Matheus Auto Electric

8/6/2019 Matheus Auto Electric

1/31

Cover Page

This sample business plan has been made available to users of Business Plan Pro , businessplanning software published by Palo Alto Software , Inc. Names , locations and numbers may havebeen changed , and substantial portions of the original plan text may have been omitted to preserveconfidentiality and proprietary information.

You are welcome to use this plan as a starting point to create your own , but you do not havepermission to resell , reproduce , publish , distribute or even copy this plan as it exists here.

Requests for reprints , academic use , and other dissemination of this sample plan should be emailedto the marketing department of Palo Alto Software at [email protected]. For productinformation visit our Website: www.paloalto.com or call: 1-800-229-7526.


2/31

Legal Page

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Matheus I Auto Electric inthis business plan is confidential; therefore , reader agrees not to disclose it without the expresswritten permission of Matheus I Auto Electric.

It is acknowledged by reader that information to be furnished in this business plan is in all respectsconfidential in nature , other than information which is in the public domain through other meansand that any disclosure or use of same by reader may cause serious harm or damage to Matheus IAuto Electric.

Upon request , this document is to be immediately returned to Matheus I Auto Electric.

___________________Signature

___________________

Name (typed or printed)

___________________Date

This is a business plan. It does not imply an offering of securities.


3/31

T able of Contents

1.0 Executive Summary ................................................................................................................ 1Chart: Highlights ...................................................................................................................... 1

1.1 Mission ..................................................................................................................................... 11.2 Keys to Success .................................................................................................................... 2

2.0 Company Summary ................................................................................................................ 22.1 Company Ownership ........................................................................................................... 22.2 Company History .................................................................................................................. 2

Table: Past Performance ....................................................................................................... 3Chart: Past Performance ....................................................................................................... 4

3.0 Products and Services ............................................................................................................ 44.0 Market Analysis Summary .................................................................................................... 5

4.1 Market Segmentation ......................................................................................................... 5Table: Market Analysis ........................................................................................................... 5Chart: Market Analysis (Pie) ................................................................................................ 6

4.2 Target Market Segment Strategy ................................................................................... 65.0 Strategy and Implementation Summary ......................................................................... 6

5.1 Competitive Edge ................................................................................................................. 65.2 Sales Forecast ....................................................................................................................... 7

Table: Sales Forecast ............................................................................................................. 7Chart: Sales Monthly .............................................................................................................. 8Chart: Sales by Year ............................................................................................................... 8

6.0 Management Summary .......................................................................................................... 96.1 Personnel Plan ...................................................................................................................... 9

Table: Personnel ...................................................................................................................... 97.0 Financial Plan .......................................................................................................................... 107.1 Break-even Analysis ......................................................................................................... 10

Table: Break-even Analysis ................................................................................................ 10Chart: Break-even Analysis 10


4/31

T able of Contents

Table: Profit and Loss .......................................................................................................... 127.3 Projected Cash Flow .......................................................................................................... 13

Chart: Cash ............................................................................................................................. 14Table: Cash Flow ................................................................................................................... 14

7.4 Projected Balance Sheet .................................................................................................. 167.4 Projected Balance Sheet .................................................................................................. 16

Table: Balance Sheet ........................................................................................................... 16

7.5 Business Ratios ................................................................................................................... 177.5 Business Ratios ................................................................................................................... 17

Table: Ratios ........................................................................................................................... 177.6 L ong-term Plan ................................................................................................................... 18

Table: Sales Forecast ..................................................................................................................... 1Table: Personnel .............................................................................................................................. 2Table: Personnel .............................................................................................................................. 2Table: General Assumptions ........................................................................................................ 3Table: General Assumptions ........................................................................................................ 3Table: Profit and Loss .................................................................................................................... 4Table: Profit and Loss .................................................................................................................... 4

Table: Cash Flow ............................................................................................................................. 6Table: Cash Flow ............................................................................................................................. 6Table: Balance Sheet ..................................................................................................................... 8Table: Balance Sheet ..................................................................................................................... 8


5/31

M atheus Auto Electric

1.0 Executive Summary

Abbey Electronic Services is a full-service electronic repair business opening in therevitalized Cherry Grove section of Montclair. The opening of the business is in conjunction withthe completion of the Cherry Grove Shopping Center. Two of the center's tenants , Harry'sElectronics and Olson's Appliance Superstore , have signed third-party repair agreements withAbbey Electronic Services. Abbey Electronic Services is under contract to provide authorizedwarranty service for selected manufacturers.

In addition to business clients , Abbey's will be open to the general public for repairs of consumer electronics either with or without warranty service. The residential community inCherry Grove has experienced explosive growth and will serve as a strong customer base forAbbey Electronic Services.

Abbey's owner , Richard Abbey , has 25 years of experience in the consumer electronics repairfield. His reputation for excellence is well established and he is a highly-respected electronicsinstructor at the community college's Electronics Engineering Technology program.

Abbey Electronic Services will have a staff of two electronics technicians in addition to Richard.

Chart: Highlights


6/31


Matheus I Auto Electric is about building a strong professional relationship with all ourcustomers that is grounded in honesty , fairness and integrity of service.

1.2 Keys to Success

Matheus I Auto Electrics' keys to success include:

y Exceptional , expedient , and convenient electrical repair services.y Building a strong professional relationship with the customer base.y Rapid order and delivery of electrical part items.

2.0 Company Summary

Abbey Electronic Services is a start-up business managed by Richard Abbey. The economicgrowth of Cherry Grove in the last several years has resulted in a revitalized community withnumerous new services and businesses. As a result , the area's need for reliable andconvenient electrical repair services has substantially risen as well. Abbey Electronic Serviceswill position itself to capitalize on the growing need of the middle- and upper-class market forquality electrical repair service in the metropolitan area. The company will be privately owned

by Richard Abbey , with most of the additional funding coming from a ten year SBA loan.2.1 Company Ownership

Abbey Electronic Services is privately owned by Richard Abbey.

2.2 Company History

Bizcomm was sold to its present owner in October of 1998 , therefore , comparable financialresults will not be available until 1999. However , past financial information indicates there isplenty of room for improvement by the company under its new ownership:

y The income tax returns for 1996 show gross sales of 722 ,635 and an operating loss of 76 ,470.

y The returns for 1997 show sales of only 476 ,194 and operating profits of 38 ,223.y Contributing to the bottom line improvement during that period , according to the tax

returns , was an increase in the gross profit margin from 42% to 64% , and a 70 ,000

reduction in depreciation , payroll taxes , utilities , insurance and other expenses.

Considering the company was sold in 1998 , the improvements on the 1997 tax return mighthave included a degree of window dressing to achieve a better sales price.

Bizcomm, through several changes in ownership , has lost continuity in respect to theknowledge and experience gained over the years in direct mail The company under its present


7/31


L oan P ercent of Interest Amount Owed Revolving Credit 11% 24 ,852Mortgage at 10.5% 141 ,147Time Note 11.25% 20 ,500Debt to Former Owner 8% 12 ,500EDIC Debt 6% 72 ,875Total Amount Owed 271,874

Depreciation and amortisation have been lumped in together. Capital assets include intangiblesof 56 ,406.

Notes payable to stockholder of 26 , 912 represent money owed to the owner , Mr. Pullman , anddo not accrue interest. To more accurately reflect the equity nature of these funds , and for easeof projecting interest charges , this 26 ,912 has been placed into the capital stock category.

Table: Past Performance

Past Performance FY 2007 FY 2008 FY 2009

Sales $250,000 $275,000 $150,000Gross Margin $0 $0 $0Gross Margin % 0.00% 0.00% 0.00%Operating Expenses $30,000 $50,000 $40,000

Balance Sheet FY 2007 FY 2008 FY 2009

Current Assets Cash $225,000 $260,000 $45,000Other Current Assets $0 $0 $0Total Current Assets $225,000 $260,000 $45,000

Fixed Assets Capital Assets $400,000 $530,000 $600,000

Accumulated Depreciation $20,000 $40,000 $60,000Total Fixed Assets $380,000 $490,000 $540,000

Total Assets $605,000 $750,000 $585,000


8/31


Total Liabilities $35,000 $63,000 $20,000

Paid-in Capital $30,000 $40,000 $10,000Retained Earnings $510,000 $597,000 $515,000Earnings $30,000 $50,000 $40,000Total Capital $570,000 $687,000 $565,000

Total Capital and Liabilities $605,000 $750,000 $585,000

Other Inputs

Payment Days 30 30 30

Chart: Past Performance

3.0 Products and Services

Abbey Electronic Services are the following:

Service Contracts/Factory Warranty Repairs/Out of Warranty Repairs


9/31


4.0 Market Analysis Summary

Abbey Electronic Services' focus is on meeting the demand of the local resident customer base , as well as service agreements with Harry's Electronics and Olson's Appliance Superstore. AbbeyElectronic Services' relationships with these two large tenants of the Cherry Grove ShoppingCenter will serve as a solid foundation for the growth of the business. The company estimatesthat about 60% of revenues will come from the these two business customers. It is estimatedthat these contracts will grow yearly at 15%. The remaining 40% will come from local walk-intraffic from local residents. We estimate that this segment of potential customers will grow by15% annually. Over time , serving the local customer base will become the core of thebusiness.

4.1 Market Segmentation

The table and chart below further estimates the total market potential of services rendered byAbbey Electronic Services in the metropolitan area.

Many industries have been heavily marketed in the past by Bizcomm . Some industry sectors , such as insurance companies , and Doctors/Dentists , are targeted with extensive well-established catalogues , making entry by others difficult. The following industry sectors listedunder the table heading "Attractive Possibilities" are likely to offer the best opportunity for newterritory and market segmentation:

Industry Sector Total Businesses Animal Hospitals (Veterinarians) 55 , 455Beauty Salons (Manicurists) 266 ,275Caterers 44 , 477

Alternative Medicine 133 ,777Employment Agencies 40 , 745Retailers (Furniture and Jewelry) 44 , 352Health Clubs 13 , 579Interior Decorators 30 , 519Marinas (Boat Yards and Dealers) 22 , 915

`The "Other" category in the Market Analysis table and chart represents the total businessesthat have sales of 1 , 000 ,000 or less. It is assumed that the very large businesses either aretoo difficult to reach effectively by direct mail (owner doesn't see the mail; junk mail isroutinely discarded by secretary , etc.) , or are so large that they have more sophisticatedcustomer communication products or have their own established printing channels.


10/31


Local Walk-In 40% 30,000 46,000 52,900 60,835 69,960 23.58%Other 27% 9,000 0 0 0 0 -100.00%Total 11.38% 50,000 50,600 58,190 66,919 76,957 11.38%

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy

The market of electronic repair services is very competitive. The majority of the successfulelectronic repair shops have strong local customer support from years of faithful service. Theniche where Abbey Electronic Services positions itself represents one convenient location forbusiness clients and local residents. The Cherry Grove area of Montclair has been booming withmiddle- and upper-class residential housing. Currently , there is no established electronic repairservice in the area. Abbey Electronic Services success in obtaining service contracts from the

two major electronic product tenants of the Cherry Grove Shopping Center immediatelyestablishes the business as the local focus for electronic repairs.

5.0 Strategy and Implementation Summary

Abbey Electronic Services will succeed by offering its customers high-quality andconvenient electronic repair service Each satisfied customer is a potential of five new referrals


11/31


10 years before taking over management of Lucas Electronic Repair. The business wasstruggling. In two years , Richard turned the business around. Lucas Electronic Repairs businessincreased by 150% during that period. The staff grew from four to eight. Richard remained asfor another five years before returning to J. Arnold and Sons. As Manager of J. Arnold and Sonsfor the past eight years , the company has grown dramatically , from a staff of 10 to its currentstaff of 18.

Richard is also a successful teacher in the Montclair Community College Electronics EngineeringTechnology program. His approach in the classroom is the same approach with customers;straight forward and honest. He has been selected by the students as the best instructor fiveyears in a row.

This is the competitive a

The advantages Bizcomm has over the competition are numerous:

y Bizcomm does its own printing. Rockford has it all done by outside printers.y Bizcomm has an Internet site as well as an online store (www.Bizcomm.com).y Bizcomm has a multitude of unused printing capacity: there is an unlimited amount of

growth potential. Sales to the large retailers can be arranged quickly (within 60 days)without a great outlay in retooling or developmental costs. Bizcomm must also utilise fullyits slight head-start in the internet. The expertise needed to create an interesting website isreadily available from a number of consultants. There is a good chance that , by getting alead on the pack early with a dynamic Internet store and web address , many leadsgenerated by mass mailings sent out by competitors could materialise as purchase orderspassed on to Bizcomm over the Internet.

y Bizcomm also owns two trademarks: Slida-Card , and Circlo-Card. Both of whichshould be leveraged.

dvantage Richard brings to everything he does whether in a business or a classroom.

5.2 Sales Forecast

The following table and charts show the projected sales forecast for Abbey Electronic Services.

Table: Sales Forecast

Sales Forecast FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Sales Service Contracts $127,266 $142,000 $155,000 $0 $0


12/31


Chart: Sales Monthly

Chart: Sales by Year


13/31


6.0 Management Summary

Richard has hired electronic repair technicians , John Williamson and Jim Logan , to join AbbeyElectronic Services.

John Williamson has 15 years of experience in the electronic repair field. John worked withGilmore Electronic Repair for four years before joining Lucas Electronic Repairs. Since that time , John has moved into a senior position at Lucas.

Jim Logan joins Abbey Electronic Services after working in the electronic repair field for 10years in the Richmond Metro area. Jim has worked for both Premiere Electronic Services and

Billings Electronics , which are the dominant repair businesses in Richmond.

Both of these technicians have a history of exceptional workmanship and great customerrelations.

6.1 Personnel Plan

The following is the staff's repair certification.

Richard is a certified to perform repairs on the following products.

y W asher/Dryer : General Electric , Kenmore , and Maytag.y R efrigerators : Frigidaire and General Electric.y Cooking R anges : General Electric and Whirlpool.y Televisions : Philips Magnavox and RCA.

John Williamson is a certified to perform repairs on the following products.

y W asher/Dryer : General Electric , Whirlpool , Amana , and Frigidaire.y R efrigerators : Kenmore and Whirlpool.y Cooking R anges : Frigidaire and Maytag.y Televisions : RCA , Sony , and Zenith.

Jim Logan is a certified to perform repairs on the following products.

y Televisions : Philips Magnavox , RCA, Sony , and Zenith.y DVD P layers/VC R s : Panasonic , RCA, Sony , and Toshiba.y Camcorders : Sony , JVC, Panasonic , RCA, and Sharp.

Table: Personnel


14/31


7.0 Financial Plan

The following is the financial plan for Abbey Electronic Services.

7.1 Break-even Analysis

The monthly break-even point is presented in the table and chart below.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even ($13,967)

Assumptions: Average Percent Variable Cost 164%

Estimated Monthly Fixed Cost $9,002

Chart: Break-even Analysis


15/31


Chart: Profit Monthly

Chart: Profit Yearly


16/31


Chart: Gross Margin Monthly

Chart: Gross Margin Yearly


17/31


Sales $287,927 $252,000 $275,000 $0 $0Direct Cost of Sales $473,500 $11,700 $12,800 $0 $0Other Production Expenses $0 $0 $0 $0 $0Total Cost of Sales $473,500 $11,700 $12,800 $0 $0

Gross Margin ($185,573) $240,300 $262,200 $0 $0Gross Margin % -64.45% 95.36% 95.35% 0.00% 0.00%

Expenses

Payroll $48,000 $52,000 $58,000 $0 $0Sales and Marketing and Other Expenses $7,400 $5,400 $5,400 $0 $0Depreciation $2,220 $2,220 $2,220 $0 $0Leased Equipment $14,400 $14,400 $14,400 $0 $0Utilities $2,400 $2,400 $2,400 $0 $0Insurance $0 $0 $0 $0 $0Rent $12,000 $12,000 $12,000 $0 $0Payroll Taxes $21,600 $23,400 $26,100 $0 $0Other $0 $0 $0 $0 $0

Total Operating Expenses $108,020 $111,820 $120,520 $0 $0

Profit Before Interest and Taxes ($293,593) $128,480 $141,680 $0 $0EBITDA ($291,373) $130,700 $143,900 $0 $0

Interest Expense $1,000 $1,000 $1,000 $1,000 $1,000Taxes Incurred $0 $38,244 $42,204 $0 $0

Net Profit ($294,593) $89,236 $98,476 ($1,000) ($1,000) Net Profit/Sales -102.32% 35.41% 35.81% 0.00% 0.00%

7.3 Projected Cash Flow

The table and chart show the projected cash flow for three years.

M h A El i


18/31


Chart: Cash

Table: Cash Flow

Pro Forma Cash Flow FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Cash Received

Cash from Operations Cash Sales $287,927 $252,000 $275,000 $0 $0Subtotal Cash from Operations $287,927 $252,000 $275,000 $0 $0

Additional Cash Received VAT Received (Output Tax) $0 $0 $0 $0 $0VAT Repayments $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0New Fixed Liabilities $0 $0 $0 $0 $0Sales of Other Current Assets $0 $0 $0 $0 $0Sales of Fixed Assets $0 $0 $0 $0 $0



19/31


Subtotal Spent on Operations $546,043 $195,880 $173,666 $10,477 $1,000

Additional Cash Spent VAT Paid Out (Input Tax) $0 $0 $0 $0 $0VAT Payments $0 $0 $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0 $0 $0Fixed Liabilities Principal Repayment $0 $0 $0 $0 $0Purchase Other Current Assets $0 $0 $0 $0 $0Purchase Fixed Assets $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0Subtotal Cash Spent $546,043 $195,880 $173,666 $10,477 $1,000

Net Cash Flow ($258,116) $56,120 $101,334 ($10,477) ($1,000) Cash Balance ($213,116) ($156,996) ($55,662) ($66,139) ($67,139)


20/31



21/31

atheus Auto Electric

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on theStandard Industrial Classification (SIC) code 7622 , Radio and Television Repair , are shown forcomparison.

Table: Ratios

Ratio Analysis FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Industry Profile

Sales Growth 91.95% -12.48% 9.13% n.a. n.a. 6.10%

Percent of Total Assets Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 27.50%Total Current Assets -65.64% -41.47% -11.65% -14.16% -14.40% 76.90%Fixed Assets 165.64% 141.47% 111.65% 114.16% 114.40% 23.10%Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities 13.63% 2.36% 2.00% 0.02% 0.02% 36.90%Fixed Liabilities 3.08% 2.64% 2.09% 2.14% 2.14% 15.80%Total Liabilities 16.71% 5.00% 4.09% 2.16% 2.16% 52.70%Net Worth 83.29% 95.00% 95.91% 97.84% 97.84% 47.30%

Percent of Sales Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%Gross Margin

-64.45% 95.36% 95.35% 0.00% 0.00% 0.00%

Selling, General & AdministrativeExpenses 92.44% 91.33% 92.26% 0.00% 0.00% 83.50%

Advertising Expenses 0.85% 0.00% 0.00% 0.00% 0.00% 0.50%Profit Before Interest and Taxes -101.97% 50.98% 51.52% 0.00% 0.00% 3.10%

Main Ratios Current -4.82 -17.60 -5.82 -804.69 -816.85 2.26Quick -4.82 -17.60 -5.82 -804.69 -816.85 1.47Total Debt to Total Assets 16.71% 5.00% 4.09% 2.16% 2.16% 52.70%Pre-tax Return on Net Worth -108.94% 35.45% 30.71% -0.22% -0.22% 7.00%Pre-tax Return on Assets -90.74% 33.67% 29.45% -0.21% -0.21% 14.70%

Additional Ratios FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 f



22/31

atheus Auto Electric

Debt Ratios Debt to Net Worth 0.20 0.05 0.04 0.02 0.02 n.a Current Liab. to Liab. 0.82 0.47 0.49 0.01 0.01 n.a

Liquidity Ratios Net Working Capital ($257,373) ($165,917) ($65,221) ($66,221) ($67,221) n.a Interest Coverage -293.59 128.48 141.68 0.00 0.00 n.a

Additional Ratios Assets to Sales 1.13 1.50 1.74 n.a. n.a. n.a Current Debt/Total Assets 14% 2% 2% 0% 0% n.a

Acid Test -4.82 -17.60 -5.82 -804.69 -816.85 n.a Sales/Net Worth 1.06 0.70 0.60 0.00 0.00 n.a Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a

7.6 Long-term Plan

Appendix


23/31

pp

Page 1

Table: Sales Forecast

Sales Forecast

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Sales VAT Rate Service Contracts 15% $8,165 $9,064 $9,179 $9,385 $9,936 $11,381 $12,000 $11,000 $12,000 $11,000 $12,000 $12,156 Walk-In Customers 15% $10,399 $11,674 $12,436 $11,028 $13,679 $14,023 $13,307 $14,642 $14,610 $14,771 $15,261 $14,830 Total Sales $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986

Direct Cost of Sales VAT Rate Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Service Contracts 15.00% $16,000 $16,500 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 Walk-In Customers 15.00% $18,000 $18,000 $19,500 $19,500 $20,000 $25,000 $26,000 $23,000 $23,000 $23,000 $23,000 $23,000 Subtotal Direct Cost of Sales $34,000 $34,500 $37,500 $37,500 $38,000 $43,000 $44,000 $41,000 $41,000 $41,000 $41,000 $41,000

Appendix


24/31

Page 2

Table: Personnel

P ersonnel P lan

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Richard Abbey 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total P eople 0 0 0 0 0 0 0 0 0 0 0 0

Total P ayroll $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000

Appendix


25/31

Page 3

Table: General Assumptions

G eneral Assumptions

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun P lan Month 1 2 3 4 5 6 7 8 9 10 11 12 Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%Other 0 0 0 0 0 0 0 0 0 0 0 0

Appendix


26/31

Page 4

Table: Profit and Loss

P ro FormaP rofit and Loss

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Sales VAT Rate $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986 Direct Cost of Sales $34,000 $34,500 $37,500 $37,500 $38,000 $43,000 $44,000 $41,000 $41,000 $41,000 $41,000 $41,000 Other P roduction Expenses 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cost of Sales $34,000 $34,500 $37,500 $37,500 $38,000 $43,000 $44,000 $41,000 $41,000 $41,000 $41,000 $41,000

G ross Margin ($15,436) ($13,761) ($15,885) ($17,087) ($14,385) ($17,596) ($18,693) ($15,358) ($14,390) ($15,229) ($13,739) ($14,014) G ross Margin % -83.15% -66.36% -73.49% -83.71% -60.92% -69.27% -73.86% -59.89% -54.08% -59.09% -50.40% -51.93%

Expenses VAT Rate P ayroll $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 Sales and Marketing and Other Expenses 15.00% $800 $800 $900 $1,000 $500 $400 $500 $500 $300 $600 $600 $500

Depreciation $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185

Leased Equipment 15.00% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 Utilities 15.00% $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 Insurance 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Rent 0.00% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 P ayroll Taxes 10% $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 Other 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses VAT Rate $9,185 $9,185 $9,285 $9,385 $8,885 $8,785 $8,885 $8,885 $8,685 $8,985 $8,985 $8,885

P rofit Before Interest and Taxes ($24,621) ($22,946) ($25,170) ($26,472) ($23,270) ($26,381) ($27,578) ($24,243) ($23,075) ($24,214) ($22,724) ($22,899) EBITDA ($24,436) ($22,761) ($24,985) ($26,287) ($23,085) ($26,196) ($27,393) ($24,058) ($22,890) ($24,029) ($22,539) ($22,714)

Interest Expense $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net P rofit ($24,704) ($23,030) ($25,254) ($26,555) ($23,354) ($26,465) ($27,661) ($24,326) ($23,158) ($24,297) ($22,807) ($22,982)

Appendix


27/31

Page 5

Net P rofit/Sales -133.07% -111.05% -116.84% -130.09% -98.89% -104.18% -109.30% -94.87% -87.03% -94.28% -83.66% -85.16%

Appendix


28/31

Page 6

Table: Cash Flow

P ro Forma Cash Flow

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Cash Received

Cash from Operations Cash Sales $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986 Subtotal Cash from Operations $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986

Additional Cash Received VAT Rate VAT Received (Output Tax) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 VAT Repayments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Fixed Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Other Current Assets 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Fixed Assets 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Received $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986

Expenditures Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Expenditures from Operations

Cash Spending $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 Bill P ayments $11,303 $39,100 $39,687 $42,687 $42,783 $42,947 $47,720 $48,683 $45,777 $45,593 $45,883 $45,880 Subtotal Spent on Operations $15,303 $43,100 $43,687 $46,687 $46,783 $46,947 $51,720 $52,683 $49,777 $49,593 $49,883 $49,880

Additional Cash Spent VAT Rate VAT P aid Out (Input Tax) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 VAT P ayments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Appendix


29/31

Page 7

P rincipal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other LiabilitiesP rincipal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Fixed LiabilitiesP rincipal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 P urchase Other Current Assets 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 P urchase Fixed Assets 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Spent $15,303 $43,100 $43,687 $46,687 $46,783 $46,947 $51,720 $52,683 $49,777 $49,593 $49,883 $49,880

Net Cash Flow $3,261 ($22,361) ($22,072) ($26,274) ($23,169) ($21,543) ($26,413) ($27,041) ($23,167) ($23,822) ($22,622) ($22,894) Cash Balance $48,261 $25,900 $3,828 ($22,446) ($45,614) ($67,157) ($93,570) ($120,611) ($143,778) ($167,600) ($190,222) ($213,116)


30/31

Appendix


31/31

Page 9

Documents

Matheus Auto Electric