This spreadsheet was created by Charlie Tillett, for

MIT

Redistribution permitted with attribution.

Copyright 1999-2017. All rights reserved.

 P & L by Year
Source Year 1 Year 2 Year 3 Year 4
Revenue
Product Revenue P&L By Qtr $ 1,480,000 93% $ 7,696,500 89% ### 87% ### 84%
Support Revenue P&L By Qtr $ 103,793 7% $ 945,142 11% $ 3,394,237 13% $ 9,016,139 16%
Total Revenue $ 1,583,793 100% $ 8,641,642 ### ### 100% ### 100%

COGS
Product COGS P&L By Qtr $ 967,000 $ 3,359,550 $ 9,004,750 ###
Support COGS P&L By Qtr $ 101,766 $ 503,708 $ 1,201,869 $ 2,343,447
Total COGS $ 1,068,766 67% $ 3,863,258 45% ### 40% ### 33%

Gross Margin
Product GM $ 513,000 $ 4,336,950 ### ###
Support GM $ 2,026 $ 441,434 $ 2,192,368 $ 6,672,692
Total GM $ 515,026 33% $ 4,778,384 55% ### 60% ### 67%

Expenses
R&D P&L By Qtr $ 1,450,500 92% $ 3,368,950 39% $ 5,204,650 20% $ 7,732,800 14%
S&M P&L By Qtr $ 1,675,000 106% $ 3,328,525 39% $ 6,806,575 27% ### 23%
G&A P&L By Qtr $ 1,330,600 84% $ 2,021,100 23% $ 3,261,050 13% $ 4,401,750 8%
Operating Exp. $ 4,456,100 281% $ 8,718,575 ### ### 60% ### 45%

Operating Profit ### -249% ### -46% $ 103,343 0% ### 22%

P & L by Year Page 2

 P & L by Quarter Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Revenue
Product Revenue Sales Plan $ - $ 200,000 $ 480,000 $ 800,000 $ 1,245,000 $ 1,542,000 $ 2,119,500 ###
Support Revenue Sales Plan $ - $ 9,000 $ 30,150 $ 64,643 $ 117,435 $ 180,954 $ 267,283 $ 379,469
Total Revenue $ - $ 209,000 $ 510,150 $ 864,643 $ 1,362,435 $ 1,722,954 $ 2,386,783 ###

COGS
Product COGS COGS $ 130,500 $ 190,500 $ 274,500 $ 371,500 $ 626,875 $ 703,350 $ 889,125 ###
Support COGS COGS $ 24,000 $ 24,500 $ 25,675 $ 27,591 $ 91,924 $ 121,653 $ 128,249 $ 161,882
Total COGS $ 154,500 $ 215,000 $ 300,175 $ 399,091 $ 718,799 $ 825,003 $ 1,017,374 ###

Gross Margin
Product GM $ (130,500) $ 9,500 $ 205,500 $ 428,500 $ 618,125 $ 838,650 $ 1,230,375 ###
Support GM $ (24,000) $ (15,500) $ 4,475 $ 37,051 $ 25,511 $ 59,301 $ 139,034 $ 217,588
Total GM $ (154,500) $ (6,000) $ 209,975 $ 465,551 $ 643,636 $ 897,951 $ 1,369,409 ###

Expenses
R&D Expenses $ 303,500 $ 327,500 $ 376,000 $ 443,500 $ 661,725 $ 790,050 $ 901,575 ###
Sales & Marketing Expenses $ 329,500 $ 354,500 $ 458,000 $ 533,000 $ 664,150 $ 772,300 $ 868,675 ###
G&A Expenses $ 323,200 $ 328,800 $ 336,200 $ 342,400 $ 482,450 $ 488,700 $ 521,950 $ 528,000
Operating Exp. $ 956,200 $ 1,010,800 ### ### $ 1,808,325 $ 2,051,050 $ 2,292,200 ###

Operating Profit ### ### $ (960,225) $ (853,349) ### ### $ (922,791) $ (699,612)

Margins
Operating Profit % n/a -487% -188% -99% -85% -67% -39% -22%

Product Gross Margin % n/a 5% 43% 54% 50% 54% 58% 59%
Support Gross Margin % n/a -172% 15% 57% 22% 33% 52% 57%
Total Gross Margin % n/a -3% 41% 54% 47% 52% 57% 59%

P & L by Qtr Page 3

 P & L by Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4
Revenue
Product Revenue ### ### ### ### $ 9,072,000 ### ### ###
Support Revenue $ 523,936 $ 691,059 $ 927,406 ### $ 1,597,484 $ 2,010,810 $ 2,453,869 $ 2,953,976
Total Revenue ### ### ### ### ### ### ### ###

COGS
Product COGS ### ### ### ### $ 3,401,075 $ 3,858,750 $ 4,164,725 $ 4,625,800
Support COGS $ 228,983 $ 267,742 $ 327,898 $ 377,246 $ 488,949 $ 545,712 $ 622,676 $ 686,110
Total COGS ### ### ### ### $ 3,890,024 $ 4,404,462 $ 4,787,401 $ 5,311,910

Gross Margin
Product GM ### ### ### ### $ 5,670,925 $ 7,101,250 $ 7,915,275 $ 9,214,200
Support GM $ 294,953 $ 423,317 $ 599,508 $ 874,589 $ 1,108,535 $ 1,465,098 $ 1,831,193 $ 2,267,866
Total GM ### ### ### ### $ 6,779,460 $ 8,566,348 $ 9,746,468 ###

Expenses
R&D ### ### ### ### $ 1,621,175 $ 1,847,250 $ 2,045,375 $ 2,219,000
Sales & Marketing ### ### ### ### $ 2,377,925 $ 2,963,750 $ 3,228,850 $ 3,834,800
G&A $ 784,550 $ 794,300 $ 836,600 $ 845,600 $ 1,059,100 $ 1,083,000 $ 1,095,250 $ 1,164,400
Operating Exp. ### ### ### ### $ 5,058,200 $ 5,894,000 $ 6,369,475 $ 7,218,200

Operating Profit $ (748,372) $ (706,483) $ 131,808 ### $ 1,721,260 $ 2,672,348 $ 3,376,993 $ 4,263,866

Margins
Operating Profit % -18% -14% 2% 15% 16% 21% 23% 25%

Product Gross Margin % 58% 58% 59% 61% 63% 65% 66% 67%
Support Gross Margin % 56% 61% 65% 70% 69% 73% 75% 77%
Total Gross Margin % 58% 59% 60% 62% 64% 66% 67% 68%

P & L by Qtr Page 4

 Sales Plan Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Unit Sales
Model 1 - 20 48 80 150 180 225 300
Model 2 - - - - 10 16 36 45
Model 3 - - - - - - - -
Total Units - 20 48 80 160 196 261 345

Sales Price
Model 1 $ 10,000 $ 10,000 $ 10,000 $ 7,500 $ 7,500 $ 7,500 $ 7,500
Model 2 $ 12,000 $ 12,000 $ 12,000 $ 12,000
Model 3

Product Revenue
Model 1 $ - $200,000 $480,000 $ 800,000 ### ### ### ###
Model 2 $ - $ - $ - $ - $ 120,000 $ 192,000 $ 432,000 $ 540,000
Model 3 $ - $ - $ - $ - $ - $ - $ - $ -
Total Product Revenue $ - $200,000 $480,000 $ 800,000 ### ### ### ###

Support Revenue
Total Installed Base $ - $200,000 $680,000 ### ### ### ### ###
Supported Base (retention) $ - $200,000 $670,000 ### ### ### ### ###
Support Revenue $ - $ 9,000 $ 30,150 $ 64,643 $ 117,435 $ 180,954 $ 267,283 $ 379,469

Revenue
Sales Revenue $ - $200,000 $480,000 $ 800,000 ### ### ### ###
Support Revenue $ - $ 9,000 $ 30,150 $ 64,643 $ 117,435 $ 180,954 $ 267,283 $ 379,469

Sales Plan Page 5

 Sales Plan Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4
Unit Sales
Model 1 500 600 800 1,000 1,200 1,200 1,200 1,200
Model 2 60 60 90 160 240 320 400 500
Model 3 2 6 20 40 72 150 180 240
Total Units 562 666 910 1,200 1,512 1,670 1,780 1,940

Sales Price
Model 1 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000
Model 2 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000
Model 3 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000

Product Revenue
Model 1 $ 3,000,000 $ 3,600,000 $ 4,800,000 $ 6,000,000 $ 6,000,000 $ 6,000,000 $ 6,000,000 $ 6,000,000
Model 2 $ 600,000 $ 600,000 $ 900,000 $ 1,600,000 $ 1,920,000 $ 2,560,000 $ 3,200,000 $ 4,000,000
Model 3 $ 32,000 $ 96,000 $ 320,000 $ 640,000 $ 1,152,000 $ 2,400,000 $ 2,880,000 $ 3,840,000
Total Product Revenue $ 3,632,000 $ 4,296,000 $ 6,020,000 $ 8,240,000 $ 9,072,000 ### ### ###

Support Revenue
Total Installed Base ### ### ### ### ### ### ### ###
Supported Base (retention) ### ### ### ### ### ### ### ###
Support Revenue $ 523,936 $ 691,059 $ 927,406 $ 1,251,836 $ 1,597,484 $ 2,010,810 $ 2,453,869 $ 2,953,976

Revenue
Sales Revenue $ 3,632,000 $ 4,296,000 $ 6,020,000 $ 8,240,000 $ 9,072,000 ### ### ###
Support Revenue $ 523,936 $ 691,059 $ 927,406 $ 1,251,836 $ 1,597,484 $ 2,010,810 $ 2,453,869 $ 2,953,976

Sales Plan Page 6

Cost of Goods Sold Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Unit Sales
Model 1 Sales Plan 20 48 80 150 180 225 300
Model 2 Sales Plan 10 16 36 45
Model 3 Sales Plan
Total Units - 20 48 80 160 196 261 345

Total Installed Units - 20 68 148 308 504 765 1,110

Sales Price
Model 1 Sales Plan $0 $10,000 $10,000 $10,000 $8,000 $8,000 $8,000 $8,000
Model 2 Sales Plan $0 $0 $0 $0 $12,000 $12,000 $12,000 $12,000
Model 3 Sales Plan $0 $0 $0 $0 $0 $0 $0 $0

Product COGS Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Variable COGS per Unit
Model 1 $ - $ 3,000 $ 3,000 $ 2,750 $ 2,750 $ 2,500 $ 2,500 $ 2,500
Model 2 20.0% $ - $ - $ - $ - $ 2,400 $ 2,400 $ 2,400 $ 2,400
Model 3 20.0% $ - $ - $ - $ - $ - $ - $ - $ -

Variable COGS
Model 1 $ - $ 60,000 $144,000 $220,000 $412,500 $450,000 $562,500 $ 750,000
Model 2 $ - $ - $ - $ - $ 24,000 $ 38,400 $ 86,400 $ 108,000
Model 3 $ - $ - $ - $ - $ - $ - $ - $ -
Total Variable Costs $ - $ 60,000 $144,000 $220,000 $436,500 $488,400 $648,900 $ 858,000

Mfg Staffing Plan

VP Mfg 1 1 1 1 1 1 1 1
Supervisor (Tech/Mgr) 10 1 1 1 1 1 1 1 1
Technician (units/mth) 60 1 1 1 2 3 4 5 6
Purch/Admin - - - - 1 1 1 2
Total MFG Staff 3 3 3 4 6 7 8 10
 Mfg Staffing Cost
VP Mfg $175,000 $ 52,500 $ 52,500 $ 52,500 $ 52,500 $ 53,375 $ 54,250 $ 55,125 $ 56,000
Supervisor (Tech/Mgr) $140,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000 $ 42,700 $ 43,400 $ 44,100 $ 44,800
Technician (units/mth) $ 70,000 $ 21,000 $ 21,000 $ 21,000 $ 42,000 $ 64,050 $ 86,800 $110,250 $ 134,400
Purch/Admin $ 50,000 $ - $ - $ - $ - $ 15,250 $ 15,500 $ 15,750 $ 32,000
$115,500 $115,500 $115,500 $136,500 $175,375 $199,950 $225,225 $ 267,200

Product COGS
Salaries & Benefits from above $115,500 $115,500 $115,500 $136,500 $175,375 $199,950 $225,225 $ 267,200
Variable Costs from above $ - $ 60,000 $144,000 $220,000 $436,500 $488,400 $648,900 $ 858,000
Facilities $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000
Total Product COGS $130,500 $190,500 $274,500 $371,500 $626,875 $703,350 $889,125 ###

Total Supported Base Sales Plan $0 $200,000 $670,000 ### ### ### ### $8,432,650

Support COGS Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Support Staffing Plan
VP Support 1 1 1 1
Manager - - - - - - - -
Support Staff 1 1 1 1 1 2 2 3
Other/Admin - - - - 1 1 1 1
Total Support Staff 1 1 1 1 3 4 4 5

Support Staffing COGS

VP Support $150,000 $ - $ - $ - $ - $ 45,750 $ 46,500 $ 47,250 $ 48,000
Manager $125,000 $ - $ - $ - $ - $ - $ - $ - $ -
Support Staff $ 80,000 $ 24,000 $ 24,000 $ 24,000 $ 24,000 $ 24,400 $ 49,600 $ 50,400 $ 76,800
Other/Admin $ 50,000 $ - $ - $ - $ - $ 15,250 $ 15,500 $ 15,750 $ 16,000
Total Support Staff $ 24,000 $ 24,000 $ 24,000 $ 24,000 $ 85,400 $111,600 $113,400 $ 140,800

Support COGS
 Salaries & Benefits $ 24,000 $ 24,000 $ 24,000 $ 24,000 $ 85,400 $111,600 $113,400 $ 140,800
Warranty Costs per year 1.00% $ - $ 500 $ 1,675 $ 3,591 $ 6,524 $ 10,053 $ 14,849 $ 21,082
Other $ - $ - $ - $ - $ - $ - $ - $ -
Total Support COGS $ 24,000 $ 24,500 $ 25,675 $ 27,591 $ 91,924 $121,653 $128,249 $ 161,882

Cost of Goods Sold

Product COGS $130,500 $190,500 $274,500 $371,500 $626,875 $703,350 $889,125 $1,140,200
Support COGS $24,000 $24,500 $25,675 $27,591 $91,924 $121,653 $128,249 $161,882
Total COGS $154,500 $215,000 $300,175 $399,091 $718,799 $825,003 ### ###
 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

500 600 800 1,000 1,200 1,200 1,200 1,200

60 60 90 160 240 320 400 500
2 6 20 40 72 150 180 240
562 666 910 1,200 1,512 1,670 1,780 1,940

1,672 2,338 3,248 4,448 5,960 7,630 9,410 11,350

$6,000 $6,000 $6,000 $6,000 $5,000 $5,000 $5,000 $5,000

$10,000 $10,000 $10,000 $10,000 $8,000 $8,000 $8,000 $8,000
$16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

$ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 1,500 $ 1,500 $ 1,500 $ 1,500

$ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 1,600 $ 1,600 $ 1,600 $ 1,600
$ 3,200 $ 3,200 $ 3,200 $ 3,200 $ 3,200 $ 3,200 $ 3,200 $ 3,200

### ### ### ### ### ### ### ###

$ 120,000 $ 120,000 $ 180,000 $ 320,000 $ 384,000 $ 512,000 $ 640,000 $ 800,000
$ 6,400 $ 19,200 $ 64,000 $ 128,000 $ 230,400 $ 480,000 $ 576,000 $ 768,000
### ### ### ### ### ### ### ###

1 1 1 1 1 1 1 1
1 1 2 2 3 3 3 3
10 12 16 21 26 28 30 33
2 3 4 5 6 7 8 9
14 17 23 29 36 39 42 46
$ 56,875 $ 57,750 $ 58,625 $ 59,500 $ 60,375 $ 61,250 $ 62,125 $ 63,000
$ 45,500 $ 46,200 $ 93,800 $ 95,200 $ 144,900 $ 147,000 $ 149,100 $ 151,200
$ 227,500 $ 277,200 $ 375,200 $ 499,800 $ 627,900 $ 686,000 $ 745,500 $ 831,600
$ 32,500 $ 49,500 $ 67,000 $ 85,000 $ 103,500 $ 122,500 $ 142,000 $ 162,000
$ 362,375 $ 430,650 $ 594,625 $ 739,500 $ 936,675 ### ### ###

$ 362,375 $ 430,650 $ 594,625 $ 739,500 $ 936,675 ### ### ###

### ### ### ### ### ### ### ###
$ 30,000 $ 30,000 $ 30,000 $ 30,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
### ### ### ### ### ### ### ###

### ### ### ### ### ### ### ###

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

1 1 1 1 1 1 1 1
1 1 1 1 2 2 2 2
3 4 5 6 7 8 9 10
2 2 3 3 4 4 5 5
7 8 10 11 14 15 17 18

$ 48,750 $ 49,500 $ 50,250 $ 51,000 $ 51,750 $ 52,500 $ 53,250 $ 54,000

$ 40,625 $ 41,250 $ 41,875 $ 42,500 $ 86,250 $ 87,500 $ 88,750 $ 90,000
$ 78,000 $ 105,600 $ 134,000 $ 163,200 $ 193,200 $ 224,000 $ 255,600 $ 288,000
$ 32,500 $ 33,000 $ 50,250 $ 51,000 $ 69,000 $ 70,000 $ 88,750 $ 90,000
$ 199,875 $ 229,350 $ 276,375 $ 307,700 $ 400,200 $ 434,000 $ 486,350 $ 522,000
$ 199,875 $ 229,350 $ 276,375 $ 307,700 $ 400,200 $ 434,000 $ 486,350 $ 522,000
$ 29,108 $ 38,392 $ 51,523 $ 69,546 $ 88,749 $ 111,712 $ 136,326 $ 164,110
$ - $ - $ - $ - $ - $ - $ - $ -
$ 228,983 $ 267,742 $ 327,898 $ 377,246 $ 488,949 $ 545,712 $ 622,676 $ 686,110

$1,518,775 $1,799,850 $2,468,625 $3,217,500 $3,401,075 $3,858,750 $4,164,725 $4,625,800

$228,983 $267,742 $327,898 $377,246 $488,949 $545,712 $622,676 $686,110
### ### ### ### ### ### ### ###
Staffing Plan Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

R&D
CTO Input 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
VP Engineering Input 1 1 1 1 1 1 1 1 1 1 1 1
Project Manager Input 1 1 1 1 2 2 2 2 2 3 3 3 3 4 4 4
Programmer Input 4 4 5 6 8 10 12 14 16 16 18 18 20 22 24 26
Tech Writer Input - 1 1 2 2 3 3 3 3 3 4 4 4 4 5 5
Other Input - - - - - - - - - - - - - - - -
Total Eng 6 7 8 10 14 17 19 21 23 24 27 27 29 32 35 37

Sales
VP Sales Input 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Regional Sales Input 1 1 2 2 3 3 4 4 6 8 10 12 14 17 20 24
Sales Support 1 for 1 1 1 2 2 3 3 4 4 6 8 10 12 14 17 20 24
Sales Admin Input 1 1 1 1 2 2 2 2 3 3 4 4 4 5 5 5
Total Sales 4 4 6 6 9 9 11 11 16 20 25 29 33 40 46 54

Marketing
VP Marketing Input 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Product Manager Input 1 1 1 1 1 1 1 1 2 2 3 3 4 4 5 5
Mar-Com Input - - 1 1 1 1 2 2 2 3 3 3 4 4 5 5
Other Input 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4
Total Mktg 3 3 4 4 5 5 6 6 8 9 10 10 13 13 15 15

General & Admin

CEO Input 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
VP Finance Input 1 1 1 1 1 1 1 1 1 1 1 1
Accounting Input 1 1 1 1 2 2 2 2 3 3 4 4 5 5 6 6
MIS Input 1 1 1 1 1 1 1 1 2 2 2 2 3 3 3 3
HR/Other Input 1 1 1 1 2 2 3 3 4 4 4 4 5 5 5 5
Total G&A 4 4 4 4 7 7 8 8 11 11 12 12 15 15 16 16

TOTAL EMPLOYEES 17 18 22 24 35 38 44 46 58 64 74 78 90 100 112 122

Annual Rev/Emp (000) Calculated $0 $46 $93 $144 $156 $181 $217 $276 $287 $312 $376 $487 $474 $519 $519 $551

Staffing Plan Page 13

Departmental Expenses Source Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
R&D
Salaries & Benefits Staffing Plan $262,500 $ 280,500 $ 318,000 $ 373,500 $ 562,725 $ 668,050 $ 757,575 $ 849,600
Tech Supplies (PP/PM) $ 2,000 input/formula $ 36,000 $ 42,000 $ 48,000 $ 60,000 $ 84,000 $ 102,000 $ 114,000 $ 126,000
Misc / Other input $ 5,000 $ 5,000 $ 10,000 $ 10,000 $ 15,000 $ 20,000 $ 30,000 $ 40,000
Total Engineering To P&L $303,500 $ 327,500 $ 376,000 $ 443,500 $ 661,725 $ 790,050 $ 901,575 ###

Sales
Salaries & Benefits Staffing Plan $157,500 $ 157,500 $ 229,500 $ 229,500 $ 324,825 $ 330,150 $ 411,075 $ 417,600
Travel (PP/PM) $ 3,000 input/formula $ 9,000 $ 9,000 $ 18,000 $ 18,000 $ 27,000 $ 27,000 $ 36,000 $ 36,000
Misc / Other input $ 15,000 $ 15,000 $ 15,000 $ 20,000 $ 20,000 $ 20,000 $ 30,000 $ 30,000
Total Sales To P&L $181,500 $ 181,500 $ 262,500 $ 267,500 $ 371,825 $ 377,150 $ 477,075 $ 483,600

Marketing
Salaries & Benefits Staffing Plan $123,000 $ 123,000 $ 145,500 $ 145,500 $ 172,325 $ 175,150 $ 201,600 $ 204,800
Literature / PR input $ 5,000 $ 5,000 $ 10,000 $ 10,000 $ 20,000 $ 20,000 $ 40,000 $ 60,000
Trade Shows input $ - $ 25,000 $ - $ 50,000 $ - $ 75,000 $ - $ 100,000
Misc / Other input $ 20,000 $ 20,000 $ 40,000 $ 60,000 $ 100,000 $ 125,000 $ 150,000 $ 175,000
Total Marketing To P&L $148,000 $ 173,000 $ 195,500 $ 265,500 $ 292,325 $ 395,150 $ 391,600 $ 539,800

General & Admin

Salaries & Benefits Staffing Plan $168,000 $ 168,000 $ 168,000 $ 168,000 $ 271,450 $ 275,900 $ 305,550 $ 310,400
Legal / Audit $ 30,000 $ 30,000 $ 30,000 $ 30,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
Rent See Below $100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
Tel & Internet (PP/PM) $ 200 input/formula $ 10,200 $ 10,800 $ 13,200 $ 14,400 $ 21,000 $ 22,800 $ 26,400 $ 27,600
Misc / Other input $ 15,000 $ 20,000 $ 25,000 $ 30,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000
Total G&A To P&L $323,200 $ 328,800 $ 336,200 $ 342,400 $ 482,450 $ 488,700 $ 521,950 $ 528,000

Total Operating Expense $956,200 ### ### ### ### ### ### ###

Expenses Page 14
 Departmental Expenses Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4
R&D
Salaries & Benefits $ 944,125 ### ### ### ### ### ### ###
Tech Supplies (PP/PM) $ 138,000 $ 144,000 $ 162,000 $ 162,000 $ 174,000 $ 192,000 $ 210,000 $ 222,000
Misc / Other $ 50,000 $ 75,000 $ 100,000 $ 150,000 $ 200,000 $ 250,000 $ 300,000 $ 350,000
Total Engineering ### ### ### ### ### ### ### ###

Sales
Salaries & Benefits $ 599,625 $ 767,250 $ 959,775 ### ### ### ### ###
Travel (PP/PM) $ 54,000 $ 72,000 $ 90,000 $ 108,000 $ 126,000 $ 153,000 $ 180,000 $ 216,000
Misc / Other $ 30,000 $ 30,000 $ 40,000 $ 40,000 $ 50,000 $ 60,000 $ 70,000 $ 60,000
Total Sales $ 683,625 $ 869,250 ### ### ### ### ### ###

Marketing
Salaries & Benefits $ 276,250 $ 305,250 $ 353,425 $ 358,700 $ 462,300 $ 469,000 $ 548,475 $ 556,200
Literature / PR $ 80,000 $ 80,000 $ 100,000 $ 100,000 $ 120,000 $ 120,000 $ 140,000 $ 140,000
Trade Shows $ - $ 125,000 $ - $ 150,000 $ - $ 200,000 $ - $ 250,000
Misc / Other $ 200,000 $ 225,000 $ 250,000 $ 275,000 $ 300,000 $ 350,000 $ 400,000 $ 350,000
Total Marketing $ 556,250 $ 735,250 $ 703,425 $ 883,700 $ 882,300 ### ### ###

General & Admin

Salaries & Benefits $ 399,750 $ 405,900 $ 442,200 $ 448,800 $ 545,100 $ 553,000 $ 592,850 $ 601,200
Legal / Audit $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
Rent $ 225,000 $ 225,000 $ 225,000 $ 225,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000
Tel & Internet (PP/PM) $ 34,800 $ 38,400 $ 44,400 $ 46,800 $ 54,000 $ 60,000 $ 22,400 $ 73,200
Misc / Other $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 60,000 $ 70,000 $ 80,000 $ 90,000
Total G&A $ 784,550 $ 794,300 $ 836,600 $ 845,600 ### ### ### ###

Total Operating Expense ### ### ### ### ### ### ### ###

Expenses Page 15
Capital Expenses Source Beginning Q1 Q2 Q3
Balance Year 1 Year 1 Year 1

Employee Workstations (PPTo Cash Flow $ 3,000 $ 51,000 $ 3,000 $ 12,000

Prototype Expenses To Cash Flow Input $ 25,000 $ 25,000 $ 25,000
$ 76,000 $ 28,000 $ 37,000

Cumulative CAPEX $ 76,000 $ 104,000 $ 141,000

Cash Flow Source Q1 Q2 Q3

Year 1 Year 1 Year 1
Beginning Cash ### ### ###

Investment Input $ 5,000,000 $ - $ - $ -

Receipts P&L Quarterly delay 1 quarter $ - $ - $ 209,000

COGS Expenses P&L Quarterly $ (154,500) $ (215,000) $ (300,175)
Departmental Expenses P&L Quarterly $ (956,200) ### ###
Allowance for Accts Payable Expenses 45 $ 122,600 $ 18,300 $ 13,700
Capital Expense CAPEX $ (76,000) $ (28,000) $ (37,000)
Change in Cash ### ### ###

Ending Balance ### ### ###

FROM FULL CASH FLOW

CHANGE IN CASH Full Cash Flow (1,064,100) (1,235,500) (1,284,675)

Cash at beginning of period Full Cash Flow 5,000,000 3,935,900 2,700,400
Cash at end of period 3,935,900 2,700,400 1,415,725
 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Year 1 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3 Year 3

$ 6,000 $ 33,000 $ 9,000 $ 18,000 $ 6,000 $ 36,000 $ 18,000 $ 30,000

$ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 100,000 $ 150,000 $ 200,000
$ 31,000 $ 83,000 $ 59,000 $ 68,000 $ 56,000 $ 136,000 $ 168,000 $ 230,000

$ 172,000 $ 255,000 $ 314,000 $ 382,000 $ 438,000 $ 574,000 $ 742,000 $ 972,000

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Year 1 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3 Year 3
### $ 223,484 ### $7,005,084 ### ### ### $ 504,521

$ - $ 10,000,000 $ - $ - $ - $ - $ - ###

$ 510,150 $ 864,643 ### $1,722,954 ### ### ### ###

$ (399,091) $ (718,799) $ (825,003) ### ### ### ### ###
### $ (1,808,325) ### ### ### ### ### ###
$ 46,600 $ 37,300 $ 62,400 $ 7,300 $ 84,100 $ 76,100 $ 101,300 $ (1,500)
$ (31,000) $ (83,000) $ (59,000) $ (68,000) $ (56,000) $ (136,000) $ (168,000) $ (230,000)
### $ 8,291,818 ### ### ### ### ### ###

$ 223,484 $ 8,515,302 ### $5,357,764 ### ### $ 504,521 ###

(1,192,241) 8,291,818 (1,510,218) (1,647,320) (1,454,198) (1,794,738) (1,604,306) 2,939,961

1,415,725 223,484 8,515,302 7,005,084 5,357,764 3,903,566 2,108,827 504,521
223,484 8,515,302 7,005,084 5,357,764 3,903,566 2,108,827 504,521 3,444,483
 Q4 Q1 Q2 Q3 Q4
Year 3 Year 4 Year 4 Year 4 Year 4

$ 12,000 $ 36,000 $ 30,000 $ 36,000 $ 30,000

$ 250,000 $ 300,000 $ 400,000 $ 500,000 $ 600,000
$ 262,000 $ 336,000 $ 430,000 $ 536,000 $ 630,000

### ### $ 2,000,000 $ 2,536,000 $ 3,166,000

Q4 Q1 Q2 Q3 Q4
Year 3 Year 4 Year 4 Year 4 Year 4
### ### $ 2,445,854 $ 2,572,376 $ 3,824,010

$ - $ - $ - $ - $ -

### ### ### ### ###

### ### $(4,404,462) $(4,787,401) $(5,311,910)
### ### $(5,894,000) $(6,369,475) $(7,218,200)
$ 122,700 $ 51,100 $ 185,500 $ (26,300) $ 174,400
$ (262,000) $ (336,000) $ (430,000) $ (536,000) $ (630,000)
### $ 258,712 $ 126,522 $ 1,251,634 $ 1,548,160

### ### $ 2,572,376 $ 3,824,010 $ 5,372,169

(1,257,340) 258,712 126,522 1,251,634 1,548,160

3,444,483 2,187,142 2,445,854 2,572,376 3,824,010
2,187,142 2,445,854 2,572,376 3,824,010 5,372,169
 Beginning Q1 Q2 Q3
Balance Year 1 Year 1 Year 1
Assets
Current Assets
Cash ### ### $ 3,118,400 $ 2,436,025
Accts Receivable (days out) 90 $ - $ - $ 209,000 $ 510,150
Total Current Assets ### ### $ 3,327,400 $ 2,946,175

Long Term Assets

Computer Eq ($ PP) $ 3,000 $ - $ 51,000 $ 54,000 $ 66,000
Other Capital Equipment CAPEX $ - $ 25,000 $ 50,000 $ 75,000
Total Long Term Assets $ - $ 76,000 $ 104,000 $ 141,000

TOTAL ASSETS ### ### $ 3,431,400 $ 3,087,175

Liabilities
Current Liabilities
Accounts Payable (days out) 45 $ - $ 122,600 $ 140,900 $ 154,600
Short Term Loans $ - $ - $ - $ -
Total Current Liabilities $ - $ 122,600 $ 140,900 $ 154,600

Long Term Liabilities

Long Term Loans $ - $ - $ - $ -
Total Long Term Liabilities $ - $ - $ - $ -

TOTAL LIABILITIES $ - $ 122,600 $ 140,900 $ 154,600

Equity & Retained Earnings

Shareholders Equity CAPEX ### ### $ 5,000,000 $ 5,000,000
Retained Earnings $ - $ - $ - $ -
Current Earnings P&L $ - ### ### ###
Total Current Liabilities ### ### $ 2,872,500 $ 1,912,275

TOTAL Equity & Liabilities ### ### $ 3,013,400 $ 2,066,875

$ - $ (418,000) ###
INPUT
INVESTMENTS RECVD CAPEX ### $ - $ - $ -

CASH FLOW NOTES

Total Assets MUST equal Total Liabilities Plus Shareholders Equity.
Any differences MUST be reflected in a change ot the cash balance
CASH is the plug number to get the formula to balance
Of course, this assumes that all your other balances are correct
 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Year 1 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3

$ 1,952,769 ### ### ### ### ### ###

$ 864,643 $ 1,362,435 $ 1,722,954 $ 2,386,783 $ 3,169,469 $ 4,155,936 $ 4,987,059
$ 2,817,411 ### ### ### ### ### ###

$ 72,000 $ 105,000 $ 114,000 $ 132,000 $ 138,000 $ 174,000 $ 192,000

$ 100,000 $ 150,000 $ 200,000 $ 250,000 $ 300,000 $ 400,000 $ 550,000
$ 172,000 $ 255,000 $ 314,000 $ 382,000 $ 438,000 $ 574,000 $ 742,000

$ 2,989,411 ### ### ### ### ### ###

$ 201,200 $ 238,500 $ 300,900 $ 308,200 $ 392,300 $ 468,400 $ 569,700

$ - $ - $ - $ - $ - $ - $ -
$ 201,200 $ 238,500 $ 300,900 $ 308,200 $ 392,300 $ 468,400 $ 569,700

$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -

$ 201,200 $ 238,500 $ 300,900 $ 308,200 $ 392,300 $ 468,400 $ 569,700

$ 5,000,000 ### ### ### ### ### ###

$ - $(3,941,074) $(3,941,074) $(3,941,074) $(3,941,074) $(7,881,265) $(7,881,265)
$(3,941,074) $(1,164,689) $(2,317,788) $(3,240,579) $(3,940,191) $ (748,372) $(1,454,855)
$ 1,058,926 $ 9,894,237 $ 8,741,138 $ 7,818,347 $ 7,118,735 $ 6,370,363 $ 5,663,880

$ 1,260,126 ### $ 9,042,038 $ 8,126,547 $ 7,511,035 $ 6,838,763 $ 6,233,580

$(1,729,285) $(2,724,871) $(3,445,907) $(4,773,567) $(6,338,939) $(8,311,872) $(9,974,118)

$ - ### $ - $ - $ - $ - $ -
 Q3 Q4 Q1 Q2 Q3 Q4
Year 3 Year 3 Year 4 Year 4 Year 4 Year 4

### ### $23,784,822 $28,513,996 $32,891,748 $38,960,121

$ 6,947,406 $ 9,491,836 $10,669,484 $12,970,810 $14,533,869 $16,793,976
### ### $34,454,306 $41,484,805 $47,425,618 $55,754,097

$ 222,000 $ 234,000 $ 270,000 $ 300,000 $ 336,000 $ 366,000

$ 750,000 $ 1,000,000 $ 1,300,000 $ 1,700,000 $ 2,200,000 $ 2,800,000
$ 972,000 $ 1,234,000 $ 1,570,000 $ 2,000,000 $ 2,536,000 $ 3,166,000

### ### $36,024,306 $43,484,805 $49,961,618 $58,920,097

$ 568,200 $ 690,900 $ 742,000 $ 927,500 $ 901,200 $ 1,075,600

$ - $ - $ - $ - $ - $ -
$ 568,200 $ 690,900 $ 742,000 $ 927,500 $ 901,200 $ 1,075,600

$ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ -

$ 568,200 $ 690,900 $ 742,000 $ 927,500 $ 901,200 $ 1,075,600

### ### $20,000,000 $20,000,000 $20,000,000 $20,000,000

$(7,881,265) $(7,881,265) $ (7,777,922) $ (7,777,922) $ (7,777,922) $ (7,777,922)
$(1,323,046) $ 103,343 $ 1,721,260 $ 4,393,608 $ 7,770,601 $12,034,467
### ### $13,943,338 $16,615,686 $19,992,679 $24,256,545

### ### $14,685,338 $17,543,186 $20,893,879 $25,332,145

### ### ### ### ### ###

$ 5,000,000 $ - $ - $ - $ - $ -
 Statement of Cash Flows Beginning Q1 Q2 Q3 Q4 Q1 Q2 Q3
Balance Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2
OPERATIONS
Net Income $ - ### ### $ (960,225) $ (853,349) $(1,164,689) ### $ (922,791)
Change in A/R $ - $ - $ (209,000) $ (301,150) $ (354,493) $ (497,793) $ (360,518) $ (663,830)
Change in A/P $ - $ 122,600 $ 18,300 $ 13,700 $ 46,600 $ 37,300 $ 62,400 $ 7,300
Cash from/to Operations $ - $ (988,100) ### ### ### $(1,625,182) ### ###

INVESTMENTS
Capital Expenses $ - $ (76,000) $ (28,000) $ (37,000) $ (31,000) $ (83,000) $ (59,000) $ (68,000)

Cash Flow Page 22

 Statement of Cash Flows Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Year 2 Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4
OPERATIONS
Net Income $ (699,612) $ (748,372) $ (706,483) $ 131,808 $ 1,426,389 ### $ 2,672,348 $ 3,376,993
Change in A/R $ (782,686) $ (986,467) $ (831,123) ### ### ### ### ###
Change in A/P $ 84,100 $ 76,100 $ 101,300 $ (1,500) $ 122,700 $ 51,100 $ 185,500 $ (26,300)
Cash from/to Operations ### ### ### ### $ (995,340) $ 594,712 $ 556,522 $ 1,787,634

INVESTMENTS
Capital Expenses $ (56,000) $ (136,000) $ (168,000) $ (230,000) $ (262,000) $ (336,000) $ (430,000) $ (536,000)

Cash Flow Page 23