Business Plan Auris

Executive Summary
The majority of hearing-impaired individuals who use hearing-aids or undergo surgery

to receive cochlear implants expect to hear well. However, the reality is that tens of
thousand of patients continue to experience severe difficulty hearing in the real world,
away from the clinical setting. This is primarily due to the incorrect adjustment of the
settings on the medical device by a clinician. Consequently, audiologists and speech
therapists greatly need a hearing test that can quickly and accurately predict how well
individuals, with either a cochlear implant or a hearing aid, can hear in a noisy "real
world" environment following installation of the medical device. Such a test is
especially important for children, as early intervention can reduce slowed learning. It
is estimated that if children with hearing loss do not receive early intervention, special
education for a child with hearing loss will cost an additional $420,000 in special
education costs and result in a lifetime cost of approximately $1 million per child. [1] In
adults, hearing loss can begin as early as age 50 and lack of early intervention can lead
to loss of jobs, emotional distress and even cognitive disorders. In addition, since life
expectancy can realistically reach to age 90 and beyond, an individual could
potentially be affected by hearing loss for half of his/her lifetime.
Pure tone hearing tests, which require audiometers and sound proof booths to deliver
the tone, are currently used to evaluate hearing loss. These tests evaluate fundamental
hearing loss, but cannot predict how well an individual will understand words and
sentences in a realistic environment. Current tests also cannot asses whether or not a
second cochlear implant or second hearing aid would significantly improve the
hearing of a patient. This is important to patients and their families as cochlear
implants and hearing aids cost approximately $40,000 and $5,000, respectively, and
often are not covered by insurance companies.
Auris Solutions is an early stage hearing care company, which solves these market
needs by delivering novel and scalable software-based hearing tests that rapidly and
reliably assess hearing in a realistic environment. Unlike other tests, our tests enable
the clinician to both optimize the hearing device settings, and make recommendations
regarding the purchase of additional hearing devices for their patients. Setting the
medical device optimally for each patient can make an enormous difference, in saving
them from the emotional and mental problems associated with hearing ineffectively.
We believe that our tests will become a mandatory part of an audiology clinic's
portfolio of hearing tests, performed following the audiogram tone test.
Auris Solutions is ready to market its first product: CRISP (Children's Realistic
Intelligibility and Speech Perception). This rapid and reliable system for clinically
testing speech intelligibility of children computerizes the method used to analyze
hearing test results, so as to enable a clinical user to more accurately control the
presentation of sounds, the storage and analysis of results, and the process by which
the child may interactively make choices and receive reinforcement during the test.
Auris Solutions is currently seeking $250,000 to implement our marketing strategy as

well as to offset our start-up costs, which include product development, capital
equipment purchases and to support the business development plan for current and
future products.
_________________________
[1] http://trfn.clpgh.org/shhh/Factsheet.html#r1
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1.1 Objectives
 We will implement a business model that will allow us to achieve and maintain
a gross margin equal to or above 75%.
 We will recruit a management team that has relevant knowledge and

experience in order to promote and enhance the company's core competencies.
 We will satisfy our customers by offering products free of defects and by

offering outstanding customer service that will consistently exceed customers'
expectations.
 We will invest a significant portion of our sales revenues into research and
development in order to grow and offer new, innovative products within the
hearing care market.
1.2 Mission
Auris Solutions, LLC is a comprehensive and innovative solutions provider for

refining hearing loss diagnoses. We pride ourselves on the fact that our products are
more rapid, reliable, and efficient than competitors. Our business will be managed to
achieve planned growth and long term profitability. We will grow by building upon
demonstrated strengths and meeting our customers' needs. As a result, Auris
Solutions, LLC will optimize shareholder value and be respected worldwide as a
solutions provider company in the hearing industry.
We stand by the following values:
 Corporate Responsibility - The Company will participate in community

events.
 Ethical Standards -The Company will conduct business based on sound

ethical principles.
 Compassion - We reach out with openness, kindness, and concern.
 Respect - We honor the wonder of the human spirit.
 Excellence - We expect the best of ourselves and one another.
 Stewardship - We use our resources responsibly.
 Community - We cultivate relationships that inspire us to serve.
1.3 Keys to Success
At Auris Solutions, we aim to provide our customers with the best products and
related services. Our commitment to quality will begin with our employees, who are
our most important assets. Thus, our employees will be accountable in each of the
following areas, which are key to our success:
 Management Team:
o Hire the right people to work for the company
o Set evaluation policies and standards for all employees
o Delegate and make staff accountable for their work
 Sales & Marketing:
o Establish awareness of Auris brand and product offerings

o Set and implement a sales strategy
o Manage barriers to entry
o Implement a marketing plan that successfully brings our advertisements

and products to the target market
o Provide customer support for all products after purchase
 Product Development and Product Quality:
o Launch new products on time
o Establish quality processes
 Management & Customer Service:
o Manage purchasing properly
o All purchases should be based on customers' needs
o Reduce need for an in-house inventory and overhead costs
o Set marketing budgets and manage accounts receivable
o Set a program to manage customer satisfaction:
 Products shipped and delivered on time
 Effectively respond to customer complaints
Company Summary
Auris Solutions is an early-stage company that is currently using its proprietary
technology (US patent #6,584,440) and well-regarded scientific knowledge to create
systems solutions for the hearing care industry. Auris aims to capitalize on the hearing
care industry by providing products that will enable hearing care professionals to
quickly and accurately test hearing loss and to assess the benefits of cochlear implants
and hearing aids for both children and adults. In addition, the company's upcoming
products will evaluate sensory/cognitive deficits in children and adults with
developmental disabilities and mental retardation.
Audiologists and speech therapists greatly need a hearing test that can quickly and
accurately assess how well an individual, with either a cochlear implant or a hearing
aid, can hear and understand words in a noisy or realistic environment. Such a test is
especially important for children, as early intervention can reduce slowed learning in a
classroom setting, which may have lifetime costs to society of up to $1M per child.
Additionally, for adults, lack of early intervention can lead to loss of jobs, emotional
distress and even cognitive disorders. This is important since hearing loss can begin as
early as age 50. And, since life expectancy can nowadays realistically reach to age 90
and beyond, an individual could potentially be affected by hearing loss for half his/her
entire life.
Current systems like audiograms are used to evaluate hearing loss, but cannot assess
how well individuals understand speech in a relatively "noisy" environment such as a
classroom setting or office. Thus, in order to solve this problem, Auris Solutions has
developed a proprietary (US patent #6,584,440) hearing test called the Children's
Realistic Intelligibility and Speech Perception (CRISP) test. The CRISP test does not
require FDA approval, has already been beta-tested and is immediately ready for
market. Although the CRISP test was primarily developed to test children's hearing
capabilities, Auris Solutions also has several other products in the pipeline, one of
which will be ready for launch in 3 months, which will create a diversified portfolio of
software testing solutions for the hearing care industry. (See 3.5, Future Products,
below for more information.)
2.1 Start-up Summary
Auris Solutions' start-up costs are associated with the related legal services to structure
the operating agreement with each stakeholder, the final software development costs,
the sales and marketing expenses, and the licensing cost. The following table is a
summary of the start-up costs that Auris Solutions will incur once the funding is
secured. Included in Start-up expenses is exclusive licensing of the patented software
from the Wisconsin Alumni Research Foundation (WARF).
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START-UP REQUIREMENTS
Start-up Expenses
Legal $20,000
Stationery etc. $5,000
Sales & Marketing $30,000

Licensing to WARF $20,000
Insurance $5,100
Rent $9,000
Property & Equipment $20,000
Travel & Conferences $24,000
Website $20,000
Software Development $50,000
Other $0
TOTAL START-UP EXPENSES $203,100
Start-up Assets
Cash Required $46,900
Other Current Assets $0
Long-term Assets $0
TOTAL ASSETS $46,900
Total Requirements $250,000
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2.2 Company Ownership
Auris Solutions plans to be a privately-held, Limited Liability Corporation, with Dr.

Plauger as one of the owners and the key driver of research and new product
development. However, we believe that in order to attract talented management, we
will need to create a stock option pool not higher than 45% of the total shares. See the
table below for an ownership breakdown.
Owners % Ownership
Dr. Plauger 20% Max
Stock Option Pool 45% Max
Investors 35% Max
2.3 Company Locations and Facilities
Auris Solutions is temporarily located in the Big Building in Madison, Wisconsin. The

present office space is small. As revenues grow, we will have to look for additional
space in order to accommodate employees. Our current facility could serve for
shipping purposes.
Products
To summarize, the CRISP test is:
 A method and system for clinically evaluating speech intelligibility in children

in such a way as to link the child's normal environmental noise experience to the
audiology clinic.
 A rapid and reliable method and system for testing the speech intelligibility of
a child, that is adapted to engage children so as to enable a tester to determine
what auditory factors are contributing to the child's speech intelligibility level.
 A method and system for simulating a child's normal classroom environment

by providing a variety of types of competing noises so as to determine their
effect(s) on the speech intelligibility of the child.
 A method and system for testing the effects of location of competing noises
relative to a target word source and the child so as to determine the spatial release
from masking potential of said location.
 A system for computerizing the method so as to enable a clinical user to more

accurately control the presentation of sounds, the storage and analysis of results,
and by which the child may interactively make choices and receive reinforcement.
The CRISP test will allow audiologists to offer better service, which will become an
additional source of revenue for their clinics. For example, depending on the
complexity of the tests, audiologists typically charge anywhere from $35 to $200 per
test for the new service. The beta version of CRISP is currently being sold and used
by both independent audiologists/speech therapists and researchers as part of a clinical
trials study for cochlear implants. These individuals are also providing additional
feedback on the functionality and ease of use of the software. The audiologists who
run the clinics and are beta-testing CRISP are considered to be significant influences
within the field of audiology. Key beta-test audiologists include:
Jane R. Madell, Ph.D.
Director: Hearing and Learning Center
Beth Israel Medical Center
[Proprietary and confidential information removed.]
Patricia Chute, Ph.D.

Mercy College
Richard Tyler, PhD.

University of Iowa
In addition to these key beta-test sites, the CRISP test is also being beta-tested in
many other clinics across the United States, including Texas (four different clinics),
California (three different clinics), Alabama, New Mexico, Wisconsin, and Michigan.
The valuable feedback from these beta-test sites will be incorporated into Version 3.0
of the CRISP test.
Testimonials
Auris Solutions has received feedback regarding the CRISP test from many of its
beta-test sites. The feedback Auris has received has been overwhelmingly positive.
For instance, Dr. Richard Tyler says, "[CRISP] is a well-designed, easy to use, and
clever test that provides lots of information and has the potential to attract lots of
users." In addition, Dr. Jane Madell says, "there is no other test like it available on the
market today." Finally, Dr. Patricia Chute says, "CRISP is very easy-to-use, and
scores more rigorously than any other test available on the market."
The feedback we have received confirms our beliefs that the CRISP test solves a real
problem in the clinics of audiologists and speech therapists.
3.1 Product Description
The CRISP test comprises target sounds as words that occur in the presence of
competing sound(s), that are either spatially near or separated from the target. CRISP
will enable the user to measure a child's ability to understand speech in the presence of
competing noise or words, and the extent to which each individual child benefits from
spatial separation of the target and competing sounds. In CRISP, the child is required
to respond to the target word by selecting a picture representation of the target word
from among several picture choices, thus providing an interactive aspect to the test.
Animations and feedback will be employed to engage the child during the test as well
as functioning as a form of positive reinforcement. CRISP provides a set of rules
whereby the sound level at which target words are presented may vary adaptively
according to the child's responses. The test repeats several target words under a variety
of types and locations of competing sounds and records the child's responses in a
results database. The results are available for further analysis by a user to produce a
customized output. A computerized system enables provisioning the test in a
controlled manner, analysis of the data, and further engagement of the child.
As shown above, the set-up requires an amplifier, a sound level meter, a minimum of
two speakers (distanced 3 ft minimum from the patient), and a computer system with
at least Windows 98 to perform the CRISP software test. Testing should take place in
a professional soundproof audiology booth, which does not present a problem, as the
booth is already a standard component of all audiology clinics. The price range for the
software is $2,000 to $2,500.
3.2 Competitive Comparison
The Industry Analysis (section 4.3, below) contains a discussion of some hearing tests
that attempt to mimic a realistic environment. These tests, however, are
primarily designed for adults. A summary of how the CRISP hearing test differs from
Age at
which Problems with
Test Purpose
can be these tests
used
other currently
available tests is
Can't be used
detailed in the
with children
table below:
Can't evaluate
masking signals
Measure speech
Connected for sentence's Doesn't provide
Adults 3.3
Speech Test intelligibility in speech
Strengths
"babble." reception
and
thresholds, or
Challenges
percent correct
scores for Barriers to
signal to noise Entry Against
ratio Competition
Auris Solutions'
Can't be used CRISP hearing
with children test system is
protected under
United States
Can't evaluate
Measure speech masking signals patent
#6,584,440:
for sentence's Adults;
Hearing in intelligibility in Children Doesn't provide Method and
speech-shaped System for
Noise test ages 8 speech
noise. Does not
Rapid and
use speech or and older reception
other types of
Reliable Testing
thresholds, or
noise sources. of Speech
percent correct
Intelligibility in
scores for
Children. The
signal to noise
patent was
ratio
granted on June
24, 2003. The
Can't be used
invention was
with children
Can't evaluate
masking signals
disclosed to the Wisconsin Alumni Research Foundation of the University of
Wisconsin at Madison (WARF); The Company is currently negotiating the terms of an
exclusive licensing agreement with WARF. In addition, CRISP, as well as any name
for each future system, are secured under trademarks. We believe that the patent as
well as the trademark will provide significant barriers to entry with respect to
competitors copying the CRISP hearing system and method.
Auris Solutions' Challenges

There are two main challenges Auris Solutions needs to address when formulating its
marketing strategy:
Establish brand equity – Because the CRISP hearing test is a new product that will be
introduced from a new company, the test and company will have no brand equity
established in the marketplace. Consequently, it will be important to establish a brand
name as soon as possible through different marketing efforts. This weakness will be
mitigated through advertising in an effort to increase awareness. However, within the
hearing care industry, credentials are key, as stated above. Therefore, with CRISP,
brand equity problems will also be mitigated through Dr. Plauger's own credibility and
status within the hearing healthcare industry.
Overcome reasons not to buy the test – Many audiologists and speech therapists use
audiometers for hearing tests and stop there. The problem with this is that the
healthcare professional will not know how well the patient will hear in a realistic
environment following surgical implantation of a cochlear implant or fitting of a
hearing aid. Therefore, it will be important to demonstrate to these audiologists how
the CRISP hearing test can offer additional functional benefits to complement the use
of the audiometer. In addition, it will also be important to make the healthcare
provider aware that administering the CRISP hearing test will be a revenue generator.
This will be mitigated through our integrated marketing communications plan.
In addition, within the hearing care industry, credentials are key; researchers, such as
Dr. Plauger, who have deep industry experience and knowledge, are very well
respected. This has enabled them to develop an extensive network of contacts within
the industry. Therefore, products that such researchers develop have more credibility
due to the researcher's own brand equity, in terms of the underlying basis of trust and
respect that has already been painstakingly established over many years. Therefore,
with Auris' current and future systems solutions, a key barrier to entry is through Dr.
Plauger's own credibility and status within the hearing healthcare industry and the
significant learning curve advantage of developing such a comprehensive test.
3.4 Sales Literature
Once funding has been secured, we will spend not more than a month in developing a
comprehensive company brochure, software demos, and a CD case for our first
product. The brochure will describe our company, as well as its product offerings,
along with some other product information for the same target customers. We will
also incorporate the same brochure into our web page.
3.5 Technology
Auris Solutions' CRISP hearing test system is protected under United States patent
#6,584,440. As a brief description of the technology, CRISP hearing test is a method
and system for testing the speech intelligibility of a child comprises providing a set of
target sounds as words in the presence and absence of competing sound(s) of a variety
of types so as to enable an analysis of the aspects of competing sounds and their
respective effects on the speech intelligibility of a child. CRISP varies the locations at
which competing sound(s) is provided, to enable an evaluation of the sounds' effects
on the spatial release from masking.
The target words used in the test are first determined to be within the vocabulary of
the child. The child is required to respond to the target word by selecting a picture
representation of the target word from among several picture choices, thus providing
an interactive aspect to the test. Optionally, a positive or negative reinforcement may
be provided. The sound level at which the target words are presented may vary
adaptively according to the child's responses, the change in sound level being
determined by a set of rules. The test is repeated over several target words and under a
variety of types and locations of competing sounds, and the child's responses are
recorded in a results database. Users may further analyze the results to produce
customized output. The computerized system enables administering the test in a
controlled manner, analyzing the data, and further engaging the child.
3.6 Future Products
In addition to CRISP, Auris Solutions also has several other products in the pipeline
that will create a diversified portfolio of software testing solutions for the hearing care
industry. The new products are listed below, with current timelines.
Products Ready to be launched by 2005:
 Minimum Audible Angle (MAA): This test measures the smallest change in

the position of a sound that can be reliably discriminated. Typically, normal
hearing adults can discriminate differences of 1-2º, and children ages 5-6 perform
similarly. However, hearing-impaired people perform much worse, especially if
they do not have binaural hearing. The MAA test can be used to assess the
benefits of having two cochlear implants, two hearing aids, or one of each, for
both children and adults. This product will be ready for launch in 2005, and
targeted to the same customer segments as the CRISP test. An owner's manual
has been completed for this product. A price range has been established between
$800 and $1,000.
Products in the Pipeline:
 CRISP Junior: A variation of CRISP for children of ages ranging from 2 to 3

years old.
 Sentence Materials: A variation of CRISP where the child would repeat the
sentence that s/he heard rather than responding to pictures in the screen.
 Echo Suppression: The ability of the auditory system to process sounds in the

real world depends on how well people can ignore echoes, which are abundant in
every room. The task is similar to the MAA test (above) except that a simulated
echo is also presented from one loudspeaker in the center. Young children are
worse than adults at suppressing echoes, due to their immature hearing. This test
provides a very useful assessment tool for the maturation of the binaural hearing
system, and can be used in children and adults.
 ERISP Test (Elder's Realistic Intelligibility and Speech Perception): A

variation of CRISP for the implementation of hearing tests that are easily used by
the elderly population. The test assists in determining the degree of hearing loss,
ability to hear in noisy environments, and benefit of a hearing aid or cochlear
implant for individual patients.
 Children with developmental disabilities (DD) and mental retardation

(MR): Other measures of hearing are being developed that will help to assess
sensory and cognitive deficits in children and adults with DD and MR. These tests
would provide (1) tools for further evaluating and differentiating between affected
individuals and (2) insight into development of appropriate tools for rehabilitation
and training.
Market Analysis Summary

The US hearing care industry is composed of more than 105,000 practitioners (94,000
speech pathologists, comprehensive and 11,000 audiologists) providing hearing care
products and services. This market class includes specialists that offer services to
hearing impaired patients. These services include several segments:
 Hearing rehabilitation, including the evaluation and rehabilitation of hearing-

impaired individuals.
 Advanced audio-diagnostic services, including the neuro-audiological

evaluation and non-medical diagnosis of hearing and balance disorders.
 Industrial and preventive audiological services, including noise level

measurements, dosimetry, and hearing screenings.
The CRISP test is expected to be offered to patients by all 3 service segments.
Typical Hearing Test Process
Typically, an individual undergoes the following process for hearing testing:

1. The patient or family makes an appointment with an audiologist or speech
therapist at the hospital or independent audiology clinic.
2. The patient is tested for hearing using a tone test delivered through an
audiometer. The patient will raise their right or left hand signaling to the clinician
that the subject hears the tone in that particular ear; in some cases an electronic
method is used where the patient will simply push a button when hearing the tone.
3. Based on the collected result, the clinician makes a clinical assessment of the
individual's ability to hear. If the individual is defined to have hearing loss, then
the audiologist will administer a tympanogram in order to test the mobility of
patient's eardrum. The audiologist will also deliver a brainstem auditory evoked
response to evaluate the health of the cochlea.
4. The clinician then makes a recommendation as to whether or not the patient

needs a hearing aid or cochlear implant.
5. After installation, the settings on the hearing aid or cochlear implant are
adjusted based on trial and error.
Where Does the CRISP Test Fit into the Hearing Test Process?
After installing and adjusting the settings on the medical device, the clinician has no
way to know if the specific settings will actually be ideal for the patient to hear in the
real world. The CRISP test will allow the clinician to make specific adjustments to the
hearing aid or cochlear implant that best optimizes the patient's ability to hear. In this
capacity, the CRISP test will fit in just after step 5 of the above process; clinicians will
be able to charge for this service.
In addition to testing hearing in patients who have no hearing devices, many patients
seek hearing care professionals to determine if another hearing aid or cochlear implant
on the other ear would benefit them. Currently, clinicians have no test that will assess
the benefit of adding another hearing device to the patient's regimen. Therefore, in this
capacity, the CRISP test would fall into steps 2 and 3. The CRISP would allow the
clinician to definitively make a recommendation to the patient regarding the addition
of another medical hearing device. Clinicians can also charge for this service.
4.1 Market Segmentation
Auris Solutions will focus its marketing efforts towards the 105,000 audiologists and
speech pathologists who work in the organizations described below.
Customer Segments [1]
Benefit
Segment Description
Sought
Independent speech Health practitioners primarily engaged in diagnosing and Functional
therapists and treating hearing speech, language, or relevant hearing and
audiologists problems. emotional
Organizations with physicians and other medical staff
Functional
primarily engaged in providing a range of outpatient
HMO medical centers and
medical services to the health maintenance organization
emotional
(HMO) subscribers.
Facilities which provide medical, diagnostic, and treatment Functional
Hospitals (non-HMO) services that include physician, nursing, and other health and
services to inpatients. emotional
Establishments of health practitioners primarily engaged
Hearing test service-
in diagnosing and treating hearing speech, language, or Functional
based firms[2]
relevant hearing problems.
Hearing aid and Companies that manufacture cochlear implants and/or
cochlear implant hearing aids. Many of these companies also offer hearing Functional
manufacturers tests in addition to their medical devices.
_____________________________
[1] 2000 U.S. Census
[2] D&B Million Dollar Database (search of SIC 8099), 2003.

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MARKET ANALYSIS
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Potential Growth CAGR

Customers
Audiologists 21% 11,000 13,310 16,105 19,487 23,579 21.00%
Speech 21% 94,000 113,740 137,625 166,526 201,496 21.00%

Pathologists
Total 21.00% 105,000 127,050 153,730 186,013 225,075 21.00%

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4.2 Industry Analysis
Auris Solutions' product offerings fall under the healthcare industry category, with a
Standard Industry code (SIC) 8099, and secondarily as part of the electromedical
equipment industry, with SIC 3845. Even during economic downturns, these markets
have remained sheltered from decreased spending.[1]Worldwide market growth for
medical equipment and products is estimated to be 12% as of 2003. U.S. companies
are benefiting from sales of new technology products, which are currently
commanding a significant price premium. We feel that Auris Solutions' product
offerings will benefit from these trends, as CRISP is a highly technical product, and it
appears that the market will support a price premium.
_____________________________
[1] Standard & Poor's Industry Review, 2003.
4.2.1 Industry Participants
Companies in the hearing-care-testing industry generated approximately $200M of

sales in 2003,[1] and the market is expected to grow in the range of 21% to 35%
annually. Based on our research, there are only 3 dominant players in this industry;
collectively, they possess 52% of the market share:
 HearUSA (29.5%)
 Bio-Logic (13%)
 National Hearing Centers (9%)
None of Auris Solutions' products will compete directly against the current hearing
test techniques, products or services offered by the above companies. Thus the
Company is an attractive potential strategic partner or acquisition target for the above
listed companies.
_________________________
[1] D&B Million Dollar Database (search of SIC 8099 limited to hearing care
products)
4.2.2 Competition and Buying Patterns
Direct competitors of the Company include companies that offer software-based

hearing tests instead. We performed a thorough search using proprietary market
research software and found only a few companies that would compete directly
against CRISP, although no companies offer products comparable to the CRISP test.
The results of our search are shown in the table below.
Competition Analysis
Company Test Cost Benefit Problem
12 one-minute tests for

estimating signal/noise Not ideal for
(SNR) loss with high children and
Speech in
frequency emphasis (HFE) to can't quickly
Auditec noise $200
assess SNR loss and calculate
(SIN)
HFE/low-pass filtered list to hearing
assess hearing aid threshold.
effectiveness in noise
Not ideal for
Scaled down version of SIN.
children and
Used to determine how
(Quick can't quickly
Auditec $500 much hearing aids help
SIN) calculate
patient to hear; uses
hearing
calibrated signal/noise ratio
threshold.
Does not
mimic real-
Digital
AUDIO-CD $25 Can use in your own home world. Not
Recordings
designed for
children.
Pilot- Pure tone.

Phoenix Game Tests hearing and speech Does not
$150
Instruments Hearing using a CD game mimic real
Test world.
Pure tone only.

Does not
For home use and clinical mimic real
Benson Tone test $50
use. Used with Windows. world. Not
made for
children.
Does not
Hearing mimic real
Helps to assess hearing aid
Biotronic aid fitting $2,420 world. Not
regimen.
software made for
children.
A typical private audiologist or hearing care professional sees approximately 10-12

patients per day. These professionals purchase related hearing products based on
reliability and the perceived benefits for their patients. Based on our research, hearing
care clinicians are relatively price insensitive because they want to offer the best
possible care for their patients. In addition, our preliminary research revealed that
hearing care professionals often purchase from $500 up to $20,000 in related
software/systems for conducting related hearing loss tests. In addition, these
individuals frequently become aware of new products from the following mediums:
 Direct Mail Advertising
 Journal Publications
 Web searches and company websites
 Conferences & Trade Shows
 Direct Sales
4.3 Target Market Segment Strategy
We plan to engage these potential customers principally through referrals, trade

shows, publications and direct advertising as well as through a small regional sales
force. The Independent Speech Therapists and Audiologists segment, as well as
birthing hospitals (non-HMO), are most likely to buy our products based on their
superior functional benefits and potential for new revenue generation by charging end-
users for per test runs. Additionally, some audiologists and speech therapists will be
motivated to buy CRISP based on the intangible benefits of feeling confident about
their audiology clinic's services, if they are offering the most comprehensive and
innovative tests available to market.
In preparation for our marketing efforts, we have created a full contact list for all of
our targeted customers. In addition, although we will initially focus on customers in
the U.S., we will consider an opportunity to grow abroad upon international patent
approval.[1] Indeed, just recently, MED-EL,[2] an Austrian cochlear implant
manufacturer, approached Auris to build an alliance with Auris in order to create the
German version of CRISP. Another company in South Africa has requested to become
a beta test site, and an Afrikaans version of CRISP is currently in development.
_______________________________________________
[1] Auris Solutions has applied for patent approval in Europe and Asia.
[2] http://www.comprehensive.com/ENG/us/us_home.asp
4.3.1 Market Trends
Every day, 33 babies are born in the U.S. with profound hearing loss, with another 66
babies born with partial hearing loss. This makes hearing loss the number one birth
defect in America. Consequently, nearly every state in the U.S. has recently passed a
law requiring that infants be screened for hearing loss.[1] It is estimated that if children
with hearing loss do not receive early intervention, special education for a child with
hearing loss will cost an additional $420,000 in special education costs, and has a
lifetime cost of approximately $1 million per child to society.[2] The costs to society of
untreated hearing loss are estimated to amount to $56 billion per year in the US, and
$92 billion per year in Europe.[3] For adults, lack of early intervention can lead to loss
of jobs, emotional distress and even the inability to cope with cognitive disorders such
as Alzheimer's. This is important since hearing loss can begin as early as age 50. In
addition, since life expectancy can nowadays realistically reach to age 90 and beyond,
an individual could potentially be affected by hearing loss for half his/her entire life.
Additionally, as baby boomers reach retirement age, the number of Americans with
hearing loss is expected to reach nearly 60 million by 2030. Consequently, hearing
care providers have a growing need for tests that will assess hearing in a realistic
environment in order to provide effective intervention.
Technological advances – As technology evolves we will see advances in the way

hearing tests are conducted. For instance, Starkey Laboratories, a hearing instruments
developer, is launching what it claims is the first Web-based hearing check. It is doing
so because it believes such a move would drive hearing aid sales. [4] This online
hearing-test method asks prospective customers to answer a series of questions before
listening to different tonal sounds. Once this individual has been checked, they are
given a diagnosis and, if required, a recommendation to seek professional assistance.
However, this test and similar ones are merely methods devised by hearing aid
manufacturers to assist consumers to perform preliminary self-diagnoses, with the
ultimate goal of encouraging the individual to seek the help of a hearing professional.
Laws and Regulations – Another important development within this market is that
audiologists are now able to offer their services directly to Medicare beneficiaries.
Previously, Medicare required that beneficiaries with hearing loss or balance disorders
obtain a physician referral before seeing an audiologist. However, as of January 1,
2004, Medicare now recognizes audiologists as autonomous health care providers.
This is the result of the introduction of the "Hearing-Health Accessibility Act of 2003"
(S. 1647) by the U.S. Senate. We believe that this regulation will enable audiologists
to increase customer traffic. Consequently, these audiologists will continue to search
for more accurate and faster ways to serve their customers. For example, the CRISP
hearing test contributes to speeding the testing process to 2-3 times faster than current
ones (i.e. HINT test).
Nearly every state in the U.S. has recently passed a law requiring that infants be
screened for hearing loss.[5] Screening and monitoring infant and childhood hearing
loss is a growing concern as children with hearing loss often have slowed
development with speech and lack of early intervention can be very costly.
Consequently, these laws have generated an overall increased awareness and
increased efforts to test and monitor children with hearing loss. Based on these trends,
we believe that Auris Solutions' CRISP will be an integral part of monitoring the
ability of children to hear and learn in a realistic environment.
Employment Growth – In order to keep up with the increased hearing testing in

infants and children, our research indicated that the number of speech-language
pathology positions and audiology positions are growing by 39% and 45%
respectively, from 2000-2010,[6] making these professions among the fastest growing
in the country, ranked among the top 30 out of 700 professions. This is an important
trend, as speech-language pathologists and therapists and audiologists make up our
primary customers.
____________________________
[1] Murphy, L. "New Laws a Boon for Diagnostic Firm: Bio-Logic Focusing on
Hearing Tests." Crain's Chicago Business: 60, Sep. 27, 1999.
[2] http://trfn.clpgh.org/shhh/Factsheet.html#r1
[3] Source: Better Hearing Institute in the USA (http://www.hear-it.org/page.dsp?
forside=yes&area=138)
[4] Hearing test goes online; New Media Age: 10(1), July 18, 2002.
[5] Murphy, L. "New Laws a Boon for Diagnostic Firm: Bio-Logic Focusing on
Hearing Tests." Crain's Chicago Business: 60, Sep. 27, 1999.
[6] BLS, November 2001-Monthly Labor Review
4.3.2 Market Needs
The majority of hearing-impaired individuals that use hearing-aids or that undergo

surgery to receive cochlear implants expect to hear well. However, the reality is that
tens of thousand of patients continue to experience severe difficulty hearing in the real
world, away from the clinical setting. This is primarily due to a clinician incorrectly
adjusting the settings on the medical device. Consequently, there is a large need by
audiologists and speech therapists for a hearing test that can quickly and accurately
predict how well individuals, with either a cochlear implant or a hearing aid, can hear
in a noisy "real world" environment following installation of the medical device. Such
a test is especially important for children, as early intervention can reduce slowed
learning. It is estimated that if children with hearing loss do not receive early
intervention, special education for a child with hearing loss will cost an additional
$420,000 in special education costs and result in a lifetime cost of approximately $1
million per child.[1] In adults, hearing loss can begin as early as age 50 and lack of
early intervention can lead to loss of jobs, emotional distress and even cognitive
disorders. In addition, since life expectancy can realistically reach to age 90 and
beyond, an individual could potentially be affected by hearing loss for half of his/her
lifetime.
Pure tone hearing tests, which require audiometers and sound proof booths to deliver
the tone, are currently used to evaluate hearing loss. These tests evaluate fundamental
hearing loss, but cannot predict how well an individual will understand words and
sentences in a realistic environment. Current tests also cannot asses whether or not a
second cochlear implant or second hearing aid would significantly improve the
hearing of a patient. This is important to patients and their families as cochlear
implants and hearing aids cost approximately $40,000 and $5,000, respectively, and
are often not covered by insurance companies.
Key Benefits of Auris Solutions' CRISP Test for our Target Market
Based on our analysis of the industry, competing tests, and competitors, the key
benefits to audiologists that the CRISP hearing test can offer are listed in the table
below.
 Can be used with young children
 Allows for 4 different types of noise sources that evaluate different types of
masking signals
 Can quickly calculate speech reception thresholds, or percent correct scores for
signal to noise ratio. This process is considered intellectual property and is
presently patented to the Wisconsin Alumni Research Foundation (WARF).
 Tests patient's performance hearing speech in noise
 Mimics Real-world environment
 Can be used an unlimited number of times
 Can help to fine-tune hearing aid settings
 Tests cochlear implant efficacy
 Can help to fine-tune and evaluate the effectiveness of a cochlear implant +

hearing aid
For the patient, this is anticipated to become a must-have test, since it will more
accurately refine his/her hearing device settings and optimize the patient's hearing in a
noisy environment. After spending nearly $5,000 for a hearing aid and/or more than
$40,000 for a cochlear implant, the patient would likely expect that s/he would be able
to utilize his/her hearing device to its utmost capacity in all real-world situations such
as a ballgame, a concert, a cocktail party, and especially the workplace or classroom
setting. Additionally, this test will also determine the efficacy of a second cochlear
implant or hearing aid, or the benefits of a combination of the two. The differences
between the optimal and non-optimal setting of the hearing device for the patient is
stark; it can mean the difference between having emotional and mental problems
associated with hearing ineffectively and the ability to enjoy a worry-free life.
Hearing Aids – The CRISP hearing test will allow audiologists to make
recommendations for a hearing aid regimen; that is, specific recommendations with
respect to microphone direction and noise suppression. The test can also assess
whether or not a patient needs one or two hearing aids. Hearing aids typically cost
$5,000 each, so this is an important decision for many patients, especially since many
insurance companies do not cover this device.
Cochlear Implants – The CRISP hearing test can help with recommendations about
whether a hearing aid is needed in one ear, given that there is a cochlear implant in the
other ear. The test can also assess whether or not the patient needs two cochlear
implants. This is a very important decision as cochlear implants cost about $25,000 on
average.
Audiogram results – Sometimes an audiogram is normal, but the patient still has
poor speech and understanding. Auris Solutions' CRISP hearing test can pin-point
whether or not this problem is related to competing noises or the location of noises,
which may help the patient develop better speech and understanding.
Additional revenues for hearing care providers – The CRISP hearing test will also
allow hearing care professionals to charge for administering the CRISP test.
Typically, hearing care clinics and hospitals charge $35 to $200 per test. Therefore,
we believe that audiologists and speech therapists will view this test as a value-added
product.
Sales Forecast
Auris Solutions' sales projections include launching CRISP (June 2004), MAA (2005)
and ERISP (2006). Our goal is to attain sales above $11,000,000 in 5 years.
We're confident that once our target market adopts CRISP and they become aware of
the quality and reliability of our products, they will be motivated to explore and
purchase more of our offerings.
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SALES FORECAST
Unit Sales
CRISP 192 346 622 1,120 2,016
MAA 115 207 373 671 1,207

ERISP 118 212 382 688 1,239
DD & MR 0 1,200 2,160 3,888 6,998
TOTAL UNIT SALES 425 1,965 3,537 6,367 11,460
Unit Prices Year 1 Year 2 Year 3 Year 4 Year 5
CRISP $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00
MAA $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
ERISP $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00
DD & MR $0.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00
Sales
CRISP $480,000 $864,000 $1,555,200 $2,799,360 $5,038,848
MAA $115,000 $207,000 $372,600 $670,680 $1,207,224
ERISP $295,000 $531,000 $955,800 $1,720,440 $3,096,792
DD & MR $0 $1,800,000 $3,240,000 $5,832,000 $10,497,600

TOTAL SALES $890,000 $3,402,000 $6,123,600 $11,022,480 $19,840,464
Direct Unit Costs Year 1 Year 2 Year 3 Year 4 Year 5
CRISP $500.00 $500.00 $500.00 $500.00 $500.00
MAA $200.00 $200.00 $200.00 $200.00 $200.00
ERISP $500.00 $500.00 $500.00 $500.00 $500.00
DD & MR $0.00 $150.00 $150.00 $150.00 $150.00
Direct Cost of Sales
CRISP $96,000 $172,800 $311,040 $559,872 $1,007,770
MAA $23,000 $41,400 $74,520 $134,136 $241,445
ERISP $59,000 $106,200 $191,160 $344,088 $619,358
DD & MR $0 $180,000 $324,000 $583,200 $1,049,760
Subtotal Direct Cost of $178,000 $500,400 $900,720 $1,621,296 $2,918,333

Sales
Management Summary
At this time, Auris Solutions is composed of 4 key individuals. They are described
below.
Chief Scientific Consultant – Sarah Plauger, PhD – Sarah Plauger is the Chief
Scientific Consultant. She is currently a researcher at the Waisman Center, as well as
an Assistant Professor at the University of Wisconsin-Madison. Dr. Plauger has over
20 years of experience within the hearing care industry and has published over 27 peer
reviewed articles in numerous industry journals. Dr. Plauger serves as a highly
regarded consultant for the Cochlear Corporation, the Department of Otolaryngology
at UC-Irvine, and the Laboratory of Physiology at the University of Oxford, UK.
Software Developer – Gongqiang Yu, PhD – Gongqiang Yu is the software developer

behind CRISP. He is currently a researcher at the Waisman Center under the
supervision of Sarah Plauger. Mr. Yu has post-doctoral training and a Ph.D. from the
Department of Physics at the National University of Singapore. His area of research is
psychoacoustics of directional hearing, with an emphasis on the precedence effect.
Marketing Manager – Kim-Anh To, MBA – Kim-Anh is the company's marketing

manager and co-founder. Ms. To has an MBA with a focus in
Entrepreneurship/Marketing as well as a degree in Anthropology from the University
of Wisconsin-Madison. Kim-Anh has over 7 years experience as a small business
manager and 2 years of business consulting experience.
Business Manager – Jose O. Rivera, MBA, BSCE – Jose is the company's business
manager and co-founder. Mr. Rivera has an MBA with a focus in Entrepreneurship
from the University of Wisconsin-Madison, and a degree in engineering from the
Polytechnic University of Puerto Rico. He has extensive experience in managing
multimillion-dollar operations and 2 years of consulting experience developing
growth and marketing strategies for companies in Wisconsin.
Upon achieving a sustainable growth, Auris Solutions seeks to hire key employees to
further advance the company.
6.1 Organizational Structure
Jose Orlando Rivera, Business Manager, is responsible for overall business

management. All functional operations and their respective managers or employees
report directly to Jose Orlando. Kim-Anh To, Marketing Manager, is responsible for
all the marketing and sales efforts. Sales and marketing consultants will report to her.
Both Dr Litovsky and Dr. Yu are engaged as the company's consultants, which means
that they will not collect salaries and benefits. Instead, they both will receive
professional service compensations when consulting services are incurred.
As co-owners, Jose and Kim-Anh jointly develop business strategy and long-term
plans. Jose is strong on creating cost-effective strategies, and management of
operations and human/capital resources. Kim-Anh is strong on marketing and micro-
management.
6.2 Management Team
Resumes:
José Orlando Rivera
Kim-Anh To
Ruth Y. Litovsky, PhD.
 CRISP Grants to Date
Gongqiang Yu, Ph.D.
6.3 Management Team Gaps
The one significant management gap remaining is a CEO with extensive business and
industry experience. We hope that with the help of external investors, we will be able
to fill this key position as soon as possible. In the meantime, Auris Solutions'
management has assembled a highly respected team of hearing industry professionals
to serve on its Advisory Board. We believe that these individuals will contribute in
closing the technological and business gaps that our company has at the time. They
are described below.
Fan-Gang Zeng, Ph.D. - Dr. Zeng is Research Director in the Department of

Otolaryngology – Head and Neck Surgery, and Director of the Hearing and Speech
Research Laboratory at the University of California, Irvine. He holds a tenure
Associate Professorship in four different departments including, Anatomy and
Neurobiology, Biomedical Engineering, Cognitive Sciences, and Otolaryngology. Dr.
Zeng has gained an international reputation for his research in neural prostheses,
auditory perception, and speech processing. He has more than 50 publications in these
areas including 2 papers in Science magazine and 3 patents in the design of cochlear
implants.
Sigfrid D. Soli, Ph.D. - Dr. Soli is currently VP of Technology Transfer and Head of
the Department of Human Communication Sciences and Devices, at the House Ear
Institute in Los Angeles, CA. He is a fellow of the Acoustical Society of America and
has been chair to numerous NIDCD review panels. Dr. Soli also still serves as a
consultant to the Committee on Disability Determination for Individuals with Hearing
Impairment, National Research Council. Dr. Soli has published more than 30 articles
relating to speech and hearing, especially with regards to electrical hearing
mechanisms such as hearing aids. Additionally, Dr. Soli holds 17 patents, many
related to the Hearing in Noise Test (HINT) that he developed in 1993.
Jane Reger Madell, Ph.D. – Dr. Madell is the Director of the Hearing and Learning
Center and Co-Director of the Cochlear Implant Center of the Beth Israel Medical
Center. Dr. Madell is also Professor of Clinical Otolaryngology at the Albert Einstein
College of Medicine. Dr. Madell is a licensed audiologist and is certified to practice in
3 states. Dr. Madell is a fellow of the American Speech Language Hearing
Association, and was Chair of a Special Interest Group on Hearing in Childhood.
Additionally, she serves on the Editorial Board of Audiology Today, an industry trade
journal. Dr. Madell has published over 60 articles and books, primarily focused on
hearing in children.
Mark Clear – Mr. Clear co-founded Integrated Media Solutions in 1995, and is the
current CEO. Consulting extensively with clients in health care, financial services,
media, technology, manufacturing, and retail sectors, Mark has a solid familiarity with
current Internet issues and trends, and experience matching new technologies to real-
world applications. His specialty is analyzing customer needs, helping them re-think
the way they do business, and recommending Internet solutions that create efficiencies
in their business processes. Mark has 18 years of experience in technology and
customer service. His background includes ten years of experience in technical
writing, database development, and system administration. He also serves on the
board of the Four Lakes chapter of the Society for Technical Communication, and
writes a periodic column on Internet business issues for the Capital Times in Madison.
Personnel Plan
Our Personnel Plan shows the deferred salaries of the principal employees and
consultants, as well as our increasing use of outside software consultants in years 2
through 5, as we develop further products.
Financial Plan
Auris is seeking $250,00 in funding to finance the start-up cost of the Company,
which includes exclusively licensing CRISP technology from WARF, and making the
necessary software enhancements to make CRISP ready for delivery, which would
include packaging, an instruction manual, demos, and tech support. Additional
funding is necessary for research and development of future hearing systems, as
mentioned in the Future Products and Services Section. Finally, the additional
financing will be used by Auris Solutions to purchase the necessary capital equipment
needed to expand the business especially as regards to international opportunities.
Structuring Control of Auris Solutions' Board

Auris proposes a Board consisting of three members, where one director is elected by
the founders, one director elected by the investors, and a third neutral director selected
by both founders and external investors or by a designated third party.
8.1 Start-up Funding
Auris is seeking $250,00 in investment funding to finance the start-up cost of the
company.
START-UP FUNDING
Start-up Expenses to Fund $203,100
Start-up Assets to Fund $46,900
TOTAL FUNDING REQUIRED $250,000
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $46,900
Additional Cash Raised $0
Cash Balance on Starting Date $46,900
TOTAL ASSETS $46,900

Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $0
Capital
Planned Investment
Investor 1 $250,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $250,000
Loss at Start-up (Start-up Expenses) ($203,100)
TOTAL CAPITAL $46,900
TOTAL CAPITAL AND LIABILITIES $46,900
Total Funding $250,000

own business plan.

8.2 The Investment Offering
Auris Solutions plans to be a privately-held, Limited Liability Corporation, with Dr.

Plauger as one of the owners and the key driver of research and new product
development. However, we believe that in order to attract talented management, we
will need to create a stock option pool not higher than 45% of the total shares. See the
table below for an ownership breakdown.
Owners % Ownership
Dr. Plauger 20% Max

45% Max
Stock Option Pool
35% Max
Investors
Auris proposes participating shares for our external investors in exchange for
$250,000 funding. The Company is willing to offer up to 35% of equity stake in the
company for the requested funding. In addition to funding, we are looking for
investors with business, management and industry experience.
Auris understands that the investor's goal is to liquefy the investment at a substantial

profit when the company's value has been maximized through astute management and
careful supervision. Auris Solutions' exit strategy is a sale of the Company within five
to seven years, where the investor's preferred participating stock would be entitled to a
double dip provision. We believe that Auris Solutions could be sold for 7 to 10 times
EBIT in year 5, based on comparable deals in the hearing care industry.
INVESTMENT OFFERING
PROPOSED YEAR: 2004 2005 2006 2009
Valuation, Investment,
Shares
Investment Amount $250,000 $0 $0
Equity Share Offering 35.00% 0.00% 0.00%

Percentage
Valuation $714,286 $0 $0 $91,000,000
Investor Exit Payout $31,850,000 $0 $0
Investor Years Until Exit 5 4 3
Investor IRR 163.65% 0.00% 0.00%
Share Ownership Year 2004 Year 2005 Year 2006 Year 2009
Founders' Shares 100,000 100,000 100,000 100,000
Stock Split Multiple 0 0 0
Stock Options Issued 20,000 0 0 0
Investor Shares Issued 64,615 0 0
Price per share $3.87 $0.00 $0.00 $492.92
Options Holders' Shares 20,000 20,000 20,000 20,000
Year 2004 Investors' Shares 64,615 64,615 64,615 64,615
Year 2005 Investors' Shares 0 0 0

Year 2006 Investors' Shares 0 0
Total Shares Outstanding 184,615 184,615 184,615 184,615
Equity Ownership Year 2004 Year 2005 Year 2006 Year 2009
Percentage
Founders' Equity 54.17% 54.17% 54.17% 54.17%
Option Holders' Equity 10.83% 10.83% 10.83% 10.83%
Year 2004 Investors' Equity 35.00% 35.00% 35.00% 35.00%
Year 2005 Investors' Equity 0.00% 0.00% 0.00%
Year 2006 Investors' Equity 0.00% 0.00%
Total Equity 100.00% 100.00% 100.00% 100.00%
Investors' Equity 35.00% 35.00% 35.00% 35.00%
Founders' & Employees' 65.00% 65.00% 65.00% 65.00%

Equity
8.3 Funding History
To date, Auris Solutions has depended primarily on grants to finance research and
operations. Auris Solutions' CRISP has been awarded competitive grants from various
federal agencies, including the National Institutes of Health (NIH), National Science
Foundation (NSF), and the U.S. Department of Energy (DOE), totaling $550,000.
These grants are typically awarded to companies or scientists with technology that has
high potential for development and commercialization. Dr. Plauger has also applied
for additional grants, in particular, the Small Business Innovation Research (SBIR)
grant. The table below outlines the grants that she has received or that are currently
pending:
Amount Year
Granting Agency
Received Received
National Organization For

$10K 1997
Hearing Research
Deafness Research
$20K 2001
Foundation
National Institute of Health
$30K 1999 – 2001
(NIH)
$145K 2001 – 2003
(NIH)
UIR – WARF $70K 2002 – 2003
$275K 2004 – 2005
(NIH)
Small Business Innovation (pending)
Research (SBIR)
TOTAL $550K
8.4 Important Assumptions
 The CRISP hearing tests have been priced between $2,000 and $2,500, based
on a market reference value plus a differentiation value. We used a price of
$2,500 in our projected income statement.
 Cost of sales includes the cost of copying, packaging and printing the software
and instruction manual. Cost of sales also includes per copy royalty paid to
WARF, which is estimated at 10% of the retail price of the software.
 The financial projections include $100,000 of external seed funding.
 In addition to salary, the key employees of Auris Solutions, LLC will be

granted stock options from the stock option pool; Dr. Plauger (also equity
stakeholder) and Dr. Yu are acting as the company's scientific officer and
software developer accordingly.
 Auris Solutions plans to launch Minimum Audible Angle (MAA) and Elder's

Realistic Intelligibility and Seech Perception (ERISP) in year 2005, and software
for Children with Developmental Disabilities (DD) & Mental Retardation (MR) in
2006.
 Operating expenses includes Research and Development costs of $2

million over five years. Patent amortization is straight line over 17 years.
 Income tax is assumed at 30%.
GENERAL ASSUMPTIONS
Plan Month 1 2 3 4 5
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0
8.5 Break-even Analysis
Please note that we have calculated the cost of the proprietary software and the
packaging at $418.82, with an average sale price of $2,094.12. We are not using a
mark-up approach for the software pricing because the costs of developing the
software are considerably low. We based our sale price of the software on comparable
software available on the market (reference value) as well as testimony of various
audiologists during our market research process (differentiation value).
Based on the above assumptions, the company would have to sell units as detailed in
the breakeven analysis table.
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BREAK-EVEN ANALYSIS
Monthly Units Break-even 18
Monthly Revenue Break-even $37,364
Assumptions:
Average Per-Unit Revenue $2,094.12
Average Per-Unit Variable Cost $418.82

Estimated Monthly Fixed Cost $29,891
8.6 Projected Profit and Loss
We plan to properly use our funding. Auris Solutions' products are now being
developed by Dr. Plauger at the Waisman Center of UW-Madison. For that reason our
Research and Development expenses for 2005 are $0, which assists in minimizing
costs associated with creating our future products, consequently maintaining
competitive profit ratios. As shown in the Profit and Loss Statement, below, the
founders will postpone their compensations, which will help in creating positive
profits for the 1st year. We plan to use our consultants' services as required.
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PRO FORMA PROFIT AND LOSS
Sales $890,000 $3,402,000 $6,123,600 $11,022,480 $19,840,464
Direct Cost of Sales $178,000 $500,400 $900,720 $1,621,296 $2,918,333

Other Costs of Goods $0 $0 $0 $0 $0
TOTAL COST OF $178,000 $500,400 $900,720 $1,621,296 $2,918,333

SALES
Gross Margin $712,000 $2,901,600 $5,222,880 $9,401,184 $16,922,131
Gross Margin % 80.00% 85.29% 85.29% 85.29% 85.29%
Expenses
Payroll $147,000 $444,000 $722,000 $1,047,700 $1,261,625
Sales and Marketing $113,654 $227,309 $454,617 $909,234 $1,818,469

and Other Expenses
Depreciation $60,187 $62,441 $81,841 $81,841 $121,841
Rent $5,000 $9,000 $16,200 $29,160 $52,488
Utilities $800 $920 $1,058 $1,217 $1,399
Insurance $10,000 $10,000 $10,000 $10,000 $10,000
Payroll Taxes $22,050 $66,600 $108,300 $157,155 $189,244

Other $0 $0 $0 $0 $0
Total Operating $358,691 $820,270 $1,394,016 $2,236,307 $3,455,066

Expenses
Profit Before Interest $264,309 $1,241,130 $2,216,504 $4,562,629 $9,483,019

and Taxes
EBITDA $324,496 $1,303,571 $2,298,345 $4,644,470 $9,604,860
Interest Expense $0 $0 $0 $0 $0
Taxes Incurred $79,293 $372,339 $664,951 $1,368,789 $2,844,906
Other Income
Interest Income $0 $0 $0 $0 $0
Other Income Account $0 $0 $0 $0 $0

Name
TOTAL OTHER $0 $0 $0 $0 $0
INCOME
Other Expense
R&D $0 $500,000 $1,000,000 $1,500,000 $2,000,000
Licensing & Royalties $89,000 $340,200 $612,360 $1,102,248 $1,984,046
TOTAL OTHER $89,000 $840,200 $1,612,360 $2,602,248 $3,984,046

EXPENSE
Net Other Income ($89,000) ($840,200) ($1,612,360) ($2,602,248) ($3,984,046)
Net Profit $185,016 $868,791 $1,551,553 $3,193,840 $6,638,113
Net Profit/Sales 20.79% 25.54% 25.34% 28.98% 33.46%

own business plan.

8.7 Projected Cash Flow
Detailed projected income statements, balance sheets and cash flows for years 2004
through 2008 are included in Appendix 2. We believe that by year-end 2004 we
should be able to sell 45 copies of the software, which is a very conservative estimate,
as the company has already encountered a substantial amount of interest in CRISP at
the various conferences and tradeshows attended by Dr. Plauger. This number is also
conservative based on the number of speech therapists and audiologists, HMO
Medical Centers and hospitals there are in the United States, according to the latest
year 2000 census.
We believe that the majority of revenue will come from software sales. Software sales
are projected to grow from 425 units for the partial-year 2004 to over 11,000 units
within five years. This figure includes the introduction of ERISP and the MAA tests in
year two, and the DD and MR test in year three.
An additional $4.5M (max) will be spent on Research and Development activities

over the next 5 years to develop future products. Auris Solutions' R&D effort is
focused on two main areas: extension and expansion of the current proprietary
technology, and research and development of new product lines. Sales and marketing
expenses are expected to increase over 10% every year. This includes advertising and
promotional spending to support growing product sales, as well as website
maintenance; we believe that marketing will play an important role in our sales. Sales
and marketing expenses exclude the travel costs for Dr. Plauger to promote her
technology at various conferences.
*Note: The 'Dividends' row currently shows $0 for all years; actual dividend amounts
will be negotiated with the investors.
Need actual charts?

plan.

PRO FORMA CASH FLOW
Cash Received
Cash from Operations
Cash Sales $356,000 $1,360,800 $2,449,440 $4,408,992 $7,936,186
Cash from Receivables $249,600 $1,238,489 $2,804,471 $5,048,048 $9,086,487
SUBTOTAL CASH FROM $605,600 $2,599,289 $5,253,911 $9,457,040 $17,022,672

OPERATIONS
Additional Cash Received
Non Operating (Other) $0 $0 $0 $0 $0

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

Received
New Current Borrowing $0 $0 $0 $0 $0

New Other Liabilities $0 $0 $0 $0 $0
(interest-free)
New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current $0 $0 $0 $0 $0

Assets
Sales of Long-term $0 $0 $0 $0 $0
Assets
New Investment $0 $0 $0 $0 $0
Received
SUBTOTAL CASH $605,600 $2,599,289 $5,253,911 $9,457,040 $17,022,672

RECEIVED
Expenditures Year 1 Year 2 Year 3 Year 4 Year 5
Expenditures from
Operations
Cash Spending $147,000 $444,000 $722,000 $1,047,700 $1,261,625
Bill Payments $292,178 $1,205,661 $2,076,180 $3,937,316 $7,527,606
SUBTOTAL SPENT ON $439,178 $1,649,661 $2,798,180 $4,985,016 $8,789,231

OPERATIONS
Additional Cash Spent
Non Operating (Other) $89,000 $840,200 $1,612,360 $2,602,248 $3,984,046

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

Paid Out
Principal Repayment of $0 $0 $0 $0 $0
Current Borrowing
Other Liabilities Principal $0 $0 $0 $0 $0

Repayment
Long-term Liabilities $0 $0 $0 $0 $0
Principal Repayment
Purchase Other Current $0 $0 $0 $0 $0

Assets
Purchase Long-term $0 $0 $0 $0 $0
Assets
Dividends $0 $0 $0 $0 $0
SUBTOTAL CASH SPENT $528,178 $2,489,861 $4,410,540 $7,587,264 $12,773,278
Net Cash Flow $77,422 $109,428 $843,372 $1,869,776 $4,249,394

Cash Balance $124,322 $233,750 $1,077,122 $2,946,898 $7,196,293
8.8 Projected Balance Sheet
As shown in the balance sheet in the following table, we expect a healthy growth in
net worth by the end of the plan period. The monthly projections are in the
appendices.
PRO FORMA BALANCE SHEET
Assets
Current Assets
Cash $124,322 $233,750 $1,077,122 $2,946,898 $7,196,293
Accounts Receivable $284,400 $1,087,111 $1,956,800 $3,522,240 $6,340,031
Other Current Assets $0 $0 $0 $0 $0
TOTAL CURRENT $408,722 $1,320,861 $3,033,922 $6,469,138 $13,536,324

ASSETS
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0
Accumulated $60,187 $122,628 $204,469 $286,310 $408,151

Depreciation
TOTAL LONG-TERM ($60,187) ($122,628) ($204,469) ($286,310) ($408,151)

ASSETS
TOTAL ASSETS $348,535 $1,198,233 $2,829,453 $6,182,828 $13,128,173
Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5
Current Liabilities
Accounts Payable $116,619 $97,526 $177,193 $336,727 $643,959
Current Borrowing $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0
SUBTOTAL CURRENT $116,619 $97,526 $177,193 $336,727 $643,959

LIABILITIES
Long-term Liabilities $0 $0 $0 $0 $0
TOTAL LIABILITIES $116,619 $97,526 $177,193 $336,727 $643,959

Paid-in Capital $250,000 $250,000 $250,000 $250,000 $250,000
Retained Earnings ($203,100) ($18,084) $850,707 $2,402,260 $5,596,100
Earnings $185,016 $868,791 $1,551,553 $3,193,840 $6,638,113
TOTAL CAPITAL $231,916 $1,100,707 $2,652,260 $5,846,100 $12,484,214
TOTAL LIABILITIES AND $348,535 $1,198,233 $2,829,453 $6,182,828 $13,128,173

CAPITAL
Net Worth $231,916 $1,100,707 $2,652,260 $5,846,100 $12,484,214
8.9 Business Ratios
Standard business are included in the following table. These ratios correspond to the
selected industry category (Application computer software, SIC code 7372.9901),
which was selected to match our business. Any discrepancy with the industry
standard might be explained by our low capital needs and liabilities as well as by our
low initial investment to develop our products; products are being develop by
consultants at UW-Madison. However, the ratios show a plan for balanced, healthy
growth. Special attention will be paid to our collection days in order to minimize the
amount of days we are awaiting payment.
RATIO ANALYSIS
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 INDUSTR

Y
PROFILE
Sales Growth 0.00% 282.25% 80.00% 80.00% 80.00% 10.27%
Percent of Total
Assets
Accounts Receivable 81.60% 90.73% 69.16% 56.97% 48.29% 23.57%
Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 41.50%
Total Current Assets 117.27% 110.23% 107.23% 104.63% 103.11% 68.84%
Long-term Assets -17.27% -10.23% -7.23% -4.63% -3.11% 31.16%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Current Liabilities 33.46% 8.14% 6.26% 5.45% 4.91% 35.07%
Long-term Liabilities 0.00% 0.00% 0.00% 0.00% 0.00% 20.22%
Total Liabilities 33.46% 8.14% 6.26% 5.45% 4.91% 55.29%
NET WORTH 66.54% 91.86% 93.74% 94.55% 95.09% 44.71%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 80.00% 85.29% 85.29% 85.29% 85.29% 100.00%

Selling, General & 62.21% 67.16% 67.85% 63.40% 57.86% 81.88%
Administrative
Expenses
Advertising Expenses 6.39% 3.34% 3.71% 4.12% 4.58% 1.23%
Profit Before Interest 29.70% 36.48% 36.20% 41.39% 47.80% 1.18%

and Taxes
Main Ratios
Current 3.50 13.54 17.12 19.21 21.02 1.46
Quick 3.50 13.54 17.12 19.21 21.02 1.12
Total Debt to Total 33.46% 8.14% 6.26% 5.45% 4.91% 1.98%

Assets
Pre-tax Return on 113.97% 112.76% 83.57% 78.05% 75.96% 64.10%

Net Worth
Pre-tax Return on 75.83% 103.58% 78.34% 73.80% 72.23% 5.51%

Assets
Additional Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Net Profit Margin 20.79% 25.54% 25.34% 28.98% 33.46% n.a
Return on Equity 79.78% 78.93% 58.50% 54.63% 53.17% n.a

Activity Ratios
Accounts Receivable 1.88 1.88 1.88 1.88 1.88 n.a

Turnover
Collection Days 50 123 151 151 151 n.a
Accounts Payable 3.51 12.17 12.17 12.17 12.17 n.a

Turnover
Payment Days 27 33 23 23 23 n.a
Total Asset Turnover 2.55 2.84 2.16 1.78 1.51 n.a
Debt Ratios
Debt to Net Worth 0.50 0.09 0.07 0.06 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $292,10 $1,223,33 $2,856,729 $6,132,41 $12,892,365 n.a

3 5 0
Interest Coverage 0.00 0.00 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.39 0.35 0.46 0.56 0.66 n.a

Current Debt/Total 33% 8% 6% 5% 5% n.a
Assets
Acid Test 1.07 2.40 6.08 8.75 11.18 n.a
Sales/Net Worth 3.84 3.09 2.31 1.89 1.59 n.a
Dividend Payout 0.00 0.00 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
Unit Sales
CRISP 0% 0 5 9 9 9 14 14 14 18 20 30 50
MAA 0% 0 0 0 0 0 0 0 0 15 20 30 50
ERISP 0% 0 0 0 0 0 0 0 0 18 20 30 50
DD & MR 0% 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL UNIT 0 5 9 9 9 14 14 14 51 60 90 150

SALES
Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
CRISP $2,500.00 $2,500.0 $2,500.00 $2,500.0 $2,500.00 $2,500.0 $2,500.00 $2,500.0 $2,500.00 $2,500.0 $2,500.00 $2,500.00
0 0 0 0 0
MAA $1,000.00 $1,000.0 $1,000.00 $1,000.0 $1,000.00 $1,000.0 $1,000.00 $1,000.0 $1,000.00 $1,000.0 $1,000.00 $1,000.00
0 0 0 0 0
ERISP $2,500.00 $2,500.0 $2,500.00 $2,500.0 $2,500.00 $2,500.0 $2,500.00 $2,500.0 $2,500.00 $2,500.0 $2,500.00 $2,500.00
0 0 0 0 0
DD & MR $1,500.00 $1,500.0 $1,500.00 $1,500.0 $1,500.00 $1,500.0 $1,500.00 $1,500.0 $1,500.00 $1,500.0 $1,500.00 $1,500.00
0 0 0 0 0
Sales
CRISP $0 $12,500 $22,500 $22,500 $22,500 $35,000 $35,000 $35,000 $45,000 $50,000 $75,000 $125,000
MAA $0 $0 $0 $0 $0 $0 $0 $0 $15,000 $20,000 $30,000 $50,000
ERISP $0 $0 $0 $0 $0 $0 $0 $0 $45,000 $50,000 $75,000 $125,000
DD & MR $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL SALES $0 $12,500 $22,500 $22,500 $22,500 $35,000 $35,000 $35,000 $105,000 $120,000 $180,000 $300,000
Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
CRISP 0.00% $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00
MAA 0.00% $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00
ERISP 0.00% $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00
DD & MR 0.00% $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00
Direct Cost of
Sales
CRISP $0 $2,500 $4,500 $4,500 $4,500 $7,000 $7,000 $7,000 $9,000 $10,000 $15,000 $25,000
MAA $0 $0 $0 $0 $0 $0 $0 $0 $3,000 $4,000 $6,000 $10,000
ERISP $0 $0 $0 $0 $0 $0 $0 $0 $9,000 $10,000 $15,000 $25,000
DD & MR $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct $0 $2,500 $4,500 $4,500 $4,500 $7,000 $7,000 $7,000 $21,000 $24,000 $36,000 $60,000
Cost of Sales
own business plan.
GENERAL ASSUMPTIONS
MONTH MONT MONTH MONT MONTH MONTH MONT MONTH MONTH MONT MONTH MONTH
1 H2 3 H4 5 6 H7 8 9 H 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 MONT MONTH MONTH MONT MONTH MONTH MONTH MONTH MONTH
1 2 3 H4 5 6 H7 8 9 10 11 12
Sales $0 $12,500 $22,500 $22,500 $22,500 $35,000 $35,000 $35,000 $105,000 $120,000 $180,000 $300,000
Direct Cost $0 $2,500 $4,500 $4,500 $4,500 $7,000 $7,000 $7,000 $21,000 $24,000 $36,000 $60,000
of Sales
Other Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
of Goods
TOTAL $0 $2,500 $4,500 $4,500 $4,500 $7,000 $7,000 $7,000 $21,000 $24,000 $36,000 $60,000
COST OF
SALES
Gross $0 $10,000 $18,000 $18,000 $18,000 $28,000 $28,000 $28,000 $84,000 $96,000 $144,000 $240,000
Margin
Gross 0.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%
Margin %
Expenses
Payroll $0 $0 $3,000 $3,000 $3,000 $7,000 $12,000 $11,000 $31,000 $23,000 $31,000 $23,000
Sales and $0 $8,000 $8,400 $8,820 $9,261 $9,724 $10,210 $10,721 $11,257 $11,820 $12,411 $13,031
Marketing
and Other
Expenses
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $60,187
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000
Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $800
Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000
Payroll 15% $0 $0 $450 $450 $450 $1,050 $1,800 $1,650 $4,650 $3,450 $4,650 $3,450
Taxes
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total $0 $8,000 $11,850 $12,270 $12,711 $17,774 $24,010 $23,371 $46,907 $38,270 $48,061 $115,468
Operating
Expenses
Profit Before $0 $750 $3,900 $3,480 $3,039 $6,726 $490 $1,129 $26,593 $45,730 $77,939 $94,532
Interest and
Taxes
EBITDA $0 $750 $3,900 $3,480 $3,039 $6,726 $490 $1,129 $26,593 $45,730 $77,939 $154,719
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expense
Taxes $0 $225 $1,170 $1,044 $912 $2,018 $147 $339 $7,978 $13,719 $23,382 $28,360
Incurred
Other
Income
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Income
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Income
Account
Name
TOTAL $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
OTHER
INCOME
Other
Expense
R&D $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Licensing & $0 $1,250 $2,250 $2,250 $2,250 $3,500 $3,500 $3,500 $10,500 $12,000 $18,000 $30,000
Royalties
TOTAL $0 $1,250 $2,250 $2,250 $2,250 $3,500 $3,500 $3,500 $10,500 $12,000 $18,000 $30,000
OTHER
EXPENSE
Net Other $0 ($1,250) ($2,250) ($2,250) ($2,250) ($3,500) ($3,500) ($3,500) ($10,500) ($12,000) ($18,000) ($30,000)
Income
Net Profit $0 $525 $2,730 $2,436 $2,127 $4,708 $343 $790 $18,615 $32,011 $54,558 $66,172
Net 0.00% 4.20% 12.13% 10.83% 9.45% 13.45% 0.98% 2.26% 17.73% 26.68% 30.31% 22.06%
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 $5,000 $9,000 $9,000 $9,000 $14,000 $14,000 $14,000 $42,000 $48,000 $72,000 $120,000
Cash from Receivables $0 $0 $250 $7,700 $13,500 $13,500 $13,750 $21,000 $21,000 $22,400 $63,300 $73,200
SUBTOTAL CASH FROM $0 $5,000 $9,250 $16,700 $22,500 $27,500 $27,750 $35,000 $63,000 $70,400 $135,300 $193,200
OPERATIONS
Additional Cash Received
Non Operating (Other) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Income
Sales Tax, VAT, HST/GST 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Received
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

(interest-free)
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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

New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
SUBTOTAL CASH $0 $5,000 $9,250 $16,700 $22,500 $27,500 $27,750 $35,000 $63,000 $70,400 $135,300 $193,200
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 Spending $0 $0 $3,000 $3,000 $3,000 $7,000 $12,000 $11,000 $31,000 $23,000 $31,000 $23,000
Bill Payments $0 $358 $10,852 $14,530 $14,824 $15,278 $19,771 $19,176 $20,549 $45,155 $53,771 $77,916
SUBTOTAL SPENT ON $0 $358 $13,852 $17,530 $17,824 $22,278 $31,771 $30,176 $51,549 $68,155 $84,771 $100,916
OPERATIONS
Additional Cash Spent
Non Operating (Other) $0 $1,250 $2,250 $2,250 $2,250 $3,500 $3,500 $3,500 $10,500 $12,000 $18,000 $30,000
Expense
Sales Tax, VAT, HST/GST $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Paid Out
Principal Repayment of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Borrowing
Other Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Repayment
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment
Purchase Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Assets
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
SUBTOTAL CASH SPENT $0 $1,608 $16,102 $19,780 $20,074 $25,778 $35,271 $33,676 $62,049 $80,155 $102,771 $130,916
Net Cash Flow $0 $3,393 ($6,852) ($3,080) $2,426 $1,722 ($7,521) $1,324 $951 ($9,755) $32,529 $62,284
Cash Balance $46,900 $50,293 $43,441 $40,361 $42,787 $44,509 $36,988 $38,312 $39,264 $29,509 $62,038 $124,322
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 12
10 11
Assets Starting
Balances
Current Assets
Cash $46,900 $46,900 $50,293 $43,441 $40,361 $42,787 $44,509 $36,988 $38,312 $39,264 $29,509 $62,038 $124,322
Accounts Receivable $0 $0 $7,500 $20,750 $26,550 $26,550 $34,050 $41,300 $41,300 $83,300 $132,900 $177,600 $284,400
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL CURRENT ASSETS $46,900 $46,900 $57,793 $64,191 $66,911 $69,337 $78,559 $78,288 $79,612 $122,564 $162,409 $239,638 $408,722
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $60,187
TOTAL LONG-TERM ASSETS $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($60,187)
TOTAL ASSETS $46,900 $46,900 $57,793 $64,191 $66,911 $69,337 $78,559 $78,288 $79,612 $122,564 $162,409 $239,638 $348,535
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 $0 $10,368 $14,036 $14,320 $14,619 $19,132 $18,519 $19,053 $43,389 $51,222 $73,894 $116,619
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 $0 $10,368 $14,036 $14,320 $14,619 $19,132 $18,519 $19,053 $43,389 $51,222 $73,894 $116,619
LIABILITIES
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL LIABILITIES $0 $0 $10,368 $14,036 $14,320 $14,619 $19,132 $18,519 $19,053 $43,389 $51,222 $73,894 $116,619
Paid-in Capital $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000
Retained Earnings ($203,100) ($203,100) ($203,100) ($203,100) ($203,100) ($203,100) ($203,100) ($203,100) ($203,100) ($203,100) ($203,100) ($203,100) ($203,100)
Earnings $0 $0 $525 $3,255 $5,691 $7,818 $12,526 $12,869 $13,660 $32,275 $64,286 $118,844 $185,016
TOTAL CAPITAL $46,900 $46,900 $47,425 $50,155 $52,591 $54,718 $59,426 $59,769 $60,560 $79,175 $111,186 $165,744 $231,916
TOTAL LIABILITIES AND $46,900 $46,900 $57,793 $64,191 $66,911 $69,337 $78,559 $78,288 $79,612 $122,564 $162,409 $239,638 $348,535
CAPITAL
Net Worth $46,900 $46,900 $47,425 $50,155 $52,591 $54,718 $59,426 $59,769 $60,560 $79,175 $111,186 $165,744 $231,916

Business Plan Auris

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Business Plan Auris

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Executive Summary

The majority of hearing-impaired individuals who use hearing-aids or undergo surgery

Auris Solutions is currently seeking $250,000 to implement our marketing strategy as

 We will recruit a management team that has relevant knowledge and

 We will satisfy our customers by offering products free of defects and by

Auris Solutions, LLC is a comprehensive and innovative solutions provider for

We stand by the following values:

 Corporate Responsibility - The Company will participate in community

 Ethical Standards -The Company will conduct business based on sound

 Compassion - We reach out with openness, kindness, and concern.

 Respect - We honor the wonder of the human spirit.

 Excellence - We expect the best of ourselves and one another.

 Stewardship - We use our resources responsibly.

 Community - We cultivate relationships that inspire us to serve.

1.3 Keys to Success

o Hire the right people to work for the company

o Set evaluation policies and standards for all employees

o Delegate and make staff accountable for their work

 Sales & Marketing:

o Establish awareness of Auris brand and product offerings

o Manage barriers to entry

o Implement a marketing plan that successfully brings our advertisements

o Provide customer support for all products after purchase

 Product Development and Product Quality:

o Launch new products on time

o Establish quality processes

 Management & Customer Service:

o Manage purchasing properly

o All purchases should be based on customers' needs

o Reduce need for an in-house inventory and overhead costs

o Set marketing budgets and manage accounts receivable

o Set a program to manage customer satisfaction:

 Products shipped and delivered on time

 Effectively respond to customer complaints

2.1 Start-up Summary

Create your own business plan

Stationery etc. $5,000

Sales & Marketing $30,000

Property & Equipment $20,000

Travel & Conferences $24,000

Software Development $50,000

TOTAL START-UP EXPENSES $203,100

Cash Required $46,900

Other Current Assets $0

Total Requirements $250,000

Need real financials?

Create your own business plan

2.2 Company Ownership

Auris Solutions plans to be a privately-held, Limited Liability Corporation, with Dr.

Dr. Plauger 20% Max

Stock Option Pool 45% Max

Investors 35% Max

2.3 Company Locations and Facilities

Auris Solutions is temporarily located in the Big Building in Madison, Wisconsin. The

 A method and system for clinically evaluating speech intelligibility in children

 A method and system for simulating a child's normal classroom environment

 A system for computerizing the method so as to enable a clinical user to more

Patricia Chute, Ph.D.

Richard Tyler, PhD.

3.2 Competitive Comparison

Auris Solutions' Challenges

3.4 Sales Literature

3.6 Future Products

Products Ready to be launched by 2005: