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"Creating Community, Nourishing Souls"

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Table of Contents
1.0 Executive Summary.............................................................................................................................1 1.1 Objectives ...................................................................................................................................2 1.2 Mission........................................................................................................................................2 1.3 Keys to Success ........................................................................................................................2 Chart: Highlights ......................................................................................................................3 2.0 Organization Summary .......................................................................................................................3 2.1 What Makes Bright House Unique ...........................................................................................3 2.2 Legal Entity .................................................................................................................................4 2.3 Start-up Summary ......................................................................................................................4 Chart: Start-up .........................................................................................................................5 Table: Start-up .........................................................................................................................6 Table: Start-up Funding ..........................................................................................................7 2.4 Locations and Facilities ............................................................................................................7 3.0 Services................................................................................................................................................8 3.1 Service Description ...................................................................................................................8 3.2 Alternative Providers .................................................................................................................8 3.3 Printed Collaterals .....................................................................................................................9 3.4 Technology..................................................................................................................................9 3.5 Future Services ..........................................................................................................................9 4.0 Market Analysis Summary................................................................................................................10 Chart: Market Analysis (Pie)................................................................................................11 Table: Market Analysis .........................................................................................................11 4.1 Market Segmentation..............................................................................................................11 4.2 Target Market Segment Strategy...........................................................................................11 4.2.1 Market Trends .............................................................................................................12 4.2.2 Market Needs ..............................................................................................................12 4.3 Service Providers Analysis.....................................................................................................13 4.3.1 Organization Participants...........................................................................................13 4.3.2 Alternatives and Usage Patterns...............................................................................13 4.3.3 Main Alternatives.........................................................................................................14 5.0 Management Summary ....................................................................................................................14 5.1 Management Team Gaps .......................................................................................................15 5.2 Caregiving Organizational Chart............................................................................................15 5.3 Personnel Plan.........................................................................................................................16 Table: Personnel ...................................................................................................................17 6.0 Strategy and Implementation Summary..........................................................................................17 Chart: Milestones ..................................................................................................................18 Table: Milestones..................................................................................................................18 7.0 Financial Plan ....................................................................................................................................19 7.1 Important Assumptions............................................................................................................19 7.2 Key Financial Indicators ..........................................................................................................19 Table: Funding Forecast ......................................................................................................20 Chart: Funding Monthly.........................................................................................................20 Chart: Funding by Year.........................................................................................................21 7.3 Projected Surplus or Deficit....................................................................................................22 Chart: Surplus Monthly..........................................................................................................22 Chart: Gross Surplus Yearly.................................................................................................22
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Table: Surplus and Deficit....................................................................................................23 7.4 Break-even Analysis................................................................................................................23 Table: Break-even Analysis .................................................................................................24 Chart: Break-even Analysis .................................................................................................24 7.5 Projected Cash Flow...............................................................................................................24 Table: Cash Flow..................................................................................................................25 Chart: Cash ...........................................................................................................................26 7.6 Projected Balance Sheet ........................................................................................................27 Table: Balance Sheet ...........................................................................................................27 7.7 Standard Ratios .......................................................................................................................27 Table: Ratios .........................................................................................................................28 Table: Funding Forecast ...........................................................................................................................1 Table: Personnel ........................................................................................................................................2 Table: Surplus and Deficit .........................................................................................................................3 Table: Cash Flow .......................................................................................................................................5 Table: Balance Sheet ................................................................................................................................6

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1.0 Executive Summary
Where would you want to live if you needed daily assistance? In your home, of course. Bright House aims to be that home for 14 lucky full-time assisted living residents, offering medicallyskilled care in a respectful, self-sustaining community, and offering skilled nursing care for short-term residents. On our beautiful, newly remodeled 6 acre property (the former Wayfield Bed and Breakfast) in the small college town of Middletown, CT, Bright House brings together dec ades of experience and innovative, alternative visions of the potential in our elderly family members' latest years. In our first five years, we will establish a new kind of Elder Care model based on the idea that the elderly are fully-realized persons, with ideas, thoughts, and experiences which matter. Can you help us to realize this goal?

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1.1 Objectives
For our first year, we have four financial objectives: To raise adequate funding for start-up. To fill all of the rooms in the main house over the course of six months. To open the Skilled Nursing Fac ility, and maintain it at 9 to 10 rooms oc cupied for 25 days per month thereafter. Begin development implementation for the ongoing funding needs of years two through five.

We have other, non-financial objectives as well: To provide a warm, comfortable, safe and engaging home for up to 14 permanent residents. Ongoing feedback through the resident House Councils will give us a weekly update on our progress. To provide skilled medical care in a similarly respectful atmosphere to our temporary Medicare residents. To provide adequate training, mentoring and recompense to our caregiving staff to create job satisfac tion.

1.2 Mission
At Bright House, we promote the dignity and self-worth of all of our residents, and strive to give them excellent quality of life, as defined by the residents, individually and as a group. To that end, we encourage resident group dec ision-making through the House Councils, ac cess to all areas of their homes here at Bright House, and self-determination in activities, soc ialization, and food preferences. Bright House is not just a caregiving fac ilityit is their home, and their community. We also value the time, skills, and expert opinions of our staff. We are committed to providing fair and living wages, reasonable, structured work schedules, and clear duties and spheres of rights and responsibilities for eac h team member. We do not expec t staff to do work for which they are not trained; we do expec t them to share their suggestions for improving any aspec t of Bright House working operations or caregiving. We aim to provide jobs which not only provide sustenance for our workers' families, but also allow them a spac e to make a difference in the world around them, through caring and expert assistance to our community's most vulnerable members.

1.3 Keys to Success


We have identified four keys to success for Bright House: We offer more resident-oriented, small-scale, home-model care than our competitors; Our innovative use of Elder Assistants lowers the cost of providing this care considerably; Our fair wages and team structure lower dissatisfac tion, and thus turnover rates among our staff; Our on-site Skilled Nursing Fac ility ensures continuity of care when our residents need Page 2

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more intensive assistance.

2.0 Organization Summary


Bright House is chartered as a nonprofit 501(C)(3) corporation in Middletown, CT, with the goal of providing holistic and respectful assisted living and skilled nursing home care to a small group of elderly residents. Our primary loc ation is the old Wayfield Bed and Breakfast, on Farmer's Road, which we have spent the last five months converting into a two building nursing home fac ility in line with Eden Alternatives "Greenhouse" model for enlightened elder living. (See architectural drawing, attac hed.) Our Medical Director, Doc tor Mildred Johnson, M.D., M.S.W., of New Haven, is one of the most respec ted gerontologists in New England. She will be supported by four licensed prac tical nurses, and six Elder Assistants, who will perform all non-clinical duties such as daily assistance, laundry, cooking, and cleaning. Once a month, our contrac ted Nutritionist will visit the retreat to give cooking lessons and to review individual residents' dietary needs. The entire staff will meet with our Board of Directors three times a year to assess the staffing and other needs of the fac ility. Our Financial operations will be overseen by Madeleine Morgan, who has managed nonprofit funding and payroll departments for 27 years (see attac hed resume). She will be supported by a full-time Medicare Liaison/Billing Specialist, and a part-time Development Officer.

2.1 What Makes Bright House Unique


Although the hospital model of care prac ticed in most nursing homes provides good results for Medicaid and Medicare billing purposesthat is, easily quantifiable lists of proc edures and Page 3

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medicines administered, test results, and billable nursing hoursit does not provide good quality of life for residents (or "patients," as they are referred to in the hospital model). At Bright House, we see a different way of assisting our elderly members through a new stage in their lives. Ac knowledging that where they live is their home, and belongs to them, not to the medical staff, we have established a fac ility that not only meets their medical and physical needs, but one that also nourishes their social connections, individual dignity, and personal preferences. Each resident has a private room with bath, opening onto a central shared common area containing the kitchen, living room, and dining room, where all meals are shared communally at our 15 foot farm-style dining table. Far more devastating than physical illness to our elders, is lac k of purpose. Studies have shown over and over that seniors who are engaged in activities they find meaningful are far more likely to retain mental ac uity, physical health, and emotional well-being. Although the hospital model tries to provide such stimulation, its "ac tivities" are usually organized by staff, with little or no input from "patients," and bec ome just one more set of required tasks for all involved. At Bright House, we have already begun working with prospec tive residents to identify areas of interest and methods of community involvement that will appeal to them.

2.2 Legal Entity


Bright House is chartered as a nonprofit 501(C)(3) corporation in Middletown, CT. Its Board of Directors is drawn from the loc al medical and community-organization communities. Board of Directors President: Dr. Michael Medical, M.D. Members: Laurie Law, Susie Social-Worker, M.P.H., John Leader.

2.3 Start-up Summary


Start-up Expenses One of the largest items in our Start-up budget is a computerized medical records system. Preliminary designs of this system have already been c onstructed by DigInfoMedTel. In addition to the obvious benefit of allowing multiple care-team members to easily exchange information as they change shifts, this system will allow our residents and staff to keep trac k of chronic conditions, monitor gradual but serious changes in c ondition which might be overlooked in dayto-day interac tions, and corroborate quantifiable medical data for our Medicare patients in the skilled nursing fac ility. Start-up Assets Current (Short-term) Assets include $6,000 of start-up inventory (bedding, cleaning and disposable medical supplies) and non-expensed, smaller medical equipment that will depreciate quickly, and will need to be replac ed in year four or five. Long-term assets include our existing loc ation, the former Wayfield Bed and Breakfast, currently assessed at $400,000 including renovations. The loc ation was willed to us by Evelyn and Jack Bright last February, with the condition that we include a small Medicare fac ility as part Page 4

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of the overall plan. This category includes new Long-term Assets needed as follows: $200,000 for (long-term, resalable) medical equipment, and $150,000 for initial furnishings, after the renovation. Medical Equipment: 1 Fully-loaded Crash Cart Standard monitoring equipment (blood pressure, sugar, etc.) Call-button system

Furnishings: For the common areas of both buildings, we will need couches, self-lifting recliners, tables, and chairs suitable to our residents' needs. We have alloc ated $35,000 for furnishing the four common rooms. Each private room will need a hospital-capable bed, linens, a dresser, and a phone, at the minimum. With the remaining funding, that leaves just over $6,000 per room. This budget will allow us to provide attrac tive, functional, and comfortable surroundings to our residents in their new homes. Each bedroom in the main building will have enough remaining space that residents can bring plenty of familiar furniture with them (up to two side tables and wingbac k/ reclining chairs, and a second dressing table or its equivalent).

Funding To fund these start-up costs, we have secured a low-interest loan for $210,000, and have collected donations and pledges in the amount of $291,500. We have also included the value ($400,000) of the Bright House property in the "donations collected" category to ac curately reflect our assets. We must raise an additional $7,650 by January 1st to begin operations.

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Table: Start-up
Start-up Requirements Start-up Expenses Legal Stationery etc. Advertising Insurance Computerized Medical Records System Expensed Medical Equipment Staff Training Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements

$500 $200 $2,450 $8,000 $20,000 $13,000 $5,000 $49,150

$78,000 $6,000 $31,000 $750,000 $865,000 $914,150

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Table: Start-up Funding
Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $49,150 $865,000 $914,150

$787,000 $78,000 $0 $78,000 $865,000

Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Donations Collected Donations Pledged Needed Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital $597,000 $94,500 $0 $7,650 $699,150 ($49,150) $650,000

$5,000 $210,000 $0 $0 $215,000

Total Capital and Liabilities Total Funding

$865,000 $914,150

2.4 Locations and Facilities


We have now nearly completed the five-month renovation of the former Wayfield Bed and Breakfast into our two main fac ilities. The main building will house our privately insured, assisted-living residents. The skilled nursing fac ility ac ross the courtyard offers more intensive care for post-operative and recovering temporary residents, as well as providing a setting for increased care for our residents as needed. Each resident in our assisted living retreat will have a private bedroom and bath, opening onto a central social area containing the living room, dining room, and kitchen. We have two larger rooms that can ac commodate married couples who move in at the same time, for a total of 12 rooms, holding up to 14 residents. Each room is wheelchair ac cessible, and can ac commodate maintenance mac hines such as oxygen.

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The skilled nursing fac ility to the left of the main building can house up to eleven adults, and is the only area of the fac ilities which will house residents receiving Medicare or Medicaid payments. This part of Bright House has two purposes: as a short-term rehabilitation center for community members recovering from surgery or medical emergencies; and as a full-service nursing fac ility for residents who can no longer take care of their own needs sufficiently in the main building. The continuity of loc ation, social contac t, and quality of care ensures that our residents will remain in the best possible surroundings when their needs are greatest. Middletown, where we are situated, is centrally loc ated 25 minutes from Hartford, and 30 minutes from New Haven. Middletown is a small college town, with an ethnically and economically-varied population.

3.0 Services
We offer two services: Assisted Living and Skilled Nursing Care. We will begin providing services in January of next year.

3.1 Service Description


Assisted Living Our residents in the main building can expec t respec tful and caring assistance as they go about the daily ac tivities of their own c hoicenot those of an Ac tivity Director, or nursing home staff. The Elder Assistants, in addition to providing personal care, will also do their laundry, cook all meals (with optional resident assistance), and clean. These residents can expec t that their new home will be just thattheir own home, shared in c ommunity with other residents, who come together to socialize, air grievances, plan ac tivities, and share their knowledge and wisdom with eac h other and all who choose to visit them. Our residents are welcome to have visitors at any time between 7am and 9pm, and to plan outings whenever and wherever they choose. In return, we expec t them to keep us informed of their health, their concerns, their enthusiasms, and their whereabouts, so that we can best assist them. Skilled Nursing Care For residents or temporary residents with more demanding health or care situations, our Skilled Nursing Care Fac ility offers a more closely supervised and assisted lifestyle on the same propertyright ac ross the courtyard. Our two full-time and two part-time Licensed Prac tical Nurses (LPNs) are joined by the full-time Elder Assistants, who perform for our skilled nursing residents many of the same services they do for our Assisted Living Residents. Residents staying in our Skilled Nursing Care Fac ility will receive any nec essary medications on the sc hedule determined when they enter the fac ility, administered by our nursing staff, and overseen by our Medical Director. They will be encouraged to take part in Bright House soc ial life, including physically non-demanding ac tivities in the Bright House garden, to speed their recovery and improve their sense of connection.

3.2 Alternative Providers


The many fac ilities in our area serving this population offer only hospital-model care fac ilities. Their strengths and weaknesses are described below, under Topic 4.3 - Service Providers Page 8

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Analysis. Our nonprofit status and our alternative care model allow us to offer more residentoriented services at a better price, with a more satisfied and team-oriented staff, than these fac ilities can. For our privately insured residents, we offer respectful and nurturing care, viewing the resident as a whole person, in a particular stage of their life's journey. For our Medicare residents, we offer a more humane, but still medically-qualified, alternative to the drab prospec ts of a standard nursing home. And for their families, we offer peace of mind, and the knowledge that outside of in-home, full-time care, their loved ones are receiving the best possible daily assistance in maintaining their preferred lifestyle.

3.3 Printed Collaterals


Our broc hure (attac hed, 1) describes the services offered and includes "before" and (envisioned) "after" pictures of the Bed and Breakfast-turned-Elder Home. Our fundraising pac ket (attac hed, 2) includes the broc hure, Dr. Johnson's resume' and mission statement, and testimonials from prospec tive residents and Dr. Johnson's colleagues. Both of these will be reworked in June of next year, to bring donors and potential residents and their families up-to-date on our progress during the first year.

3.4 Technology
In addition to our advanced medical equipment, the main use of technology at Bright House will be the installation and use of our computerized medical record system. The benefits of this system (described in the Start-up Summary, above) are numerous. The system will also allow residents to ac cess their own individual records with a password at will, to ensure that they understand as much as they can about their own situation, and how to maintain their health. We are working carefully with DigInfoMedTel to ensure that all of our technology meets Health Insurance Portability and Ac countability Ac t (HIPAA) standards before implementation. We will hold a series of HIPAA trainings with the software in mid-December to ensure that our staff is fully-knowledgeable in this area.

3.5 Future Services


We hope that Bright House bec omes a model for alternative Elder Care in our area. The loc al population in this affluent state could support dozens of Elder Care Homes such as ours. In the second year, with our residents and staff established, we plan to explore potential connections with loc al alternative sc hools, who have expressed an interest in bi-monthly 'heritage trips,' for their students to take lessons in areas of our residents' expertise, from gardening, to cooking, to fishing, to electrical design (to name just a few of the many skills our current group of prospec tive residents have to offer). After our first five years, on a firm financial footing, we would also like to find ways to reduce resident monthly costs to make such c are available to families with more modest incomes. We envision using these initial years to gain the experience and teamwork nec essary for Page 9

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establishing the best caregiver/resident proportion.

4.0 Market Analysis Summary


We are basing our Market Analysis on data from Middlesex and Hartford counties, affluent portions of which, such as Glastonbury, are within a short drive of our fac ility. Base Numbers for private residents: The current total population of residents 65 and older, ac cording to the 2000 U.S. Census, is 155,071 in Middlesex County, and 857,183 for the same group in nearby Hartford County. (The percentage of elderly in both c ounties is slightly higher than the 12.4% of the overall Connecticut population.) Our projections reduce that number by 70% to ac count for those healthy enough to care for themselves, or with family members able to care for them, leaving us with a total potential market of 303,676. We then reduce that number again by half to get the total potential customers living within a 35 minute drive of Middletown (these are small counties, and we are situated at their juncture), leaving us with 151,838. Of these, we estimate roughly 8.5% will have the means ($150,000 or more family income) to pay for full-time private care at our fac ility (based on the 2000 census data about Connecticut income). This leaves us with roughly 12,906 nearby upper-income residents of Hartford and Middlesex County who are 65 or older, and in need of medical or other daily assistance in their living situation. To project into the future, we again looked to the 2000 Census. The Census' Projected Population of Connecticut is as follows: 1995 467,000 2000 461,000 2005 456,000 2015 526,000 2025 671,000

While the overall population of Connecticut is projected to dec line over the next five years, before rising again, we know that the proportion of the overall population age 75 and older (our target market age) is slowly rising. We therefore include a modest projected increase in potential customers of 1% over the next five years. Medicare residents and short stays: A study published recently in the journal Health Affairs by Morrissey, Sloan, and Valvona found that the proportion of Medicare patients transferred to post-hospital care has doubled since the Prospec tive Payment System (PPS) was introduced. Rather than staying in the hospital until recuperated, the current system preferentially delegates recovery care to private nonhospital fac ilities, leaving room in hospitals for urgent or crisis care. We base our projections for Medicare residents on the same figures listed above, but looking at the percentage of elderly with family incomes between $30,000 and $75,000 dollars,* rather than just the highest brac ket, we get 40% of the population, or 60,735. We apply the same conservative 1% growth rate, below. *This income range was chosen because it correlates with the kind of higher education levels that most families choosing non-hospital model skilled nursing care report. Although residents with lower incomes may have a need for our service, they are traditionally less likely to seek out alternative care. Page 10

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Table: Market Analysis


Market Analysis Year 1 Potential Customers Privately-paying Full-time Residents Medicare Patients Other Total Growth 1% 1% 0% 1.00% 12,906 60,735 0 73,641 Year 2 13,035 61,342 0 74,377 Year 3 13,165 61,955 0 75,120 Year 4 13,297 62,575 0 75,872 Year 5 13,430 63,201 0 76,631 CAGR 1.00% 1.00% 0.00% 1.00%

4.1 Market Segmentation


Although we have broken our target population into two groups based on income, our marketing strategies rely on another level of breakdownmarketing to potential residents, and marketing to the families of potential residents, who may or may not have similar needs.

4.2 Target Market Segment Strategy


The overall populations we wish to serve are older people (65 and older), in need of daily assistance, who value community and the contributions of their peers. Since Bright House will bec ome their home, we espec ially are seeking residents willing to make this house a home, and learn from and teac h eac h other. We also recognize that we must meet the somewhat different needs of our residents' families, who will help them make the dec ision to live with us, or recuperate here, and who will almost certainly be contributing to the monthly payments nec essary to provide for their care. Page 11

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4.2.1 Market Trends
In the old days, families just took care of families and that took care of the problem of aging, but we can no longer do that. Churches and other organizations cant always take up the slac k in this area, and so we are left with public policy dec isions about what happens. -Senator John Glenn, April 27, 1998 Elder Care Today and Tomorrow, Fielding Hearing of the U. S. Senate Special Committee on Aging, Columbus, Ohio As mentioned in our Market Analysis, the percentage of the population over 75 is growing rapidly, thanks to better nutrition, preventative health c are, and living conditions in our country over the course of the last century, not to mention the Baby Boomers. At the same time, the increasing kinds of career opportunities for women, and the growing cost of health c are, have contributed to a nursing shortage which threatens the quality of professionally-provided elder care. Phyllis Moen and Emma Detinger of Cornell University point out, in a paper for the Sloan Work Family Policy Center, that the quote above, "...reflects an issue emanating from structural lag, as policies and prac tices fail to keep pac e with c hanges in the workforce, in families, and in gender roles (Riley and Riley 1994, 2000). The organization of both work and career paths reflects a continued reliance on the male breadwinner template, assuming a workforce without family responsibilities (Moen and Yu 2000). But the new reality is that almost half the workforce is now female, meaning that most workersmale and femalehave no one at home to provide care to older ailing or infirm relatives, much less child care (see disc ussion in Harrington 1999 and Moen 1992). Moreover, most cannot afford to purchase comprehensive, round-the-cloc k care. The 21st century will witness concerns over childcare policies and prac tices morphing into concerns over dependent care policies and prac ticesan amalgam of both c hildcare and elder care."

4.2.2 Market Needs


The aging of the Baby Boomers is a well-known and much disc ussed fac t of our times. More and more of this population, many of whom were instrumental in c reating the counter-culture of the 1960's and 70's, are unhappily surprised about the options available to them as they age. Fortunately, just as AARP (formerly known as the American Assoc iation of Retired Persons) has bec ome a major representative of this non-traditional group, elder-care alternatives along the Eden Care model are being founded. Residents'/Patients' Needs Our own experience, based on years of caring for elderly patients, is that people seeking assisted living care and skilled nursing care have many of the same needs: To be To be To be To be team treated with respect and dignity ac tively engaged in a community of some kind involved in his/her own treatment and living plan cared for by skilled, medically-knowledgeable clinicians and caregivers, working as a

You may notice that our list of "needs" seems to go in the opposite order to that of most hospital-model nursing homes; this is not an ac cident. Unfortunately, most of our elderly Page 12

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population who need care are treated with the billing system's needs, and not their own, in mind. Families' Needs Similarly, the families of people seeking caring environments have their own set of needs they are seeking to fulfill: Peac e of mind about their loved-ones' physical and mental state Relief from the time-consuming job of caring for their family members themselves Relief from the feelings of guilt which often overcome them when they find they do not have the physical, emotional, or intellectual resources to personally provide appropriate care for those they love

The big, unstated elephant-in-the-room for families seeking care is the feeling of being a bad daughter or son or spouse, who is not willing or able to put her life on hold to take care of a much-loved family member. At Bright House, we do not seek to dismiss this feeling, but to reassure families in everything we do that the choice to let us take care of their family member is a loving, kind, and generous ac t.

4.3 Service Providers Analysis


There are a number of different options for families seeking nursing home care, from in-hospital recovery centers, to for-profit chains, to spec ialized care for people with Alzheimer's, AIDS, diabetes, and so on. The specialized care fac ilities, which are usually nonprofit, and offer individualized nursing care, come closest to our care model, but are usually reserved for people with a particular ailment in need of intensive medical assistance.

4.3.1 Organization Participants


There are 125 Medicare-licensed senior care providers within 25 miles of Middletown (out to Hartford, Glastonbury, and Farmington). These can be broken down into four rough groups (in descending order): Private, for-profit nursing homes Church-based nursing homes Veterans' Homes Others (like the Alzheimer's Resource Network)

Of these, 57 are part of a multi-home chain, and only 15 are nonprofit. None of them combine both assisted living and skilled nursing care with the alternative, non-hospital model we use.

4.3.2 Alternatives and Usage Patterns


Families choose one elder care fac ility over another for a variety of reasons. The most common issues involved in their dec ision are distance from their home(s), affordability, quality of staff and fac ilities, and particular medical specialties nec essary for their family member. Families will usually choose the highest level of care affordable within 45 minutes to one hour of their homes, in order Page 13

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to make visiting their family member easier.

4.3.3 Main Alternatives


The following three organizations are representative of the types described above: Fox Hill Center, Roc kville For-profit, part of a chain 3.37 nursing staff hours/resident day 150 beds (not 150 rooms) 11 deficiencies in Medicare inspec tion

Fox Hill Center is typical of the hospital-model nursing home. It is large (150 beds), for-profit, and has a fairly low rate of nursing hours per resident day. Its size makes it able to care for many patients, but often at the expense of individual attention. Sister Anne Virginie Grimes Health Center, New Haven Nonprofit, religious based, loc ated in a hospital 4.16 nh/rd 125 beds 3 deficiencies

The Grimes Health Center, like many religious care centers, is nonprofit, and has a slightly higher rate of nursing hours per resident day than the for-profit centers, despite its large size. Quality of care, however, is noticeably higher (3 deficiencies in inspec tion, compared to 11 at Fox Hill). Leeway, Inc., New Haven Nonprofit 5.04 nh/rd 40 beds 4 deficiencies

Leeway is a typical spec ialized private (not in a hospital) nonprofit care fac ility. It is much smaller than the other two described, has the highest rate of nursing care per resident day, and high quality marks in inspec tion. Its small size and nonprofit status allow it to foc us on providing individual attention. Leeway is Connecticut's first and only skilled nursing home dedicated solely to the treatment of people living with AIDS.

5.0 Management Summary


Caregiving Management Bright House offers a different management structure from that of the typical hospital-model nursing home. Our primary caregivers, the 6 Elder Assistants, work as a self-managed team, meeting with the Medical Director and the nurse on-call every morning to coordinate care for the

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coming day. Although the Medical Director has the ultimate responsibility for the health and well-being of all residents and visitors, the nursing and caregiving staff, with their different kinds of knowledge about the residents' physical, soc ial, and mental well-being, are expec ted to note, disc uss, and recommend courses of ac tion for all residents who, in their combined estimation, need help. A 2001 study by the Robert Wood Johnson Foundation found that the small percentage of Chief Nursing Officers reporting no nursing shortages in their fac ilities at the time of the study cited formalized programs foc used on the needs of, and professional recognition for, their nursing staffs as the reason for their adequate staffing. Our compensation pac kages, management structure, and caregiving requirements are designed to continually remind our LPNs and Elder Assistants how very valuable they are. Dr. Mildred Johnson is our Medical Director. Dr. Johnson has served as the head of Gerontology for six years at The Connecticut Hospital, and oversaw the creation, last year, of their Elder Assistant training program, which provides certification for Certified Nursing Assistants (CNA) to provide in-home hospice and respite care. Dr. Johnson has 20 years of experience working with elderly patients in this area, and has been integral in designing the physical layout, management structure, and priorities of Bright House. The rest of our already-hired caregiving staff brings a whopping collective 75 years of professional experience in c aring for elderly patients. Financial Management: Madeleine Morgan has been overseeing financial management of nonprofit organizations in Connecticut for 27 years. She bec ame involved in our project when her mother developed a long-term care plan with Dr. Johnson which included home-based hospice care. "I wish everyone could have the same love and attention Dr. Johnson showed to my mother," Madeleine said. Ms. Morgan will be in c harge of all financial operations at Bright House, overseeing billing, personnel payment and benefits, and development efforts. Advertising and Marketing: We are fortunate to have a skilled public relations officer in our group. Janice Ruthers is a retired ad executive living in Middletown with her husband (a professor at the university). She will be working 20 hours per week in our offices as a volunteer for the first two years of our plan, helping us design advertisements and broc hures, and to plan events like our Open House in December to let the public see the results of our efforts.

5.1 Management Team Gaps


We still need to hire one swing-shift LPN, and one Elder Assistant. We are currently recruiting through Dr. Johnson's connections at The Connecticut Hospital, and expec t to complete our team by mid-December, at the latest.

5.2 Caregiving Organizational Chart


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5.3 Personnel Plan


One of the greatest stumbling bloc ks for traditional nursing homes is the dissatisfac tion and high turnover rate of its staff. Given the current and foreseeable nursing shortages, this is an especially troubling tendency. Our Personnel Plan reflects our committment to offer employment that is not only meaningful, but compensates our employees fairly for their time, energy, and the emotional toll it takes to spend your days caring for others. A study in 2000 by the Connecticut Legislative Program Review and Investigations Committee, the first to measure resident outcomes in relation to nursing staff levels, found residents were at increased risk for malnutrition, bedsores, dehydration, and preventable hospitalizations when nursing staff levels dropped beneath 2.75 hours per resident day (this includes Certified Nursing Assistants). In addition to its small size, which provides for individual attention, our Skilled Nursing Care Fac ility's personnel plan will provide no less than 5 hours per resident day of nursing attention. Our assisted living retreat ac ross the lawn will make use of these skilled nurses, but will rely for the most part on the care and attention of our Elder Assistants, nursing aides with spec ial training for providing care in a holistic setting. Our committment to fair, living wages is evident in our personnel plan. To ensure the best possible care for permanent and respite-care residents, all full-time staff positions include full health benefits, sick leave, and two weeks paid vac ation time per year, increasing with seniority in years two and three. All benefits are included in the Personnel monthly payments. Our part-time positions (1 Medicare Holistic/Billing Specialist, and a Development officer) offer benefits with a higher employee contribution, and paid vac ation in proportion to FTE (full-time equivalent) worked (.5 FTE = one week paid vac ation/year, etc.). Our Development Officer already has a second part-time position with a loc al patients- rights advoc ac y group; we are working with them to coordinate her hours and provide her with a full benefits pac kage. To meet our staffing goals, we need the following medical and caretaking staff: 1 full-time Medical Director (Dr. Johnson) Page 16

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2 full-time LPNs (alternating 30- and 40-hour weeks9pm to 7am, switching 4 and 3 days/week) (hiredwill start training December) 1 swing-shift LPN (35 hrs/week, 5-10pm) (still seeking) 6 full-time Elder Assistants (5 CNAs with CPR and First Aid training are currently taking part in our spec ial Elder Care training; the sixth still needs to be hired)

We will also need administrative and development personnel: 1 full-time Financial Manager (Madeleine Morgan) 1 part-time (20 hours/week) Medicare Billing Specialist (Abby Hannahcurrently helping to plan our computerized medical records system) 1 part-time Development officer (Jessica Breindel)

Table: Personnel
Personnel Plan Year 1 Medical/Clinical Personnel Medical Director LPNs - Full-time 35-40 hrs, night LPNs - swing shift, 30 hours, day Subtotal Caretaking Personnel Elder Assistants Other Subtotal Administrative Personnel Medicare Liason / Billing Specialist Financial Manager Janice Ruthers - Part-time Marketing Subtotal Fundraising Personnel Development Officer - Part-time Name or Title or Group Name or Title or Group Subtotal Total People Total Payroll $66,000 $117,000 $34,125 $217,125 Year 2 $66,000 $118,000 $58,500 $242,500 Year 3 $67,000 $119,000 $59,000 $245,000

$221,520 $0 $221,520

$223,000 $0 $223,000

$255,000 $0 $255,000

$33,600 $64,800 $0 $98,400

$34,000 $65,000 $0 $99,000

$34,500 $65,500 $0 $100,000

$14,400 $0 $0 $14,400 14 $551,445

$15,000 $0 $0 $15,000 14 $579,500

$15,500 $0 $0 $15,500 14 $615,500

6.0 Strategy and Implementation Summary


We have set ourselves ambitious goals. The key to holding ourselves to these goals is to set concrete, measurable milestones, with c lear responsibilities and budgets, where applicable. We have already mentioned the ongoing caregiver meetings, House Councils, and other feedback to measure our caregiving performance. The Milestones Chart, below, shows the concrete financial, marketing, and implementation goals in graphic format. (Details can be found in the Milestones Table in the Appendix.)

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Table: Milestones
Milestones Milestone Collect Pledges for Remaining Funds Finalize Agreements w/ Medical Suppliers Finish All Remodeling Buy Furnishings Inspection Collect Donations Pledged Install-Test Computerized Medical System Place Ads in Hartford Courant Finish Brochures Test Billing System Finish Hiring Process Alternative Care Model Staff Training Open House First Residents Move in First Operational Review House Councils Begin Assisted Living Facility Full Add "What's New" Pamphlet to Brochures Totals Start Date 6/4/2009 7/30/2004 6/23/2004 8/15/2004 11/1/2004 7/26/2004 9/1/2004 10/1/2004 9/1/2004 10/15/2004 8/1/2004 12/1/2004 12/10/2004 1/1/2005 1/15/2005 1/20/2005 6/1/2005 6/1/2005 End Date 8/30/2004 9/30/2004 8/15/2004 11/1/2004 11/15/2004 11/15/2004 10/30/2004 10/15/2004 11/1/2004 11/10/2004 12/15/2004 1/1/2005 12/20/2004 1/5/2005 1/30/2005 1/20/2005 6/1/2005 6/20/2005 Budget $0 $0 Manager Breindel Morgan Department Department Department Department Department Department Department Department Department Department Department Department Department Department Department Department Department Department Department

$5,000 Morgan, Ruthers $0 Morgan, Ruthers, Johnson $0 Johnson $0 Breindel, Morgan $0 Hannah $450 Ruthers $2,000 Ruthers $0 Morgan, Hannah $0 Morgan, Johnson $5,000 Johnson $0 Ruthers

$0 ABC $0 Johnson, Morgan $0 Johnson, Elder Assistants Johnson, Morgan, Ruthers $200 Ruthers $12,650 $0

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7.0 Financial Plan
As our Break-even Analysis (below) shows, Bright House would need 13 residents per month to break-even at current funding levels. We intend, of course, to do better than this.

7.1 Important Assumptions


A "full" elder care fac ility is generally 90% to 95% full. Our non-standard model allows us to forecast for full oc cupancy in the main building, since turnover rates for assisted living residents are expec ted to be quite low (1-2 per year, at most). The skilled nursing fac ility, on the other hand, requires a certain number of empty beds to offer the flexibility needed to ac commodate shorter stays. We therefore are projecting reac hing "capacity" of our eleven-bed fac ility at 10 full beds. Our resident monthly prices are based on the current Medicare nursing-hours- per-resident-day rates for our kind of services. Medicare patients are billed at roughly $135/day for nursing care, not including the cost of any medication to be administered by our staff. Our private patients are billed at a slightly higher rate to ac count for the low Medicare reimbursement rate, but also to pay for the extra benefits they receive as part of living at Bright House. Our rates are roughly 2/3 of our nearest competitors, the difference being made up for in donations, and savings gained through staff retention and the use of highly trained, flexible, Elder Assistants. The small size of our fac ility allows us a cost savings on maintenance and grounds. One other important assumption concerns payables: We have assumed collection days of 60, which averages our private residents' monthly up-front payment, and the typical 60-90 day reimbursement rate from Medicare.

7.2 Key Financial Indicators


We will be closely watching two things: Private Resident capacity Medicare Billing payment rates and collection days

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Table: Funding Forecast
Funding Forecast Year 1 Units Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Total Units Unit Prices Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Funding Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Total Funding Direct Unit Costs Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Direct Cost of Funding Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Subtotal Direct Cost of Funding $0 $76,140 $0 $76,140 $0 $89,424 $0 $89,424 $0 $91,287 $0 $91,287 150 94 0 244 Year 1 $3,200.00 $4,050.00 $0.00 Year 2 150 96 0 246 Year 2 $3,200.00 $4,050.00 $0.00 Year 3 150 98 0 248 Year 3 $3,200.00 $4,050.00 $0.00

$480,000 $380,700 $0 $860,700 Year 1 $0.00 $810.00 $0.00

$480,000 $388,800 $0 $868,800 Year 2 $0.00 $931.50 $0.00

$480,000 $396,900 $0 $876,900 Year 3 $0.00 $931.50 $0.00

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7.3 Projected Surplus or Deficit
The projected surplus and deficit follows, below.

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Table: Surplus and Deficit
Surplus and Deficit Funding Direct Cost Medical/Clinical Payroll Non-reusable Medical Equipment #NAME? Total Direct Cost Gross Surplus Gross Surplus % Operating Expenses Caretaking Expenses Caretaking Payroll Groceries Cleaning Supplies Other Caretaking Expenses Total Caretaking Expenses Caretaking % Administrative Expenses Administrative Payroll Other Expense Account Name Depreciation Property Taxes Utilities Insurance Payroll Taxes Grounds and Building Upkeep Other Total Administrative Expenses Administrative % Fundraising Expenses: Fundraising Payroll Brochures, Marketing Fundraising Expenses Total Fundraising Expenses Fundraising % Total Operating Expenses Surplus Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Surplus Net Surplus/Funding Year 1 $860,700 $76,140 $217,125 $4,800 $0 $298,065 $562,635 65.37% Year 2 $868,800 $89,424 $242,500 $5,000 $0 $336,924 $531,876 61.22% Year 3 $876,900 $91,287 $245,000 $5,000 $0 $341,287 $535,613 61.08%

$221,520 $16,800 $1,200 $0 $239,520 27.83%

$223,000 $18,000 $1,200 $0 $242,200 27.88%

$255,000 $20,000 $1,300 $0 $276,300 31.51%

$98,400 $0 $1,200 $12,000 $24,000 $14,400 $82,717 $4,800 $0 $237,517 27.60%

$99,000 $0 $1,500 $13,000 $25,000 $15,000 $86,925 $5,000 $0 $245,425 28.25%

$100,000 $0 $1,800 $14,000 $26,000 $15,000 $92,325 $5,000 $0 $254,125 28.98%

$14,400 $800 $0 $15,200 1.77% $492,237 $70,398 $71,598 $20,479 $0 $49,919 5.80%

$15,000 $1,000 $0 $16,000 1.84% $503,625 $28,251 $29,751 $17,200 $0 $11,051 1.27%

$15,500 $500 $0 $16,000 1.82% $546,425 ($10,812) ($9,012) $13,450 $0 ($24,262) -2.77%

7.4 Break-even Analysis


The following Break-even Analysis table shows that with our forecasted operating expenses, Page 23

Bright House
including personnel, we need to serve 13 residents to cover costs. We plan to reac h this fairly conservative goal by the second month of operations (see the Resident Forecast, above).

Table: Break-even Analysis


Break-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 13 $45,001

$3,527.46 $312.05 $41,020

7.5 Projected Cash Flow


Our projected Cash Flow follows. Of spec ial note are plans to sell off two bac k ac res at the far south end of the property in July to loc al developers who have approached us about planning two large, single-family residences. (Developers' sketches included in appendix.) Also of note are future fundraising plans: With the help of our Development Officer, we plan fundraising campaigns in years two and three of $35,000 and $40,000, respec tively. These funds will contribute to our forecasted long-term loan payments, since we plan to pay off the principal ahead of sc hedule. Our projected fundraising goals and anticipated expenses are conservative, including only a modest expec ted increase in income from residents in years two and three; yet, even at these levels, our plan maintains a healthy, positive cash balance throughout. Page 24

Bright House
Table: Cash Flow
Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Funding Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance Year 2 Year 3

$645,525 $173,236 $818,761

$651,600 $216,805 $868,405

$657,675 $218,830 $876,505

$0 $5,000 $0 $0 $0 $25,000 $0 $848,761 Year 1

$0 $0 $0 $0 $0 $0 $35,000 $903,405 Year 2

$0 $0 $0 $0 $0 $0 $40,000 $916,505 Year 3

$551,445 $237,601 $789,046

$579,500 $277,357 $856,857

$615,500 $282,423 $897,923

$0 $5,500 $0 $25,000 $0 $0 $0 $819,546 $29,215 $107,215

$0 $0 $0 $35,000 $0 $0 $0 $891,857 $11,549 $118,764

$0 $0 $0 $40,000 $0 $0 $0 $937,923 ($21,418) $97,346

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7.6 Projected Balance Sheet
Our Balance Sheet shows a continued high net worth, reflecting the value of our property, fac ility, and medical and communication assets.

Table: Balance Sheet


Pro Forma Balance Sheet Year 1 Assets Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Accumulated Surplus/Deficit Surplus/Deficit Total Capital Total Liabilities and Capital Net Worth Year 2 Year 3

$107,215 $41,939 $8,100 $31,000 $188,254

$118,764 $42,334 $8,883 $31,000 $200,981

$97,346 $42,729 $7,882 $31,000 $178,957

$725,000 $1,200 $723,800 $912,054 Year 1

$725,000 $2,700 $722,300 $923,281 Year 2

$725,000 $4,500 $720,500 $899,457 Year 3

$22,635 $4,500 $0 $27,135 $185,000 $212,135 $699,150 ($49,150) $49,919 $699,919 $912,054 $699,919

$22,811 $4,500 $0 $27,311 $150,000 $177,311 $734,150 $769 $11,051 $745,970 $923,281 $745,970

$23,249 $4,500 $0 $27,749 $110,000 $137,749 $774,150 $11,820 ($24,262) $761,708 $899,457 $761,708

7.7 Standard Ratios


The Ratios table which follows shows how we differ in asset and income structure from other continuous care fac ilities.

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Table: Ratios
Ratio Analysis Funding Growth Percent of Total Assets Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Funding Funding Gross Surplus Selling, General & Administrative Expenses Advertising Expenses Surplus Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Surplus Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Inventory Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Funding Current Debt/Total Assets Acid Test Funding/Net Worth 1.06 3% 5.09 1.23 1.06 3% 5.48 1.16 1.03 3% 4.63 1.15 n.a n.a n.a n.a 6.94 6.64 23.26% 7.13% 5.47% Year 1 5.80% 7.13% 7.36 7.03 19.20% 1.48% 1.20% Year 2 1.27% 1.48% 6.45 6.17 15.31% -3.19% -2.70% Year 3 -2.77% -3.19% 1.61 1.20 54.58% 5.88% 12.94% Year 1 n.a. Year 2 0.94% Year 3 0.93% Industry Profile 1.62%

4.60% 0.89% 3.40% 20.64% 79.36% 100.00% 2.98% 20.28% 23.26% 76.74%

4.59% 0.96% 3.36% 21.77% 78.23% 100.00% 2.96% 16.25% 19.20% 80.80%

4.75% 0.88% 3.45% 19.90% 80.10% 100.00% 3.09% 12.23% 15.31% 84.69%

14.37% 0.55% 36.74% 51.66% 48.34% 100.00% 20.58% 28.02% 48.60% 51.40%

100.00% 65.37% 59.57% 1.95% 8.18%

100.00% 61.22% 59.95% 2.07% 3.25%

100.00% 61.08% 63.85% 2.28% -1.23%

100.00% 100.00% 80.78% 0.39% 2.77%

n.a n.a

5.13 57 11.82 11.50 27 0.94

5.13 71 10.53 12.17 30 0.94

5.13 71 10.89 12.17 30 0.97

n.a n.a n.a n.a n.a n.a

0.30 0.13

0.24 0.15

0.18 0.20

n.a n.a

$161,119 3.44

$173,670 1.64

$151,208 -0.80

n.a n.a

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Dividend Payout 0.00 0.00 0.00 n.a

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Appendix
Table: Funding Forecast
Funding Forecast Month 1 Units Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Total Units Unit Prices Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Funding Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Total Funding Direct Unit Costs Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Direct Cost of Funding Assisted Living Main Residents Medicare Residents - Skilled Nursing Facility Other Subtotal Direct Cost of Funding $0 $2,430 $0 $2,430 $0 $3,240 $0 $3,240 $0 $3,240 $0 $3,240 $0 $4,860 $0 $4,860 $0 $6,480 $0 $6,480 $0 $7,290 $0 $7,290 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 $0 $8,100 0% 0% 0% 8 3 0 11 Month 1 $3,200.00 $4,050.00 $0.00 Month 2 10 4 0 14 Month 2 $3,200.00 $4,050.00 $0.00 Month 3 10 4 0 14 Month 3 $3,200.00 $4,050.00 $0.00 Month 4 12 6 0 18 Month 4 $3,200.00 $4,050.00 $0.00 Month 5 12 8 0 20 Month 5 $3,200.00 $4,050.00 $0.00 Month 6 14 9 0 23 Month 6 $3,200.00 $4,050.00 $0.00 Month 7 14 10 0 24 Month 7 $3,200.00 $4,050.00 $0.00 Month 8 14 10 0 24 Month 8 $3,200.00 $4,050.00 $0.00 Month 9 14 10 0 24 Month 9 $3,200.00 $4,050.00 $0.00 Month 10 14 10 0 24 Month 10 $3,200.00 $4,050.00 $0.00 Month 11 14 10 0 24 Month 11 $3,200.00 $4,050.00 $0.00 Month 12 14 10 0 24 Month 12 $3,200.00 $4,050.00 $0.00

$25,600 $12,150 $0 $37,750 Month 1 $0.00 $810.00 $0.00

$32,000 $16,200 $0 $48,200 Month 2 $0.00 $810.00 $0.00

$32,000 $16,200 $0 $48,200 Month 3 $0.00 $810.00 $0.00

$38,400 $24,300 $0 $62,700 Month 4 $0.00 $810.00 $0.00

$38,400 $32,400 $0 $70,800 Month 5 $0.00 $810.00 $0.00

$44,800 $36,450 $0 $81,250 Month 6 $0.00 $810.00 $0.00

$44,800 $40,500 $0 $85,300 Month 7 $0.00 $810.00 $0.00

$44,800 $40,500 $0 $85,300 Month 8 $0.00 $810.00 $0.00

$44,800 $40,500 $0 $85,300 Month 9 $0.00 $810.00 $0.00

$44,800 $40,500 $0 $85,300 Month 10 $0.00 $810.00 $0.00

$44,800 $40,500 $0 $85,300 Month 11 $0.00 $810.00 $0.00

$44,800 $40,500 $0 $85,300 Month 12 $0.00 $810.00 $0.00

0.00% 20.00% 20.00%

Page 1

Appendix
Table: Personnel
Personnel Plan Month 1 Medical/Clinical Personnel Medical Director LPNs - Full-time 35-40 hrs, night LPNs - swing shift, 30 hours, day Subtotal Caretaking Personnel Elder Assistants Other Subtotal Administrative Personnel Medicare Liason / Billing Specialist Financial Manager Janice Ruthers - Part-time Marketing Subtotal Fundraising Personnel Development Officer - Part-time Name or Title or Group Name or Title or Group Subtotal Total People Total Payroll 100% $1,200 $0 $0 $1,200 13 $40,250 $1,200 $0 $0 $1,200 13 $43,370 $1,200 $0 $0 $1,200 13 $43,370 $1,200 $0 $0 $1,200 13 $43,370 $1,200 $0 $0 $1,200 13 $43,370 $1,200 $0 $0 $1,200 14 $48,245 $1,200 $0 $0 $1,200 14 $48,245 $1,200 $0 $0 $1,200 14 $48,245 $1,200 $0 $0 $1,200 14 $48,245 $1,200 $0 $0 $1,200 14 $48,245 $1,200 $0 $0 $1,200 14 $48,245 $1,200 $0 $0 $1,200 14 $48,245 100% 200% 100% $5,500 $9,750 $0 $15,250 Month 2 $5,500 $9,750 $0 $15,250 Month 3 $5,500 $9,750 $0 $15,250 Month 4 $5,500 $9,750 $0 $15,250 Month 5 $5,500 $9,750 $0 $15,250 Month 6 $5,500 $9,750 $4,875 $20,125 Month 7 $5,500 $9,750 $4,875 $20,125 Month 8 $5,500 $9,750 $4,875 $20,125 Month 9 $5,500 $9,750 $4,875 $20,125 Month 10 $5,500 $9,750 $4,875 $20,125 Month 11 $5,500 $9,750 $4,875 $20,125 Month 12 $5,500 $9,750 $4,875 $20,125

600%

$15,600 $0 $15,600

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

$18,720 $0 $18,720

100% 100% 100%

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

$2,800 $5,400 $0 $8,200

Page 2

Appendix
Table: Surplus and Deficit
Surplus and Deficit Funding Direct Cost Medical/Clinical Payroll Non-reusable Medical Equipment #NAME? Total Direct Cost Gross Surplus Gross Surplus % Operating Expenses Caretaking Expenses Caretaking Payroll Groceries Cleaning Supplies Other Caretaking Expenses Total Caretaking Expenses Caretaking % Administrative Expenses Administrative Payroll Other Expense Account Name Depreciation Property Taxes Utilities Insurance Payroll Taxes Grounds and Building Upkeep Other Total Administrative Expenses Administrative % Fundraising Expenses: Fundraising Payroll Brochures, Marketing Fundraising Expenses Total Fundraising Expenses $1,200 $800 $0 $2,000 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 $1,200 $0 $0 $1,200 15% 15% Month 1 $37,750 $2,430 $15,250 $400 $0 $18,080 $19,670 52.11% Month 2 $48,200 $3,240 $15,250 $400 $0 $18,890 $29,310 60.81% Month 3 $48,200 $3,240 $15,250 $400 $0 $18,890 $29,310 60.81% Month 4 $62,700 $4,860 $15,250 $400 $0 $20,510 $42,190 67.29% Month 5 $70,800 $6,480 $15,250 $400 $0 $22,130 $48,670 68.74% Month 6 $81,250 $7,290 $20,125 $400 $0 $27,815 $53,435 65.77% Month 7 $85,300 $8,100 $20,125 $400 $0 $28,625 $56,675 66.44% Month 8 $85,300 $8,100 $20,125 $400 $0 $28,625 $56,675 66.44% Month 9 $85,300 $8,100 $20,125 $400 $0 $28,625 $56,675 66.44% Month 10 $85,300 $8,100 $20,125 $400 $0 $28,625 $56,675 66.44% Month 11 $85,300 $8,100 $20,125 $400 $0 $28,625 $56,675 66.44% Month 12 $85,300 $8,100 $20,125 $400 $0 $28,625 $56,675 66.44%

$15,600 $1,400 $100 $0 $17,100 45.30%

$18,720 $1,400 $100 $0 $20,220 41.95%

$18,720 $1,400 $100 $0 $20,220 41.95%

$18,720 $1,400 $100 $0 $20,220 32.25%

$18,720 $1,400 $100 $0 $20,220 28.56%

$18,720 $1,400 $100 $0 $20,220 24.89%

$18,720 $1,400 $100 $0 $20,220 23.70%

$18,720 $1,400 $100 $0 $20,220 23.70%

$18,720 $1,400 $100 $0 $20,220 23.70%

$18,720 $1,400 $100 $0 $20,220 23.70%

$18,720 $1,400 $100 $0 $20,220 23.70%

$18,720 $1,400 $100 $0 $20,220 23.70%

$8,200 $0 $100 $1,000 $2,000 $1,200 $6,038 $400 $0 $18,938 50.17%

$8,200 $0 $100 $1,000 $2,000 $1,200 $6,506 $400 $0 $19,406 40.26%

$8,200 $0 $100 $1,000 $2,000 $1,200 $6,506 $400 $0 $19,406 40.26%

$8,200 $0 $100 $1,000 $2,000 $1,200 $6,506 $400 $0 $19,406 30.95%

$8,200 $0 $100 $1,000 $2,000 $1,200 $6,506 $400 $0 $19,406 27.41%

$8,200 $0 $100 $1,000 $2,000 $1,200 $7,237 $400 $0 $20,137 24.78%

$8,200 $0 $100 $1,000 $2,000 $1,200 $7,237 $400 $0 $20,137 23.61%

$8,200 $0 $100 $1,000 $2,000 $1,200 $7,237 $400 $0 $20,137 23.61%

$8,200 $0 $100 $1,000 $2,000 $1,200 $7,237 $400 $0 $20,137 23.61%

$8,200 $0 $100 $1,000 $2,000 $1,200 $7,237 $400 $0 $20,137 23.61%

$8,200 $0 $100 $1,000 $2,000 $1,200 $7,237 $400 $0 $20,137 23.61%

$8,200 $0 $100 $1,000 $2,000 $1,200 $7,237 $400 $0 $20,137 23.61%

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Appendix
Fundraising % Total Operating Expenses Surplus Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Surplus Net Surplus/Funding 5.30% $38,038 ($18,368) ($18,268) $1,821 $0 ($20,188) -53.48% 2.49% $40,826 ($11,516) ($11,416) $1,808 $0 ($13,324) -27.64% 2.49% $40,826 ($11,516) ($11,416) $1,792 $0 ($13,307) -27.61% 1.91% $40,826 $1,365 $1,465 $1,775 $0 ($411) -0.65% 1.69% $40,826 $7,845 $7,945 $1,750 $0 $6,095 8.61% 1.48% $41,557 $11,878 $11,978 $1,725 $0 $10,153 12.50% 1.41% $41,557 $15,118 $15,218 $1,696 $0 $13,422 15.74% 1.41% $41,557 $15,118 $15,218 $1,671 $0 $13,447 15.76% 1.41% $41,557 $15,118 $15,218 $1,646 $0 $13,472 15.79% 1.41% $41,557 $15,118 $15,218 $1,621 $0 $13,497 15.82% 1.41% $41,557 $15,118 $15,218 $1,596 $0 $13,522 15.85% 1.41% $41,557 $15,118 $15,218 $1,579 $0 $13,539 15.87%

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Appendix
Table: Cash Flow
Pro Forma Cash Flow Month 1 Cash Received Cash from Operations Cash Funding Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $40,250 $505 $40,755 $43,370 $15,244 $58,614 $43,370 $17,734 $61,104 $43,370 $18,145 $61,515 $43,370 $21,314 $64,684 $48,245 $22,879 $71,124 $48,245 $23,588 $71,833 $48,245 $24,315 $72,560 $48,245 $23,507 $71,752 $48,245 $23,482 $71,727 $48,245 $23,457 $71,702 $48,245 $23,432 $71,677 0.00% $0 $5,000 $0 $0 $0 $0 $0 $33,313 Month 1 $0 $0 $0 $0 $0 $0 $0 $36,465 Month 2 $0 $0 $0 $0 $0 $0 $0 $45,675 Month 3 $0 $0 $0 $0 $0 $0 $0 $59,075 Month 4 $0 $0 $0 $0 $0 $0 $0 $65,271 Month 5 $0 $0 $0 $0 $0 $0 $0 $76,680 Month 6 $0 $0 $0 $0 $0 $25,000 $0 $106,762 Month 7 $0 $0 $0 $0 $0 $0 $0 $84,321 Month 8 $0 $0 $0 $0 $0 $0 $0 $85,300 Month 9 $0 $0 $0 $0 $0 $0 $0 $85,300 Month 10 $0 $0 $0 $0 $0 $0 $0 $85,300 Month 11 $0 $0 $0 $0 $0 $0 $0 $85,300 Month 12 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

$28,313 $0 $28,313

$36,150 $315 $36,465

$36,150 $9,525 $45,675

$47,025 $12,050 $59,075

$53,100 $12,171 $65,271

$60,938 $15,743 $76,680

$63,975 $17,787 $81,762

$63,975 $20,346 $84,321

$63,975 $21,325 $85,300

$63,975 $21,325 $85,300

$63,975 $21,325 $85,300

$63,975 $21,325 $85,300

$0 $500 $0 $1,000 $0 $0 $0 $42,255 ($8,943) $69,057

$0 $500 $0 $1,000 $0 $0 $0 $60,114 ($23,649) $45,408

$0 $1,000 $0 $1,000 $0 $0 $0 $63,104 ($17,430) $27,978

$0 $1,000 $0 $1,000 $0 $0 $0 $63,515 ($4,440) $23,539

$0 $1,000 $0 $2,000 $0 $0 $0 $67,684 ($2,413) $21,126

$0 $1,000 $0 $2,000 $0 $0 $0 $74,124 $2,556 $23,682

$0 $500 $0 $3,000 $0 $0 $0 $75,333 $31,429 $55,111

$0 $0 $0 $3,000 $0 $0 $0 $75,560 $8,761 $63,873

$0 $0 $0 $3,000 $0 $0 $0 $74,752 $10,548 $74,421

$0 $0 $0 $3,000 $0 $0 $0 $74,727 $10,573 $84,994

$0 $0 $0 $3,000 $0 $0 $0 $74,702 $10,598 $95,592

$0 $0 $0 $2,000 $0 $0 $0 $73,677 $11,623 $107,215

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Appendix
Table: Balance Sheet
Pro Forma Balance Sheet Month 1 Assets Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Accumulated Surplus/Deficit Surplus/Deficit Total Capital Total Liabilities and Capital Net Worth Starting Balances Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

$78,000 $0 $6,000 $31,000 $115,000

$69,057 $9,438 $3,570 $31,000 $113,065

$45,408 $21,173 $3,240 $31,000 $100,821

$27,978 $23,698 $3,240 $31,000 $85,917

$23,539 $27,323 $4,860 $31,000 $86,722

$21,126 $32,853 $6,480 $31,000 $91,458

$23,682 $37,423 $7,290 $31,000 $99,394

$55,111 $40,960 $8,100 $31,000 $135,171

$63,873 $41,939 $8,100 $31,000 $144,912

$74,421 $41,939 $8,100 $31,000 $155,460

$84,994 $41,939 $8,100 $31,000 $166,033

$95,592 $41,939 $8,100 $31,000 $176,631

$107,215 $41,939 $8,100 $31,000 $188,254

$750,000 $0 $750,000 $865,000

$750,000 $100 $749,900 $862,965 Month 1

$750,000 $200 $749,800 $850,621 Month 2

$750,000 $300 $749,700 $835,617 Month 3

$750,000 $400 $749,600 $836,322 Month 4

$750,000 $500 $749,500 $840,958 Month 5

$750,000 $600 $749,400 $848,794 Month 6

$725,000 $700 $724,300 $859,471 Month 7

$725,000 $800 $724,200 $869,112 Month 8

$725,000 $900 $724,100 $879,560 Month 9

$725,000 $1,000 $724,000 $890,033 Month 10

$725,000 $1,100 $723,900 $900,531 Month 11

$725,000 $1,200 $723,800 $912,054 Month 12

$0 $5,000 $0 $5,000 $210,000 $215,000 $699,150 ($49,150) $0 $650,000 $865,000 $650,000

$14,653 $9,500 $0 $24,153 $209,000 $233,153 $699,150 ($49,150) ($20,188) $629,812 $862,965 $629,812

$17,133 $9,000 $0 $26,133 $208,000 $234,133 $699,150 ($49,150) ($33,512) $616,488 $850,621 $616,488

$17,436 $8,000 $0 $25,436 $207,000 $232,436 $699,150 ($49,150) ($46,819) $603,181 $835,617 $603,181

$20,552 $7,000 $0 $27,552 $206,000 $233,552 $699,150 ($49,150) ($47,230) $602,770 $836,322 $602,770

$22,094 $6,000 $0 $28,094 $204,000 $232,094 $699,150 ($49,150) ($41,135) $608,865 $840,958 $608,865

$22,776 $5,000 $0 $27,776 $202,000 $229,776 $699,150 ($49,150) ($30,982) $619,018 $848,794 $619,018

$23,531 $4,500 $0 $28,031 $199,000 $227,031 $699,150 ($49,150) ($17,560) $632,440 $859,471 $632,440

$22,724 $4,500 $0 $27,224 $196,000 $223,224 $699,150 ($49,150) ($4,112) $645,888 $869,112 $645,888

$22,700 $4,500 $0 $27,200 $193,000 $220,200 $699,150 ($49,150) $9,360 $659,360 $879,560 $659,360

$22,676 $4,500 $0 $27,176 $190,000 $217,176 $699,150 ($49,150) $22,858 $672,858 $890,033 $672,858

$22,651 $4,500 $0 $27,151 $187,000 $214,151 $699,150 ($49,150) $36,380 $686,380 $900,531 $686,380

$22,635 $4,500 $0 $27,135 $185,000 $212,135 $699,150 ($49,150) $49,919 $699,919 $912,054 $699,919

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