ 27,862.9 $ 27,893.9 $ 47,665.4 $ 27,975.4 $ 27,975.4 $ 64,964.2
Subtotal Spent on Operations
$ 27,760.1 $ 27,770.4 $ 27,782.9 $ 27,797.8 $ 27,815.6 $ 27,837.1 $ 27,862.9 $ 27,893.9 $ 47,665.4 $ 27,975.4 $ 27,975.4 $ 64,964.2

Additional Cash Spent

Current Borrowing Repay

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 27,760.1 $ 27,770.4 $ 27,782.9 $ 27,797.8 $ 27,815.6 $ 27,837.1 $ 27,862.9 $ 27,893.9 $ 47,665.4 $ 27,975.4 $ 27,975.4 $ 64,964.2

Net Cash Flow

$ (10,510.1) $ (7,070.4) $ (2,942.9) $ 2,010.2 $ 7,954.4 $ 15,086.9 $ 23,645.1 $ 33,946.1 $ 26,506.6 $ 61,030.6 $ 61,030.6 $ 33,241.8
Cash Balance
$ 19,839.9 $ 12,769.5 $ 9,826.6 $ 11,836.9 $ 19,791.2 $ 34,878.1 $ 58,523.3 $ 92,469.4 $ 118,976.0 $ 180,006.7 $ 241,037.3 $ 274,279.1

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