Executive Summary

Gaming Futures, LLC, provides Windows® application development/support,

PlayStation2® development, XBox® development, 2D and 3D art and visual effects, and
project guidance. Gaming Futures is a game development studio formed by veterans of
Modicum On-Line and Axiomatic InterRational. As developers of the best-selling and
critically acclaimed "DreæmWhyrks" series, Gaming Futures' talented core team
members have produced five titles together, and have individual experience with dozens
more. Gaming Futures is committed to creating high-quality, innovative, successful
games and software.

We offer the following:

 Game concepts and development for PC, PS2®, XBox®, Pocket PC®.

 Game platform ports: PC/PS2/XBox/Game Boy®.

 2D and 3D art, programming, libraries to spec.

 Interface design and software enhancement.

 Cohesive, talented development team with years of experience shipping products

together.

 Proven track record: DreæmWhyrks series has over 3 million units sold to date.

 On time and on budget shipping.

The company is forming out of the ashes of Axiomatic InterRational which shut down
last June. Gaming Futures is the core group of the last DreæmWhyrks project at
Axiomatic. The DreæmWhyrks line has shipped over 3 million units. The production
team has four years of successful product development as a team. Individually, the group
has over 30 years of experience and has contributed to over 40 software products.
Bill Kerl, Project Manager for Gaming Futures, believes the company is well positioned
to be a valuable resource to gaming companies that are seeking cost-effective ways to
implement a gaming design mission that will meet projected completion dates. One of the
greatest obstacles is the ability of the production team to perform without wasted effort
and resources. Gaming Futures has a documented history of completing its projects under
budget and on time.

Currently, the company has been successful in acquiring three contracts with the
following companies:

 Clear Mountain Productions

 Weaver Farm, Inc.

Note: Windows®, PlayStation2®, PS2®, Xbox®, Pocket PC® , and Game Boy® are registered
trademarks of their respective corporations.

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1.1 Objectives

Gaming Futures' objectives are as follows:

 Achieve sales goal of $200,000 during first year of operation.

 Achieve a customer base of 40 companies.

 Increase sales by 15% during the second year of operation.

1.2 Mission

The mission of Gaming Futures is to provide the highest quality service through the
development of innovative, exciting products to the interactive entertainment industry.

Company Summary
Gaming Futures, LLC, is a game development studio providing Windows application
development/support, PS2 development, XBox development, 2D and 3D art and visual
effects, and project guidance. The company will be organized as a Limited Liability
Corporation.

2.1 Company Ownership

Gaming Futures, LLC is owned by its team of developers:

 Bill Kerl

 Diane Huber

 Marcus Hathcock

 Jillian Daley

 Jeremy Lang
2.2 Company Locations and Facilities

Gaming Futures is located in a 3,000 square foot office space in the Northwest Industrial
Park in northwest Madison.

2.3 Start-up Summary

The start-up expense for the Gaming Futures is focused primarily on equipment and
office space. William, Diane, Marcus, Jillian, and Jeremy will each invest $35,000. In
addition, Gaming Futures will secure a $100,000 long term loan.

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START-UP FUNDING
Start-up Expenses to Fund $124,300

Start-up Assets to Fund $150,700

TOTAL FUNDING REQUIRED $275,000

Assets

Non-cash Assets from Start-up $90,000

Cash Requirements from Start-up $60,700

Additional Cash Raised $0

Cash Balance on Starting Date $60,700

TOTAL ASSETS $150,700

Liabilities and Capital

Liabilities

Current Borrowing $0
Long-term Liabilities $100,000

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

TOTAL LIABILITIES $100,000

Capital

Planned Investment

Bill Kerl $35,000

Diane Huber $35,000

Marcus Hathcock $35,000

Jillian Daley $35,000

Jeremy Lang $35,000

Additional Investment Requirement $0

 TOTAL PLANNED INVESTMENT $175,000

Loss at Start-up (Start-up Expenses) ($124,300)

TOTAL CAPITAL $50,700

TOTAL CAPITAL AND LIABILITIES $150,700

Total Funding $275,000

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START-UP

Requirements

Start-up Expenses

Legal $1,000
Stationery etc. $400

Brochures $400

Insurance $1,000

Rent $1,500

Expensed Equipment $120,000

TOTAL START-UP EXPENSES $124,300

Start-up Assets

Cash Required $60,700

Other Current Assets $20,000

Long-term Assets $70,000

TOTAL ASSETS $150,700

Total Requirements $275,000

Services
Gaming Futures' cohesive, talented development team offer their clients:

 Game concepts and development for PC, PS2, Xbox, Pocket PC

 Game platform ports: PC/PS2/Xbox/Game Boy

 2D and 3D art, programming, libraries to spec.

 Interface design and software enhancement.

 On time and on budget shipping.

Market Analysis Summary

According to a new report from DFC Intelligence, recent sales indicate that the video
game market is poised for impressive growth. The report forecasts that annual unit sales
of video games and PC games in the U.S. is expected to grow over 40% from 2001 to
2006. The successful introduction of four new game systems in 2000 and 2001 meant that
the industry was able to avoid the major downturn in sales that has occurred in past
platform transitions. According to DFC Intelligence, the industry should experience
another year of record sales in 2002.

The interactive games industry is a major economic force. With an estimated global value
of some $10 to $20 billion, the industry rivals Hollywood in revenues and is now
recognized as a propulsive force behind the creation of markets for information and
communication technologies. Games account for nearly one-third of consumer software
sales in North America.

4.1 Target Market Segment Strategy

Not only was the video game market not slowed by a softening economy or the terrorist
attacks, but 2001 turned out to be the best year ever for the U.S. video game industry.
The total U.S. video game industry grew from $6.6 billion in 2000 to $9.4 billion in
2001. The previous all-time record was $6.9 billion in 1999.

DFC estimates that by 2006 the three leading games systems, the Sony PlayStation2, the
Microsoft Xbox and the Nintendo GameCube, should have combined U.S. sales of over
60 million units. The report forecasts strong sales for all three systems. There are
currently 3,000 gaming companies that are producing games for one or more of the
leading gaming systems. While strong market growth is predicted, there are also many
challenges facing the interactive entertainment industry.

Sales of the total U.S. interactive entertainment software market, which includes PC
entertainment and video game software, approached $6 billion in 2001 versus $5.4 billion
in 2000, DFC found. Console and portable software sales rose 8.3 percent in unit sales,
compared to 2000, while PC entertainment software experienced a unit increase of 3.8
percent. The main challenge is that while unit sales are expected to rise rapidly,
development and marketing costs are also soaring.

4.2 Service Business Analysis

Companies are combating development costs by outsourcing segments of the

development project. Currently, it is estimated that 30% of project work is outsourced.
There are a number of advantages to this strategy.

By outsourcing, companies can take advantage of a tremendous gaming experience base

without paying the personnel price tag to retain the talent on payroll. By negotiating a
price for the outsourcing, companies can also cap development cost. More importantly, as
few larger companies compete in the marketplace for dominance, a number of service
firms will emerge to fill the demand for quality developers that are necessary for specific
projects, much like the rest of software industry. It is estimated that product development
in the software industry can save upwards to 30% of development costs by outsourcing
key elements of the development process.
4.2.1 Competition and Buying Patterns

The interactive game industry is based on the hype that is created by core players. The
ability to create product that satisfies the gaming demands of core players is a critical
consideration when outsourcing opportunities emerge. This unique cultural aspect of the
industry influences how companies outsource. Technological expertise is secondary to
the ability to create a product that the target group will immediately be comfortable with.
Companies are looking for production track records with products with similar play
devices that were focused on similar target users. Typically, a selected group of firms are
asked to submit proposals for the outsourcing assignment much like an ad campaign. The
firm with the best ideas and the best talent to implement the idea gets the contract. Over
80% of the interactive game companies have outsourced segments of game development.
This represents a client base of 400 companies.

Currently there are 100+ firms that compete for outsourcing contracts in the interactive
game industry. Because of the unique cultural aspect of the interactive gaming
community, companies specialize in gaming devices or user groups in order to gain
advantage in the proposal process.

The team's track record is the most important pivotal issue when competing for
outsourcing contracts. A firm that has an intact team that has achieved past project goals
has an advantage in the bidding process. Production companies are looking for
assurances that deadlines will be met and the quality will be there. The production of a
game is on a tight schedule and any missed deadline will ripple effect over the entire
project, and could result in missed revenues and increased expenses.

Strategy and Implementation Summary

Gaming Futures' developers, William Kerl and Diane Huber, have extensive connections
throughout the gaming industry. They will be responsible for marketing the company's
services to potential customers.
5.1 Competitive Edge

The competitive advantage of Gaming Futures is always bringing in a project before the
projected deadline. As noted in the Market Analysis Summary, one of the greatest
challenges will be production costs. Nowhere is this more critical than with outsourced
projects. If a company can produce by deadline, they will get more work.

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5.2 Marketing Strategy

William Kerl and Diane Huber will approach the 120 production companies that are
currently producing video games. A marketing CD has been created for these
presentations.

William and Diane have begun the process of presenting their company's services to
gaming production companies. The team has created a presentation program that will be
the centerpiece of the marketing program.

Currently, the company has been successful in acquiring three contracts with the
following companies:

 Clear Mountain Productions

 Weaver Farm, Inc.

The company will continue to aggressively pursue new contracts.

5.3 Sales Strategy

Gaming Futures anticipates that sales will start during the third month. The first two
months of operation will have flat sales. After that point, sales will increase.
5.3.1 Sales Forecast

The following is the sales forecast for three years. The owners have agreed not to take a
salary for the first three months of the operation, and during this phase all five owners
will be involved in sales.

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SALES FORECAST

YEAR 1 YEAR 2 YEAR 3

Sales

Projects $279,000 $380,000 $644,000

Other $0 $0 $0
 TOTAL SALES $279,000 $380,000 $644,000

Direct Cost of Sales Year 1 Year 2 Year 3

Projects $0 $0 $0

Other $0 $0 $0

Subtotal Direct Cost of Sales $0 $0 $0

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5.4 Milestones
The accompanying table lists important program milestones, with dates and managers in charge,
and budgets for each. The milestone schedule indicates our emphasis on planning for
implementation.
What the table doesn't show is the commitment behind it. Our business plan includes
complete provisions for plan-vs.-actual analysis, and we will hold monthly follow-up
meetings to discuss the variance and course corrections.
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MILESTONES

Milestone Start Date End Date Budget Manager Department

Office Setup 5/1/2002 5/20/2002 $5,000 William Kerl Admin

Equipment/Network 5/1/2002 5/20/2002 $100,000 Jeremy Admin

Setup Lang
 Marketing CD 3/1/2002 4/1/2002 $2,000 Diane Web
Huber

Face to Face Selling 4/1/2001 6/1/2002 $2,000 All Web

Totals $109,000

Personnel Plan
Gaming Futures staff is as follows:

Bill Kerl- Producer/New Business

Starting out with games in 1993 programming on the 3DO, then programming and
producing DreæmWhyrks games since 1995, Bill is driven to get things out. Planning for
success is the most important part of any project.

Diane Huber - Lead Engineer

Diane has been programming computers for over 25 years and has been making great
games for the last 15 years, including DreæmWhyrks, Mighty Quinn, and Fire Mountain.

Marcus Hathcock- Programmer/GamePlay

Marcus is a software engineer who has 5 years experience implementing interfaces and
gameplay; most of this time was spent working on the DreæmWhyrks series at
Axiomatic.

Jillian Daley- Senior Software Engineer

With 11 years programming experience building games, tools, and technologies, she's
been involved in all aspects of several full 3D sims including Penthesilea and the
DreæmWhyrks series.
Jeremy Lang- Software Engineer
Jeremy has specialized in using artificial intelligence to simulate physical events. For the
past six years Jeremy's projects at Axiomatic have included the DreæmWhyrks series,
Mighty Quinn, Fire Mountain, and Storm Warnings.

PERSONNEL PLAN

YEAR 1 YEAR 2 YEAR 3

Bill Kerl $27,000 $42,000 $50,000

Diane Huber $27,000 $42,000 $50,000

Marcus Hathcock $27,000 $42,000 $50,000

Jillian Daley $27,000 $42,000 $50,000

Jeremy Lang $27,000 $42,000 $50,000

President $0 $0 $120,000

TOTAL PEOPLE 5 5 6
 Total Payroll $135,000 $210,000 $370,000

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6.1 Management Team Gaps

Currently, the firm doesn't have a corporate leader to manage the anticipated growth of
the company during its third year of operation and beyond. As sales grow, the focus will
be on production. The management of the company's resources and decisions on how to
effectively grow the firm will demand an individual with extensive management
expertise as well as experience in the interactive gaming industry. This is critical vacancy
will be addressed during the third year. The firm will hire a President to fill this role.

Financial Plan
The following is the financial plan for Gaming Futures. The various topic tables display
annual figures for the first three years. Monthly figures for the first year are presented in
the appendix.

7.1 Break-even Analysis

The following table and chart show our Break-even Analysis.

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BREAK-EVEN ANALYSIS

Monthly Revenue Break-even $16,971

Assumptions:

Average Percent Variable Cost 0%

 Estimated Monthly Fixed Cost $16,971

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7.2 Projected Profit and Loss

The following table and charts highlight the projected profit and loss for three years.

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PRO FORMA PROFIT AND LOSS

YEAR 1 YEAR 2 YEAR 3

Sales $279,000 $380,000 $644,000

Direct Cost of Sales $0 $0 $0

Other Production Expenses $0 $0 $0

TOTAL COST OF SALES $0 $0 $0

Gross Margin $279,000 $380,000 $644,000

Gross Margin % 100.00% 100.00% 100.00%

Expenses
Payroll $135,000 $210,000 $370,000

Sales and Marketing and Other Expenses $12,000 $15,000 $20,000

Depreciation $9,996 $10,000 $10,000

Leased Equipment $0 $0 $0

Utilities $4,800 $4,800 $4,800

Insurance $3,600 $3,600 $3,600

Rent $18,000 $18,000 $18,000

Payroll Taxes $20,250 $31,500 $55,500

Other $0 $0 $0

Total Operating Expenses $203,646 $292,900 $481,900

Profit Before Interest and Taxes $75,354 $87,100 $162,100

EBITDA $85,350 $97,100 $172,100

 Interest Expense $8,960 $7,080 $5,080

Taxes Incurred $19,918 $24,006 $47,106

Net Profit $46,476 $56,014 $109,914

Net Profit/Sales 16.66% 14.74% 17.07%

7.3 Projected Cash Flow

The following table and chart highlights the projected cash flow for three years.

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PRO FORMA CASH FLOW

YEAR 1 YEAR 2 YEAR 3

Cash Received

Cash from Operations

Cash Sales $69,750 $95,000 $161,000

Cash from Receivables $142,750 $260,927 $420,075

SUBTOTAL CASH FROM OPERATIONS $212,500 $355,927 $581,075

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

SUBTOTAL CASH RECEIVED $212,500 $355,927 $581,075

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $135,000 $210,000 $370,000

Bill Payments $73,476 $109,491 $149,968

SUBTOTAL SPENT ON OPERATIONS $208,476 $319,491 $519,968

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

 Principal Repayment of Current Borrowing $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $19,200 $20,000 $20,000

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

SUBTOTAL CASH SPENT $227,676 $339,491 $539,968

Net Cash Flow ($15,176) $16,435 $41,107

Cash Balance $45,524 $61,959 $103,066

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

PRO FORMA BALANCE SHEET

 YEAR 1 YEAR 2 YEAR 3

Assets

Current Assets

Cash $45,524 $61,959 $103,066

Accounts Receivable $66,500 $90,573 $153,498

Other Current Assets $20,000 $20,000 $20,000

TOTAL CURRENT ASSETS $132,024 $172,533 $276,564

Long-term Assets

Long-term Assets $70,000 $70,000 $70,000

Accumulated Depreciation $9,996 $19,996 $29,996

TOTAL LONG-TERM ASSETS $60,004 $50,004 $40,004

TOTAL ASSETS $192,028 $222,537 $316,568

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $14,052 $8,547 $12,665

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

SUBTOTAL CURRENT LIABILITIES $14,052 $8,547 $12,665

Long-term Liabilities $80,800 $60,800 $40,800

TOTAL LIABILITIES $94,852 $69,347 $53,465

Paid-in Capital $175,000 $175,000 $175,000

Retained Earnings ($124,300) ($77,824) ($21,810)

Earnings $46,476 $56,014 $109,914

TOTAL CAPITAL $97,176 $153,190 $263,104

 TOTAL LIABILITIES AND CAPITAL $192,028 $222,537 $316,568

Net Worth $97,176 $153,190 $263,104

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based
on the Standard Industrial Classification (SIC) code 7371, Computer Programming
Services, are shown for comparison.

RATIO ANALYSIS

YEAR 1 YEAR 2 YEAR 3 INDUSTRY

PROFILE

Sales Growth 0.00% 36.20% 69.47% 10.40%

Percent of Total Assets

Accounts Receivable 34.63% 40.70% 48.49% 24.10%

Other Current Assets 10.42% 8.99% 6.32% 42.90%

Total Current Assets 68.75% 77.53% 87.36% 71.10%

Long-term Assets 31.25% 22.47% 12.64% 28.90%

TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%

Current Liabilities 7.32% 3.84% 4.00% 47.80%

Long-term Liabilities 42.08% 27.32% 12.89% 19.10%

Total Liabilities 49.39% 31.16% 16.89% 66.90%

NET WORTH 50.61% 68.84% 83.11% 33.10%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 100.00% 100.00% 100.00% 0.00%

Selling, General & Administrative 83.34% 85.26% 82.93% 82.10%

Expenses

Advertising Expenses 4.30% 3.95% 3.11% 1.20%

Profit Before Interest and Taxes 27.01% 22.92% 25.17% 2.00%

Main Ratios

Current 9.40 20.19 21.84 1.30

Quick 9.40 20.19 21.84 1.03

Total Debt to Total Assets 49.39% 31.16% 16.89% 66.90%

Pre-tax Return on Net Worth 68.32% 52.24% 59.68% 3.10%

Pre-tax Return on Assets 34.58% 35.96% 49.60% 9.30%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 16.66% 14.74% 17.07% n.a

Return on Equity 47.83% 36.57% 41.78% n.a

Activity Ratios

Accounts Receivable Turnover 3.15 3.15 3.15 n.a

Collection Days 55 101 92 n.a

Accounts Payable Turnover 6.23 12.17 12.17 n.a

Payment Days 27 40 25 n.a

Total Asset Turnover 1.45 1.71 2.03 n.a

Debt Ratios

Debt to Net Worth 0.98 0.45 0.20 n.a

Current Liab. to Liab. 0.15 0.12 0.24 n.a

Liquidity Ratios

Net Working Capital $117,972 $163,986 $263,900 n.a

Interest Coverage 8.41 12.30 31.91 n.a

Additional Ratios

Assets to Sales 0.69 0.59 0.49 n.a

Current Debt/Total Assets 7% 4% 4% n.a

 Acid Test 4.66 9.59 9.72 n.a

Sales/Net Worth 2.87 2.48 2.45 n.a

Dividend Payout 0.00 0.00 0.00 n.a

Appendix

SALES FORECAST

MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12

Sales

Projects 0% $0 $0 $10,000 $15,000 $17,000 $24,000 $28,000 $30,000 $30,000 $35,000 $40,000 $50,000

Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

TOTAL SALES $0 $0 $10,000 $15,000 $17,000 $24,000 $28,000 $30,000 $30,000 $35,000 $40,000 $50,000

Direct Cost of Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
Sales 10 11 12

Projects $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cost of Sales
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PERSONNEL PLAN

MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12

Bill Kerl 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Diane Huber 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Marcus 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Hathcock

Jillian Daley 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Jeremy Lang 0% $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

President 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

TOTAL PEOPLE 5 5 5 5 5 5 5 5 5 5 5 5

Total Payroll $0 $0 $0 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000

GENERAL ASSUMPTIONS
 MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12

Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest Rate

Long-term 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest Rate

Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

PRO FORMA PROFIT AND LOSS

MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12

Sales $0 $0 $10,000 $15,000 $17,000 $24,000 $28,000 $30,000 $30,000 $35,000 $40,000 $50,000

Direct Cost of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Production
Expenses

TOTAL COST $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
OF SALES

Gross Margin $0 $0 $10,000 $15,000 $17,000 $24,000 $28,000 $30,000 $30,000 $35,000 $40,000 $50,000

Gross Margin 0.00% 0.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
%
Expenses

Payroll $0 $0 $0 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000

Sales and $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Marketing and
Other
Expenses

Depreciation $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833

Leased $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Equipment

Utilities $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400

Insurance $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Rent $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Payroll Taxes 15% $0 $0 $0 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total $4,033 $4,033 $4,033 $21,283 $21,283 $21,283 $21,283 $21,283 $21,283 $21,283 $21,283 $21,283
Operating
Expenses

Profit Before ($4,033) ($4,033) $5,967 ($6,283) ($4,283) $2,717 $6,717 $8,717 $8,717 $13,717 $18,717 $28,717
Interest and
Taxes

EBITDA ($3,200) ($3,200) $6,800 ($5,450) ($3,450) $3,550 $7,550 $9,550 $9,550 $14,550 $19,550 $29,550

Interest $820 $807 $793 $780 $767 $753 $740 $727 $713 $700 $687 $673
Expense
Taxes Incurred ($1,456) ($1,452) $1,552 ($2,119) ($1,515) $589 $1,793 $2,397 $2,401 $3,905 $5,409 $8,413

Net Profit ($3,397) ($3,388) $3,622 ($4,944) ($3,535) $1,375 $4,184 $5,593 $5,603 $9,112 $12,621 $19,631

Net 0.00% 0.00% 36.22% -32.96% -20.79% 5.73% 14.94% 18.64% 18.68% 26.03% 31.55% 39.26%
Profit/Sales

PRO FORMA CASH FLOW

MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12

Cash Received

Cash from
Operations

Cash Sales $0 $0 $2,500 $3,750 $4,250 $6,000 $7,000 $7,500 $7,500 $8,750 $10,000 $12,500

Cash from $0 $0 $0 $250 $7,625 $11,300 $12,925 $18,100 $21,050 $22,500 $22,625 $26,375
Receivables

SUBTOTAL $0 $0 $2,500 $4,000 $11,875 $17,300 $19,925 $25,600 $28,550 $31,250 $32,625 $38,875
CASH FROM
OPERATIONS

Additional
Cash Received

Sales Tax, 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

VAT, HST/GST
Received

New Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
New Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
(interest-free)

New Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Liabilities

Sales of Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Assets

Sales of Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Assets

New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Investment
Received

SUBTOTAL $0 $0 $2,500 $4,000 $11,875 $17,300 $19,925 $25,600 $28,550 $31,250 $32,625 $38,875
CASH
RECEIVED

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
10 11 12

Expenditures
from
Operations

Cash $0 $0 $0 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Spending

Bill Payments $85 $2,564 $2,654 $5,498 $4,131 $4,771 $6,832 $8,003 $8,573 $8,614 $10,105 $11,645

SUBTOTAL $85 $2,564 $2,654 $20,498 $19,131 $19,771 $21,832 $23,003 $23,573 $23,614 $25,105 $26,645
SPENT ON
OPERATIONS

Additional
Cash Spent
Sales Tax, $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
VAT, HST/GST
Paid Out

Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment of
Current
Borrowing

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Principal
Repayment

Long-term $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Liabilities
Principal
Repayment

Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current
Assets

Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term
Assets

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

SUBTOTAL $1,685 $4,164 $4,254 $22,098 $20,731 $21,371 $23,432 $24,603 $25,173 $25,214 $26,705 $28,245
CASH SPENT

Net Cash Flow ($1,685) ($4,164) ($1,754) ($18,098) ($8,856) ($4,071) ($3,507) $997 $3,377 $6,036 $5,920 $10,630

Cash Balance $59,015 $54,851 $53,096 $34,999 $26,143 $22,071 $18,564 $19,562 $22,938 $28,974 $34,894 $45,524

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PRO FORMA BALANCE SHEET

MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6 MONTH 7 MONTH 8 MONTH 9 MONTH MONTH MONTH

10 11 12

Assets Starting Balances

Current Assets

Cash $60,700 $59,015 $54,851 $53,096 $34,999 $26,143 $22,071 $18,564 $19,562 $22,938 $28,974 $34,894 $45,524

Accounts Receivable $0 $0 $0 $7,500 $18,500 $23,625 $30,325 $38,400 $42,800 $44,250 $48,000 $55,375 $66,500

Other Current Assets $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000

TOTAL CURRENT ASSETS $80,700 $79,015 $74,851 $80,596 $73,499 $69,768 $72,396 $76,964 $82,362 $87,188 $96,974 $110,269 $132,024

Long-term Assets

Long-term Assets $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000

Accumulated Depreciation $0 $833 $1,666 $2,499 $3,332 $4,165 $4,998 $5,831 $6,664 $7,497 $8,330 $9,163 $9,996

TOTAL LONG-TERM ASSETS $70,000 $69,167 $68,334 $67,501 $66,668 $65,835 $65,002 $64,169 $63,336 $62,503 $61,670 $60,837 $60,004

TOTAL ASSETS $150,700 $148,182 $143,185 $148,097 $140,167 $135,603 $137,398 $141,133 $145,698 $149,691 $158,644 $171,106 $192,028

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities

Accounts Payable $0 $2,479 $2,470 $5,361 $3,974 $4,545 $6,566 $7,717 $8,288 $8,279 $9,720 $11,161 $14,052

Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

SUBTOTAL CURRENT $0 $2,479 $2,470 $5,361 $3,974 $4,545 $6,566 $7,717 $8,288 $8,279 $9,720 $11,161 $14,052

LIABILITIES

Long-term Liabilities $100,000 $98,400 $96,800 $95,200 $93,600 $92,000 $90,400 $88,800 $87,200 $85,600 $84,000 $82,400 $80,800

TOTAL LIABILITIES $100,000 $100,879 $99,270 $100,561 $97,574 $96,545 $96,966 $96,517 $95,488 $93,879 $93,720 $93,561 $94,852

Paid-in Capital $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000

Retained Earnings ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300) ($124,300)

Earnings $0 ($3,397) ($6,785) ($3,163) ($8,107) ($11,642) ($10,268) ($6,084) ($490) $5,112 $14,224 $26,845 $46,476

TOTAL CAPITAL $50,700 $47,303 $43,915 $47,537 $42,593 $39,058 $40,432 $44,616 $50,210 $55,812 $64,924 $77,545 $97,176

TOTAL LIABILITIES AND $150,700 $148,182 $143,185 $148,097 $140,167 $135,603 $137,398 $141,133 $145,698 $149,691 $158,644 $171,106 $192,028

CAPITAL

Net Worth $50,700 $47,303 $43,915 $47,537 $42,593 $39,058 $40,432 $44,616 $50,210 $55,812 $64,924 $77,545 $97,176