February 2004

This sample business plan has been made available to users of Business Plan Pro®, business
planning software published by Palo Alto Software. Names, locations and numbers may have
been changed, and substantial portions of the original plan text may have been omitted to
preserve confidentiality and proprietary information.

You are welcome to use this plan as a starting point to create your own, but you do not have
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Requests for reprints, academic use, and other dissemination of this sample plan should be
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product information visit our Website: www.paloalto.com or call: 1-800-229-7526.

Copyright © Palo Alto Software, Inc., 1995-2005 All rights reserved.

 Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Austin Kinetic in this
business plan is confidential; therefore, reader agrees not to disclose it without the express
written permission of an Austin Kinetic officer.

It is acknowledged by reader that information to be furnished in this business plan is in all

respects confidential in nature, other than information which is in the public domain through
other means and that any disclosure or use of same by reader, may cause serious harm or
damage to Austin Kinetic.

Upon request, this document is to be immediately returned to any Austin Kinetic officer.

___________________
Signature

___________________
Name (typed or printed)

___________________
Date

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

 Table of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3.0 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

5.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

6.0 Web Plan Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

6.1 Website Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Development Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

7.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

7.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

8.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

8.1 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.2 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.3 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.4 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.6 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.7 Long-term Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
 Austin Kinetic

1.0 Executive Summary

Austin Kinetic is an information technology consulting firm serving the Austin Metro area with
top quality engineers who have a keen interest in customer satisfaction. The time is right for
consulting companies to flourish. With the recent gains in the stock market, capital is again
becoming available for IT infrastructure improvements. Austin Kinetic will position itself to win
a good deal of that emerging business. The company has been incorporated in Nevada and
has acquired an operating permit for Texas. Austin Kinetic anticipates a cumulative net profit
of over $1M by the end of FY2008.

The Market
Austin is known as "little Silicon valley" due to its high percentage of technology companies.
With its relatively low cost of living and ample space for expansion, Austin promises to be a
strong market into the foreseeable future. There are currently over 7,000 companies that fit
the aim of Austin Kinetic in the Austin Metro area, with only four major competitors. This
combination provides a rich opportunity, bolstered by the current up-turn in the area and
national economy.

The Business Model

Austin Kinetic will leverage the industry knowledge of its founding members to provide
outstanding service to its customers. The company will initially have as little overhead as
possible with its founders working out of their own homes, using their own transportation
means to reach clients. The company will be developed with a "customer service and
satisfaction first" mentality in an effort to build acceptance and a positive reputation in the
local industry.

The Management Team

In order for the company to be successful, Austin Kinetic must fully leverage the experience
and insight of its management team, which includes Adam Authortisement, Bob Borgware,
Cary Curry, Dean Dri, and Edgar Extension. The team has over forty-eight cumulative years of
experience in service operations management and information technology support. They
currently hold multiple technology industry vendor certifications crossing several disciplines
including both logical and physical network structure and management. Over the course of
their careers, the team has served in various technical roles with Fortune 500 companies and
has been successful in both large and small environments.

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 Austin Kinetic

Highlights

$2,500,000

$2,000,000

$1,500,000
Sales
Gross Margin
$1,000,000 Net Profit

$500,000

$0
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

1.1 Objectives

Austin Kinetic's objectives for the first five years:

1. Establish and maintain at least twenty-four full time service contract customers.
2. Establish an office in Austin, TX.
3. Break the $1M revenue mark.

1.2 Mission

Austin Kinetic is an innovative business technology company that was founded on the belief
that one company can make more than a difference, it can change the whole face of business
as we know it.

1.3 Keys to Success

• Depth of knowledge.
• Breadth of ability.
• Development of a strong business relationship with customers to gain an understanding
of their business and business needs.
• Ability to network in the industry.

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 Austin Kinetic

2.0 Company Summary

Austin Kinetic is incorporated in Nevada with an operating office in Austin, Texas. Initial staff
will consist of a small group of experienced computer engineers who's skills and experience
collectively cover a very broad segment of the open systems' distributed client/server field.
The company's initial focus will be installation and configuration projects which will be
developed into ongoing support contracts.

2.1 Company Ownership

Austin Kinetic is incorporated. The major share holders are Adam Authortisement, Bob
Borgware, Cary Curry, Dean Dri, and Edgar Extension.

2.2 Start-up Summary

The start-up costs for the company are expected to be $11,00 and will be funded by the
founder's personal funds. There will be only small initial equipment cost as the company will be
greatly dependent upon its founders' resources. It is expected that each employee will initially
cover the cost of transportation, cell phone, and incidentals that arise in the course of due
business. The company will begin covering those costs as revenue streams are generated.
Specific guidelines and policies will be developed prior to the sixth operating month.

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $800
Stationery etc. $100
Voice Mail Service $150
Website development $1,000
Computers $5,000
Cell Phones $500
Total Start-up Expenses $7,550

Start-up Assets
Cash Required $4,550
Other Current Assets $0
Long-term Assets $0
Total Assets $4,550

Total Requirements $12,100

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 Austin Kinetic

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $7,550
Start-up Assets to Fund $4,550
Total Funding Required $12,100

Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $4,550
Additional Cash Raised $0
Cash Balance on Starting Date $4,550
Total Assets $4,550

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities $0
Total Liabilities $0

Capital

Planned Investment
John Butler $2,500
Eddie Hodges $2,400
Sidney Johnson $2,400
Darren Galatas $2,400
Johnathan & Grace Panepinto $2,400
Additional Investment Requirement $0
Total Planned Investment $12,100

Loss at Start-up (Start-up Expenses) ($7,550)

Total Capital $4,550

Total Capital and Liabilities $4,550

Total Funding $12,100

Start-up

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0
Expenses Assets Investment Loans

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 Austin Kinetic

3.0 Services

Austin Kinetic will offer several support options, including hourly support services, with the
option to buy in blocks of 40 hours at a discounted rate. Blocks purchased will be valid for 180
days from date of purchase. Additionally, semi-annual service contracts will be available.
Contract pricing will be negotiated on a per-contract basis.

• Project work will be billed and estimated on a per-project basis.

• Web and ASP hosting will be billed on a per-system basis.

Operating systems supported (limited to current and three previous revisions):

• Windows
• Novell NetWare
• Solaris
• Red Hat Linux

Hardware supported (hardware configurations must be validated by OEM):

• All open desktop, server, storage, and network systems.

• Dell, ADIC, Storagetech, and HP tape drives and libraries.
• Additional hardware will have to be reviewed on a per-case basis.

Software packages supported (Restricted to implementation and initial configuration):

• Microsoft Exchange
• Lotus Notes/Domino
• SUS Messaging Center
• Microsoft SQL server
• Oracle DBS
• Veritas Backup Exec / Net Backup
• Legato Networker
• Arcserve
• Site Scope
• SMS
• Additional packages will have to be reviewed on a per-cases basis.

Service offerings:

Austin Kinetic has several pre-set packages available for general monitoring of a customer's
network equipment and applications. The packages are categorized by the type and use of
equipment to be monitored. An initial one-time setup fee of $500 will be required per physical
site at the onset of any service agreement. This amount is not affected by the number of
systems to be monitored at the designated physical site. The customer will be required to
provide Internet access to the monitoring server. Out-of-band notification can be added for an
additional $50 per month plus a one-time, per-physical-site, $150 initial setup fee.

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 Austin Kinetic
Basic Server Management*$350 per month
Austin Kinetic provides professional management of operating systems, including Windows,
NetWare, Red Hat Linux, and Solaris. This service is perfect for companies that want to
manage their own applications, but not deal with the ongoing hassle of tuning, securing, and
maintaining the operating system. We will take the burden of ensuring you get the proper
services for your specific server and operating system.

• A system audit to document your architecture and suggest improvements

• 24/7 technical support of the server and operating system from experienced engineers
• Security and bug patch notification for the operating system, and when approved, a
service call will be scheduled for installation.*
• Monitoring the network availability of one IP.
• Monitoring the server's disk usage, processor usage and load average
• Visibility into Austin Kinetic's trouble ticket system via a secure portal

* Except for the initial system audit, service time to repair or otherwise service the monitored
system is not included in this monitoring agreement.

Application Server Management Services* $450 per month.

Ensuring your applications are available and running at peak efficiency is a 24/7 responsibility.
Austin Kinetic offers comprehensive application monitoring and management so your
customers and employees will be able to use your applications without significant unscheduled
interruption. We offer a complete range of management services tailored to remove the
burden of ensuring your applications are up and getting the proper maintenance.

• A system audit to document your architecture and suggest improvements

• 24/7 technical support of the server, operating system and applications from
experienced engineers
• Security and bug patch notification for the operating system and applications, and
when approved, installation
• Monitoring application and network availability
• Monitoring application response time
• Monitoring the server's disk usage, processor usage, and load average
• Visibility into Austin Kinetic's trouble ticket system via a secure portal
• Periodic activity reports

* Except for the initial system audit, service time to repair or otherwise service the monitored
system is not included in this monitoring agreement.

Database Server Management Services* $500 per month.

Ensuring your Oracle, MySQL, and MS SQL 2000 databases are configured and maintained
properly is a time-consuming task for IT departments. Austin Kinetic can augment your
internal skill set with comprehensive database server management. We offer a broad range of
management services and will take the burden of ensuring you get the proper services for
your specific server and databases. Typical database services offered by Austin Kinetic include:

• A system audit to document your architecture and suggest improvements

• 24/7 technical support of the server, operating system and database from experienced
engineers
• Security and bug patch notification for the operating system and database, and when
approved, installation
• Monitoring database and network availability
• Monitoring database response time
• Monitoring the server's disk usage, processor usage and load average
• Visibility into Austin Kinetic's trouble ticket system via a secure portal
• Periodic activity reports

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 Austin Kinetic
* Except for the initial system audit, service time to repair or otherwise service the monitored
system is not included in this monitoring agreement.

Network Device Management Services* $450 per month.

Network devices - firewalls, load balancer, routers, switches and hubs - must be properly
configured and maintained to ensure network security and reliable operation. Austin Kinetic
offers a broad range of network management services and will take the burden of ensuring
you get the proper services for your specific network.

• A network audit to document your topology and addressing scheme

• 24/7 technical support of the network devices from experienced engineers
• Security and bug patch notification, and when approved, installation
• Maintaining the security of firewalls
• Monitoring bandwidth usage
• Monitoring network device availability and performance
• Visibility into Austin Kinetic's trouble ticket system via a secure portal

* Except for the initial system audit, service time to repair or otherwise service the monitored
system is not included in this monitoring agreement.

Benefits of Security Management Services (Priced determined on a per-site basis.)

Maintaining the security of your Internet-based systems is more important and more time
consuming that ever. Austin Kinetic removes the burden of protecting your systems by offering
24/7 security management that combines intrusion detection and vulnerability scanning. We
also will not burden your existing hardware as a pre-configured 1U server is installed in your
network to handle the intrusion detection and vulnerability task.

• Identify misconfigured firewalls

• Catch attacks that firewalls legitimately allow through (such as attacks against Web
servers)
• Document hacker attempts that fail
• Watch for insider hacking
• Identify users installing unsecured software on their machines
• Recognize unauthorized machines using the network
• See incorrect IP space utilization

Austin Kinetic will ensure your intrusion detection and vulnerability scanning system is properly
installed and maintained. This includes configuring the system, testing the pattern matching,
updating scanning profiles, monitoring 24/7, reporting suspicious activities or vulnerability, and
providing a monthly report.

Data Backup* $50 plus a one-time setup fee of $150 per backup server. There will be an
additional $100 per-site, per-month charge if tapes are required to be kept off-site.

Protecting your organization's data is critical. Austin Kinetic will manage your data protection
system to ensure that your data is protected by tape backup. While Austin Kinetic cannot be
held responsible for lost data, we will ensure that validated and tested backups occur on a
regularly scheduled basis. The customer will be responsible for procuring and installing the
necessary hardware. Austin Kinetic will configure and monitor the backup software, monitor
and test backup jobs, and perform needed file restoration.

* This service does not require the $500 site setup fee.

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 Austin Kinetic

4.0 Market Analysis Summary

The Information and Technology Service industry is expected to grow at 8.58% per year
through 2010.
--U.S. Department of Labor (2003) http://www.bls.gov/iag/iag.services.htm
We will be primarily focusing on mid-sized companies with 500 or fewer employers. These
companies typically do not have large internal IT departments and could benefit the greatest
from our offerings.

4.1 Market Segmentation

The information in the market analysis table gained from the U.S. Census Bureau,
http://factfinder.census.gov/servlet/GQRGeoSearchByListServlet?ds_name=E9700A1. Though
the data is based upon 1997 data, it is representative of the local market's potential.

Table: Market Analysis

Market Analysis
2004 2005 2006 2007 2008
Potential Customers Growth CAGR
Retail trade 8% 2,925 3,159 3,412 3,685 3,980 8.00%
Professional, scientific,
8% 3,128 3,378 3,648 3,940 4,255 8.00%
& technical services
Health care & social
8% 1,705 1,841 1,988 2,147 2,319 7.99%
assistance
Total 8.00% 7,758 8,378 9,048 9,772 10,554 8.00%

Market Analysis (Pie)

Retail trade
Professional, scientific, & technical services
Health care & social assistance

Page 8
 Austin Kinetic

4.2 Target Market Segment Strategy

Austin Kinetic is interested in servicing companies that are large enough to show direct P&L
benefit from information technology investment, but not large enough to maintain their own
permanent IT staff. The business groups targeted in the market analysis table represent the
largest groups in our target area that fit our interests.

4.3 Service Business Analysis

Austin Kinetic is in the business of satisfying companies' information technology infrastructure

needs. We will provide service at various levels from consulting to installation. Services will be
sold on a per-customer/case basis with heavy personal interaction between Austin Kinetic
sales representatives and prospective customers.

4.3.1 Competition and Buying Patterns

In this industry that Austin Kinetic, word of mouth and reputation are king. While a limited
amount of highly focused marketing will be effective, most contracts are gleaned from social
contacts and networking.

5.0 Strategy and Implementation Summary

Austin Kinetic's initial funding will be from its founders' personal funds. Word-of-mouth and
industry networking will be Austin Kinetic's key source of clients. The company's success will
be based upon the service and satisfaction of customers to the point that they willingly refer
new business.

5.1 Competitive Edge

From the onset, Austin Kinetic will have over 20 years of cumulative experience in the
information technology field with a very broad range of hands-on experience. This, combined
with a keen sense of customer service and satisfaction, will differentiate Austin Kinetic from its
competitors.

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 Austin Kinetic

5.2 Marketing Strategy

Austin Kinetic's initial marketing strategy will be largely word-of-mouth and industry group
networking. Our biggest initial challenge will be to get our name known in the local market.
We will become involved in several industry specific organizations in the local community which
will give us direct access to potential customers.

5.3 Sales Strategy

Sales will focus a bit less on building relationships and more on solidifying confidence in Austin
Kinetic's competencies and skills. Our primary focus will be to answer the question, "how can
Austin Kinetic best meet a customer's information technology needs?" Delivering this answer in
a clear, concise proposal allied with competitive pricing will be the key to closing deals.

5.3.1 Sales Forecast

Sales are forecast with an emphasis on project work at the onset. In the first few months, we
will be primarily occupied in conducting short-term one-day to one-week projects while
building Austin Kinetic's reputation and brand name. Within the first six months, Austin Kinetic
will have signed three annual service contracts, doubling that by the end of the year and each
semi-annual period thereafter. Sales contracts will be set period contracts paid by monthly
installments.

As a service business, our only direct costs would relate to the time spent by employees in
responding to customers' needs. Our employees are all paid a set salary, and not by hourly
billing, so we have no direct costs of sales; these salaries can be found in the Personnel Plan.

Table: Sales Forecast

Sales Forecast
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Sales
Project related $309,600 $705,600 $1,051,200 $1,396,800 $1,742,400
Service contract $30,000 $108,000 $180,000 $252,000 $324,000
Total Sales $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Direct Cost of Sales FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Technician Salary $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0

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 Austin Kinetic

Sales Monthly

$50,000

$45,000

$40,000

$35,000

$30,000

$25,000 Project related

$20,000 Service contract

$15,000

$10,000

$5,000

$0
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Sales by Year

$2,500,000

$2,000,000

$1,500,000
Project related
Service contract
$1,000,000

$500,000

$0
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

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 Austin Kinetic

5.4 Milestones

Austin Kinetic will have very simple marketing milestones geared toward industry networking
and beginning to build name recognition.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Join Austin's chamber of commerce 2/1/2004 3/1/2004 $0 Adam Marketing
Register with Austin Business
2/1/2004 3/1/2004 $0 Adam Marketing
Journal
Obtain first service contract 5/30/2004 6/5/2004 $0 Bob and Dean All
Open Office 2/1/2004 2/1/2005 $3,500 Edgar Operations
Totals $3,500

Milestones

Join Austin's chamber of commerce

Register with Austin Business Journal

Obtain first service contract

Open Office

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

6.0 Web Plan Summary

Austin Kinetic's Web presence will not only serve as a medium for the company's marketing
message, but also will serve as an important tool for our customers. Customers will be
provided with the ability to manage and monitor their accounts from anywhere that has access
to the Internet. Additionally, consultants in the field will be able to track time and work
journals through the site as well as develop and print immediate job estimates.

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 Austin Kinetic

6.1 Website Marketing Strategy

Austin Kinetic's Web presence will be utilized as a tool to assist the company's overall
marketing strategy. It will serve as a point of reference for information about the company
and its services, and in a small part, lend credibility to the marketing message.

6.2 Development Requirements

Austin Kinetic's site will reside in a two-tier environment. A back-end database will be utilized
to manage customer data. The site will be developed with the assistance of a contracted
professional developer.

7.0 Management Summary

At the outset, Austin Kinetic will maintain five part-time employees, its founders. These
employees will be responsible for all aspects of the business and serve in both managerial as
well as technical roles. As the business grows, additional engineers will be hired. We anticipate
that during the fourth year of operation, the original five employees will be free from any
technical duties and concentrate solely on their management responsibilities. At this time,
Austin Kinetic will look to add a full-time sales and marketing manager as well.

7.1 Personnel Plan

Business permitting, Austin Kinetic will maintain a staff of five engineers through most of FY
2007. A secretary will be hired at the start of FY2006 to assist with telephone and office
management. At the end of FY 2007, an additional engineer will be brought on board as
workload dictates. Beginning FY 2008, the original founding members will be transitioned from
field work and into management, replaced by additional engineers. Additionally, a full time
marketing/sales representative will be hired.

Compensation projections were made with annual merit increases of 5% for staff and 15% for
the founders. The table also shows a profit sharing plan starting in the second year, based on
5% of the previous year's net profits. These bonuses will be divided equally among staff
members, including owners.

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 Austin Kinetic

Table: Personnel

Personnel Plan
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Profit Sharing - 5% net profits $0 $7,923 $12,464 $23,621 $16,616
Adam Authortisement (CEO) $14,400 $55,000 $63,000 $73,000 $83,600
Edgar Extension (COO) $14,400 $55,000 $63,000 $73,000 $83,600
Cary Curry (CIO) $14,400 $55,000 $63,000 $73,000 $83,600
Dean Dri (CFO) $14,400 $55,000 $63,000 $73,000 $83,600
Bob Borgware (CTO) $14,400 $55,000 $63,000 $73,000 $83,600
Secretary $0 $30,000 $31,500 $33,000 $34,700
Sales/Marketing $0 $0 $0 $70,000 $73,500
Technician-1 $0 $0 $13,750 $55,688 $58,472
Technician-2 $0 $0 $0 $55,000 $57,750
Technician-3 $0 $0 $0 $55,000 $57,750
Technician-4 $0 $0 $0 $55,000 $57,750
Technician-5 $0 $0 $0 $55,000 $57,750
Technician-6 $0 $0 $0 $55,000 $57,750
Technician-7 $0 $0 $0 $45,833 $57,292
Technician-8 $0 $0 $0 $9,167 $55,458
Technician-9 $0 $0 $0 $0 $36,667
Total People 5 6 7 15 16

Total Payroll $72,000 $312,923 $372,714 $877,309 $1,039,455

8.0 Financial Plan

Austin Kinetic will initially grow with project work, beginning to build service contracts from the
six month point forward. The company will increase its project work to 2,560 man hours per
month and increase its service contracts count by six each year. The initial growth will be
financed primarily out of the pockets of its founders. The company will fund all growth from
the cash flow of the business, remaining debt-free.

8.1 Important Assumptions

At the onset, the founding members of Austin Kinetic will take on much of the financial burden
of running the company. There will be no need for dedicated office space until FY 2006 when
we expect to open an office in Austin. Until then, Austin Kinetic will compensate travel-related
expenses, if any, incurred in the course of business. The only foreseen recurring expenses will
be voice mail services, marketing, insurance, Internet access, and Web presence. The lion's
share of funds will be held by Austin Kinetic to develop cash reserves for future expansion and
a business climate buffer.

Customers will be billed on an hourly basis of $120. Engineers will be paid a salary, plus $25
per hour for on-call and overtime. Employees who establish the new project/contract will be
paid a 5% bonus of the total project / contract price. Business call time of cell phones will be
reimbursed.

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 Austin Kinetic

Table: General Assumptions

General Assumptions
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
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

8.2 Break-even Analysis

The table and chart below show our break-even analysis. As a service business, we have no
direct cost of sales. Our break-even point ni the first year is therefore equal to the amount
needed to cover our operating expenses, including payroll. We will reach break even at $9,435
per month, in the third month.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $9,435

Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $9,435

Break-even Analysis

$15,000

$10,000

$5,000

$0

($5,000)

($10,000)

$0 $4,000 $8,000 $12,000 $16,000 $20,000

Monthly break-even point

Break-even point = where line intersects with 0

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 Austin Kinetic

8.3 Projected Profit and Loss

In the first year, we will be based out of the founders' homes. Adam Authortisement has
renovated his garage for use as a meeting space and general office, when we need to get
together as a group. Utilities in the first year represent the cost of home high-speed Internet
access for all five employees ($45 each per month). This access is necessary for
communications between personnel and for file transmission for all project and service work.

After the first year, it will be more cost-effective and attuned to our growth to rent a space in
downtown Austin, where we can consolidate equipment, combine utilities, and have a central
location for our work and our secretary. Office space rented beginning FY2006 is forecast to be
$2,500 per month.

The Profit and Loss also includes a provision for charity donations, which we have deemed
important to our mission, as well as to marketing and outreach in the community. Starting in
the second year, 5% of net profits each will be set aside for charity on an annual basis based
upon the previous year's performance.

After the first month, Marketing and Promotion expenses are set at 5% of the previous
month's and year's sales.

Table: Profit and Loss

Pro Forma Profit and Loss

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Sales $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400
Direct Cost of Sales $0 $0 $0 $0 $0
Other Costs of Sales $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------
Total Cost of Sales $0 $0 $0 $0 $0

Gross Margin $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Gross Margin % 100.00% 100.00% 100.00% 100.00% 100.00%

Expenses
Payroll $72,000 $312,923 $372,714 $877,309 $1,039,455
Marketing/Promotion $14,720 $16,980 $40,680 $61,560 $82,440
Depreciation $0 $714 $2,038 $2,464 $3,540
Rent $0 $45,000 $45,000 $50,000 $50,000
Moving Expenses $5,000 $0 $0 $0 $0
Utilities $2,700 $2,000 $2,500 $2,500 $3,000
Insurance $3,000 $10,000 $10,000 $10,000 $10,000
Payroll Taxes $10,800 $46,938 $55,907 $131,596 $155,918
Expensed Computer Equipment $5,000 $15,000 $15,000 $15,000 $15,000
Charity (5% of previous year net profit) $0 $7,923 $12,464 $23,621 $16,616
------------ ------------ ------------ ------------ ------------
Total Operating Expenses $113,220 $457,479 $556,304 $1,174,051 $1,375,970

Profit Before Interest and Taxes $226,380 $356,121 $674,896 $474,749 $690,430
Interest Expense $0 $0 $0 $0 $0
Taxes Incurred $67,914 $106,836 $202,469 $142,425 $207,129

Net Profit $158,466 $249,285 $472,427 $332,324 $483,301

Net Profit/Sales 46.66% 30.64% 38.37% 20.16% 23.39%

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 Austin Kinetic

Profit Monthly

$25,000

$20,000

$15,000

$10,000

$5,000

$0
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Profit Yearly

$500,000

$450,000

$400,000
$350,000

$300,000
$250,000

$200,000

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

$0
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

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 Austin Kinetic

Gross Margin Monthly

$50,000

$45,000

$40,000

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Gross Margin Yearly

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

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 Austin Kinetic

8.4 Projected Cash Flow

We have no sales on credit; all service accounts and projects are paid in advance, in
installments. We anticipate no problems with our cash flow. By staying debt free and keeping
expenses down, we expect a cash balance over $180,000 by the end of the first year.

Table: Cash Flow

Pro Forma Cash Flow

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Cash Received

Cash from Operations

Cash Sales $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400
Subtotal Cash from Operations $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Additional Cash Received

Sales Tax, VAT, HST/GST
$0 $0 $0 $0 $0
Received
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0
Subtotal Cash Received $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Expenditures FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Expenditures from Operations

Cash spending $72,000 $312,923 $372,714 $877,309 $1,039,455
Bill Payments $91,591 $91,486 $439,238 $352,342 $618,253
Subtotal Spent on Operations $163,591 $404,409 $811,953 $1,229,651 $1,657,708

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0
Principal Repayment of Current
$0 $0 $0 $0 $0
Borrowing
Other Liabilities Principal
$0 $0 $0 $0 $0
Repayment
Long-term Liabilities Principal
$0 $0 $0 $0 $0
Repayment
Purchase Other Current Assets $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $5,000 $10,000 $5,000 $10,000
Dividends $0 $0 $0 $0 $0
Subtotal Cash Spent $163,591 $409,409 $821,953 $1,234,651 $1,667,708

Net Cash Flow $176,009 $404,191 $409,247 $414,149 $398,692

Cash Balance $180,559 $584,750 $993,997 $1,408,146 $1,806,838

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 Austin Kinetic

Cash

$200,000

$180,000

$160,000

$140,000

$120,000

$100,000 Net Cash Flow

$80,000 Cash Balance

$60,000

$40,000

$20,000

$0
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

8.5 Projected Balance Sheet

Our Balance Sheet is quite solid. We will build our asset base slowly over the first five years,
expensing most of our computer and hardware equipment to offset taxes, since they will need
replacing every two to three years.

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 Austin Kinetic

Table: Balance Sheet

Pro Forma Balance Sheet

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Assets

Current Assets
Cash $1,408,14 $1,806,83
$180,559 $584,750 $993,997
6 8
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $1,408,14 $1,806,83
$180,559 $584,750 $993,997
6 8

Long-term Assets
Long-term Assets $0 $5,000 $15,000 $20,000 $30,000
Accumulated Depreciation $0 $714 $2,752 $5,216 $8,756
Total Long-term Assets $0 $4,286 $12,248 $14,784 $21,244
Total Assets $1,422,93 $1,828,08
$180,559 $589,036 $1,006,245
0 2

Liabilities and Capital FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Current Liabilities
Accounts Payable $17,543 $176,735 $121,517 $205,878 $127,728
Current Borrowing $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current Liabilities $17,543 $176,735 $121,517 $205,878 $127,728

Long-term Liabilities $0 $0 $0 $0 $0
Total Liabilities $17,543 $176,735 $121,517 $205,878 $127,728

Paid-in Capital $12,100 $12,100 $12,100 $12,100 $12,100

Retained Earnings $1,204,95
($7,550) $150,916 $400,201 $872,628
2
Earnings $158,466 $249,285 $472,427 $332,324 $483,301
Total Capital $1,217,05 $1,700,35
$163,016 $412,301 $884,728
2 4
Total Liabilities and Capital $1,422,93 $1,828,08
$180,559 $589,036 $1,006,245
0 2

Net Worth $1,217,05 $1,700,35

$163,016 $412,301 $884,728
2 4

8.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 7379.02, Computer Related Consulting Services,
are shown for comparison.

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 Austin Kinetic

Table: Ratios

Ratio Analysis
Industry
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Profile
Sales Growth 0.00% 139.58% 51.33% 33.92% 25.33% 5.93%

Percent of Total Assets

Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 51.96%
Total Current Assets 100.00% 99.27% 98.78% 98.96% 98.84% 71.50%
Long-term Assets 0.00% 0.73% 1.22% 1.04% 1.16% 28.50%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities 9.72% 30.00% 12.08% 14.47% 6.99% 36.87%

Long-term Liabilities 0.00% 0.00% 0.00% 0.00% 0.00% 15.50%
Total Liabilities 9.72% 30.00% 12.08% 14.47% 6.99% 52.37%
Net Worth 90.28% 70.00% 87.92% 85.53% 93.01% 47.63%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Selling, General & Administrative
47.42% 59.67% 73.67% 70.43% 69.19% 79.97%
Expenses
Advertising Expenses 5.00% 2.09% 3.30% 3.73% 3.99% 1.53%
Profit Before Interest and Taxes 66.66% 43.77% 54.82% 28.79% 33.41% 1.97%

Main Ratios
Current 10.29 3.31 8.18 6.84 14.15 1.33
Quick 10.29 3.31 8.18 6.84 14.15 1.07
Total Debt to Total Assets 9.72% 30.00% 12.08% 14.47% 6.99% 59.80%
Pre-tax Return on Net Worth 138.87% 86.37% 76.28% 39.01% 40.61% 3.73%
Pre-tax Return on Assets 125.38% 60.46% 67.07% 33.36% 37.77% 9.29%

Additional Ratios FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Net Profit Margin 46.66% 30.64% 38.37% 20.16% 23.39% n.a
Return on Equity 97.21% 60.46% 53.40% 27.31% 28.42% n.a

Activity Ratios
Accounts Payable Turnover 6.22 1.42 3.16 2.12 4.23 n.a
Payment Days 27 141 142 137 113 n.a
Total Asset Turnover 1.88 1.38 1.22 1.16 1.13 n.a

Debt Ratios
Debt to Net Worth 0.11 0.43 0.14 0.17 0.08 n.a
Current Liab. to Liab. 1.00 1.00 1.00 1.00 1.00 n.a

Liquidity Ratios
Net Working Capital $163,016 $408,015 $872,480 $1,202,268 $1,679,110 n.a
Interest Coverage 0.00 0.00 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.53 0.72 0.82 0.86 0.88 n.a
Current Debt/Total Assets 10% 30% 12% 14% 7% n.a
Acid Test 10.29 3.31 8.18 6.84 14.15 n.a
Sales/Net Worth 2.08 1.97 1.39 1.35 1.22 n.a
Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a

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 Austin Kinetic

8.7 Long-term Plan

Austin Kinetic anticipates maintaining a steady profit percentage and plans to build cash
reserves to an amount which would cover operating expenses for twelve months should any
catastrophic event occur. This will be a moving target and be recalculated on an annual basis
as the business cash flow changes. There has been no pre-set limit placed upon Austin
Kinetic. Its founders see the possibility of expanding the company into a global force ranked
equal to today's top Fortune 500 companies.

Page 23
 Appendix

Appendix Table: Sales Forecast

Sales Forecast
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Sales
Project related 0% $2,400 $4,800 $9,600 $19,200 $24,000 $26,400 $31,200 $33,600 $36,000 $38,400 $40,800 $43,200
Service contract 0% $0 $0 $0 $0 $0 $3,000 $3,000 $4,000 $4,000 $5,000 $5,000 $6,000
Total Sales $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

Direct Cost of Sales Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Technician Salary $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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 Appendix

Appendix Table: Personnel

Personnel Plan
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Profit Sharing - 5% net profits 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Adam Authortisement (CEO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100
Edgar Extension (COO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100
Cary Curry (CIO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100
Dean Dri (CFO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100
Bob Borgware (CTO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100
Secretary 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales/Marketing 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-1 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-2 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-3 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-4 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-5 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-6 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-7 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-8 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Technician-9 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 5 5 5 5 5 5 5 5 5 5 5 5

Total Payroll $500 $1,000 $2,000 $4,000 $5,000 $6,250 $7,250 $8,000 $8,500 $9,250 $9,750 $10,500

Page 25
 Appendix

Appendix Table: General Assumptions

General Assumptions
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
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

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 Appendix

Appendix Table: Profit and Loss

Pro Forma Profit and Loss

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Sales $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Gross Margin $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200
Gross Margin % 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Expenses
Payroll $500 $1,000 $2,000 $4,000 $5,000 $6,250 $7,250 $8,000 $8,500 $9,250 $9,750 $10,500
Marketing/Promotion 5% $200 $120 $240 $480 $960 $1,200 $1,470 $1,710 $1,880 $2,000 $2,170 $2,290
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Moving Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000
Utilities $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225
Insurance $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Payroll Taxes 15% $75 $150 $300 $600 $750 $938 $1,088 $1,200 $1,275 $1,388 $1,463 $1,575
Expensed Computer Equipment 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000 $0 $0
Charity (5% of previous year net profit) 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Operating Expenses $1,250 $1,745 $3,015 $5,555 $7,185 $8,863 $10,283 $11,385 $12,130 $18,113 $13,858 $19,840

Profit Before Interest and Taxes $1,150 $3,055 $6,585 $13,645 $16,815 $20,538 $23,918 $26,215 $27,870 $25,288 $31,943 $29,360
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $345 $917 $1,976 $4,094 $5,045 $6,161 $7,175 $7,865 $8,361 $7,586 $9,583 $8,808

Net Profit $805 $2,139 $4,610 $9,552 $11,771 $14,376 $16,742 $18,351 $19,509 $17,701 $22,360 $20,552
Net Profit/Sales 33.54% 44.55% 48.02% 49.75% 49.04% 48.90% 48.95% 48.80% 48.77% 40.79% 48.82% 41.77%

Page 27
 Appendix

Appendix Table: Cash Flow

Pro Forma Cash Flow

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Cash Received

Cash from Operations

Cash Sales $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200
Subtotal Cash from Operations $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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 Received $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

Expenditures Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Expenditures from Operations

Cash spending $500 $1,000 $2,000 $4,000 $5,000 $6,250 $7,250 $8,000 $8,500 $9,250 $9,750 $10,500
Bill Payments $37 $1,114 $1,706 $3,079 $5,701 $7,281 $8,822 $10,242 $11,274 $12,140 $16,357 $13,839
Subtotal Spent on Operations $537 $2,114 $3,706 $7,079 $10,701 $13,531 $16,072 $18,242 $19,774 $21,390 $26,107 $24,339

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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 $537 $2,114 $3,706 $7,079 $10,701 $13,531 $16,072 $18,242 $19,774 $21,390 $26,107 $24,339

Net Cash Flow $1,864 $2,686 $5,894 $12,121 $13,299 $15,869 $18,128 $19,358 $20,226 $22,010 $19,693 $24,861
Cash Balance $6,414 $9,100 $14,994 $27,115 $40,414 $56,283 $74,411 $93,769 $113,994 $136,005 $155,698 $180,559

Page 28
 Appendix

Appendix Table: Balance Sheet

Pro Forma Balance Sheet

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Assets Starting Balances

Current Assets
Cash $4,550 $6,414 $9,100 $14,994 $27,115 $40,414 $56,283 $74,411 $93,769 $113,994 $136,005 $155,698 $180,559
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $4,550 $6,414 $9,100 $14,994 $27,115 $40,414 $56,283 $74,411 $93,769 $113,994 $136,005 $155,698 $180,559

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 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $4,550 $6,414 $9,100 $14,994 $27,115 $40,414 $56,283 $74,411 $93,769 $113,994 $136,005 $155,698 $180,559

Liabilities and Capital Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Current Liabilities
Accounts Payable $0 $1,059 $1,606 $2,891 $5,460 $6,989 $8,481 $9,867 $10,875 $11,591 $15,900 $13,234 $17,543
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 Liabilities $0 $1,059 $1,606 $2,891 $5,460 $6,989 $8,481 $9,867 $10,875 $11,591 $15,900 $13,234 $17,543

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $1,059 $1,606 $2,891 $5,460 $6,989 $8,481 $9,867 $10,875 $11,591 $15,900 $13,234 $17,543

Paid-in Capital $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100
Retained Earnings ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550)
Earnings $0 $805 $2,944 $7,553 $17,105 $28,875 $43,251 $59,994 $78,344 $97,853 $115,554 $137,914 $158,466
Total Capital $4,550 $5,355 $7,494 $12,103 $21,655 $33,425 $47,801 $64,544 $82,894 $102,403 $120,104 $142,464 $163,016
Total Liabilities and Capital $4,550 $6,414 $9,100 $14,994 $27,115 $40,414 $56,283 $74,411 $93,769 $113,994 $136,005 $155,698 $180,559

Net Worth $4,550 $5,355 $7,494 $12,103 $21,655 $33,425 $47,801 $64,544 $82,894 $102,403 $120,104 $142,464 $163,016

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