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published by Palo Alto Software, Inc. Names, loc ations and numbers may have been changed, and substantial portions of the original plan text may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to resell, reproduce, publish, distribute or even c opy this plan as it exists here. Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright Palo Alto Software, Inc., 1995-2009 All rights reserved.
Confidentiality Agreement
The undersigned reader ac knowledges that the information provided by _________________________ in this business plan is confidential; therefore, reader agrees not to disc lose it without the express written permission of _________________________. It is ac knowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disc losure or use of same by reader, may cause serious harm or damage to _________________________. Upon request, this doc ument is to be immediately returned to _________________________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.
Table of Contents
1.0 Executive Summary.............................................................................................................................1 Chart: Highlights ......................................................................................................................2 1.1 Mission........................................................................................................................................2 1.2 Keys to Success ........................................................................................................................2 1.3 Objectives ...................................................................................................................................3 2.0 Company Summary.............................................................................................................................3 2.1 Start-up Summary ......................................................................................................................4 Table: Start-up Funding ..........................................................................................................5 Chart: Start-up .........................................................................................................................6 Table: Start-up .........................................................................................................................6 2.2 Company Ownership .................................................................................................................6 3.0 Products and Services........................................................................................................................7 4.0 Market Analysis Summary..................................................................................................................8 4.1 Market Segmentation ................................................................................................................8 Table: Market Analysis .........................................................................................................10 Chart: Market Analysis (Pie)................................................................................................11 4.1.1 Detailed Market Breakdown......................................................................................11 4.2 Target Market Segment Strategy...........................................................................................13 4.3 Service Business Analysis .....................................................................................................14 4.3.1 Competition and Buying Patterns .............................................................................14 5.0 Strategy and Implementation Summary..........................................................................................14 5.1 Competitive Edge....................................................................................................................15 5.2 Marketing Strategy ..................................................................................................................16 5.3 Sales Strategy..........................................................................................................................18 5.4 Sales Forecast.........................................................................................................................18 Table: Sales Forecast ..........................................................................................................19 Chart: Sales Monthly.............................................................................................................19 Chart: Sales by Year.............................................................................................................20 5.5 Web Plan Summary.................................................................................................................20 5.5.1 Development Requirements ......................................................................................20 5.6 Milestones ................................................................................................................................21 Table: Milestones..................................................................................................................21 Chart: Milestones ..................................................................................................................22 6.0 Management Summary ....................................................................................................................22 6.1 Management Team .................................................................................................................23 6.2 Personnel Plan.........................................................................................................................23 Table: Personnel ...................................................................................................................23 7.0 Financial Plan ....................................................................................................................................24 7.1 The Investment Offering...........................................................................................................24 Table: Investment Offering ...................................................................................................25 7.2 Break-even Analysis................................................................................................................25 Table: Break-even Analysis .................................................................................................26 Chart: Break-even Analysis .................................................................................................26 7.3 Important Assumptions............................................................................................................26 Table: General Assumptions ...............................................................................................27 7.4 Projected Profit and Loss .......................................................................................................27 Chart: Profit Yearly................................................................................................................27
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Chart: Gross Margin Monthly ...............................................................................................28 Chart: Gross Margin Yearly..................................................................................................28 Table: Profit and Loss ..........................................................................................................29 Chart: Profit Monthly .............................................................................................................30 7.5 Projected Cash Flow...............................................................................................................30 Chart: Cash ...........................................................................................................................31 Table: Cash Flow..................................................................................................................32 7.6 Projected Balance Sheet ........................................................................................................33 Table: Balance Sheet ...........................................................................................................33 7.7 Business Ratios .......................................................................................................................33 Table: Ratios .........................................................................................................................35 Table: Sales Forecast ...............................................................................................................................1 Table: Personnel ........................................................................................................................................2 Table: General Assumptions ....................................................................................................................3 Table: Profit and Loss ...............................................................................................................................4 Table: Cash Flow .......................................................................................................................................5 Table: Balance Sheet ................................................................................................................................6
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1.0 Executive Summary
RQM Technologies (RQM) is an exciting start-up company in the newly emerging field of Personal Trac king Devices; respected industry analysts such as Ovum and ABI Research predict this will bec ome a $22 billion market within the next five years. Products and Services RQM will develop and distribute miniaturized Personal Locator Devices (or Personal Trac king Devices). Initially, the manufacturing of our devices will be subcontrac ted, while we develop the supporting software and systems internally, although we plan to manufacture our products in-house in future years. Unlike our competitors, we have military-inspired proprietary technology (patents applied for) which allows many of our systems to work with or without the presence of cellular towers, enabling their use anywhere in the world, including cities, deserts, oc eans, lakes, mountains, or anywhere else adventurous travelers find themselves. Our products are also distinct in that they are small and fully programmable. Our systems can be customized by the end user for his or her unique, individual applications - for example, maritime applications which include a water-ac tivated signal (as when a crewman falls overboard) are different from those required in business applications. Market Our primary target markets include, but are not limited to, the family consumer, channel sales to original equipment manufacturers (OEMs), businesses trac king shipments or vehicles, the military, and the political arena. Because of our unique proprietary programming capabilities for eac h individual unit, we have already received indications of interest from several of these target markets, including one branch of the U.S. Military. We predict our systems will also appeal strongly to families concerned about the safety of their loved ones. Sadly, child abduction is on the rise globally. More than 2,100 c hildren are reported missing eac h day in the U.S. alone (FBI National Crime Information Center). At the other end of the age spectrum, there are 4.5 million Alzheimer patients in the U.S., 60% of whom (2.7 million adults) wander away from their homes at some point, unaware of their surroundings. We believe our devices will greatly reduce these figures in both c ases, while potentially saving lives. The combined number of "potential" customers for our products is well over 500,000,000; we will foc us on a more realistic and attainable three-year sales goal of roughly 99,000 users worldwide, which will generate many millions of dollars in sales revenues. Management The founders of RQM Technologies, Steven M. Bloome and Andrew F. Siska, have been assoc iates for over 20 years; they create the perfect synergy to ensure the success of our company. Steven M. Bloome is a Sales and Marketing Management veteran with more than 25 years of successfully penetrating previously unseen markets niches, partnering with other companies in win-win scenarios, and creating national presence for companies. He is also, ac complished in launching new products. Andrew F. Siska is a Chief Electronic Engineer with 20 years experience, and is considered an expert in his field, having previously designed devices for military applications, medical imaging systems, computers and more. By foc using on our strengths, our key customers, and our customers' needs, RQM Technologies will increase sales to several millions of dollars within two years, while also improving the gross margin on sales, cash management and working capital. Page 1
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1.1 Mission
RQM Technologies' mission is to bec ome the leading vendor of Personal Locator Devices worldwide. Through a combination of evolving technologies, miniaturization, affordability for the end-user, programming capabilities and ease of use, RQM Technologies will be known as the premier developer/supplier of potentially life-saving Personal Locator Devices.
To maintain these key fac tors, RQM Technologies' needs include start-up funding, partnering with value-added investor/partners, aggressive marketing, quality sales professionals, ac complished C-Level management, product branding, increasing reac h into target markets, affiliating with the right channel partners, competitive intelligence and appropriate use of Page 2
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evolving technologies.
1.3 Objectives
RQM Technologies has identified three types of objectives that will serve as challenging but attainable goals for the organization. They are: Business Objectives 1. 2. 3. To bec ome the premier vendor in the new and evolving Personal Locator Device industry. To reac h profitability within one year of the company's launch. To develop additional profit centers such as programming, training, seminars, ancillary equipment, etc. within the first two years.
Financial Objectives 1. 2. 3. Increase product sales to several million dollars annually by the end of the second year. Bring gross margin up and maintain that high level by the third year. Improve inventory turnover on an ongoing basis, until "just-in-time" inventory is standard by the third year.
Marketing Objectives 1. 2. 3. 4. Foc us on target marketing to increase market penetration and domination. Expand target markets with c ontrolled growth. Establish brand awareness for the RQM Technologies' name and products. Position ourselves as the leading Personal Locator Device company in the world.
while also serving the business arena, as a way to better manage the logistics of: outside personnel fleet vehicles valuable parcels and deliveries
The company's management philosophy is based on responsibility and mutual respec t, while encouraging ownership of responsibilities to help foster personal and professional growth. RQM Technologies foc uses on productivity for growth and profitability, and respect for its customers Page 3
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and employees to increase repeat and referral business while minimizing employee turnover. Additionally, the company encourages employees to have fun by allowing creative independence and providing professional challenges that are realistic, attainable and rewarding.
Details of our start-up requirements can be found in the Start-up tables, below.
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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 $100,700 $349,300 $450,000
Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Founders Investor Other Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital $250,000 $200,000 $0 $0 $450,000 ($100,700) $349,300
$0 $0 $0 $0 $0
$349,300 $450,000
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Table: Start-up
Start-up Requirements Start-up Expenses Legal Stationery etc. Consultants Insurance Utilities Rent Research and Development Expensed Equipment Industrial Design Personnel Company Vehicles & Associated Expenses Other Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements
$30,000 $1,500 $5,000 $1,000 $2,400 $3,800 $3,500 $10,000 $10,700 $30,000 $2,800 $0 $100,700
RQM Technologies
RQM Technologies is owned and operated by its founders, Steven M. Bloome and Andrew F. Siska. We are currently in search of an investor/partner(s) who will bring more to RQM Technologies than just financing. The ideal Investor/Partner(s) we are seeking should bring expertise in the areas of legal, financial, and international regulatory issues, as a portion of our target market(s) will be international in scope in the near future. The Investor/Partner(s) will receive an equity position in the company and sit on the Board of Directors. More details on the company's founding partners may be found below, in the Management Summary.
Both units are being developed simultaneously, and will be available for pre-sale orders in the Fall of 2004. Services As RQM Technologies grows, we will be defining and developing additional profit centers for our company and investors by offering value-added services such as training classes, seminars, onPage 7
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site programming, private labeling for our channel market resellers, and other ancillary revenue streams based on individual client needs.
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Channel Sales to Original Equipment Manufacturers (OEMs): As the heavily saturated markets of cellular phone carriers and computer manufacturers grow more competitive eac h year, both segments are continuously looking to add new technologies and systems to draw consumers to their spec ific and sometimes proprietary products and services. The RQM Technologies remote devices are designed to be used with a "home base" unit, (a PDA, most cell phones or computer), and we see great potential to partner with c ellular providers, cell phone manufacturers, computer manufacturers and resellers. This natural synergy between our product's capabilities and this market segment's needs should prove to have a large and positive impac t on the awareness of the RQM Technologies name and products, as well as increasing revenues through positioning our products with the leaders of this market segment. It is our understanding that cellular phone providers will be incorporating the technologies used in our "home base" units into their cell phones within the next three years. This will prove invaluable for RQM Technologies, as we position ourselves as the leader in this remote technology, which will work with almost every new cell phone manufactured by 2006 2007. Businesses: Our product enables a business loc ation to keep real-time trac king of company vehicles, valuable pac kages, outside employees, deliveries, etc. We believe our device will be viewed by businesses as an economical way to increase productivity, giving them real-time data on the loc ations of their field employees and vehicles at all times, and helping to better manage fleet and deliveries logistics. One of our key strengths in this market segment is the low one- time cost, rather than a recurring fee for usage, adding to the business's ROI for our products. The Military: Ac cording to recent Department of Defense press releases, the military appears to be searching for a device such as ours. The United States Coast Guard, for instance, is called upon for Search and Resc ue missions more than 40,000 per year, on average. The problem with the currently used "beacon system": Since 121.5 MHz beacons transmit anonymously, the only way to ascertain the loc ation is to dispatch expensive resources to investigate. Current beacon systems can take up to an hour to translate information, while only providing vague loc ation data, forcing time intensive and expensive Search and Resc ue (SAR) missions. In the field, the RQM Technologies' remote unit will save lives, finding those missing in action, and loc ating sailors lost at sea. Their use will also taxpayer dollars, making Search and Rescue missions shorter and less expensive. A consultant to the U.S. Navy has indicated solid interest in two of our devices for use in the military. The Political Market: Ac cording to statistics from specialized insurers like Hisc ox (UK), political kidnappings are prevalent in restive countries such as Colombia, Mexico, and the Philippines; they are also on the rise in smaller countries such as Turkey and Trinidad. The governments of these countries are spending millions of dollars in ransom eac h year in order to minimize publicity and embarrassment. By fitting political figures, captains of industry and high profile businessmen with our device, we believe this trend will dec rease in the countries which use our product, proving its efficac y in the field and sparking interest from other countries. Our research shows that all current competitors with similar products require the user to log on to the competitors website (or phone into call-centers) to ac tually loc ate the missing person, while incurring monthly fees ranging from $20.00 - $40.00 per month. In essence, their systems dictate that the users must be loc ated at their internet-ac cessible computer in order to use the competitors' systems. Imagine that you are a mother, visiting a park with your child. Suddenly, you turn around and cannot see him - he has disappeared! With our competitors' systems, you would have to run home to log on to your computer, losing valuable time and probably increasing the distance between yourself and your child. With our system, however, you simply turn on your PDA or cell phone while still at the park, and view your child's loc ation, direction and speed of travel while you are still in c lose proximity. The RQM Technologies Page 9
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systems will allow a user to loc ate the missing person(s) from potentially any cell phone, wireless Palm Pilot, or PDA, freeing them from the need to be in front of a fixed computer, while increasing real-time efficiencies. This important difference of a few minutes will literally translate into saving lives. In addition, we project the following secondary long-term markets: Maritime Market: Personal Flotation Device (PFDs) and Life Boat companies are typically manufacturers of textiles, and do not generally have the expertise to develop high-end global positioning satellite electronic trac king systems. We are planning on lobbying the Senate, through our consultant to the U.S. Navy (and Coast Guard), to enact laws mandating that these life-saving devices be fitted in all Personal Flotation Devices. This would save lives, and save taxpayers hundreds of millions of dollars in c osts associated with traditional U.S. Coast Guard Search and Recovery methods. The Coast Guard admits that radio beacons are outdated technology, and they are currently implementing a program called Resc ue 21, searching for better ways to loc ate missing persons at sea in a more timely and efficient manner. Pet Supply Chain Stores: RQM Technologies Personal Locator Device is small enough to fit onto a pet collar. We are planning to partner with large pet-supply chains such as PetCo, PetSmart, etc., as well as pet collar manufacturers, to make this technology more ac cessible to consumers worried about their pets wandering off.
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But the family market also has to worry about its elderly loved ones. Ac cording to the same census report, there are 40,144,000 adults over 62 years of age in the U.S., 4.5 million of whom have Alzheimer's disease. With a median income in the U.S. of $51,742 per family, our family consumer market in the U.S. has the potential for selling our affordable devices for over Page 11
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60,492,447 c hildren under the age of 14, in addition to over 4,500,000 active senior citizens afflicted with Alzheimer', based on the above figures, for a combined target market of over 64,992,447 c onsumers. Business Segment It is more difficult to determine exac t numbers for the business segment, as spec ific data is not as readily available. However, as of 2001 (latest census data available) there were 12,753,076 businesses operating in the U.S. which fit our target market, meaning they have a strong or immediate need for our products; this number excludes others, such as retail sales, wholesale traders, information management, education, public administration, or other services not defined. Business breakdown by employment in spec ific industries: 2,405,825 Americans work in agriculture, forestry, fishing, hunting and mining. 9,161,256 work in c onstruction. 17,067,103 work in manufacturing. 6,884,607 work in transportation, warehousing and utilities. 12,486,846 work in professional, sc ientific, management, administrative and waste management services.
The price points for similar Personal Locator Device systems using GPS/GSM technologies in the business segment are currently in the $200 - $2000 range, and in most cases, do not offer the remote abilities or programming capabilities for specific businesses needs in managing logistics and trac king. We believe our low prices, combined with these features and the autonomous internal trac king ability (not reliant on a vendor's website with monthly fees) will be very attrac tive to the business segment. Military and Government On an average day, the United States Coast Guard assists 192 people in distress, and conducts 109 search and rescue cases. In 2000, the Coast Guard responded to 40,264 c alls for assistance - from a broad spectrum of the public ranging from recreational boaters in distress to the captains of freighters sinking in gale-force winds. During that same year - on a share of its operating expenses, totaling $342 million - the service saved more than 3,400 lives and saved over $80 million in property. Our system will shorten the duration of current Search and Rescue missions, which in turn will allow rescuers to loc ate victims at sea faster. This will not only save more lives, but will cut costs for the United States Department of Defense. This same system used at sea would immediately alert the dec k's computers if a serviceman at sea fell overboard, once the remote unit is programmed to be water ac tivated. We have a preliminary interest from the U.S. Navy, thanks in part to our ability to program individual remote units with medical histories and other pertinent information for eac h serviceman's remote unit. By using our system, coupled with encrypted signals for the military, our programmable PTDs also work in deserts, jungles, mountains, etc., showing longitude, latitude, altitude, speed and direction of travel, representing "eyes in the skies" for the military to know exac tly where their field personnel are loc ated at any given moment. We have also developed a lower-cost unit for the U.S. Navy which relies on "line of sight" technology, which is affordable enough to equip every seaman in the U.S. Naval fleet. We have already received an indication of interest from the U.S. Navy, through our consultant, due to the extremely low cost and efficac y of the product.
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4.2 Target Market Segment Strategy
Our choice of target markets is strategic, and reflects our strengths and weaknesses. The Family Consumer Market is key for RQM Technologies for several reasons. First, as a system that works anywhere in the world, (versus all of our competitors' c ellular tower reliant systems), our potential market is 8 billion people worldwide. Capturing a market share of only 1/10 of 1% of this potential, we would realize the sale of 8 million units. As we enter this market segment, we will be aggressively seeking partner companies such as cellular phone providers and computer OEMs (included in c hannel sales to further penetrate the consumer market) and associations such as The National Center for Missing and Exploited Children, The National Alzheimer's Association, Amber Alert Network, etc. An alliance with any of these type of organizations will add significant credibility, branding and positioning, thus generating sales for RQM Technologies. The Channel Sales to OEMs segment will be strong for several reasons. By positioning our product for cellular providers, cell phone manufacturers, and computer manufacturers as an ancillary item to help them market their own products, we will effectively increase our sales force substantially, without the expenses of payroll, benefits, etc., bec ause their sales force(s) will sell our products for their respec tive companies. This would also positively impac t branding, making our name more commonplac e in all the markets disc ussed herein. By securing alliances in this market, we also position ourselves as the leader in this new technology and its associated applications. This will foster confidence in the RQM Technologies' product, increase sales dramatically and help our company break into the global market. We will also be seeking entry into the automotive market to compete with LoJac k. Our system is more effective than the current LoJac k system, and with a lower price point, we feel we will be able to partner with the automotive manufacturers. The RQM system will allow them to offer a more efficient product to their customers, while increasing their profit margins for this type of technology. The Business Market is more difficult to estimate. RQM Technologies' products will benefit any business that depends on knowledge of the whereabouts of their products, services, vehicles, valuable parcels or outside personnel are on a real-time basis. The keys to success in this segment are threefold: An affordable, one- time cost per unit for the business, instead of our competitors' higher-priced units with recurring monthly charges. The ease and ability to self-manage this program internally without the nec essity to use call centers or websites for a monthly fee. The programming capabilities of our units, which allows businesses to easily customize eac h individual unit based on their unique needs for eac h individual application.
The Military Market: We have a strong contac t with a consultant to the U.S. Navy, who feels, based on recent DOD press releases, coupled with previous projects on which he has successfully consulted, that we are developing a product the military would greatly desire bec ause of its purpose, abilities and low price point. One of the benefits to the programming capabilities of our PTD is the ability to program eac h soldier's medical information and history into their remote units, so that any medic attending to them in the field would immediately have Page 13
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this valuable information. The U.S. Navy will be very interested in two of our loc ator systems. The Political Market may be more difficult to penetrate bec ause of the complexity of foreign governments, and international laws, and wide variations in c ultural approaches to safety and government oversight of individuals. However, we feel we will still be able to enter into agreements with several smaller countries that are in the throws of political turmoil. We project that the benefits our products provide will quickly foster confidence in their potential, and will not be seen as a "Big Brother" device. Once our products have proven their efficac y by saving individuals from kidnappings, especially high profile officials, we believe markets in other countries will quickly open up to RQM Technologies.
RQM Technologies
Focus on target markets. We need to foc us our sales and marketing efforts strategically in order to succeed in our target markets. As a start-up company, we believe the consumer market and channel sales will give us the quickest launch and penetration while immediately generating revenues to sustain our company's growth and expansion into other markets. The business market will likely be the next key, as we promote our products as tools for businesses to manage outside personnel and fleet costs and logistics. Fulfill the promise. We can't just market and sell our products, service and support; we must ac tually deliver as well. We need to make sure we have the technological knowledge we claim to have, while keeping up with evolving technologies to advance the capabilities of our newest products and services.
RQM Technologies
Price: Greater initial cost to the end user ($200-$2000), with fewer features and capabilities. Recurring monthly fees to the end user with most systems. applications, such as water ac tivation, parameter limit alert, medical history of the wearer, etc. The units cannot be armed from a remote loc ation.
The most significant difference between our system and our competitors' is our use of "unassisted" GPS/GSM technology. Unlike our competitors', our system is not reliant on being in an area where cellular towers exist. Our competitors' products do not work in areas where there is no cellular coverage, or less than the three three cellular towers needed for triangulation. Our system uses military inspired radio frequencies which transmit directly to the GPS satellite network. Our system will work anywhere in the world, including deserts, mountains, oc eans and all other remote loc ations. RQM Technologies also eliminates the need for the "trac ker" to -hone into a call center, or to sit in front of a computer to download from a our website (both for a monthly fee ranging from $20-$40/month) in order to find someone who is missing, losing valuable minutes which c an mean the difference between life and death. Our Personal Locator Device(s) allow the chase unit (wireless Palm Pilot, laptop, and most cell phones) to follow the remote unit, even as both units (remote and "base unit") are in transit.
RQM Technologies
demonstration nationwide. As an incredibly worthy cause, we believe that many media outlets will want to run this human-interest story in an effort to help aid against child abductions and wandering Alzheimer's patients by helping to make our technology public knowledge. We expec t this nationwide publicity to break down most existing barriers of entry into our other targeted markets. We will aggressively target publicity of our staged abduction through TV shows such as Oprah, The Maury Povich Show, Regis and Kelly, 60 Minutes, and all others that can sway national opinion that cater to family and safety issues. We believe that this and further demonstrations will be very well received, while gaining invaluable exposure as we begin branding our name while positioning our company. We will then market heavily in publications geared towards parenting and Alzheimer's assoc iations for the consumer market, while aggressively seeking free publicity through print, radio and television, spec ifically once our Personal Location Device has demonstrated its efficac y during the staged abduction. Channel Market to OEMs We will foc us our efforts to partner with Original Equipment Manufac turers on nationwide cellular providers and computer manufacturers. We will emphasize our products' potential as an additional source of revenue for them, both at the front end for product sales, and in the case of cellular providers, with recurring monthly revenues; this should make our product very desirable as part of their product lines. By solidifying these partnership agreements, we will also enable cross-marketing bac k into the consumer market through their sales forces' efforts and their advertising, increasing our sales efforts nationwide without the expense of additional personnel to cover the entire U.S. We believe that once partnered with these companies, our channel market partners (resellers) will advertise the RQM Technologies Personal Locator Device (s) as new features in their traditional outlets, primarily print advertising and in-house POS material, in order to increase mutual sales and brand awareness, benefiting both organizations, while fitting a nation of families with our potentially life-saving device. Business Market We will be marketing to businesses through traditional sales efforts, such as advertising in trade publications and establishing a presence at select trade shows geared towards businesses in our market segment. For the larger companies we target, we will offer the free use of a limited number of our products for a limited time, to prove their efficac y in c ontrolling costs of outside fleets and personnel, in order to penetrate and gain market share in this segment. We believe once senior management of these businesses feel more in c ontrol of the whereabouts of their outside concerns (personnel and vehicles, deliveries, pac kages, equipment, etc.) they will understand that they can, in essence, manage their outside logistics from the comfort of their office more efficiently than through traditional methods. Military and Political Markets Our military and political markets will nec essitate a slightly different and more personal approach through specific relationships we have developed with individuals inside these market segments. We feel these markets are worth pursuing aggressively. We are currently in disc ussion with a consultant to the U.S. Navy, who feels the military is looking for a device such as the RQM Technologies' Personal Locator Device(s), in order to better protect their servicemen.
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5.3 Sales Strategy
We need to convince consumers of the serious benefits of RQM Technologies' Personal Locator Devices. Except for vehicle, equipment or pac kage trac king, we sell a "life-saving loc ator-resc ue product," not an electronics system that relays GPS/GSM loc ation data. Once our device has been proven effective in a real-life situation, we firmly believe that multiple media sources will want to run our product's life-saving results as a human interest story. Any press, print or broadcast third party endorsements will be included in future sales and marketing literature. We are planning to stage a moc k-abduction, with the media present in order to document and feature the efficac y of our product on their respective television programs or in their print media. We have to sell our service and support. The RQM Technologies' Personal Locator Device(s) remote unit, while very easy to program and fac ilitate, will be better received if we offer (fee based) training services for our larger clients, such as our channel sales partners and large corporate ac counts. Simplifying the understanding and implementation of our system will help encourage the daily use and sales efforts of our product, while generating additional revenues for RQM Technologies, our channel market resellers while increasing the ROI for our investor/ partner(s). The Yearly Total Sales chart summarizes our ambitious sales forecast. We expec t sales to increase dramatically as the RQM Technologies' Personal Locator Device(s) demonstrate its efficac y, and is well received in our target markets. Once our system saves a life, we will aggressively pursue widespread press and publicity, at which point, we believe all barriers into the consumer markets will be eliminated, while opening markets we may not have targeted as primary markets.
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Table: Sales Forecast
Sales Forecast Year 1 Sales Family Consumers Channel Sales to OEMs Businesses Military Political Total Sales Direct Cost of Sales Chipset Programming Packaging Subtotal Direct Cost of Sales $540,000 $605,000 $206,500 $150,000 $450,000 $1,951,500 Year 1 $683,025 $0 $292,725 $975,750 Year 2 $800,000 $1,500,000 $300,000 $1,000,000 $472,500 $4,072,500 Year 2 $1,425,375 $0 $570,150 $1,995,525 Year 3 $1,250,000 $2,225,000 $750,000 $1,125,000 $496,125 $5,846,125 Year 3 $2,046,144 $0 $701,535 $2,747,679
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new products, product add-ons and software updates, ancillary products, newsletters and downloadable market research reports. We may need to contrac t further technical resources to build the trac kable download information with the capabilities of transmitting and organizing extensive information.
5.6 Milestones
The following table lists important program milestones, with dates and managers in c harge, and budgets for eac h. The milestone schedule indicates our emphasis on planning for implementation. What the table doesn't show is the commitment behind it. Our business plan includes complete provisions for plan-vs.-ac tual analysis, and we will be holding follow-up meetings every month to disc uss the variance and course corrections.
Table: Milestones
Milestones Milestone Prototype Completion Patent Applications Independent Lab Testing Funding Staged Child Abduction Publicity in Major Print Publication Begin Sales Marketing Materials Publicity on broadcast media Consumer Electronic Show 2005 Totals Start Date 6/1/2004 6/1/2004 7/1/2004 6/1/2004 10/1/2004 9/15/2004 11/1/2004 9/1/2004 11/15/2004 10/15/2004 End Date 8/1/2004 8/1/2004 9/1/2004 10/1/2004 11/1/2004 11/1/2004 11/1/2004 11/15/2004 12/1/2004 1/11/2005 Budget $2,500 $50,000 $10,000 $500 $1,000 $1,500 $0 $5,000 $1,000 $25,000 $96,500 Manager AS AS/SB AS/SB SB AS/SB SB SB/AS SB/AS SB SB/AS Department Tech/R&D Tech/R&D Tech/R&D Marketing Tech/R&D Marketing Sales Marketing Marketing Marketing/Tech
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6.1 Management Team
Steven M. Bloome - President/CEO Mr. Bloome is a 25 year veteran in Sales and Marketing Management, who has worked for such companies as MobileComm - A BellSouth Company, Bear Stearns, Telecast Productions and HiTec Group, International. Mr. Bloome's strengths include the ability to understand a wide range of business profiles, prac tices and markets. His ac complishments demonstrate superior strengths and skills in the developing and managing successful sales forces, as well as loc ating and developing untapped market niches in numerous and diverse industries. He is experienced in partnering with recognized industry-leading companies to add scope, strength and brand awareness to both partner companies in win-win situations. He brought the first battery program to the paging industry by partnering MobileComm with Ray-O-Vac Battery, as well as partnering HiTec Group Int'l with Ameritech to bec ome the Special Needs Center in a five state area. Mr. Bloome is also experienced in c ompany start-ups, turnaround situations, new product launches and developing a national presence for companies. Andrew F. Siska - Chief Electrical Engineer/CTO Mr. Siska has owned and ac ted as Chief Electronics Engineer of Embedded Systems Electronics, Inc. (ESE) since 1994 and is an ac tive member of the Institute of Electrical and Electronics Engineering. As CEE of Embedded Systems Electronics, Mr. Siska has been c ontrac ted by major electronic companies to initially design or improve products such as communication devices, imaging systems, digital camera circuitry, computers, video imaging systems, medical equipment. In his field, Mr. Siska is considered an expert in hardware, software, and electronic engineering. Mr. Siska holds a Bac helors of Electronics Engineering from the Ohio Institute of Technology, and an MBA from the Keller Graduate Sc hool of Management.
Table: Personnel
Personnel Plan Steven M. Bloome (Pres/CEO) Andrew J. Siska (CTO) CEO CFO Reception/Secretarial Total People Total Payroll Year 1 $97,000 $95,500 $0 $0 $22,500 3 $215,000 Year 2 $130,000 $120,000 $125,000 $120,000 $75,000 6 $570,000 Year 3 $175,000 $150,000 $150,000 $120,000 $160,000 6 $755,000
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RQM Technologies
7.0 Financial Plan
As a start-up company in an emerging and changing industry, we have intentionally designed a conservative plan, looking to ensure the ac hievement of our corporate goals along with a solid ROI to our investor/partner(s). We will of course revise our financial plan throughout the first year based on ac tual figures in sales, manufacturing costs, technological advances, personnel, office space, marketing costs, and so on. Securing the patents (applied for) for our advanced devices and systems in a new and emerging industry will add immediate value to RQM. Our plan's success is also predicated on the following assumptions: Securing seed money with investor(s)/partner who will bring added value to RQM. The ac ceptance of our device(s)/systems by the public, the business sector and the military. The ability to attrac t strong C-Level management to our team as needed. Managing growth and production costs so as to maintain projected margins and cash flow. Staying ahead of technological advances in this field, and reac ting to these changes in a timely and efficient manner. Managing the start-up of RQM with minimal personnel until steady growth necessitates hiring additional department management and support staff. Partnering with strong OEMs quickly in order to penetrate and dominate market share. Partnering with industry leaders (such as UPS, the U.S. Navy, etc.,) to assist in demonstrating the efficac y of our systems. Success in marketing our products for brand awareness and positioning. Adjusting and adapting to the market trends within this new and emerging industry.
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RQM Technologies
Table: Investment Offering
Investment Offering Proposed Year: Valuation, Investment, Shares Investment Amount Equity Share Offering Percentage Valuation Investor Exit Payout Investor Years Until Exit Investor IRR Share Ownership Founders' Shares Stock Split Multiple Stock Options Issued Investor Shares Issued Price per share Options Holders' Shares Year 2004 Investors' Shares Year 2005 Investors' Shares Year 2006 Investors' Shares Total Shares Outstanding Equity Ownership Percentage Founders' Equity Option Holders' Equity Year 2004 Investors' Equity Year 2005 Investors' Equity Year 2006 Investors' Equity Total Equity Investors' Equity Founders' & Employees' Equity Seed 2004 Round 1 2005 Round 2 2006 Exit 2007
$200,000 30.00% $666,667 $1,350,000 3 88.99% Year 2004 50,000 0 21,429 $9.33 0 21,429
$0 0.00% $0 $0 1 0.00% Year 2006 50,000 0 0 0 $0.00 0 21,429 0 0 71,429 Year 2006 70.00% 0.00% 30.00% 0.00% 0.00% 100.00% 30.00% 70.00%
$4,500,000
Year 2007 50,000 0 0 $63.00 0 21,429 0 0 71,429 Year 2007 70.00% 0.00% 30.00% 0.00% 0.00% 100.00% 30.00% 70.00%
71,429 Year 2005 70.00% 0.00% 30.00% 0.00% 100.00% 30.00% 70.00%
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RQM Technologies
Table: Break-even Analysis
Break-even Analysis Monthly Revenue Break-even Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost $156,331
50% $78,165
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RQM Technologies
Table: General Assumptions
General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Year 1 1 6.00% 8.50% 30.00% 0 Year 2 2 6.00% 8.50% 30.00% 0 Year 3 3 6.00% 8.50% 30.00% 0
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Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % Year 1 $1,951,500 $975,750 $0 $975,750 $975,750 50.00% Year 2 $4,072,500 $1,995,525 $0 $1,995,525 $2,076,975 51.00% Year 3 $5,846,125 $2,747,679 $0 $2,747,679 $3,098,446 53.00%
Expenses Payroll Sales and Marketing and Other Expenses Depreciation Advertising & Marketing Collateral Industrial Design Rent Telephone Utilities Insurance Payroll Taxes Company Vehicles and related expenses Trade Shows & Events Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales
$215,000 $216,000 $0 $295,000 $64,284 $22,800 $7,500 $14,400 $6,000 $50,200 $16,800 $30,000 $937,984 $37,766 $37,766 $0 $11,330 $26,436 1.35%
$570,000 $200,000 $0 $350,000 $75,000 $26,000 $10,000 $18,000 $7,500 $85,500 $18,000 $0 $1,360,000 $716,975 $716,975 $0 $215,093 $501,883 12.32%
$755,000 $250,000 $0 $425,000 $80,000 $30,000 $15,000 $20,000 $7,500 $113,250 $19,000 $0 $1,714,750 $1,383,696 $1,383,696 $0 $415,109 $968,587 16.57%
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Table: Cash Flow
Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales 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
$0 $0 $0 $0 $0 $0 $0 $1,721,333 Year 1
$0 $0 $0 $0 $0 $0 $0 $3,822,342 Year 2
$0 $0 $0 $0 $0 $0 $0 $5,636,938 Year 3
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RQM Technologies
7.6 Projected Balance Sheet
The Balance Sheet shows an increasingly stable cash position and net worth over the first three years, as our products bec ome more established in the market. We do not plan to borrow money to fund growth, so our liabilities in all years represent simple Ac counts Payable stemming from ongoing operating expenses.
$0 $0 $0 $518,108 Year 1
$0 $0 $0 $1,019,234 Year 2
$0 $0 $0 $1,832,801 Year 3
RQM Technologies
higher percentage of our products' value lies in the innovative design and (patents applied for) customizable interfac e, than in skilled assembly (the typical distinguishing feature in this industry). Our ratios will, therefore, differ from others in this industry.
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RQM Technologies
Table: Ratios
Ratio Analysis Sales 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 Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit 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 Profit 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 Sales Current Debt/Total Assets Acid Test Sales/Net Worth 0.27 37% 0.82 5.99 0.25 26% 0.62 5.41 0.31 18% 2.37 3.91 n.a n.a n.a n.a 2.69 2.01 37.13% 11.59% 7.29% Year 1 1.35% 8.12% 3.82 2.42 26.16% 95.26% 70.34% Year 2 12.32% 66.68% 5.45 4.41 18.37% 92.48% 75.50% Year 3 16.57% 64.74% 1.77 0.87 64.99% 2.57% 7.35% Year 1 n.a. Year 2 108.69% Year 3 43.55% Industry Profile 5.37%
44.42% 25.27% 0.00% 100.00% 0.00% 100.00% 37.13% 0.00% 37.13% 62.87%
47.13% 36.70% 0.00% 100.00% 0.00% 100.00% 26.16% 0.00% 26.16% 73.84%
37.62% 18.92% 0.00% 100.00% 0.00% 100.00% 18.37% 0.00% 18.37% 81.63%
20.57% 32.33% 31.89% 84.79% 15.21% 100.00% 44.07% 12.73% 56.80% 43.20%
n.a n.a
0.59 1.00
0.35 1.00
0.22 1.00
n.a n.a
$325,736 0.00
$752,619 0.00
$1,496,206 0.00
n.a n.a
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RQM Technologies
Dividend Payout 1.89 0.15 0.23 n.a
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Appendix
Table: Sales Forecast
Sales Forecast Month 1 Sales Family Consumers Channel Sales to OEMs Businesses Military Political Total Sales Direct Cost of Sales Chipset Programming Packaging Subtotal Direct Cost of Sales 0% 0% 0% 0% 0% $0 $0 $0 $0 $0 $0 Month 1 $0 $0 $0 $0 Month 2 $0 $0 $0 $0 $0 $0 Month 2 $0 $0 $0 $0 Month 3 $0 $0 $0 $0 $0 $0 Month 3 $0 $0 $0 $0 Month 4 $35,000 $60,000 $14,000 $0 $50,000 $159,000 Month 4 $55,650 $0 $23,850 $79,500 Month 5 $45,000 $70,000 $16,000 $0 $50,000 $181,000 Month 5 $63,350 $0 $27,150 $90,500 Month 6 $50,000 $70,000 $18,000 $0 $50,000 $188,000 Month 6 $65,800 $0 $28,200 $94,000 Month 7 $60,000 $70,000 $20,000 $25,000 $50,000 $225,000 Month 7 $78,750 $0 $33,750 $112,500 Month 8 $60,000 $75,000 $23,000 $25,000 $50,000 $233,000 Month 8 $81,550 $0 $34,950 $116,500 Month 9 $65,000 $75,000 $25,000 $25,000 $50,000 $240,000 Month 9 $84,000 $0 $36,000 $120,000 Month 10 $70,000 $85,000 $27,500 $25,000 $50,000 $257,500 Month 10 $90,125 $0 $38,625 $128,750 Month 11 $75,000 $50,000 $30,000 $25,000 $50,000 $230,000 Month 11 $80,500 $0 $34,500 $115,000 Month 12 $80,000 $50,000 $33,000 $25,000 $50,000 $238,000 Month 12 $83,300 $0 $35,700 $119,000
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Table: Personnel
Personnel Plan Steven M. Bloome (Pres/CEO) Andrew J. Siska (CTO) CEO CFO Reception/Secretarial Total People Total Payroll 0% 0% 0% 0% 0% Month 1 $7,500 $7,500 $0 $0 $0 2 $15,000 Month 2 $7,500 $7,500 $0 $0 $0 2 $15,000 Month 3 $7,500 $7,500 $0 $0 $0 2 $15,000 Month 4 $7,500 $7,500 $0 $0 $2,500 3 $17,500 Month 5 $7,500 $7,500 $0 $0 $2,500 3 $17,500 Month 6 $8,500 $8,000 $0 $0 $2,500 3 $19,000 Month 7 $8,500 $8,000 $0 $0 $2,500 3 $19,000 Month 8 $8,500 $8,000 $0 $0 $2,500 3 $19,000 Month 9 $8,500 $8,000 $0 $0 $2,500 3 $19,000 Month 10 $8,500 $8,000 $0 $0 $2,500 3 $19,000 Month 11 $8,500 $8,000 $0 $0 $2,500 3 $19,000 Month 12 $8,500 $10,000 $0 $0 $2,500 3 $21,000
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Appendix
Table: General Assumptions
General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Month 1 1 6.00% 8.50% 30.00% 0 Month 2 2 6.00% 8.50% 30.00% 0 Month 3 3 6.00% 8.50% 30.00% 0 Month 4 4 6.00% 8.50% 30.00% 0 Month 5 5 6.00% 8.50% 30.00% 0 Month 6 6 6.00% 8.50% 30.00% 0 Month 7 7 6.00% 8.50% 30.00% 0 Month 8 8 6.00% 8.50% 30.00% 0 Month 9 9 6.00% 8.50% 30.00% 0 Month 10 10 6.00% 8.50% 30.00% 0 Month 11 11 6.00% 8.50% 30.00% 0 Month 12 12 6.00% 8.50% 30.00% 0
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Appendix
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % Month 1 $0 $0 $0 $0 $0 0.00% Month 2 $0 $0 $0 $0 $0 0.00% Month 3 $0 $0 $0 $0 $0 0.00% Month 4 $159,000 $79,500 $0 $79,500 $79,500 50.00% Month 5 $181,000 $90,500 $0 $90,500 $90,500 50.00% Month 6 $188,000 $94,000 $0 $94,000 $94,000 50.00% Month 7 $225,000 $112,500 $0 $112,500 $112,500 50.00% Month 8 $233,000 $116,500 $0 $116,500 $116,500 50.00% Month 9 $240,000 $120,000 $0 $120,000 $120,000 50.00% Month 10 $257,500 $128,750 $0 $128,750 $128,750 50.00% Month 11 $230,000 $115,000 $0 $115,000 $115,000 50.00% Month 12 $238,000 $119,000 $0 $119,000 $119,000 50.00%
Expenses Payroll Sales and Marketing and Other Expenses Depreciation Advertising & Marketing Collateral Industrial Design Rent Telephone Utilities Insurance Payroll Taxes Company Vehicles and related expenses Trade Shows & Events Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales 15% $15,000 $0 $0 $20,000 $5,357 $1,900 $500 $1,200 $500 $3,200 $1,400 $0 $49,057 ($49,057) ($49,057) $0 ($14,717) ($34,340) 0.00% $15,000 $0 $0 $25,000 $5,357 $1,900 $500 $1,200 $500 $3,200 $1,400 $0 $54,057 ($54,057) ($54,057) $0 ($16,217) ($37,840) 0.00% $15,000 $12,500 $0 $25,000 $5,357 $1,900 $600 $1,200 $500 $3,200 $1,400 $0 $66,657 ($66,657) ($66,657) $0 ($19,997) ($46,660) 0.00% $17,500 $16,000 $0 $25,000 $5,357 $1,900 $600 $1,200 $500 $4,400 $1,400 $0 $73,857 $5,643 $5,643 $0 $1,693 $3,950 2.48% $17,500 $17,500 $0 $25,000 $5,357 $1,900 $750 $1,200 $500 $4,400 $1,400 $15,000 $90,507 ($7) ($7) $0 ($2) ($5) 0.00% $19,000 $20,000 $0 $25,000 $5,357 $1,900 $750 $1,200 $500 $4,400 $1,400 $15,000 $94,507 ($507) ($507) $0 ($152) ($355) -0.19% $19,000 $25,000 $0 $25,000 $5,357 $1,900 $750 $1,200 $500 $4,400 $1,400 $0 $84,507 $27,993 $27,993 $0 $8,398 $19,595 8.71% $19,000 $25,000 $0 $25,000 $5,357 $1,900 $50 $1,200 $500 $4,400 $1,400 $0 $83,807 $32,693 $32,693 $0 $9,808 $22,885 9.82% $19,000 $25,000 $0 $25,000 $5,357 $1,900 $750 $1,200 $500 $4,400 $1,400 $0 $84,507 $35,493 $35,493 $0 $10,648 $24,845 10.35% $19,000 $25,000 $0 $25,000 $5,357 $1,900 $750 $1,200 $500 $4,400 $1,400 $0 $84,507 $44,243 $44,243 $0 $13,273 $30,970 12.03% $19,000 $25,000 $0 $25,000 $5,357 $1,900 $750 $1,200 $500 $4,900 $1,400 $0 $85,007 $29,993 $29,993 $0 $8,998 $20,995 9.13% $21,000 $25,000 $0 $25,000 $5,357 $1,900 $750 $1,200 $500 $4,900 $1,400 $0 $87,007 $31,993 $31,993 $0 $9,598 $22,395 9.41%
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Appendix
Table: Cash Flow
Pro Forma Cash Flow Month 1 Cash Received Cash from Operations Cash Sales 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 $15,000 $645 $15,645 $15,000 $19,457 $34,457 $15,000 $23,134 $38,134 $17,500 $38,105 $55,605 $17,500 $223,353 $240,853 $19,000 $175,525 $194,525 $19,000 $174,323 $193,323 $19,000 $206,380 $225,380 $19,000 $195,665 $214,665 $19,000 $200,577 $219,577 $19,000 $215,746 $234,746 $21,000 $175,684 $196,684 0.00% $0 $0 $0 $0 $0 $0 $0 $0 Month 1 $0 $0 $0 $0 $0 $0 $0 $0 Month 2 $0 $0 $0 $0 $0 $0 $0 $0 Month 3 $0 $0 $0 $0 $0 $0 $0 $79,500 Month 4 $0 $0 $0 $0 $0 $0 $0 $93,150 Month 5 $0 $0 $0 $0 $0 $0 $0 $173,867 Month 6 $0 $0 $0 $0 $0 $0 $0 $203,117 Month 7 $0 $0 $0 $0 $0 $0 $0 $211,117 Month 8 $0 $0 $0 $0 $0 $0 $0 $232,633 Month 9 $0 $0 $0 $0 $0 $0 $0 $245,367 Month 10 $0 $0 $0 $0 $0 $0 $0 $235,292 Month 11 $0 $0 $0 $0 $0 $0 $0 $247,292 Month 12 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$0 $0 $0
$0 $0 $0
$0 $0 $0
$79,500 $0 $79,500
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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 Retained Earnings Earnings 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
$349,300 $0 $0 $0 $349,300
$333,655 $0 $0 $0 $333,655
$299,199 $0 $0 $0 $299,199
$261,065 $0 $0 $0 $261,065
$0 $0 $0 $349,300
$0 $0 $0 $333,655 Month 1
$0 $0 $0 $299,199 Month 2
$0 $0 $0 $261,065 Month 3
$0 $0 $0 $451,910 Month 4
$0 $0 $0 $404,157 Month 5
$0 $0 $0 $401,482 Month 6
$0 $0 $0 $453,509 Month 7
$0 $0 $0 $465,529 Month 8
$0 $0 $0 $494,714 Month 9
$0 $0 $0 $542,262 Month 10
$0 $0 $0 $522,392 Month 11
$0 $0 $0 $518,108 Month 12
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