Sample Investor Plan

Mobile Payment Application

Business Plan

Founders: John Doe

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EXECUTIVE SUMMARY

The ecommerce industry has two problems; the cumbersome checkout process and the increase of cyber crime. More people are using mobile devices for online purchases and the current experience is not aligned with expectations for a fast and user-friendly checkout. The poor desktop experience of tedious form-filling is worse on a mobile device with checkout abandonment topping 90%. Additionally, 3 out of 5 shoppers have five or more online passwords and adding credentials is difficult to manage. The Company’s mobile payment app solves both problems by offering retailers and consumers a simpler, faster and more private way to shop online. With Payment Company, the typical transaction is completed in under 12 seconds, achieved through numeric PIN-based authentication and a streamlined user interface for selecting payment methods and shipping addresses. The long checkout process becomes the simple ‘swipe card, enter pin, hit OK’ experience everyone knows from in-store checkout. The Company has also devised an ingenious process where all financially sensitive information is encrypted and stored on the phone. The Company reduces risk by encrypting the user’s sensitive information and storing it locally in the app on their mobile device, not on servers or the cloud where it is at risk. The encrypted information, passed securely to the payment gateway, is never shared with retailers, 3rd parties or even the Company. The Company’s fully-functioning mobile app is available for iOS and Android. Eleven small retailers have already agreed to integrate Payment Company and discussions with several enterprise retailers are in process. Ecommerce sales will reach $500 billion by 2018. In 2014, an estimated 110,000 eCommerce websites worldwide generated over $1M and Forrester estimates that alternative payments platforms will be adopted by 45% of shoppers by 2017 representing $6.43B. The Online Payment Software Developers industry has grown tremendously the last five years. Revenues earned by developers has been growing at average of 17.6% annually, totaling $14.3BN in 2014. The accelerated pace of revenue growth has led to high profit margins for the industry’s major players and lured a large amount of new entrants. During the past five years, the number of enterprises in the industry has grown to 1,459. The Company will monetize its software by licensing Payment Company to online retailers. With a small, medium and large retailer-based solution, the Company will charge its accounts a flat fee based upon a price band that fits within these spectrums. Specifically, these are $150, $5,000 and $15,000 per month, respectively. The product is completely free for consumers and retailers can incorporate their own payment processor thus avoiding additional processing fees. Retailers also benefit from partnering with Payment Company by incurring a lower shopping cart abandonment rate, thus enabling retailers of all sizes to earn a direct return on their investment. The Company anticipates that their primary customers will be online retailers that generate at least 40,000 orders a month or approximately $25M a year. According to Internet Retailer Top 500 and Second Top 500, there are at least 1,000 e-tailers in the US that meet this profile. The Company will employ its own direct sales force to reach these potential accounts. The Company also holds strategic partnership with BlueFin Payment Systems and Comodo, who has agreed to promote Payment Company to smaller retailers. The minimum monthly order size for these small accounts is at least 1,225 orders a month or $730K a year. It is unknown how many accounts meet this profile. Payment Company will utilize mass marketing branding efforts to develop top-of-mind awareness for its services. Payment Company faces competition from other payment technologies. The most notable services are: Visa Checkout, Google Wallet, and Apple Pay. Despite a competitive field, such services are still in the early stages of adoption and the Company has a significant advantage over other technologies in the market due to its unparalleled ease of use and ability to pay without usernames or passwords. This technology is protected by a pending patent and allows Payment Company to break into the market with a service that sets itself apart from existing technologies. Mike Marenick and Robert McHugh are the founders of Payment Company, and are leading a team of seasoned industry professionals who are well connected and attuned to the needs of the market. The work ethic and business acumen of this team will be the key drivers that propel this venture towards a position of lasting success.

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OBJECTIVE

The purpose of this plan is to provide investors with the information necessary to evaluate the scope and future growth of Payment Company in the market place. In addition to serving as a road map for management, the plan will show that: 1) a significant market opportunity exists when analyzing the current market demands and competitive landscape; 2) the management team in place is qualified to execute on a well-thought-out operational, marketing and sales strategy; and 3) the correct capital structure will allow for a long lasting, profitable business. To achieve the Company’s objectives, Payment Company is seeking $2,250,000 in seed plus funding. The funding will be allocated in a variety of ways including staffing, product development, operations, and marketing initiatives. The investment risk is minimal based on the management experience and industry growth rates. Payment Company’s financial model shows consistent growth for the brand over the next 3 years. By year 3, plans call for the Company to achieve $22.8MM in annual gross revenue with a net profit of $2.8M or 12.34%. STARTUP SUMMARY

The total start-up funding needed to successfully implement this venture is $2.25M. To date, the founders have raised $500K in developing a functional product and the Payment Company brand. Once the additional capital is raised, $800K will be used for start-up expenses. The remaining balance of $1.45M will be used for working capital.

Legal $100,000

Prelaunch Marketing $120,000

Application Development $368,000

Website Development $30,000

Consulting $60,000

Rent Deposit $2,500

Computer and Office Equipment $60,000

Other $59,500

Total Startup Expenses $800,000

Cash Required $1,450,000

Startup Inventory $0

Other Current Assets $0

Long-term Assets $0

Total Assets $1 ,450,000

Total Requirements $2,250,000

Startup Expenses

Startup Assets

Startup RequirementsStartup Expenses to Fund $800,000Startup Assets to Fund $1,450,000Total Funding Required $2,250,000

Non-cash Assets from Startup $0Cash Requirements from Startup $1,450,000Additional Cash Raised $0Cash Balance on Starting Date $1,450,000Total Assets $1 ,450,000

Liabi l itiesCurrent Borrowing $0Long-term Liabilities $0Accounts Payable (Outstanding Bills) $0Other Current Liabilities (interest-free) $0Total Liabi l i ties $0

Owner $0Investor $2,250,000Additional Investment Requirement $0Total P lanned Investment $2,250,000

Loss at Startup (Startup Expenses) ($800,000)Total Capital $1 ,450,000

Total Capital and Liabi l i ties $1 ,450,000

Total Funding $2 ,250,000

Liabilities and Capital

Assets

CapitalPlanned Investment

Startup Funding

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THE PAYMENT COMPANY APPLICATION

Payment Company is a disruptive mobile payment platform that enables users to shop online without the need for a username and password. Users simply download the application, scan their credit card and driver’s license and select a PIN. In less than 60 seconds this information is entered, users can shop at any store that accepts Payment Company. The checkout process is extremely minimal, fast and easy. Users simply verify their PIN and Payment Company facilitates a seamless transaction. Consumers benefit as they never have to use their device’s QWERTY keyboard throughout the entire process, nor are they asked to create a new username/password or share financially sensitive data with another company. With Payment Company, consumers store their financial data locally; such data is never shared with the retailer, Payment Company or any other third-parties. Retailers also benefit immensely as the solution reduces shopping cart abandonment and thus improves their bottom line. Retailers do not need to add or change any internal process to utilize Payment Company. Payment Company passes encrypted financial data directly to the retailer’s existing payment gateway or merchant processor. On the following page is a detailed feature list for both consumers and retailers.

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USER PRIVACY

Complete privacy and control All of the Payment Company user's personal and financial information is stored locally on their device, protected by the latest encryption technology. As part of the Company’s commitment to privacy, all information is completely invisible to Payment Company, third-parties and even the user. Furthermore, the risk associated with having multiple accounts with different companies is eliminated. This brings control back to the user and provides him or her with peace of mind. Two and three-pass parameters Users must have a Payment Company PIN, Phone and Phone PIN to confirm checkout. This multi-layer security parameter reduces the risk of fraud. PIN-based Authentication and Transaction Authorization Payment Company leverages a PIN to authenticate users and approve transactions, eliminating the need for usernames and passwords, which can be forgotten so easily. Instead, users are presented with a fast, familiar and secure experience similar to checking out in a retail store – swipe card, enter PIN and press OK. Application Locking Users have the ability to lock the app at their discretion. This feature adds an additional level of security to the app as it prevents unauthorized users from accessing personal information by automatically locking once the app is closed or minimized. Non-sensitive menu options remain available when the app is in a locked state.

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USER EXPERIENCE

Scan-based Onboarding Scan-based onboarding allows for expedient account setup. All required personal and financial information can be entered in less than 60 seconds, without use of the keypad. QWERTY Keypad Input Eliminated Fast PIN-based checkout reduces the chance of typing errors and the time needed to check out. These features are particularly valuable for mobile device users. Access and Availability Payment Company is integrated into the merchant's cart page, providing users with convenient access no matter where the user is or what device they are using. Device Compatibility Payment Company is available for both iOS and Android devices. User base is not segmented or prioritized by device type or operating system and is backwards and forward compatible. This allows Payment Company the greatest exposure to users.

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ACCOUNT MANAGMENT

Simple Payment and Shipping Selection Payment methods and shipping addresses can easily be selected from a single screen by intuitively swiping through a proprietary card carousel. Quick Payment Method and Address Editing Users can easily manage their account to add, edit or delete credit cards and shipping addresses through a main dashboard home screen. Recent Transactions Users can quickly and easily view recent transactions information, including date, credit card used, retailer name, checkout amount and authorization statuses. Default Payment Settings & Personal/Business Toggle Users can designate a credit card to be the default payment method when making a purchase. Quick toggle makes it simple for users to separate business and personal expenses. Simple Address Import Users have the option to import shipping address information directly from their native contacts list on their mobile device to the Payment Company platform with just one touch. Bluetooth Data Transfer Users can transfer their account to a new device via near field Bluetooth technology (future release).

Additional Costs

• Hardware, fees, changes in coding

• Must meet security standards

Consumer Trust at Stake

• Brand name importance

• Brand loyalty at risk

Liability Shift

• Losses from Card Not Present transactions are merchant liability

75% of merchants view payment security and/or customer data security as primary concerns

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RETAILER/MERCHANT FEATURES

Reduces PCI Compliance Responsibility By creating a fully secure end-to-end payment channel, Payment Company eliminates the need for retailers to store their customers' personal and financial information. This reduces the costs associated with PCI compliance and audits. Simple Integration into Existing Ecommerce Website Integration with the Payment Company API can be completed in hours, allowing retailers to quickly benefit from Payment Company's checkout experience without significant cost or time requirements. Improved Checkout Experience The required steps for checkout are significantly reduced. Total checkout time is decreased to just 12 seconds. QWERTY Keypad Input Eliminated Intuitive swipe navigation reduces the steps, time and ultimately the frustration of checking out on a mobile device. Works With Existing Merchant Account Unlike PayPal, which requires a separate merchant account, Payment Company integrates with the retailer's existing account. This reduces overhead, payment holds and managerial oversight. Orders Are Completed on the Merchant's Website Customers never leave a retailer's site to checkout, allowing them to quickly be reengaged with targeted marketing.

THE PAYMENT COMPANY EXPERIENCE

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INDUSTRY ANALYSIS SUMMARY: ONLINE PAYMENT PROCESSING SOFTWARE1

The Online Payment Processing Software Developers industry has experienced rapid growth during the five years to 2014, with revenue expanding an average 17.6% annually over the period. The accelerated pace of revenue growth has led to high profit margins for the industry’s major players and lured a large amount of new entrants to the industry. During the past five years, the number of enterprises in the industry has grown at an average annual rate of 20.8% to 1,459 operators, and is expected to grow, albeit more slowly, at an annualized 4.4% during the next five years. Some acquisition activity has taken place, such as eBay’s acquisition of the mobile payment platform developers Zong and Braintree and its sister’s company, PayPal’s recent acquisition of Paydiant. In addition, LoopPay was also recently acquired by Samsung in their efforts to develop a digital wallet platform. Acquisition activity will increase during the next five years, slightly tempering the flood of industry entrants.

During the next five years, mobile payment processing systems are expected to become a prominent part of the industry. These systems will enable small businesses and merchants to receive payments via their mobile phones. The new technology has already gained a foothold in some industries, particularly taxi companies, but will become more widespread over the next five years as developers improve their interfaces, consumers grow comfortable with the new technology and industry players prove they are more efficient and convenient than their many alternatives. Over the long term, the industry will look to develop a payment-as-a-platform model, a system that would create an all-encompassing layer to connect disparate methods of payment. These two new product types will encourage continued rapid revenue growth, with the industry expected to grow at an annualized rate of 4.4% during the five years to 2019 to reach $17.8 billion.

MARKET TRENDS: MERCHANTS WILL PROCESS PAYMENTS DIRECTLY2

PayPal and other services gained their industry footholds during the past 10 years because they offered the safety of an intermediary in online purchases. Consumers felt comfortable setting up one account with the payment processing platform, sharing credit card or bank account information, and then using that account to interact financially on the internet. This trend has started to reverse, primarily due to the reduction in fees charged to process credit card payments. As a result, it is cheaper for merchants to allow only the direct use of credit cards and refuse to accept payment from payment processing platforms. In addition, credit card companies have strongly increased their online fraud prevention capabilities since the inception of the internet. Consequently, merchants are not looking to add payment processors but more so value added solutions to their existing processors.

1 “Online payment processing software developers.” IBISWorld. 2014. Obtained at www.ibisworld.com. 2 IBID

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PRODUCTS AND SERVICES SEGMENTATION3

The industry essentially provides one service – facilitating online payments. At the heart of this service are the processing networks that form the principal routes for the electronic movement of money and financial data. Some firms may have direct access to this network while others must access it through intermediaries. Thus, it is useful to segment the industry’s one service into several different services that are differentiated from one another by the proximity the payment processing firm has to this underlying financial network.

RETAILERS WORK DIRECTLY WITH MERCHANT ACCOUNTS

Payment Company business model does not add any intermediary into the payment processing ecosystem. The company solutions enables retailers to use their own payment processor and thus plays in the merchant accounts segment of the market. The data suggest that merchants prefer to manage their own fraud prevention, chargebacks and settlements rather than pay a premium for a third-party processor.

MAJOR MARKETS4

The industry’s primary market is merchants that conduct business over the internet. These businesses can be segmented into small firms and medium-to-large firms. Additionally, a small portion of industry revenue comes from consumers that transfer money using payment processing software. Over the next five years, no market segment is expected to significantly change its percentage of industry revenue.

3 IBID 4 IBID

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TARGET: SMALL, MEDIUM AND LARGE RETAILERS5

Payment Company will largely target medium to large ecommerce accounts. The Company will also sell its services to smaller businesses, however not focus its internal resources to target such accounts. Instead, the Company will leverage a strategic partnership with Comodo to sell to these smaller accounts. Below is a segment summary of the small and medium-to large enterprise accounts.

Small business

Small businesses are estimated to account for about 46.3% of industry revenue. Due to the small sales volume of most small businesses, pricing agreements with firms that take a percentage of each transaction are the most cost-effective way for these businesses to implement payment processing platforms on their sites. Payment Company has taken into account such needs and will offer a low flat monthly fee that is in range of a small sized retailer’s budget.

Medium-to-large enterprises

Medium-to-large enterprises account for about 48.4% of industry revenue. While there are many more small businesses than there are large ones, large businesses have a high volume of sales transactions, which generates significant revenue for the industry. While many payment processing firms offer discounted percentage rates for high sales volumes, large businesses may find pricing agreements that involve an initial setup fee and recurring monthly fees more attractive.

POTENTIAL ENTERPRISE ACCOUNTS

The management team has personal ties to a number of key executives in the enterprise segment. Enterprise is defined as internet sales in excess of $1B annually. These potential accounts have expressed interest in the Payment Company services and are willing to entertain a proposal to integrate Payment Company into their internet storefront and make introductions to other Fortune 500 companies. While the business plan does not account for enterprise level sales, there is a significant likelihood that the management team will close a number of these accounts after its launch date. References will be furnished upon request.

5 IBID

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PRICING

While Payment Company is free for users, the Company’s pricing model calls for a flat monthly licensing fee based upon the retailer’s order volume. The management team has thus segmented potentials accounts into small, medium and large sized and has priced Payment Company to meet everyone ROI requirements. See below:

Assumes 1) average shopping cart abandonment rate of 60%. 2) AOV of $50 3) Expected Margin of 10%

Market size

Payment Company operates within the merchant account sector of the industry. The Company focuses primarily on medium and large sized businesses. This intersection accounts for 15.5% of total industry sales. Furthermore, it is estimated that the maximum adoption for alternative payment systems to reach 45% in the future 6. Given the industry research, the management team estimates the total addressable market to be $6.43 BN.7

MARKET NEEDS

The market is in need of a payment platform such a Payment Company. With the status quo, consumers risk their security and suffer an inconvenience from registrations when shopping online. In the face of increased cyber-attacks, shoppers are not safe, exposing their credit card and personal information with highly vulnerable retailers. A news study reports that, “eCommerce sites were found to be the number one targeted asset accounting for 48 percent of all data breaches investigated, a 15 percent increase from the previous year.”8 At the same time, consumers do not want to change their behavior or deal and an extra layer of security protocols to protect themselves. Currently, 3 out of 5 shoppers report having 5 or more unique online passwords.9 Adding any additional credentials is difficult to manage. Retailers are also leaving money on the table as this phenomenon causes many consumers to shop at a brick and mortar or not shop at all. Business news daily reports that “Security issues top the reasons why consumers are hesitant to shop on their smartphones or tablets”.10 As such, the need for services that can transact and store information locally without the need for new credentials is greater than ever. This is precisely the area that Payment Company will address.

6 “Us Mobile Payments Forecast, 2013 To 2017” Forrester Research, Inc. 2013 7 “US Ecommerce growth” Forbes, 2014 Obtained at http://www.forbes.com/sites/forrester/2014/05/12/us-ecommerce-grows-reaching-414b-by-2018-but-physical-stores-will-live-on/ 8 https://www.thawte.com/about/news/?story=387720 9 https://www.secureworldexpo.com/identity-crisis-within-social-networks 10 http://www.businessnewsdaily.com/7756-online-shopping-preferences.html

Small Sized Companies Value Medium Sized Companies Value Large Sized Companies ValueAnnual Sales $734,694 Annual Sales $24,489,796 Annual Sales $73,469,388AOV $50 AOV $50 AOV $50Expected Margin $5 Expected Margin $5 Expected Margin $5Orders / Month 3000 Orders / Month 10,000 Orders / Month 100,000 Estimated Abandoned Orders 5000 Estimated Abandoned Orders 16,667 Estimated Abandoned Orders 166,667 Base Line Conversion 2% Base Line Conversion 2% Base Line Conversion 2%New Conversion 2.45% New Conversion 2.45% New Conversion 2.45%Estimated Order with Paydunk 3675 Estimated Order with Paydunk 12,250 Estimated Order with Paydunk 122,500 Orders recaptured 675 Orders recaptured 2,250 Orders recaptured 22,500

Sales by Paydunk $33,750 Sales by Paydunk $112,500 Sales by Paydunk $1,125,000Gross Profit made by retailer $3,375 Gross Profit made by retailer $11,250 Gross Profit made by retailer $112,500Licensing Fee $150 Licensing Fee $5,000 Licensing Fee $15,000Net Profit $3,225 Net Profit $6,250 Net Profit $97,500ROI 2150% ROI 125% ROI 650%

New Orders / Month to breakeven 30 New Orders / Month to breakeven 1000 New Orders / Month to breakeven 3000Monthly baseline 1224 Orders / Month baseline 40,816 Orders / Month baseline 122,449

$6.43B in alternative online payments

$14.3B in payments fees from online merchants

$294B in e-commerce transactions in the US (2014)

110,000 e-commerce websites generating +$1M online revenue

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COMPETITIVE ANALYSIS

Payment Company was selected for a graduate research project by Kellogg School of Management’s Analytical Consulting Lab. In this project, MBA candidates dedicate a semester working on Payment Company’s customer acquisition strategy, competitive analysis and financial modeling. Payment Company is keenly aware that it must consistently analyze the competitive landscape to accelerate its position in the marketplace. Any business that operates with a similar model serves as a direct or indirect competitor. The identified competitors are described below. Paypal – Acquired by eBay eBay operates in this industry through its payments segment that includes the core payment brand PayPal, which enables individuals and businesses to send and receive payments online and through mobile devices. eBay has a related consumer credit business, Bill Me Later, which enables US merchants to offer credit to US consumers at the point of sale for eCommerce and mobile transactions. The majority of revenue for the payments segments comes from a take rate on the net TPV, the total dollar volume of payments, net of payment reversals, completed through the PayPal payments networks, including Bill Me Later.

Visa Inc. - Estimated market share: 4.9% Visa is an American multinational financial services company that facilitates electronic payment systems throughout the world. The company operates the world’s largest retail electronic payments network through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. It has made 4 related acquisitions in this space.

Google Inc. - Estimated market share: N/A Google Wallet was the mobile wallet pioneer in the US in using NFC technology. However due to lack of partnerships and the telecom providers unwillingness to install the wallet as part of the new phones being sold, it did not see early mainstream adoption. Estimates indicate approximately 50,000 to 100,000 downloads with few consumers actually using it. After the launch of Apple Pay, Google did a major reboot to their wallet initiative and was able to broker a partnership with Softcard (who is now defunct) to acquire some of its IP, and is planning to re-launch the wallet and the Payments API platform.

Apple Pay: - Estimated market share: 1.7% Market share Apple Pay is Apple's mobile payment solution for the iPhone 6 and Apple Watch. Payments made through Apple Pay accounted for between 0.1%-1.6% of transactions at five top retailers in the month following the launch of the feature. According to a report released today by ITG Market Research, Apple Pay has gained a 1.7% market share as of six weeks after its release

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COMPETITIVE ADVANTAGES

What follows is a listing of the primary competitive advantages of the Company upon entering the market.

• Consumers do not require any new credentials to use. Just a one-time set up, their phone number and PIN • Setup is completed in less than 60 seconds. • No new payment processor required. Merchants can use an existing one • Minimal streamlined integration into eCommerce platforms • Data is stored encrypted locally on the user’s device within the app. Payment Company is immune from cyber

breaches • Outstanding support and service for the product • Knowledge and leadership of founders

BARRIERS TO ENTRY11

The increasing competition and expected consolidation makes it challenging for new entrants in the industry to enter. New entrants must have a fundamental knowledge of website development, online financial transactions and securing sensitive information on the internet. This necessitates a workforce of highly skilled employees and an investment in an infrastructure to provide online payment services. Payment Company’s unique model allows it to overcome these challenges by shifting the storage of sensitive information to local devices.

Furthermore, regardless of how secure a new entrant’s payment platform is, lesser-known companies may struggle to gain the trust of merchants and consumers. This barrier to entry reinforces itself: Firms cannot gain the trust of businesses and consumers without establishing a well-known brand name, and firms cannot establish a well-known brand name without attracting a large user base of consumers and merchant partners. Despite these challenges, the management team is confident it can overcome such obstacles as Payment Company differentiates itself with an unparalleled shopping experience. With its innovative mobile, secure and easy payment system, it will quickly earn the trust of merchants and consumers alike and be able to defend its positions from new entrants as it scales. The Company also holds a patent pending to protect itself from copycats.

SWOT ANALYSIS

The following is a listing of the key strengths and weaknesses of Payment Company, as well as the opportunities and threats that exist within the marketplace.

Strengths Weaknesses • Knowledge and network of founders • Patent pending technology • Fastest, simplest payment method in the

market • Customer service commitment • Commitment to privacy • Scope of services to various sized retailers

• Company needs funding and working capital for a successful launch

• As a new business, the Company must build its credibility

Opportunities Threats • Applications in the brick and mortar market • Consumer behavior shifting to mobile

payments • Increased burden on compliance will shift data

warehousing solutions to local devices • Growth in international eCommerce market

• Larger players can replicate Payment Company • Larger retailers may promote their own

payment method

11 “Online payment processing software developers.” IBISWorld. 2014. Obtained at www.ibisworld.com.

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BRANDING AND MARKETING

Payment Company recognizes that maintaining a sterling, well-regarded brand is essential to propagating a strong standing amongst both retailers and consumers. The objective is to raise brand awareness on both fronts that will emphasize a user friendly user platform. The Company’s branding will aid in fueling word-of-mouth exchange and building a loyal customer following. The Company will also fervently track any direct or indirect competition in the marketplace to ensure it stays on top of cutting-edge industry trends and opportunities. Moving forward, Payment Company will strive to meet the following objectives as it accomplishes specific keys to success: OBJECTIVES

• Become a recognized leader in the online payment industry • Develop a strong customer service model that fits the needs of different sized retailer • Remain flexible in product offerings and offer custom suites that meet the needs of sellers • Remain attuned to the marketplace and integrate products into the business mix that meet the needs of the

targeted audience

MARKETING CAMPAIGN

Marketing for Payment Company will be done through a variety of channels including the direct sales to medium and large sized retailers, internet marketing, social media, press releases, and word of mouth. Internet efforts will be driven through a user friendly website and mobile application. In addition to the web and mobile presence, plans also call for developing an extremely strong social media campaign. Word of mouth will round out the marketing model and has the potential of providing the most marketing push as it will allow the organization to deliver an authentic, trusted marketing message. DIRECT SALES:

Payment Company will employ a dedicated sales team for sales and promotional efforts to medium and large sized retailers. Key decision makers will be VP of eCommerce, director level marketing roles and senior IT influencers. All sales efforts will involve informational discussions and presentations. PARTNERSHIPS:

Payment Company will engage in strategic partnerships to promote its service to smaller retailers. One such partnership is Comodo, whose salesforce sells and renews SSL certificates to tens of thousands of retailers annually. A commission structure will be offered to promote Payment Company. SOCIAL MEDIA:

Payment Company will allocate a large portion of its marketing budget to generate brand awareness and manage its brand on social media sites, such as Facebook and Twitter. Social media has the potential to reach millions of potential consumers.

PRESS RELEASES:

Press releases will alert relevant media channels of the Company’s offerings, business updates, and other newsworthy items. Media coverage will increase the Company’s credibility and recognition among the public and key industry decision makers. WEBSITE AND MOBILE:

A well-optimized web and mobile site with proper site structure, page layout, and clear and easy navigation, along with targeted keywords embedded throughout the site has been constructed and will ensure proper search engine placement and saturation. GOOGLE ADWORDS:

AdWords offers pay-per-click (PPC) advertising, cost-per-thousand (CPM) advertising, and site-targeted advertising for text, banner, and rich-media ads.

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EXIT STRATEGY

After careful consideration, the Company has developed the following scenarios for the investors and management to recover their investments.

SCENARIO ONE: REPAYMENT

Payment Company chooses to remain a privately owned enterprise. The Company repays its investors in full, consolidating ownership in the Founders.

SCENARIO TWO: BUYOUT

Payment Company, as a successful income-generating operation, experiences growth and sees the opportunity to expand its brand into additional markets. This opens the door for additional product offerings and revenue streams. Due to its substantial market growth and industry recognition, major competing brands begin to take notice of the Company. These businesses approach Payment Company with attractive buyout offers, and the Company negotiates and sells to the best deal.

SCENARIO THREE: MERGER

Payment Company merges with another company to expand its market reach and development capabilities. Potential merger partners include companies that can offer a more diversified market reach or provide expanded resources for product or service research and development. Payment Company’s management would maintain majority control of the Company and combine its operational and sales efforts with its merger partner.

SCENARIO FOUR: IPO

The Company sells its interest in itself through the sale of stocks on the open market. Going public is an arduous and challenging journey for a Company but, if achieved, is highly rewarding. As a public company, or IPO, Payment Company will enjoy increased exposure and prestige, helping it to attract and retain the most talented executives and employees. Payment Company’s ownership and management may also liquidate its equity in the Company through the sale of its ownership shares. If the ownership sells, the new stockholders will own the brand and will be responsible for its operation and future activities.

CONCLUSION

Payment Company may entertain merger or acquisition scenarios by a major company upon the realization of anticipated operating results and favorable market conditions. Aside from merger or acquisition, the Company may instead strive to sell its interest in through the sale of stocks on the open market, likely reaping outstanding reward for investors if IPO-status is achieved and potentially handing control of the brand over to the new majority stockholders. The Company may also choose to liquidate its assets, repay its investors and debtors, and close the business. A final option would be repaying investors and remaining a privately owned enterprise. The Company will entertain all scenarios that could be lucrative for the Company and investors. The final decision will depend on market forces and the wishes of the Company’s owners and investors.

INVESTMENT ANALYSIS

The Company is seeking a cash infusion of $2.25M in seed plus funding in exchange for a 15% equity stake in Payment Company. Upon hitting’s its milestones, the company anticipates a round 1 of financings at the end of year 3 and an exit in 6 years. Below are the projected investment scenarios.

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Investment O ffering Seed Round 1 Round 2 ExitProposed Year: 1 2 3 7

Investment Amount $500,000 $2,250,000 $0Equity Share Offering Percentage 16.67% 15.00% 0.00%Valuation $3,000,000 $15,000,000 $0 $89,600,000Investor Exit Payout $12,693,333 $13,440,000 $0Investor Years Until Exit 6 5 4Investor IRR 71.44% 42.97% 0.00%

Share O wnership Year 1 Year 2 Year 3 Year 7Founders' Shares 10,000,000 10,000,000 10,000,000 10,000,000Stock Split Multiple 0 0 0Stock Options Issued 0 0 0 0Investor Shares Issued 2,000,000 2,117,647 0Price per share $0.25 $1.06 $0.00 $6.35Options Holders' Shares 0 0 0 0Year 1 Investors' Shares 2,000,000 2,000,000 2,000,000 2,000,000Year 2 Investors' Shares 2,117,647 2,117,647 2,117,647Year 3 Investors' Shares 0 0Total Shares Outstanding 12,000,000 14,117,647 14,117,647 14,117,647

Equity O wnership Perc entage Year 1 Year 2 Year 3 Year 7Founders' Equity 83.33% 70.83% 70.83% 70.83%Option Holders' Equity 0.00% 0.00% 0.00% 0.00%Year 1 Investors' Equity 16.67% 14.17% 14.17% 14.17%Year 2 Investors' Equity 15.00% 15.00% 15.00%Year 3 Investors' Equity 0.00% 0.00%Total Equity 100.00% 100.00% 100.00% 100.00%Investors' Equity 16.67% 29.17% 29.17% 29.17%Founders' & Employees' Equity 83.33% 70.83% 70.83% 70.83%

Valuation, Investment, Shares

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MANAGEMENT

JOHN DOE - COFOUNDER

Mr. Doe has over 30 years’ experience in management and technology consulting. He achieved a 31-year career with Accenture (formerly Andersen Consulting), where he served in a number of management positions, including global management responsibility for human performance service offerings, global change management for communications and high tech industries, Americas change management, Ohio consulting practice head and worldwide head for the distribution industry practice. He has extensive experience in strategic initiatives and operational responsibilities grounded in information technology and performance management. Mr. Doe continues in an active role with both private and public companies. He has been an investor, advisor and board member for early-stage and public companies providing a wide range of technology solution offerings including eLearning, compliance and corporate governance, employee sourcing and recruiting, and home networking. Mr. Doe serves on the board of Agilysys, Inc. ( NASDAQ), a leading distributor of computer hardware and provider of software solutions. During his business career in Cleveland, Mr. Doe was involved with a number of civic and charitable organizations. He served on the Achievement Centers for Children board, Playhouse Square board, Boy Scouts of America board, and held various leadership roles in United Way campaigns. Mr. Doe holds a B.S. in Industrial Engineering and an M.B.A. from The Ohio State University. JOHN SMITH – CO-FOUNDER

Mr. Smith has over 11 years of experience as an investor, entrepreneur, operational executive and investment banker within the technology space. Prior to Payment Company, John worked at Payment Ventures where he pursued investment opportunities in mobile, internet, gaming, software, and e-commerce. Before joining Payment Ventures, John served as the Director of Corporate Development & Analytics at PlayPhone. In this role he was responsible for M&A sourcing and execution, strategic partnerships, and improving operational metrics. John also worked as an investment banking analyst in the TMT group at Cowen and Company where he completed a number of M&A and equity transactions in the digital media and communications equipment sectors. Chris began his career at Intel as an operations financial analyst within the Flash Products Division. In addition, John has consulted for several technology startups including Gilt Groupe and ngmoco.

John earned a B.A. with a double major in Economics and Political Science from the University of California, Davis and an MBA from IESE Business School in Barcelona. John was selected as a Kauffman Finalist in 2012.

JOHN MILLER – BUSINESS DEVELOPMENT

John brings far more than 17 years of experience in business development, human resources, training and consulting to his role as a Business Development Manager. He brings a vitality, professionalism and warmth, and a mindset of service and advocacy to his work with clients. John’s primary focus is to build awareness to prospective clients, and develop and maintain relationships with current and past clients. As an advocate of the company's vision to enrich the spirit and performance of organizations, and its purpose to positively impact the world by creating thriving organizational cultures, John finds his work rewarding and fulfilling. Prior to joining Payment Company, John spent seven years in the staffing/executive placement industry where he held roles as a business development manager, national training manager and executive search consultant. John graduated from Chicago College of Commerce where he studied court and convention reporting.

PERSONNEL FORECAST

The personnel forecast below shows the staffing needs for the next five years.

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SALES FORECAST

The following is a three-year sales forecast:

Personnel Plan Year 1 Year 2 Year 3Co-Founder $75,000 $75,000 $75,000Co-Founder $75,000 $75,000 $75,000COO $60,000 $60,000 $60,000CFO $0 $0 $160,000Operations and Onboarding managers $0 $90,000 $180,000Operations $120,000 $120,000 $240,000Sales / Account Managers $25,000 $50,000 $200,000Sr. Developer $0 $300,000 $300,000Junior Developer $0 $150,000 $150,000Analyst $0 $70,000 $70,000Customer Service $45,000 $180,000 $180,000IT Support $75,000 $150,000 $300,000Total People 8 19 31

Total People $475,000 $1,320,000 $1,990,000

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Sales ForecastUnit Sales Year 1 Year 2 Year 3Small Companies 321 5,080 800 Medium Companies 81 1,664 264 Large Companies 6 192 31 Total Unit Sales 408 6,936 1,095

Unit Prices Year 1 Year 2 Year 3Small Companies $150 $150 $1,800Medium Companies $5,000 $5,000 $60,000Large Companies $15,000 $15,000 $180,000

Sales Year 1 Year 2 Year 3Small Companies $48,195 $761,940 $1,440,488Medium Companies $403,500 $8,322,000 $15,841,682Large Companies $90,000 $2,880,000 $5,526,168Total Sales $541,695 $11,963,940 $22,808,338

Direct Unit Costs Year 1 Year 2 Year 3Small Companies $10.00 $10.00 $120.00Medium Companies $500.00 $500.00 $6,000.00Large Companies $1,500.00 $1,500.00 $18,000.00

Direct Cost of Sales Year 1 Year 2 Year 3Small Companies $3,213 $50,796 $96,033Medium Companies $40,350 $832,200 $1,584,168Large Companies $9,000 $288,000 $552,617Subtotal Direct Cost of Sales $52,563 $1,170,996 $2,232,818

AssumptionsAvg Abandon rate 60%

Medium Companies 80%Large Companies 20%Unique Meetings / rep 100Sales Cycle (months) 8Deal closed per month 5Close rate 5%Months of selling in a year 6 Annual Retention 95%

Sales reps (direct)Year 1 1Year 2 2Year 3 8Year 4 15Year 5 22

ComodoSmalled Size Companies 85%Medium Sized Companies 15%Clients reached per month 300Close rate 2%Deals closed per month 6Sales Cycle (Months) 2Months of selling in a year 10

AgentsYear 1 3Year 2 10Year 3 15Year 4 20Year 5 25

Direct Sales Channel

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BREAK-EVEN ANALYSIS

The following break-even analysis shows the revenue necessary to break-even in the first year of operation. As shown below, the Company is expected to incur average monthly costs of $57,767 in Year 1. On Average, the Company’s pays out $129 in commission to per account per month. The contribution margin of each account is $1,328 per account per month. At this rate, the Company needs to hold at least 48 retailers in its sales portfolio.

Assumes a ratio of 74% small retailers, 22% medium retailers and 2% large retailers

Monthly Units Break-even 48Monthly Revenue Break-even 63,974$

Average Per-Unit Revenue 1,328$ Average Per-Unit Variable Cost 129$ Average Percent Variable Cost -$ Estimated Monthly Fixed Cost 57,767$

Assumptions:

Break-even Analysis

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PROJECTED INCOME STATEMENT

Pro Forma Profit and Loss Year 1 Year 2 Year 3Sales $541,695 $11,963,940 $22,808,338Direct Cost of Sales $52,563 $1,170,996 $2,232,818Production Payroll $0 $0 $0Other Costs of Sales $0 $0 $0Total Cost of Sales $52,563 $1,170,996 $2,232,818

Gross Margin $489,132 $10,792,944 $20,575,521Gross Margin % 90.30% 90.21% 90.21%

Operating ExpensesPayroll $0 $1,320,000 $1,990,000Marketing/Promotion $575,000 $9,675,000 $14,000,000Depreciation $0 $0 $0Rent $15,000 $15,000 $60,000Internet $6,000 $9,000 $10,000Utilities $5,400 $5,400 $7,000Hosting Fees $1,800 $3,000 $5,000Liscenses and Subscriptions $3,000 $6,000 $10,000Supplies $2,400 $6,600 $10,000Maintainence $8,400 $8,400 $8,400Insurance $7,200 $8,400 $10,000Professional Fees $60,000 $60,000 $120,000Payroll Taxes $0 $198,000 $298,500Other $9,000 $12,000 $25,000Total Operating Expenses $693,200 $11,326,800 $16,553,900

Profit Before Interest and Taxes ($204,068) ($533,856) $4,021,621EBITDA ($204,068) ($533,856) $4,021,621 Interest Expense $0 $0 $0 Taxes Incurred $0 $0 $1,206,486

Net Profit ($204,068) ($533,856) $2,815,135Net Profit/Sales -37.67% -4.46% 12.34%

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PROJECTED CASH FLOW

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PROJECTED BALANCE SHEET

The balance sheet is a snapshot of Payment Company’s financial condition. The balance sheet has three parts: assets, liabilities and ownership equity.

Pro Forma Cash Flow Year 1 Year 2 Year 3

Cash ReceivedCash from OperationsCash Sales $0 $0 $0Cash from Receivables $381,879 $10,786,500 $21,596,218Subtotal Cash from Operations $381,879 $10,786,500 $21,596,218

ExpendituresExpenditures from OperationsCash Spending $0 $1,320,000 $1,990,000Bill Payments $548,207 $9,933,773 $17,965,067Subtotal Spent on Operations $548,207 $11,253,773 $19,955,067

Net Cash Flow ($166,328) ($467,273) $1,641,151Cash Balance $1,283,672 $816,398 $2,457,549

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Pro Forma Balance SheetAssets Year 1 Year 2 Year 3Current AssetsCash $1,283,672 $816,398 $2,457,549Accounts Receivable $159,816 $1,337,256 $2,549,376Inventory $0 $0 $0Other Current Assets $0 $0 $0Total Current Assets $1,443,488 $2,153,654 $5,006,926

Long-term AssetsLong-term Assets $0 $0 $0Accumulated Depreciation $0 $0 $0Total Long-term Assets $0 $0 $0

Total Assets $1,443,488 $2,153,654 $5,006,926

Liabilities and Capital Year 1 Year 2 Year 3Current LiabilitiesAccounts Payable $197,556 $1,441,578 $1,479,715Current Borrowing $0 $0 $0Other Current Liabilities $0 $0 $0Subtotal Current Liabilities $197,556 $1,441,578 $1,479,715

Long-term Liabilities $0 $0 $0

Total Liabilities $197,556 $1,441,578 $1,479,715Paid-in Capital $2,250,000 $2,250,000 $2,250,000Retained Earnings ($800,000) ($1,004,068) ($1,537,924)Earnings ($204,068) ($533,856) $2,815,135Total Capital $1,245,932 $712,076 $3,527,211

Total Liabilities and Capital $1,443,488 $2,153,654 $5,006,926

Net Worth $1,245,932 $712,076 $3,527,211

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APPENDIX: YEAR ONE FINANCIALS

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Direc t ChannelMedium Companies 4 4 4Large Companies 1 1 1Total 5 5 5ComodoSmall 15 15 15 15 15 15Medium 3 3 3 3 3 3Total 18 18 18 18 18 18Total Ac c ounts ClosedSmall 15 15 15 15 15 15Medium 3 3 3 7 7 7Large 0 0 0 1 1 1Ac c umulated Ac c ountsSmall 15 31 46 61 77 92Medium 3 5 8 15 22 28Large 0 0 0 1 2 3

Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24Direc t ChannelMedium Companies 8 8 8 8 8 8 8 8 8 8 8 8Large Companies 2 2 2 2 2 2 2 2 2 2 2 2Total 10 10 10 10 10 10 10 10 10 10 10 10ComodoSmall 51 51 51 51 51 51 51 51 51 51 51 51Medium 9 9 9 9 9 9 9 9 9 9 9 9Total 60 60 60 60 60 60 60 60 60 60 60 60Total Ac c ounts ClosedSmall 51 51 51 51 51 51 51 51 51 51 51 51Medium 17 17 17 17 17 17 17 17 17 17 17 17Large 2 2 2 2 2 2 2 2 2 2 2 2Ac c umulated Ac c ountsSmall 143 194 245 296 347 398 449 500 551 602 653 704Medium 45 62 79 96 113 130 147 164 181 198 215 232Large 5 7 9 11 13 15 17 19 21 23 25 27

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Personnel Plan Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Co-Founder $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250Co-Founder $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250COO $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000CFO $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Operations and Onboarding managers $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Operations $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000Sales / Account Managers $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083Sr. Developer $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Junior Developer $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Analyst $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Customer Service $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750IT Support $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250Total FTEs 8 8 8 8 8 8 8 8 8 8 8 8Total Payroll $39,583 $39,583 $39,583 $39,583 $39,583 $39,583 $39,583 $39,583 $39,583 $39,583 $39,583 $39,583

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Pro Forma Profit and Loss Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Sales $0 $0 $0 $0 $0 $0 $15,795 $31,590 $47,385 $98,180 $148,975 $199,770Direct Cost of Sales $0 $0 $0 $0 $0 $0 $1,503 $3,006 $4,509 $9,512 $14,515 $19,518Production Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Cost of Sales $0 $0 $0 $0 $0 $0 $1,503 $3,006 $4,509 $9,512 $14,515 $19,518

Gross Margin $0 $0 $0 $0 $0 $0 $14,292 $28,584 $42,876 $88,668 $134,460 $180,252Gross Margin % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 90.48% 90.48% 90.48% 90.31% 90.26% 90.23%

Operating Expenses

Sales and Marketing ExpensesSales and Marketing Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Advertising/Promotion $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Sales and Marketing Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Sales and Marketing Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales and Marketing % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

ExpensesPayroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Marketing/Promotion $0 $0 $0 $0 $25,000 $30,000 $35,000 $40,000 $45,000 $75,000 $150,000 $175,000Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Rent $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250Internet $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500Utilities $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450Hosting Fees $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150Liscenses and Subscriptions $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250Supplies $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200Maintainence $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700Insurance $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600Professional Fees $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000Payroll Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750Total Expense $9,850 $9,850 $9,850 $9,850 $34,850 $39,850 $44,850 $49,850 $54,850 $84,850 $159,850 $184,850General and Administrative % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Other Expenses:Other Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Consultants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Total Operating Expenses $9,850 $9,850 $9,850 $9,850 $34,850 $39,850 $44,850 $49,850 $54,850 $84,850 $159,850 $184,850

Profit Before Interest and Taxes ($9,850) ($9,850) ($9,850) ($9,850) ($34,850) ($39,850) ($30,558) ($21,266) ($11,974) $3,818 ($25,390) ($4,598)EBITDA ($9,850) ($9,850) ($9,850) ($9,850) ($34,850) ($39,850) ($30,558) ($21,266) ($11,974) $3,818 ($25,390) ($4,598) Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other IncomeOther Income Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Income Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other ExpenseOther Expense Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Expense Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Other Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Net Profit ($9,850) ($9,850) ($9,850) ($9,850) ($34,850) ($39,850) ($30,558) ($21,266) ($11,974) $3,818 ($25,390) ($4,598)Net Profit/Sales 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% -193.47% -67.32% -25.27% 3.89% -17.04% -2.30%

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Pro Forma Cash FlowCash Received Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Cash from OperationsCash Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Cash from Receivables $0 $0 $0 $0 $0 $0 $3,159 $18,954 $34,749 $57,544 $108,339 $159,134Subtotal Cash from Operations $0 $0 $0 $0 $0 $0 $3,159 $18,954 $34,749 $57,544 $108,339 $159,134

Subtotal Cash Received $0 $0 $0 $0 $0 $0 $3,159 $18,954 $34,749 $57,544 $108,339 $159,134

ExpendituresExpenditures from OperationsCash Spending $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Bill Payments $328 $9,850 $9,850 $9,850 $10,683 $35,017 $40,067 $46,570 $53,073 $60,526 $97,029 $175,365Subtotal Spent on Operations $328 $9,850 $9,850 $9,850 $10,683 $35,017 $40,067 $46,570 $53,073 $60,526 $97,029 $175,365

Subtotal Cash Spent $328 $9,850 $9,850 $9,850 $10,683 $35,017 $40,067 $46,570 $53,073 $60,526 $97,029 $175,365

Net Cash Flow ($328) ($9,850) ($9,850) ($9,850) ($10,683) ($35,017) ($36,908) ($27,616) ($18,324) ($2,982) $11,310 ($16,231)Cash Balance $1,449,672 $1,439,822 $1,429,972 $1,420,122 $1,409,438 $1,374,422 $1,337,514 $1,309,898 $1,291,574 $1,288,593 $1,299,903 $1,283,672

Pro Forma Balance Sheet Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Assets Starting BalancesCurrent AssetsCash $1,450,000 $1,449,672 $1,439,822 $1,429,972 $1,420,122 $1,409,438 $1,374,422 $1,337,514 $1,309,898 $1,291,574 $1,288,593 $1,299,903 $1,283,672Accounts Receivable $0 $0 $0 $0 $0 $0 $0 $12,636 $25,272 $37,908 $78,544 $119,180 $159,816Inventory $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Current Assets $1,450,000 $1,449,672 $1,439,822 $1,429,972 $1,420,122 $1,409,438 $1,374,422 $1,350,150 $1,335,170 $1,329,482 $1,367,137 $1,419,083 $1,443,488

Long-term AssetsLong-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Assets $1,450,000 $1,449,672 $1,439,822 $1,429,972 $1,420,122 $1,409,438 $1,374,422 $1,350,150 $1,335,170 $1,329,482 $1,367,137 $1,419,083 $1,443,488

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Current LiabilitiesAccounts Payable $0 $9,522 $9,522 $9,522 $9,522 $33,688 $38,522 $44,808 $51,094 $57,380 $91,217 $168,553 $197,556Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Current Liabilities $0 $9,522 $9,522 $9,522 $9,522 $33,688 $38,522 $44,808 $51,094 $57,380 $91,217 $168,553 $197,556

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Liabilities $0 $9,522 $9,522 $9,522 $9,522 $33,688 $38,522 $44,808 $51,094 $57,380 $91,217 $168,553 $197,556

Paid-in Capital $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000Retained Earnings -$800,000 -$800,000 -$800,000 -$800,000 -$800,000 -$800,000 -$800,000 -$800,000 -$800,000 -$800,000 -$800,000 -$800,000 -$800,000Earnings $0 -$9,850 -$19,700 -$29,550 -$39,400 -$74,250 -$114,100 -$144,658 -$165,924 -$177,898 -$174,080 -$199,470 -$204,068Total Capital $1,450,000 $1,440,150 $1,430,300 $1,420,450 $1,410,600 $1,375,750 $1,335,900 $1,305,342 $1,284,076 $1,272,102 $1,275,920 $1,250,530 $1,245,932Total Liabilities and Capital $1,450,000 $1,449,672 $1,439,822 $1,429,972 $1,420,122 $1,409,438 $1,374,422 $1,350,150 $1,335,170 $1,329,482 $1,367,137 $1,419,083 $1,443,488

Net Worth $1,450,000 $1,440,150 $1,430,300 $1,420,450 $1,410,600 $1,375,750 $1,335,900 $1,305,342 $1,284,076 $1,272,102 $1,275,920 $1,250,530 $1,245,932