King Financial Corporahon King Financial Corporahon: Banister Financial, Inc. Banister Financial, Inc

1338
Harding Place
Banister Financial, Inc. Suite 200
Charlo5e, NC 28204
(704) 334-4932
businessvalue.com
PRELIMINARY DRAFT - NOT AN OPINION OF VALUE
King Financial CorporaHon
Opinion of the Fair Market Value of:

100 Shares of VoHng Common Stock
(100 Total Shares of VoHng Common Stock Outstanding)
For Equitable DistribuHon Purposes in the maIer of

William Brian King v. Kara Hemenway King,
Cabarrus County File No: 20-CVD-3500 (in Arbitra8on)
ValuaHon Dates:
May 5, 2019 (Date of SeparaHon)
March 31, 2022 (Current Date)
Report Date: -----------------

© Copyright 2022, Banister Financial, Inc.
© 2022, Banister Financial, Inc. PRELIMINARY DRAFT. NOT AN OPINION OF VALUE.
I. INTRODUCTION....................................................................................................................4
A. PURPOSE AND SCOPE.................................................................................................................................... 4
B. SUMMARY OF OPINION OF FAIR MARKET VALUE........................................................................................... 5

1. Findings...............................................................................................................................................................5
2. Report Must be Read in its EnVrety....................................................................................................................5
3. DefiniVons...........................................................................................................................................................6
4. Summary of Key ValuaVon Factors......................................................................................................................6
C. VALUATOR INDEPENDENCE............................................................................................................................. 7
D. VALUATOR QUALIFICATIONS........................................................................................................................... 7
E. INFORMATION USED IN THIS VALUATION....................................................................................................... 9
F. VALUATION STANDARDS............................................................................................................................... 11
II. COMPANY INFORMATION..................................................................................................12
A. COMPANY OVERVIEW.................................................................................................................................. 12
1. Nature and History of the Company.................................................................................................................12
2. Ownership.........................................................................................................................................................12
a. Overview.......................................................................................................................................................12
b. Company Governance...................................................................................................................................12
c. Prior TransacVons in the Shares....................................................................................................................12
d. No Intent to Market or Sell the Company.....................................................................................................13
3. Management and Employees...........................................................................................................................13
4. CompeVVon.......................................................................................................................................................13
5. Clients................................................................................................................................................................14
6. Suppliers............................................................................................................................................................15
7. FaciliVes.............................................................................................................................................................15
8. Borrowing RelaVonships...................................................................................................................................16
9. Non-OperaVng Assets and LiabiliVes................................................................................................................16
10. Related Party TransacVons..............................................................................................................................17
11. Revenue and Earnings Summary.....................................................................................................................17
12. Book Value of Shareholder's Equity Summary................................................................................................18
13. DistribuVons....................................................................................................................................................18
14. ConVngent LiabiliVes.......................................................................................................................................19
15. Economic CondiVons.......................................................................................................................................19
a. The Economy In General: May 5, 2019, Date of SeparaVon .........................................................................19
b. State Economy: May 5, 2019, Date of SeparaVon........................................................................................21
c. The Economy in General: March 31 2022, Current Date..............................................................................22
d. State Economy: March 31, 2022, Current Date............................................................................................24
e. PopulaVon Growth: Both ValuaVon Dates....................................................................................................25
III. FINANCIAL ANALYSIS.........................................................................................................27
A. OVERVIEW................................................................................................................................................... 27
1. Purpose of this SecVon.....................................................................................................................................27
2. Financial Statement InformaVon......................................................................................................................27
3. Sources Used in Comparisons with Peers.........................................................................................................28
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B. FINANCIAL ANALYSIS.................................................................................................................................... 28
1. Overview...........................................................................................................................................................28
2. Income Statement Profitability Analysis...........................................................................................................28
a. Overview.......................................................................................................................................................28
b. Revenues.......................................................................................................................................................29
c. Gross Profit Margins......................................................................................................................................30
d. OperaVng Expenses.......................................................................................................................................30
e. OperaVng Profit Margins...............................................................................................................................31
f. Other Income and Expense............................................................................................................................33
g. Pre-Tax Profitability.......................................................................................................................................34
3. Balance Sheet Analysis......................................................................................................................................36
a. Overview.......................................................................................................................................................36
b. Balance Sheet Analysis Not Conducted in this MaWer..................................................................................36
c. Interim Financial InformaVon as of the Two ValuaVon Dates .......................................................................37
IV. VALUATION METHODOLOGY.............................................................................................39
A. INTRODUCTION............................................................................................................................................ 39
1. Summary of General Methodology Employed..................................................................................................39
2. Income Approach..............................................................................................................................................39
a. CapitalizaVon Method...................................................................................................................................39
b. Discounted Future Benefits Method.............................................................................................................40
3. Market Approach..............................................................................................................................................41
a. Overview.......................................................................................................................................................41
b. Market Methods Not Employed...................................................................................................................42
4. Asset Approach.................................................................................................................................................42
B. INCOME VALUATION APPROACH.................................................................................................................. 42

1. IntroducVon.......................................................................................................................................................42
2. Development of Normalized Cash Flow............................................................................................................42
3. Discount and CapitalizaVon Rate Development................................................................................................46
a. Overview.......................................................................................................................................................46
b. Cost of Equity Capital....................................................................................................................................48
c. Specific Company Risk Premium...................................................................................................................49
d. SummaVon of Components to EsVmate Equity Discount Rate....................................................................50
e. Long-term Annual Growth Rate....................................................................................................................51
f. Tax AffecVng Analysis: Overview....................................................................................................................52
g. Differences in Available Cash Flow................................................................................................................53
h. Analysis of the Interest at Issue....................................................................................................................53
4. Preliminary Opinion of Fair Market Value.........................................................................................................54
5. Adjustment for Non-OperaVng Assets..............................................................................................................56
6. Discount for Lack of Marketability....................................................................................................................56
C. MARKET VALUATION APPROACH: GUIDELINE PUBLIC COMPANIES............................................................... 57

1. Overview...........................................................................................................................................................57
2. Search for Guideline Public Companies............................................................................................................57
3. Guideline Public Companies Selected...............................................................................................................57
D. MARKET APPROACH: GUIDELINE TRANSACTION METHOD........................................................................... 58

1. Overview...........................................................................................................................................................58
2. DealStats TransacVons......................................................................................................................................58
3. BIZCOMPS TransacVons.....................................................................................................................................59
4. FP TransiVon PracVces for Sale.........................................................................................................................59
5. ValuaVon Guidance in the 2022 Business Reference Guide..............................................................................61
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6. Summary of Guideline TransacVon Data...........................................................................................................62
E. ASSET VALUATION APPROACH...................................................................................................................... 63

1. Overview of Methods........................................................................................................................................63
2. Asset Method Not Employed............................................................................................................................63
V. VALUATION CONCLUSION...................................................................................................65
A. SUMMARY OF FINDINGS BY EACH VALUATION APPROACH........................................................................... 65
B. FINAL OPINION OF FAIR MARKET VALUE...................................................................................................... 65
EXHIBITS................................................................................................................................67
A-1. LimiVng CondiVons........................................................................................................................................67
A-2. DefiniVons......................................................................................................................................................67
A-3. QualificaVons, Michael A. Paschall, ASA, ABV, CFA, JD..................................................................................67
B-1. Marketability Study InformaVon...................................................................................................................67
C-1. Common Size Balance Sheets (Assets)..........................................................................................................67
C-2. Common Size Balance Sheets (LiabiliVes and Equity)...................................................................................67
C-3. Common Size Income Statements.................................................................................................................67
C-4. RaVo Analysis.................................................................................................................................................67
C-5. Adjustments to Reported Financial Results...................................................................................................67
C-6. ExplanaVon of Adjustments to Reported Financial Results...........................................................................67
C-7. SEAM Model (Date of SeparaVon).................................................................................................................67
C-8. SEAM Mode (Current Date)...........................................................................................................................67
C-9. ExplanaVon of SEAM Model..........................................................................................................................67
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I. INTRODUCTION
A. PURPOSE AND SCOPE
Purpose: Banister Financial, Inc. (“Banister”) was engaged to provide an opinion of the
fair market value (as defined below) of 100 shares of VoVng Common stock (a 100% controlling
interest in 100 total VoVng Common shares outstanding) in King Financial CorporaVon
(“Company”). There is one class of common stock outstanding at the Company. The opinions of
fair market value are as of valuaVon dates of May 5, 2019 (Date of SeparaVon) and March 31,
2022 (Current Date). The only Intended Users of this valuaVon report and its opinions of fair
market value are James McElroy & Diehl, P.A. (“Client”), and its client, Kara Hemenway King
(“Ms. King”). The sole Intended Use of this valuaVon engagement is for equitable distribuVon
purposes in the maWer of William Brian King v. Kara Hemenway King, Cabarrus County File No:
20-CVD-3500 (In ArbitraMon).
Standard of Value Used: The standard of value in this valuaVon report is fair market
value which is herein defined as the “price, expressed in terms of cash equivalents, at which
property would change hands between a hypotheVcal willing and able buyer and a hypotheVcal
willing and able seller, acVng at arms' length in an open and unrestricted market, when neither
is under compulsion to buy or sell and when both have reasonable knowledge of the relevant
facts.” See Exhibit A-2 for definiVons of business valuaVon terms.
Type of ValuaSon Report: This valuaVon report and its opinion of fair market value is a
valuaVon engagement as that term is defined in the Statement on Standards for ValuaMon
Services (SSVS) of the American InsVtute of CerVfied Public Accountants (AICPA). Under the
SSVS, an opinion of fair market value that results from a valuaVon engagement is contained in a
“Detailed Report” expressed as a conclusion of value. This valuaVon report is also an “Appraisal
Report” as defined by the Uniform Standard of Professional Appraisal PracMce (USPAP).
Important LimitaSons: Readers of this valuaVon report must read Exhibit A-1 (LimiMng
CondiMons) to understand the assumpVons, limitaVons, and intended use of this valuaVon
engagement and opinion of fair market value. This valuaVon report and its opinion of fair
market value is invalid as of any other valuaVon date, any other valuaVon purpose, any other
interest in the Firm, or for use by any other party other than as noted above. This valuaVon and
opinion of fair market value considers only informaVon known or knowable as of the stated
valuaVon date.
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B. SUMMARY OF OPINION OF FAIR MARKET VALUE
1. Findings
Banister's opinion of the fair market value of 100 shares of VoVng Common stock (a
100% controlling interest in 100 total VoVng Common shares outstanding) in King Financial
CorporaVon, as of the specified valuaVon dates and for the specified purpose is as follows:
Opinion of the Fair Market Value 1

of 100 Shares of VoSng Common Stock
King Financial CorporaSon
for Equitable DistribuSon Purposes
as of May 5, 2019 (Date of SeparaSon)
and March 31, 2022 (Current Date)
# of Total Opinion of
Common Common Ownership Fair Market
ValuaSon Shares Shares Interest Value of
Date Valued Outstanding Valued Interest
May 5, 2019 Date of SeparaSon 100 100 100.0% $455,000
March 31, 2022 Current Date 100 100 100.0% $555,000
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Rounded. Readers must read this enVre report, including Exhibit A-1 (LimiMng CondiMons), for a complete understanding of
this opinion of fair market value, including any assumpVons (including any hypotheVcal condiVons), limitaVons, and
the intended use of the opinion of fair market value. This opinion of fair market value considers only informaVon
known or knowable as of the stated valuaVon date. Values include the Loan to Shareholder balance but do not include
the net value of the Company-owned vehicle (market value less debt).
This opinion of fair market value is on an all cash and equivalent terms basis and
assumes a going concern premise of value. The signed TransmiWal LeWer and RepresentaVon of
the ValuaVon Analyst at the beginning of this report pertain to the opinion of fair market value
above and are incorporated by reference herein. Banister has no obligaVon to update this
report or its opinion of fair market value for informaVon that comes to our aWenVon aFer the
date of this report.
2. Report Must be Read in its EnSrety
This valuaVon report must be read in its enVrety (including, but not limited to the
LimiMng CondiMons contained in Exhibit A-1) in order to understand the opinion and conclusion
of fair market value contained herein. This valuaVon report contains important assumpVons
and limitaVons associated with the opinion of fair market value contained herein. Also
discussed throughout this report are the specific purpose and intended use of this report and
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opinion and conclusion of fair market value, the applicable valuaVon date to which this report
and opinion and conclusion of fair market value pertains, and restricVons on the use and users
of this report and opinion and conclusion of fair market value. Failure to read this report in its
enVrety (including the LimiMng CondiMons in Exhibit A-1) will result in an incomplete
understanding of the opinion of fair market value contained herein and of the foregoing issues.
3. DefiniSons
Please see Exhibit A-2 for the InternaMonal ValuaMon Glossary - Business ValuaMon.
These definiVons are adopted by a number of professional socieVes and organizaVons, including
the American Society of Appraisers (ASA). The Glossary was last updated on February 24, 2022.
Exhibit A-2 also includes the Glossary of AddiMonal Terms as promulgated in the AICPA's
Statement on Standards for ValuaMon Services.
4. Summary of Key ValuaSon Factors
Listed below is a summary of some of the posiVve and negaVve factors considered in
this valuaVon (not all-inclusive):
PosiSve Factors
1. The Company has a fairly long history in the Concord market (since 2003).
2. The Company's key execuVve, Brian King, is a Concord naVve with deep roots in the
community, potenVally giving the Company a compeVVve advantage with local clients.
3. Mr. King's CFP (CerVfied Financial Planner) designaVon may set the Company apart from other
firms whose principals do not have this designaVon.
4. The Company does not have any significant client concentraVons.
5. The Company collects its fees quarterly and has not had any material issues with bad debts.
Because the Company does not have or book accounts receivable, inventory, or accounts
payable, it does not need to finance any operaVng working capital.
6. The Company does not use or need to use interest-bearing debt for operaVng purposes.
7. The Company reported solid profitability in recent years.
8. The Company paid out approximately 100% of its reported net profit as distribuVons in recent
years. Because the Company does not have material working capital or capital equipment
needs, there is no need to retain a significant amount of profit in the business.
9. The Company's immediate market (Concord, NC) has enjoyed strong economic and populaVon
growth in the past and is expected to enjoy similar growth in the future.
10. The interest being valued is a 100% controlling interest.
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NegaSve Factors
1. There is significant key person risk with the reliance on Brian King.
2. There is a significant amount of compeVVon in the Company's industry as barriers to entry are
fairly low.
3. The Company faces a specific compeVVve threat due to its proximity to CharloWe, NC, as there
are many larger and more sophisVcated financial planning firms in that area. Management
indicated that the Company occasionally loses clients to CharloWe firms due to the client's
desire to go with a larger, beWer-staffed, and more well-known financial planning firm.
4. Management believes the Company's systems are somewhat dated and need improvement.
5. ConVnuing advances in technology allow for an increasing amount of "do it yourself" financial
planning.
6. Although the Company has a large number of clients (and no significant client concentraVon
risk), these clients are generally low-revenue in nature, creaVng a large amount of
administraVve work for the Company.
7. The Company's financial informaVon is unaudited.
C. VALUATOR INDEPENDENCE
This report was prepared in full by Banister Financial, Inc., Michael A. Paschall, ASA, ABV,
CFA, JD, ExecuVve Vice President, as noted in the accompanying TransmiWal LeWer and
RepresentaVon of the ValuaVon Analyst dated -----------(NOT DATED UNTIL A FINAL REPORT IS
ISSUED). Banister Financial, Inc. acted as an independent valuaVon firm and has not acted as an
advocate for the Client or any other party. This report was prepared in accordance with the
Code of Ethics of the American Society of Appraisers, the Uniform Standards of Professional
Appraisal PracMce, and the American InsVtute of CerVfied Public Accountants' (AICPA)
Statement of Standards for ValuaMon Services No. 1. Banister’s fee for this engagement was in
no way determined by the opinion of fair market value given.
D. VALUATOR QUALIFICATIONS
A summary of Michael Paschall’s qualificaVons is included in Exhibit A-3.
Michael Paschall, ASA, ABV, CFA, JD, is a Managing Director of Banister Financial, Inc., a
CharloWe, NC, business valuaVon firm. Paschall is an Accredited Senior Appraiser (ASA) in
business valuaVon with the American Society of Appraisers, is Accredited in Business ValuaVon
(ABV) by the American InsVtute of CerVfied Public Accountants (AICPA), and is a Chartered
Financial Analyst (CFA) charterholder. Paschall earned his undergraduate degree in English and
economics from the University of North Carolina at Chapel Hill and his J.D. from the Wake Forest
University School of Law.
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Paschall is co-author (with George B. Hawkins, ASA, ABV, CFA, also of Banister Financial,
Inc.) of the Wolters Kluwer (formerly CCH Incorporated) 2021 Business ValuaMon Guide (twenty-
first ediMon), former co-editor of the quarterly CCH Business ValuaMon Alert, co-editor of Fair
Value, and has wriWen arVcles for a wide variety of publicaVons, including such naVonal
publicaVons as the American Journal of Family Law, Business ValuaMon Digest, Business
ValuaMon Review, Judges & Lawyers Business ValuaMon Update, Shannon PraN’s Business
ValuaMon Update, The ValuaMon CompilaMon, and ValuaMon Strategies, as well as Family Forum
and The Will and the Way, publicaVons of the North Carolina Bar AssociaVon.
Paschall has spoken on various business valuaVon topics to a number of different groups
including the Advanced Business ValuaVon Conference of the American Society of Appraisers
(ASA), the NaVonal Business ValuaVon Conference of the American InsVtute of CerVfied Public
Accountants (AICPA), the NaVonal Trust Closely Held Business AssociaVon, and the American
Academy of Matrimonial Lawyers. Paschall has also spoken at numerous conVnuing legal
educaVon seminars sponsored by the North Carolina Bar AssociaVon and previously served as a
regular lecturer in the Law and ValuaMon course offered by the Law and MBA Schools at Wake
Forest University.
Paschall's previous service in various industry organizaVons includes the following:
• Former Chairman of the of the Ethics CommiWee of the American Society of Appraisers.
The Ethics CommiWee invesVgates complaints against Members alleging conduct
contrary to or in violaVon of the ConsVtuVon of the American Society of Appraisers,
the Bylaws of the American Society of Appraisers, the Principles of Appraisal PracVce
and Code of Ethics, the Uniform Standards of Professional Appraisal PracVce, the
InternaVonal ValuaVon Standards, or the Supplemental Professional Standards.
• Former member the Tax Reform Task Force of the American Society of Appraisers. The
Tax Reform Task Force was established to study the impact on business valuaVon of
the Tax Cuts and Jobs Act that was signed into law in December 2017.
• Former Advisor and Examiner on the American Society of Appraisers InternaVonal

Board of Examiners (Business ValuaVon SecVon). The InternaVonal Board of
Examiners analyzes the technical competency and compliance with business valuaVon
standards of valuaVon reports submiWed by candidates for the Accredited Member
(AM) or Accredited Senior Appraiser (ASA) designaVons of the American Society of
Appraisers.
Paschall has been qualified as an expert witness in business valuaVon in various state
court, binding arbitraVon, and mediaVon proceedings and has been retained on business
valuaVon maWers by the United States Department of JusVce.
Paschall is in compliance with the mandatory recerVficaVon requirements for Accredited

Senior Appraisers (ASA) of the American Society of Appraisers, for qualified professionals with
the Accredited in Business ValuaVon (ABV) designaVon of the American InsVtute of CerVfied
8
Public Accountants (AICPA), and the Code of Ethics and Standards of Professional Conduct of
CFA InsVtute.
E. INFORMATION USED IN THIS VALUATION
This valuaVon has been prepared with reliance on the following resources and
informaVon (not all-inclusive):
1. Unaudited, self-prepared federal income tax returns for the fiscal years ended
December 31, 2014-2021. Unaudited, Company-prepared financial statements for
the years ended December 31, 2015-2021, and the interim periods ended May 5,
2019, and March 31, 2022.
2. During this project, Michael Paschall of Banister Financial interviewed and/or

received informaVon from the following individuals:
• William Brian King, President and 100% owner of the Company. Mr. King is
referred to as "Management" in this report.
• Jonathan Feit, AWorney at Law, James, McElroy & Diehl, P.A., legal counsel for Kara
King.
• Haley White, AWorney at Law, James, McElroy & Diehl, P.A., legal counsel for Kara
King.
• Michelle Mack, AWorney at Law, James, McElroy & Diehl, P.A., legal counsel for
Kara King.
3. Unaudited supplemental informaVon, including the following:
• Payroll reports, 2015-2021.

• ArVcles of IncorporaVon filed February 20, 2003.
• Investment Advisor Public Disclosure (IAPD) form on William Brian King, as
published by the North American SecuriVes Administrators AssociaVon (NASSA).
• DeposiVon of William Brian King, dated October 26, 2021.
• DepreciaVon and AmorVzaVon Reports from various tax returns.
• Real Property Appraisal of Office Building at 51 Means Ave. SE, Concord, NC,
28025. Appraisal prepared by T.B. Harris Jr. & Associates as of valuaVon dates of
May 5, 2019, and May 12, 2021.
• InformaVon as found on the Company's website.
Banister relied upon the Harris real estate appraisal report for the esSmated fair
market rental rate for the real estate leased by the Company. Banister expresses
no opinion as to the accuracy or validity of this appraisal as Banister's professionals
are not qualified as real estate appraisers. If the opinion of the fair market rental
rate in this appraisal report is inaccurate, Banister's opinion of fair market value in
this valuaSon report could differ, perhaps materially. Banister did not engage this
9
appraiser and in no way supervised this appraiser or its employees in the

preparaSon of this appraisal report.
4. Surveys of industry peer financial results contained in RMA Annual Statement

Studies, 2015-2021 ediVons. Published by the Risk Management AssociaVon, a
banking industry associaVon, this study provides detailed financial raVo informaVon
on a variety of industries, separated by company size.
5. Surveys of industry compensaVon informaVon, including the NaMonal ExecuMve

CompensaMon Survey (2015-2021 ediVons) and Reasonable CompensaMon Reports
(RC Reports), data for 2015-2021.
6. Search for possible guideline public companies and industry informaVon including a
search of the Edgar database of public company filings with the SecuriVes and
Exchange Commission.
7. Search for possible sales of similar companies from a number of resources including:
• Review of various forms filed with the SecuriVes and Exchange Commission (SEC)
by various public companies.
• Review of DealStats on-line merger and acquisiVon database.
• Review of BIZCOMPS on-line merger and acquisiVon database.
8. Data on annual rates of return realized by investors for holding shares in publicly-
traded companies from the Kroll Cost of Capital Navigator (“COCN”), a product of
Kroll, LLC (formerly by Duff & Phelps, LLC).
9. Various data on economic and populaVon forecasts, including the following:
• Monthly Economic Outlook, published by Wells Fargo SecuriVes as of April 10,

2019.
• Monthly Economic Outlook, published by Wells Fargo SecuriVes as of March 11,
2022.
• "The North Carolina Economic Outlook, 1st Quarter 2019," by N.C. State University
economist Michael Walden.
• "NCSU Index of North Carolina Leading Economic Indicators," published in March
2022 by N.C. State University economist Michael Walden.
• North Carolina State Data Center forecasts of populaVon growth.
10. Resources regarding business valuaVon issues including the following:
• 2021 Business ValuaMon Guide, Twenty-first EdiMon, by George B. Hawkins, ASA,

ABV, CFA, and Michael A. Paschall, ASA, ABV, CFA, JD, published by Wolters
Kluwer.
• Business ValuaMon Standards of the Business ValuaVon CommiWee of the
American Society of Appraisers.
10
• Statement of Standards for ValuaMon Services No. 1, published by the American

InsVtute of CerVfied Public Accountants' (AICPA).
• Uniform Standards of Professional Appraisal PracMce, published by the Appraisal
FoundaVon and mandated by federal law.
• Valuing A Business: The Analysis and Appraisal of Closely Held Companies , Fi@h
EdiMon, by Shannon P. PraW, FASA, CFA, DBA, et. al.
• Understanding Business ValuaMon, A PracMcal Guide to Valuing Small to Medium
Sized Businesses, Fi@h EdiMon, by Gary R. Trugman, CPA/ABV, MCBA, ASA, MVS.
• Financial ValuaMon, ApplicaMons and Models, Fourth EdiMon , by James B. Hitchner,
CPA/ABV/CFF, ASA.
Banister and the analyst preparing this opinion and conclusion of value have relied upon
all informaVon provided or used in the valuaVon report to be true, accurate, and complete
without independent verificaVon on our part. Banister assumes no responsibility or liability as
to the reliability of this informaVon. Neither Banister nor any of its professionals has any past or
present audit, review, compilaVon or aWest relaVonship of any kind with this enVty with respect
to the preparaVon of any financial informaVon, including financial statements or tax returns.
Please see the LimiMng CondiMons in Exhibit A-1 for addiVonal informaVon.
F. VALUATION STANDARDS
This valuaVon has been prepared in conformance with the Business ValuaMon Standards
of the American Society of Appraisers, the Statement on Standards for ValuaMon Services No. 1
of the American InsVtute of CerVfied Public Accountants (AICPA), and the Uniform Standards of
Professional Appraisal PracMce which are required by applicable federal law.
This valuaVon has also been prepared with reliance on Revenue Ruling 59-60, issued by
the Internal Revenue Service. This Revenue Ruling gives specific guidance with respect to the
valuaVon of closely held common stocks for giF, estate and other tax purposes and is useful for
consideraVon. The ruling lists eight broad factors (discussed in detail in Revenue Ruling 59-60)
requiring careful analysis, all of which were considered in the preparaVon of this valuaVon:
1. The nature of the business and the history of the enterprise from its incepVon;
2. The economic outlook in general and the specific industry in parVcular;
3. The book value of the stock and the financial condiVon of the business;
4. The earnings capacity of the company;
5. The dividend-paying capacity of the company;
6. Whether or not the enterprise has goodwill or other intangible value;
7. Sales of the stock and the size of the block of stock to be valued; and,
8. The market price of stocks of corporaVons engaged in the same or similar line
of business having their stocks acVvely traded in a free and open market,
either on an exchange or over-the-counter.
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II. COMPANY INFORMATION
A. COMPANY OVERVIEW
1. Nature and History of the Company
King Financial CorporaVon (“Company”), headquartered in Concord, NC, is a financial

planning company offering financial planning, asset management, life insurance products,
reVrement planning, estate planning and 401(k) plan advising. The Company was incorporated
in North Carolina and elected to be taxed as a Subchapter S corporaVon under the Internal
Revenue Code on February 20, 2003.
The Company's founder, President, and 100% owner, Brian King, began his financial
career working in the retail management program at Wachovia Bank in 1996. From 1998 to
2000, Mr. King sold life insurance and group health insurance at the Hinrichs Financial Group (an
affiliate of Mass Mutual). In 2001, Mr. King joined NFP then in 2003 founded the Company. As
Mr. King grew his business, he gradually shiFed away from group health insurance and towards
financial planning.
Mr. King indicates he built the Company by building relaVonships with individuals and
focusing on needs-based planning on an individual basis. While the Company does not directly
manage assets, Management esVmated that total client assets under management (AUM) at
the end of 2020 was approximately $61 million.
2. Ownership
a. Overview
The Company has been 100% owned by Mr. King since its incepVon in 2003. The
Company's ArVcles of IncorporaVon indicate the Company is authorized to issue 100 shares.
Mr. King is unsure of how many shares are issued and outstanding, however, there have been
no other shareholders in the Company other than Mr. King.
b. Company Governance
Were this report concerned with a less-than-100% interest in the Company, it would be
necessary to examine the various governing documents of the Company to determine the
control aWributes inherent in the interest at issue. Because this valuaVon report is concerned
with the valuaVon of a 100% controlling interest, no such analysis is necessary. An owner of a
100% interest in the Company can take whatever acVon he or she desires without opposiVon
from any other owners.
c. Prior TransacSons in the Shares
There have been no prior transacVons in the shares.
12
d. No Intent to Market or Sell the Company
Management indicated there have been no efforts to market or sell the Company.
Management indicated that the Company receives occasional interest from firms such as
Ameriprise or LPL to see if the Company is interested in affiliaVng with its organizaVon,
however, this would not represent a sale as Mr. King would receive no consideraVon in
associaVon with such affiliaVon. Management has elected to remain an independent company.
3. Management and Employees
Brian King is the founder, President and 100% owner of the Company. Mr. King is the key
employee at the Company due to his client relaVonships and experience in the industry. Mr.
King is also a CerVfied Financial Planner (CFP), a designaVon that he believes differenVates
himself from certain other compeVtors in the industry. There is no succession plan for the
Company should Mr. King be unable or unwilling to perform his duVes at the Company. Mr. King
esVmates he spends 40+ hours a week working at the Company. Mr. King also has professional
obligaVons outside the Company as he has been an elected member of the Concord City Council
since 2015. Mr. King was in his mid- to late-40s as of both valuaVon dates.
According to the Investment Advisor Public Disclosure (IAPD) form on William Brian King,
as published by the North American SecuriVes Administrators AssociaVon (NASSA), Mr. King
passed general industry/product exams Series 6 (1998) and Series 7 (2012). Mr. King also
passed state securiVes law exams Series 63 (1998) and Series 65 (2002).
Candace Long works in an administraVve role at the Company. Ms. Long has worked at
the Company since 2007. Ms. Long was in her mid-40s as of both valuaVon dates.
Ashlynn Harkey joined the Company as a 1099 independent contractor in September

2019. Ms. Harkey came from Aflac and sells group insurance. Ms. Harkey was in her mid- to
late-40s as of both valuaVon dates.
Management indicated that Brian King's ex-wife, Kara King, was compensated by the
Company over the 2015-2020 period, however, Management also indicated that Ms. King did
not provide any managerial services to the Company during this period. AddiVonal analysis of
the compensaVon paid to Mr. King and Ms. King is contained in the Financial Analysis secVon
later in this report.
4. CompeSSon
Management believes the compeVVve environment for the Company is intense,

primarily due to the large number of financial planning ouUits located in and around the greater
CharloWe area. Management did not note any parVcular or specific compeVtors of the
Company.
Various compeVVve advantages of the Company include the following:
13
1. Management believes Mr. King's longevity and familiarity in the local Concord
market gives him an entree with many local clients.
2. Management believes Mr. King's CFP designaVon sets him apart from other
potenVal compeVtors who do not hold that designaVon.
3. Management believes the Company provides more services and products than
some of its compeVtors (however, also see compeVVve disadvantages).
Various compeVVve disadvantages of the Company include the following:
1. Although the Company provides a number of services, there are compeVng firms
that provide an even greater range of services, creaVng a one-stop-shopping
benefit for their clients.
2. Management noted that many of the Company's higher-dollar relaVonships have

leF the Company as they perceive other planning and wealth management firms
(parVcularly those located in CharloWe) to be more sophisVcated and suitable for
a larger net worth. This has leF the Company with a large number of relaVvely
small relaVonships. While this increases the Company's diversificaVon and
lowers its client concentraVon risk, it also creates the situaVon whereby the
Company has a large number of clients, each of which generate a relaVvely small
amount of revenues.
3. The lack of other advisors and total reliance on Mr. King is believed to be a
disadvantage as clients may perceive this to be a more risky situaVon than an
organizaVon with mulVple advisors and a deeper bench.
4. ArVficial intelligence and increasing use of technology allows clients to self-

perform many of the services provided by the Company.
5. Management believes that millennials are not wide users of financial planning
services.
6. Management believes the Company's systems are anVquated and could use
upgrading.
5. Clients
Management provided an unaudited list of client relaVonships for the full year 2020.
This list indicated about $61 million in assets under management (AUM) and over 400 individual
clients. There was no significant client concentraVon as Management esVmates the Company's
largest relaVonship represents about $23,000 in annual revenue, or about 5.6% of the
Company's reported revenues in 2020. The vast majority of the Company's clients generate less
than $1,000 in revenues per year. While this provides a diversified client base, it also creates a
14
great deal of administraVve work for a relaVvely low return. Management's ideal client base
would consist of fewer clients generaVng a higher revenue per client.
Management believes the typical AUM relaVonship with the Company is between
$500,000 and $3,000,000. As noted above, many of the Company's higher-dollar relaVonships
have leF the Company as they perceive other planning and wealth management firms
(parVcularly those located in CharloWe) to be more sophisVcated and suitable for a larger net
worth. This has leF the Company with a large number of relaVvely small relaVonships.
Management indicated that the Company receives the bulk of its fees on a quarterly
basis (at the beginning of January, April, July, and October). Smaller amounts of revenue are
received on a monthly or even weekly basis, depending on the product. The Company has been
able to manage its cash flow based on this schedule and has not needed to use revolving credit.
Based on this payment arrangement, the Company does not appear to book accounts
receivable and does not have bad debt or collecVon issues. Neither accounts receivables nor
bad debt expense are indicated on the Company's cash-basis tax returns, cash-basis QuickBooks
financial statements or accrual-basis QuickBooks financial statements.
6. Suppliers
The Company’s primary “supplier” is its independent broker/dealer, Kestra Financial.

Services provided by Kestra Financial include advisory services, alternaVve investments, banking
services, bonds corporate benefits, educaVon savings plans, equiVes, fixed product managed,
accounts mutual funds, research reVrement services, trust services, variable annuiVes, and
variable life. Management indicated the Company's relaVonship with Kestra is at will as either
party is free to terminate the relaVonship at any Vme.
7. FaciliSes
The Company operates from a single locaVon at 51 Means Avenue in Concord, NC.
According to a real estate appraisal by T.B. Harris Jr. & Associates (the "Harris Appraisal"), this
property consists of 0.23 acres of land that is improved by a 3,816 square foot office building.
The improvements were built in 1972. The building is two stories with the upper level
consisVng of 1,938 square feet and the lower level consisVng of 1,878 square feet.
This property is owned by Blue Hose ProperVes, LLC, an enVty that is owned by Brian
King and Kara King. The Harris Appraisal indicated that the top floor of this property is leased to
an unrelated tenant at an annual rate of $27,000, or $13.93 per square foot (PSF). Mr. King
indicated that this lease rate has remained constant for several years. This lease is on a gross
basis whereby Blue Hose ProperVes is responsible for all of the operaVng expenses except
janitorial.
The Company occupies the lower level but also subleases an office on the lower level to
an unrelated party. This unrelated tenant also has access and use of the common areas of the
lower level, including a conference room. Mr. King indicated that the lease rate for this
unrelated, lower-level tenant has remained constant at $6,000 annually for several years.
15
The Harris Appraisal opined that a market lease rate for this property (as of both
valuaVon dates of its appraisal) was $14.00 per square foot. This equates to an annual rent
expense for the enVre lower level of the property of $26,292. AdjusVng for the $6,000 annual
rent of that porVon of the lower floor leased by an unrelated tenant (and therefore not used by
the Company) equates to an esVmated market rental rate of $20,292 for the porVon of the
lower level used by the Company.
As seen in Exhibit C-3, the Company's annual rent payment varied from year to year. An
adjustment to a market rental rate (based on the Harris Appraisal) is made in Exhibits C-5 and C-
6 of this report. Banister Financial is not a real estate appraisal firm and cannot verify or
validate the esVmated fair market rental rate determined in the Harris Appraisal. The Client is
hereby made aware of this LimiMng CondiMon.
8. Borrowing RelaSonships
Management indicated that the Company does not need to borrow to support its
operaVons. Management indicated that the interest-bearing debt on the Company's balance
sheet in the 2015-2021 period (see Exhibit C-2) was vehicle financing for two vehicles. Details
on the first vehicle are not known, however, the second vehicle was a Range Rover automobile
purchased by the Company on November 15, 2018, at an iniVal cost of $85,723. Each vehicle is
treated as a non-operaVng asset of the Company. The balance sheet impact of these vehicles
(i.e., the net book value and associated interest-bearing debt) is not included in the opinion of
fair market value in this report due to the non-operaVng status of these assets.
9. Non-OperaSng Assets and LiabiliSes
Non-operaVng assets and liabiliVes at the Company at either valuaVon date were as
follows:
1. Range Rover. As noted in the Borrowing RelaMonships secVon above, the

Company purchased a Range Rover on November 15, 2018. Management
indicated that the debt shown on the Company's balance sheet in the 2018-
2022 (interim) period represented financing on that vehicle. As noted above,
the net value of this vehicle (i.e., its market value on the respecVve valuaVon
dates, less the amount of debt on the vehicle at those respecVve dates) is not
included in the opinion of fair market value in this report due to the non-
operaVng status of this item. As an asset of the Company that was acquired
during the marriage, the net value of this asset is presumably a marital asset,
however, Banister does not have an appraisal of the fair market value of this
asset on the respecVve valuaVon dates, nor does Banister have the exact
interest-bearing debt amount on this asset on the respecVve valuaVon dates
to determine a net value for this asset.
2. Shareholder Loans. As seen on Exhibit C-1, the Company reported a

shareholder loan (asset) each year over the 2015-2021 period. This loan is
16
believed to represent the accounVng entry that reflects the amount of cash
draws (distribuVons) by Mr. King that exceed the amount of contribuVons
made by Mr. King to the Company, including expenses that were paid by the
Company that were later reclassified by the Company's accountant as
personal in nature.
Due to the exclusion of the Company-owned vehicle from this report, the only non-
operaVng assets at the Company were shareholder loans of:
$79,487 as of the May 5, 2019, Date of SeparaVon

$79,287 as of the March 31, 2022, Current Date
10. Related Party TransacSons
The only related party transacVons noted are the compensaVon amounts paid to Brian
King and Kara King as well as the rent expense on the building leased by the Company.
Adjustments for both of these items are later made in the Financial Analysis secVon of this
report. Management did not note any other related party transacVons.
Mr. King indicated that he at Vmes used the Company credit card for personal expenses,
however, he believes that the Company's accountant accurately classified the business versus
personal expenses at the end of each year, classifying those expenses deemed to be personal as
a distribuVon to Mr. King. Banister is not a forensic accounVng firm and cannot verify or
validate Mr. King's belief on this issue.
11. Revenue and Earnings Summary
Summarized below are selected historic results for the Company for the fiscal years
ended December 31, 2015-2021.
Historical Results 1
Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31

Item 2015 2016 2017 2018 2019 2020 2021
Revenues $329,360 $411,698 $368,330 $414,043 $419,548 $410,767 $421,456

OperaVng Exp $264,461 $307,606 $292,558 $384,646 $269,164 $289,226 $304,646
Gross Profit $64,899 $104,092 $75,772 $29,397 $150,384 $121,541 $116,810

Other Inc (Exp) ($6,539) ($13,218) ($5,881) ($9,714) ($8,633) ($3,250) ($2,343)
Pre-tax Profit $58,360 $90,874 $69,891 $19,683 $141,751 $118,291 $114,467
1
Source: Unaudited federal income tax returns.
17
As seen above, except for lower years in 2015 and 2017, the Company's revenues were
generally between $410,000 and $420,000 in every other year. The Company also reported
solid profits in each year. A detailed analysis of the Company’s operaVng performance and
financial posiVon is contained in the Financial Analysis secVon of this report. Historic annual
balance sheets are in Exhibits C-1 and C-2, historic income statement in Exhibit C-3, and
financial raVos in Exhibit C-4. Reported Company results are adjusted as necessary in Exhibits
C-5 and C-6.
12. Book Value of Shareholder's Equity Summary
The Company's reported shareholders' equity over the 2015-2022 (interim) period is as
follows:
Summary of Reported and Adjusted Shareholders' Equity 1
Reported Adjusted
Shareholder's Shareholder's
Date Equity Equity
12/31/15 $37,748 $3,395

12/31/16 $50,300 $10,774
12/31/17 $56,605 $1,780
12/31/18 $100 $732
5/5/19 Date of SeparaSon ($68,409) $6,920
12/31/19 $6,379 $3,012
12/31/20 $432 $351
12/31/21 $780 $3,050
3/31/22 Current Date $48,525 $12,513
1
Source: Unaudited tax returns and unaudited internal financial statements. InformaVon
shown on the cash basis of accounVng and therefore may not accurately reflect all of
the asset and liability accounts of the Company. The adjusted shareholder's equity
figures do not include the impact of non-operaVng items such as vehicles (and
related debt) and loans to shareholders.
As seen above, the Company's adjusted shareholder's equity was modest over the 2015-
2021 period, basically consisVng of the Company's cash balance. Adjusted shareholder's equity
as of the May 5, 2019, Date of SeparaVon was reported as negaVve, however, this was due to
the classificaVon of the loan to shareholder as negaVve equity (instead of as an Other Asset as
was done on all other financial statements).
13. DistribuSons
A summary of distribuVons paid over the 2015-2021 period is as follows:
18
Summary of DistribuSons Paid 1

Reported
Pre-tax Reported Payout
Date Profit DistribuSon RaSo
12/31/15 $58,360 $28,638 49.1%

12/31/16 $90,874 $78,322 86.2%
12/31/17 $69,891 $63,586 91.0%
12/31/18 $19,683 $66,188 336.3%
12/31/19 $141,751 $135,472 95.6%
12/31/20 $118,291 $124,238 105.0%
12/31/21 $114,467 $114,119 99.7%
Totals $613,317 $610,563 99.6%
1
Source: Unaudited tax returns. Payout raVo calculated as reported
distribuVons divided by reported net profit.
As seen above, the Company distributed basically 100% of reported pre-tax profit over
the 2015-2021 period. An owner of the 100% controlling interest that is at issue in this report
can pay whatever distribuVon he or she desires, subject to the Company's ability to pay the
distribuVon.
14. ConSngent LiabiliSes
Banister inquired but was not made aware of any material pending or threatened
liVgaVon, tax problems, or other material factors of any kind other than as shown on the
Company’s balance sheets dated May 5, 2019, and March 31, 2022, or as discussed throughout
this report. We have relied upon this representaVon without any independent verificaVon on
our part and have assumed these representaVons to be reliable for purposes of this valuaVon.
Were these representaVons not accurate, the result could be an opinion of fair market value
that is materially different than that contained in this report.
The Company was subject to a limited scope examinaVon by the U.S. SecuriVes and
Exchange Commission (SEC) in 2018. The SEC noted three deficiencies in a leWer to the
Company dated September 13, 2018. The Company noted the correcVon of these deficiencies
in a return leWer to the SEC dated October 9, 2018.
15. Economic CondiSons
a. The Economy In General: May 5, 2019, Date of SeparaSon
Various excerpts from the Wells Fargo Economics Monthly Economic Outlook (published
April 10, 2019) are as follows:
19
Despite DeceleraSon, the Economy Is Not Falling Apart. Monthly economic data from the
just-completed quarter suggest that the economy lost even more momentum in Q1-2019.
Specifically, we esVmate that the sequenVal rate of real GDP growth, which was as strong as
4.2% in Q2-2018, downshiFed from 2.2% in the last quarter of 2018 to only 1.8% in Q1,
which would be the slowest rate of annualized growth in two years. Significant deceleraVon
in consumer spending appears to be the main culprit behind the slowdown in the overall
rate of real GDP growth in the first quarter. The surprising 1.6% drop in retail sales in
December caused nominal spending on goods to enter Q1 on a weak note (boWom leF
chart). Although sales bounced back 0.7% in January, they edged down again 0.2% in
February. The combinaVon of December’s drop in nominal retail sales and lackluster growth
in the first two months of the year means that real consumer spending on goods and
services likely grew less than 1% in the first quarter.
Fortunately, the underlying fundamentals remain supporVve of stronger growth in consumer

spending in coming quarters. For starters, the labor market is robust, with iniVal jobless
claims standing at a 50-year low at present. Second, household deleveraging over the past
decade—the household debt-to- disposable income raVo has receded by more than 30
percentage points since 2008—means that household balance sheets are generally in good
shape. In addiVon, indices of consumer confidence remain at high levels. Recent data
indicate that consumer spending has held up recently. Auto sales perked up in March, and
chain store sales have remained resilient in recent weeks.
Other areas of spending appear to be growing reasonably well. The decline in mortgage
rates—the 30-year fixed rate has dropped nearly a full percentage point since November—
has breathed new life back into the housing market. Growth in investment spending has
downshiFed but it generally remains posiVve, and government spending should grow
strongly, at least for the next few quarters. In sum, we look for the overall rate of real GDP
growth to bounce back in the second quarter (see chart on front page). That said, we
forecast that real GDP will grow 2.4% in 2019 and 2.1% in 2020, well short of the 2.9% rate
that was notched last year.
Fed Likely on Hold for the Rest of the Year. If our GDP growth forecast comes to pass, then
the Federal Open Market CommiWee (FOMC) probably will not feel compelled to cut rates
anyVme soon, as many investors currently expect. Pricing in the U.S. government bond
market at present implies that there is a 50% chance of a rate cut by the end of the year.
(That probability was as high as roughly 80% a few weeks ago.) Although we do not look for
a rate cut this year, we acknowledge that the FOMC could indeed ease policy if growth turns
out to be weaker than we expect. But as we wrote in a recent report, we do not think the
condiVons are in place for a recession in the foreseeable future. An unexpected shock could
occur at any Vme, but there do not appear to be major imbalances in the economy at this
Vme that could lead to recession.
But the condiVons for a rate hike this year may no longer be in place either, as we had
thought unVl recently. Fed policymakers have universally said that they can be “paVent” as
they digest incoming economic data, indicaVng that a rate hike is probably not in the cards in
the near term. Furthermore, the inflaVon data do not support a rate hike at this Vme. The
year-over-year rate of PCE inflaVon currently stands at 1.4%, below the Fed’s objecVve of 2%.
The fall in the overall rate of PCE inflaVon reflects, at least in part, the $0.90/gallon drop in
gasoline prices that occurred in Q4. Gas prices have subsequently retraced most of their Q4
20
decline, but the “core” rate of PCE inflaVon, which excludes food and energy prices,
conVnues to run below 2% as well. If, as we expect, rates of consumer price inflaVon
conVnue to remain near the Fed’s objecVve of 2%, then why would the FOMC raise rates? In
short, we have removed the rate hike that we previously forecasted, and now believe that
the FOMC will likely keep its target for the fed funds rate in its current range of 2.25% to
2.50% for the rest of the year.
Following the severe collapse in 2008, the broad equity markets improved steadily over
the 2009-2014 period. Market growth paused in 2015 but resumed in 2016 as key underlying
economic indicators such as GDP growth, job growth, consumer spending and real estate
development remained posiVve. Market growth was very strong in 2017 as economic growth
conVnued and investors assumed a more pro-business outlook due to the possibility of reduced
taxes and regulaVons. Markets declined in 2018, however, due to increasing concerns about the
health of the global economy as well as weaker forecasts by domesVc companies. Markets
were up very strongly in interim 2019, erasing their 2018 losses. This rebound was due to
conVnued strength in the domesVc economy, historically low unemployment, conVnued low
inflaVon and a more moderate plan by the Federal Reserve to increase interest rates.
Change in the Equity Markets 1

Dow Jones S&P
Industrial Pct. 500 Pct. NASDAQ Pct.
Date Average Change Index Change Composite Change
12/31/11 12,218 NA 1,258 NA 2,605 NA

12/31/12 13,104 7.3% 1,426 13.4% 3,020 15.9%
12/31/13 16,577 26.5% 1,848 29.6% 4,177 38.3%
12/31/14 17,823 7.5% 2,059 11.4% 4,736 13.4%
12/31/15 17,425 (2.2%) 2,044 (0.7%) 5,007 5.7%
12/31/16 19,763 13.4% 2,239 9.5% 5,383 7.5%
12/31/17 24,719 25.1% 2,674 19.4% 6,903 28.2%
12/31/18 23,327 (5.6%) 2,507 (6.2%) 6,635 (3.9%)
5/5/19 26,505 13.6% 2,946 17.5% 8,164 23.0%
b. State Economy: May 5, 2019, Date of SeparaSon
In "The North Carolina Economic Outlook, 1st Quarter 2019," N.C. State University
economist Michael Walden provided the following top economic headlines for North Carolina in
2018 and 2019:
1. The broadest measure of economic output in North Carolina - real Gross DomesVc
Product - is on track to increase faster in 2018 than in 2017. However, the state's 2018
rate is slower than the naVon's rate.
2. InformaVon, TransportaVon, and Professional Services were the top three expanding
economic sectors in the state in 2018.
3. Payroll job growth in the state will likely exceed the naVonal job growth rate by over 40%
in 2018.
21
4. The three major measures of unemployment all dropped in North Carolina in 2018.
5. The broadest measure of unemployment - including discouraged and under-employed

workers - ended lower in North Carolina than in the naVon in 2018.
6. The average wage rate - adjusted for inflaVon- remained flat in North Carolina in 2018,
but the rate declined in the naVon.
7. All regional groups of North Carolina counVes experienced job growth in 2018, with rural
counVes registering the fastest rate.
8. North Carolina's real Gross DomesVc Product is expected to increase 2.5% in 2019,
slightly slower than 2018's rate.
9. Close to 85,000 net new payroll jobs are projected to be added in North Carolina in 2019,
less than the 100,000 jobs gained in 2018.
10. Asheville, Durham, and Raleigh are forecasted to end 2019 with "headline"
unemployment rates under 3%.
c. The Economy in General: March 31 2022, Current Date
Various excerpts from the Wells Fargo Economics Monthly Economic Outlook (published
March 11, 2022) are as follows:
• The economic landscape has changed considerably since we published our previous
monthly U.S. Economic Outlook on February 9. Specifically, the Russian invasion of
Ukraine has sent oil prices soaring. Russia accounts for roughly 10% of global oil output.
• Although not many Western governments have outright banned importaVon of Russian
petroleum, with the notable excepVon of the United States, many Western oil
companies have essenVally implemented self-imposed boycoWs of Russian oil. Our
operaVng assumpVon is that the conflict will drag on for some Vme. Even if the war
comes to an end in the near term, we believe the West will conVnue to shun purchases
of Russian oil for the foreseeable future. Consequently, we forecast that oil prices will
remain elevated in coming quarters.
• Higher petroleum prices likely will liF inflaVon rates even higher than we forecasted a
month ago. We look for the overall rate of CPI inflaVon to average 8.2% during the
second quarter and to only recede to 6.3% by the end of the year.
• Higher inflaVon will erode growth in real income, which likely will lead to slower growth
in real consumer spending. But we do not look for consumer spending to crater, unless
oil prices rise significantly higher than we currently forecast. Household balance sheets
are generally in solid shape at present, and the household savings rate could fall further
to support conVnued growth in consumer spending.
22
• The outlook for higher inflaVon has led us to add an addiVonal 25-bp rate hike to our
forecast. We now see the FOMC raising rates by 25 bps at its meeVngs in March, May,
June, July, September and December. We think that the uncertainVes surrounding the
economic outlook will convince many FOMC members that an overly aggressive pace of
monetary Vghtening (i.e., raising rates by 50 bps or more at a given meeVng) would not
be warranted.
• We believe the FOMC will decide at its June 15 meeVng to shrink its balance sheet
starVng in July, and we anVcipate that balance sheet runoff will start slowly but ramp up
at a well-defined pace in following months. Balance sheet reducVon will act as an
addiVonal form of monetary Vghtening.
As seen in the table below, market growth was negaVve or slightly posiVve in 2015 but
resumed in 2016 as key underlying economic indicators such as GDP growth, job growth,
consumer spending and real estate development remained posiVve. Market growth was very
strong in 2017 as economic growth conVnued and investors assumed a more pro-business
outlook due to the possibility of reduced taxes and regulaVons. Markets declined in 2018,
however, due to increasing concerns about the health of the global economy as well as weaker
forecasts by domesVc companies. Markets were up very strongly in 2019, erasing their 2018
losses. This rebound was due to conVnued strength in the domesVc economy, historically low
unemployment, conVnued low inflaVon and a scaling back of anVcipated rate increases by the
Federal Reserve.
AFer a sharp drop in the spring of 2020 due to the iniVal impact of the COVID-19
pandemic, the broad equity market rebounded strongly through the end of the year with all
three major indexes noted below finishing above their 2019 levels. The tech-heavy NASDAQ
experienced a very strong increase over its 2019 close due to the physical restricVons imposed
by the pandemic and the widespread use of virtual technologies such as Zoom. This posiVve
market performance conVnued in 2021 as the widespread distribuVon of COVID-19 vaccines,
conVnued low interest rates, a gradual return to a more normal lifestyle, and the saVsfacVon of
pent-up consumer demand from 2020 resulted in conVnued recovery in the broad economy.
Markets declined in interim 2022 as the 7.9% inflaVon rate in February was the highest
rate since January 1982. AddiVonally, Russia's invasion of the Ukraine created global poliVcal
and economic uncertainty, including sharp increases in energy prices.
23
Change in the Equity Markets

Dow Jones S&P
Industrial Pct. 500 Pct. NASDAQ Pct.
Date Average Change Index Change Composite Change
12/31/14 17,823 NA 2,059 NA 4,736 NA

12/31/15 17,425 (2.2%) 2,044 (0.7%) 5,007 5.7%
12/31/16 19,763 13.4% 2,239 9.5% 5,383 7.5%
12/31/17 24,719 25.1% 2,674 19.4% 6,903 28.2%
12/31/18 23,327 (5.6%) 2,507 (6.2%) 6,635 (3.9%)
12/31/19 28,538 22.3% 3,231 28.9% 8,973 35.2%
12/31/20 30,606 7.2% 3,756 16.2% 12,888 43.6%
12/31/21 36,398 18.9% 4,766 26.9% 15,645 21.4%
3/31/22 34,678 (4.7%) 4,530 (5.0%) 14,221 (9.1%)
d. State Economy: March 31, 2022, Current Date
In the March 2022 "NCSU Index of North Carolina Leading Economic Indicators," N.C.
State University economist Michael Walden provided the following summary:
The NCSU INDEX OF NORTH CAROLINA LEADING ECONOMIC INDICATORS (the “Index”), a
forecast of the state economy’s direcVon four to six months ahead, rose a strong 1.7% in
February from its level in January. Gains in manufacturing hours, manufacturing earnings, and
building permits more than countered a decline in the naVonal index and a rise in new
unemployment claims. The Index is now 7% higher than a year ago and has especially
accelerated since last Fall. Three factors will drive the future course of the North Carolina
economy. One is Covid, which will be a posiVve for the economy if cases and severity decline.
Second is the Ukraine War. If it escalates and directly involves U.S. forces, fear of what may
happen could put the economy in reverse. Conversely, a seWlement or even a stalemate
would be viewed posiVvely. Third is how fast the Federal Reserve Vghtens monetary policy
and slows the economy to curtail inflaVon. The worry is if the Fed’s acVons push the economy
from growing more slowly to not growing at all – meaning a recession.
24
About the Index: The Index is composed of five components: the Economic Cycle Research
InsVtute (ECRI)’s Weekly Leading Index (hWp://www.businesscycle.com/resources/), North
Carolina iniVal claims for unemployment benefits, North Carolina building permits, average
weekly hours of work of all North Carolina employees in manufacturing, and average weekly
earnings of all North Carolina employees in manufacturing. All data are seasonally-adjusted
and modified for differences in prices levels where appropriate. Data are from the U.S. Bureau
of Labor StaVsVcs, the U.S. Census Bureau, and ECRI, whose permission to use their Weekly
Leading Index is greatly appreciated. All calculaVons are done by Dr. Michael Walden.
e. PopulaSon Growth: Both ValuaSon Dates
The Company is located in Concord, NC, and draws its customer base from the
immediate surrounding area. PopulaVon growth in the market served by the Company will
potenVally have a key impact on its overall growth rate and the potenVal demand for financial
planning services. Projected populaVon growth for Cabarrus County and the State of North
Carolina are shown in the following table:
25
Projected PopulaSon Growth 1
2015 2025 2035
Cabarrus County 195,278 238,899 281,789

Annual Compound Growth Rate (10 yrs) NA 2.0% 1.7%
Annual Compound Growth Rate (20 yrs) 1.9%
North Carolina 10,041,966 11,248,928 12,445,902

Annual Compound Growth Rate (10 yrs) NA 1.1% 1.0%
Annual Compound Growth Rate (20 yrs) 1.1%
1
Source: North Carolina State Data Center.
As seen above, Cabarrus County is expected to have a populaVon growth rate higher
than that of the overall state. This is a posiVve for the Company.
26
III. FINANCIAL ANALYSIS
A. OVERVIEW
1. Purpose of this SecSon
The purpose of this secVon is to examine the financial condiVon and performance of the
Company in order to gain insight into trends affecVng future earnings capacity and a review of
various financial risks. The knowledge gained from this analysis, as well as a review of other
factors impacVng the business (including those discussed elsewhere in this report), were
elements that entered into the valuaVon of the Company.
2. Financial Statement InformaSon
Exhibits C-1 through C-4 contain spreadsheet summaries of financial statements for the
Company and a summary of financial statement raVos. The Company's reported results are
adjusted as noted in Exhibits C-5 and C-6. This informaVon is summary in nature. Readers of
this report should consult the actual financial statements of the Company, including any
footnotes. The exhibits include:
Financial Statement InformaSon 1

Fiscal Years Ended December 31, 2015-2021
Exhibit InformaSon
C-1 Common Size Balance Sheet (Assets)

C-2 Common Size Balance Sheet (LiabiliVes and Equity)
C-3 Common Size Income Statement
C-4 Financial RaVos
C-5 Adjustments to Reported Income Statements
C-6 ExplanaVon of Adjustments to Reported Income Statements
1
Source: Unaudited tax returns.
The summaries in the exhibits are based on the Company’s annual unaudited federal
income tax returns for the years ending December 31, 2015-2021. The financial informaVon
contained in the exhibits is summarized in nature and some informaVon has been presented
differently by Banister Financial to facilitate our analysis and valuaVon. Please consult the
actual financial statements and any notes thereto. Banister Financial has not independently
verified or audited any financial or other data and has assumed it to be true, accurate and
complete without independent verificaVon.
27
3. Sources Used in Comparisons with Peers
Company results were compared with the closest available peer industry descripVon
using data from RMA Annual Statement Studies, 2015-2021 EdiMons, published by the Risk
Management AssociaVon, a banking industry associaVon. This study provides detailed
financial raVo informaVon on a variety of industry groupings and is separated by firm size.
The following NAICS Code was used in this report:
Industry Peer Data

NAICS Code DescripSon
Investment Advice
Establishments primarily engaged in providing customized investment
advice to clients on a fee basis, but do not have the authority to
523930 execute trades. Primary acVviVes performed by establishments in
this industry are providing financial planning advice and investment
couseling to meet the goals and needs of specific clients.
Data in the RMA Studies are segregated by revenue size. Data in the RMA Studies for the
Company's revenue size (under $1 million) is used each year.
B. FINANCIAL ANALYSIS

1. Overview
The Company was analyzed using financial raVos relaVng to profitability, liquidity,
working capital, asset efficiency, leverage, debt coverage and return on equity. The purpose of
this analysis is to assess the Company’s relaVve performance and financial risk. The following
analysis is comprised of two broad secVons. The first, income statement profitability analysis,
assesses the trends in revenues, expenses and profitability of the Company, the various factors
that led to the reported results, and how the Company results compared relaVve to its industry
peers. The second, balance sheet analysis, explores the financial strength of the Company,
including its use of debt and interest coverage versus industry peers. Financial informaVon was
based on audited and unaudited financial statements.
2. Income Statement Profitability Analysis
a. Overview
Income statement profitability is a funcVon of sales, gross profit margins on those sales,
and expenses. Following is an analysis of the Company’s revenues, gross profit margins,
28
operaVng expenses and operaVng and pre-tax profit margins as compared to industry averages.
Also included is a discussion of some of the factors that led to the results aWained.
b. Revenues
The overall revenue trend for the Company over the 2015-2021 period is as follows
(based on unaudited tax returns):
Revenue Trends
Period Reported Dollar Pct.

Ended Revenues Change Change
12/31/13 $224,341 NA NA
12/31/14 $256,275 $31,934 14.2%
12/31/15 $329,360 $73,085 28.5%
12/31/16 $411,698 $82,338 25.0%
12/31/17 $368,330 ($43,368) (10.5%)
12/31/18 $414,043 $45,713 12.4%
12/31/19 $419,548 $5,505 1.3%
12/31/20 $410,767 ($8,781) (2.1%)
12/31/21 $421,456 $10,689 2.6%

As seen above, revenues increased strongly over the 2013 to 2016 period. Following a
decline in 2017, the Company's revenues remained in the $410,000 to $420,000 range each
year over the 2018-2021 period. The above results are shown graphically as follows:
29
Company Historical Revenues
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
2013 2014 2015 2016 2017 2018 2019 2020 2021
Company Revenues
year over the 2018-2021 period with no clear trend indicated.
c. Gross Profit Margins
The gross profit margin is computed by dividing gross profit (sales less cost of sales) by
net sales, with the margin expressed as a percentage. As a service business, neither the
Company nor its industry reports cost of sales.
d. OperaSng Expenses
The ability to manage operaSng expenses can be a criVcal variable impacVng a

company’s overall profitability. Shown below is a comparison of the Company’s unadjusted and
adjusted operaVng expense margin with the industry:
30
OperaSng Expense Margin: Trends and Comparison to Industry 1
2015 2016 2017 2018 2019 2020 2021
Company Revenues $329,360 $411,698 $368,330 $414,043 $419,548 $410,767 $421,456
Company 80.2% 75.0% 79.2% 93.2% 64.2% 70.4% 72.4%
Adjusted Company 83.1% 73.9% 85.1% 82.7% 72.6% 74.7% 80.6%
Industry 69.7% 61.5% 69.3% 63.6% 70.6% 66.3% 63.8%
1
Source: RMA. Company adjustments shown and explained in Exhibit C-5. Company margins in Exhibits C-3
and C-5 may not agree exactly due to rounding.
As seen above, the Company's adjusted operaVng expense margin ranged between
72.6% and 85.1% over the 2015-2021 period. The two highest adjusted operaVng expense
margins were reported in the sub-$400,000 revenue years of 2015 and 2017. As seen in Exhibit
C-5, the Company's dollar amount of adjusted operaVng expenses generally ranged between
$300,000 and $315,000 over the 2016-2021 period except for spikes in 2018 (due to higher
salaries and wages, adverVsing expense, and travel) and 2021 (due to higher accounVng
expense, outside services / independent contractors, and prinVng expense).
As seen above, the Company did not compare favorably to the industry in any year,
however, comparison of the Company's adjusted margins to the industry margins may not be
enVrely accurate as it is not known how many (if any) of the companies comprising the industry
informaVon also do not pay a market rate of compensaVon to their owners.
e. OperaSng Profit Margins
Shown below is the Company’s unadjusted and adjusted operaSng profit margins as
compared to the industry:
31
OperaSng Profit Margin: Trends and Comparison to Industry 1
2015 2016 2017 2018 2019 2020 2021
Company 19.8% 25.0% 20.8% 6.8% 35.8% 29.6% 27.6%
Industry 30.3% 38.5% 30.7% 36.4% 29.4% 33.7% 36.2%
1
As seen above, the Company's adjusted operaVng profit margin ranged between 16.9%
and 27.4% with no clear trend indicated. The Company's margins did not compare favorably to
the industry's margins in any year, however, these margins may not be perfectly comparable
due to management compensaVon and other potenVal differences between the Company's
adjusted results and the industry data. Regardless of any comparison to the industry, the
Company exhibited solid, double-digit adjusted operaVng profit margins in each year.
Comparison of the Company's adjusted operaVng profit and adjusted operaVng profit
margin with the average industry margins is shown graphically as follows:
32
OperaSng Profit Margin Analysis
$140,000 45.0%
40.0%
$120,000
35.0%
$100,000
30.0%
$80,000 25.0%
$60,000 20.0%
15.0%
$40,000
10.0%
$20,000
5.0%
$0 0.0%
2015 2016 2017 2018 2019 2020 2021
Co Adj OperaVng Profit Co Adj Op Profit Margin Industry Op Profit Margin
As seen above, the Company's adjusted operaVng profit margin underperformed the
industry margin each year over the 2015-2020 period.
f. Other Income and Expense
Shown below is the Company’s unadjusted net other income (expense) raVo as
compared to the industry figures:
33
Other Income (Expense) Margin: Trends and Comparison to Industry 1
2015 2016 2017 2018 2019 2020 2021
Company (2.0%) (3.2%) (1.6%) (2.3%) (2.1%) (0.8%) (0.5%)
Industry (10.0%) (5.6%) (4.3%) (5.4%) (4.1%) (4.4%) (3.3%)
1
As seen above, the Company’s adjusted other income and expense margin was zero in
each year, comparing favorably to the industry figures in all years analyzed. This is due likely to
the fact that the Company generally does not use interest-bearing debt (except for vehicle
financing, which was removed due to its non-operaVng nature). As a result, the Company does
not report any interest expense (on an operaVng basis). It is not known why the industry figures
are so much larger than the Company's figures. This may be due to expense classificaVon
differences between the Company and the companies comprising the industry data.
g. Pre-Tax Profitability
The Company’s pre-tax profitability as compared to the industry is shown as follows:
Pre-Tax Profit Margin: Trends and Comparison to Industry 1
2015 2016 2017 2018 2019 2020 2021
Company 17.8% 21.8% 19.2% 4.5% 33.7% 28.8% 27.1%
Industry 20.3% 32.9% 26.4% 31.0% 25.2% 29.2% 32.9%
1
34
As seen above, the Company's adjusted pre-tax profit margin ranged between 16.9% and
27.4% with no clear trend indicated. The Company's margins did not compare favorably to the
industry's margins in most years, however, these margins may not be perfectly comparable due
to management compensaVon and other potenVal differences between the Company's
adjusted results and the industry data. Regardless of any comparison to the industry, the
Company exhibited solid, double-digit adjusted pre-tax profit margins in each year.
Comparison of the Company's adjusted pre-tax profit and adjusted pre-tax profit margin
with the average industry margin is shown graphically as follows:
Pre-tax Profit Margin Analysis
$140,000 35.0%
$120,000 30.0%
$100,000 25.0%
$80,000 20.0%
$60,000 15.0%
$40,000 10.0%
$20,000 5.0%
$0 0.0%
2015 2016 2017 2018 2019 2020 2021
Co Adj Pre-Tax Profit Co Adj PT Profit Margin Industry PT Profit Margin
As seen above, the Company's adjusted pre-tax margin compared more closely to the
industry margin, including one year of outperformance in 2019.
35
3. Balance Sheet Analysis
a. Overview
Balance sheet analysis normally includes a review of the Company’s levels of liquidity
and working capital, factors indicaVve of its ability to meet short-term obligaVons and support
operaVng requirements. AddiVonally, this includes an analysis of individual items that comprise
working capital efficiency (current assets and liabiliVes), including the quality and turnover of
receivables and inventory and the reliance on trade supplier terms.
Another factor normally reviewed as an indicator of financial risk is the level of financial
leverage. This includes the degree of reliance on interest bearing debt to finance Company
operaVons, along with the ability to service those obligaVons through cash flows generated by
operaVons. Finally, the Company’s return on equity may be examined to determine the degree
of financial returns provided to shareholders and the elements that comprised that return,
including profit margins, asset uVlizaVon (turnover) and leverage.
b. Balance Sheet Analysis Not Conducted in this MaTer
An analysis of the Company's balance sheet was not conducted in this maWer due to the
following reasons:
1. As seen in Exhibit C-1, the Company reported a very modest amount of cash at
the end of each year between 2015 and 2021, ranging between $351 and $9,853.
2. The Company is a service business that did not report working capital items such
as accounts receivable or inventory in any year over the 2015-2021 period (see
Exhibit C-1).
3. The Company is not heavily dependent on capital equipment. As seen in Exhibit

C-1 (and as supported by various unaudited depreciaVon schedules and
QuickBooks financial statements), the Company does not report a significant
amount of fixed assets in any year over the 2015-2021 period. The Company
reports minor fixed assets such as office furniture and computers. The costs
basis of these assets is several thousand dollars at most and these assets are fully
depreciated. The major fixed asset for the Company in all years is a vehicle,
however, this is a non-operaVng asset of the Company. As such, the Company
basically has a nominal amount of operaVng fixed assets (all of which is fully
depreciated).
4. The only other asset reported at the Company is Loans to Shareholder (see Other
Assets in Exhibit C-1). This represents payments made to the Company's sole
owner, Mr. King, in the form of a loan (as opposed to the form of a distribuVon).
This is also a non-operaVng asset of the Company.
36
5. The Company reported interest-bearing debt in most years (see ST Notes Payable
and Long Term LiabiliVes in Exhibit C-2). This debt, however, represented vehicle
financing. Because the vehicle is a non-operaVng asset, the debt associated with
this asset is also non-operaVng in nature.
6. If the three major items discussed above (vehicles, loans to shareholder, and
interest-bearing debt) are removed from the Company's balance sheet, the
Company has virtually no assets or liabiliVes as seen below:
HypotheScal Restated Balance Sheets 1
Date of Current
SeparaSon Date
Dec 31 Dec 31 Dec 31 Dec 31 May 05 Dec 31 Dec 31 Dec 31 Mar 31
Item 2015 2016 2017 2018 2019 2019 2020 2021 2022
Cash $2,474 $9,853 $859 $732 $13,590 $3,012 $351 $3,050 $29,265
Net Fixed Assets $921 $921 $921 $0 $0 $0 $0 $0 $2,961
Total Assets $3,395 $10,774 $1,780 $732 $13,590 $3,012 $351 $3,050 $32,226
Total LiabiliSes $0 $0 $0 $0 $6,670 $0 $0 $0 $19,713
Equity $3,395 $10,774 $1,780 $732 $6,920 $3,012 $351 $3,050 $12,513
1
Source: Based on unaudited federal income tax returns and unaudited financial statements. Restatements include the removal of
vehicles, loans to shareholder, and interest-bearing debt on the vehicles.
As seen above, there is very liWle to analyze once the Company's balance sheets
are stripped of their non-operaVng assets and liabiliVes as the remaining balance
sheets are very simple and do not require any analysis as to the impact on the
operaVng of the Company. As seen earlier in this report, the Company is a
service business whose owner has historically drawn out basically 100% of the
Company's profit via salary and distribuVons.
Based on these factors, no analysis of the Company's balance sheet was undertaken in
this report.
c. Interim Financial InformaSon as of the Two ValuaSon Dates
Although an analysis of the Company's balance sheet is not pracVcal in this case, it is
necessary to consider the Company's interim financial statements (as of the May 5, 2019, Date
of SeparaVon and March 31, 2022, Current Date) as to their impact on the value at those
respecVve dates. Financial data for this interim analysis is based on the Company's unaudited
QuickBooks statements. A summary of these statements is as follows:
37
Summary of Interim Financial Data
May 5, 2019, Date of SeparaSon March 31, 2022, Current Date
Item Amount Item Amount
Cash $13,590 Cash $29,265

Total Current Assets $13,590 Total Current Assets $29,265
Furniture/Fixtures $42,968 Furniture/Fixtures $29,207

Vehicles $64,292 Vehicles $64,292
Accumulated DepreciaVon ($107,260) Accumulated DepreciaVon ($90,538)
Net Fixed Assets $0 Net Fixed Assets $2,961
Loans to Shareholder $79,487 Loans to Shareholder $79,287
Total Assets $93,077 Total Assets $111,513
Credit Cards $6,670 Credit Cards $19,713

Car Loan – US Bank $0 Car Loan – US Bank $43,275
Total Current LiabiliVes $6,670 Total Current LiabiliVes $62,988
Car Loan – US Bank $75,329 Long-Term LiabiliVes $0

Total LiabiliVes $81,999 Total LiabiliVes $62,988
Shareholders' Equity $11,078 Shareholders' Equity $48,525
Working Capital $6,920 Working Capital ($33,723)

Interest-Bearing Debt $81,999 Interest-Bearing Debt $62,988
1
Source: Unaudited, Company-prepared financial statements. Loans to Shareholder reclassified
from negaVve equity in the May 5, 2019, balance sheet.
38
IV. VALUATION METHODOLOGY
A. INTRODUCTION
1. Summary of General Methodology Employed
This valuaVon considered the use of the income, asset, and market approaches in
esVmaVng the fair market value. Specifically, this report employed an income approach
(capitalizaVon of net cash flow). Various other approaches were either inappropriate or unable
to be used in this report for various reasons that are explained later. Following is a general
overview of the income, asset and market approaches considered and the ones which were
employed. A detailed descripVon of how these approaches were applied in parVcular to the
Company follows later in the report.
2. Income Approach
There are several methods within the income approach category, including capitalizaVon
of income methods and discounted future benefits methods. Following is a brief explanaVon of
the various methods available within the income approach and how they can be used to value a
business.
a. CapitalizaSon Method
The capitalizaVon method esVmates value by conversion of a company’s esVmated

future income stream into value. This is accomplished through applicaVon of an appropriate
capitalizaVon rate which incorporates both an investor’s required rate of return for risk and a
factor for future growth earnings. The result is that value is ulVmately based on the present
worth, today, of anVcipated future benefits the buyer will receive (in the form of earnings, cash
flow or dividends). An offshoot of the Gordon-Shapiro dividend discount valuaVon model, the
capitalizaVon of an income stream is a single period valuaVon approach that employs the
following formula:
Formula for Use of CapitalizaSon Method
Present Value = Income Stream for Coming Year

(d-g)
Where: d = discount rate (required rate of return)

g = growth rate
When an invested capital approach is employed, the historical adjusted earnings are
capitalized at a weighted average cost of capital, a measure incorporaVng the costs of debt and
equity. The resulVng value represents the value for the total capitalizaVon of the company,
39
including debt and equity. From this value is subtracted the total present value of debt in order
to obtain the value of equity in the company benefiVng common shareholders.
A capitalizaVon approach was used and is later discussed in this report.
b. Discounted Future Benefits Method
The discounted future benefits method involves projecVng the possible future income
streams (e.g., earnings, cash flow) on a year-by-year basis, usually for five or seven years.
Future income streams are then discounted at an appropriate discount rate (required rate of
return on investment for risk) required by a buyer, back to a present value today. At the final
projecVon year a terminal value of the company is determined based on the esVmated
normalized and sustainable earnings or cash flow of the company at that point in Vme. This
terminal value is then discounted back (at the discount rate) to its present value as of the
valuaVon date. The summaVon of the present value of both the income streams and the
terminal value yields a value esVmate of the company.
When an invested capital approach is employed, the income streams are discounted to
present value at a weighted average cost of capital, a measure incorporaVng the costs of debt
and equity. The resulVng value represents the value for the total capitalizaVon of the company,
including debt and equity. From this value is subtracted the total present value of debt in order
to obtain the value of equity in the company benefiVng common shareholders.
Shown below is the generalized formula descripVon of the discounted future benefits
method (assuming a five-year forecast period for illustraVve purposes). The formula shows the
indicated value to be the sum of the present values of the annual income streams and the
capitalized future terminal value of the company:
40
Formula for Use of Discounted Future Benefits Method 1
Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Year
Present = CF 1 + CF 2 + CF 3 + CF 4 + CF 5 + CF 5 (1+g) / (k-g)

Value (1+k) 0.5 (1+k) 1.5 (1+k) 2.5 (1+k) 3.5 (1+k) 4.5 (1+k) 5
Where:
CF 1 ,CF 2 , CF 3 , etc. = expected income or cash flow in 1st period, 2nd period, 3rd period, etc.
k = discount rate (cost of capital)
g = long-term, sustainable growth rate
1
Formula shown for an assumed five-year forecast period. Mid-period discounVng convenVon is employed under the
assumpVon that annual cash flows are, on average, received midway through each forecast year. The terminal value
of the company is assumed as of a valuaVon date of the first day of the sixth year of the forecast.
If a company’s earnings or cash flow are growing at a constant rate into perpetuity, the
above method does not need to be employed as the formula is then mathemaVcally equivalent
to the results achieved by the capitalizaVon approach discussed earlier. However, when a
company is experiencing a normal near-term super-normal rate of growth that is above a
sustainable long-term trend or where there are cyclical or unusual near-term factors which are
influencing results (and which can be reasonably predicted), this method might more reliably
capture those impacts on valuaVon than would a capitalizaVon approach.
A discounted future benefits method was not used in this report due to the lack of
expectaVon of significantly different results going forward as of both valuaVon dates. As seen
earlier in the Financial Analysis secVon of this report, the Company's revenues have been fairly
constant in recent years and there is no reason to believe this situaVon will change in the near
future. As such, a capitalizaVon of historical earnings method is believed to be appropriate in
this maWer. Furthermore, Management does not prepare forecasts.
3. Market Approach
a. Overview
There are several methods within the market approach, including the idenVficaVon of
guideline public companies whose securiVes sell on a free and open market (the guideline
public company method), the examinaVon of transacVon data available on actual sales of
similar companies (the guideline transacVon method), the existence of actual or potenVal
markets for a security such as buy/sell or shareholder agreements, and past transacVons in the
shares of the Company itself (the direct market method).
41
b. Market Methods Not Employed
The guideline public company method was not used due to a lack of suitable publicly-
traded companies to use in comparison. The guideline transacVon method was not used due to
a lack of suitable similar transacVon companies to use in comparison. The direct market
method was not used as there have been no prior trades in the Company's stock.
4. Asset Approach
The asset approach involves adjusVng the Company’s assets and liabiliVes up or down to
reflect their fair market value, taking into account tangible and intangible assets and any
conVngent liabiliVes. Although tangible assets can be appraised and their actual balance sheet
values adjusted to reflect those results accordingly, the bigger problem with the use of this
method is dealing with the valuaVon of the intangible assets such as the name, reputaVon,
trained workforce and other factors. The asset method was not used in this report due to the
belief that there were superior methods of valuaVon available. Because the Company offers an
intangible service to its customers, it is not heavily reliant on any significant capital equipment
and does not have any operaVng fixed assets of any significant value.
B. INCOME VALUATION APPROACH
1. IntroducSon
This valuaVon employed the capitalizaVon of net cash flow (to equity) method in arriving
at an opinion of fair market value. Analysis included the development of the appropriate
discount and capitalizaVon rates, followed by adjustments made to earnings and the valuaVon
findings when the net cash flow is capitalized. Where appropriate, actual historic earnings
(from which net cash flow is derived) were adjusted for any non-recurring, unusual, non-
operaVng, or one-Vme factors (see Financial Analysis secVon of this report for a more detailed
discussion). The valuaVon considered but did not use a discounted future benefit method for
the reasons discussed earlier.
2. Development of Normalized Cash Flow
The capitalizaVon rate developed later in this secVon results in a rate of return
applicable to net cash flow which is defined as follows:
42
DefiniSon of Net Cash Flow to Equity
Earnings before Income Taxes (Pre-tax Profit)

- Income Taxes on Pre-tax Profit
+ DepreciaVon and AmorVzaVon
= Gross Cash Flow
- Capital Expenditures
- Incremental Working Capital Needs
+/- Change in Long Term Debt
= Net Cash Flow
The above measure calculates the net cash flow to the equity value of the company. As
such, it represents the discreVonary cash generaVng capacity of the business enterprise
available to the common equity holders aFer other calls on the cash including capital
expenditures, incremental working capital needs, and borrowings. An all-equity method was
selected for this report due to the lack of interest-bearing debt at the Company. Due to the
nature of the business, the Company has not used and does not need to uVlize interest-bearing
debt in its capital structure. It is important to note that the net cash flow figure above
represents a long-term annual sustainable measure of potenVal net cash flow, not an amount in
any parVcular year.
The above components in the calculaVon of net cash flow were determined as follows:
1. Normalized Adjusted Pre-tax Profit. The Company's adjusted pre-tax profit is

used as the starVng point for the Company's earnings measure. The
Company's adjusted pre-tax profit for the 2015-2021 period is calculated in
Exhibits C-5 and C-6 of this report. A summary of the revenues and adjusted
pre-tax profit of the Company over the 2015-2021 period is as follows:
43
Revenues and Adjusted Pre-tax Profit 1

Adjusted
Adjusted Pre-Tax
Period Reported Pre-tax Profit
Ended Revenues Profit Margin
12/31/15 $329,360 $55,809 16.9%

12/31/16 $411,698 $107,433 26.1%
12/31/17 $368,330 $54,809 14.9%
12/31/18 $414,043 $71,494 17.3%
12/31/19 $419,548 $114,989 27.4%
12/31/20 $410,767 $104,000 25.3%
12/31/21 $421,456 $81,777 19.4%
16-18 Average (DOS) $398,024 $77,912 19.6%
19-21 Average (Current) $417,257 $100,255 24.0%
1
See Exhibits C-5 and C-6.
The Company's 2016-2018 average adjusted pre-tax profit of $78,000

(rounded) is selected as the normalized adjusted pre-tax profit as of the May
5, 2019, Date of SeparaVon. The Company's 2019-2021 average adjusted
pre-tax profit of $100,000 (rounded) is selected as the normalized adjusted
pre-tax profit as of the March 31, 2022, Current Date. A three-year average is
used at each valuaVon date to miVgate the impact of any single good or bad
year.
As noted earlier, the Company elected to be treated as a subchapter S

corporaVon upon its incorporaVon in 2003. No income tax liability is incurred
at the enVty level, however, the Company's owners are taxed on the
Company's income at personal income tax rates based on the pro-rata basis
of each individual's ownership (which, in this case, is one 100% owner). The
rates of return used to develop capitalizaVon rates are developed from the
rates of return (as measured by dividends and capital appreciaVon) required
by investors in shares of publicly traded companies that are regular C
corporaVons. Consequently, the Company must first be valued as if it were a
regular C corporaVon. Therefore, income taxes were subtracted based on a
21% federal C corporaVon rate and a 2.5% state (NC) rate, with state taxes
assumed deducVble for federal purposes. This results in a net tax rate of
23.0%. Later in this report, an appropriate adjustment to the capitalizaVon
rate is considered to account for the addiVonal aFer-tax cash benefits to
shareholders that arise due to the Company's S corporaVon tax status.
44
Based on the above assumpVons, the adjusted net-of-debt net income of the
Company is calculated as follows:
CapitalizaSon of Normalized Annual Net Income
5/5/19 3/31/22
Date of Current
SeparaSon Date
Federal Income Tax Rate 21.0% 21.0%

State (NC) Income Tax Rate 2.5% 2.5%
Blended Income Tax Rate 23.0% 23.0%
Normalized Pre-tax Profit $78,000 $100,000

Less: Income Taxes ($17,940) ($23,000)
Normalized Annual Net Profit (net of debt) $60,060 $77,000
2. DepreciaSon, AmorSzaSon and Capital Expenditures. As discussed earlier in

this report, the Company reported very liWle depreciaVon expense related to
operaVng assets of the Company. As discussed in Exhibit C-5, the vast
majority of the depreciaVon and SecVon 179 expense reported in 2018 was
vehicle-related. As a service business, the Company is not heavily dependent
on large amounts of capital equipment to operate. For purposes of this
analysis, a very modest annual depreciaVon expense of $1,000 was assumed
as of each valuaVon date of this report.
Over a long period of Vme capital spending, by definiVon, must exceed the
rate of depreciaVon expense or depreciaVon expense will reduce and
equipment will age. In addiVon, inflaVon will result in increased prices over
Vme. Based on these factors, normalized capital expenditures as of the May
5, 2019, Date of SeparaVon were forecasted at 104.1% (the esVmated long-
term growth rate for the Company at that date - see analysis later in this
secVon) of the selected non-cash expense figure above, or $1,041.
Normalized capital expenditures as of the March 31, 2022, Current Date
were forecasted at 104.3% (the esVmated long-term growth rate for the
Company at that date - see analysis later in this secVon) of the selected non-
cash expense figure above, or $1,043. It is recognized that actual non-cash
expenses and capital expenditures may be above or below these normalized
figures in certain years in the future. Because the capitalizaVon method is
concerned with the long-term relaVonship of these items, the above
assumpVons are believed to be valid.
45
3. Incremental Working Capital Needs. The Company has virtually no

incremental working capital need due to the fact that the Company bills its
accounts directly. As a result, the Company has no accounts receivable, no
inventory and no accounts payable. Based on this situaVon, no incremental
working capital needs were forecast for the Company.
4. Net Changes in Long-Term Interest-Bearing Debt. The Company does not

currently use long-term or other interest-bearing debt (other than for non-
operaVng purposes such as vehicle financing) and there is no indicaVon this
status will change in the future. Therefore, no changes of debt were
included.
Based on the above assumpVons and calculaVons, the esVmated normalized annual net
cash flow of the Company is as follows:
Normalized Annual Net Cash Flow
5/5/19 3/31/22
Date of Current
SeparaSon Date
Normalized Annual Net Profit $60,060 $77,000

Add: Non Cash Expenses $1,000 $1,000
Less: Capital Expenditures ($1,041) ($1,043)
Less: Incremental Working Capital Needs $0 $0
Add/Less: Changes in Long Term Debt $0 $0
Normalized Annual Net Cash Flow $60,019 $76,957
3. Discount and CapitalizaSon Rate Development
a. Overview
The build-up method derivaVon of the Capital Asset Pricing Model (CAPM) was
employed in esVmaVng discount and capitalizaVon rates. For purposes of this analysis, an all-
equity rate was used, therefore, no development of the cost of debt or capital structure (i.e.,
equity versus debt) was necessary. The rate of return required is the sum of the risk-free return
plus a risk premium required by the market in general plus a risk premium for any addiVonal
risks inherent to the specific company. The greater the risk for a specific company, the greater
46
the annual rate of return required to compensate the investor for incurring the risk. The
buildup method can be summarized by the following formula:
Build Up Method Formula
Risk Free Rate

+ General Equity Risk Premium
+ Industry Risk Premium
+ Risk Premium for Size
+ Specific Company Risk
= Discount Rate (cost of equity)
Rates for U.S. Treasury Bills, Notes or Bonds are oFen employed as proxies of the risk
free rate. To this rate is then added a risk premium required by the market in general, a risk
premium for the Company's specific industry, and a risk premium due to the specific aWributes
of the Company. The result is a discount rate represenVng the annual investor-required rate of
return, a measure of the cost of equity (a discount rate). This discount rate can then be used in
several ways for valuaVon purposes:
• EsSmate the Weighted Average Cost of Capital. When combined with the Company’s
relaVve proporVon of capital supplied by equity (at the cost of equity capital) and its
relaVve proporVon of capital supplied by debt (at the aFer-tax cost of debt), an
overall weighted average cost of capital (WACC) can be determined. The WACC can
then be used as the rate at which to discount projected future net-of-debt cash flows
(or earnings, if appropriate) to obtain a value esVmate for the total capitalizaVon of
the Company. This value includes debt and equity and is called the enterprise value
or the market value of invested capital (MVIC).
• CapitalizaSon Rate to be Applied to Earnings or Other Income or Cash Flow

Measures. SubtracVng the annual growth rate in earnings (or other measure to be
used) from the discount rate (cost of equity), yields an esVmate of the rate at which
to capitalize earnings. When the earnings are divided by the capitalizaVon rate this
results in an esVmate of value.
The preliminary opinion of fair market value under the capitalizaVon of net cash flow
method is derived from rates of return for public companies. Because shares of privately-held
companies are generally less marketable than shares of publicly-traded companies, discounts
are oFen taken from the resulVng values from the income approach due to the lack of
marketability. This analysis is contained later in this report.
47
b. Cost of Equity Capital
In order to use the Capital Asset Pricing Model to esVmate the required return for
invesVng in a company, it is important to know how much of an addiVonal return investors have
required for invesVng in company stocks above that of a risk-free return from a safe investment
such as U.S. Treasury bonds. Studies on returns of public company stocks enable the valuator to
esVmate this total addiVonal market equity risk premium required that is above the risk-free
rate.
The Kroll, LLC, online Cost of Capital Navigator (COCN) calculates the cost of equity
capital for a parVcular company. The COCN includes the normalized risk-free rate as well as a
calculaVon of the smoothed average equity risk premium based on various metrics related to
the public companies studied, including (among others): annual revenues, total assets, total
shareholders' equity, average operaVng profit, operaVng profit margin, and others. The cost of
equity capital is done as of the specific valuaVon date of the report. The cost of equity capital is
also industry-specific (via the Company's specific SIC Code). As such, various risk factors that
impact the Company's industry are incorporated into the indicated cost of equity capital.
The COCN provides a staVsVcal regression formula for each public company variable
(e.g., revenues, total assets, etc.). This regression formula describes the relaVonship between
the specific variable and the market equity risk premium for the public company universe in the
study. The use of this regression formula for each variable enables a more precise esVmaVon of
the market equity risk premium for each specific variable of the subject company being valued.
Using the COCN, the cost of equity capital (including the normalized risk-free rate as well
as the equity risk premium) was determined for the Company based on the four characterisVcs
indicated below. A simple average of these results was then used to determine the cost of
equity capital for the Company. This is calculated as follows:
48
Summary of Duff & Phelps Cost of Capital Navigator Data 1

Book 5 Year
Value of Total Average Net
Item Equity Assets EBITDA Sales
As of 5/5/19 Date of SeparaSon
Company Measure $6,920 $13,590 $72,945 $414,043
Normalized Risk-Free Rate 3.50% 3.50% 3.50% 3.50%

Risk Premium over Risk-Free Rate 19.75% 22.06% 17.04% 17.24%
Equity Risk Premium Adjustment 0.44% 0.44% 0.44% 0.44%
Cost of Equity Capital 23.69% 26.00% 20.98% 21.18%
Average 22.96%
As of 3/31/22 Current Date
Company Measure $12,513 $32,226 $86,147 $421,456
Normalized Risk-Free Rate 2.50% 2.50% 2.50% 2.50%

Risk Premium over Risk-Free Rate 21.99% 24.71% 19.73% 19.29%
Equity Risk Premium Adjustment (0.53%) (0.53%) (0.53%) (0.53%)
Cost of Equity Capital 23.96% 26.68% 21.70% 21.26%
Average 23.40%
1
Source: Kroll Cost of Capital Navigator. Book value of equity and total asset figures are adjusted for
non-operaVng assets and liabiliVes (see Financial Analysis secVon). EBITDA is earnings before
income taxes, interest expense, depreciaVon and amorVzaVon. Adjusted EBITDA is shown in
Exhibit C-5. Industry-specific informaVon for financial service companies is not available in the
COCN, therefore, a general risk premium model was used.
As seen above, the average indicated cost of equity for the Company as of the May 5,
2019, Date of SeparaVon ValuaVon date was 23.0% (rounded). The average indicated cost of
equity for the Company as of the March 31, 2022, Current date was 23.4% (rounded)
c. Specific Company Risk Premium
It may be appropriate to employ an addiVonal risk premium for company specific risk
over and above the risk represented by the general equity risk premium. In this specific
instance, a 2.0% addiVonal equity risk premium was employed, based, in part, on the factors
summarized in the Summary of Key ValuaMon Factors secVon of this report and elsewhere
throughout the text.
49
Factors Increasing Risk
1. There is significant key person risk with the reliance on Brian King.
2. There is a significant amount of compeVVon in the Company's industry as barriers to entry are
fairly low.
3. The Company faces a specific compeVVve threat due to its proximity to CharloWe, NC, as there
are many larger and more sophisVcated financial planning firms in that area. Management
indicated that the Company occasionally loses clients to CharloWe firms due to the client's
desire to go with a larger, beWer-staffed, and more well-known financial planning firm.
4. Management believes the Company's systems are somewhat dated and need improvement.
5. ConVnuing advances in technology allow for an increasing amount of "do it yourself" financial
planning.
6. Although the Company has a large number of clients (and no significant client concentraVon
risk), these clients are generally low-revenue in nature, creaVng a large amount of
administraVve work for the Company.
7. The Company's financial informaVon is unaudited.
Factors Decreasing Risk
1. The Company has a fairly long history in the Concord market (since 2003).
2. The Company's key execuVve, Brian King, is a Concord naVve with deep roots in the
community, potenVally giving the Company a compeVVve advantage with local clients.
3. Mr. King's CFP (CerVfied Financial Planner) designaVon may set the Company apart from other
firms whose principals do not have this designaVon.
4. The Company does not have any significant client concentraVons.
5. The Company collects its fees quarterly and has not had any material issues with bad debts.
Because the Company does not have or book accounts receivable, inventory, or accounts
payable, it does not need to finance any operaVng working capital.
6. The Company does not use or need to use interest-bearing debt for operaVng purposes.
7. The Company reported solid profitability in recent years.
8. The Company paid out approximately 100% of its reported net profit as distribuVons in recent
years. Because the Company does not have material working capital or capital equipment
needs, there is no need to retain a significant amount of profit in the business.
9. The Company's immediate market (Concord, NC) has enjoyed strong economic and populaVon
growth in the past and is expected to enjoy similar growth in the future.
d. SummaSon of Components to EsSmate Equity Discount Rate
The various components of the build-up method were then added together to arrive at
an annual equity discount rate, as shown in the following table. The long-term sustainable
growth rate is then subtracted from the discount rate to determine the capitalizaVon rate.
50
Development of Equity Discount Rate 1
5/5/19 3/31/22
Date of Current
SeparaSon Date
Cost of Equity Capital (risk-free rate plus ERP) 23.0% 23.4%

Plus: Company Specific Risk Premium 2.0% 2.0%
Equals: Discount Rate (for future profit) 25.0% 25.4%
1
ERP is equity risk premium. Cost of Equity Capital and Company Specific Risk
Premium developed earlier in this secVon.
e. Long-term Annual Growth Rate
It is necessary to subtract a long-term growth rate from the equity discount rate in order
to derive an equity capitalizaVon rate. As seen earlier in the Financial Analysis secVon of this
report, the overall revenue trend for the Company over the 2013-2021 period is as follows
(based on unaudited tax returns):
Revenue Trends
Period Reported Dollar Pct.

Ended Revenues Change Change
12/31/13 $224,341 NA NA
12/31/14 $256,275 $31,934 14.2%
12/31/15 $329,360 $73,085 28.5%
12/31/16 $411,698 $82,338 25.0%
12/31/17 $368,330 ($43,368) (10.5%)
12/31/18 $414,043 $45,713 12.4%
12/31/19 $419,548 $5,505 1.3%
12/31/20 $410,767 ($8,781) (2.1%)
12/31/21 $421,456 $10,689 2.6%

year over the 2018-2021 period.
In addiVon to the Company's historical revenue growth, other factors considered in the
selecVon of the long-term sustainable growth rate included the following:
• InflaSon. As of the May 5, 2019, Date of SeparaVon valuaVon date, the forecast for
long-term (10 year) inflaVon was 2.2%. This forecast is based on the Federal Reserve
51
Bank of Philadelphia’s Livingston Survey, December 2018. As of the March 31, 2022,
Current Date, the forecast for long-term (10 year) inflaVon was 2.4%. This forecast is
based on the Livingston Survey, December 2021.
• Overall Economic Growth. As of the May 5, 2019, Date of SeparaVon valuaVon date,
the forecast for long-term (10 year) Gross DomesVc Product (GDP) growth was 2.1%.
This rate is based on the Federal Reserve Bank of Philadelphia’s Livingston Survey,
December 2019. As of the March 31, 2022, Current Date, the forecast for long-term
(10 year) GDP growth was 2.1%. This forecast is based on the Livingston Survey,
December 2021.
• PopulaSon Growth. As noted earlier, the forecasted long-term (20 year) annual
populaVon growth rate for the Company's immediate area (Cabarrus County) is
1.9%.
Based on the above factors, a long-term growth rate of 4.1% was assumed as of the May
5, 2019, Date of SeparaVon valuaVon date. A long-term growth rate of 4.3% was assumed as of
the March 31, 2022, Current Date. These assumed growth rates are based on the combined
populaVon and inflaVon long-term growth forecasts as these are believed to be the key
components of potenVal future growth at the Company.
f. Tax AffecSng Analysis: Overview
As noted in the Company IntroducMon secVon, the Company elected subchapter S status
upon its incorporaVon in 2003. As an S corporaVon, the Company pays no income taxes on its
earnings. Each Company owner, however, is personally responsible for his or her pro-rata share
of the income tax liability of the Company that is “passed-through” to that individual. This
places the S corporaVon owner in a beWer situaVon than the C corporaVon shareholder as the S
corporaVon owner pays only one level of taxes (on the pro-rata share of company profits that is
passed through to each owner) whereas the C corporaVon shareholder incurs two levels of
taxes (income tax on company profits at the enVty level as well as addiVonal income taxes due
on any dividends paid).
As seen above, the capitalizaVon rate used in the capitalizaVon of adjusted net cash flow
method is based on rates of return from publicly-traded companies (the market equity risk
premium). All of the publicly-traded companies comprising this return data are C corporaVons.
As a result, an adjustment to the capitalizaVon rate must be made to account for the different
taxaVon scenarios of the C corporaVon shareholder versus the S corporaVon owner. Because
the S corporaVon owner is in a beWer taxaVon posiVon than the C corporaVon shareholder (i.e.,
one level of taxaVon for the S corporaVon owner versus two levels of taxaVon for the C
corporaVon shareholder), a downward adjustment to the C corporaVon-based capitalizaVon
rate developed above is necessary. The magnitude of this adjustment is calculated in Exhibit C-
7 (as of May 5, 2019, Date of SeparaVon) and Exhibit C-8 (as of March 31, 2022, Current Date).
The assumpVons for this model are explained in Exhibit C-9.
52
g. Differences in Available Cash Flow
The tax affecVng model in Exhibits C-7 and C-8 is known as the S CorporaVon Economic
Adjustment Model (SEAM). The SEAM was developed by Daniel R. Van Vleet, ASA, of Stout
Risius and Ross, Inc. (SRR). According to the SRR website:
[The SEAM] has gained widespread usage, credibility and acceptance. When using the
SEAM, analysts first value the S corporaVon at its C corporaVon equivalent value. This is
important since the discount rate used in the Discounted Cash Flow Method and the P/E
mulVples used in the Guideline Public Company Method are derived from publicly traded C
corporaVons. Consequently the proper applicaVon of these methods requires that the
earnings used to esVmate S CorporaVon value are also on a C corporaVon equivalent basis.
However, as properly noted by relevant Tax Court decisions, this type of analysis is simplisVc,
incomplete, and does not properly reflect the differences in tax aWributes between S
corporaVons, C corporaVons, and their respecVve shareholders. The SEAM is based on these
tax differences and is used to adjust a C corporaVon equivalent value to an S corporaVon
value.
The SEAM in Exhibits C-7 and C-8 is adapted for the provisions of the Tax Cuts and Job
Act (TCJA) which was signed into law on December 22, 2017, and is effecVve as of January 1,
2018. As seen in Exhibits C-7 and C-8, the calculated incremental adjustment to the C
corporaVon based capitalizaVon rate is an 11.0% downward adjustment (effecVve as of each
valuaVon date).
h. Analysis of the Interest at Issue
The main issues to consider in determining whether or not tax affecVng of a company’s
earnings is appropriate are examined as follows:
1. Most Likely Buyer. The opinion of fair market value in this report is based on the
perspecVve of 100% controlling interest in the Company. Due to the size and
nature of the Company's business, it is believed that the most likely buyer of this
interest would be an individual who would likely desire the conVnuaVon of the S
elecVon and the realizaVon of the benefits associated with that elecVon. While it
is conceivable that a C corporaVon buyer could purchase a 100% controlling
interest, the small, locally-owned, personal-service nature of companies in this
industry is believed to indicate that an individual buyer is far more likely. This
factor argues for an adjustment to the C corporaVon-based capitalizaVon rate.
2. Possibility of Breaking the S ElecSon. As discussed above, it is highly unlikely that

the Company or its sole shareholder would do anything that would jeopardize
the Company's S elecVon and the single-taxaVon benefits associated with that
status. This factor argues for an adjustment to the C corporaVon-based
capitalizaVon rate.
53
3. Sufficiency of DistribuSons to Pay Pass-Through Taxes. As noted earlier, S

corporaVons do not realize any income tax liability at the corporate level.
Instead, the income tax liability of an S corporaVon is “passed through” to each
individual owner of the company on a pro-rata basis. It is therefore important to
determine if sufficient distribuVons are made to the owners of the S corporaVon
that would allow for the payment of these pass-through income taxes. As seen
earlier in this report, the Company paid out basically 100% of reported profit
over the 2015-2021 period as a distribuVon. This pracVce allowed the
Company's sole owner to saVsfy the pass-through income tax liability of the
Company as well as realize an addiVonal return. This factor argues for an
adjustment to the C corporaVon-based capitalizaVon rate.
Based on this analysis, it was determined that a full applicaVon of C corporaVon income
tax rates to the Company’s results, followed by an addiVonal adjustment to the C corporaVon-
based cost of equity to reflect the benefits of the S elecVon, was appropriate. The full
applicaVon of C corporaVon income tax rates was done earlier in this secVon. The applicaVon of
the adjustment (calculated in Exhibits C-7 and C-8) to the C corporaVon-based cost of equity is
shown in the table in the following secVon.
4. Preliminary Opinion of Fair Market Value
The discount rate esVmated to this point assumes the receipt of Company cash flows at
the end of the period (i.e., the receipt of 100% of the cash flow exactly one year aFer the
valuaVon date). This assumpVon does not reflect the actual receipt of the Company's cash
flows which, in reality, are received throughout the year. As such, it is necessary to use the mid-
year convenVon which essenVally assumes the receipt of 100% of the Company's annual cash
flow exactly mid-way through the year. Although this is not how the Company's cash flow will
actually be realized by the Company's owners, it is a beWer approximaVon than the assumpVon
that 100% of the Company's cash flow will be received at the end of the year.
The formula to calculate the adjusted capitalizaVon rate to account for the mid-year
convenVon is as follows:
Adj. Cap Rate = 1 / ((((1+g)(1+k)n)/(k-g))/(1-s))
where: g is the annual growth rate

k is the discount rate
n is the period in years (0.5 year midpoint assumpVon)
s is the S corporaVon adjustment
Based on the above formula and the earlier assumpVons, the Company's capitalizaVon
rate and preliminary opinion of fair market value are calculated as shown below:
54
Preliminary Opinion of Fair Market Value 1

CapitalizaSon of Net Cash Flow
5/5/19 3/31/22
Date of Current
SeparaSon Date
CalculaSon of Adjusted Cap Rate
Inputs:
growth rate (g) 4.1% 4.3%
discount rate (k) 25.0% 25.4%
period in years (n) 0.5 0.5
S adjustment (s) 11.0% 11.0%
Adjusted Cap Rate 16.0% 16.1%
CapitalizaSon of Net Cash Flow
Net Cash Flow $60,019 $76,957

Div by: Adj. Cap Rate 16.0% 16.1%
Equals: EnSty Value $375,119 $477,994
1
The preliminary opinion of fair market value above is prior to consideraVon of potenVal
non-operaVng assets and marketability consideraVons. See discussion and derivaVon
of various inputs and formula for adjusted cap rate earlier in this secVon. See
calculaVon of S adjustment in Exhibits C-7 through C-9.
As seen above, the preliminary opinion of the fair market value of a 100% controlling
interest in the equity value of the Company under the capitalizaVon of net cash flow approach
(before adjustments) is $375,119 as of the May 5, 2019, Date of SeparaVon valuaVon date and
$477,994 as of the March 31, 2022, Current valuaVon date.
As noted earlier, this report is concerned with a 100% controlling interest in the
Company. Within the business valuaVon field, there is some quesVon as to whether the value
derived under the capitalizaVon of adjusted net cash flow method represents a minority interest
value or a controlling interest value. Some valuaVon professionals argue that discount and
capitalizaVon rates are neither minority nor majority rates and controlling-interest-type
adjustments made to the numerator (i.e., the income statement) are what determine whether
the resulVng value is a controlling or minority interest. Other valuaVon professionals argue
that, because the capitalizaVon rate is developed using rate of return data for very small
minority interests in publicly-traded companies, the preliminary opinion of fair market value
under this method is a minority value. Due to the lack of consensus on this issue, no
adjustment for control was made to the preliminary opinion of fair market value under this
method.
55
5. Adjustment for Non-OperaSng Assets
As noted earlier in this report, the Company has non-operaVng assets in the form of a
vehicle, related debt on the vehicle, and shareholder loans. No adjustment for the net value of
the vehicle (i.e., its market value less the debt owed on the vehicle) is made in this report as
Banister is not an equipment appraisal firm and does not have an independent appraisal on the
vehicle as of each valuaVon date. It is noted that the net value of the vehicle should be added
to the opinion of fair market value at each valuaVon date. The shareholder loan balance is
added back as a non-operaVng asset as follows:
Adjustment for Non-OperaSng Assets 1
5/5/19 3/31/22
Date of Current
SeparaSon Date
Preliminary Opinion of Fair Market Value (FMV) $375,119 $477,994

Add: Non-OperaVng Assets $79,487 $79,287
Equals: Preliminary Opinion of FMV $454,606 $557,281
1
See Non-OperaMng Assets secVon earlier in this report. Does not include the net value of
the vehicle owned by the Company (i.e., its market value less the debt owed).
6. Discount for Lack of Marketability
Ownership interests in the Company at issue in this report are not registered for public
sale or sold in any public or private market. Therefore, the preliminary opinion of fair market
value determined earlier must be discounted for the lack of marketability to arrive at a non-
traded value. Investors value marketability and will pay more for an asset that is readily
marketable than for an otherwise idenVcal asset that is not readily marketable. Also, Revenue
Ruling 77-287 specifically states that “securiVes traded on a public market generally are worth
more to investors."
Exhibit B-1 contains a summary of the results of a number of studies on discounts for
lack of marketability for a controlling interest. AFer consideraVon of these factors, no discount
for lack of marketability was applied to the 100% controlling interest in the Company. This is
due to the fact that a 100% owner of the Company conVnues to receive the benefit of the cash
flow of the Company unVl it is sold. Furthermore, there is a fundamental problem in
considering the cost of the sale of a company in determining its value. For example, in Financial
ValuaMon, ApplicaMons and Models (Fourth EdiMon), author Jim Hitchner states:
There is also a commonsense argument against the applicaVon of a DLOM [Discount for Lack
of Marketability] to capture the Vme and expense in selling a company. As a buyer, wouldn’t
you love the fact that the seller is lowering his price based on expenses and risks he alone
56
incurs? This makes no sense. What is going on here is the mixing of value and proceeds.
Value is typically higher than proceeds to the seller, as it should be. Be careful not to confuse
proceeds with value.
C. MARKET VALUATION APPROACH: GUIDELINE PUBLIC COMPANIES
1. Overview
This valuaVon considered the guideline public company approach. An extensive search
was undertaken for freely and acVvely traded public companies in the same or similar line of
business. The following secVon outlines the search procedure undertaken.
2. Search for Guideline Public Companies
A search was made for possible guideline public companies in the same or similar line of
business as the Company by reviewing public companies listed in NAICS Code 523930
(investment advice). Resources used to idenVfy companies in these SIC codes included various
on-line searches including Morningstar and the Edgar SEC database. A number of companies
were iniVally reviewed to determine if any of those listed was reasonably similar and met iniVal
selecVon criteria. Where appropriate, annual reports, 10-K’s or other descripVve informaVon
was obtained. The purpose of this review was to determine their validity as possible guideline
public companies along the following criteria:
Guideline Public Company SelecSon Criteria
1. Revenues not greater than ten Vmes the Company's revenues.

2. Freely and acVvely traded shares on the over-the-counter or naVonal exchanges.
3. Reasonably similar capital structure.
4. Same or similar line of business
5. Not in financial distress.
3. Guideline Public Companies Selected
Most companies idenVfied are either much larger, publicly-traded enVVes and/or are
divisions of larger financial insVtuVons. Other companies are privately-held. All of the
companies idenVfied far exceeded the revenue criteria noted above. These companies typically
serve a widely diverse customer base and offer a far greater range of products and services.
This is unlike the Company which serves a narrow base of customers and offers far more limited
services.
57
D. MARKET APPROACH: GUIDELINE TRANSACTION METHOD
1. Overview
A valuaVon method within the market approach is the guideline transacVon (or merged
and acquired companies) method which involves locaVng sales data on the purchases of similar
private companies. A search was undertaken to aWempt to idenVfy potenVal transacVons by
the following approaches:
• The issue was discussed with the execuVves of the business to ascertain if they
were aware of any transacVons of similar businesses.
• Searches were made of on-line business databases (including PraN’s Stats,
BIZCOMPS, and others) to aWempt to idenVfy transacVons.
• Annual summaries of acquisiVon transacVons naVonwide as contained in
MERGERSTAT TransacMon Roster were reviewed to aWempt to idenVfy ones in the
same or similar industry as the Company.
• SecuriVes and Exchange Commission filings of public companies in the same
industry were reviewed to determine if similar transacVons could be idenVfied
that contained sufficient details to allow their use.
• Similar pracVces listed for sale on the FP TransiVons website were considered as
possible indicaVons of transacVon mulVples realized in the industry.
• ExaminaVon was made of business valuaVon resources on the potenVal valuaVon
and pricing of companies in this industry.
The same NAICS Code (523930) used in the Financial Analysis secVon of this report as
well as in the guideline public company method above was examined for purposes of this
analysis.
2. DealStats TransacSons
A total of 32 transacVons in the NAICS Code above were examined in the DealStats
database. UlVmately, none of these transacVons could be used due to one or more of the
following limitaVons:
• TransacVon company in a different line of business than the Company.

• Lack of key informaVon on the transacVon company (such as AUM).
• TransacVon date aFer the valuaVon date of this report.
• TransacVon date more than five years prior to the valuaVon date of this report.
• Revenues less than 10% of the Company's most recent annual revenues.
• Revenues greater than ten Vmes the Company's most recent annual revenues.
• TransacVon company with unprofitable operaVons.
• TransacVon company located outside of the United States.
• Purchase price paid in terms other than 100% cash.
• Earnout or other conVngent payment part of the price structure.
58
3. BIZCOMPS TransacSons
No transacVons were found in the BIZCOMPS database for NAICS code 523930
(investment advice). As a result, the BIZCOMPS database could not be used.
4. FP TransiSon PracSces for Sale
FP TransiVon, headquartered in Lake Oswego, OR, is a consulVng firm specializing in the

financial services industry. Services offered by the firm include the following:
• PracVce valuaVon, benchmarking, and equity management. FP TransiVon has done

over 15,000 independent business valuaVons of financial services firms.
• Development and design of customized plans centered on sustainable enterprises.
• Restructuring ownership-level compensaVon structures to support internal
ownership tracks.
• SeXng up equity-centric ensemble organizaVonal structures.
• CreaVng or modifying enVty structures to work for mulVple generaVons of owners.
• Cash flow modeling a variety of conVnuity and Success in Succession Planning™
soluVons.
• Working directly with broker-dealers, custodians, and insurance providers to develop
and implement business transiVon systems and procedures for field use.
In conjuncVon with the above services, FP TransiVon created and conVnues to operate
the largest open market for buying and selling financial pracVces. We were unable to find
historical lisVng data as of the two valuaVon dates of this report, however, the listed financial
pracVces as of the Vme this report was being compiled were as follows:
59
Summary of PracSces Listed for Sale 1
Asking Price/ Price/

LocaSon Price Revenue Revenue AUM AUM
PiWsburgh, PA $6,700,000 $2,823,400 2.4 $389,000,000 1.72%

Sonoma County, CA $4,000,000 $2,302,000 1.7 $111,000,000 3.60%
upstate New York $4,800,000 $1,775,392 2.7 $1,088,248,610 0.44%
CharloWe, NC $3,875,000 $1,371,692 2.8 $185,000,000 2.09%
San Diego, CA $4,200,000 $1,370,848 3.1 $185,000,000 2.27%
CharloWe, NC $4,000,000 $1,221,855 3.3 $133,400,000 3.00%
NYC metro area (NJ) $2,600,000 $1,199,071 2.2 $204,000,000 1.27%
Pacific Northwest $1,680,000 $1,163,354 1.4 $259,485,849 0.65%
southern New York $2,750,000 $986,135 2.8 $140,561,811 1.96%
MassachuseWs $2,700,000 $907,351 3.0 $160,000,000 1.69%
NYC metro area (NJ) $1,950,000 $883,393 2.2 $122,000,000 1.60%
western Michigan $2,500,000 $837,605 3.0 $115,618,715 2.16%
San Francisco Bay, CA $2,000,000 $809,077 2.5 $111,820,567 1.79%
Portland, OR $2,300,000 $758,500 3.0 $121,400,000 1.89%
Marin County, CA $1,800,000 $711,300 2.5 $78,378,005 2.30%
Chicago metro, IL $1,200,000 $694,783 1.7 $98,800,000 1.21%
Colorado $1,750,000 $658,003 2.7 $74,221,000 2.36%
northern Illinois $1,650,000 $549,100 3.0 $107,789,000 1.53%
central California $1,400,000 $514,050 2.7 $45,000,000 3.11%
Portland, OR $1,300,000 $512,462 2.5 $40,000,000 3.25%
PiWsburgh, PA $1,450,000 $462,973 3.1 $60,000,000 2.42%
Houston, TX $1,350,000 $462,868 2.9 $71,644,013 1.88%
Montgomery County. MD $1,200,000 $452,830 2.7 $86,991,000 1.38%
central Pennsylvania $975,000 $447,212 2.2 $64,876,000 1.50%
Washington DC area $1,100,000 $445,471 2.5 $71,595,718 1.54%
central Florida $1,200,000 $417,555 2.9 $125,445,466 0.96%
Dallas, TX $1,100,000 $370,000 3.0 $42,000,000 2.62%
Annapolis, MD $710,000 $286,531 2.5 $60,015,400 1.18%
Kentucky $675,000 $274,684 2.5 $54,287,449 1.24%
Washington state $750,000 $249,919 3.0 $24,919,209 3.01%
Dallas, TX $500,000 $199,588 2.5 $21,131,000 2.37%
Boston, MA $400,000 $144,037 2.8 $12,480,314 3.21%
Boston, MA $250,000 $127,007 2.0 $10,000,000 2.50%
Philadelphia, PA $400,000 $124,785 3.2 $17,500,000 2.29%
$1 million and over 8 2.5 1.88%

$500,000 to $1,00,000 12 2.6 2.07%
$250,000 to $500,000 9 2.7 1.64%
Under $250,000 5 2.7 2.68%
Overall Average 34 2.6 2.00%

Overall Median 2.7 1.93%
1
Source: FP TransiVon website. AUM is assets under management.
As seen above, FP TransiVon listed a total of 34 pracVces for sale with these pracVces
located across the United States. PracVces are segregated in the above table by revenue size.
The average lisVng price to revenue for the nine companies in the Company's revenue range
60
($250,000 to $500,000) is 2.7x with the average lisVng price to AUM (Assets Under
Management) being 1.64%. Based on the Company's revenues of about $415,000 to $420,000
as of each valuaVon date, the applicaVon of the 2.7x mulVple implies a potenVal lisVng price in
the $1,125,000 range (before adjustment for non-operaVng assets). Based on Management-
esVmated AUM of about $61 million, the applicaVon of the 1.64% mulVple implies a potenVal
lisVng price of $1,024,000 (before adjustment for non-operaVng assets). These potenVal lisVng
prices are higher than the preliminary opinions of fair market value under the income approach
shown earlier in this report, however, they cannot be used in this case as they do not represent
closed transacVons. Furthermore, there is insufficient informaVon on the profitability of the
listed pracVces, therefore, profit-based mulVples cannot be calculated from this data.
5. ValuaSon Guidance in the 2022 Business Reference Guide
2022 Business Reference Guide: The EssenMal Guide to Pricing Businesses and Franchises
(“BRG”), compiled by Tom West, Business Brokerage Press, contains a secVon dealing with rules
of thumb in the sale of registered investment advisory firms. Although this is not a valuaVon
method, it is nonetheless helpful data against which to compare the findings from other
valuaVon methodologies. The BRG indicates a rule of thumb of 1.5 Vmes to 2.5 Vmes annual
revenues, 3 to 5 Vmes Sellers’ DiscreVonary Earnings (or SDE, defined as adjusted EBITDA plus
owners compensaVon) or 6 Vmes EBITDA. Based on the Company's data at each valuaVon date,
these suggested mulVples represent the following potenVal values:
61
PotenSal Values Using BRG Mutliples 1
5/5/19 Date of SeparaSon 3/31/22 Current Date

Low High Low High
MulSple MulSple MulSple MulSple
Latest Year's Revenues $414,043 $414,043 $421,456 $421,456

Times: MulVple Midpoint 1.5 2.5 1.5 2.5
Equals: Preliminary Opinion of FMV $621,065 $1,035,108 $632,184 $1,053,640
Add: Non-OperaVng Assets $79,487 $79,487 $79,287 $79,287
Latest Year's Adjusted EBITDA $73,730 $73,730 $81,777 $81,777

Add: Latest Year's Owners Comp $156,100 $156,100 $170,574 $170,574
Equals: SDE $229,830 $229,830 $252,351 $252,351
Times: MulVple Midpoint 3.0 5.0 3.0 5.0
Latest Year's Adjusted EBITDA $73,730 $73,730 $81,777 $81,777

Times: MulVple 6.0 6.0 6.0 6.0
Equals: Preliminary Opinion of FMV $442,380 $442,380 $490,662 $490,662
Equals: Preliminary Opinion of FMV $521,867 $521,867 $569,949 $569,949
1
Based on mulVples in the 2022 Business Reference Guide (BRG). Company informaVon adjusted as shown in
Exhibit C-5. CalculaVon of non-operaVng assets shown earlier in this report.
As seen above, the preliminary opinions of fair market value as of the May 5, 2019, Date
of SeparaVon range between $521,867 and $1,228,637. The preliminary opinions of fair market
value as of the March 31, 2022, Current valuaVon date range between $569,949 and
$1,341,042. The preliminary opinions of fair market value under the income approach shown
earlier in this report are slightly below the low end of the above ranges.
6. Summary of Guideline TransacSon Data
As discussed in the previous secVons, there was insufficient actual transacVon data
available in the DealStats and BIZCOMPS databases. Furthermore, the FP TransiVon data
represents asking prices (not closed transacVons) and the data in the BRG are the observed
rules of thumb and not specific closed transacVons. As a result, none of this guideline
transacVon data can be used in this report, however, the FP TransiVon asking prices and BRG
rules of thumb suggest that the preliminary opinions of fair market value under the income
approach may represent the low end of the potenVal valuaVon range for the Company.
62
E. ASSET VALUATION APPROACH
1. Overview of Methods
The asset approach involves adjusVng the Company’s assets and liabiliVes up or down to
reflect their “fair market value,” taking into account tangible assets and any conVngent
liabiliVes. Although tangible assets can be appraised and their actual balance sheet values
adjusted to reflect those results accordingly, the bigger problem with the use of this method is
dealing with the valuaVon of the intangible assets such as the name, reputaVon, trained
workforce, and other factors.
2. Asset Method Not Employed

The asset approach was considered but not used in the valuaVon of the Company as
beWer valuaVon methods are available. Business ValuaVon Standard III of the American Society
of Appraisers states that the Asset-Based Approach should be considered in valuaVons
conducted at the total enMty level and involve the following: 1. An investment or real estate
holding company, and 2. A business appraised on a basis other than as a going concern.
ValuaVons of parMcular ownership interests in an enterprise may or may not require the use of
the asset-based approach. The asset-based approach should not be the sole appraisal approach
used in assignments relaVng to operaVng companies appraised as going concerns unless this
approach is customarily used by sellers and buyers.
Under the Uniform Standards of Professional Appraisal PracMce (“USPAP”) it is generally

inappropriate to take into account liquidaVon value when the interest cannot cause liquidaVon.
Summarized below is the USPAP posiVon in Standards Rule 9-3, along with its comment
regarding its posiVon when liquidaVon value is not appropriate:
In developing an appraisal of any equity interest in a business enterprise with the ability
to cause liquidaVon, an appraiser must invesVgate the possibility that the business
enterprise may have a higher value by liquidaVon of all or part of the enterprise than by
conVnued operaVon as is. If liquidaVon of all or part of the enterprise is the indicated
premise of value, an appraisal of any real property or personal property to be liquidated
may be appropriate.
Comment: This Standards Rule requires the appraiser to recognize that conVnued
operaVon of a business is not always the best premise of value because liquidaVon of all
or part of the enterprise may result in a higher value. However, this typically applies
only when the business equity being appraised is in a posiSon to cause liquidaSon
[emphasis added]. If liquidaVon of all or part of the enterprise is the appropriate
premise of value, the scope of work may include an appraisal of real property or tangible
personal property. If so, competency in real property appraisal (STANDARD 1) or
tangible personal property appraisal (STANDARD 7) is required.
63
An asset approach is believed to be inapplicable in this case as it does not capture the
goodwill or intangible value of the Company that is indicated under other approaches. As noted
earlier, the Company is a service business that is not dependent on large amounts of capital
equipment or working capital. As a result, the asset approach was not used in this report.
64
V. VALUATION CONCLUSION
A. SUMMARY OF FINDINGS BY EACH VALUATION APPROACH
The methodologies employed resulted in the following preliminary opinions of fair

market value for a 100% interest in the Company as of valuaVon dates of May 5, 2019 (Date of
SeparaVon) and March 31, 2022 (Current Date):
Preliminary Opinion of Fair Market Value

100% Controlling Interest
5/5/19 3/31/22
Date of SeparaSon Current Date
Preliminary Preliminary
Opinion of Opinion of
ValuaSon Approach Fair Market Value Fair Market Value
Income Approach
1. CapitalizaVon of Adjusted Cash Flow $454,606 $557,281
Market Approach
None employed NA NA
Asset Approach
None employed NA NA
Based on a review of the findings, our opinion of the fair market value of a 100%
controlling interest in the Company as of the May 5, 2019, Date of SeparaVon valuaVon date is
$455,000 (rounded). Our opinion of the fair market value of a 100% controlling interest in the
Company as of the March 31, 2022, Current valuaVon date is $555,000 (rounded). All of the
weighVng was given to the sole method used. No addiVonal adjustments to these values are
necessary.
B. FINAL OPINION OF FAIR MARKET VALUE
Banister's opinion of the fair market value of 100 shares of VoVng Common stock (a
100% controlling interest in 100 total VoVng Common shares outstanding) in King Financial
CorporaVon, as of the specified valuaVon dates and for the specified purpose is as follows:
65
Opinion of the Fair Market Value 1

of 100 Shares of VoSng Common Stock
King Financial CorporaSon
for Equitable DistribuSon Purposes
as of May 5, 2019 (Date of SeparaSon)
and March 31, 2022 (Current Date)
# of Total Opinion of
Common Common Ownership Fair Market
ValuaSon Shares Shares Interest Value of
Date Valued Outstanding Valued Interest
May 5, 2019 Date of SeparaSon 100 100 100.0% $455,000
March 31, 2022 Current Date 100 100 100.0% $555,000
1
Rounded. Readers must read this enVre report, including Exhibit A-1 (LimiMng CondiMons), for a complete understanding of
this opinion of fair market value, including any assumpVons (including any hypotheVcal condiVons), limitaVons, and
the intended use of the opinion of fair market value. This opinion of fair market value considers only informaVon
known or knowable as of the stated valuaVon date. Values include the Loan to Shareholder balance but do not include
the net value of the Company-owned vehicle (market value less debt).
This opinion of fair market value is on an all cash and equivalent terms basis and
assumes a going concern premise of value. Readers of this valuaVon report must read the
enVre report, including the IntroducMon secVon and the LimiMng CondiMons in Exhibit A-1 to
understand the purpose, intended use, valuaVon date, idenVficaVon of the Client and intended
users, informaVon relied upon, restricVons, limitaVons, assumpVons, and other important
informaVon. This valuaVon report and its opinion of fair market value is valid only as of the
stated valuaVon date, only for the specific ownership interest valued, only for the specific Client
as noted and only for the stated purpose as noted. This valuaVon report and its opinion of fair
market value is invalid as of any other valuaVon date, any other ownership interest, any other
party, and any other purpose.
66
EXHIBITS
A-1. LimiSng CondiSons

A-2. DefiniSons
A-3. QualificaSons, Michael A. Paschall, ASA, ABV, CFA, JD
B-1. Marketability Study InformaSon
C-1. Common Size Balance Sheets (Assets)
C-2. Common Size Balance Sheets (LiabiliSes and Equity)
C-3. Common Size Income Statements
C-4. RaSo Analysis
C-5. Adjustments to Reported Financial Results
C-6. ExplanaSon of Adjustments to Reported Financial Results
C-7. SEAM Model (Date of SeparaSon)
C-8. SEAM Mode (Current Date)
C-9. ExplanaSon of SEAM Model
67
Exhibit A-1: Limi0ng Condi0ons
1. This valuaLon report was provided by Banister Financial, Inc. (“Banister”) exclusively for
use by the Client(s) for the specific purpose(s) and of the specific valuaLon date(s)
stated in the valuaLon report. This valuaLon report and any informaLon contained
within are not to be used by any other party, for any other purpose, or as of any other
valuaLon date. This valuaLon report is valid only for the named Client(s) in the report,
the specified purpose(s), and the specified valuaLon date(s). Any other use by any other
party for any other purpose or as of any other valuaLon date will render this valuaLon
report invalid and is not authorized. Furthermore, this valuaLon report and any
opinion(s) or conclusion(s) of value are not intended by Banister and should not be
construed by the reader to be investment advice in any manner whatsoever. Any
opinion(s) or conclusion(s) of value represent a considered opinion of Banister based on
informaLon furnished to Banister by the enLty, the property, and/or other sources.
2. This valuaLon report, its findings, its opinion(s) or conclusion(s) of value, and any
informaLon contained within are not to be included (in whole, in part, or by reference)
in any offering memorandum or prospectus of any kind or in any public or private
offering of securiLes. This valuaLon report, its findings, its opinion(s) or conclusion(s) of
value, and any informaLon contained within are not to be supplied to prospecLve
buyers. This valuaLon report makes no recommendaLon regarding the purchase or sale
of assets or securiLes and expresses no opinion whatsoever (expressed or implied)
concerning the future financial or investment performance arising from a purchase or
sale of any interest in or asset of the enLty or property valued. This valuaLon report
provides only Banister’s opinion of value (as defined in the report), for the specific
Client(s) as noted, for the specific purpose(s) as noted, and as of the specific valuaLon
date(s) as noted, not of a possible value or any indicaLon of investment performance or
other factors at future dates, which are unknown.
3. This valuaLon report, its findings, it opinion(s) or conclusion(s) of value, and any
informaLon contained within are not to be used in a forced redempLon of interests of
any kind. This valuaLon report does not represent a “fairness” opinion for any pending
or contemplated transacLon. This valuaLon report, its findings, its opinion(s) or
conclusion(s) of value, and any informaLon contained within should not be interpreted
by the directors, officers, or owners of the enLty or property as indicaLng the fairness
of any contemplated transacLon.
4. Banister assumes no responsibility for any liability for damages of any kind resulLng from
reliance on this valuaLon report, its findings, its opinion(s) or conclusion(s) of value, and
any informaLon contained within, by the Client or any other party.
5. This valuaLon report was based upon financial statements, tax returns, other enLty or
property informaLon, public informaLon, industry and staLsLcal informaLon, and other
informaLon supplied by various parLes and from various sources. Certain of the
adjustments, data and other informaLon and analyses in this report were based upon
consideraLon of other informaLon as supplied by various parLes, trade and
professional associaLons and other resources. Banister has relied upon all informaLon
1
and representaLons supplied as being true, accurate and complete. Banister has not
independently verified any of this data and Banister expresses no opinion whatsoever
regarding the accuracy or reliability of such informaLon. Banister has not audited,
reviewed or compiled the financial informaLon provided to us and, accordingly, we
express no audit opinion or any other form of assurance as to the reliability of this
informaLon.
6. Banister assumes no responsibility for maMers of a legal or tax-oriented nature affecLng

any of the property valued or any opinion of Ltle. It is assumed that all property is
readily transferable, free and clear of all liens and encumbrances of any kind, except as
may be stated herein.
7. This valuaLon report assumes that there are no factors such as restricLve agreements of
any kind, other than those that may be noted herein, which will: (1) affect or impair
value in any way or (2) impact the ability to effect an expedient sale of the interest or
property being valued. To the extent that the impact of any such agreements or other
factors (e.g., voLng rights, impacts of bylaws, arLcles of incorporaLon, operaLng
agreements, partnership agreements, state statutes, case law, inability to parLLon, etc.)
are discussed in this valuaLon report as to their possible impact, Banister and its
professionals are not qualified to render any legal opinion of any kind. Any discussion of
these factors by Banister in its valuaLon report is from the perspecLve of a lay person,
is highly summarized in nature, and may not be all-encompassing. Readers of this
valuaLon report should consult qualified legal counsel in ascertaining any and all legal,
contractual and other related issues that impact (in any way) the enLty or property, its
assets and its ownership interests (i.e., shares, membership interests, partnership
interests, etc.) before making any purchase, sale, transfer, or other related decisions.
8. This valuaLon report is not to be used for any allocaLon of values for various individual
assets or asset classes of the enLty or property valued as may be required by the
Internal Revenue Service (“IRS”) or for any other tax related purpose other than is
specifically noted in the Purpose and Scope secLon of this report. Banister expresses no
opinion, assurances or guarantees of any kind regarding the tax or regulatory treatment
of any valuaLon issues or other issues involving the purchase or sale of the enLty’s
interests or assets or any interest in property. Readers of this report should seek the
advice of qualified legal and tax counsel in such maMers. No legal, tax or accounLng
opinions are expressed herein, nor is any opinion expressed as to the accuracy or
validity of any of the financial informaLon contained in this report or its conformity with
“generally accepted accounLng principles.” Readers of this valuaLon report should
consult the actual financial statements of the enLty or property, including the notes
thereto.
9. Compliance with any required IRS and/or United States Treasury Adequate Disclosure
Guidelines for any reason, including but not limited to any gi= tax, estate tax, charitable
contribuLon, or other tax maMer, is the sole responsibility of the Client. The Client
2
should obtain qualified legal and tax guidance on these maMers to ensure appropriate
compliance with any required guidelines.
10. All of the representaLons and informaLon supplied by the enLty or property, its
management, and its agents, are assumed to be true, accurate, and complete and have
not been independently verified. No liabiliLes (actual or conLngent, known or
unknown) are assumed other than those shown on the enLty's or property's financial
statements or tax returns or as contained in the notes to the financial statements,
except as may be noted in this valuaLon report.
11. All informaLon provided to or obtained by Banister in the course of this engagement,
including but not limited to Banister’s work papers and valuaLon files, shall remain the
sole and exclusive property of Banister. Banister may destroy any or all informaLon
related to this engagement at Banister’s sole discreLon and without prior noLce to the
Client or any other parLes to this engagement. Banister has no responsibility or
obligaLon to provide any informaLon to the Client or any other parLes at any Lme.
Banister’s determinaLon of its records retenLon obligaLon in this engagement shall be
made in conjuncLon with the appropriate governing rules and regulaLons as
promulgated by certain business valuaLon organizaLons in effect at the Lme.
12. This valuaLon report does not provide any opinion as to any tax implicaLons to a buyer,
seller or any other party arising from a purchase, sale, or transfer (by any means) of any
enLty, property, assets, liabiliLes, or ownership interests. Any esLmated tax impact
contained in this valuaLon report cannot be relied upon by a prospecLve buyer, seller,
transferor, or transferee of any enLty, property, asset, liability, or ownership interest.
Readers of this valuaLon report should consult a qualified tax advisor to fully
understand and quanLfy any and all tax ramificaLons.
13. Nothing in this valuaLon report is intended to recommend, imply or provide any
guarantees, representaLons, warranLes or opinions of any kind whatsoever regarding
the financial prudence, collateral, investment potenLal or debt service ability of the
enLty or property, or any investment in the enLty's or property's assets or ownership
interests by any party, including investors of any kind, financial insLtuLons and all other
individuals or enLLes. Such party should undertake a full due diligence review of the
enLty or property and make his or her own independent determinaLons of its future
prospects, financial and otherwise, and the financial prudence, tax, legal, and all other
ramificaLons of any contemplated transacLon. Such party should retain independent
and qualified advisors for this purpose.
14. A “due diligence” review of the enLty or property has not been undertaken and this
valuaLon report should not be construed as such. Numerous material factors impacLng
the enLty or property might be idenLfied in such a review but are not within the scope
of this engagement. “Due diligence” encompasses a highly detailed, comprehensive,
expensive and Lme-consuming audit of an enLty’s or property’s financial informaLon,
management, contracts, customers, suppliers, compeLtors, environmental issues, legal
3
issues, exposure to hacking, cybersecurity, data breach and data security issues, and
many other maMers. Those efforts are far more encompassing than the scope of a
normal business valuaLon and o=en involve the services of a mulL-disciplinary team of
aMorneys, accountants and other consultants and advisors. The term “due diligence” is
o=en misused and misunderstood by those not involved in mergers and acquisiLons.
Because a “due diligence” review was not performed, however, does not mean that
Banister was not diligent, objecLve or unbiased in its valuaLon report. As is shown in
this valuaLon report, Banister undertook an extensive analysis of the enLty or property
and used objecLve independent data in doing so, where possible, to reach its opinion(s)
and/or conclusion(s) of value. This analysis, however, should not be misinterpreted to
be the same as a due diligence review, which, as noted, is far beyond the scope of a
normal business valuaLon.
15. This valuaLon report may be based in part on forecasts of revenues, earnings and other
maMers as esLmated by the management of the enLty, the property, and/or Banister.
Some assumpLons inevitably will not materialize, and numerous unanLcipated events
and circumstances may occur. In addiLon, the achievement of forecasted results is
dependent on the assumpLons, plans, and acLons of management. Therefore, the
actual performance in the areas forecasted will vary from the forecast, and the
variaLons may be material. Banister expresses no form of assurance whatsoever on the
likelihood of achieving the forecasts or on the reasonableness of the assumpLons,
representaLons and conclusions. Any such forecasts are presented as part of the
valuaLon report and are not intended to be used separately or for any other purpose,
including obtaining credit, making investment or purchase decisions, or soliciLng
investors. Any such party seeking these alternaLve purposes must independently
examine the outlook for the enLty or property and make his or her own separate
determinaLons. Such party should employ qualified advisors to assist him or her in this
determinaLon.
16. This valuaLon report may be based on the capitalizaLon of historic earnings, net cash
flow or other measures. Banister expresses no opinion, guarantee or form of assurance
of any kind that these results will in fact conLnue into the future, an assumpLon that is
implicit in the capitalizaLon approach. Past results are no guarantee of future
performance. Readers must make their own independent determinaLon of the
prospects for the enLty or property, financial and otherwise, and should retain
independent and qualified advisors to assist in that regard.
17. This valuaLon report may include an opinion or conclusion of value on one or more
debt instruments (e.g., accounts, loans, or notes receivable, promissory notes, or
similar types of assets). Nothing in this valuaLon report is intended to recommend,
imply or provide any guarantees, representaLons, warranLes or opinions of any kind
whatsoever regarding the debt service ability by any obligor or any such debt
instrument. Readers must make their own independent determinaLon (and should
retain independent and qualified advisors to assist in this determinaLon) of the
prospects for any debt instrument (financial or otherwise), including but not limited to
4
the obligor's willingness and ability to repay, the value of any associated collateral, and
the enforceability of the debt instrument and any security agreement(s). Nothing in this
valuaLon report is intended to recommend, imply or provide any guarantees,
representaLons, warranLes or opinions of any kind whatsoever regarding the
investment potenLal or financial prudence of purchasing or invesLng in any debt
instrument(s), or the value or reliability of any collateral as security for any debt
instrument(s). Nothing in this valuaLon report should be construed as providing a “due
diligence” study of any debt instruments, as such a review has not been undertaken. No
“fairness opinion” of any kind is expressed herein regarding any debt instruments or for
any pending or contemplated transacLon.
18. Nothing in this valuaLon report consLtutes a recommendaLon regarding the purchase
or sale of any securiLes, properLes, or assets. Banister expresses no opinion,
guarantees or form of assurance of any kind, expressed or implied, on the potenLal
investment performance resulLng from a purchase of any enLty, property, asset,
liability, or ownership interest.
19. It has been assumed for valuaLon purposes that the enLty or property is in good
standing and is not in violaLon of any laws, statutes, or regulaLons of any kind,
however, this has not been independently verified. This valuaLon report assumes no
conLngent or other liabiliLes of any kind, including pending or threatened lawsuits,
environmental or hazardous waste or other similar maMers, other than is specifically
noted in the valuaLon report. These issues were outside of the scope of this valuaLon
report, but, if considered, could have a material impact on the findings contained
herein.
20. The valuaLon date is stated in the valuaLon report without any guarantees as to the
opinion(s) or conclusion(s) of value (as defined) at the valuaLon date(s) or any future
date, or any contrary opinions as to value as of the same date. A specific buyer, for a
variety of reasons, might be willing to pay materially above or below the indicated value
(as defined). Likewise, a specific seller, for a variety of reasons, might be willing to sell
materially above or below the indicated value (as defined).
21. The date(s) of value (as defined) to which the opinion(s) or conclusion(s) expressed in
this report apply is(are) set forth herein. Unless otherwise specified in the report, the
dollar amount of any value reported is based on the purchasing power of the U.S. dollar
as of that date(s). Banister assumes no responsibility for economic or physical factors
occurring subsequent to the date that may affect the opinion(s) or conclusion(s)
reported.
22. Hazardous substances, if present within a facility or property, can introduce an actual or
potenLal liability that will adversely affect the marketability and value of the enLty or
property. Such liability may be in the form of immediate recogniLon of exisLng
hazardous condiLons as well as future liability resulLng from the release of currently
non-hazardous contaminants. Banister is not an environmental consultant or auditor,
5
does not conduct or provide environmental assessments, and has not performed such
an analysis or assessment on any subject properLes in this engagement. Banister has
given no consideraLon to the potenLal impact on value from such liability in this
valuaLon report, unless as noted in the valuaLon report. Readers of this valuaLon
report should undertake a full due diligence of all environmental and hazardous waste
issues with the enLty and employ qualified advisors in assessing this potenLal risk and
its potenLal impact on value.
23. This valuaLon report does not analyze or consider any informaLon technology
deficiencies, weaknesses, exposure or liability of the enLty or property, including any
actual or potenLal exposure to hacking, malware, data breach or cybersecurity issues
that might be present. These factors might expose an enLty or property to substanLal
liability and expense and may have a material impact on future revenues, earnings and
value. Readers of this valuaLon report should undertake a full due diligence of all
informaLon technology issues with the enLty or property and employ qualified advisors
in assessing this potenLal risk and its potenLal impact on value.
24. Unless otherwise stated in the valuaLon report, this valuaLon report assumes a “going
concern,” based on an all cash purchase, or equivalent terms thereof. The enLty or
property may have a materially different value in liquidaLon. Unless specifically stated
in the valuaLon report, no esLmate of the value that could be achieved in liquidaLon is
included in this report. Adjusted and unadjusted equity and other appraised values
stated in this valuaLon report should not be construed as esLmates of the liquidaLon
value of the enLty or property.
25. Ongoing competent and qualified management of the enLty or property is assumed.
The opinion(s) or conclusion(s) of value in this valuaLon report are based on the
assumpLon that the current level of management experLse and effecLveness would
conLnue to be maintained and the character and integrity of the enLty or property
following any sale, reorganizaLon, exchange, or diminuLon of the parLcipaLon of
ownership or management would not be materially or significantly changed.
26. Banister may have relied upon certain appraisals of real and/or personal property in its
valuaLon report. Banister has relied upon these appraisals without any independent
verificaLon and without expressing any opinion whatsoever as to the accuracy or
validity of such findings as Banister and its professionals are not qualified as appraisers
of real or personal property. Banister in no way supervised the acLviLes of the
specialists performing the appraisals of real and/or personal property. The value of any
real or personal property contained in this valuaLon report (including values
determined by appraisal, by taxing authoriLes, by an actual transacLon price, etc.) were
supplied to Banister by the enLty or property, the Client, and/or appraisers engaged by
the enLty, property, and/or the Client. Were these real and/or personal property
appraisals or indicaLons of value to be inaccurate as of the stated valuaLon date(s) in
the valuaLon report (including appraisals or indicaLons of value as of a different
valuaLon date than the valuaLon date(s) of this valuaLon report), the opinion of value
6
(as defined) of the ownership interests (as defined) in this valuaLon report could differ,
perhaps materially.
27. It is assumed that all of the enLty's or property's assets are in good, working order;
however, this has not been independently verified by Banister.
28. Unless expressly stated in the valuaLon report, it has been assumed that a non-
controlling owner in the enLty or property would not have the right of parLLon to
receive a pro-rata porLon of the enLty's or property's assets, including any real
property holdings. Banister is not a law firm and is not qualified to interpret potenLal
legal issues affecLng the enLty or property and the legal rights impacLng ownership
interests in the enLty or property. Readers of this valuaLon report should employ
qualified advisors in assessing this issue and its potenLal impact on value.
29. It has been assumed that none of the enLty’s or property’s governing documents or
agreements would be in violaLon of any statutes, laws, rules, regulaLons, case law or
other authority. Banister is not a law firm and is not qualified to interpret potenLal legal
issues affecLng the enLty or property and the value of ownership interests in the enLty
or property. Readers of this valuaLon report should employ qualified advisors in
assessing this issue and its potenLal impact on value.
30. Banister and its officers, shareholders and employees are not required to tesLfy in court
or aMend any hearings, deposiLons, or proceedings of any kind with reference to any of
the maMers in this valuaLon report unless prior saLsfactory arrangements have been
agreed upon in advance and in wriLng by Banister. CompensaLon for Banister's
parLcipaLon in such acLviLes will be at Banister’s then-standard hourly rate for such
services, plus reimbursement to Banister for any out of pocket costs incurred.
31. This valuaLon project is subject to the terms and condiLons set forth in the
engagement leMer between the Client and Banister.
32. This valuaLon report, its contents (in whole or in part), informaLon, findings, opinion(s)
or conclusion(s) of value are confidenLal and are not to be published, copied,
reproduced, disclosed, or disseminated in any way by any means, in whole or in part (or
by reference), without the express prior wriMen permission of a duly authorized officer
of Banister. This valuaLon report is copyrighted and remains the property of Banister.
Neither all nor any part of the contents, findings, opinion(s) or conclusion(s) of value of
this valuaLon report (or of the idenLty of Banister or any valuaLon analyst connected to
Banister) shall be conveyed (in whole, in part, or by reference to) to the public through
adverLsing, public relaLons, news, sales media, mail, direct transmiMal, or any other
means of communicaLon without the express prior wriMen consent and approval of
Banister.
33. Banister shall be under no obligaLon to update this valuaLon report or its findings for
any reason, including but not limited to any informaLon that comes to Banister's
7
aMenLon a=er the date of issuance of this report. This valuaLon report and opinion of
fair market value considers only informaLon that was known or knowable as of the
valuaLon date of this report.
34. No change of any item in this valuaLon report shall be made by anyone other than
Banister and Banister shall have no responsibility or liability for any such unauthorized
change.
8
Exhibit A-2: Business ValuaOon DefiniOons
InternaOonal ValuaOon Glossary - Business ValuaOon

Updated February 24, 2022
Purpose
Business valuaOon providers and users benefit from common understanding of terms with
clearly established meanings and consistent applicaOon throughout the profession. To this
end the following socieOes and organizaOons have worked collaboraOvely to compile
definiOons for the terms included in this Glossary:
• ASA – American Society of Appraisers

• CBV InsOtute – Chartered Business Valuators InsOtute
• RICS – Royal InsOtuOon of Chartered Surveyors
• TAQEEM – Saudi Authority for Accredited Valuers
This Glossary updates the InternaOonal Glossary of Business ValuaOon Terms originally
published in 2001.
Scope
This Glossary was developed as part of ongoing efforts to harmonize definiOons for terms
used in business valuaOon. It is intended to be a reference tool to facilitate communicaOon
within the business valuaOon profession and with relevant stakeholders and users. This
Glossary is designed to be helpful, but neither authoritaOve nor prescripOve.
To that end, the Glossary aims to provide a common understanding of technical terms used
within the various sub-pracOce areas of business valuaOon, and for those operaOng in
different markets. Users of valuaOon services are encouraged to familiarize themselves with
the appropriate context, as not all terms are applicable to every use.
It is acknowledged that terms used in different markets may vary. If any term in this
glossary conflicts with a published governmental, judicial, or accounOng authority,
precedence should be given to the use and interpretaOon of terms as they appear in
applicable published authoritaOve guidance, given the purpose of the valuaOon.
Given that the definiOon for some terms in this Glossary may differ slightly based on the
purpose of the valuaOon and jurisdicOon, business valuaOon professionals1 should ensure
they are using and disclosing the most appropriate definiOon for the circumstances of the
engagement.
Furthermore, organizaOons such as valuaOon professional organizaOons (VPOs), accounOng

regulatory bodies, tax authoriOes, and courts may have somewhat different definiOons and
interpretaOons. Users are also encouraged to refer to valuaOon texts and other relevant
documents for more informaOon and applicaOon guidance on specific terms.
1
If the business valuaOon professional believes that one or more of these terms needs to be
used in a manner that materially departs from this glossary, it is recommended that the
term be defined as used within that valuaOon engagement. The use of the appropriate
definiOon relies on the professional judgement of the business valuaOon professional.
In determining the terms to be included in this Glossary, the following items were excluded:
• terms that are defined in a common dicOonary.

• generally understood or commonly used business, finance, and accounOng terms
or terms used in other disciplines.
• pracOce terminology or performance frameworks.
• terms specific to a parOcular VPO or used within a parOcular VPO's standards.
• jurisdicOonal differences, including terms of local accounOng or legal standards.
Users of this Glossary are cauOoned that when a jurisdicOonal definiOon applies,
it should take precedence over the definiOons in this Glossary (one example of
this might be with respect to the term "fair value").
Various valuaOon and accounOng standards were considered in the development of this
Glossary, such as InternaOonal ValuaOon Standards (IVS), InternaOonal Financial ReporOng
Standards (IFRS), United States Generally Accepted AccounOng Principles (US GAAP),
Uniform Standards of Professional Appraisal PracOce (USPAP), and Statement on Standards
for ValuaOon Services (SSVS). While it is acknowledged that US GAAP and IFRS define
certain terms related to financial reporOng valuaOon, this Glossary does not include all such
terms.
The term "business valuaOon professionals" is intended to be a generic term to refer to

individuals that provide business valuaOon services, regardless of their jurisdicOon or the
professional organizaOon to which they belong. Synonymous terms include valuers,
valuators, analysts, appraisers, etc. Business valuaOon professionals may include an
individual or group of individuals. Generally, business valuaOon professionals possess the
necessary qualificaOons, ability, and experience to undertake a valuaOon engagement. In
some jurisdicOons, licensing is required in order to provide business valuaOon services.
ConsideraOons and LimitaOons
The definiOons provided herein are current as of the date of publicaOon. As they are
subject to change, this Glossary is intended to be updated periodically. This Glossary uses
"see also" to refer to terms that are related, but not synonymous. Synonymous terms are
cross-referenced with "also known as." Contrary terms are cross-referenced using "contrast
with."
2
DefiniOons
Adjusted Net Asset Value Method — a method within the Asset Approach whereby a
business' assets and liabiliOes (including off-balance sheet assets, Intangible Assets, and
conOngent assets and/or liabiliOes) are adjusted to market values or another appropriate
Standard of Value. Also known as adjusted book value method or asset accumulaOon
method.
Adjusted Present Value (APV) — a technique typically used to esOmate the value of a
levered business as the sum of the value of an unlevered business (i.e., 100% equity
financed) and the value of the tax benefits associated with debt financing.
Appraisal — also known as ValuaOon.
Asset Approach — a general manner of esOmaOng the value of a business using one or
more methods based on a summaOon of the value of the assets, net of liabiliOes, where
each has been valued using either the market, income, or cost approach. Also known as
asset-based approach. See also Cost Approach.
APriOon — the annual percentage rate of loss (or churn) of an exisOng asset such as a
customer relaOonship Intangible Asset.
Backsolve Method — a method within the Market Approach whereby the total Equity
Value (or the value of a specific equity class) of a business is implied from a recent
transacOon in the business' securiOes.
Basis of Value — also known as Standard of Value.
Beta — a measure of the relaOve risk (or sensiOvity) of an individual security versus the risk
of a market porNolio. See also Capital Asset Pricing Model, SystemaOc Risk, UnsystemaOc
Risk, Levered Beta, and Unlevered Beta.
Binominal LaQce Model — a model typically used to esOmate the value of an asset or
investment that employs a binomial tree to show the different paths the price of an
underlying asset, such as a security, might take over the security's life.
Blockage Discount — an amount or percentage deducted from the current market price of
a publicly-traded security to reflect the decrease in the per security value of a block of
securiOes that is of a size that could not likely be sold in a reasonable period given normal
trading volume.
Build-up Model — a model in which the expected return for a security (or porNolio of
securiOes) is measured by a Risk-Free Rate plus premiums for SystemaOc Risk (e.g., Equity
3
Risk Premium, size premium and industry risk premium) and UnsystemaOc Risk (e.g.,
Company-Specific Risk Premium). See also Capital Asset Pricing Model.
Capital Asset Pricing Model (CAPM) — a single factor asset pricing model that measures
the expected return for a security (or porNolio of securiOes) as the sum of a Risk-Free Rate
plus a risk premium. The risk premium is equal to the SystemaOc Risk (measured by Beta)
of the security (or porNolio of securiOes) mulOplied by the risk premium of holding the
overall market porNolio. The CAPM is o?en modified or extended for other risk factors,
such as size, country risk, and Company-Specific Risk. See also Build-up Model.
Capital Structure — the composiOon of the Invested Capital of a business, including debt
and Debt Equivalents, equity, and Hybrid SecuriOes. See also Simple Capital Structure and
Complex Capital Structure.
CapitalizaOon of Earnings Method —a form of the CapitalizaOon of Economic Income

Method.
CapitalizaOon of Economic Income Method — a method within the Income Approach

whereby expected Economic Income for a representaOve single period is converted to
value through division by a CapitalizaOon Rate. Also known as the capitalizaOon method or
direct capitalizaOon method.
CapitalizaOon Rate — a divisor (usually expressed as a percentage) used to convert into

value the expected Economic Income of a normalized single period. The CapitalizaOon Rate
is generally calculated as a Discount Rate less a long-term growth rate.
Cash Flow — cash inflows or ouNlows that are generated over a period by an asset,
business, or investment; o?en supplemented by a qualifier in the given valuaOon context
(e.g., discreOonary or operaOng). See also Net Cash Flow to Equity and Net Cash Flow to
Invested Capital.
Company-Specific Risk Premium — an adjustment to the cost of equity to account for

Company-Specific Risk. Also known as alpha.
Company-Specific Risk —the risk that is unique to a specific investment in a business, in

excess of the Equity Risk Premium, size risk, and/or country risk (e.g., significant customer
concentraOon, business dependence on key person(s), or lack of product diversificaOon).
Also known as UnsystemaOc Risk.
Complex Capital Structure — a Capital Structure that includes debt and equity securiOes
with different economic and control rights. Contrast with Simple Capital Structure.
Contributory Asset Charge — an economic charge for Contributory Assets applied in the
MulO-Period Excess Earnings Method. See also Contributory Assets, Excess Earnings
Method, and MulO-Period Excess Earnings Method.
4
Contributory Assets — assets (e.g., working capital, machinery and equipment,

trademarks, assembled workforce) that are used in conjuncOon with the subject Intangible
Asset in the realizaOon of prospecOve cash flows associated with the Intangible Asset being
valued. See also MulO-Period Excess Earnings Method and Contributory Asset Charge.
Control — a level of ownership having sufficient rights (e.g., voOng) to direct the
management, policies, and disposiOon of a business.
Control Premium — an amount or percentage by which the pro rata value of a Controlling
Interest exceeds the pro rata value of a Noncontrolling Interest in a business, to reflect the
anOcipated economic benefits of Control. Also known as acquisiOon premium.
Controlling Interest — an ownership interest in a business that conveys the economic

benefits of Control to the holder(s) of such interest.
Cost Approach — a general manner of esOmaOng the value of an asset, investment, or (in
limited circumstances) a business using one or more methods that reflect the economic
principle that a buyer will generally pay no more for an asset than the cost to obtain
another asset of equal uOlity, whether by purchase or by construcOon. The approach
considers the current replacement or reproducOon cost and the physical deterioraOon and
all other relevant forms of obsolescence. See also Asset Approach.
Cost of Capital — the expected rate of return that the market requires in order to aPract
funds to a parOcular investment considering the risk of the investment. See also Weighted
Average Cost of Capital.
Cost Savings Method — a method within the Income Approach whereby the value of an
Intangible Asset is esOmated based on an expected future benefit stream of the asset in
terms of the future expenses that are avoided (or reduced) by owning the asset.
Current Value Method — a procedure to allocate the Equity Value to the various equity
interests (or Enterprise Value to the various debt and equity interests) in a business as
though the business were to be sold on the ValuaOon Date, without considering the
opOon-like payoffs of the equity interests. Contrast with Probability-Weighted Expected
Return Method and OpOon Pricing Method.
Debt Equivalents — a debt-like financial obligaOon or other non-equity claim resulOng from
the signing of a short- or long-term contract (e.g., operaOng leases, unfunded pension
liabiliOes, asset reOrement obligaOons, conOngent liabiliOes). See also Capital Structure and
Hybrid SecuriOes.
Discount for Lack of Control — an amount or percentage deducted from the pro rata
amount of 100% of the enOty's Equity Value (when determined on a Controlling Interest
basis) to reflect the absence of some or all of the economic benefits of Control.
5
Discount for Lack of Liquidity — an amount or percentage applied to the value of an

ownership interest to reflect a relaOve lack of Liquidity.
Discount for Lack of Marketability — an amount or percentage applied to the value of an

ownership interest to reflect a relaOve lack of Marketability.
Discount for Lack of VoOng Rights — an amount or percentage applied to the per share
value of a voOng share to reflect an absence of voOng rights.
Discount Rate — a Rate of Return used to convert Economic Income into present value.
Discounted Cash Flow (DCF) Method — a form of the Discounted Economic Income
Method based on Cash Flow.
Discounted Economic Income Method — a method within the Income Approach whereby
the present value of expected Economic Income is calculated using a Discount Rate.
Distributor Method — a variaOon of the MulO-Period Excess Earnings Method that relies
upon market-based distributor data or other market inputs to value customer relaOonship
Intangible Assets. SomeOmes referred to as the disaggregated method.
Economic Income — monetary inflows or ouNlows resulOng from business acOviOes (e.g.,
Cash Flows, EBITDA, net income).
Economic Obsolescence — a form of depreciaOon or loss in value or usefulness of an asset

caused by factors external to the asset, especially factors related to changes in demand for
products or services produced by the asset. See also FuncOonal Obsolescence and Physical
Obsolescence.
EffecOve Date — see also ValuaOon Date, Measurement Date, or date of value.
End of Period DiscounOng — a convenOon used when discounOng Economic Income to

present value that reflects such income being generated at the end of each respecOve
period. Contrast with Mid-Period DiscounOng.
Enterprise Value — the Market Value of Invested Capital, typically adjusted to remove all
or a porOon of cash and cash equivalents, and other NonoperaOng Assets. See also Market
Value of Invested Capital and Invested Capital.
Equity Instrument — a contract that creates a residual interest in a business' assets a?er
deducOng its liabiliOes.
Equity Risk Premium — the incremental return that investors expect to receive from an
investment in public equity securiOes over that of a risk-free security. It is generally
6
calculated as the difference between the expected rate of return on the overall market and
the return on a risk-free instrument. Also known as market risk premium, or equity market
risk premium.
Equity Value — the value of a business to its equity holders. Equity Value is generally
calculated as the Market Value of Invested Capital less the market value of any debt and
Debt Equivalents, Hybrid SecuriOes, and other non-equity claims.
ESG — environmental, social, and governance factors that impact a business or asset and
its financial performance and operaOons (e.g., the impact of sustainability and ethical
pracOces).
Excess Earnings — the amount of expected Cash Flow that exceeds the economic charge
for the use of the Contributory Assets used to generate such cash flow.
Excess Earnings Method — a method of esOmaOng the value of a business, determined as

the sum of (i) the value of the selected Tangible Asset base, and (ii) the value of all of the
Intangible Assets (including goodwill) derived by capitalizing Excess Earnings. SomeOmes
referred to as the capitalized excess earnings method.
Expected Cash Flow — the probability-weighted average of the various possible scenarios
of a subject business' Cash Flows.
Expected Present Value Technique — a present value technique using the Expected Cash
Flow of an asset, business, or investment.
Fair Market Value — a Standard of Value considered to represent the price, expressed in
terms of cash equivalents, at which property would change hands between a hypotheOcal
willing and able buyer and a hypotheOcal willing and able seller, each acOng at arms-length
in an open and unrestricted market, when neither is under compulsion to buy or to sell and
when both have reasonable knowledge of relevant facts. See also Market Value.
Fair Value — a Standard of Value for which there are different definiOons, depending on
the context and purpose. Fair Value is typically defined or imposed by a third party (e.g., by
law, regulaOon, contract, or financial reporOng standard-seQng bodies). The most
commonly used definiOon for financial reporOng purposes is under IFRS and US GAAP,
which define Fair Value as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transacOon between market parOcipants at the
measurement date.
Fairness Opinion — an opinion as to whether the consideraOon proposed to be paid or

received in a transacOon is fair from a financial point of view to the party paying or
receiving such consideraOon.
7
Forced LiquidaOon Value — a form of LiquidaOon Value in which an asset or assets are
presumed to be sold with less than a reasonable period of market exposure. Contrast with
Orderly LiquidaOon Value.
FuncOonal Obsolescence — a form of depreciaOon in which the loss in value or usefulness

of an asset is caused by inefficiencies or inadequacies of the asset itself, when compared to
a more efficient or less costly newly developed asset. See also Economic Obsolescence,
Physical Obsolescence, Replacement Cost Method, and Replacement Cost New.
Going Concern — an ongoing operaOng business enterprise.
Going Concern Value — a Premise of Value that assumes the business is an ongoing
commercial enterprise with a reasonable expectaOon of future earning power.
Goodwill — an Intangible Asset which represents any future economic benefit arising from
a business or a group of assets which is not individually idenOfied or separately recognized.
Goodwill can arise as a result of name, reputaOon, customer loyalty, locaOon, products, and
similar factors not separately idenOfied. In the context of a business combinaOon, goodwill
is measured as the difference between (A) the aggregate of (i) the value of the
consideraOon transferred (generally at Fair Value), (ii) the amount of any noncontrolling
interest, and (iii) in a business combinaOon achieved in stages, the acquisiOon-date Fair
Value of the acquirer's previously held equity interest in the acquiree, and (B) the net of the
acquisiOon-date amounts of the IdenOfiable Assets acquired and the liabiliOes as assumed.
Greenfield Method — a method used to esOmate the value of certain Intangible Assets
(e.g., franchise agreements or broadcast spectrum) based on the discounted cash flows of a
hypotheOcal start-up business. The Greenfield Method assumes that the subject asset is
the only asset of the business at the ValuaOon Date and that investments are made during
the start-up period to purchase, build, or rent the other assets required to assemble the
business. See also Contributory Assets, Excess Earnings Method, and MulO-Period Excess
Earnings Method.
Guideline Public Company Method — a method within the Market Approach whereby the
value of a business is esOmated by applicaOon of MulOples derived from market prices of
securiOes of publicly traded companies that are engaged in the same or similar lines of
business as the subject business.
Guideline TransacOon Method — a method within the Market Approach whereby the
value of a business is esOmated by applicaOon of MulOples derived from one or more
transacOons of Controlling Interests in companies engaged in the same or similar lines of
business as the subject business. SomeOmes known as guideline merger and acquisiOon
method.
8
Hybrid SecuriOes — a component of a company’s Capital Structure that cannot be

classified purely as debt or equity, as it may have characterisOcs of both (e.g., converOble
debt, converOble preferred stock, employee stock opOons).
IdenOfiable Intangible Asset — in a financial reporOng context, an Intangible Asset is

idenOfiable if it meets certain contractual and/or separability criteria as defined by a
relevant standard (e.g., IFRS 3 or ASC 805).
Income Approach — a general manner of esOmaOng the value of an asset, business, or

investment using one or more methods that convert expected Economic Income into a
present amount.
Intangible Asset — an asset that lacks physical substance and derives value from the
economic properOes that grant rights and/or Economic Income to its owner (e.g., patents,
copyrights, trademarks, or customer relaOonships). See also IdenOfiable Intangible Asset.
Intellectual Property — a legal concept that refers to creaOons of the mind that are derived
from intellectual or creaOve effort for which exclusive or fracOonal rights are recognized
(e.g., trademarks, trade names, trade secrets, patents, copyright, design rights, and
proprietary informaOon). Intellectual property rights generally give the owner the right to
prohibit others from using the property without permission.
Internal Rate of Return — the Discount Rate which equates the present value of expected
net cash flows to the iniOal investment (cost).
Intrinsic Value — the value that an investor considers, on the basis of available facts, to be
the "true," "real," or fundamental value that will become the Market Value when other
investors reach the same conclusion. When the term applies to opOons, Intrinsic Value is
the difference between the exercise (strike) price of an opOon and the market price of the
underlying security.
Invested Capital — the sum of a business' equity, debt and Debt Equivalents, Hybrid
SecuriOes, and other non-equity claims. See also Enterprise Value and Market Value of
Invested Capital.
Investment Risk — the uncertainty of realizing Economic Income as expected (with respect
to amount and/or Oming).
Investment Value — a Standard of Value considered to represent the value of an asset or

business to a parOcular owner or prospecOve owner for individual investment or
operaOonal objecOves. Also known as value to the owner.
Key Person Discount — an amount or percentage deducted from the value of an operaOng
business to reflect the reducOon in value resulOng from the actual or potenOal loss of a key
person upon which the business is highly dependent.
9
Levered Beta — a measure of Beta reflecOng a Capital Structure that includes debt. Also
known as equity beta. Contrast with Unlevered Beta.
LiquidaOon Value — the amount, net of relevant costs (e.g., preparaOon and disposal), that
would be realized if the business is terminated, and the assets are sold. See also Orderly
LiquidaOon Value and Forced LiquidaOon Value.
Liquidity — the ability to quickly or readily convert an asset, business, or investment to

cash at minimal cost. See also Marketability.
Market Approach — a general manner of esOmaOng a value of an asset, business, or

investment by using one or more ValuaOon Methods that compare the valuaOon subject to
other assets, businesses, or investments that have been sold or for which price and other
informaOon is available.
Market CapitalizaOon — the sum, at market values, of a business' Market CapitalizaOon of

Equity and interest-bearing debt.
Market CapitalizaOon of Equity — the aggregate Equity Value of a publicly-traded

company, calculated as the product of its market price and the number of equity securiOes
outstanding.
Market Value — a Standard of Value considered to represent the esOmated amount for
which an asset or liability should exchange on the ValuaOon Date between a willing buyer
and a willing seller in an arm's length transacOon, a?er proper markeOng, and where the
parOes had each acted knowledgeably, prudently, and without compulsion. See also Fair
Market Value.
Market Value of Invested Capital — the sum, at market value, of a business' equity, debt
and Debt Equivalents, Hybrid SecuriOes, and non-equity claims.
Marketability — the ability to quickly or readily convert an asset, business, or investment

to cash at minimal cost that reflects the capability and ease of transfer or salability of that
property. Marketability is affected by, among other things, the parOcular market in which
the asset is expected to transact and the characterisOcs of the asset. See also Liquidity.
Measurement Date — also known as ValuaOon Date, EffecOve Date, or date of value.
Mid-Period DiscounOng — a convenOon used in the Discounted Economic Income Method

that reflects Economic Income being generated at a mid-period, approximaOng the effect of
Economic Income being generated throughout the period. Contrast with End of Period
DiscounOng.
10
Monte Carlo Method — a staOsOcal technique that samples randomly from a probability-
distribuOon in order to produce different possible outcomes that simulate the various
sources of uncertainty that affect the value of a subject asset, business, or investment.
MulO-Period Excess Earnings Method — a method of esOmaOng the value of the primary
income-generaOng Intangible Asset within a group of assets, by calculaOng the Cash Flow
aPributable to that asset a?er deducOng Contributory Asset Charges. See also Excess
Earnings Method.
MulOple — a raOo calculated as the value of a business or security divided by Economic

Income or a non-financial metric. Also known as market mulOple, pricing mulOple, or
valuaOon raOo.
Net Asset Value — the difference between a business' total assets and liabiliOes restated at
a parOcular Standard of Value rather than accounOng book values.
Net Book Value — the difference between a business' total assets and liabiliOes at
accounOng book values (synonymous with book equity). With respect to a specific asset,
this is the original capitalized cost less accumulated amorOzaOon, depreciaOon, depleOon,
allowances, or impairment.
Net Cash Flow to Equity — Cash Flow available to equity holders a?er funding business
operaOons, paying taxes, making necessary capital investments, and servicing debt and
Debt Equivalents, Hybrid SecuriOes, and non-equity claims. See also Net Cash Flow to
Invested Capital. SomeOmes referred to as free cash flow to equity.
Net Cash Flow to Invested Capital — Cash Flow available to all security holders a?er
funding business operaOons, paying taxes, and making necessary capital investments. See
also Net Cash Flow to Equity. SomeOmes referred to as free cash flow to invested capital or
free cash flow to the firm.
Net Present Value — the value, as of a specified date, of future cash inflows less cash
ouNlows (including the cost of iniOal investment) calculated using a Discount Rate.
Nominal Cash Flows — Cash Flows that include the effects of inflaOon. Contrast with Real
Cash Flows.
Nominal Rate of Return — a Rate of Return that includes the effect of inflaOon. Contrast
with Real Rate of Return.
Noncontrolling Interest — an ownership interest that lacks Control of the business. Also
known as minority interest or minority shareholding.
NonoperaOng Assets — assets (or liabiliOes) not necessary to support the ongoing
operaOons of a business. SomeOmes referred to as redundant or surplus assets.
11
Normalized Earnings — Economic Income adjusted for extraordinary, nonrecurring,

noneconomic, or other unusual items in order to eliminate anomalies and facilitate
comparisons.
Normalizing Adjustments — adjustments to a business' financial statements for

NonoperaOng Assets and liabiliOes, and/or for extraordinary, nonrecurring, noneconomic,
or other unusual items in order to eliminate anomalies and facilitate comparisons.
OpOon Pricing Method — a forward-looking technique used to allocate value between

various equity classes with different economic rights, assuming various future outcomes.
The OpOon Pricing Method considers the current Equity Value and then allocates that value
to the various equity classes considering a conOnuous distribuOon of outcomes, rather than
focusing on disOnct future scenarios.
Orderly LiquidaOon Value — a form of LiquidaOon Value in which the asset or assets are
presumed to be sold over a reasonable period of market exposure to maximize expected
return. Contrast with Forced LiquidaOon Value.
Physical Obsolescence — a form of depreciaOon where the loss in value or usefulness of an

asset is due to the decrease or expiry in its life from wear and tear, deterioraOon, exposure
to various elements, physical stresses, and similar factors. See also Economic
Obsolescence, and FuncOonal Obsolescence.
PorNolio — an assemblage of various assets, investments, or liabiliOes.
PorNolio Discount — an amount or percentage deducted from the value of a business to

reflect its ownership of dissimilar operaOons or assets in a combinaOon that might not be
aPracOve to a potenOal buyer. Also known as conglomerate discount.
Post-Money Value — a business' implied aggregate value immediately following its most
recent round of financing. Contrast with Pre-Money Value.
Premise of Value — an assumpOon regarding the circumstances that may be applicable to

the subject valuaOon. See also Going Concern Value and LiquidaOon Value.
Pre-Money Value — a business' implied aggregate value immediately preceding its most
recent round of financing. Contrast with Post-Money Value.
Present Value — the value, as of a specified date, of expected Economic Income, calculated
using a Discount Rate. See also Net Present Value.
Price — the monetary or other consideraOon asked, offered, or paid for an asset, which
may be different from the value.
12
Prior TransacOon Method — a method within the Market Approach that uses previous
transacOons involving the subject business as an indicator of value. Also known as subject
company transacOon method or recent transacOon method.
Probability-Weighted Expected Return Method (PWERM) — a scenario-based technique

used to esOmate the value of an equity interest based on the probability-weighted present
value of various discrete future outcomes for the business (i.e., iniOal public offering, sale,
dissoluOon, or conOnued operaOon unOl a later exit date).
Purchase Price AllocaOon — a term commonly used to describe the process of allocaOng
the price paid in a business combinaOon among the assets acquired and liabiliOes assumed
of the target business, using a variety of methods.
Rate of Return — an amount, expressed as a percentage of the amount of the investment,

of anOcipated or realized Economic Income and/or change in value of an investment.
Real Cash Flows — Cash Flows that exclude the effect of inflaOon over Ome. Contrast with
Nominal Cash Flows.
Real Rate of Return — a Rate of Return that does not include the effect of inflaOon.
Contrast with Nominal Rate of Return.
Relief from Royalty Method — a method that esOmates the value of an Intangible Asset by
reference to the present value of the hypotheOcal royalty payments that are avoided by
owning the asset as compared with licensing it from a third party. Also known as royalty
savings method. See also Royalty.
Replacement Cost Method — a method under the Cost Approach that esOmates the value
of an asset by calculaOng the cost, as of the ValuaOon Date, to recreate the funcOonality or
uOlity of a similar asset. See also Cost Approach, and Replacement Cost New.
Replacement Cost New — the cost, as of the ValuaOon Date, of an idenOcal new asset or a
new asset having the equivalent uOlity to the subject asset. Also known as reproducOon
cost new.
Report Date – the date of issuance of a ValuaOon report. Contrast with ValuaOon Date.
Required Rate of Return — the minimum Rate of Return acceptable by investors before
they will commit money to an investment, given its level of risk.
Risk Premium — a Rate of Return added to a base rate (e.g., a Risk-Free Rate) to reflect the
incremental risk of an asset, business, or investment (e.g., Equity Risk Premium,
UnsystemaOc Risk premium, country risk premium, or size premium).
13
Risk-Free Rate — a Rate of Return available in the market on an investment perceived as

free of default risk.
Royalty — a payment (hypotheOcal or actual) made for the use of an asset, especially an
Intangible Asset or a natural resource. See also Relief from Royalty Method.
Salvage Value — the value of an asset at the end of its economic life given the purpose for
which the asset was created. The asset may sOll have value for an alternaOve use or for
recycling.
Scenario Analysis — the technique of modeling mulOple scenarios of possible future

Economic Income to derive expected value. See also Monte Carlo Method, OpOon Pricing
Method, and Probability-Weighted Expected Return Method (PWERM).
Simple Capital Structure — a Capital Structure that includes a single equity class and may
include debt or debt-like preferred securiOes. Contrast with Complex Capital Structure.
Standalone Value — the value of an asset, business, or investment esOmated without

consideraOons of potenOal Synergies.
Standard of Value — the definiOon of value used in a valuaOon (e.g., Fair Market Value,
Market Value, Fair Value, or Investment Value). The Standard of Value affects the
methods, inputs, and assumpOons used by the business valuaOon professional. Also known
as Basis of Value.
Synergies — the concept that the performance and value of two assets or businesses
combined will be greater than the sum of the separate individual parts, resulOng from the
expectaOon of economies of scale or post-acquisiOon benefits.
SynergisOc Value — the expected value resulOng from a combinaOon of two or more assets
or businesses, which is greater than the sum of the separate individual parts.
SystemaOc Risk — risk that is common to all risky securiOes and cannot be eliminated
through diversificaOon. Also known as market risk and non-diversifiable risk. Contrast with
UnsystemaOc Risk. See also Beta.
Tangible Asset — an asset that has physical form and derives value from its physical
properOes or tangible nature (e.g., real estate, property, plant, equipment). Contrast with
Intangible Asset.
Tax AmorOzaOon Benefit — the present value of income tax savings resulOng from the tax
deducOon generated by the amorOzaOon of an Intangible Asset.
Tax DepreciaOon Benefit — the present value of income tax savings resulOng from the tax
deducOon generated by the depreciaOon of a Tangible Asset.
14
Terminal Value — an esOmate of the value of Economic Income of a business beyond the
discrete forecast period in the Discounted Economic Income Method. Also known as
residual value or conOnuing value.
Unlevered Beta — a measure of Beta reflecOng a capital structure without debt. Also
known as asset beta. Contrast with Levered Beta.
Unlevered Cost of Capital — the expected Rate of Return that the market requires in order
to aPract funds to a parOcular investment, assuming an unlevered Capital Structure. See
also Weighted Average Cost of Capital.
UnsystemaOc Risk — risk specific to an individual security that can be eliminated through
diversificaOon. Also known as idiosyncraOc risk or diversifiable risk. Contrast with
SystemaOc Risk.
ValuaOon — the act or process of developing an opinion or conclusion of value at a

ValuaOon Date using a Premise of Value, a Standard of Value, and one or more ValuaOon
Approaches. Also known as Appraisal.
ValuaOon Approach — a general manner of esOmaOng a value that uses one or more
specific ValuaOon Methods. See also Cost Approach, Asset Approach, Income Approach,
and Market Approach.
ValuaOon Date — the specific point in Ome at which the conclusion of value applies. Also
known as EffecOve Date, Measurement Date, or date of value. Contrast with Report Date.
ValuaOon Method — within a ValuaOon Approach, a methodology used to esOmate value

(e.g., Discounted Cash Flow Method under the Income Approach).
ValuaOon Model — a tool used by business valuaOon professionals to esOmate the value of
an asset, business, or investment consisOng of a series of calculaOons involving the
applicaOon of ValuaOon Methods and the business valuaOon professional's informed
judgement.
Value in Exchange — the value of an asset or liability if sold in the open market. Contrast
with Value in Use.
Value in Use — the value of an asset, business, or investment in its current or conOnued
use. Also known as value in conOnued use, or exisOng use value. Contrast with Value in
Exchange.
Waterfall — the contractual allocaOons of Cash Flows, commonly resulOng from a liquidity
event (e.g., merger, acquisiOon, iniOal public offering), to the various ownership classes
15
(e.g., debt, preferred equity, common equity) in a business, reflecOng the economic rights
of each class.
Weighted Average Cost of Capital (WACC) — a measure of a business' overall Cost of

Capital in which the expected Rate of Return on each component of capital (e.g., debt,
equity) is weighted at market value based upon its relaOve proporOon of the Capital
Structure.
With and Without Method — a method used to esOmate the value of an asset by
comparing a scenario in which the business uses the asset and another scenario in which
the business does not use the asset, all other factors held constant. Also known as premium
profits method.
Working Capital — the amount of current assets minus current liabiliOes held in a business
for its day-to-day operaOonal needs. Also known as debt-free net working capital when all
or a porOon of cash and the current porOon of interest-bearing debt is excluded.
16
Glossary of AddiOonal Terms
Source: American InsOtute of CerOfied Public Accountants, Statement on Standards for

Valua4on Services.
AssumpOons and LimiOng CondiOons. Parameters and boundaries under which a

valuaOon is performed, as agreed upon by the valuaOon analyst and the client or as
acknowledged or understood by the valuaOon analyst and the client as being due to
exisOng circumstances. An example is the acceptance, without further verificaOon, by
the valuaOon analyst from the client of the client’s financial statements and related
informaOon.
Business Ownership Interest. A designated share in the ownership of a business (business

enterprise).
Calculated Value. An esOmate as to the value of a business, business ownership interest,

security, or intangible asset, arrived at by applying valuaOon procedures agreed upon
with the client and using professional judgment as to the value or range of values based
on those procedures.
CalculaOon Engagement. An engagement to esOmate value wherein the valuaOon analyst

and the client agree on the specific valuaOon approaches and valuaOon methods that
the valuaOon analyst will use and the extent of valuaOon procedures the valuaOon
analyst will perform to esOmate the value of a subject interest. A calculaOon
engagement generally does not include all of the valuaOon procedures required for a
valuaOon engagement. If a valuaOon engagement had been performed, the results
might have been different. The valuaOon analyst expresses the results of the calculaOon
engagement as a calculated value, which may be either a single amount or a range.
Capital or Contributory Asset Charge. A fair return on an enOty’s contributory assets,

which are tangible and intangible assets used in the producOon of income or cash flow
associated with an intangible asset being valued. In this context, income or cash flow
refers to an applicable measure of income or cash flow, such as net income, or
operaOng cash flow before taxes and capital expenditures. A capital charge may be
expressed as a percentage return on an economic rent associated with, or a profit split
related to, the contributory assets.
CapitalizaOon of Benefits Method. A method within the income approach whereby

expected future benefits (for example, earnings or cash flow) for a representaOve single
period are converted to value through division by a capitalizaOon rate.
Comparable Profits Method. A method of determining the value of intangible assets by

comparing the profits of the subject enOty with those of similar uncontrolled
17
companies that have the same or similar complement of intangible assets as the subject
company.
Comparable Uncontrolled TransacOon Method. A method of determining the value of

intangible assets by comparing the subject transacOon to similar transacOons in the
market place made between independent (uncontrolled) parOes.
Conclusion of Value. An esOmate of the value of a business, business ownership interest,

security, or intangible asset, arrived at by applying the valuaOon procedures appropriate
for a valuaOon engagement and using professional judgment as to the value or range of
values based on those procedures.
Control Adjustment. A valuaOon adjustment to financial statements to reflect the effect of

a controlling interest in a business. An example would be an adjustment to owners’
compensaOon that is in excess of market compensaOon.
Engagement to EsOmate Value. An engagement, or any part of an engagement (for

example, a tax, liOgaOon, or acquisiOon-related engagement), that involves determining
the value of a business, business ownership interest, security, or intangible asset. Also
known as valuaOon service.
Excess OperaOng Assets. OperaOng assets in excess of those needed for the normal
operaOon of a business.
Fair Value. In valuaOon applicaOons, there are two commonly used definiOons for fair
value:
(1) For financial reporOng purposes only, the price that would be received to sell
an asset or paid to transfer a liability in an orderly transacOon between
market parOcipants at the measurement date. Source: Financial AccounOng
Standards Board definiOon in Statement of Financial AccounOng Standards
(SFAS) No. 157, Fair Value Measurements, as used in the context of Generally
Accepted AccounOng Principles (GAAP) (EffecOve 2008).
(2) For state legal maPers only, some states have laws that use the term fair value in
shareholder and partner maPers. For state legal maPers only, therefore, the term
may be defined by statute or case law in the parOcular jurisdicOon.
Guideline Company TransacOons Method. A method within the market approach whereby
market mulOples are derived from the sales of enOre companies engaged in the same
or similar lines of business.
HypotheOcal CondiOon. That which is or may be contrary to what exists, but is supposed
for the purpose of analysis.
18
Incremental Income. AddiOonal income or cash flow aPributable to an enOty’s ownership

or operaOon of an intangible asset being valued, as determined by a comparison of the
enOty’s income or cash flow with the intangible asset to the enOty’s income or cash
flow without the intangible asset. In this context, income or cash flow refers to an
applicable measure of income or cash flow, such as license royalty income or operaOng
cash flow before taxes and capital expenditures.
NormalizaOon. See “Normalized Earnings” earlier in this Exhibit.
Pre-Adjustment Value. The value arrived at prior to the applicaOon, if appropriate, of

valuaOon discounts or premiums.
Profit Split Income. With respect to the valuaOon of an intangible asset of an enOty, a
percentage allocaOon of the enOty’s income or cash flow whereby (1) a split (or
percentage) is allocated to the subject intangible and (2) the remainder is allocated to
all of the enOty’s tangible and other intangible assets. In this context, income or cash
flow refers to an applicable measure of income or cash flow, such as net income or
operaOng cash flow before taxes and capital expenditures.
Relief from Royalty Method. A valuaOon method used to value certain intangible assets
(for example, trademarks and trade names) based on the premise that the only value
that a purchaser of the assets receives is the exempOon from paying a royalty for its
use. ApplicaOon of this method usually involves esOmaOng the fair market value of an
intangible asset by quanOfying the present value of the stream of market-derived
royalty payments that the owner of the intangible asset is exempted from or “relieved”
from paying.
Residual Income. For an enOty that owns or operates an intangible asset being valued, the
porOon of the enOty’s income or cash flow remaining a?er subtracOng a capital charge
on all of the enOty’s tangible and other intangible assets. Income or cash flows can refer
to any appropriate measure of income or cash flow, such as net income or operaOng
cash flow before taxes and capital expenditures.
Security. A cerOficate evidencing ownership or the rights to owner-ship in a business

enterprise that (1) is represented by an instrument or by a book record or contractual
agreement, (2) is of a type com-m only dealt in on securiOes exchanges or markets or,
when represented by an instrument, is commonly recognized in any area in which it is
issued or dealt in as a medium for investment, and (3) either one of a class or series or,
by its terms, is divisible into a class or series of shares, parOcipaOons, interests, rights,
or interest-bearing obligaOons.
Subject Interest. A business, business ownership interest, security, or intangible asset that
is the subject of a valuaOon engagement.
Subsequent Event. An event that occurs subsequent to the valuaOon date.
19
ValuaOon Analyst. For purposes of this Statement, an AICPA member who performs an
engagement to esOmate value that culminates in the expression of a conclusion of
value or a calculated value.
ValuaOon AssumpOons. Statements or inputs uOlized in the performance of an

engagement to esOmate value that serve as a basis for the applicaOon of parOcular
valuaOon methods.
ValuaOon Engagement. An engagement to esOmate value in which a valuaOon analyst

determines an esOmate of the value of a subject interest by performing appropriate
valuaOon procedures, as outlined in the AICPA Statement on Standards for ValuaOon
Services, and is free to apply the valuaOon approaches and methods he or she deems
appropriate in the circumstances. The valuaOon analyst expresses the results of the
valuaOon engagement as a conclusion of value, which may be either a single amount or
a range.
20
Exhibit A-3: QualificaIons of Michael A. Paschall, ASA, ABV, CFA, JD
Overview
Michael A. Paschall, ASA, ABV, CFA, JD, is a Managing Director of Banister Financial, Inc., a
CharloUe, NC, firm specializing in the valuaTon of privately-held corporaTons, partnerships, and
professional pracTces. ValuaTons are performed for giD and estate taxaTon, buy/sell agreements,
purchase or sale, shareholder disagreements, equitable distribuTon, employee stock ownership
plans, and other instances where an independent valuaTon is required. Since 1986, Paschall has
analyzed and valued hundreds of businesses in a wide variety of industries, ranging from small
companies and professional pracTces to large companies with mulT-state and internaTonal
operaTons.
Professional AssociaIon DesignaIons and Memberships
Accredited Senior Appraiser (ASA) in Business ValuaTon by the American Society of

Appraisers (ASA)
Accredited in Business ValuaTon (ABV) by the American InsTtute of CerTfied Public
Accountants (AICPA)
Chartered Financial Analyst (CFA) Charterholder
North Carolina State Bar, member (inacTve status)
North Carolina Bar AssociaTon, member
Estate Planning and Fiduciary Law SecTon
Family Law SecTon
Business Law SecTon
EducaIonal Background
University of North Carolina at Chapel Hill, B.A. in English and Economics

Wake Forest University School of Law, J.D.
AccreditaIon in Business ValuaIon
Accredited Senior Appraiser (ASA) in Business ValuaTon by the American Society of

Appraisers (ASA). CerTficaTon requirements include five years full Tme business valuaTon
experience, compleTon of required courses and examinaTons, and the submission of two wriUen
business valuaTon reports for review by the InternaTonal Board of Examiners. Periodic recerTficaTon
and conTnuing educaTon is required. The American Society of Appraisers is recognized by the IRS,
the courts, and major valuaTon firms as the leading cerTfying body of business appraisers.
Accredited in Business ValuaTon (ABV) by the American InsTtute of CerTfied Public

Accountants (AICPA). CerTficaTon as a qualified finance professional requires holding a bachelor's
degree or equivalent, compleTng the AICPA Code of Professional Conduct and Standards EducaTon
for Financial Professionals course, and meeTng a business experience threshold of a minimum of
4,500 hours of business valuaTon experience within the prior five years. Periodic recerTficaTon and
conTnuing educaTon is required.
1
CerIficaIon in Financial Analysis
Chartered Financial Analyst (CFA) Charterholder. Successfully completed three year program
tesTng skill, knowledge, and applicaTon of ethics and professional standards, financial accounTng,
microeconomics, macroeconomics, quanTtaTve analysis, capital market theory, equity security
analysis, fixed income security analysis, derivaTve security analysis, asset allocaTon, and porSolio
management.
Author of NaIonal Business ValuaIon Book
George B. Hawkins, ASA, ABV, CFA, and Michael A. Paschall, ASA, ABV, CFA, JD, both of
Banister Financial, Inc., are the co-authors of the Business ValuaIon Guide (first published in 1999,
twenty-first ediTon published in 2020). The publisher, Wolters Kluwer (formerly CCH, Incorporated,
and, prior to that, Commerce Clearinghouse), is one of the world’s largest legal, tax and accounTng
publishers. The Business ValuaIon Guide, which is marketed naTonally, provides comprehensive
treatment of complex business valuaTon issues facing aUorneys, accountants, investment banking
professionals, and closely held business owners. The publicaTon focuses on the areas of mergers and
acquisiTons, tax and estate planning, succession issues, family law, shareholder disputes and
liTgaTon.
NaIonal PosiIons in Business ValuaIon
Former Chairman of the Ethics CommiJee of the American Society of Appraisers. The Ethics
CommiUee invesTgates complaints against Members alleging conduct contrary to or in violaTon of
the ConsTtuTon of the American Society of Appraisers, the Bylaws of the American Society of
Appraisers, the Principles of Appraisal PracTce and Code of Ethics, the Uniform Standards of
Professional Appraisal PracTce, the InternaTonal ValuaTon Standards, or the Supplemental
Professional Standards. The Ethics CommiUee makes appropriate recommendaTons to the President
and Board of Governors of the American Society of Appraisers.
Former Member of the Tax Reform Task Force of the American Society of Appraisers. The Tax
Reform Task Force was established to study the impact on business valuaTon of the Tax Cuts and Jobs
Act that was signed into law on December 22, 2017. The Tax Reform Task Force addresses quesTons
posed by ASA members as to the impact of the new tax law on various business valuaTon issues.
Former Advisor of the InternaIonal Board of Examiners of the American Society of

Appraisers, Business ValuaTon SecTon. As a part of obtaining cerTficaTon from the American Society
of Appraisers, candidates must submit two wriUen valuaTon reports. One of approximately 30
Examiners iniTally grades the reports to determine if the reports meet the required business
valuaTon report standards for content, technical competence, and experTse. Once these reports
have been iniTally graded by an Examiner, they are then sent to one of four Advisors for final review
and the ulTmate acceptable/unacceptable determinaTon.
Former Examiner of the InternaIonal Board of Examiners of the American Society of

Appraisers, Business ValuaTon SecTon. As a part of obtaining cerTficaTon from the American Society
of Appraisers, candidates must submit two wriUen valuaTon reports. One of approximately 30
Examiners iniTally grades the reports to determine if the reports meet the required business
valuaTon report standards for content, technical competence, and experTse.
2
Court Appointments and Expert Witness MaJers
Prior QualificaTon as an Expert Witness in:

United States District Court
North Carolina Business Court
North Carolina Superior Court
North Carolina District Court
North Carolina binding arbitraTon and mediaTon proceedings
South Carolina binding arbitraTon and mediaTon proceedings
Swiss Chambers Court of ArbitraTon and MediaTon
Retained by the United States Department of JusTce to consult on various business valuaTon
issues.
Graduate-Level InstrucIon
Guest Lecturer, Law and ValuaIon, Wake Forest University School of Law and the Wake
Forest University Babcock Graduate School of Management.
Guest Lecturer, Merger & AcquisiIon Law, Wake Forest University School of Law.
Seminar PresentaIons: NaIonal Business ValuaIon Conferences
Advanced Business ValuaTon Conference of the American Society of Appraisers

NaTonal Business ValuaTon Conference of the American InsTtute of CerTfied Public
Accountants (AICPA)
NaTonal Trust Closely Held Business AssociaTon
NaIonal Teleconference PresentaIons
Business ValuaTon Resources Teleconference on Tax AffecTng.

Business ValuaTon Resources Teleconference on Reasonable CompensaTon.
Business ValuaTon Resources Teleconference on the Jelke Reversal.
Seminar PresentaIons: ConInuing EducaIon
Advanced Planning and DraDing Intensive Program, North Carolina Bar AssociaTon CLE
Advanced Equitable DistribuTon Seminar, North Carolina Bar AssociaTon CLE
Annual Estate Planning and Fiduciary Law Program, North Carolina Bar AssociaTon CLE
Joint Program of Business Law and Estate Planning, North Carolina Bar AssociaTon CLE
Family Law Intensive Seminar, North Carolina Bar AssociaTon CLE
American Academy of Matrimonial Lawyers (North and South Carolina secTons)
Mecklenburg County Bar, Annual Civil LiTgaTon Forum
Mecklenburg County Bar, LiTgaTng Business ValuaTon Disputes
Mecklenburg County Bar, Estate Planning SecTon
Mecklenburg County Bar, Family Law SecTon
CharloUe Estate Planning Council
The Estate Planning Council of Winston-Salem
Western Piedmont Estate Planning Council
Greenville, SC, Estate Planning Council
3
Sandhills Tax Roundtable

Land of the Sky Estate Planning Council
Kansas Society of CPAs Business ValuaTon Conference
Minnesota Society of CPAs Business ValuaTon Conference
Family Office EducaTon Series, EY
Metrolina Entrepreneurial Council’s Capital Access Conference
Business Law Society, Wake Forest University Law School
PublicaIons: Books
2020 Business ValuaIon Guide, Twenty-First EdiIon, co-authored with George B. Hawkins,
published by Wolters Kluwer (formerly CCH Incorporated).
PublicaIons: Editorships
CCH Business ValuaIon Alert (published from 1999-2015) co-editor with George B. Hawkins,
published by Wolters Kluwer (formerly CCH Incorporated).
Fair Value, co-editor with George B. Hawkins since 1994, published by Banister Financial, Inc.
PublicaIons: Periodicals
“The 35% ‘Standard’ Marketability Discount: R.I.P.” CCH Business ValuaIon Alert, Vol. 6, Issue
No. 2, February 2005, published by CCH Incorporated.

“Back to the Future!” Business ValuaIon Review, Vol. 21, No. 2, June 2002, published by the
Business ValuaTon CommiUee of the American Society of Appraisers.
“Back to the Future, Part II” Business ValuaIon Review, Vol. 27, No. 3, Fall 2008, published by
the Business ValuaTon CommiUee of the American Society of Appraisers.
“'Breaking Bad' in the Business ValuaTon Profession” Business ValuaIon Update, Vol. 24, No.
7, July 2018, published Business ValuaTon Resources, LLC.
“Business appraisers and allegaTons of accounTng fraud” Judges & Lawyers Business
ValuaIon Update, Vol. 3, Issue 9, September 2001, published by Business ValuaTon
Resources, LLC (co-authored with George B. Hawkins).
“Business Appraisers and AllegaTons of AccounTng Fraud” The ValuaIon CompilaIon, Vol.
VIII, Fall 2002, published by the NaTonal AssociaTon of CerTfied ValuaTon Analysts (co-
authored with George B. Hawkins).
“'CalculaTon Engagements: STll Broken, STll Bad” Business ValuaIon Update, Vol. 25, No. 2,
February 2019, published Business ValuaTon Resources, LLC.
“Daubert, We Hardly Knew Ye” Fair Value, Vol. 13, No. 1, Summer 2004, published by Banister
Financial, Inc.
4
“A DeclaraTon of Independence” CCH Business ValuaIon Alert, Vol. 3, Issue No. 2, January
2002, published by CCH Incorporated.
“Determining the Appropriate Discount for Your FLP” The Will and the Way, Vol. 17, No. 4,
June/July 1998, published by the Estate Planning & Fiduciary Law SecTon of the N.C. Bar
AssociaTon.
“DiscounTng for Built-In Capital Gains in LLCs, Partnerships and S CorporaTons” The Will and
the Way, Vol. 22, No. 4, June 2003, published by the Estate Planning & Fiduciary Law
SecTon of the N.C. Bar AssociaTon.
“Do Smaller Companies Warrant a Higher Discount Rate for Risk?” CCH Business ValuaIon
Alert, Vol. 1, Issue No. 2, December 1999, published by CCH Incorporated (co-authored
with George B. Hawkins).
“The Forest and the Tree” Fair Value, Vol. 22, No. 1, Spring/Summer 2017, published by
Banister Financial, Inc.
“A Fountain Run Dry Equals Missed Opportunity” Family Forum, Vol. 23, No. 2, February
2003, published by the North Carolina Bar AssociaTon’s Family Law SecTon.
“A gross result in the Gross Case: All Your Prior S CorporaTon ValuaTons Are Invalid” Business
ValuaIon Review, Vol. 21, No. 1, March 2002, published by the Business ValuaTon
CommiUee of the American Society of Appraisers (co-authored with George B. Hawkins).
“A gross result in the Gross case calls into quesTon circumstances in which tax affecTng is
valid” Shannon PraJ’s Business ValuaIon Update, Vol. 8, No. 1, January 2002, published
by Business ValuaTon Resources, LLC (co-authored with George B. Hawkins).
“Hambsters” Fair Value, Vol. 15, No. 1, Spring 2006, published by Banister Financial, Inc.
“IdenTcal Twins? Not in Equitable DistribuTon” American Journal of Family Law, Vol. 20, No.
1, Spring 2006, published by Aspen Publishers, Inc.
“IdenTcal Twins? Not in Equitable DistribuTon” CCH Business ValuaIon Alert, Vol. 6, Issue
No. 4, July 2005, published by CCH Incorporated.
“Important Business ValuaTon Developments” The Will and the Way, Vol. 21, No. 2, February
2002, published by the Estate Planning & Fiduciary Law SecTon of the N.C. Bar
AssociaTon (co-authored with George B. Hawkins).
“The IRS Does Not Like Your Marketability Discount” Fair Value, Vol. 20, No. 2, Summer/Fall
2013, published by Banister Financial, Inc.
“Is the JusTficaTon of Purchase Test Always JusTfied?” CCH Business ValuaIon Alert, Vol. 1,
Issue No. 3, February 2000, published by CCH Incorporated (co-authored with George B.
Hawkins and Gary S. Parker).
5
“Jointly-Retained Business ValuaTons in Disputes” ValuaIon Strategies, Vol. 5, No. 3,

January/February 2002, published by Warren, Gorham & Lamont, a division of RIA (co-
authored with George B. Hawkins).
“Jointly-Retained Business ValuaTons in Disputes – Making Sure the Process Works” Business
ValuaIon Digest, Vol. 7, Issue 2, November 2001, published by The Canadian InsTtute of
Chartered Business Valuators (co-authored with George B. Hawkins).
“Jointly-Retained Business ValuaTons in Matrimonial Disputes” American Journal of Family

Law, Vol. 16, No. 1, Spring 2002, published by Aspen Publishers, Inc. (co-authored with
George B. Hawkins).
“Kick the Habit: The Excess Earnings Method Must Go!” Business ValuaIon Review, Vol. 20,
No. 3, September 2001, published by the Business ValuaTon CommiUee of the American
Society of Appraisers.
“Kick the Habit: The Excess Earnings Method Must Go!” Family Forum, Vol. 22, No. 5, June
“Marketability Discounts - Is New Really BeUer?” Fair Value, Vol. 19, No. 1, Fall 2009,
published by Banister Financial, Inc.
“Moore is BeUer!” Fair Value, Vol. 21, No. 1, Spring/Summer 2016, published by Banister
Financial, Inc.
“Namby Pamby Hamby” Fair Value, Vol. 12, No. 1, Winter/Spring 2003, published by Banister
Financial, Inc.
“New Regs Defuse GiD Tax Return ValuaTon Time Bomb” CCH Business ValuaIon Alert, Vol.
1, Issue No. 4, April 2000, published by CCH Incorporated.
“Pass-through enTty discounts for built-in capital gains taxes” Shannon PraJ’s Business
ValuaIon Update, Vol. 10, No. 5, May 2004, published by Business ValuaTon Resources,
LLC.
“Premium for VoTng Stock in Simplot: A ReflecTon of the Real World?” CCH Business
ValuaIon Alert, Vol. 1, Issue No. 1, October 1999, published by CCH Incorporated.
“'Rohling the Dice with a CalculaTon Engagement” Business ValuaIon Update, Vol. 25, No.
11, November 2019, published Business ValuaTon Resources, LLC.
“The SelecTve 'Expert'” CCH Business ValuaIon Alert, Vol. 14, Issue No. 3, July 2013,
published by CCH Incorporated (co-authored with George B. Hawkins).
“Some ObservaTons on Tax-AffecTng” Business ValuaIon Review, Vol. 24, No. 1, March 2005,
published by the Business ValuaTon CommiUee of the American Society of Appraisers.

“Value Stock OpTons for Divorce and Estate Planning” Family Forum, Vol. 21, Number 4, April
6
PublicaIons: ContribuIng Author
BVR's Guide to Business ValuaIon Issues in Estate and Gi; Tax , published 2010, by Business
ValuaTon Resources, LLC.
PublicaIons: Technical Review
Technical Reviewer for Fannon’s Guide to the ValuaIon of Subchapter S CorporaIons,

published 2008, by Nancy J. Fannon, ASA, MCBA, CPA, ABV, BVAL, published by Business
ValuaTon Resources, LLC.
Contact InformaIon
Banister Financial, Inc.

1338 Harding Place, Suite 200
CharloUe, NC 28204
Phone: (704) 334-1625
Website: www.businessvalue.com
E-mail: mpaschall@businessvalue.com
7
Exhibit B-1: Discount for Lack of Marketability
1. Overview
The interest at issue here represents a controlling interest in an enLty whose interests
are not registered for public sale and could warrant some discount for lack of marketability from
the “as if freely traded” value determined earlier. Were this a valuaLon of a non-controlling
interest, we would go into a detailed analysis of the numerous studies made to esLmate the
lack of marketability associated with non-controlling interests in privately-held enLLes. These
works include studies by Maher, Moroney, Silber, Baird, Gelman, the SecuriLes and Exchange
Commission (SEC), Management Planning, Emory and others. These studies (both the restricted
stock approach as well as the iniLal public offering approach) are based on very small minority
interests. Because the interest at issue in this report is a controlling interest, we did not
undergo the analysis of the non-controlling interest studies.
Even an owner of a controlling interest in a privately-held enLty may not be able to

quickly convert the controlling interest into cash as compared to an owner of a publicly-traded
stock who can obtain liquidity for his or her shares in a maMer of days. As noted by the U.S. Tax
Court: “Even controlling shares in a nonpublic corporaLon suffer from lack of marketability
because of the absence of a ready private placement market and the fact that floataLon costs
would have to be incurred if the corporaLon were to publicly offer its stock.” An owner owning
a controlling interest in a closely-held enLty who wishes to liquidate that interest faces a
number of transacLonal consideraLons:
1. Uncertain Lme horizon to complete offering or sale.

2. Cost to prepare for and execute offering or sale.
3. Risk as to eventual price.
4. Form of transacLon proceeds (may not be all cash).
5. Inability to hypothecate (i.e., cannot use as collateral).
6. Investment banker or brokerage fees.
There is some debate within the valuaLon community about whether or not a
controlling interest should be discounted for a lack of marketability at all. Even though the
shares, units, or ownership interest of the enLty may be illiquid, some valuaLon professionals
maintain that the controlling owner is compensated for this illiquidity by realizing the full effect
and return of the cash flow while waiLng to find a buyer. Other valuaLon professionals argue
that even if this is true, the Lme, uncertainty, and costs incurred in finding a buyer represent
illiquidity that is different from being able to immediately convert the shares, units, or
ownership interest to cash.
1
2. Analysis of Study Data
One proxy of the cost of marketability of an enLre enLty is the cost of a public offering.
This is something of a misnomer also, since most underwriLng of public stock offerings do not
usually allow 100% of the present ownership to immediately cash out of the shares due to the
potenLal negaLve signal this may send to investors. AddiLonally, in taking a company public,
the exisLng shareholder usually receives shares that are restricted from public sale for some
period of Lme. Nonetheless, this type of study yields useful informaLon. In a study by the
SecuriLes and Exchange Commission, the following flotaLon costs were found:
Cost of FlotaEon 1
Size of Number Other Total

Issue of Issues Comp. Expense Expense
Under $0.5 43 13.24% 10.35% 23.59%

$0.5 to $0.99 227 12.48% 8.26% 20.74%
$1 to $1.99 271 10.60% 5.87% 16.47%
$2 to $4.99 450 8.19% 3.71% 11.90%
$5 to $9.99 287 6.70% 2.03% 8.73%
$10 to $19.99 170 5.52% 1.11% 6.63%
$20 to $49.99 109 4.41% 0.62% 5.03%
$50 to $99.99 30 3.94% 0.31% 4.25%
$100 to $499.99 12 3.03% 0.16% 3.19%
$500 and over 0 NA NA NA
1
Source: Cost of Flota8on of Registered Issues 1971-72 (Washington, D.C.: SecuriLes
and Exchange Commission, 1974), p. 9. as reprinted in Valuing a Business (third
ediLon, p. 352). Size of issue in millions.
A later study by Jay RiMer also examined the direct expenses of going public as a
percentage of gross proceeds. That study is reproduced as follows:
2
Direct Expense of Going Public as a Percentage of Gross Proceeds 1
Gross Proceeds # of Underwrt. Other Total

(millions) Offers Discount Expenses Expenses
Firm Commitment Offers

$0.1 to $1.99 68 9.84% 9.64% 19.48%
$2 to $3.99 165 9.83% 7.60% 17.43%
$4 to $5.99 133 9.10% 5.67% 14.77%
$6 to $9.99 122 8.03% 4.31% 12.34%
$10 and over 176 7.24% 2.10% 9.34%
All Offers 664 8.67% 5.36% 14.03%
Best Effort Offers

$0.1 to $1.99 175 10.63% 9.52% 20.15%
$2 to $3.99 146 10.00% 6.21% 16.21%
$4 to $5.99 23 9.86% 3.71% 13.57%
$6 to $9.99 15 9.80% 3.42% 13.22%
$10 and over 5 8.03% 2.40% 10.43%
All Offers 364 10.26% 7.48% 17.74%
1
Source: Jay R. RiMer, “The Costs of Going Public,” Journal of Financial Economics, January 1987, p.
272, as reprinted in Valuing a Business (third ediLon, p. 353). Period is for 1977 to 1982.
The RiMer study concludes that larger companies generally negoLate lower underwriLng
fees, as a percent of IPO gross proceeds. A later (2000) study by RiMer and Hsuan-Chi Chen
examined the underwriter price discount (commission) from 3,203 firm commitment IPOs from
January 1985 to December 1998. The transacLons all had domesLc gross proceeds of at least
$20 million. RiMer and Chen concluded that a significant number of IPOs (60% of all IPOs from
1988 to 1994 and 77% from 1995 through 1998) were completed with an underwriter price
discount of exactly 7%.
A more recent study by Ashok Abbot of IPO data compiled in the SecuriLes Data
CorporaLon (SDC) PlaLnum database examined the costs involved in an iniLal public offering
(IPO) based upon ten years of data (1993 through 2003) and 7,824 IPOs. This study found an
average cost of 6% as a percentage of IPO proceeds with the average cost increasing as the
market capitalizaLon of the offering decreased. The trimmed minimum (excluding the lowest
5% results) discount observed was 0.42% and the trimmed maximum (excluding the highest 5%
results) discount observed was 11.2%.
The above factors were considered in the determinaLon of the discount for lack of
marketability for the controlling interest at issue in this report. The selecLon and applicaLon of
this adjustment is contained in the narraLve of this report.
3
Exhibit C-1: Balance Sheet (Common Size)
King Financial CorporaMon
AccounMng Basis: Cash Cash Cash Cash Cash Cash Cash

Statement Date: 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21
Months in Period: 12 % of 12 % of 12 % of 12 % of 12 % of 12 % of 12 % of
Accountant: self prepared Total self prepared Total self prepared Total self prepared Total self prepared Total self prepared Total The Acctg Grp Total
Statement Type: Tax Return Assets Tax Return Assets Tax Return Assets Tax Return Assets Tax Return Assets Tax Return Assets Tax Return Assets
Current Assets
Cash $2,474 5.2% $9,853 17.9% $859 1.5% $732 0.9% $3,012 3.7% $351 0.5% $3,050 3.7%
Accounts Receivable $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
Inventory $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
Total Current Assets $2,474 5.2% $9,853 17.9% $859 1.5% $732 0.9% $3,012 3.7% $351 0.5% $3,050 3.7%
Fixed Assets
Gross Fixed Assets $75,216 158.1% $75,216 136.9% $75,216 132.9% $107,260 133.7% $107,260 130.0% $90,538 121.3% $90,538 110.0%
Gross Fixed Assets $75,216 158.1% $75,216 136.9% $75,216 132.9% $107,260 133.7% $107,260 130.0% $90,538 121.3% $90,538 110.0%
Accumulated DepreciaKon ($74,295) (156.2%) ($74,295) (135.2%) ($74,295) (131.3%) ($107,260) (133.7%) ($107,260) (130.0%) ($90,538) (121.3%) ($90,538) (110.0%)
Net Fixed Assets $921 1.9% $921 1.7% $921 1.6% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
Other Assets
Loans to Shareholders $44,181 92.9% $44,181 80.4% $54,825 96.9% $79,487 99.1% $79,487 96.3% $74,287 99.5% $79,287 96.3%
Intangible Assets (Net) $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
Total Other Assets $44,181 92.9% $44,181 80.4% $54,825 96.9% $79,487 99.1% $79,487 96.3% $74,287 99.5% $79,287 96.3%
TOTAL ASSETS $47,576 100.0% $54,955 100.0% $56,605 100.0% $80,219 100.0% $82,499 100.0% $74,638 100.0% $82,337 100.0%
Dollar amounts actual. Totals may not equal 100.0% exactly due to rounding. Banister Financial cannot verify or validate the accuracy of this informaKon.
Exhibit C-2: Balance Sheet (Common Size)

Statement Date: 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21
Statement Type: Tax Return Assets Tax Return Assets Tax Return Assets Tax Return Assets Tax Return Assets Tax Return Assets Tax Return Assets
Current LiabiliMes
Accounts Payable $0 0.0% $4,655 8.5% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
ST Notes Payable $9,828 20.7% $0 0.0% $0 0.0% $0 0.0% $6,656 8.1% $13,811 18.5% $29,505 35.8%
Total Current LiabiliMes $9,828 20.7% $4,655 8.5% $0 0.0% $0 0.0% $6,656 8.1% $13,811 18.5% $29,505 35.8%
Long-Term LiabiliMes
Long Term LiabiliKes $0 0.0% $0 0.0% $0 0.0% $80,119 99.9% $69,464 84.2% $60,395 80.9% $52,052 63.2%
Total Long Term LiabiliMes $0 0.0% $0 0.0% $0 0.0% $80,119 99.9% $69,464 84.2% $60,395 80.9% $52,052 63.2%
TOTAL LIABILITIES $9,828 20.7% $4,655 8.5% $0 0.0% $80,119 99.9% $76,120 92.3% $74,206 99.4% $81,557 99.0%
Capital Stock $100 0.2% $100 0.2% $100 0.2% $100 0.1% $100 0.1% $100 0.1% $100 0.1%
Retained Earnings $37,648 79.1% $50,200 91.3% $56,505 99.8% $0 0.0% $6,279 7.6% $332 0.4% $680 0.8%
TOTAL EQUITY $37,748 79.3% $50,300 91.5% $56,605 100.0% $100 0.1% $6,379 7.7% $432 0.5% $780 0.9%
TOTAL LIABILITIES + EQUITY $47,576 100.0% $54,955 100.0% $56,605 100.0% $80,219 100.0% $82,499 100.0% $74,638 99.9% $82,337 99.9%
Common Shares Outstanding 0 0 0 0 0 0 0
Interest-Bearing Debt (memo) $9,828 20.7% $0 0.0% $0 0.0% $80,119 99.9% $76,120 92.3% $74,206 99.4% $81,557 99.1%
Dollar amounts actual. Totals may not equal 100.0% exactly due to rounding. Banister Financial cannot verify or validate the accuracy of this informaKon.
Exhibit C-3: Income Statement (Common Size)

Statement Date: 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21
Statement Type: Tax Return Revs Tax Return Revs Tax Return Revs Tax Return Revs Tax Return Revs Tax Return Revs Tax Return Revs
Total Revenues $329,360 100.0% $411,698 100.0% $368,330 100.0% $414,043 100.0% $419,548 100.0% $410,767 100.0% $421,456 100.0%
OperaMng Expenses
Officers CompensaKon $117,434 35.7% $131,190 31.9% $108,000 29.3% $113,100 27.3% $117,600 28.0% $150,167 36.6% $150,833 35.8%
Salaries and Wages $27,692 8.4% $36,156 8.8% $47,524 12.9% $65,723 15.9% $50,328 12.0% $32,502 7.9% $25,010 5.9%
Repairs and Maintenance $286 0.1% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
Rent Expense $27,400 8.3% $23,500 5.7% $26,800 7.3% $16,516 4.0% $0 0.0% $10,000 2.4% $5,000 1.2%
Taxes and Licenses $11,347 3.4% $13,094 3.2% $12,870 3.5% $14,394 3.5% $13,746 3.3% $14,528 3.5% $16,537 3.9%
AdverKsing $3,245 1.0% $9,729 2.4% $3,472 0.9% $11,192 2.7% $5,557 1.3% $2,510 0.6% $8,604 2.0%
Pension/Profit-Sharing Plans $4,488 1.4% $5,253 1.3% $3,417 0.9% $4,473 1.1% $4,390 1.0% $3,579 0.9% $1,000 0.2%
Employee Benefit Programs $7,280 2.2% $7,720 1.9% $6,780 1.8% $5,280 1.3% $5,280 1.3% $5,280 1.3% $5,280 1.3%
AccounKng $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $13,000 3.1%
Automobile/Truck Expense $5,947 1.8% $2,719 0.7% $4,530 1.2% $6,436 1.6% $8,400 2.0% $13,905 3.4% $7,839 1.9%
Bank Charges $232 0.1% $429 0.1% $419 0.1% $1,064 0.3% $2,076 0.5% $2,099 0.5% $2,156 0.5%
Commissions $11,451 3.5% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
Computer Service/Supplies $925 0.3% $5,558 1.4% $1,412 0.4% $395 0.1% $642 0.2% $871 0.2% $1,959 0.5%
Dues and SubscripKons $4,975 1.5% $4,979 1.2% $5,983 1.6% $7,328 1.8% $5,402 1.3% $9,877 2.4% $10,124 2.4%
Equipment Rental $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $2,794 0.7%
Insurance $0 0.0% $4,905 1.2% $5,994 1.6% $5,561 1.3% $1,204 0.3% $1,166 0.3% $2,738 0.6%
Legal and Professional $428 0.1% $11,297 2.7% $11,485 3.1% $5,590 1.4% $6,181 1.5% $4,190 1.0% $0 0.0%
Meals and Entertainment $18,907 5.7% $12,157 3.0% $16,647 4.5% $16,077 3.9% $21,136 5.0% $6,393 1.6% $6,127 1.5%
Miscellaneous Expense $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $313 0.1%
Office Expense $1,048 0.3% $2,246 0.5% $722 0.2% $244 0.1% $880 0.2% $1,754 0.4% $731 0.2%
Outside Services/Indep Contractors $3,000 0.9% $15,244 3.7% $16,236 4.4% $17,807 4.3% $8,149 1.9% $12,169 3.0% $23,127 5.5%
Postage $962 0.3% $996 0.2% $959 0.3% $1,371 0.3% $1,355 0.3% $532 0.1% $827 0.2%
PrinKng $73 0.0% $0 0.0% $0 0.0% $436 0.1% $0 0.0% $0 0.0% $9,523 2.3%
Security $702 0.2% $773 0.2% $752 0.2% $793 0.2% $836 0.2% $318 0.1% $0 0.0%
Supplies $5,351 1.6% $6,913 1.7% $7,560 2.1% $2,967 0.7% $2,370 0.6% $617 0.2% $1,024 0.2%
Telephone $5,051 1.5% $6,819 1.7% $5,820 1.6% $5,410 1.3% $6,631 1.6% $9,271 2.3% $8,353 2.0%
Tools $0 0.0% $0 0.0% $0 0.0% $3,097 0.7% $2,454 0.6% $2,667 0.6% $0 0.0%
Training/ConKnuing EducaKon $112 0.0% $223 0.1% $0 0.0% $626 0.2% $19 0.0% $280 0.1% $286 0.1%
Travel $4,516 1.4% $4,501 1.1% $3,856 1.0% $11,140 2.7% $3,081 0.7% $1,344 0.3% $515 0.1%
Payroll AdministraKon Fees $675 0.2% $705 0.2% $820 0.2% $723 0.2% $713 0.2% $1,025 0.2% $0 0.0%
401(k) AdministraKon Fee $900 0.3% $500 0.1% $500 0.1% $375 0.1% $500 0.1% $500 0.1% $125 0.0%
Account Analysis Fee $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $660 0.2%
Post Office Box Rental $0 0.0% $0 0.0% $0 0.0% $0 0.0% $234 0.1% $254 0.1% $161 0.0%
DepreciaKon $34 0.0% $0 0.0% $0 0.0% $39,292 9.5% $0 0.0% $1,428 0.3% $0 0.0%
SecKon 179 Expense $0 0.0% $0 0.0% $0 0.0% $27,236 6.6% $0 0.0% $0 0.0% $0 0.0%
AmorKzaKon $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
Total OperaMng Expenses $264,461 80.2% $307,606 75.0% $292,558 79.2% $384,646 93.2% $269,164 64.2% $289,226 70.4% $304,646 72.4%
Dollar amounts actual. Banister Financial cannot verify or validate the accuracy of this informaKon.
Exhibit C-3: Income Statement (Common Size)

Statement Date: 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21
Statement Type: Tax Return Revs Tax Return Revs Tax Return Revs Tax Return Revs Tax Return Revs Tax Return Revs Tax Return Revs
OperaMng Profit $64,899 19.8% $104,092 25.0% $75,772 20.8% $29,397 6.8% $150,384 35.8% $121,541 29.6% $116,810 27.6%
Other Income (Expense)

Interest Expense ($514) (0.2%) ($442) (0.1%) ($132) 0.0% ($445) (0.1%) ($3,696) (0.9%) ($3,100) (0.8%) ($183) 0.0%
Interest Income $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $2,000 0.5% $0 0.0%
Charitable ContribuKons ($6,025) (1.8%) ($12,776) (3.1%) ($5,749) (1.6%) ($9,269) (2.2%) ($4,937) (1.2%) ($2,150) (0.5%) ($2,160) (0.5%)
Other Income (Expense) $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0%
Total Other Income (Expense) ($6,539) (2.0%) ($13,218) (3.2%) ($5,881) (1.6%) ($9,714) (2.3%) ($8,633) (2.1%) ($3,250) (0.8%) ($2,343) (0.5%)
Pre-tax Profit $58,360 17.8% $90,874 21.8% $69,891 19.2% $19,683 4.5% $141,751 33.7% $118,291 28.8% $114,467 27.1%
EBIT $58,874 17.9% $91,316 22.2% $70,023 19.0% $20,128 4.9% $145,447 34.7% $121,391 29.6% $114,650 27.2%
EBITDA $58,908 17.9% $91,316 22.2% $70,023 19.0% $86,656 20.9% $145,447 34.7% $122,819 29.9% $114,650 27.2%
Capital Expenditures (memo) NR NR NR NR NR NR NR
Change in Stockholder Equity

Beginning Stockholder Equity $8,026 $37,748 $50,300 $56,605 $100 $6,379 $432
Add: Net Profit $58,360 $90,874 $69,891 $19,683 $141,751 $118,291 $114,467
Less: DistribuKons ($28,638) ($78,322) ($63,586) ($66,188) ($135,472) ($124,238) ($114,119)
Tax/Book Timing Differences $0 $0 $0 ($10,000) $0 $0 $0
Other Adjustments $0 $0 $0 $0 $0 $0 $0
Ending Stockholder Equity $37,748 $50,300 $56,605 $100 $6,379 $432 $780
Exhibit C-4: Financial RaMos

Statement Date: 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21
Months in Period: 12 12 12 12 12 12 12
Accountant: self prepared self prepared self prepared self prepared self prepared self prepared The Acctg Grp
Statement Type: Tax Return Tax Return Tax Return Tax Return Tax Return Tax Return Tax Return
LIQUIDITY
Working Capital ($7,354) $5,198 $859 $732 ($3,644) ($13,460) ($26,455)
Current RaKo 0.3 2.1 NA NA 0.5 0.0 0.1
Quick RaKo 0.3 2.1 NA NA 0.5 0.0 0.1
Sales to Working Capital (44.8) 79.2 428.8 565.6 (115.1) (30.5) (15.9)
ACTIVITY
Accounts Receivable Days NA NA NA NA NA NA NA
Accounts Receivable Turnover NA NA NA NA NA NA NA
Inventory Days NA NA NA NA NA NA NA
Inventory Turnover NA NA NA NA NA NA NA
Accounts Payable Days NA NA NA NA NA NA NA
Accounts Payable Turnover NA NA NA NA NA NA NA
OperaKng Cycle NA NA NA NA NA NA NA
LEVERAGE
Interest-Bearing Debt $9,828 $0 $0 $80,119 $76,120 $74,206 $81,557
Total LiabiliKes $9,828 $4,655 $0 $80,119 $76,120 $74,206 $81,557
Tangible Net Worth $37,748 $50,300 $56,605 $100 $6,379 $432 $780
Debt to Tangible Worth 0.3 0.1 0.0 801.2 11.9 171.8 104.6
EBIT/Interest Expense 114.5 206.6 530.5 45.2 39.4 39.2 626.5
EFFICIENCY
Sales to Total Assets 6.9 7.5 6.5 5.2 5.1 5.5 5.1
Sales to Net Fixed Assets NA NA NA NA NA NA NA
PROFITABILITY
Pre-tax Return on Tang. Assets 122.7% 165.4% 123.5% 24.5% 171.8% 158.5% 139.0%
Pre-tax Return on Tang. Equity 154.6% 180.7% 123.5% 19,683.0% 2,222.2% 27,382.2% 14,675.3%
GROWTH
Sales Growth 25.0% (10.5%) 12.4% 1.3% (2.1%) 2.6%
Gross Profit Growth NA NA NA NA NA NA
OperaKng Profit Growth 60.4% (27.2%) (61.2%) 411.6% (19.2%) (3.9%)
Pre-tax Profit Growth 55.7% (23.1%) (71.8%) 620.2% (16.6%) (3.2%)
Total Assets Growth 15.5% 3.0% 41.7% 2.8% (9.5%) 10.3%
Exhibit C-5: Adjustments to Reported Financial Results
Note 2015 2016 2017 2018 2019 2020 2021
Reported Revenues $329,360 $411,698 $368,330 $414,043 $419,548 $410,767 $421,456
Reported OperaEng Expenses $264,461 $307,606 $292,558 $384,646 $269,164 $289,226 $304,646
Less: Brian King CompensaEon 1 ($117,434) ($131,190) ($108,000) ($113,100) ($117,600) ($150,167) ($150,833)
Add: Market Comp CEO 1 $142,853 $147,139 $151,553 $156,100 $160,783 $165,606 $170,574
Less: Kara King CompensaEon 2 ($9,221) ($16,082) ($16,082) ($24,581) ($28,080) ($8,190) $0
Less: Actual Rent Expense 3 ($27,400) ($23,500) ($26,800) ($16,516) $0 ($10,000) ($5,000)
Add: Market Rent Expense 3 $20,292 $20,292 $20,292 $20,292 $20,292 $20,292 $20,292
Less: Vehicle DepreciaEon Expense 4 $0 $0 $0 ($39,292) $0 $0 $0
Less: Vehicle SecEon 179 Expense 4 $0 $0 $0 ($25,000) $0 $0 $0
Adjusted OperaEng Expenses $273,551 $304,265 $313,521 $342,549 $304,559 $306,767 $339,679
Adjusted Op Exp Margin 83.1% 73.9% 85.1% 82.7% 72.6% 74.7% 80.6%
Adjusted OperaEng Profit $55,809 $107,433 $54,809 $71,494 $114,989 $104,000 $81,777
Adjusted Opera:ng Profit Margin 16.9% 26.1% 14.9% 17.3% 27.4% 25.3% 19.4%
Reported Other Income (Expense) ($6,539) ($13,218) ($5,881) ($9,714) ($8,633) ($3,250) ($2,343)
Add: Interest Expense 5 $514 $442 $132 $445 $3,696 $3,100 $183
Less: Interest Income 6 $0 $0 $0 $0 $0 ($2,000) $0
Add: Charitable ContribuEons 7 $6,025 $12,776 $5,749 $9,269 $4,937 $2,150 $2,160
Adjusted Other Income (Expense) $0 $0 $0 $0 $0 $0 $0

Adjusted Other Inc (Exp) Margin 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted Pre-tax Profit $55,809 $107,433 $54,809 $71,494 $114,989 $104,000 $81,777
Adjusted Pre-tax Profit Margin 16.9% 26.1% 14.9% 17.3% 27.4% 25.3% 19.4%
Adjusted Interest Expense $0 $0 $0 $0 $0 $0 $0

Adjusted Interest Coverage NM NM NM NM NM NM NM
Adjusted EBIT $55,809 $107,433 $54,809 $71,494 $114,989 $104,000 $81,777

Adjusted EBIT Margin 16.9% 26.1% 14.9% 17.3% 27.4% 25.3% 19.4%
Reported DepreciaEon 4 $0 $0 $0 $39,292 $0 $0 $0

Reported SecEon 179 Expense 4 $0 $0 $0 $27,236 $0 $1,428 $0
Adjusted DepreciaEon 4 $0 $0 $0 ($64,292) $0 $0 $0
Total Non-Cash Expense 4 $0 $0 $0 $2,236 $0 $1,428 $0
Adjusted EBITDA $55,809 $107,433 $54,809 $73,730 $114,989 $105,428 $81,777

Adjusted EBITDA Margin 16.9% 26.1% 14.9% 17.8% 27.4% 25.7% 19.4%
Based on unaudited financial statements and conversaEons with Management.

Adjustments made to the Company’s financial statements include the following:
1. Owner CompensaAon: Brian King. The Company's sole owner, Brian King, was
compensated by the Company each year over the 2015-2021 period. As such, the
actual compensaQon amounts of Mr. King was subtracted from the reported operaQng
expenses and a market rate of compensaQon for the managerial duQes provided to
the Company by Mr. King was added back.
For valuaQon purposes, it is necessary to compare Mr. King's actual total

compensaQon to industry compensaQon levels to determine if there is any excess
profit remaining at the Company aAer Mr. King is compensated at a fair market rate
for the services he provides to the Company. This analysis is necessary to comply with
the requirements of Poore v. Poore, 75 N.C. App. 414, 331 S.E.2d 266, disc. review
denied, 314 N.C. 543, 335 S.E.2d 316 (1985). The Poore court had the following
comments on the valuaQon of a professional pracQce:
The component of a professional pracQce which is the most controversial and difficult to
value, and yet oAen the most valuable, is its goodwill…Goodwill is commonly defined as
the expectaQon of conQnued public patronage…It is an intangible asset which defies
precise definiQon and valuaQon…It is clear, however, that goodwill exists, that it has
value, and that it has limited marketability.” (75 N.C. App. 414, 420)
There is no set rule for determining the value of the goodwill of a professional pracQce;
rather, each case must be determined in light of its own parQcular facts…The
determinaQon of the existence and value of goodwill is a quesQon of fact and not of
law…and should be made with the aid of expert tesQmony…Among the factors which
may affect the value of goodwill and which therefore are relevant in valuing it are the
age, health, and professional reputaQon of the pracQQoner, the nature of the pracQce,
the length of Qme the pracQce has been in existence, its past profits, its comparaQve
professional success, and the value of its other assets.” (75 N.C. App. 414, 421)
Any legiQmate method of valuaQon that measures the present value of goodwill by
taking into account past results, and not the postmarital efforts of the professional
spouse, is a proper method of valuing goodwill…One method that has been widely
accepted in other jurisdicQons is to determine the market value of the goodwill, i.e., the
price that a willing buyer would pay to a willing seller for it…Another method that has
been received favorably is a capitalizaQon of excess earnings approach…Under this
approach, the value of goodwill is based in part on the amount by which the earnings of
the professional spouse exceed that which would have been earned by a person with
similar educaQon, experience, and skill as an employee in the same general locale…It
has also been suggested that the value of goodwill be based on one year’s average gross
income of the pracQce, or a percentage thereof…and that evidence of sales of
comparable pracQces is relevant to the determinaQon of its value.” (75 N.C. App. 414,
421-422)
1
As indicated above, the Poore court states that under a capitalizaQon of excess
earnings approach, an income statement adjustment is necessary by subsQtuQng the
market level of compensaQon necessary to pay an individual with "similar educaQon,
experience, and skill as an employee in the same general locale." In this case, this
individual would replicate the various duQes provided to the Company by Mr. King.
A number of compensaQon surveys were consulted for the determinaQon of a market

compensaQon rate for Mr. King. These surveys included the following:
a. Na2onal Compensa2on Survey (NCS). The NCS is published by the Bureau of

Labor StaQsQcs (BLS). The BLS is a division of the U.S. Department of Labor and
measures labor market acQvity, working condiQons, price changes, and
producQvity in the U.S. economy to support public and private decision making.
The NCS produces data on occupaQonal earnings, compensaQon cost trends, and
benefits. The NCS provides compensaQon data in a wide range of formats,
including by occupaQon, by metropolitan area, and in percenQle formats (10th,
25th, median, mean, 75th, and 90th). For purposes of this analysis, the
occupaQonal category "Personal Financial Advisors" was selected. This occupaQon
is defined as individuals who "advise clients on financial plans using knowledge of
tax and investment strategies, securiQes, insurance, pension plans, and real estate.
DuQes include assessing clients' assets, liabiliQes, cash flow, insurance coverage,
tax status, and financial objecQves. May also buy and sell financial assets for
clients." Also selected for this analysis was the metropolitan area of CharloRe-
Concord-Gastonia, NC-SC.
b. Na2onal Execu2ve Compensa2on Survey (NECS). This database allows for the
input of a several factors, including (1) manufacturing versus non-manufacturing
company, (2) revenue range, and (3) execuQve posiQon. This database provides
market compensaQon amounts in a number of different classificaQons, including
mean, median, 10th percenQle, 25th percenQle, 75th percenQle, and 90th
percenQle. This database includes market compensaQon data for almost 50
separate execuQve and managerial posiQons. Market compensaQon data for the
Chief ExecuQve Officer posiQon was used for a market compensaQon figure for
Mr. King.
Key drawbacks with the data in the NECS include the fact that specific industry
data is not available. The Company is classified as a non-manufacturing company,
a category which obviously includes a wide range of industries. Another key
drawback with this data is the revenue size classificaQon. The smallest revenue
category in the NECS is from zero to $4.9 million. With annual revenues around
the $400,000 level in the 2016-2021 period, the Company falls at the very low end
of this classificaQon. This suggests the use of the 10th percenQle or 25th
percenQle data in the NECS to approximate the Company's relaQve size versus
other companies in the zero to $4.9 million revenue range.
2
c. RC Reports. This database allows for the input of a number of perQnent factors,
including (1) industry code (when available - not every industry code is included
in this database and some industry codes are very broad), (2) execuQve posiQon,
(3) state where the business is located, (4) number of Company employees, (5)
business performance versus peers, (6) Qme dedicated by the execuQve to the
business, (7) gross profit of the business, and (8) owner experience and/or
proficiency level. Market compensaQon data for the Chief ExecuQve Officer
posiQon was used for a market compensaQon figure for Mr. King.
One key drawback with the data in RC Reports is the industry classificaQon.
Although RC Reports allows for a more specialized industry classificaQon than the
NECS, the industry classificaQon in RC Reports is sQll fairly broad as it includes the
following categories:
• mortgage and nonmortgage loan brokers

• financial transacQons processing, reserve, and clearinghouse acQviQes
• other acQviQes related to credit intermediaQon
• investment banking and securiQes dealing
• securiQes brokerage
• commodity contracts dealing
• commodity contracts brokerage
• securiQes and commodity exchanges
• miscellaneous intermediaQon
• porPolio management
• investment advice
• trust, fiduciary, and custody acQviQes
• miscellaneous financial investment acQviQes
Data from the above three compensaQon surveys is shown in the following table:
3
CompensaAon Survey Data 1
2015 2016 2017 2018 2019 2020 2021
NCS (BLS)
10th PercenQle $46,120 $45,200 $48,080 $48,090 $48,010 $46,900 $49,760
25th PercenQle $59,910 $58,380 $61,350 $70,460 $72,160 $68,090 $65,990
Median $84,520 $79,720 $88,330 $115,720 $116,760 $114,090 $102,030
Mean $109,730 $106,390 $115,740 $144,480 $146,410 $146,650 $121,730
75th PercenQle $132,920 $123,830 $144,120 $193,200 $206,220 NA $136,310
90th PercenQle NA NA NA NA NA NA NA
NECS
10th PercenQle $75,000 $72,521 $91,800 $94,156 $103,421 $100,000 $97,300
25th PercenQle $94,500 $97,750 $114,330 $125,000 $127,248 $118,250 $122,338
Median $142,000 $139,992 $179,000 $208,300 $175,000 $228,375 $168,825
Mean $177,413 $167,637 $283,892 $315,751 $210,143 $268,681 $209,378
RC Reports
CharloRe $303,514 $298,918 $282,206 $294,661 $276,946 $282,125 $391,850
North Carolina $288,360 $280,824 $269,212 $251,687 $246,818 $251,433 $288,648
NaQonal $224,397 $220,018 $222,002 $234,017 $220,389 $224,510 $250,409
1
Source: NaBonal CompensaBon Survey (NCS) as published by the Bureau of Labor StaQsQcs (BLS), NaBonal
ExecuBve CompensaBon Survey (NECS), and RC Reports. NA: Not available.
Various comments on the above table are as follows:
1. The NCS data is the most specialized data due to its strict limitaQon to Personal
Financial Advisors as well as its limitaQon to the CharloRe-Concord-Gastonia area.
This provides a very narrow sample of individuals in Mr. King's industry who also
work in the same geographical area as Mr. King. As seen above, no data was
available for the 90th percenQle classificaQon and the 75th percenQle classificaQon
is missing one year (2020) of data.
2. As noted above, the key drawbacks with the NECS data are: (1) its general nature
(i.e., non-manufacturing companies) and (2) its revenue range (zero to $4.9
million). Because the Company's revenues fall at the low end of the zero to $4.9
million revenue range, the use of the 10th or 25th percenQle data would be
warranted with this data.
3. Also noted above is the key drawback with the RC Reports data, namely the
inclusion of other professions within the financial services industry. This broader
base of professions may include highly-compensated professionals (such as
investment bankers) that drive the comparaQvely higher salaries seen in the RC
Reports data in the above table.
4
For purposes of this analysis, the 75th percenQle of the NCS data was used. As noted
above, the NCS data is clearly the most specialized and on-point data as compared to
the other compensaQon surveys due to its use of Mr. King's specific occupaQon and
specific geographical area. The 75th percenQle was used due to recognize that Mr.
King's 20+ years of experience in the industry likely warrants a market compensaQon
above the mean and median. For purposes of this analysis the average compensaQon
figure was used for 2018 with compensaQon amounts for the 2015-2017 period deflated
by a modest 3% and compensaQon amounts for the 2019-2021 period inflated by the
same modest 3%. This smoothing of the compensaQon data has the effect of miQgaQng
unexplained increases and decreases in the compensaQon data.
Other compensaQon surveys were consulted but ulQmately could not be used due to a
lack of sufficient data. These surveys included the Financial Planner Salary Guide
(published by AccounQng.com), the InvestmentNews Adviser CompensaBon & Staffing
Survey (sponsored by Pershing, LLC), the Schwab RIA Benchmarking Study and RIA
CompensaBon Report, the Fidelity RIA Benchmarking Study, Trends in Adviser
CompensaBon and Benefits (by FPA), and the FA Insight Study of Advisory Firms: People
and Pay.
2. CompensaAon: Kara King. As noted earlier in this report, Kara King was also
compensated by the Company each year over the 2015-2020 period. Management
indicated that Ms. King did not provide any managerial services to the Company during
this Qme, therefore, her compensaQon was subtracted from the reported operaQng
expenses. It is possible Ms. King also received other benefits from the Company,
however, no detail on these items was available.
3. Rent Expense. As noted earlier, the Company leases its sole office space from a related
enQty, Blue Hose ProperQes, LLC (owned by Brian King and Kara King). The actual rent
paid by the Company is subtracted from the reported operaQng expenses and a
market rental rate (based on the Harris Real Estate Appraisal - see FaciliBes secQon
earlier in this report) is added back.
4. DepreciaAon and SecAon 179 Expense Associated with Vehicle. As seen earlier in the
Non-OperaBng Assets secQon of this report, the Company owned a total of two
vehicles over the 2015-2021 period (a Range Rover in 2018 replaced a previous vehicle
owned). Because these assets are not necessary for the operaQon of the Company, its
income statement and balance sheet impact are removed from the Company's
reported financial statements. This included adding back the reported depreciaQon
and SecQon 179 expense associated with the Range Rover purchased in 2018.
No other depreciaQon or SecQon 179 expense associated with this asset was reported
in 2019 or 2020 as this asset appears to have been fully depreciated in 2018. This
assumpQon is based on the Form 4562 of the 2018 tax return which indicates a 75%
5
business use applied to the original cost of $85,723, or a depreciable value of

approximately $64,292. The same Form 4562 then indicates a depreciaQon deducQon
of $39,292 in 2018 and an elected SecQon 179 cost (a form of accelerated
depreciaQon) of $25,000, or a total depreciaQon/SecQon 179 expense of $64,292.
Based on these figures, this vehicle was fully depreciated by the end of 2018 (the year
of its purchase).
5. Interest Expense. As noted earlier in the Borrowing RelaBonships and Non-OperaBng

Assets secQons of this report, Management indicated that the interest-bearing debt
balances at the Company over the 2015-2021 period represent vehicle financing. Due
to the non-operaQng aspect of these assets, the interest expense on this debt was
added back to the reported other income and expense.
6. Interest Income. Interest income was subtracted from the reported other income and
expense due to the one-Qme, non-operaQng nature of this item.
7. Charitable ContribuAons. Charitable contribuQons were added back to reported other

income and expense in each year due to the discreQonary and non-operaQng nature
of this expense.
No balance sheet-based calculaQons for the Company were made due to the fact that, on
an adjusted basis (i.e., aAer the removal of non-operaQng items such as vehicles, related debt,
and loans to shareholder), there only nominal assets remain (primarily modest cash balances).
This makes the calculaQon of return on assets (ROA), return on equity (ROE), and other asset-
based measures (such as liquidity and leverage) relaQvely meaningless. As a service business, the
Company does not report key working capital items such as accounts receivable and inventory
and also does not have or need significant capital equipment.
6
Exhibit C-7: Cap Rate Adjustment to Reflect Net Benefits to S CorporaGon Shareholder
ValuaGon Date: May 5, 2019 ACA Total State Total

Note TAX RATES Fed Tax Fed (NC) Net Tax
1 Corporate 21.0% 0.0% 21.0% 2.5% 23.0%

2 Personal (ordinary income) 37.0% 3.8% 40.8% 5.25% 46.1%
3 Personal (dividends) 20.0% 3.8% 23.8% 5.25% 29.1%
4 Personal (capital gains) 20.0% 3.8% 23.8% 5.25% 29.1%
INPUTS:
5 Qualified Business Income (QBI) $71,494
6 Dividend/DistribuJon Payout RaJo 100.0%
7 AcJve Involvement in Business (Yes/No) No Notes explained in Exhibit C-9
8 PTE Wages (Non-Owners) $46,422
9 Reasonable Wages – PTE Owner $156,100
10 Unadjusted Basis of Qualified Property $21,537
Item C Corp PTE
11 Qualified Business Income (QBI) $71,494 $71,494

12 Less: Income Taxes (corporate) 23.0% ($16,444) 0.0% $0
13 Equals: Net Income $55,050 $71,494
14 Times: Dividend/Distribu1on Payout Ra1o 100.0% 100.0%
15 Equals: Dividend (C) / DistribuJon (PTE) $55,050 $71,494
16 Less: Income Taxes (personal) ($27,632)
17 Less: Dividend Taxes (personal) 29.1% ($16,020)
18 Net Proceeds to Shareholder/Owner $39,030 $43,862
19 Net Income (PTE Taxable for Basis Purposes) $55,050 $71,494

20 Less: Dividend (C) / DistribuJon (PTE) ($55,050) ($71,494)
21 Net Capital Gain $0 $0
22 Effect of Increase in Tax Basis $0 $0
23 Net Taxable Capital Gains $0 $0
24 Less: Capital Gains Tax Liability 29.1% $0 $0
25 Net Capital Gains Benefit to Shareholder/Owner $0 $0
26 Add: Net Proceeds to Shareholder/Owner (from above) $39,030 $43,862
27 Total Benefit $39,030 $43,862
28 PTE Benefit (Detriment) vs. C Corp 12.4%

29 Incremental Adjustment to Cap Rate (11.0%)
30 Personal Taxes on PTE Income
31 Total PTE Wages (including Owner) $202,522 50.0% $101,261 Wage

LimitaJon
32 Total PTE Wages (including Owner) $202,522 25.0% $50,631 (greater
33 Unadjusted Basis of Qualified Property $21,537 2.5% $538 of the two):
34 Total $51,169 $101,261
35 AcGve Involvement: NA No
36 Qualified Business Income (QBI) $0 $71,494

37 PTE DeducJon (lesser of 20% of QBI or Wage Limit) 20% $0 ($14,299)
38 Adjusted PTE Taxable Income $0 $57,195
39 Federal Income Taxes (personal) on Adj PTE Income 37.0% $0 $21,162
40 ACA Taxes on QBI 3.8% $0 $2,717
41 State Income Taxes (personal) on QBI 5.25% $0 $3,753
42 Total Fed/ACA/State Taxes $0 $27,632
43 EffecJve Tax Rate on Pre-tax PTE Income NA 38.6%
Exhibit C-8: Cap Rate Adjustment to Reflect Net Benefits to S CorporaGon Shareholder
ValuaGon Date: March 31, 2022 ACA Total State Total

Note TAX RATES Fed Tax Fed (NC) Net Tax
1 Corporate 21.0% 0.0% 21.0% 2.5% 23.0%

2 Personal (ordinary income) 37.0% 3.8% 40.8% 5.25% 46.1%
3 Personal (dividends) 20.0% 3.8% 23.8% 5.25% 29.1%
4 Personal (capital gains) 20.0% 3.8% 23.8% 5.25% 29.1%
INPUTS:
5 Qualified Business Income (QBI) $81,777
6 Dividend/DistribuJon Payout RaJo 100.0%
7 AcJve Involvement in Business (Yes/No) No Notes explained in Exhibit C-9
8 PTE Wages (Non-Owners) $30,290
9 Reasonable Wages – PTE Owner $170,574
10 Unadjusted Basis of Qualified Property $4,815
Item C Corp PTE
11 Qualified Business Income (QBI) $81,777 $81,777

12 Less: Income Taxes (corporate) 23.0% ($18,809) 0.0% $0
13 Equals: Net Income $62,968 $81,777
14 Times: Dividend/Distribu1on Payout Ra1o 100.0% 100.0%
15 Equals: Dividend (C) / DistribuJon (PTE) $62,968 $81,777
16 Less: Income Taxes (personal) ($31,607)
17 Less: Dividend Taxes (personal) 29.1% ($18,324)
18 Net Proceeds to Shareholder/Owner $44,644 $50,170
19 Net Income (PTE Taxable for Basis Purposes) $62,968 $81,777

20 Less: Dividend (C) / DistribuJon (PTE) ($62,968) ($81,777)
21 Net Capital Gain $0 $0
22 Effect of Increase in Tax Basis $0 $0
23 Net Taxable Capital Gains $0 $0
24 Less: Capital Gains Tax Liability 29.1% $0 $0
25 Net Capital Gains Benefit to Shareholder/Owner $0 $0
26 Add: Net Proceeds to Shareholder/Owner (from above) $44,644 $50,170
27 Total Benefit $44,644 $50,170
28 PTE Benefit (Detriment) vs. C Corp 12.4%

29 Incremental Adjustment to Cap Rate (11.0%)
30 Personal Taxes on PTE Income
31 Total PTE Wages (including Owner) $200,864 50.0% $100,432 Wage

LimitaJon
32 Total PTE Wages (including Owner) $200,864 25.0% $50,216 (greater
33 Unadjusted Basis of Qualified Property $4,815 2.5% $120 of the two):
34 Total $50,336 $100,432
35 AcGve Involvement: NA No
36 Qualified Business Income (QBI) $0 $81,777

37 PTE DeducJon (lesser of 20% of QBI or Wage Limit) 20% $0 ($16,355)
38 Adjusted PTE Taxable Income $0 $65,422
39 Federal Income Taxes (personal) on Adj PTE Income 37.0% $0 $24,206
40 ACA Taxes on QBI 3.8% $0 $3,108
41 State Income Taxes (personal) on QBI 5.25% $0 $4,293
42 Total Fed/ACA/State Taxes $0 $31,607
43 EffecJve Tax Rate on Pre-tax PTE Income NA 38.7%
Exhibit C-9: SEAM Assump8ons
Business enQQes have one of two choices as concerns the taxaQon situaQon for their
owners:
1. Single Level Taxa8on. This group consists of enQQes known as “pass-through”

enQQes (designated as “PTE” in Exhibits C-7 and C-8). These enQQes include S
corporaQons, LLCs (limited liability companies), partnerships, and others. A pass-
through enQty pays no income tax on its earnings at the enQty level. Each owner
(shareholder, member, or partner), however, is personally responsible for his or
her pro-rata share of the income tax liability of the enQty that is “passed-
through” to that individual. As such, these enQQes are subject to only a single
level of taxaQon (at the personal level, and not at the enQty level).
2. Double Level Taxa8on. This group consists of C corporaQons. A shareholder in a

C corporaQons is subject to two levels of taxaQon. The first level of taxaQon
occurs at the enQty level as the enQty pays income tax on its earnings. The
second level of taxaQon occurs at the personal level as shareholders pay income
tax on any dividends paid to them.
The capitalizaQon and/or discount rates used in the income approach are based on rates
of return from publicly-traded companies (the market equity risk premium). All of the publicly-
traded companies comprising this return data are C corporaQons. As a result, an adjustment to
the capitalizaQon rate must be made to account for the different taxaQon scenarios of the C
corporaQon shareholder versus an owner in a pass-through enQty. The magnitude of this
adjustment is calculated in Exhibits C-7 and C-8.
The tax affecQng model in Exhibits C-7 and C-8 is known as the S CorporaQon Economic
Adjustment Model (SEAM). The SEAM was developed by Daniel R. Van Vleet, ASA, of the
Griffing Group, and formerly of Stout Risius and Ross, Inc. (SRR). According to the SRR website:
[The SEAM] has gained widespread usage, credibility and acceptance. When using the
SEAM, analysts first value the S corporaQon at its C corporaQon equivalent value. This is
important since the discount rate used in the Discounted Cash Flow Method and the P/E
mulQples used in the Guideline Public Company Method are derived from publicly traded C
corporaQons. Consequently the proper applicaQon of these methods requires that the
earnings used to esQmate S CorporaQon value are also on a C corporaQon equivalent basis.
However, as properly noted by relevant Tax Court decisions, this type of analysis is simplisQc,
incomplete, and does not properly reflect the differences in tax aRributes between S
corporaQons, C corporaQons, and their respecQve shareholders. The SEAM is based on these
tax differences and is used to adjust a C corporaQon equivalent value to an S corporaQon
value.
The SEAM in Exhibits C-7 and C-8 is adapted for the provisions of the Tax Cuts and Job
Act (TCJA) which was signed into law on December 22, 2017, and is effecQve as of January 1,
2018. As of the valuaQon date of this report, the applicaQon of the TCJA was not clear in all
situaQons. For example, there may be certain business and industries that are exempt from
certain provisions of the TCJA. Also, there are income limitaQons that impact whether certain
1
provisions of the TCJA apply. Readers of this report should read the TCJA and engage
competent tax counsel to understand and interpret the provisions and applicaQon of the TCJA.
An explanaQon of the inputs and calculaQons in the SEAM are as follows (by the
indicated Note in Exhibits C-7 and C-8):
1. C corporaQon tax rates (federal, ACA, and state) in effect as of the valuaQon date
of this report. ACA is the Affordable Care Act surtax. State taxes are assumed
deducQble for federal purposes to determine the net tax rate. All tax rates
assume the highest marginal rate.
2. Personal (ordinary income) tax rates in effect as of the valuaQon date of this
report. State taxes are not assumed to be deducQble for federal purposes.
Whether or not the ACA surtax applies depends on whether the owner of the
interest at issue would be considered acQve or passive by the IRS (see note 7
below). All tax rates assume the highest marginal rate.
3. Personal (dividend) tax rates in effect as of the valuaQon date of this report. State
taxes are not assumed to be deducQble for federal purposes. Whether or not the
ACA surtax applies depends on whether the owner of the interest at issue would
be considered acQve or passive by the IRS (see note 7 below). All tax rates
assume the highest marginal rate. The ACA tax is applied to dividends regardless
of whether the owner of the interest is considered by the IRS to have acQve or
passive involvement in the enQty.
4. Personal (capital gain) tax rates in effect as of the valuaQon date of this report.
State taxes are not assumed to be deducQble for federal purposes. Whether or
not the ACA surtax applies depends on whether the owner of the interest at
issue would be considered acQve or passive by the IRS (see note 7 below). All tax
rates assume the highest marginal rate. The ACA tax is applied to capital gains
regardless of whether the owner of the interest is considered by the IRS to have
acQve or passive involvement in the enQty.
5. Qualified Business Income (QBI) is defined as the enQty's profit aBer a reasonable
amount of compensaQon is paid to the enQty's owners. QBI does not include
interest income (other than that which is properly allocable to a trade or
business), dividend income, long- or short-term capital gain income, or income
unassociated with a U.S. trade or business. The determinaQon of the enQty's QBI
is shown in the Valua8on Methodology secQon of this report.
6. The selected dividend/distribuQon payout raQo is based on the earlier analysis in

the Company Informa8on secQon of this report.
2
7. The determinaQon of whether the hypotheQcal willing buyer of the specified

interest in the PTE would have acQve or passive involvement in the enQty (as
defined by the IRS) is based on the facts and circumstances in each specific case.
8. PTE wages is defined as all compensaQon paid to the enQty's employees, less a
reasonable wage paid to the owner of the PTE.
9. Reasonable wages - PTE owner is based on an esQmated market rate of

compensaQon for the duQes performed by the PTE owner. This issue is discussed
in the Financial Analysis secQon of this report.
10. The unadjusted basis of qualified property is defined as the pre-depreciaQon

cost of the fixed assets of the enQty (excluding land). The pre-depreciaQon cost
of fixed assets that are beyond ten years from the acquisiQon date or the last
year of the depreciaQon recovery period (whichever is later) are not included.
11. QBI is defined above in Note 5.
12. Income taxes are applied to the C corporaQon's QBI (as determined in the
Valua8on Methodology secQon of this report) based on the applicable rates
described in Note 1 above. No income tax is applied to the PTE's QBI as PTEs do
not pay income taxes at the enQty level.
13. Net income is calculated as the C corporaQon's QBI less income taxes. Net
income for the PTE is the same as pre-tax QBI as the PTE does not pay income
taxes at the enQty level.
14. The dividend payout raQo (see note 6 above) is applied to the C corporaQon's
aBer-tax income and the PTE's pre-tax income.
15. The applicaQon of the dividend payout raQo results in the esQmated dividend
(for C corporaQons) and distribuQon (for PTEs).
16. Individual income taxes are applied to the PTE. Personal taxes on PTE income
are calculated in lines 30-40 of Exhibits C-7 and C-8 (see notes below). No
individual income taxes are applied to the C corporaQon as the C corporaQon has
already paid income taxes at the enQty level.
17. Dividend taxes are applied to the C corporaQon's dividend amount. The
dividend tax rate is described in Note 3 above. No dividend/distribuQon tax
liability is applicable to the PTE's distribuQon amount.
18. Net Proceeds to the Shareholder (C corporaQon) / Owner (PTE) are shown aBer
all tax liability has been incurred. This includes enQty income tax and dividend
3
tax for the C corporaQon and income tax for the pass-through income to the PTE
owner.
19. This figure is explained in Note 13 above.
20. This figure is explained in Note 15 above.
21. Net Capital Gain is calculated by subtracQng the dividend (C corporaQon) or

distribuQon (PTE) from the Net Income figure described in Note 13.
22. The amount of earnings retained (i.e., are not paid out as a distribuQon)
increases the tax cost basis of the PTE owner's ownership interest. This reduces
the capital gains liability if the PTE ownership interest is later sold at a gain.
23. Net Taxable Capital Gains is calculated as Net Capital Gain less the Effect of
Increase in Tax Basis.
24. The Capital Gains Tax Liability is calculated as the capital gains tax rate (discussed
in Note 4 above) Qmes the net Taxable Capital Gains. This applies only to C
corporaQons as the retained earnings of the PTE increases the basis of that
ownership interest and reduces the capital gains liability upon the later sale of
the PTE ownership interest.
25. The Net Capital Gains Benefit to Shareholder/Owner is the aBer-tax benefit to
the shareholder/owner upon the sale of the ownership interest.
26. The Net Proceeds to Shareholder/Owner is discussed in Note 18 above.
27. The Net Proceeds to Shareholder/Owner (Note 18) is added to the Net Capital
Gains Benefit (Note 25) to determine the Total Benefit to the owner in each of
the C corporaQon and PTE contexts.
28. The PTE Benefit versus the C corporaQon is calculated by dividing the PTE Net
Proceeds to Owner (Note 27) by the C corporaQon Net Proceeds to Shareholder
(Note 27) with the difference expressed as a percentage. A posiQve percentage
indicates it is more beneficial (due to the greater Total Benefit received) to be an
owner in a PTE as opposed to a shareholder in a C corporaQon, all other factors
being equal. A negaQve percentage indicates it is more beneficial to be a
shareholder in a C corporaQon than an owner in a PTE, all other factors being
equal.
29. The Incremental Adjustment to Cap Rate is calculated by dividing the C

corporaQon Net Proceeds to Shareholder (Note 27) by the PTE Net Proceeds to
Owner (Note 27) with the difference expressed as a percentage. This is the
inverse calculaQon than the one described in Note 28 above. The Incremental
4
Adjustment to Cap Rate is incorporated into the weighted average cost of capital
(WACC) calculaQon in the Valua8on Methodology secQon of the report. As noted
at the beginning of this exhibit, this adjustment is necessary due to the fact that
the discount and/or capitalizaQon rate in this report is based 100% on rates of
return of C corporaQons.
A negaQve (downward) Incremental Adjustment to Cap Rate means it is more

beneficial (due to the greater Total Benefit received) to be an owner in a PTE as
opposed to a shareholder in a C corporaQon. If this is the case, a downward
adjustment to the C corporaQon equivalent WACC is made. All other factors
being equal, a lower WACC results in a higher calculated value, thereby reflecQng
the relaQve benefit of being an owner in a PTE as compared to a shareholder in a
C corporaQon.
A posiQve (upward) Incremental Adjustment to Cap Rate means it is less

beneficial (due to the lower Total Benefit received) to be an owner in a PTE as
opposed to a shareholder in a C corporaQon. If this is the case, an upward
adjustment to the C corporaQon equivalent WACC is made. All other factors
being equal, a higher WACC results in a lower calculated value, thereby reflecQng
the relaQve disadvantage of being an owner in a PTE as compared to a
shareholder in a C corporaQon.
30. The calculaQon of the personal taxes on PTE income can be complicated and are
shown in this secQon of the SEAM. The Wage LimitaQon is computed in Notes
31-34. The Wage LimitaQon is a potenQal input in the PTE DeducQon (Note 37)
and is determined based on the greater of two potenQal inputs. The first input is
the figure based on 50% of the Total PTE Wages (including Owner). The second
input is the sum of 25% of the Total PTE Wages (including Owner) and 2.5% of
the Unadjusted Basis of Qualified Property. The greater of these two figures is
the Wage LimitaQon that is a potenQal input in the PTE DeducQon (Note 37).
31. Total PTE Wages (including Owner) is all compensaQon, including a reasonable
amount of compensaQon for the owner. This figure is mulQplied by 50% to
determine the first of the two figures that will determine the Wage LimitaQon
(Note 34).
32. Total PTE Wages (including Owner) is all compensaQon, including a reasonable
amount of compensaQon for the owner. This figure is mulQplied by 25% to
determine the first of two components that determine the second of the two
figures that will determine the Wage LimitaQon (Note 34).
33. Unadjusted Basis of Qualified Property (defined in Note 10) is mulQplied by 2.5%
to determine the second of two components that determine the second of the
two figures that will determine the Wage LimitaQon (Note 34).
5
34. This line totals Notes 32 (25% of Total PTE Wages) and 33 (2.5% of Unadjusted
Basis of Qualified Property. The Wage LimitaQon is the greater of the boxed
figures from Note 31 and Note 34. The Wage LimitaQon is a potenQal input in
the PTE DeducQon (Note 37).
35. The calculaQon of the applicable income taxes (Note 39) depends on whether
the owner in the PTE is classified as having acQve involvement or passive
involvement in the enQty (see Note 7).
36. QBI is explained in Note 5 above.
37. The PTE DeducQon is equal to the lesser of 20% of QBI (Note 5) or the Wage
LimitaQon (Note 34).
38. The Adjusted PTE Taxable Income is calculated by subtracQng the PTE DeducQon
from the QBI. This indicates the amount of PTE income that is taxed individually
to the owner.
39. The amount of federal income tax liability is calculated by mulQplying the federal
personal (ordinary income) tax rate explained in Note 2 Qmes the Adjusted PTE
Taxable Income.
40. The amount of ACA tax liability is calculated by mulQplying the ACA rate Qmes
the QBI (not the Adjusted PTE Taxable Income). The ACA tax liability does not
apply if the IRS considers the owner to have acQve involvement in the enQty.
41. The amount of state income tax liability is calculated by mulQplying the state
personal (ordinary income) tax rate Qmes the QBI (not the Adjusted PTE Taxable
Income).
42. Lines 39-41 are totaled to determine the total amount of federal, ACA, and state
taxes.
43. The effecQve tax rate on pre-tax PTE income is calculated by dividing the total
federal, ACA, and state tax liability (Note 42) by the QBI (Note 36).

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King Financial Corporahon King Financial Corporahon: Banister Financial, Inc. Banister Financial, Inc

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1338

PRELIMINARY DRAFT - NOT AN OPINION OF VALUE

King Financial CorporaHon

Opinion of the Fair Market Value of:

For Equitable DistribuHon Purposes in the maIer of

Report Date: -----------------

A. PURPOSE AND SCOPE.................................................................................................................................... 4

B. SUMMARY OF OPINION OF FAIR MARKET VALUE........................................................................................... 5

E. INFORMATION USED IN THIS VALUATION....................................................................................................... 9

II. COMPANY INFORMATION..................................................................................................12

III. FINANCIAL ANALYSIS.........................................................................................................27

IV. VALUATION METHODOLOGY.............................................................................................39

B. INCOME VALUATION APPROACH.................................................................................................................. 42

C. MARKET VALUATION APPROACH: GUIDELINE PUBLIC COMPANIES............................................................... 57

D. MARKET APPROACH: GUIDELINE TRANSACTION METHOD........................................................................... 58

6. Summary of Guideline TransacVon Data...........................................................................................................62

E. ASSET VALUATION APPROACH...................................................................................................................... 63

A. SUMMARY OF FINDINGS BY EACH VALUATION APPROACH........................................................................... 65

B. FINAL OPINION OF FAIR MARKET VALUE...................................................................................................... 65

A. PURPOSE AND SCOPE

B. SUMMARY OF OPINION OF FAIR MARKET VALUE

Opinion of the Fair Market Value 1

May 5, 2019 Date of SeparaSon 100 100 100.0% $455,000

March 31, 2022 Current Date 100 100 100.0% $555,000

2. Report Must be Read in its EnSrety

4. Summary of Key ValuaSon Factors

A summary of Michael Paschall’s qualiﬁcaVons is included in Exhibit A-3.

Paschall's previous service in various industry organizaVons includes the following:

• Former Advisor and Examiner on the American Society of Appraisers InternaVonal

Paschall is in compliance with the mandatory recerVﬁcaVon requirements for Accredited

E. INFORMATION USED IN THIS VALUATION

2. During this project, Michael Paschall of Banister Financial interviewed and/or

3. Unaudited supplemental informaVon, including the following:

• Payroll reports, 2015-2021.

appraiser and in no way supervised this appraiser or its employees in the

4. Surveys of industry peer ﬁnancial results contained in RMA Annual Statement

5. Surveys of industry compensaVon informaVon, including the NaMonal ExecuMve

9. Various data on economic and populaVon forecasts, including the following:

• Monthly Economic Outlook, published by Wells Fargo SecuriVes as of April 10,

10. Resources regarding business valuaVon issues including the following:

• 2021 Business ValuaMon Guide, Twenty-ﬁrst EdiMon, by George B. Hawkins, ASA,

• Statement of Standards for ValuaMon Services No. 1, published by the American

II. COMPANY INFORMATION

1. Nature and History of the Company

King Financial CorporaVon (“Company”), headquartered in Concord, NC, is a ﬁnancial

c. Prior TransacSons in the Shares

There have been no prior transacVons in the shares.

d. No Intent to Market or Sell the Company

3. Management and Employees

Ashlynn Harkey joined the Company as a 1099 independent contractor in September

Management believes the compeVVve environment for the Company is intense,

Various compeVVve advantages of the Company include the following:

Various compeVVve disadvantages of the Company include the following:

2. Management noted that many of the Company's higher-dollar relaVonships have

4. ArVﬁcial intelligence and increasing use of technology allows clients to self-

The Company’s primary “supplier” is its independent broker/dealer, Kestra Financial.

9. Non-OperaSng Assets and LiabiliSes

1. Range Rover. As noted in the Borrowing RelaMonships secVon above, the

2. Shareholder Loans. As seen on Exhibit C-1, the Company reported a

$79,487 as of the May 5, 2019, Date of SeparaVon

10. Related Party TransacSons

11. Revenue and Earnings Summary

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