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January 2000

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Table of Contents
1.0 2.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.1 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.2 Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Products and Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Future Product Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Customers and Target Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Competitive Advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.1 Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Sales and Distribution Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Strategic Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 6 6 6 7 8 8 9 9 9 10 10 10 11

3.0

4.0

5.0

6.0 7.0 8.0

Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 7.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Significant Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Profit and Loss Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 14 15 16 17 19 19

Farmers Group
1.0 Executive Summary
Introduction Farmers Group is being formed from the acquisition of two successful vegetable farm, Green Acres Vegetable Farm and Mobile Farmers Vegetable Farm. The latter has long-researched horticultural and agronomic techniques, as well as compost and soil blending technology now being promoted by the DEO, the USDA, the EPA, and other government agencies. The company is a combination of cutting edge, highest quality, and efficient food technology and production. It is committed to the improvement of food taste and nutritional quality. It is being founded to build upon an extensive array of biological and horticultural education, experience, and the research of its founders. This is further coupled with the experience of James Jackson, the current manager of Mobile Farmers Vegetable Farm, and consultation with the present owner of Green Acres Vegetable Farm, Errol Grynthum. The Company Farmers Group is an Alabama-based company, located in Calhoun county, whose mission is to provide high quality, nutritional, and flavorful vegetables and strawberries for consumption in both near and remote regions of the United States. Additionally the company will provide high quality planting materials for use nationwide. Farmers Group is the buyout and merger of two successful vegetable farms. The idea behind the business is to provide healthy and delicious vegetables and fruit to the public. In addition to vegetables and fruits, the company plans to produce and market manure compost garden amendment products. Farmers Group's management team is led by Mr. James Jackson as Business Manager, who has extensive knowledge of the industry. The company expects to employ five temporary employees during the equipment re-location phase, four employees on a permanent basis, and three part-time employees. Products Farmers Group's plans to concentrate on vegetables as its primary product. This includes growing carrots, romaine lettuce, leeks, red onions, summer squash, spinach, pumpkins, winter squash, globe beets, and winter greens. The company's farm, will have a capacity sufficient to produce in excess of 200,000 lbs. of vegetables per year. The company plans to utilize traditional and more advanced plant technologies to produce new cultivars of strawberries and lima beans with locally-adapted superior characteristics for the Gulf-South growing area. This strategy will allow Farmers Group to produce crops during most of the year and will allow double cultivation of the greenhouses with almost no additional heating necessary in the winter months. The Market Over the past decade the market for organic food has grown by 15% to 20% and every year 40% of U.S. consumers occasionally reach for something labeled organic. Sales for organic foods are expected to top $11 billion this year. Sales by farmers' markets have increased by 79% since 1994, to 3,137 markets in all 50 states, and the number of farmers who sell at them has more than tripled to 67,000. About three million Americans a week now get their fresh food directly from the farmers who grew it. This makes for an excellent environment for a industry participant such as Farmers Group that is willing to compete in a niche market and Page 1

Farmers Group
be first to the market with new products. Financial Considerations The company is seeking $830,000 in both short-term and long-term funding to finance the purchase of Farmers Group's new farm, upgrade the facilities, and cover start-up expenses and first year losses. It is estimated that the company will begin to make a profit in Year 2 of operations. The company does not expect to have any cash flow problems during the first four years of operations. The company's break-even point is a monthly production of 3,409 lbs of produce.

1.1 Mission
Farmers Group is an Alabama-based company, whose mission is to provide high quality, nutritional, and flavorful vegetables and strawberries for consumption in both near and remote regions of the United States. Additionally the company will provide high quality planting materials for use nationwide.

2.0 The Company


Farmers Group is the buyout and merger of two successful vegetable farms. The idea behind the business is to provide healthy and delicious vegetables and fruit to the public. In addition to vegetables and fruits, the company plans to produce and market manure compost garden amendment products.

2.1 Start-up Summary


Projected revenues for 2000 to 2004 are $-40,000, $8,500, $50,000, $70,800 and $82,500 respectively. Additionally the company estimates that once fully operational, income per product, per annum would be as follows; vegetable ($50,000) manure ($20,000) and horticulture ($10,000). The company is seeking to raise of $1,800,000 for the purpose of financing the acquisition of the Green Acres Vegetable Farm and Mobile Farmers Vegetable Farm, facilities modifications, equipment, and funding operating expenses.

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Farmers Group
Table: Start-up Start-up Requirements Start-up Expenses Legal Facilities modification Seed Organic Herbicides/Pesticides Consultants Insurance Research and development Expensed equipment Other Total Start-up Expenses Start-up Assets Needed Cash Balance on Starting Date Start-up Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Total Requirements Funding Investment Investor 1 Investor 2 Investor 3 Investor 4 Other Total Investment Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Current Liabilities Long-term Liabilities Total Liabilities Loss at Start-up Total Capital Total Capital and Liabilities $250,000 $250,000 $250,000 $250,000 $0 $1,000,000 $30,000 $400,000 $0 $430,000 $400,000 $830,000 ($684,600) $315,400 $1,145,400 $19,000 $300,000 $600 $5,000 $25,000 $10,000 $25,000 $250,000 $50,000 $684,600 $245,400 $150,000 $250,000 $645,400 $500,000 $1,145,400 $1,830,000

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Farmers Group

Start-up

$1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Expenses Assets Investment Loans

2.2 Facilities
The farm is located in Calhoun county approximately 4.5 miles outside of Jasper. The operation will utilize: One large greenhouse, enclosing the vegetable area. Horticultural greenhouse. Filters, water treatment devices. Backwash facilities. Outdoor vegetable facilities. Business office building.

An additional portion of the operation will be the manure composting facility. Local and regional dairy operations have trouble with manure accumulations, and the company hopes to enter into contracts in removing the manure. Farmers Group will then turn this into a saleable product. The company plans to supply the region's nursery outlets with a top-quality, premium garden and soil amendment product for area horticulture.

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Farmers Group
3.0 Products and Technologies
While at Mobile Farmers Vegetable Farm James Jackson, steadily used and experimented with compost and fertilized with manure of different kinds. The most important things with manure usage is to eliminate the viable weed seed drawback by thoroughly composting the manure, to add enough cellulose on product to bring it to the proper ratio and to bring its water content to proper levels. A properly composted manure product has no seeds that will germinate and proliferate in it. Additionally, a properly composted manure product has something a chemically formulated synthetic fertilizer does not have: enzymes. Enzymes are critical for producing a truly nutritious and superior flavored product. Research has shown that the superior flavor of a fruit or vegetable is closely related to vitamin content and folic acid content in green vegetables. The state-of-the-art vegetable equipment starting up in the new location utilizes revolutionary harvest designs that: Allow faster, longer growth Cut the harvest labor by over 80% Cut the harvest time and by so doing: Decrease loss in weight gain, and Eliminate weight loss from shock.

3.1 Products
Vegetables Farmers Group's first line of production will be the green vegetable and red vegetable. During the summer months Farmers Group will be growing carrots, romaine lettuce, leeks, red onions, summer squash, and spinach. In the fall, production will center on pumpkins, winter squash, globe beets and winter greens. With the growth of the popular organic food niche, and the federal government's new organic labeling policy, Farmers Group will focus its produce on the intermediate organic label. This means that approximately 70% of the food production process will be organic and all foods produced by Farmers Group will be eligible for the "contains organic ingredients" label. The company's farm will have a capacity sufficient to produce in excess of 200,000 lbs. of vegetables per year. Strawberries The company's more technical horticultural aspects include efforts to utilize traditional and more advanced plant technologies to produce new cultivars of crops such as strawberries and lima beans with locally-adapted superior characteristics for the Gulf-South growing area. Flavor, disease resistance, adaptability to green-house culture, fall and winter season production are factors being combined in greens cultivation to tap into the $2.99 pint berry market of the fall and winter. Farmers Group's strategy is a combination of the two technologies during the cool winter months which will allow the utilization of normally wasted space in the greenhouses for the high price winter greens production. This will allow double cultivation of the greenhouses with almost no additional heating necessary in this climate.

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Farmers Group
3.2 Research and Development
The company is currently seeking contact with Alabama universities in order to learn about and acquire new hybrids of strawberries and vegetables that are hardier and grow faster in our local microclimates. These and other available species and systems will be constantly tracked. In addition to the above, the company is seeking contacts at Universities in Italy and Germany that are involved in greens, and will continue the quest for the best flavored, large, and firm fall and winter strawberries. Currently, Farmers Group is conducting research to test certain clay-sand-manure mixture levels to obtain better, cheaper bedding and agronomic soil mixtures that are more effective than the standard used in the industry in Alabama (Pine bark mulch-composted).

3.3 Future Product Plans


In the meantime, the company would like to explore the possibilities of crayfish production. Farmers Group believes this to be a high revenue venture with retail prices running in excess of $15.00 per pound in most places. The company also believes that if crayfish production is successful then it could become the number one endeavor of Farmers Group. Currently there is a defunct fish farming production facility with all the necessary capital equipment approximately two miles from the current farm. Purchase of this facility would allow Farmers Group to begin production and to capitalize on this higher margin product. What makes this most attractive is the two ventures have significant joint cost potential, allowing for a reduction in marginal costs for all products and creation of real economies of scale that would provide Farmers Group with a competitive advantage.

4.0 Market Description


At a time when eating has become a political statement, the government is paying up to $19 billion a year to subsidize commodity crops in a glutted global market. Federal officials say that nearly 40% of all farm income now comes directly from government subsidies, and the farm bill signed by President Bush this year will pay $190 billion over 10 years, which includes $83 billion in new spending. However, there are two market niches that are growing at an amazing rate, the organic market and the simple farmers' market. The organic market provides less than 2% of the nation's food supply and takes up less than 1% of its cropland. But organic farms are flourishing as never before. Over the past decade the market for organic food has grown by 15 to 20% and every year 40% of U.S. consumers occasionally reach for something labeled organic. Sales for organic foods are expected to top $11 billion this year. Conglomerates as big as Heinz and General Mills are now launching or buying organic lines and selling them in mainstream supermarkets.* With no subsidies and no middle men, farmers' markets have increased by 79% since 1994, to 3,137 markets in all 50 states, and the number of farmers who sell at them has more than tripled to 67,000, the Agriculture Department has reported. About three million Americans a week now get their fresh food directly from the farmers who grew it. "Right now, green markets are growing faster than anything in agriculture," said Dr. Steven Blank, a farm economist at the University of California at Davis and the author of three books on the subject. These numbers, of course, represent a very thin slice of the big pie of national food. Farmers' Page 6

Farmers Group
markets reported about $1 billion in sales last year, compared with more than $200 billion in overall farm revenue. Barely 3% of the nation's two million farmers sell some of what they grow directly to consumers. But in an era of big-box food stores, when 10 major grocery chains control the purchase of 50% of fresh food, the proliferation of open-air markets has come out of nowhere, giving more consumers an option and allowing many small farmers to stay in business.** With these trends in mind, Farmers Groups will concentrate on: Wholesale live vegetable markets nationwide that sell organic produce. Fresh farmers' markets. Fall and winter greens market. Nursery outlets selling composted manure.

*Source: Certified Organic Geoffrey Cowley NEWSWEEK September 30, 2000. **Source: Farmers Markets Booming Across US Timothy Egan New York Times, September 29, 2000.

4.1 Customers and Target Markets


The target customers include oriental vegetable markets demanding organic and semi-organic green vegetables, vegetable processors, and private individual buyers through direct selling and farmers markets. The company will continue to service the existing customers of the purchased vegetable farms. In its greens production the company will target virtually all main food outlets. The company plans to use the Internet as one of its marketing channels in the future. The company's target customers will be as follows: Vegetables: Oriental vegetable markets demanding organic and semi-organic vegetables. Vegetable processors. Alabama National Guard. People approaching the farm. Roadside stands and farmers' markets.

Product-Bagged Manure: Nursery and Garden Centers. Private customers approaching facility. Bulk customers. The company will also take over customers from the previous owner of the vegetable facility. Farmers Group has an established list of present customers of Errol Grynthum's vegetable farm, which is a major asset to the sales of the company.

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Farmers Group
4.2 Competition
Alabama is one of the premier farming areas of the eastern United States. This creates an intensely competitive environment with a large number of industry participants. Since almost all of the produce is considered to be commodities, and large scale buyers are more consolidated than the farmers themselves, overall margins are small and rivalries for wholesaler contracts are strong. Competitive threats come from three main segments: Imported vegetables of lower quality.> Mississippi pound raised vegetables. Alabama vegetable producers. Direct competition in the individual buyers market segment comes from three farms in the immediate area including the Anniston farm, Organics-To-You farm, and the Terrance Livingston vegetable farm. Each of these competitors has produce stands as well as selling to local farmers' markets. However, with the exception of Organics-To-You Farm, none of the others focus on a niche market and depend heavily on federal subsidies.

4.3 Target Market Segment Strategy


The Market Analysis Pie shown below reflects the total number of potential customers for Farmers Group. The number of Oriental markets and vegetable processors represent national estimates of industry participants, whereas the number of individual buyers represents the estimated annual number of individuals that will be driving by the farm.
Table: Market Analysis Market Analysis Potential Customers Vegetable processors Oriental vegetable markets Individual buyers Total Growth 3% 1% 5% 4.68% 2000 5,000 25,000 300,000 330,000 2001 5,150 25,250 315,000 345,400 2002 5,305 25,503 330,750 361,558 2003 5,464 25,758 347,288 378,510 2004 5,628 26,016 364,652 396,296 CAGR 3.00% 1.00% 5.00% 4.68%

Market Analysis (Pie)

Vegetable processors Oriental vegetable markets Individual buyers

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Farmers Group
5.0 Strategy
The Farmers Group strategy is to profitably and efficiently utilize present and future agricultural technology in the production of vegetables. The company, by acquiring an existing profitable vegetable farm with all the necessary custom-innovated equipment, will gain a significant industry advantage. Additional application and utilization of horticultural technology in the production of strawberries will allow double utilization of the climate controled portion of the overhead. Farmers Group hopes to consolidate considerable goodwill already created by exercising the option of not adding another high-production facility to the present supplydemand scenario. The company's goals in the first year are to: Prepare the future site. Relocate and expand Green Acres vegetable system and get it operational. Integrate greens culture into the system. Have the composting system in full production by early spring of the second year.

The company's long-term plan is to phase out whichever products are least lucrative and replace them with products that are practical and cost efficient.

5.1 Competitive Advantages


Farmers Group's main competitive advantages are: Efficient production utilizing greenhouses. Reduced overhead by fully realizing crop output potential and economies of scale through joint costs. Knowledge due to research since 1988.

5.2 Marketing Strategy


Farmers Group will initially market and supply its products to target customers. The company is further exploring marketing opportunities on the Internet. To this extent, the company would like to set up a website to market its products. The company will utilize aggressive advertising strategies to further market its products. These strategies include the promotion of products through the sponsoring of spots on cooking shows and exhibitions, and also engaging prominent chefs to help promote this fledgling industry.

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Farmers Group
5.2.1 Pricing
The company sets its pricing based on market rates as far as vegetable products are concerned. Farmers Group's pricing for strawberries will exceed the average market price for the following reasons: Taste sampling at outlets will be encouraged. Unparalleled flavor superiority will addict greens tasters. Promotion of pesticide-free, fumigant-free cultural techniques of soil, environment, ozone, and health-friendly production techniques.

5.3 Sales and Distribution Strategy


At Farmers Group, the sales process is primarily the same for vegetables as it is for composting products, in that both products will be mainly sold through wholesale marketing. As in the past, live shipments will be delivered by contract carriers in special oxygenated tanks carrying 8,000 vegetables or more, and will be continued as demanded. Farmers Group's bagged manure products will be delivered and unloaded in sizable wholesale quantities by the pallet. Smaller, more local orders will significantly increase the overall sales when the 300-450 live vegetables carrying tank system is put into service late in 2000 or early in 2001. The company's average sales cycle from first contact to closing of the sale is approximately 3 to 12 days for vegetable products. Farmers Group plans to shorten this cycle. Furthermore, the company estimates that from first contact to sale conclusion, the cycle for fresh strawberries will run 3 days or less. Composted products sale cycle should run from 3 to 12 days. Direct sales contacts of vegetable markets by delivery personnel, as well as cold calling by telephone of potential market outlets, will also be employed.

5.4 Strategic Relationships


The company has strategic alliances with: Alabama State University Horticulture Department Southeastern Alabama State University Biology Department Dr. Michael SmithVegetable Specialist James EdwardsHorticultural Inspection Charles NewtonWildlife Alabama Wildlife Mobile Nursery Center

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Farmers Group
6.0 Sales Forecast
Table: Sales Forecast Sales Forecast Sales Sales Other Total Sales Direct Cost of Sales Sales Other Subtotal Direct Cost of Sales 2000 $575,000 $0 $575,000 2000 $391,000 $0 $391,000 2001 $700,000 $0 $700,000 2001 $478,100 $0 $478,100 2002 $850,000 $0 $850,000 2002 $578,850 $0 $578,850 2003 $889,100 $0 $889,100 2003 $601,032 $0 $601,032 2004 $927,331 $0 $927,331 2004 $627,803 $0 $627,803

Sales by Year
$1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 2000 2001 2002 2003 2004

Sales Other

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Farmers Group

Sales Monthly
$180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sales Other

7.0 Management
Farmers Group's management team is led by Mr. James Jackson, Business Manager, and the current manager of Mobile Farmers Vegetable Farm, who has extensive knowledge of the industry and has been tracking vegetable trends for 30 years. The company's management philosophy is based on responsibility and mutual respect. Farmers Group has an environment and structure that encourages productivity and respect for customers and fellow employees.

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Farmers Group
7.1 Organization
Overall, Farmers Group will have 12 personnel. The company expects to employ 5 temporary employees during the equipment re-location phase, 4 employees on a permanent basis, and 3 part-time employee. The Farmers Group team is organized into three groups: Management Management will be responsible for supervising and participating in the daily operations of the facility. Management consists of: James Jackson, Business Manager, Full Time Terry Howard, Executive Director, FullTime Kevin Perry, Management Trainee, 3/4 Time Victor Green, Management Trainee, 1/4 Time

Daily Maintenance This group will consist of the following: Henry Jones, Logistical Engineer, Full Time Colin Henry, Heavy Equipment, Full Time Michael Owen, Welder, 1/2 Time Contract Personnel They will be utilized initially for the moving and setting up of the vegetable farm, greenhouses, and the building of the manure composting facility.
Table: Personnel Personnel Plan Business Manager Executive Director Manager Trainee Manager Trainee Logistic engineer Heavy equipment Welder Contract workers Total People Total Payroll 2000 $25,000 $25,000 $9,000 $4,000 $18,000 $18,000 $3,500 $15,000 7 $117,500 2001 $30,000 $30,000 $6,000 $6,000 $18,000 $18,000 $3,000 $0 7 $111,000 2002 $30,000 $30,000 $6,000 $6,000 $18,000 $18,000 $3,000 $0 7 $111,000 2003 $30,000 $30,000 $6,000 $6,000 $18,000 $18,000 $3,000 $0 7 $111,000 2004 $30,000 $30,000 $6,000 $6,000 $18,000 $18,000 $3,000 $0 7 $111,000

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Farmers Group
8.0 Finance
Funding Requirements and Uses The company is raising $1,800,000 for the purpose of financing the acquisition of the Green Acres Vegetable Farm and Mobile Farmers Vegetable Farm, and funding operating expenses. The table below provides a breakdown of how the funds will be used.
Breakdown of Use of Funds Acquisition: Property Equipment System Sub-total Operating Expenses: Salaries Marketing and promotion Other operating expenses Sub-total Total

$1,300,000 $400,000 $1,700,000 $80,000 $10,000 $10,000 $100,000 $1,800,000

8.1 Significant Assumptions


Nature and Limitation of Projections This financial projection is based on sales volume at the levels described in the sales forecast section and presents, to the best of management's knowledge, the company's expected assets, liabilities, capital, and revenues and expenses. The projections reflect management's judgement of the expected conditions and its expected course of action given the hypothetical assumptions. Nature of Operations The company is in the business of vegetable farming, greens cultivation, and composting. The company expects to be operating in 2000. Revenues The company's revenue is derived primarily from the sale of vegetables, strawberries, and bagged composted manure products. Expenses The company's expenses are primarily those of salaries, utilities, and insurance costs. Other expenses are based on management's estimates and industry averages.

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Farmers Group
Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Sales on Credit % Other Calculated Totals Payroll Expense Sales on Credit New Accounts Payable Inventory Purchase 2000 1 7.00% 7.00% 20.00% 75.00% 0.00% $117,500 $431,250 $649,515 $482,400 2001 2 7.00% 7.00% 20.00% 75.00% 0.00% $111,000 $525,000 $417,725 $236,700 2002 3 7.00% 7.00% 20.00% 75.00% 0.00% $111,000 $637,500 $732,149 $578,850 2003 4 7.00% 7.00% 20.00% 75.00% 0.00% $111,000 $666,825 $749,218 $601,032 2004 5 7.00% 7.00% 20.00% 75.00% 0.00% $111,000 $695,498 $770,963 $627,803

8.2 Break-even Analysis


The company's break-even analysis is given below. Units are expressed in pounds.

Break-even Analysis
$15,000 $10,000 $5,000 $0 ($5,000) ($10,000) ($15,000) $0 $7,000 $14,000 $22,000 $29,000 $36,000

Monthly break-even point


Break-even point = where line intersects with 0

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 3,409 $20,457 $6.00 $1.86 $14,115

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Farmers Group
8.3 Profit and Loss Statement
Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Costs of Goods Other Cost of Goods Sold Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Gas and Oil Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales Include Negative Taxes 2000 $575,000 $391,000 $10,000 -----------$401,000 $174,000 30.26% 2001 $700,000 $478,100 $10,000 -----------$488,100 $211,900 30.27% 2002 $850,000 $578,850 $10,000 -----------$588,850 $261,150 30.72% 2003 $889,100 $601,032 $10,000 -----------$611,032 $278,068 31.28% 2004 $927,331 $627,803 $10,000 -----------$637,803 $289,528 31.22%

$117,500 $111,000 $111,000 $111,000 $111,000 $11,400 $11,100 $16,550 $15,300 $17,550 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,040 $3,000 $3,000 $3,000 $3,000 $6,000 $6,000 $6,000 $6,000 $6,000 $5,040 $5,500 $5,500 $5,500 $5,500 $0 $0 $0 $0 $0 $17,625 $16,650 $16,650 $16,650 $16,650 $0 $0 $0 $0 $0 -------------------------------------------------------$159,605 $153,250 $158,700 $157,450 $159,700 $14,395 $58,650 $102,450 $120,618 $129,828 $54,664 $47,845 $39,095 $32,095 $26,495 $0 $2,161 $12,671 $17,705 $20,667 ($40,269) $8,644 $50,684 $70,819 $82,666 -7.00% 1.23% 5.96% 7.97% 8.91% FALSE TRUE TRUE TRUE TRUE

Profit Yearly
$100,000 $80,000 $60,000 $40,000 $20,000 $0 ($20,000) ($40,000) ($60,000) 2000 2001 2002 2003 2004

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Farmers Group
8.4 Projected Cash Flow
The chart and table below contain the cash flow assumptions and projections for Farmers Group during the first five years of plan implementation. Year 1 monthlies are presented in the appendix.

Cash
$250,000 $200,000 $150,000 $100,000 $50,000 $0 ($50,000) ($100,000) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Net Cash Flow Cash Balance

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Farmers Group
Table: Cash Flow Pro Forma Cash Flow Cash Received Cash from Operations: Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Non Operating (Other) Income 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 Payment of Accounts Payable Subtotal Spent on Operations Additional Cash Spent Non Operating (Other) Expense 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 2000 2001 2002 2003 2004

$143,750 $431,250 $575,000 $0 $0 $0 $0 $0 $0 $0 $0 $575,000 2000 $57,154 $669,978 $727,132 $0 $0 $54,000 $0 $0 $0 $0 $0 $781,132 ($206,132) $39,268

$175,000 $525,000 $700,000 $0 $0 $0 $0 $0 $0 $0 $0 $700,000 2001 $32,231 $421,884 $454,115 $0 $0 $100,000 $0 $25,000 $0 $0 $25,000 $604,115 $95,885 $135,153

$212,500 $637,500 $850,000 $0 $0 $0 $0 $0 $0 $0 $0 $850,000 2002 $67,167 $726,320 $793,486 $0 $0 $100,000 $0 $25,000 $0 $0 $20,000 $938,486 ($88,486) $46,667

$222,275 $666,825 $889,100 $0 $0 $0 $0 $0 $0 $0 $0 $889,100 2003 $69,063 $748,902 $817,965 $0 $0 $25,000 $0 $50,000 $0 $0 $10,000 $902,965 ($13,865) $32,802

$231,833 $695,498 $927,331 $0 $0 $0 $0 $0 $0 $0 $0 $927,331 2004 $73,701 $770,189 $843,891 $0 $0 $35,000 $0 $50,000 $20,000 $0 $10,000 $958,891 ($31,560) $1,242

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Farmers Group
8.5 Projected Balance Sheet
Table: Balance Sheet Pro Forma Balance Sheet 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 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 2000 $9,537 $346,000 $0 $355,537 $400,000 $755,537 $1,000,000 ($684,600) ($40,269) $275,131 $1,030,668 $275,131 2001 $5,378 $246,000 $0 $251,378 $375,000 $626,378 $1,000,000 ($749,869) $8,644 $258,775 $885,153 $258,775 2002 $11,208 $146,000 $0 $157,208 $350,000 $507,208 $1,000,000 ($761,225) $50,684 $289,459 $796,667 $289,459 2003 $11,524 $121,000 $0 $132,524 $300,000 $432,524 $1,000,000 ($720,541) $70,819 $350,278 $782,802 $350,278 2004 $12,298 $86,000 $0 $98,298 $250,000 $348,298 $1,000,000 ($659,722) $82,666 $422,944 $771,242 $422,944 2000 $39,268 ($0) $241,400 $250,000 $530,668 $500,000 $0 $500,000 $1,030,668 2001 $135,153 $0 $0 $250,000 $385,153 $500,000 $0 $500,000 $885,153 2002 $46,667 $0 $0 $250,000 $296,667 $500,000 $0 $500,000 $796,667 2003 $32,802 $0 $0 $250,000 $282,802 $500,000 $0 $500,000 $782,802 2004 $1,242 $0 $0 $270,000 $271,242 $500,000 $0 $500,000 $771,242

8.6 Business Ratios


The business ratios given below are contrasted to industry standards for SIC code 0161 which covers vegetable and melon growers. Within this category, research has shown that there can be significant deviations from industry standards due to farm size, product life cycle, and capital resources. Farmers Group is a start-up venture, and therefore has a more heavy debt to equity ratio than most existing farms. Furthermore, due to its move into a niche market, the company is expected to spend more on advertising than its competitors. The first two years of operations are expected also to have a higher growth rate than average as it gains market share.

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Farmers Group
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 Business Vitality Profile Sales per Employee Survival Rate 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 Dividend Payout 2000 0.00% 0.00% 23.42% 24.26% 51.49% 48.51% 100.00% 0.00% 38.81% 38.81% 61.19% 100.00% 30.26% 37.26% 0.83% 2.50% 1.49 0.81 73.31% -14.64% -3.91% 2000 $82,143 2000 -7.00% -14.64% 0.00 40 2.00 68.10 34 0.56 2.75 0.47 $175,131 0.26 1.79 34% 0.81 2.09 0.00 2001 21.74% 0.00% 0.00% 28.24% 43.51% 56.49% 100.00% 0.00% 42.37% 42.37% 57.63% 100.00% 30.27% 29.04% 0.71% 8.38% 1.53 1.53 70.76% 4.18% 1.22% 2001 $100,000 2001 1.23% 3.34% 0.00 0 0.00 77.67 78 0.79 2.42 0.40 $133,775 1.23 1.26 28% 1.53 2.71 2.89 2002 21.43% 0.00% 0.00% 31.38% 37.24% 62.76% 100.00% 0.00% 43.93% 43.93% 56.07% 100.00% 30.72% 24.76% 1.23% 12.05% 1.89 1.89 63.67% 21.89% 7.95% 2002 $121,429 2002 5.96% 17.51% 0.00 0 0.00 65.33 50 1.07 1.75 0.31 $139,459 2.62 0.94 20% 1.89 2.94 0.39 2003 4.60% 0.00% 0.00% 31.94% 36.13% 63.87% 100.00% 0.00% 38.32% 38.32% 61.68% 100.00% 31.28% 23.31% 1.20% 13.57% 2.13 2.13 55.25% 25.27% 11.31% 2003 $127,014 2003 7.97% 20.22% 0.00 0 0.00 65.01 66 1.14 1.23 0.31 $150,278 3.76 0.88 17% 2.13 2.54 0.14 2004 Industry Profile 4.30% -4.60% 0.00% 0.00% 35.01% 35.17% 64.83% 100.00% 0.00% 32.42% 32.42% 67.58% 100.00% 31.22% 22.31% 1.23% 14.00% 2.76 2.76 45.16% 24.43% 13.40% 2004 $132,476 2004 8.91% 19.55% 0.00 0 0.00 62.69 68 1.20 0.82 0.28 $172,944 4.90 0.83 13% 2.76 2.19 0.12 12.90% 14.40% 28.90% 56.20% 43.80% 100.00% 31.10% 20.50% 51.60% 48.40% 100.00% 32.00% 20.70% 0.20% 1.70% 1.65 0.88 51.60% 2.20% 4.50% Industry $0 0.00% n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a

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Appendix
Appendix Table: Sales Forecast Sales Forecast Sales Sales Other Total Sales Direct Cost of Sales Sales Other Subtotal Direct Cost of Sales Jan $0 $0 $0 Jan $0 $0 $0 Feb $0 $0 $0 Feb $0 $0 $0 Mar $10,000 $0 $10,000 Mar $6,800 $0 $6,800 Apr $25,000 $0 $25,000 Apr $17,000 $0 $17,000 May $40,000 $0 $40,000 May $27,200 $0 $27,200 Jun $55,000 $0 $55,000 Jun $37,400 $0 $37,400 Jul $100,000 $0 $100,000 Jul $68,000 $0 $68,000 Aug $175,000 $0 $175,000 Aug $119,000 $0 $119,000 Sep $120,000 $0 $120,000 Sep $81,600 $0 $81,600 Oct $50,000 $0 $50,000 Oct $34,000 $0 $34,000 Nov $0 $0 $0 Nov $0 $0 $0 Dec $0 $0 $0 Dec $0 $0 $0

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Appendix
Appendix Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Sales on Credit % Other Calculated Totals Payroll Expense Sales on Credit New Accounts Payable Inventory Purchase Jan 1 7.00% 7.00% 20.00% 75.00% 0.00% $11,500 $0 $19,981 $0 Feb 2 7.00% 7.00% 20.00% 75.00% 0.00% $11,500 $0 $19,981 $0 Mar 3 7.00% 7.00% 20.00% 75.00% 0.00% $11,000 $7,500 $19,466 $0 Apr 4 7.00% 7.00% 20.00% 75.00% 0.00% $7,500 $18,750 $15,441 $0 May 5 7.00% 7.00% 20.00% 75.00% 0.00% $7,000 $30,000 $14,810 $0 Jun 6 7.00% 7.00% 20.00% 75.00% 0.00% $9,500 $41,250 $63,146 $50,600 Jul 7 7.00% 7.00% 20.00% 75.00% 0.00% $9,000 $75,000 $160,830 $159,800 Aug 8 7.00% 7.00% 20.00% 75.00% 0.00% $9,500 $131,250 $262,385 $272,000 Sep 9 7.00% 7.00% 20.00% 75.00% 0.00% $10,000 $90,000 $18,160 $0 Oct 10 7.00% 7.00% 20.00% 75.00% 0.00% $10,500 $37,500 $18,735 $0 Nov 11 7.00% 7.00% 20.00% 75.00% 0.00% $10,000 $0 $18,002 $0 Dec 12 7.00% 7.00% 20.00% 75.00% 0.00% $10,500 $0 $18,577 $0

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Appendix
Appendix Table: Cash Flow Pro Forma Cash Flow Cash Received Cash from Operations: Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Non Operating (Other) Income 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 Payment of Accounts Payable Subtotal Spent on Operations Additional Cash Spent Non Operating (Other) Expense 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 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Jan $751 $33,225 $33,976 $0 $0 $0 $0 $0 $0 $0 $0 $33,976 ($33,976) $211,424

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Feb $751 $23,495 $24,246 $0 $0 $0 $0 $0 $0 $0 $0 $24,246 ($24,246) $187,179

$2,500 $0 $2,500 $0 $0 $0 $0 $0 $0 $0 $0 $2,500 Mar $757 $22,739 $23,497 $0 $0 $0 $0 $0 $0 $0 $0 $23,497 ($20,997) $166,182

$6,250 $5,250 $11,500 $0 $0 $0 $0 $0 $0 $0 $0 $11,500 Apr $757 $15,413 $16,170 $0 $0 $0 $0 $0 $0 $0 $0 $16,170 ($4,670) $161,512

$10,000 $15,375 $25,375 $0 $0 $0 $0 $0 $0 $0 $0 $25,375 May $751 $14,866 $15,617 $0 $0 $5,000 $0 $0 $0 $0 $0 $20,617 $4,758 $166,270

$13,750 $26,625 $40,375 $0 $0 $0 $0 $0 $0 $0 $0 $40,375 Jun $5,802 $17,711 $23,513 $0 $0 $15,000 $0 $0 $0 $0 $0 $38,513 $1,862 $168,131

$25,000 $37,875 $62,875 $0 $0 $0 $0 $0 $0 $0 $0 $62,875 Jul $16,720 $41,356 $58,076 $0 $0 $4,000 $0 $0 $0 $0 $0 $62,076 $799 $168,931

$43,750 $64,875 $108,625 $0 $0 $0 $0 $0 $0 $0 $0 $108,625 Aug $27,940 $115,551 $143,491 $0 $0 $0 $0 $0 $0 $0 $0 $143,491 ($34,866) $134,065

$30,000 $114,375 $144,375 $0 $0 $0 $0 $0 $0 $0 $0 $144,375 Sep $740 $215,836 $216,576 $0 $0 $0 $0 $0 $0 $0 $0 $216,576 ($72,201) $61,864

$12,500 $102,375 $114,875 $0 $0 $0 $0 $0 $0 $0 $0 $114,875 Oct $740 $132,975 $133,715 $0 $0 $0 $0 $0 $0 $0 $0 $133,715 ($18,840) $43,024

$0 $53,250 $53,250 $0 $0 $0 $0 $0 $0 $0 $0 $53,250 Nov $722 $18,160 $18,882 $0 $0 $30,000 $0 $0 $0 $0 $0 $48,882 $4,368 $47,391

$0 $11,250 $11,250 $0 $0 $0 $0 $0 $0 $0 $0 $11,250 Dec $722 $18,651 $19,373 $0 $0 $0 $0 $0 $0 $0 $0 $19,373 ($8,123) $39,268

0.00%

Page 3

Appendix
Appendix Table: Balance Sheet Pro Forma Balance Sheet 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 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 $30,000 $400,000 $0 $430,000 $400,000 $830,000 $1,000,000 ($684,600) $0 $315,400 $1,145,400 $315,400 Jan $16,756 $400,000 $0 $416,756 $400,000 $816,756 $1,000,000 ($684,600) ($20,732) $294,668 $1,111,424 $294,668 Feb $13,242 $400,000 $0 $413,242 $400,000 $813,242 $1,000,000 ($684,600) ($41,463) $273,937 $1,087,179 $273,937 Mar $9,969 $400,000 $0 $409,969 $400,000 $809,969 $1,000,000 ($684,600) ($58,487) $256,913 $1,066,882 $256,913 Apr $9,997 $400,000 $0 $409,997 $400,000 $809,997 $1,000,000 ($684,600) ($66,685) $248,715 $1,058,712 $248,715 May $9,941 $395,000 $0 $404,941 $400,000 $804,941 $1,000,000 ($684,600) ($69,446) $245,954 $1,050,895 $245,954 Jun $55,376 $380,000 $0 $435,376 $400,000 $835,376 $1,000,000 ($684,600) ($70,194) $245,206 $1,080,581 $245,206 Jul $174,850 $376,000 $0 $550,850 $400,000 $950,850 $1,000,000 ($684,600) ($55,944) $259,456 $1,210,306 $259,456 Aug $321,684 $376,000 $0 $697,684 $400,000 $1,097,684 $1,000,000 ($684,600) ($18,269) $297,131 $1,394,815 $297,131 Sep $124,008 $376,000 $0 $500,008 $400,000 $900,008 $1,000,000 ($684,600) $1,231 $316,631 $1,216,639 $316,631 Oct $9,768 $376,000 $0 $385,768 $400,000 $785,768 $1,000,000 ($684,600) ($2,244) $313,156 $1,098,924 $313,156 Nov $9,610 $346,000 $0 $355,610 $400,000 $755,610 $1,000,000 ($684,600) ($20,969) $294,431 $1,050,041 $294,431 Dec $9,537 $346,000 $0 $355,537 $400,000 $755,537 $1,000,000 ($684,600) ($40,269) $275,131 $1,030,668 $275,131 Starting Balances $245,400 $0 $150,000 $250,000 $645,400 $500,000 $0 $500,000 $1,145,400 Jan $211,424 $0 $150,000 $250,000 $611,424 $500,000 $0 $500,000 $1,111,424 Feb $187,179 $0 $150,000 $250,000 $587,179 $500,000 $0 $500,000 $1,087,179 Mar $166,182 $7,500 $143,200 $250,000 $566,882 $500,000 $0 $500,000 $1,066,882 Apr $161,512 $21,000 $126,200 $250,000 $558,712 $500,000 $0 $500,000 $1,058,712 May $166,270 $35,625 $99,000 $250,000 $550,895 $500,000 $0 $500,000 $1,050,895 Jun $168,131 $50,250 $112,200 $250,000 $580,581 $500,000 $0 $500,000 $1,080,581 Jul $168,931 $87,375 $204,000 $250,000 $710,306 $500,000 $0 $500,000 $1,210,306 Aug $134,065 $153,750 $357,000 $250,000 $894,815 $500,000 $0 $500,000 $1,394,815 Sep $61,864 $129,375 $275,400 $250,000 $716,639 $500,000 $0 $500,000 $1,216,639 Oct $43,024 $64,500 $241,400 $250,000 $598,924 $500,000 $0 $500,000 $1,098,924 Nov $47,391 $11,250 $241,400 $250,000 $550,041 $500,000 $0 $500,000 $1,050,041 Dec $39,268 ($0) $241,400 $250,000 $530,668 $500,000 $0 $500,000 $1,030,668

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Appendix
Appendix Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Costs of Goods Other Cost of Goods Sold Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Gas and Oil Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales Include Negative Taxes Jan $0 $0 $800 -----------$800 ($800) 0.00% $11,500 $950 $0 $0 $170 $500 $420 $0 $1,725 $0 -----------$15,265 ($16,065) $4,667 $0 ($20,732) 0.00% Feb $0 $0 $800 -----------$800 ($800) 0.00% $11,500 $950 $0 $0 $170 $500 $420 $0 $1,725 $0 -----------$15,265 ($16,065) $4,667 $0 ($20,732) 0.00% Mar $10,000 $6,800 $867 -----------$7,667 $2,333 23.33% $11,000 $950 $0 $0 $170 $500 $420 $0 $1,650 $0 -----------$14,690 ($12,357) $4,667 $0 ($17,023) -170.23% Apr $25,000 $17,000 $867 -----------$17,867 $7,133 28.53% $7,500 $950 $0 $0 $170 $500 $420 $0 $1,125 $0 -----------$10,665 ($3,532) $4,667 $0 ($8,198) -32.79% May $40,000 $27,200 $833 -----------$28,033 $11,967 29.92% $7,000 $950 $0 $0 $170 $500 $420 $0 $1,050 $0 -----------$10,090 $1,877 $4,638 $0 ($2,761) -6.90% Jun $55,000 $37,400 $833 -----------$38,233 $16,767 30.48% $9,500 $950 $0 $0 $170 $500 $420 $0 $1,425 $0 -----------$12,965 $3,802 $4,550 $0 ($748) -1.36% Jul $100,000 $68,000 $833 -----------$68,833 $31,167 31.17% $9,000 $950 $0 $0 $170 $500 $420 $0 $1,350 $0 -----------$12,390 $18,777 $4,527 $0 $14,250 14.25% Aug $175,000 $119,000 $833 -----------$119,833 $55,167 31.52% $9,500 $950 $0 $0 $170 $500 $420 $0 $1,425 $0 -----------$12,965 $42,202 $4,527 $0 $37,675 21.53% Sep $120,000 $81,600 $833 -----------$82,433 $37,567 31.31% $10,000 $950 $0 $0 $170 $500 $420 $0 $1,500 $0 -----------$13,540 $24,027 $4,527 $0 $19,500 16.25% Oct $50,000 $34,000 $833 -----------$34,833 $15,167 30.33% $10,500 $950 $0 $0 $170 $500 $420 $0 $1,575 $0 -----------$14,115 $1,052 $4,527 $0 ($3,475) -6.95% Nov $0 $0 $833 -----------$833 ($833) 0.00% $10,000 $950 $0 $0 $170 $500 $420 $0 $1,500 $0 -----------$13,540 ($14,373) $4,352 $0 ($18,725) 0.00% Dec $0 $0 $833 -----------$833 ($833) 0.00% $10,500 $950 $0 $0 $170 $500 $420 $0 $1,575 $0 -----------$14,115 ($14,948) $4,352 $0 ($19,300) 0.00%

15%

Page 5

Appendix
Appendix Table: Personnel Personnel Plan Business Manager Executive Director Manager Trainee Manager Trainee Logistic engineer Heavy equipment Welder Contract workers Total People Total Payroll Jan $1,500 $1,500 $0 $0 $1,500 $1,500 $500 $5,000 12 $11,500 Feb $1,500 $1,500 $0 $0 $1,500 $1,500 $500 $5,000 12 $11,500 Mar $1,500 $1,500 $0 $0 $1,500 $1,500 $0 $5,000 12 $11,000 Apr $1,500 $1,500 $1,000 $0 $1,500 $1,500 $500 $0 7 $7,500 May $1,500 $1,500 $1,000 $0 $1,500 $1,500 $0 $0 7 $7,000 Jun $2,500 $2,500 $1,000 $0 $1,500 $1,500 $500 $0 7 $9,500 Jul $2,500 $2,500 $1,000 $0 $1,500 $1,500 $0 $0 7 $9,000 Aug $2,500 $2,500 $1,000 $0 $1,500 $1,500 $500 $0 7 $9,500 Sep $2,500 $2,500 $1,000 $1,000 $1,500 $1,500 $0 $0 7 $10,000 Oct $2,500 $2,500 $1,000 $1,000 $1,500 $1,500 $500 $0 7 $10,500 Nov $2,500 $2,500 $1,000 $1,000 $1,500 $1,500 $0 $0 7 $10,000 Dec $2,500 $2,500 $1,000 $1,000 $1,500 $1,500 $500 $0 7 $10,500

Page 6