Financial Projections Model v6.8.4.xlsx

Financial Projections ModelFor Business Plans

Frank Moyes and Stephen Lawrence

Deming Center for EntrepreneurshipLeeds College of Business

University of ColoradoBoulder, Colorado

Copyright © 2003 by the Regents of the University of Colorado

Instructions

Financial Projections Model v6.8.3

This financial model is designed to enable entrepreneurs and students project the financial results of their ventures for a five-year period. As with all models there are certain simplifying assumptions that have been made. Each of the assumption spreadsheets has an accompanying Comments box (denoted by a cell with small red triangle in the upper right corner) that provides suggestions on how to complete the spreadsheet and the underlying assumptions to the model.

You will notice that the cells in the spreadsheet are color-coded. This has been done to assist you in entering data, creating or changing formulae, or deleting data, formulae and links.

Enter data and information in Green shaded cells only.Blue shaded cells calculate results within a spreadsheet.Data in Yellow shaded cells is transferred to other worksheets.Purple shaded cells bring in data from other spreadsheets.

In the Green and Blue shaded cells, data and formulas may changed, moved or deleted. The current calculations are for illustration only -- you will need to tailor these spreadsheets to fit your plan.

In the Yellow shaded cells data and formulas may be changed, but not deleted.

DO NOT delete the Purple shaded cells -- they link one spreadsheet with others.

There are 7 principal spreadsheet outputs of this model: INCOME: Income Statement BALANCE: Balance Sheet CASHFLOW: Cash Flow Statement BREAKEVEN: Break-even analysis SUMMARY: Analysis of key measures INCOME-MOS: Income Statements by months for Years 1 to 5 CASHFLOW-MOS: Cash flow Statements by months for Years 1 and 2, and by quarters for Years 3 to 5 VAL-1 & VAL-2: Venture capital method for valuing companies

All other spreadsheets are to be used for calculating the underlying assumptions of the 7 principal spreadsheets:

COMPS: Comparison of financial measures to peer companies REVENUE: Revenue Projections COST OF REV: Cost of Goods Sold OPER EXPEN: Operating Expenses PROP & EQUIP: Capital Expenditures, Depreciation, and Net Fixed Assets SALARIES: Salary Personnel EXTRA: Extraordinary Income and Expense TAXES: Tax calculation WORKCAP: Working Capital FUNDING: Equity, Debt, Interest Expense, Interest Income, Dividends and Retained Earnings

These assumption spreadsheets are linked to each other and to the 7 principal spreadsheets. When you make a change in one of the spreadsheets, the impact is automatically recalculated for all other spreadsheets.

When doing financial projections, it is easy to get lost in the trees and lose the sense of what is reality. Most errors can be identified if you continuously ask yourself “Does this result make sense?” The COMPS spreadsheet, where you look at peer companies, can be particularly helpful as a reality test.

There is an example in the model with which you can experiment. When you are ready to start your own projections, clear all the numbers in the green shaded cells, and then you can begin to enter new numbers. Enter the name of your company in the first cell of the COMPS spreadsheet. Before you begin, make a copy of the model on a separate disk.

This original version of the model has been used since the mid-1980’s. It has undergone numerous revisions over that period. Since 1998, students in the Business Plan Preparation course at the University of Colorado have used it to prepare their business plans. We have appreciated their suggestions for improvements and would encourage all users to send us comments and suggestions.

Created by Frank Moyes and Stephen Lawrence Deming Center for Entrepreneurship Leeds School of Business University of Colorado Boulder, Colorado

Copyright © 2001 by the Regents of the University of Colorado

02/23/201614:24:08

XYZ Company NotesPeer Company Comparisons

Select BestCompany A Company B Company C Comparison Projections

Ratios Year 1 Year 2 Year 3 Year 4 Year 5Accounts Receivable % of Rev 10.0% 10.0% 8.3% 8.3% 8.3% 8.3% 8.3%Inventory % of Rev 15.0% 15.0% 8.3% 8.3% 6.7% 6.7% 6.7%Accounts Payable % of Rev 8.0% 8.0% 8.7% 8.7% 8.7% 8.7% 8.7%Working Capital % of Rev 16.0% 16.0% 7.9% 7.9% 6.3% 6.3% 6.3%Net Fixed Assets % of Rev 9.0% 9.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Current Ratio 2.3 2.3 3.2 (6.8) (25.1) (37.1) (84.0)Debt to Capital (LT Debt + Equity) 1.2 1.2 0.00 (0.44) (0.07) (0.02) (0.01)

ProfitabilityGross Profit % of Rev 30.0% 30.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Sales & Marketing % of Rev 30.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Research & Development % of Rev 30.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!General & Administration % of Rev 30.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Operating Expenses % of Rev 40.0% 17.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Earnings from Operations % of Rev 12.0% 12.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!EBIT % of Rev 12.0% 12.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Depreciation % of Rev 3.0% 3.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!EBITDA % of Rev 14.0% 14.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Net Earnings % of Rev 5.0% 5.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

ReturnsReturn on Assets 12.0% 12.0% -167.5% 262.8% 80.3% 57.4% 45.9%Return on Equity 15.0% 15.0% -207.5% 160.6% 72.9% 55.0% 45.1%Return on Capital (LT Debt + Equity) 15.0% 15.0% -207.5% 231.6% 78.1% 56.2% 45.5%

Growth Revenue Growth Rate - CAGR: 15.0% 15.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! Net Earnings Growth Rate - CAGR: 12.0% 12.0% 158.7% 67.9% 67.3% 50.2%

02/23/201614:24:08XYZ Company

Revenue ProjectionsYears 1 to 5($)

Year 1 Year 2 Year 3 Year 4 Year 5Product A

Number of UnitsPrice per unit

Total 0 0 0 0 0 Service B

Number of CustomersFee per Customer

Total 0 0 0 0 0

Net Revenue 0 0 0 0 0

Revenues by Months & Quarters($)

Months Year 1 Year 2 Year 3 Year 4 Year 5Month 1 100,000 115,000 132,250 152,088 174,901 Month 2 100,000 115,000 132,250 152,088 174,901 Month 3 100,000 115,000 132,250 152,088 174,901

Total 1st Quarter 300,000 345,000 396,750 456,263 524,702 Month 4 100,000 115,000 132,250 152,088 174,901 Month 5 100,000 115,000 132,250 152,088 174,901 Month 6 100,000 115,000 132,250 152,088 174,901

Total 2nd Quarter 300,000 345,000 396,750 456,263 524,702 Month 7 100,000 115,000 132,250 152,088 174,901 Month 8 100,000 115,000 132,250 152,088 174,901 Month 9 100,000 115,000 132,250 152,088 174,901

Total 3rd Quarter 300,000 345,000 396,750 456,263 524,702 Month 10 100,000 115,000 132,250 152,088 174,901 Month 11 100,000 115,000 132,250 152,088 174,901 Month 12 100,000 115,000 132,250 152,088 174,901

Total 4th Quarter 300,000 345,000 396,750 456,263 524,702 Total for year 1,200,000 1,380,000 1,587,000 1,825,050 2,098,808

Average Revenue by Month 0 0 0 0 0 by Quarter 0 0 0 0 0

02/23/201614:24:08XYZ Company

Cost of RevenuesYears 1 to 5($)

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue 0 0 0 0 0

Cost of Revenue

Product AMaterial Costs per Unit 15.00 14.00 11.00 10.00 9.00Subcontact Costs per Unit 10.00 10.00 7.00 6.50 6.00

Total Direct Costs per Unit 25.00 24.00 18.00 16.50 15.00Unit Sales 0 0 0 0 0 Total Direct Costs 0 0 0 0 0

Labor Costs 69,000 227,700 552,000 864,000 1,200,000 Total Direct Costs 69,000 227,700 552,000 864,000 1,200,000

Service BService Personnel Costs 120,750 212,750 480,000 1,500,000 2,750,000

Other ExpensesSalary Expenses 276,000 690,000 990,000 1,410,000 2,000,000 Depreciation 36,714 91,714 137,429 190,286 243,143 Facility costs (rent, energy) 50,000 200,000 300,000 300,000 450,000 System Costs 25,000 100,000 150,000 300,000 350,000

All other costs % of Revenue 4% 0 0 0 0 0 Total Cost of Revenues 577,464 1,522,164 2,609,429 4,564,286 6,993,143

% of Revenue #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Allocation of Cost of Revenue between:Variable 189,750 440,450 1,032,000 2,364,000 3,950,000 Fixed 387,714 1,081,714 1,577,429 2,200,286 3,043,143

Total 577,464 1,522,164 2,609,429 4,564,286 6,993,143

Cost of Revenues by Months & Quarters($)

Year 1 Year 2 Year 3 Year 4 Year 5Month 1 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Month 2Month 3

Total 1st QuarterMonth 4Month 5Month 6

Total 2nd QuarterMonth 7Month 8Month 9

Total 3rd QuarterMonth 10Month 11Month 12

Total 4th QuarterTotal for year

02/23/201614:24:09XYZ Company

Operating ExpensesYears 1 to 5($)


Net Revenues 0 0 0 0 0

Sales & MarketingDrivers

Salaries and Benefits 69,000 270,250 432,900 624,000 816,000 Commissions % of Revenue 5% 0 0 0 0 0 Direct Mail Campaign 50,000 150,000 300,000 500,000 1,000,000

All other expenses % of Revenue 6% 0 0 0 0 0 Total Sales and Marketing 119,000 420,250 732,900 1,124,000 1,816,000 % of Revenue #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Research & DevelopmentDrivers

Salaries and Benefits 69,000 195,500 310,050 504,000 672,000 Testing 50,000 60,000 100,000 250,000 300,000

All other expenses % of Revenue 3% 0 0 0 0 0 Total Reaserch & Development 119,000 255,500 410,050 754,000 972,000 % of Revenue #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

General & AdministrationDrivers

Salaries and Benefits 125,000 300,150 388,440 573,600 784,800 Depreciation 6,667 40,000 106,667 183,333 266,667 Rent and Utilities 20,000 20,000 100,000 110,000 200,000

All other expenses % of Revenue 2% 0 0 0 0 0

Total General & Administration 151,667 360,150 595,107 866,933 1,251,467 % of Revenue #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Total Operating Expenses 389,667 1,035,900 1,738,057 2,744,933 4,039,467 % of Revenue #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Allocation of Operating Expenses between:Vaiable 0 0 0 0 0 Fixed 389,667 1,035,900 1,738,057 2,744,933 4,039,467

Total 389,667 1,035,900 1,738,057 2,744,933 4,039,467

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Sales & Marketing by Months & Quarters($)


Total 1st Quarter #DIV/0! #DIV/0! #DIV/0!Month 4 #DIV/0! #DIV/0! #DIV/0!Month 5Month 6

Total 2nd Quarter #DIV/0! #DIV/0! #DIV/0!Month 7 #DIV/0! #DIV/0! #DIV/0!Month 8Month 9

Total 3rd Quarter #DIV/0! #DIV/0! #DIV/0!Month 10 #DIV/0! #DIV/0! #DIV/0!Month 11Month 12

Total 4th Quarter #DIV/0! #DIV/0! #DIV/0!Total for year

Research & Development by Months & Quarters($)






General & Administrative by Months & Quarters($)






02/23/201614:24:09XYZ Company

PersonnelYears 1 to 5($)

Year 1 Year 2 Year 3

Net Revenues 0 0 0

Sales & MarketingSales Manager 60,000 80,000 100,000 Marketing Manager 80,000 100,000 Customer service 40,000 120,000 Tech support 35,000 50,000 (other…)(other…)(other…)

Total Salary 60,000 235,000 370,000 BenefitsPercent (%) 15% 15% 17%

Total benefit costs 9,000 35,250 62,900 Total S & M Compensation 69,000 270,250 432,900 % of Revenue #DIV/0! #DIV/0! #DIV/0!

Research and DevelopmentR & D Manager 80,000 100,000 Engineers 60,000 60,000 130,000 Technicians 30,000 35,000 Subcontract(other…)(other…)


Total benefit costs 9,000 25,500 45,050 Total R & D Compensation 69,000 195,500 310,050 % of Revenue #DIV/0! #DIV/0! #DIV/0!

General & AdministrationChief Executive Officer 60,000 80,000 100,000 Chief Financial Officer 50,000 60,000 Accounting 40,000 45,000 25,000 Secretarial 25,000 26,000 27,000 Clerks and admin personnel 60,000 120,000 (other…)(other…)


Total benefit costs 0 39,150 56,440 Total G & A Compensation 125,000 300,150 388,440 % of Revenue #DIV/0! #DIV/0! #DIV/0!

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Cost of RevenueManufacturing Personnel

Operations Manager 100,000 125,000 150,000 Quality Assurance 50,000 100,000 150,000 Materials and Logistics 40,000 150,000 200,000 Engineering 75,000 125,000 Other personnel 50,000 150,000 200,000 (other...)


Total benefit costs 36,000 90,000 165,000 Total Salary Costs 276,000 690,000 990,000

Hourly PersonnelNumber of employees 3 9 20 Average wages per employee 20,000 22,000 23,000

Total wages 60,000 198,000 460,000 BenefitsPercent (%) 15% 15% 20%

Total benefit costs 9,000 29,700 92,000 Total Wage Costs 69,000 227,700 552,000

Service PersonnelNumber of employees 3 5 10 Salary per employee 35,000 37,000 40,000

Total salaries 105,000 185,000 400,000 BenefitsPercent (%) 15% 15% 20%

Total benefit costs 15,750 27,750 80,000 Total Salary Costs 120,750 212,750 480,000

Total COR's Compensation 465,750 1,130,450 2,022,000 % of Revenue #DIV/0! #DIV/0! #DIV/0!

Total Salary & Wages 545,000 1,464,000 2,252,000 Total Benefits 63,000 219,600 421,390 Total Compensation 728,750 1,896,350 3,153,390 % of Revenue #DIV/0! #DIV/0! #DIV/0!

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Year 4 Year 5

0 0

125,000 150,000 125,000 150,000 200,000 250,000

70,000 130,000

520,000 680,000

20% 20%104,000 136,000 624,000 816,000

#DIV/0! #DIV/0!

125,000 150,000 230,000 300,000

65,000 110,000

420,000 560,000

20% 20%84,000 112,000

504,000 672,000 #DIV/0! #DIV/0!

125,000 150,000 75,000 100,000 50,000 75,000 28,000 29,000

200,000 300,000

478,000 654,000

20% 20%95,600 130,800

573,600 784,800 #DIV/0! #DIV/0!

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175,000 200,000 300,000 350,000 300,000 450,000 150,000 300,000 250,000 300,000

1,175,000 1,600,000

20% 25%235,000 400,000

1,410,000 2,000,000

30 40 24,000 24,000

720,000 960,000

20% 25%144,000 240,000

864,000 1,200,000

25 40 50,000 55,000

1,250,000 2,200,000

20% 25%250,000 550,000

1,500,000 2,750,000

3,774,000 5,950,000 #DIV/0! #DIV/0!

3,313,000 4,454,000 662,600 1,018,800

5,475,600 8,222,800 #DIV/0! #DIV/0!

02/23/201614:24:09XYZ Company

Extraordinary Income & ExpenseYears 1 to 5($)


Income (Item…) 0 (Item…) (Item…)

Total 0 0 0 0 0 Start-up expenses

Legal 25,000 Relocation 20,000

(Item…)Total 45,000 0 0 0 0

Total Extraordinary Income/(Expense) (45,000) 0 0 0 0

Extraordinary Income and Expense by Months & Quarters($)

Year 1 Year 2 Year 3 Year 4 Year 5Month 1 (25,000)Month 2 (20,000)Month 3

Total 1st Quarter (45,000) 0 0 0 0 Month 4Month 5Month 6

Total 2nd Quarter 0 0 0 0 0 Month 7Month 8Month 9

Total 3rd Quarter 0 0 0 0 0 Month 10Month 11Month 12

Total 4th Quarter 0 0 0 0 0 Total for year (45,000) 0 0 0 0

02/23/201614:24:09XYZ Company

TaxesYears 1 to 5($)


Net Revenues 0 0 0 0 0

Income Tax (Rate Federal & State) 0.40 0.40 0.40 0.40 0.40

Net Earnings Before Taxes (1,012,131) (2,618,064) (4,395,485) (7,354,219) (11,046,610)Cumulative (1,012,131) (3,630,195) (8,025,681) (15,379,900) (26,426,509)

Taxes 0 0 0 0 0 Percent of Revenues #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

02/23/201614:24:09XYZ Company

Property and EquipmentYears 1 to 5($)

Year 0 Year 1 Year 2Purchased

Net Revenues Assets 0 0

Capital ExpendituresComputers, Software & Office Equipment 20,000 100,000 Plant & Equipment 250,000 350,000 Other 10,000 50,000

Total Capital Expenditures 0 280,000 500,000 % of Revenue #DIV/0! #DIV/0!

Depreciation Computers, Sofware & Office Equipment (allocated to General & Administrative Expenses) Depreciation Rate: Years 1 3 3 Year 0 0 0 Year 1 6,667 6,667 Year 2 33,333 Year 3 Year 4 Year 5

Total Depreciation 6,667 40,000

Depreciation on Plant and Equipment (allocated to Cost of Revenue) Depreciation Rate: Years 1 7 7 Year 0 0 0 Year 1 35,714 35,714 Year 2 50,000 Year 3 Year 4 Year 5


Depreciation Other (allocated to Cost of Revenue) Depreciation Rate: Years 1 10 10 Year 0 0 0 Year 1 1,000 1,000 Year 2 5,000 Year 3 Year 4 Year 5


Total Depreciation 43,381 131,714 % of Revenue #DIV/0! #DIV/0!

Property & Equipment Gross Asset Value 0 280,000 780,000 Accumulated Depreciation 43,381 175,095

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Net Property and Equipment 0 236,619 604,905 % of Revenue #DIV/0! #DIV/0!

Capital Expenditures by Months & Quarters($)

Year 1 Year 2Month 1 50,000 100,000 Month 2 100,000 100,000 Month 3 50,000

Total 1st Quarter 200,000 200,000 Month 4 40,000 Month 5Month 6 100,000

Total 2nd Quarter 40,000 100,000 Month 7 40,000 Month 8Month 9 100,000

Total 3rd Quarter 40,000 100,000 Month 10Month 11Month 12 100,000

Total 4th Quarter 0 100,000 Total for year 280,000 500,000

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0 0 0

200,000 250,000 350,000 250,000 300,000 300,000 100,000 100,000 100,000 550,000 650,000 750,000

#DIV/0! #DIV/0! #DIV/0!

Depreciation Computers, Sofware & Office Equipment (allocated to General & Administrative Expenses)3 3 3 0 0 0

6,667 0 0 33,333 33,333 0 66,667 66,667 66,667

83,333 83,333 116,667

106,667 183,333 266,667

7 7 7 0 0 0

35,714 35,714 35,714 50,000 50,000 50,000 35,714 35,714 35,714

42,857 42,857 42,857

121,429 164,286 207,143

10 10 10 0 0 0

1,000 1,000 1,000 5,000 5,000 5,000

10,000 10,000 10,000 10,000 10,000

10,000 16,000 26,000 36,000

244,095 373,619 509,810 #DIV/0! #DIV/0! #DIV/0!

1,330,000 1,980,000 2,730,000 419,190 792,810 1,302,619

02/23/201614:24:09

910,810 1,187,190 1,427,381 #DIV/0! #DIV/0! #DIV/0!

Capital Expenditures by Months & Quarters


100,000 200,000 200,000

200,000 200,000 200,000

100,000 100,000 200,000

150,000 150,000 150,000 550,000 650,000 750,000

02/23/201614:24:09XYZ Company

Working CapitalYears 1 to 5($)

Year 1 Year 2 Year 3 Year 4 Year 5Net Revenues 0 0 0 0 0

Accounts Receivable% of Revenue 8.3% 8.3% 8.3% 8.3% 8.3%Days Outstanding 30 30 30 30 30Accounts Receivable 99,600 114,540 131,721 151,479 174,201 (Increase)/Decrease from Prev. Period (99,600) (14,940) (17,181) (19,758) (22,722)

Inventory% of Revenue 8.3% 8.3% 6.7% 6.7% 6.7%Inventory Turns 12 12 15 15 15Inventory Days 30 30 24 24 24Inventory 99,600 114,540 106,329 122,278 140,620 (Increase)/Decrease from Prev. Period (99,600) (14,940) 8,211 (15,949) (18,342)

Other Current Assets% of Revenue 1.0% 1.0% 1.0% 1.0% 1.0%Days 4 4 4 4 4 Other CA Value 12,000 13,800 15,870 18,251 20,988 (Increase)/Decrease from Prev. Period (12,000) (1,800) (2,070) (2,381) (2,738)

Accounts Payable & Accrued Expenses% of Revenue 8.7% 8.7% 8.7% 8.7% 8.7%Days 31 31 31 31 31 AP & Accrued Value 104,400 120,060 138,069 158,779 182,596 Increase/(Decrease) from Prev. Period 104,400 15,660 18,009 20,710 23,817

Other Current Liabilites% of Revenue 1.0% 1.0% 1.0% 1.0% 1.0%Days 4 4 4 4 4 Other Current Liabilities 12,000 13,800 15,870 18,251 20,988 Increase/(Decrease) from Prev. Period 12,000 1,800 2,070 2,381 2,738

Revenues by Months & Quarters($)

Year 1 Year 2 Year 3 Year 4 Year 5Month 1 100,000 115,000 132,250 152,088 174,901 Month 2 100,000 115,000 132,250 152,088 174,901

Month 3 100,000 115,000 132,250 152,088 174,901 Total 1st Quarter 300,000 345,000 396,750 456,263 524,702

Month 4 100,000 115,000 132,250 152,088 174,901 Month 5 100,000 115,000 132,250 152,088 174,901 Month 6 100,000 115,000 132,250 152,088 174,901

Total 2nd Quarter 300,000 345,000 396,750 456,263 524,702 Month 7 100,000 115,000 132,250 152,088 174,901 Month 8 100,000 115,000 132,250 152,088 174,901 Month 9 100,000 115,000 132,250 152,088 174,901

Total 3rd Quarter 300,000 345,000 396,750 456,263 524,702 Month 10 100,000 115,000 132,250 152,088 174,901 Month 11 100,000 115,000 132,250 152,088 174,901 Month 12 100,000 115,000 132,250 152,088 174,901

Total 4th Quarter 300,000 345,000 396,750 456,263 524,702 Total for year 1,200,000 1,380,000 1,587,000 1,825,050 2,098,808

Accounts Receivable by Months & Quarters($)

Year 1 Year 2 Year 3 Year 4 Year 5Month 1 99,600 114,540 Month 2 99,600 114,540 Month 3 99,600 114,540 131,721 151,479 174,201 Month 4 99,600 114,540 Month 5 99,600 114,540

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Month 6 99,600 114,540 131,721 151,479 174,201 Month 7 99,600 114,540 Month 8 99,600 114,540 Month 9 99,600 114,540 131,721 151,479 174,201 Month 10 99,600 114,540 Month 11 99,600 114,540 Month 12 99,600 114,540 131,721 151,479 174,201

Inventory by Months & Quarters($)

Year 1 Year 2 Year 3 Year 4 Year 5Month 1 99,600 114,540 Month 2 99,600 114,540 Month 3 99,600 114,540 106,329 122,278 140,620 Month 4 99,600 114,540 Month 5 99,600 114,540 Month 6 99,600 114,540 106,329 122,278 140,620 Month 7 99,600 114,540 Month 8 99,600 114,540 Month 9 99,600 114,540 106,329 122,278 140,620 Month 10 99,600 114,540 Month 11 99,600 114,540 Month 12 99,600 114,540 106,329 122,278 140,620

Other Current Assets by Months & Quarters($)


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Accounts Payble & Accrued Expenses by Months & Quarters($)

Year 1 Year 2 Year 3 Year 4 Year 5Month 1 - 4,400 Month 2 0 0 Month 3 31 31 138,069 158,779 182,596 Month 4 104,400 120,060 Month 5 104,400 120,060 Month 6 104,400 120,060 138,069 158,779 182,596 Month 7 104,400 120,060 Month 8 104,400 120,060 Month 9 104,400 120,060 138,069 158,779 182,596 Month 10 104,400 120,060 Month 11 104,400 120,060 Month 12 104,400 120,060 138,069 158,779 182,596

Other Current Liabilities by Months & Quarters($)


02/23/201614:24:09XYZ Company

Funding ProjectionsYears 1 to 5($)

Begin Year 1 Year 2 Year 3 Year 4 Year 5Beginning Cash 1,500,000 Equity

Common 500,000 500,000 500,000 500,000 500,000 500,000 Increase / (Decrease) Previous Period 0 0 0 0 0

PreferredA Round 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 B Round 500,000 500,000 500,000 500,000

Total Preferred 1,000,000 1,000,000 1,500,000 1,500,000 1,500,000 1,500,000 Increase / (Decrease) Previous Period 0 500,000 0 0 0

Total Equity 1,500,000 1,500,000 2,000,000 2,000,000 2,000,000 2,000,000

Debt Short Term Debt 100,000

Increase / (Decrease) Previous Period 0 0 0 100,000 (100,000)

Long Term DebtCurrent Portion 100,000 100,000 100,000 100,000 Long Term Portion 400,000 300,000 200,000 100,000

Total Long Term Debt 0 500,000 400,000 300,000 200,000

Increase / (Decrease) Previous PeriodCurrent Portion 0 100,000 0 0 0 Long Term Protion 0 400,000 (100,000) (100,000) (100,000)

Total Long Term Debt 0 500,000 (100,000) (100,000) (100,000)

Total Equity & Debt 1,500,000 1,500,000 2,500,000 2,400,000 2,400,000 2,200,000

Interest Interest Rate

Short Term Debt 9.0% 9.0% 9.0% 9.0% 9.0%Long Term Debt 12.0% 12.0% 12.0% 12.0% 12.0%

Interest ExpenseShort Term Debt 0 0 0 9,000 0 Long Term Debt 0 60,000 48,000 36,000 24,000 Total Interest 0 60,000 48,000 45,000 24,000

Interest IncomeInterest Rate 4.0% 4.0% 4.0% 4.0% 4.0%Interest Income 0 0 0 0 10,000

Retained EarningsNet Income (1,012,131) (2,618,064) (4,395,485) (7,354,219) (11,046,610)Dividends 50,000 Increase / (Decrease) Retained Earnings (1,012,131) (2,618,064) (4,395,485) (7,354,219) (11,096,610)Beginning Retained Earnings 0 (1,012,131) (3,630,195) (8,025,681) (15,379,900)Ending Retained Earnings (1,012,131) (3,630,195) (8,025,681) (15,379,900) (26,476,509)

02/23/201614:24:09XYZ Company

Income StatementYears 1 to 5($)


NET REVENUES 0 0 0 0 0

COST OF REVENUE 577,464 1,522,164 2,609,429 4,564,286 6,993,143 % of Revenues #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

GROSS PROFIT (577,464) (1,522,164) (2,609,429) (4,564,286) (6,993,143) % of Revenues #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

OPERATING EXPENSES Sales & Marketing 119,000 420,250 732,900 1,124,000 1,816,000 Research & Development 119,000 255,500 410,050 754,000 972,000 General and Administration 151,667 360,150 595,107 866,933 1,251,467 Total Operating Expenses 389,667 1,035,900 1,738,057 2,744,933 4,039,467 % of Revenues

EARNINGS FROM OPERATIONS (967,131) (2,558,064) (4,347,485) (7,309,219) (11,032,610)

EXTRAORDINARY INCOME / (EXPENSE) (45,000) 0 0 0 0

EARNINGS BEFORE INTEREST & TAXES (1,012,131) (2,558,064) (4,347,485) (7,309,219) (11,032,610)

INTEREST INCOME / (EXPENSE) 0 (60,000) (48,000) (45,000) (14,000)

NET EARNINGS BEFORE TAXES (1,012,131) (2,618,064) (4,395,485) (7,354,219) (11,046,610)

TAXES 0 0 0 0 0

NET EARNINGS (1,012,131) (2,618,064) (4,395,485) (7,354,219) (11,046,610) % of Revenues #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

02/23/201614:24:09XYZ Company

Balance SheetYears 1 to 5($)

Begin Year 1 Year 2 Year 3 Year 4

ASSETS

CURRENT ASSETS

Cash 1,500,000 156,450 (1,844,120) (6,636,471) (14,282,068)

Accounts Receivable 99,600 114,540 131,721 151,479

Inventories 99,600 114,540 106,329 122,278

Other Current Assets 12,000 13,800 15,870 18,251

Total Current Assets 1,500,000 367,650 (1,601,240) (6,382,551) (13,990,060)

PROPERTY & EQUIPMENT 0 236,619 604,905 910,810 1,187,190

TOTAL ASSETS 1,500,000 604,269 (996,335) (5,471,742) (12,802,870)

LIABILITIES & SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Short Term Debt 0 0 0 0 100,000

Accounts Payable & Accrued Expen 104,400 120,060 138,069 158,779

Other Current Liab 12,000 13,800 15,870 18,251

Current portion of long term debt 0 0 100,000 100,000 100,000

Total Current Liabilities 0 116,400 233,860 253,939 377,030

0 0 400,000 300,000 200,000

STOCKHOLDERS' EQUITY

CommonStock 500,000 500,000 500,000 500,000 500,000

Preferred Stock 1,000,000 1,000,000 1,500,000 1,500,000 1,500,000

Retained Earnings (1,012,131) (3,630,195) (8,025,681) (15,379,900)

Total Equity 1,500,000 487,869 (1,630,195) (6,025,681) (13,379,900)

TOTAL LIABILITIES & EQUITY 1,500,000 604,269 (996,335) (5,471,742) (12,802,870)

LONG TERM DEBT (less current portion)

02/23/201614:24:09

Year 5

(25,836,115)

174,201

140,620

20,988

(25,500,306)

1,427,381

(24,072,925)

0

182,596

20,988

100,000

303,584

100,000

500,000

1,500,000

(26,476,509)

(24,476,509)

(24,072,925)

02/23/201614:24:09XYZ Company

Cash Flow StatememtYears 1 to 5($)

Year 1 Year 2 Year 3 Year 4OPERATING ACTIVITIES Net Earnings (1,012,131) (2,618,064) (4,395,485) (7,354,219) Depreciation 43,381 131,714 244,095 373,619 Working Capital Changes

(Increase)/Decrease Accounts Receivable (99,600) (14,940) (17,181) (19,758)(Increase)/Decrease Inventories (99,600) (14,940) 8,211 (15,949)(Increase)/Decrease Other Current Assets (12,000) (1,800) (2,070) (2,381)Increase/(Decrease) Accts Pay & Accrd Expenses 104,400 15,660 18,009 20,710 Increase/(Decrease) Other Current Liab 12,000 1,800 2,070 2,381 Net Cash Provided/(Used) by Operating Activities (1,063,550) (2,500,570) (4,142,351) (6,995,597)

INVESTING ACTIVITIES Property & Equipment (280,000) (500,000) (550,000) (650,000) Other

Net Cash Used in Investing Activities (280,000) (500,000) (550,000) (650,000)

FINANCING ACTIVITIES Increase/(Decrease) Short Term Debt 0 0 0 100,000 Increase/(Decrease) Curr. Portion LTD 0 100,000 0 0 Increase/(Decrease) Long Term Debt 0 400,000 (100,000) (100,000) Increase/(Decrease) Common Stock 0 0 0 0 Increase/(Decrease) Preferred Stock 0 500,000 0 0 Dividends Declared 0 0 0 0

Net Cash Provided / (Used) by Financing 0 1,000,000 (100,000) 0

INCREASE/(DECREASE) IN CASH (1,343,550) (2,000,570) (4,792,351) (7,645,597)

CASH AT BEGINNING OF YEAR 1,500,000 156,450 (1,844,120) (6,636,471)CASH AT END OF YEAR 1,500,000 156,450 (1,844,120) (6,636,471) (14,282,068)

02/23/201614:24:09

Year 5

(11,046,610)509,810

(22,722)(18,342)

(2,738)23,817

2,738 (10,554,047)

(750,000)

(750,000)

(100,000)0

(100,000)0 0

(50,000)(250,000)

(11,554,047)

(14,282,068)(25,836,115)

02/23/201614:24:09

XYZ CompanyBreak-Even AnalysisYears 1 to 5($)

Year 1 Year 2 Year 3 Year 4 Year 5Revenue 0 0 0 0 0

Cost of RevenueVariable 189,750 440,450 1,032,000 2,364,000 3,950,000 Fixed 387,714 1,081,714 1,577,429 2,200,286 3,043,143 Total 577,464 1,522,164 2,609,429 4,564,286 6,993,143

Operating ExpensesVariable 0 0 0 0 0 Fixed 389,667 1,035,900 1,738,057 2,744,933 4,039,467 Total 389,667 1,035,900 1,738,057 2,744,933 4,039,467

Total Costs & ExpensesVariable 189,750 440,450 1,032,000 2,364,000 3,950,000 Fixed 777,381 2,117,614 3,315,485 4,945,219 7,082,610 Total 967,131 2,558,064 4,347,485 7,309,219 11,032,610

Variable Costs/Revenue Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Break-Even Point Revenues #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

02/23/201614:24:09XYZ Company

Income Statement Year 1Year 1 by Months Total Annual

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

NET REVENUES 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 1,200,000 0

COST OF REVENUE #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 577,464

GROSS PROFIT #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (577,464)

OPERATING EXPENSES Sales & Marketing #DIV/0! #DIV/0! 119,000 Research & Development #DIV/0! 119,000 General and Administration #DIV/0! 151,667 Total Operating Expenses #DIV/0! 0 0 0 0 0 0 0 0 0 0 0 389,667

EARNINGS FROM OPERATIONS #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (967,131)

EXTRAORDINARY INCOME / (EXPENSE) (25,000) (20,000) 0 0 0 0 0 0 0 0 0 0 (45,000) (45,000)

EARNINGS BEFORE INTEREST & TAXES #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,012,131)

INTEREST INCOME / (EXPENSE) 0 0 0 0 0 0 0 0 0 0 0 0 0 0

NET EARNINGS BEFORE TAXES #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,012,131)

TAXES 0 0 0 0 0 0 0 0 0 0 0 0 0 0

NET EARNINGS #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,012,131)

XYZ CompanyIncome Statement Year 2Year 2 by Months Total Annual

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

NET REVENUES 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 1,380,000 0

COST OF REVENUE #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1,522,164

GROSS PROFIT #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,522,164)

OPERATING EXPENSES Sales & Marketing #DIV/0! #DIV/0! 420,250 Research & Development #DIV/0! 255,500 General and Administration #DIV/0! 360,150 Total Operating Expenses #DIV/0! 0 0 0 0 0 0 0 0 0 0 0 1,035,900

EARNINGS FROM OPERATIONS #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (2,558,064)

EXTRAORDINARY INCOME / (EXPENSE) 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EARNINGS BEFORE INTEREST & TAXES #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (2,558,064)

INTEREST INCOME / (EXPENSE) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (60,000) (60,000)

NET EARNINGS BEFORE TAXES #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (2,618,064)

TAXES 0 0 0 0 0 0 0 0 0 0 0 0 0 0

NET EARNINGS #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (2,618,064)

02/23/201614:24:09XYZ Company

Income Statement Year 3 Year 4 Year 5Years 3, 4 & 5 by Quarters Annual Annual Annual

Year 3 Year 4 Year 5 Projection Projection Projection1st Qtr 2nd Qrtr 3rd Qrtr 4th Qrtr Total 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total

NET REVENUES 396,750 396,750 396,750 396,750 1,587,000 456,263 456,263 456,263 456,263 1,825,050 524,702 524,702 524,702 524,702 2,098,808 0 0 0 0 0 0

COST OF REVENUE #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 2,609,429 4,564,286 6,993,143

GROSS PROFIT #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (2,609,429) (4,564,286) (6,993,143)

OPERATING EXPENSES Sales & Marketing #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 732,900 1,124,000 1,816,000 Research & Development #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 410,050 754,000 972,000 General and Administration #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 595,107 866,933 1,251,467 Total Operating Expenses #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1,738,057 2,744,933 4,039,467

EARNINGS FROM OPERATIONS #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (4,347,485) (7,309,219) (11,032,610)

EXTRAORDINARY INCOME / (EXPENSE) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EARNINGS BEFORE INTEREST & TAXES #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (4,347,485) (7,309,219) (11,032,610)

INTEREST INCOME / (EXPENSE) (12,000) (12,000) (12,000) (12,000) (48,000) (11,250) (11,250) (11,250) (11,250) (45,000) (3,500) (3,500) (3,500) (3,500) (14,000) (48,000) (45,000) (14,000)

NET EARNINGS BEFORE TAXES #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (4,395,485) (7,354,219) (11,046,610)

TAXES 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

NET EARNINGS #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (4,395,485) (7,354,219) (11,046,610)

02/23/201614:24:09XYZ Company

Cash Flow Statement Year 1Year 1 by Months Estimated Annual

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 ProjectionOPERATING ACTIVITIES Net Earnings #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,012,131) Depreciation 3,615 3,615 3,615 3,615 3,615 3,615 3,615 3,615 3,615 3,615 3,615 3,615 43,381 43,381 Working Capital Changes

(Increase)/Decrease Accounts Receivable (99,600) 0 0 0 0 0 0 0 0 0 0 0 (99,600) (99,600)(Increase)/Decrease Inventories (99,600) 0 0 0 0 0 0 0 0 0 0 0 (99,600) (99,600)(Increase)/Decrease Other Current Assets (99,600) 0 0 87,600 0 0 0 0 0 0 0 0 (12,000) (12,000)Increase/(Decrease) Accts Pay & Accrd Expenses 0 0 31 104,369 0 0 0 0 0 0 0 0 104,400 104,400 Increase/(Decrease) Other Current Liab 12,000 0 0 0 0 0 0 0 0 0 0 0 12,000 12,000 Net Cash Provided/(Used) by Operating Activities #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,063,550)

INVESTING ACTIVITIES Property & Equipment (50,000) (100,000) (50,000) (40,000) 0 0 (40,000) 0 0 0 0 0 (280,000) (280,000) Other 0 0

Net Cash Used in Investing Activities (50,000) (100,000) (50,000) (40,000) 0 0 (40,000) 0 0 0 0 0 (280,000) (280,000)

FINANCING ACTIVITIES Increase/(Decrease) Short Term Debt 0 0 0 0 Increase/(Decrease) Curr. Portion LTD 0 0 0 0 Increase/(Decrease) Long Term Debt 0 0 0 0 Increase/(Decrease) Common Stock 0 0 0 0 Increase/(Decrease) Preferred Stock 0 0 0 0 Dividends Declared 0 0 0

Net Cash Provided / (Used) by Financing 0 0 0 0 0 0 0 0 0 0 0 0 0 0

INCREASE/(DECREASE) IN CASH #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,343,550)

CASH AT BEGINNING OF PERIOD 1,500,000 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1,500,000 CASH AT END OF PERIOD #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 156,450

XYZ CompanyCash Flow Statement Year 2Year 2 by Months Estimated Annual

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 2 ProjectionOPERATING ACTIVITIES Net Earnings #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (2,618,064) Depreciation 10,976 10,976 10,976 10,976 10,976 10,976 10,976 10,976 10,976 10,976 10,976 10,976 131,714 131,714 Working Capital Changes 0

(Increase)/Decrease Accounts Receivable (14,940) 0 0 0 0 0 0 0 0 0 0 0 (14,940) (14,940)(Increase)/Decrease Inventories (14,940) 0 0 0 0 0 0 0 0 0 0 0 (14,940) (14,940)(Increase)/Decrease Other Current Assets (1,800) 0 0 0 0 0 0 0 0 0 0 0 (1,800) (1,800)Increase/(Decrease) Accts Pay & Accrd Expenses (100,000) (4,400) 31 120,029 0 0 0 0 0 0 0 0 15,660 15,660 Increase/(Decrease) Other Current Liab 1,800 0 0 0 0 0 0 0 0 0 0 0 1,800 1,800 Net Cash Provided/(Used) by Operating Activities #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (2,500,570)

0 INVESTING ACTIVITIES 0 Property & Equipment (100,000) (100,000) 0 0 0 (100,000) 0 0 (100,000) 0 0 (100,000) (500,000) (500,000) Other 0 0

Net Cash Used in Investing Activities (100,000) (100,000) 0 0 0 (100,000) 0 0 (100,000) 0 0 (100,000) (500,000) (500,000)0

FINANCING ACTIVITIES 0 Increase/(Decrease) Short Term Debt 0 0 0 0 Increase/(Decrease) Curr. Portion LTD 100,000 0 100,000 100,000 Increase/(Decrease) Long Term Debt 400,000 0 400,000 400,000 Increase/(Decrease) Common Stock 0 0 0 0 Increase/(Decrease) Preferred Stock 500,000 0 500,000 500,000 Dividends Declared 0 0 0

Net Cash Provided / (Used) by Financing 1,000,000 0 0 0 0 0 0 0 0 0 0 0 1,000,000 1,000,000 0

INCREASE/(DECREASE) IN CASH #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (2,000,570)

CASH AT BEGINNING OF PERIOD #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 156,450 CASH AT END OF PERIOD #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,844,120)

02/23/201614:24:09XYZ Company

Cash Flow Statement Year 3 Year 4 Year 5Years 3, 4 & 5 by Quarters Annual Annual Annual

Year 3 Year 4 Year 5 Projection Projection Projection1st Qtr 2nd Qrtr 3rd Qrtr 4th Qrtr Total 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total

OPERATING ACTIVITIES Net Earnings #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (4,395,485) (7,354,219) (11,046,610) Depreciation 61,024 61,024 61,024 61,024 244,095 93,405 93,405 93,405 93,405 373,619 127,452 127,452 127,452 127,452 509,810 244,095 373,619 509,810 Working Capital Changes

(Increase)/Decrease Accounts Receivable (17,181) 0 0 0 (17,181) (19,758) 0 0 0 (19,758) (22,722) 0 0 0 (22,722) (17,181) (19,758) (22,722)(Increase)/Decrease Inventories 8,211 0 0 0 8,211 (15,949) 0 0 0 (15,949) (18,342) 0 0 0 (18,342) 8,211 (15,949) (18,342)(Increase)/Decrease Other Current Assets (2,070) 0 0 0 (2,070) (2,381) 0 0 0 (2,381) (2,738) 0 0 0 (2,738) (2,070) (2,381) (2,738)Increase/(Decrease) Accts Pay & Accrd Expenses 18,009 0 0 0 18,009 20,710 0 0 0 20,710 23,817 0 0 0 23,817 18,009 20,710 23,817 Increase/(Decrease) Other Current Liab 2,070 0 0 0 2,070 2,381 0 0 0 2,381 2,738 0 0 0 2,738 2,070 2,381 2,738 Net Cash Provided/(Used) by Operating Activities #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (4,142,351) (6,995,597) (10,554,047)

INVESTING ACTIVITIES Property & Equipment (100,000) (200,000) (100,000) (150,000) (550,000) (200,000) (200,000) (100,000) (150,000) (650,000) (200,000) (200,000) (200,000) (150,000) (750,000) (550,000) (650,000) (750,000) Other 0 0 0 0 0

Net Cash Used in Investing Activities (100,000) (200,000) (100,000) (150,000) (550,000) (200,000) (200,000) (100,000) (150,000) (650,000) (200,000) (200,000) (200,000) (150,000) (750,000) (550,000) (650,000) (750,000)

FINANCING ACTIVITIES Increase/(Decrease) Short Term Debt 0 0 0 100,000 0 100,000 0 (100,000) (100,000) 0 100,000 (100,000) Increase/(Decrease) Curr. Portion LTD 0 0 0 0 0 0 0 0 0 0 0 0 Increase/(Decrease) Long Term Debt 0 (100,000) (100,000) 0 (100,000) (100,000) 0 (100,000) (100,000) (100,000) (100,000) (100,000) Increase/(Decrease) Common Stock 0 0 0 0 0 0 0 0 0 0 0 0 Increase/(Decrease) Preferred Stock 0 0 0 0 0 0 0 0 0 0 0 0 Dividends Declared 0 0 0 0 (50,000) (50,000) 0 0 (50,000)

Net Cash Provided / (Used) by Financing 0 0 0 (100,000) (100,000) 100,000 0 0 (100,000) 0 0 0 0 (250,000) (250,000) (100,000) 0 (250,000)

INCREASE/(DECREASE) IN CASH #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (4,792,351) (7,645,597) (11,554,047)

CASH AT BEGINNING OF PERIOD #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1,844,120) (6,636,471) (14,282,068)CASH AT END OF PERIOD #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (6,636,471) (14,282,068) (25,836,115)

02/23/201614:24:09XYZ Company

SummaryYears 1 to 5

Year 1 Year 2 Year 3 Year 4 Year 5Summary Financials ($)

Revenue 0 0 0 0 0 Gross Profit (577,464) (1,522,164) (2,609,429) (4,564,286) (6,993,143)EBIT (1,012,131) (2,558,064) (4,347,485) (7,309,219) (11,032,610)EBITDA (968,750) (2,426,350) (4,103,390) (6,935,600) (10,522,800)Net Earnings (1,012,131) (2,618,064) (4,395,485) (7,354,219) (11,046,610)Net Cash from Operating Activities (1,063,550) (2,500,570) (4,142,351) (6,995,597) (10,554,047)Capital Expenditures 280,000 500,000 550,000 650,000 750,000 Interest Income/(Expense) 0 (60,000) (48,000) (45,000) (14,000)Dividends 0 0 0 0 50,000 Cash 156,450 (1,844,120) (6,636,471) (14,282,068) (25,836,115)Total Equity (512,131) (3,130,195) (7,525,681) (14,879,900) (25,976,509)Total Debt 0 500,000 400,000 300,000 200,000

Growth Revenue Growth Rate - CAGR: #DIV/0! #DIV/0! #DIV/0! #DIV/0! Net Earnings Growth Rate - CAGR: 158.7% 67.9% 67.3% 50.2%

Ratios Current Ratio 3.2 -6.8 -25.1 -37.1 -84.0 Debt to Capital (LT Debt + Equity) 0.0 -0.4 -0.1 0.0 0.0

ProfitabilityGross Profit % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!Operating Expenses %Net Earnings % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

ReturnsReturn on Assets -167.5% 262.8% 80.3% 57.4% 45.9%Return on Equity -207.5% 160.6% 72.9% 55.0% 45.1%Return on Capital (LT Debt + Equity) -207.5% 231.6% 78.1% 56.2% 45.5%

02/23/201614:24:09

XYZ Company NotesValuation Venture Capital MethodYears 1 to 5

Assumptions: REFInvestor required IRR 60% AP/E ratio at IPO or acquisition 15 BInitial investment $1,500,000 C FV(A,C) G/F IRR(D,G)

REF D E F G H I J K

Valuation Calculation Year Net Income IRR Calculation WorkspaceCalculation Income Stmt B * E FV(F,D) C / G F * H I / C IRR(I,C,D) Start Year 1 Year 2 Year 3 Year 4 Year 5

Liquidity Event in Year 1 1 (1,012,131) ($15,181,967) $2,400,000 100.0% $0 0% #N/A ($1,500,000) $0 Liquidity Event in Year 2 2 (2,618,064) ($39,270,964) $3,840,000 100.0% $0 0% ($1,500,000) $0 $0 Liquidity Event in Year 3 3 (4,395,485) ($65,932,279) $6,144,000 100.0% $0 0% ($1,500,000) $0 $0 $0 Liquidity Event in Year 4 4 (7,354,219) ($110,313,286) $9,830,400 100.0% $0 0% ($1,500,000) $0 $0 $0 $0 Liquidity Event in Year 5 5 (11,046,610) ($165,699,143) $15,728,640 100.0% $0 0% ($1,500,000) $0 $0 $0 $0 $0

Negotiation Workspace

Year1 25.0% $0 0% #N/A ($1,500,000) $0 2 25.0% $0 0% ($1,500,000) $0 $0 3 25.0% $0 0% ($1,500,000) $0 $0 $0 4 25.0% $0 0% ($1,500,000) $0 $0 $0 $0 5 40.0% $0 0% ($1,500,000) $0 $0 $0 $0 $0

MarketCapitalization

Required Future Value (Investor)

Investor'sShare

Investor'sReturn

Investor'sROI

Investor'sIRR

Investor'sShare

Investor'sReturn

Investor'sROI

Investor'sIRR

02/23/201614:24:09

XYZ CompanyValuation Venture Capital MethodYears 1 to 5Multiple Rounds

Assumptions Ref CalculationMonth of IPO 60 AForecast annualized earnings at IPO ($11,046,610) BP/E ratio at IPO 15 C

Investment Round First Second Third Month of Investment 0 24 CInvestor required IRR 60% 50% DAmount of Investment $1,500,000 $500,000 ERequired Monthly IRR 5.00% 4.17% 0.00% F D/12Duration of Investment 60 36 60 G A-C

CalculationsMarket Capitalization at IPO ($165,699,143) H B*C

First Second Third Required FV for Investor at IPO $15,728,640 $1,687,500 $0 I E*(1+F)^GIndividual Investor's Share -9.5% -1.0% 0.0% J I/HIndividual Investor's ROI 1049% 338% #DIV/0! K I/EIndividual Investor's IRR 60% 50% #DIV/0! L (I/E)^(12/G)-1

Cumulative Investors' Share -9.5% -10.5% -10.5% M sum(J)Cumulative Founders' Share 109.5% 110.5% 110.5% N 1-M

Negotiations Round First Second Third Individual Investor's Share 15.0% 5.0% 3.0%FV for Investor at IPO ($24,854,871) ($8,284,957) ($4,970,974)Individual Investor's ROI -1657% -1657% #DIV/0!Individual Investor's IRR -275% -355% #DIV/0!

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