Bluehouse Market Financial Projections and Valuation Model

FINANCIAL PROJECTIONS AND VALUATION MODEL

2017 - 2021

UNITS SOLD

PRODUCTS SOLD JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2017E 2018E 2019E 2020E 2021E

Greenhouse A: 42,120 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 42,120 42,120 42,120 42,120 42,120

Greenhouse B: 126,360 10,530 10,530 10,530 31,590 126,360 126,360 126,360 126,360

Greenhouse C: 126,360 126,360 126,360 126,360

Greenhouse D: 126,360 126,360 126,360

TOTAL UNITS HARVESTED 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 14,040 14,040 14,040 73,710 168,480 294,840 421,200 421,200

TOTAL GREENHOUSES: 1 1 1 1 1 1 1 1 1 2 2 2 2 2 3 4 4

PRODUCTS SOLD

Living Basil 33% 1,170 1,170 1,170 1,170 1,170 1,170 1,170 1,170 1,170 4,680 4,680 4,680 24,570 56,160 98,280 140,400 140,400

Living lettuce 33% 1,170 1,170 1,170 1,170 1,170 1,170 1,170 1,170 1,170 4,680 4,680 4,680 24,570 56,160 98,280 140,400 140,400

Napa Cabbage 33% 1,170 1,170 1,170 1,170 1,170 1,170 1,170 1,170 1,170 4,680 4,680 4,680 24,570 56,160 98,280 140,400 140,400

TOTAL UNITS SOLD 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 14,040 14,040 14,040 73,710 168,480 294,840 421,200 421,200

CASES SOLD

Living Basil 48.8 48.8 48.8 48.8 48.8 48.8 48.8 48.8 48.8 195.0 195.0 195.0 1,024 2,340 4,095 5,850 5,850

Living lettuce 48.8 48.8 48.8 48.8 48.8 48.8 48.8 48.8 48.8 195.0 195.0 195.0 1,024 2,340 4,095 5,850 5,850

Napa Cabbage 48.8 48.8 48.8 48.8 48.8 48.8 48.8 48.8 48.8 195.0 195.0 195.0 1,024 2,340 4,095 5,850 5,850

146 146 146 146 146 146 146 146 146 585 585 585 3,071 7,020 12,285 17,550 17,550

REVENUE AND GROSS PROFIT

REVENUE

/Unit JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2017E 2018E 2019E 2020E 2021ELiving Basil 2.49 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 11,653 11,653 11,653 61,179 139,838 244,717 349,596 349,596

Living lettuce 2.49 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 11,653 11,653 11,653 61,179 139,838 244,717 349,596 349,596

Napa Cabbage 2.49 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 11,653 11,653 11,653 61,179 139,838 244,717 349,596 349,596

TOTAL REVENUE 8,740 8,740 8,740 8,740 8,740 8,740 8,740 8,740 8,740 34,960 34,960 34,960 183,538 419,515 734,152 1,048,788 1,048,788

COST OF GOODS SOLD

/Unit JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2017E 2018E 2019E 2020E 2021EIron: 0.01 22 22 22 22 22 22 22 22 22 86 86 86 453 1,036 1,813 2,590 2,590

Potassium Carbonate: 0.01 40 40 40 40 40 40 40 40 40 160 160 160 840 1,920 3,360 4,800 4,800

Calcium Carbonate: 0.01 40 40 40 40 40 40 40 40 40 160 160 160 840 1,920 3,360 4,800 4,800

Supplement Total: 0.03 102 102 102 102 102 102 102 102 102 406 406 406 2,133 4,876 8,533 12,190 12,190

Plastic Bag: 0.19 667 667 667 667 667 667 667 667 667 2,668 2,668 2,668 14,005 32,011 56,020 80,028 80,028

Fish Feed: 0.03 121 121 121 121 121 121 121 121 121 483 483 483 2,535 5,794 10,139 14,484 14,484

Seeds: 0.01 25 25 25 25 25 25 25 25 25 100 100 100 525 1,200 2,100 3,000 3,000

Plug: 0.03 117 117 117 117 117 117 117 117 117 468 468 468 2,457 5,616 9,828 14,040 14,040

TOTAL COGS 0.32 1,133 1,133 1,133 1,133 1,133 1,133 1,133 1,133 1,133 4,531 4,531 4,531 23,788 54,373 95,153 135,932 135,932

GROSS PROFIT

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2017E 2018E 2019E 2020E 2021E

TOTAL GROSS PROFIT 7,607 7,607 7,607 7,607 7,607 7,607 7,607 7,607 7,607 30,429 30,429 30,429 159,750 365,142 638,999 912,856 912,856

GROSS PROFIT / REVENUE 87% 87% 87% 87% 87% 87% 87% 87% 87% 87% 87% 87% 87% 87% 87% 87% 87%

INCOME STATEMENT


SALESLiving Basil 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 11,653 11,653 11,653 61,179 139,838 244,717 349,596 349,596

Living lettuce 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 11,653 11,653 11,653 61,179 139,838 244,717 349,596 349,596

Napa Cabbage 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 11,653 11,653 11,653 61,179 139,838 244,717 349,596 349,596

TOTAL SALES 8,740 8,740 8,740 8,740 8,740 8,740 8,740 8,740 8,740 34,960 34,960 34,960 183,538 419,515 734,152 1,048,788 1,048,788

COST OF GOODS SOLDIron: 22 22 22 22 22 22 22 22 22 86 86 86 453 1,036 1,813 2,590 2,590

Potassium Carbonate: 40 40 40 40 40 40 40 40 40 160 160 160 840 1,920 3,360 4,800 4,800

Calcium Carbonate: 40 40 40 40 40 40 40 40 40 160 160 160 840 1,920 3,360 4,800 4,800

Supplement Total: 102 102 102 102 102 102 102 102 102 406 406 406 2,133 4,876 8,533 12,190 12,190

Plastic Bag: 667 667 667 667 667 667 667 667 667 2,668 2,668 2,668 14,005 32,011 56,020 80,028 80,028

Fish Feed: 121 121 121 121 121 121 121 121 121 483 483 483 2,535 5,794 10,139 14,484 14,484

Seeds: 25 25 25 25 25 25 25 25 25 100 100 100 525 1,200 2,100 3,000 3,000

Plug: 117 117 117 117 117 117 117 117 117 468 468 468 2,457 5,616 9,828 14,040 14,040

TOTAL COGS 1,133 1,133 1,133 1,133 1,133 1,133 1,133 1,133 1,133 4,531 4,531 4,531 23,788 54,373 95,153 135,932 135,932

GROSS PROFIT 7,607 7,607 7,607 7,607 7,607 7,607 7,607 7,607 7,607 30,429 30,429 30,429 159,750 365,142 638,999 912,856 912,856

% Margin 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0%

EXPENSES

Payroll

Farm Manager - - - 2,598 2,598 2,598 2,598 2,598 2,598 5,000 5,000 5,000 30,588 60,000 60,000 60,000 60,000

Greenhouse Laborer 1,299 1,299 1,299 1,299 1,299 1,299 1,299 1,299 1,299 5,196 5,196 5,196 27,279 62,352 93,528 155,880 155,880

Benefits 208 208 208 624 624 624 624 624 624 1,631 1,631 1,631 9,259 19,576 24,564 34,541 34,541

Payroll Taxes 182 182 182 546 546 546 546 546 546 1,427 1,427 1,427 8,101 17,129 21,494 30,223 30,223

Total Payroll, Taxes, and Benefits 1,689 1,689 1,689 5,066 5,066 5,066 5,066 5,066 5,066 13,255 13,255 13,255 75,227 159,058 199,586 280,644 280,644

Advertising and Marketing: 190 190 190 190 190 190 190 190 190 761 761 761 3,994 3,994 3,994 7,987 7,987

Fuel: 34 34 34 34 34 34 34 34 34 135 135 135 709 1,621 3,242 6,485 6,485

Electricity Greenhouses: 200 200 200 200 200 200 200 200 200 400 400 400 3,000 4,800 7,200 9,600 9,600

Heating: 400 400 - - - - - - 400 800 800 800 3,600 9,600 14,400 19,200 19,200

Permits and CCOF Certification: 125 125 125 125 125 125 125 125 125 125 125 125 1,500 1,500 1,500 1,500 1,500

Medical Insurance: - - - - - - - - - - - - - 36,000 72,000 72,000

Liability Insurance: 250 250 250 250 250 250 250 250 250 250 250 250 3,000 3,000 6,000 9,000 9,000

Professional Fees: 200 200 200 200 200 200 200 200 200 200 200 200 2,400 2,400 2,400 2,400 2,400

Computer and Internet: 125 125 125 125 125 125 125 125 125 125 125 125 1,500 1,500 1,500 1,500 1,500

Office Supplies: 125 125 125 125 125 125 125 125 125 125 125 125 1,500 1,500 1,500 1,500 1,500

TOTAL EXPENSES 3,338 3,338 2,938 6,315 6,315 6,315 6,315 6,315 6,715 16,176 16,176 16,176 96,430 188,973 277,323 411,816 411,816

% Margin 38.2% 38.2% 33.6% 72.3% 72.3% 72.3% 72.3% 72.3% 76.8% 46.3% 46.3% 46.3% 52.5% 45.0% 37.8% 39.3% 39.3%

EBITDA 4,269 4,269 4,669 1,292 1,292 1,292 1,292 1,292 892 14,253 14,253 14,253 63,320 176,170 361,676 501,039 501,039

% Margin 48.9% 48.9% 53.4% 14.8% 14.8% 14.8% 14.8% 14.8% 10.2% 40.8% 40.8% 40.8% 34.5% 42.0% 49.3% 47.8% 47.8%

Interest Expense / Income - - - - - - - - - - - - - - - - - Depreciation 210 210 210 210 210 951 951 951 951 951 951 951 7,706 20,314 29,214 38,113 38,113 Income Before Taxes 4,060 4,060 4,460 1,083 1,083 341 341 341 (59) 13,302 13,302 13,302 55,614 155,856 332,463 462,926 462,926

Tax 1,421 1,421 1,561 379 379 119 119 119 - 4,656 4,656 4,656 19,465 54,550 116,362 162,024 162,024

NET INCOME 2,639 2,639 2,899 704 704 222 222 222 (59) 8,646 8,646 8,646 36,149 101,306 216,101 300,902 300,902

% Margin 30.2% 30.2% 33.2% 8.1% 8.1% 2.5% 2.5% 2.5% -0.7% 24.7% 24.7% 24.7% 19.7% 24.1% 29.4% 28.7% 28.7%

BALANCE SHEET


ASSETS Cash and Equivalents 111,178 114,026 117,135 118,048 118,961 6,136 7,309 8,482 9,374 13,717 6,121 38,082 38,082 50,348 137,584 301,561 580,395 Accounts Receivable 8,597 8,597 8,597 8,597 8,597 8,597 8,597 8,597 8,597 17,193 34,386 34,386 34,386 34,481 60,341 86,202 86,202 Inventory 9,046 9,046 9,046 9,046 9,046 34,046 34,046 34,046 34,046 34,046 34,046 4,457 4,457 4,469 7,821 11,173 11,173 Total Current Assets 128,820 131,669 134,777 135,690 136,604 48,779 49,951 51,124 52,016 64,956 74,553 76,925 76,925 89,298 205,746 398,935 677,770 Property, Plant, and Equipment 25,142 25,142 25,142 25,142 25,142 114,140 114,140 114,140 114,140 114,140 114,140 114,140 114,140 203,138 292,136 381,134 381,134 Accumulated Depreciation (210) (419) (629) (838) (1,048) (1,999) (2,950) (3,901) (4,852) (5,803) (6,755) (7,706) (7,706) (28,020) (57,233) (95,347) (133,460) Net PP&E 24,933 24,723 24,514 24,304 24,095 112,142 111,190 110,239 109,288 108,337 107,386 106,435 106,435 175,119 234,903 285,787 247,674

TOTAL ASSETS 153,753 156,392 159,291 159,995 160,698 160,920 161,142 161,363 161,304 173,293 181,939 183,359 183,359 264,417 440,649 684,722 925,444

LIABILITIES AND EQUITY Liabilities

Current Liabilities Accounts Payable 1,114 1,114 1,114 1,114 1,114 1,114 1,114 1,114 1,114 4,457 4,457 4,457 4,457 4,469 7,821 11,173 11,173

Total Current Liabilities 1,114 1,114 1,114 1,114 1,114 1,114 1,114 1,114 1,114 4,457 4,457 4,457 4,457 4,469 7,821 11,173 11,173

Long-Term Liabilities Secured Loan - - - - - - - - - - - - - - - - -

Total Long-Term Liabilities - - - - - - - - - - - - - - - - -

TOTAL LIABILITIES 1,114 1,114 1,114 1,114 1,114 1,114 1,114 1,114 1,114 4,457 4,457 4,457 4,457 4,469 7,821 11,173 11,173

EQUITY Shareholders Equity 152,639 155,278 158,177 158,881 159,584 159,806 160,027 160,249 160,190 168,836 177,482 178,903 178,903 259,948 432,828 673,550 914,271

TOTAL EQUITY 152,639 155,278 158,177 158,881 159,584 159,806 160,027 160,249 160,190 168,836 177,482 178,903 178,903 259,948 432,828 673,550 914,271

TOTAL LIABILITIES AND EQUITY 153,753 156,392 159,291 159,995 160,698 160,920 161,142 161,363 161,304 173,293 181,939 183,359 183,359 264,417 440,649 684,722 925,444

WORKING CAPITAL


OPERATING ACTIVITIES Days Sales Outstanding 30 30 30 30 30 30 30 30 30 15 30 30 30 30 30 30 30 Days Inventory Outstanding 45 45 45 45 45 45 45 45 45 45 45 45 45 45 45 45 45 Days Payables Outstanding 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30

STATEMENT OF CASH FLOWS


OPERATING ACTIVITIES Net Income 2,639 2,639 2,899 704 704 222 222 222 (59) 8,646 8,646 8,646 36,128 101,306 216,101 300,902 300,902

Accounts Receivable (8,597) - - - - - - - - (8,597) (17,193) - (34,386) (94) (25,861) (25,861) -

Inventory Asset (9,046) - - - - (25,000) - - - - - 29,589 (4,457) (12) (3,352) (3,352) -

Depreciation 210 210 210 210 210 951 951 951 951 951 951 951 7,706 20,314 29,214 38,113 38,113

Accounts Payable 1,114 - - - - - - - - 3,343 - - 4,457 12 3,352 3,352 -

Total Adjustments to Reconcile Net Income (16,319) 210 210 210 210 (24,049) 951 951 951 (4,303) (16,242) 30,540 (26,681) 20,220 3,353 12,253 38,113

NET CASH FROM OPERATIONS (13,680) 2,848 3,108 913 913 (23,827) 1,173 1,173 892 4,343 (7,596) 39,186 9,448 121,526 219,454 313,155 339,015

INVESTING ACTIVITIES Capital Expenditures: (25,142) - - - - (88,998) - - - - - - (114,140) (88,998) (88,998) (88,998) -

NET CASH FROM FINANCING (25,142) - - - - (88,998) - - - - - - (114,140) (88,998) (88,998) (88,998) -

FINANCING ACTIVITIES Secured Loan - - - - - - - - - - - - - - - - -

Shareholder Contribution 145,000 - - - - - - - - - - - 145,000 - - - -

Investor Distribution - 20% Net Income - - - - - - - - - - - (7,226) (7,226) (20,261) (43,220) (60,180) (60,180)

NET CASH FROM FINANCING 145,000 - - - - - - - - - - (7,226) 137,774 (20,261) (43,220) (60,180) (60,180)

NET CASH FLOW 106,178 2,848 3,108 913 913 (112,825) 1,173 1,173 892 4,343 (7,596) 31,961 33,082 12,267 87,236 163,976 278,835

BEGINNING CASH BALANCE 5,000 111,178 114,026 117,135 118,048 118,961 6,136 7,309 8,482 9,374 13,717 6,121 5,000 38,082 50,348 137,584 301,561

ENDING CASH BALANCE 111,178 114,026 117,135 118,048 118,961 6,136 7,309 8,482 9,374 13,717 6,121 38,082 38,082 50,348 137,584 301,561 580,395

BLUEHOUSE MARKET PROJECTED OPERATING METRICS ($000) 2016 OPERATING METRICS ($000)

PROJECTED

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC FY1 FY2 FY3 FY4 FY5

Units Sold 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 3,510 14,040 14,040 14,040 73,710 168,480 294,840 421,200 421,200 NAME JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC FY1 FY2 FY3 FY4 FY5

Sales 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 35.0 35.0 35.0 184 420 734 1,049 1,049

Gross Margin 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 30.4 30.4 30.4 160 365 639 913 913

Operating Expenses 3.3 3.3 2.9 6.3 6.3 6.3 6.3 6.3 6.7 16.2 16.2 16.2 96 189 277 412 412

EBITDA 4.3 4.3 4.7 1.3 1.3 1.3 1.3 1.3 0.9 14.3 14.3 14.3 63 176 362 501 501

Net Income 2.6 2.6 2.9 0.7 0.7 0.2 0.2 0.2 (0.1) 8.6 8.6 8.6 36 101 216 301 301

Investor's Distribution - - - - - - - - - - - 7.2 7 20 43 60 60

Percentages

Gross Margin/Sales 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0% 87.0%

EBITDA/Revenue 48.9% 48.9% 53.4% 14.8% 14.8% 14.8% 14.8% 14.8% 10.2% 40.8% 40.8% 40.8% 34.5% 42.0% 49.3% 47.8% 47.8%

Net Income/Revenue 30.2% 30.2% 33.2% 8.1% 8.1% 2.5% 2.5% 2.5% -0.7% 24.7% 24.7% 24.7% 19.7% 24.1% 29.4% 28.7% 28.7%

Cash Flow From Operations (13.7) 2.8 3.1 0.9 0.9 (23.8) 1.2 1.2 0.9 4.3 (7.6) 39.2 9.4 121.5 219 313 339

Cash Flow From Investing (25.1) - - - - (89.0) - - - - - - - (89) (89) (89) -

Cash Flow From Financing 145.0 - - - - - - - - - - (7.2) 137.8 (20) (43) (60) (60)

Net Cash Flow 106.2 2.8 3.1 0.9 0.9 (112.8) 1.2 1.2 0.9 4.3 (7.6) 32.0 147.2 12 87 164 279

Cash Balance - Ending 111.2 114.0 117.1 118.0 119.0 6.1 7.3 8.5 9.4 13.7 6.1 38.1 38.1 50 138 302 580

MONTHLY BREAKEVEN FY2

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

2,0

00

2,5

00

3,0

00

3,5

00

4,0

00

4,5

00

5,0

00

5,5

00

6,0

00

6,5

00

7,0

00

7,5

00

8,0

00

8,5

00

9,0

00

9,5

00

10,0

00

10,5

00

11,0

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11,5

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12,0

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12,5

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13,0

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13,5

00

Sales

Fixed Costs

Total Costs

Units Sold

SALES AND EBITDA BY YEAR

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2017E 2018E 2019E 2020E

TOTAL SALES NET INCOME

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2017E 2018E 2019E 2020E 2021E

TOTAL SALES EBITDA

NET INCOME AND INVESTOR DISTRIBUTIONS

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2017E 2018E 2019E 2020E 2021E

NET INCOME INVESTOR DISTRIBUTIONS

PROJECTED OPERATING METRICS ($000)

-

200

400

600

800

1,000

1,200

FY1 FY2 FY3 FY4 FY5

Sales Gross Margin Operating Expenses EBITDA Net Income

Program / Task Budget ($) Prior Oct Nov Dec Jan Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Historical Activities:

Feasibility Studies

Strategic Planning

Market Research

Site Selection & Negotiation

Permits & Approval

Land Acquisition

Site Construction

System Cycling:

Owner Investment: 5,000

Equity Investment: 145,000

Lender Commitment: -

Total Commitments: 150,000

Pre-Operating Expenditures:

Cost of Goods Sold 9,046

PP&E for GH 1: 25,142

PP&E Reserve for GH 2: 88,998

Cash Reserve for Operations: 26,814

Total Uses: 150,000

Expenses:

Cost of Goods Sold: 445,178

Operating Expenses: 1,386,358

Expand Retail Selection:

Construct Additional Greenhouse:

Revenues: 3,434,781

Less Expenses: 1,831,537

Less Taxes: 514,424

Net Income: 1,088,820

FY4FY3FY2FY1

Implementation Plan

Pre-Op2016 Prelim. FY5

183,538 419,515 734,152 1,048,788 1,048,788

BLUEHOUSE MARKET, INC. CAPITAL EXPENDITURES GREENHOUSE 1(USD)

Item Qty Price Ea. Freight Total Price

Electrical Work 1 2,000 - 2,000

Nursery Tables for Propagation 4 250 - 1,000

Growers Supply Series 500 Greenhouse - 41,373 - -

Labor and Grading 1 5,000 - 5,000

46" High Output Energy-Efficient High Bay Fixture 54W T-5 - 8 Lamp8 220 100 1,760

1,000w Grow Lights 13 268 - 3,350

Deep Water Culture System 1 3,692 - 3,692

2,500 gal Water Tank 1 1,500 100 1,500

Plumbing 1 500 500

Rafts 100 15 1,500

Pond Liner 1 1,000 1,000

Trays 45 2 90

Fish 2,000 1 2,500

Filtration Tank 2 500 1,000

Air Blower 1 250 250

Total: 25,142

BLUEHOUSE MARKET, INC. CAPITAL EXPENDITURES GREENHOUSE 2(USD)

Item Qty Price Each Freight Total Price

Electrical Work 1 2,000 - 2,000

Nursery Tables for Propagation 7 250 - 1,692

Growers Supply Series 500 Greenhouse 1 41,373 - 41,373

Labor and Grading 1 5,000 - 5,000

46" High Output Energy-Efficient High Bay Fixture 54W T-5 - 8 Lamp23 220 100 5,082

1,000w Grow Lights 38 268 - 10,050

Deep Water Culture System 1 9,231 - 9,231

2,500 gal Water Tank 2 1,500 100 3,000

Plumbing 2 500 1,000

Rafts 300 15 4,500

Pond Liner 2 1,000 2,000

Trays 135 2 270

Filtration Tank 2 500 1,000

Fish 2,000 1 2,500

Air Blower 1 300 300

Total: 88,998

Total Greenhouse A + Greenhouse B: 114,140

Start-Up Assets: Loans:

Short-Term Loans - Working Capital

Long-Term Loans - Inventory 28,688

Working Capital - Greenhouse A 9,046 Total Loans - Cash Reserve 7,172

Working Capital - Greenhouse B 26,814 Investments Total Working Capital 35,860

PP&E- Greenhouse A 25,142 Additional Investment 145,000 Capital Expenditures

PP&E - Greenhouse B 88,998 Owner Investment 5,000 Property, Plant, and Equipment 109,140

Total Assets Required 150,000 Total Investments 150,000 Total Capital Expenditures: 109,140

TOTAL REQUIREMENTS 150,000 TOTAL RESOURCES 150,000 TOTAL USES 145,000

0.23 0.59

Royalty, 2.0x MOIC, 20% Equity

Total Resources Available 150,000 Start-Up Assets 150,000 Payback Period 6.1 Years

Internal Rate of Return (IRR) 18.0%

Less: Assets Purchased 150,000 Start-Up Liabilities -

Common Stock, 20% Stake

Start-Up Loss (Gain) - Start-Up Equity 150,000 (Callable by management at initial valuation)

IRR, No Exit, Dividends Only

10-Year Holding Period: 26.9%

30-year Holding Period: 30.1%

USE OF PROCEEDS

ESTIMATED FINANCIAL CONDITION AT START-UP: JANUARY 1, 2017 RETURN ON INVESTMENT

CAPITALIZATION PLAN

REQUIREMENTS RESOURCES

Sacramento Region Grocery Store Demand for Living Basil

Customer Total Store

Outlets*

Avg. Cases

Purchased

Per Store

(All Basil

Products)

All Basil

Purchased

Per Grocery

Chain

Living Basil

Sales

Demand Per

Grocery

Store

Living Basil

Demand Per

Grocery

Chain

Nugget Market 10 11 110 6 60

Whole Foods 4 19 76 6 24

Sac. Nat. Foods Co-op 1 30 30 4 4

Safeway 20 9 180 2 40

Raley's 20 5 100 2 40

Bel-Air 18 4 72 2 36

Total Outlets: 73

Total Cases Per Week: 568 204

Total Cases Per Year: 29,536 10,608

Total Units Per Year (24/Case): 708,864 254,592

*Only includes grocery stores located in the Sacramento Region,

from Woodland to Roseville

BLUEHOUSE MARKET, INC. DISCOUNTED CASH FLOW ANALYSIS(USD, Fiscal Year ending December 31)

2017E 2018E 2019E 2020E 2021E

Sales 183,538$ 419,515$ 734,152$ 1,048,788$ 1,048,788$

% growth #REF! 129% 75% 43% 0%

COGS 23,788 54,373 95,153 135,932 135,932

Gross Profit 159,750$ 365,142$ 638,999$ 912,856$ 912,856$

% margin 87% 87% 87% 87% 87%

SG&A 96,430 188,973 277,323 411,816 411,816

EBITDA 63,320$ 176,170$ 361,676$ 501,039$ 501,039$

% margin 34% 42% 49% 48% 48%

Depreciation & Amortization 7,706 20,314 29,214 38,113 38,113

EBIT 55,614$ 155,856$ 332,463$ 462,926$ 462,926$

% margin 30% 37% 45% 44% 44%

Less: Taxes (19,465) (54,550) (116,362) (162,024) (162,024)

Plus: Depreciation & Amortization 55,614 155,856 332,463 462,926 462,926

Less: Capital Expenditures (114,140) (88,998) (88,998) (88,998) -

Less: Increase in Net Working Capital (26,681) 20,220 3,353 12,253 38,113

Unlevered Free Cash Flow (49,058)$ 188,384$ 462,919$ 687,083$ 801,941$

WACC 15%

Discount Period 1 2 3 4 5

Discount Factor 0.87 0.76 0.66 0.57 0.50

Present Value of Free Cash Flow (42,659)$ 142,445$ 304,377$ 392,842$ 398,706$

EBITDA Method Perpetuity Method

Cumulative Present Value of FCF 1,195,711$ Unlevered FCF 801,941$

Growth Rate 2%

Terminal Value 6,292,152$

Terminal Year EBITDA 501,039$ Net Present Value 3,128,312$

Exit Multiple 9.0x

Terminal Value 4,509,353$ Enterprise Value 4,324,022$

Discount Factor 0.50

Present Value of Terminal Value 2,241,945$

% of Enterprise Value 65%

Enterprise Value 3,437,656$

Terminal Value

BLUEHOUSE MARKET, INC. - Sensitivity - Terminal Growth Rates

Discount Rate

4,324,022.03$ 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0%

-1.0% 4,792,895$ 4,359,526$ 3,986,609$ 3,662,706$ 3,379,073$ 3,128,914$ 2,906,867$

0.0% 5,119,592$ 4,629,770$ 4,212,711$ 3,853,753$ 3,541,905$ 3,268,768$ 3,027,812$

1.0% 5,505,689$ 4,945,056$ 4,473,597$ 4,072,092$ 3,726,449$ 3,426,105$ 3,162,986$

2.0% 5,969,006$ 5,317,666$ 4,777,965$ 4,324,022$ 3,937,356$ 3,604,420$ 3,315,057$

3.0% 6,535,281$ 5,764,798$ 5,137,672$ 4,617,940$ 4,180,711$ 3,808,208$ 3,487,404$

4.0% 7,243,126$ 6,311,293$ 5,569,321$ 4,965,298$ 4,464,624$ 4,043,349$ 3,684,371$

BLUEHOUSE MARKET, INC. - Sensitivity - Terminal EBITDA Multiples

Discount Rate

3,437,655.68$ 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0%

6.0 x 3,033,388$ 2,913,270$ 2,799,034$ 2,690,341$ 2,586,872$ 2,488,333$ 2,394,445$

7.0 x 3,317,691$ 3,185,214$ 3,059,258$ 2,939,446$ 2,825,424$ 2,716,862$ 2,613,453$

8.0 x 3,601,994$ 3,457,158$ 3,319,482$ 3,188,551$ 3,063,975$ 2,945,392$ 2,832,462$

9.0 x 3,886,297$ 3,729,102$ 3,579,706$ 3,437,656$ 3,302,526$ 3,173,921$ 3,051,471$

10.0 x 4,170,600$ 4,001,046$ 3,839,930$ 3,686,761$ 3,541,077$ 3,402,451$ 3,270,480$

11.0 x 4,454,903$ 4,272,990$ 4,100,154$ 3,935,866$ 3,779,629$ 3,630,981$ 3,489,489$

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BLUEHOUSE MARKET, INC. BLUEHOUSE MARKET, INC. - Range of Valuation Multiples / Premiums BLUEHOUSE MARKET, INC. - Implied Enterprise Value

VALUATION STATISTICS75th 25th Applicable 25th 75th

Maximum Percentile Median Percentile Minimum Company Minimum Percentile Median Percentile Maximum

Methodology Name Multiple Multiple Multiple Multiple Multiple Figure Multiple Multiple Multiple Multiple Multiple

Public Company Comparables:

LTM EV / Revenue: 3.3x 2.9x 2.1x 1.9x 1.8x N/A - - - - -

2017E EV / Revenue: 3.2x 2.8x 2.0x 1.8x 1.7x 183,538 312,014 330,368 367,076 513,906 587,321

2018E EV / Revenue: 3.1x 2.7x 1.9x 1.7x 1.6x 419,515 671,224 713,176 797,079 1,132,691 1,300,497

LTM EV / EBITDA: 10.9x 8.3x 7.5x 6.9x 4.4x N/A - - - - -

2017E / EBITDA: 10.8x 8.2x 7.4x 6.8x 4.3x 63,320 275,303 429,240 467,118 520,487 684,901

2018E / EBITDA: 10.7x 8.1x 7.3x 6.7x 4.2x 176,170 748,339 1,176,628 1,282,013 1,430,498 1,887,934

LTM P/E: 18.1x 13.7x 10.4x 10.1x 9.4x N/A - - - - -

2017E P/E: 18.0x 13.6x 10.3x 10.0x 9.3x 36,149 336,602 362,199 373,031 490,009 650,979

2018E P/E: 17.9x 13.5x 10.2x 9.9x 9.2x 101,306 933,185 1,004,920 1,035,276 1,363,104 1,814,217

Discounted Cash Flow Analysis:

17.0% - 13.0% Discount Rate, Terminal EBITDA Multiple 5x - 9x: 2,394,445 3,063,975 3,437,656 3,839,930 4,454,903

17.0% - 13.0% Discount Rate, Terminal Growth Rate 0% - 4%: 2,906,867 3,726,449 4,324,022 5,764,798 7,243,126

BLUEHOUSE MARKET - ENTERPRISE VALUE

- 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

17.0% - 13.0% Discount Rate, Terminal Growth Rate 0% - 4%:

17.0% - 13.0% Discount Rate, Terminal EBITDA Multiple 5x - 9x:

2017E P/E:

2016E P/E:

LTM P/E:

2017E / EBITDA:

2016E / EBITDA:

LTM EV / EBITDA:

2017E EV / Revenue:

2016E EV / Revenue:

LTM EV / Revenue:

25th to Median

Median to 75th

Discounted Cash Flow:

Public Company Comparables: