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Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Austin Kinetic in thisbusiness plan is confidential; therefore, reader agrees not to disclose it without the express

written permission of an Austin Kinetic officer.

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 means

and that any disclosure or use of same by reader, may cause serious harm or damage to Austin

Kinetic.

Upon request, this document is to be immediately returned to any Austin Kinetic officer.

___________________Signature

___________________

Name (typed or printed)

___________________

Date

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



Table of Contents

1.0 Executive Summary.............................................................................................................................1Char t: Highlights......................................................................................................................2

1.1 Objectives ...................................................................................................................................21.2 Mission.......................................................................................... ..............................................21.3 Keys to Success ........................................................................................................................2

2.0 Company Summary.............................................................................................................................32.1 Company Ownership .................................................................................................................32.2 Start-up Summary......................................................................................................................3

Table: Star t-up Funding..........................................................................................................4Chart: Start-up .........................................................................................................................5Table: Start-up.........................................................................................................................5

3.0 Services................................................................................................................................................54.0 Market Analysis Summary..................................................................................................................8

4.1 Market Segmentation ................................................................................................................9Table: Market Analysis ...........................................................................................................9Chart: Market Analysis (Pie)..................................................................................................9

4.2 Target Market Segment Strategy.............................................................................................94.3 Service Business Analysis........................................................................................................9

4.3.1 Competition and Buying Patterns .............................................................................105.0 Strategy and Implementation Summary..........................................................................................10

5.1 Competitive Edge....................................................................................................................105.2 Marketing Strategy ..................................................................................................................105.3 Sales Strategy..........................................................................................................................10

5.3.1 Sales Forecast............................................................................................................10

Table: Sales Forecast.................................................................................................11Chart: Sales Monthly ...................................................................................................11Chart: Sales by Year ...................................................................................................12

5 4 Milestones 12



Table of ContentsTable: Profit and Loss ..........................................................................................................19

8.4 Projected Cash Flow...............................................................................................................19Chart: Cash ...........................................................................................................................20Table: Cash Flow..................................................................................................................21

8.5 Projected Balance Sheet........................................................................................................22Table: Balance Sheet...........................................................................................................22

8.6 Business Ratios.......................................................................................................................23Table: Ratios .........................................................................................................................24

8.7 Long-term Plan.........................................................................................................................24

Table: Sales Forecast ...............................................................................................................................1Table: Personnel ........................................................................................................................................2Table: General Assumptions ....................................................................................................................3Table: Profit and Loss ...............................................................................................................................4Table: Cash Flow.......................................................................................................................................5Table: Balance Sheet ................................................................................................................................6



Austin Kinetic

1.0 Executive Summary

Austin Kinetic is an information technology consulting firm serving the Aust in Metro area with top

quality engineers who have a keen interest in customer satisfaction. The t ime is right forconsulting companies to flourish. With the recent gains in the stock market, capital is againbecoming available for IT infrastructure improvements. Austin Kinetic will position itself to win

a good deal of that emerging business. The company has been incorporated in Nevada andhas acquired an operating permit for Texas. Austin Kinetic anticipates an enviable cumulative

net profit by the end of year three.

The Market

Austin is known as "little Silicon valley" due to its high percentage of technology companies.

With its relatively low cost of living and ample space for expansion, Austin promises to be astrong market into the foreseeable future. There are currently over 7,000 companies that fit

the aim of Austin Kinetic in the Aust in Metro area, with only four major competitors. Thiscombination provides a rich opportunity, bolstered by the current up-turn in the area and

national economy.

The Business Model

Austin Kinetic will leverage the industry knowledge of its founding members to provide

outstanding service to its customers. The company will initially have as litt le overhead aspossible with its founders working out of their own homes, using their own transportation

means to reach clients. The company will be developed with a "customer service andsatisfaction first" mentality in an effort to build acceptance and a positive reputation in the local

industry.

The Management Team



Austin Kinetic

1.1 Objectives

Austin Kinetic's objectives for the first five years:

1. Establish and maintain at least twenty-four full time service contract customers.2. Establish an office in Austin, TX.

3. Break the Big M revenue mark.



Austin Kinetic

2.0 Company Summary

Austin Kinetic is incorporated in Nevada with an operating office in Austin, Texas. Initial staff will

consist of a small group of experienced computer engineers who's skills andexperience collectively cover a very broad segment of the open systems' distributed client/server field. The company's initial focus will be installation and configuration projects which will

be developed into ongoing support contracts.

2.1 Company Ownership

Austin Kinetic is incorporated. The major share holders are Adam Authortisement, Bob

Borgware, Cary Curry, Dean Dri, and Edgar Extension.

2.2 Start-up Summary

The start-up costs for the company are detailed in the table below, and will be funded by thefounder's personal funds. There will be only small initial equipment cost as the company will begreatly dependent upon its founders' resources. It is expected that each employee will initially

cover the cost of transportation, cell phone, and incidentals that arise in the course of duebusiness. The company will begin covering those costs as revenue streams are

generated. Specific guidelines and policies will be developed prior to the sixth operating month.



Austin Kinetic

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $7,550

Start-up Assets to Fund $4,550

Total Funding Required $12,100

Assets

Non-cash Assets from Start-up $0

Cash Requirements from Start-up $4,550

Addit ional Cash Raised $0

Cash Balance on Starting Date $4,550

Total Assets $4,550

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabili ties $0

Accounts Payab le (Outstanding Bi ll s) $0

Other Current Liabili ties (interest-free) $0

Total Liabili ties $0

Capital

Planned Investment

John Butler $2,500

Eddie Hodges $2,400

Sidney Johnson $2,400

Darren Galatas $2,400

Johnathan & Grace Panepinto $2,400

Addit ional Investment Requi rement $0

Total Planned Investment $12,100



Austin Kinetic

Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal $800

Stationery etc. $100



Austin Kinetic· Web and ASP hosting will be billed on a per-system basis.

Operating systems supported (limited to current and three previous revisions):

· Windows· Novell NetWare· Solaris· Red Hat Linux

Hardware supported (hardware configurations must be validated by OEM):

· All open desktop, server, storage, and network systems.· Dell, ADIC, Storagetech, and HP tape drives and libraries.· Additional hardware will have to be reviewed on a per-case basis.

Software packages supported (Restricted to implementat ion and initial configuration):

· Microsoft Exchange· Lotus Notes/Domino· SUS Messaging Center· Microsoft SQL server· Oracle DBS· Veritas Backup Exec / Net Backup· Legato Networker· Arcserve· Site Scope· SMS· Additional packages will have to be reviewed on a per-cases basis.

Service offerings:

Austin Kinetic has several pre-set packages available for general monitoring of acustomer's network equipment and applications The packages are categorized by the type



Austin Kineticmonitored system is not included in this monitoring agreement.

Application Server Management Services* $450 per month.

Ensuring your applications are available and running at peak efficiency is a 24/7 responsibility.Austin Kinetic offers comprehensive application monitoring and management so your customers

and employees will be able to use your applications without significant unscheduledinterruption. We offer a complete range of management services tailored to remove the burdenof ensuring your applications are up and getting the proper maintenance.

· A system audit to document your architecture and suggest improvements

· 24/7 technical support of the server, operating system and applications fromexperienced engineers

· Security and bug patch notification for the operating system and applications, andwhen approved, installation

· Monitoring application and network availability· Monitoring application response time· Monitoring the server's disk usage, processor usage, and load average· Visibility into Austin Kinetic's trouble ticket system via a secure portal· Periodic activity reports

* Except for the initial system audit, service time to repair or otherwise service themonitored system is not included in this monitoring agreement.

Database Server Management Services* $500 per month.

Ensuring your Oracle, MySQL, and MS SQL 2000 databases are configured and maintainedproperly is a time-consuming task for IT departments. Austin Kinetic can augment your internal

skill set with comprehensive database server management. We offer a broad range of management services and will take the burden of ensuring you get the proper services for your

specific server and databases. Typical database services offered by Austin Kinetic include:

· A system audit to document your architecture and suggest improvements· 24/7 technical support of the server, operating system and database from experienced

engineers



Austin Kinetic· Monitoring bandwidth usage

· Monitoring network device availability and performance· Visibility into Austin Kinetic's trouble ticket system via a secure portal

* Except for the initial system audit, service time to repair or otherwise service the

monitored system is not included in this monitoring agreement.

Benefits of Security Management Services (Priced determined on a per-site basis.)

Maintaining the security of your Internet-based systems is more important and more timeconsuming that ever. Austin Kinetic removes the burden of protecting your systems by offering

24/7 security management that combines intrusion detec tion and vulnerability scanning. Wealso will not burden your existing hardware as a pre-configured 1U server is installed in your

network to handle the intrusion detection and vulnerability task.

· Identify misconfigured firewalls· Catch attacks that firewalls legitimately allow through (such as attacks against Web

servers)· Document hacker attempts that fail· Watch for insider hacking

· Identify users installing unsecured software on their machines· Recognize unauthorized machines using the network· See incorrect IP space utilization

Austin Kinetic will ensure your intrusion detection and vulnerability scanning system is properly

installed and maintained. This includes configuring the system, testing the pattern matching,updating scanning profiles, monitoring 24/7, reporting suspicious activities or vulnerability, and

providing a monthly report.

Data Backup* $50 plus a one-time setup fee of $150 per backup server. There will be anadditional $100 per-site, per-month charge if tapes are required to be kept off-site.

Protecting your organization's data is critical. Austin Kinetic will manage your data protection



Austin Kinetic

4.1 Market Segmentation

The information in the market analysis table gained from the U.S. Census Bureau, http://

factfinder.census.gov/servlet/GQRGeoSearchByListServlet?ds_name=E9700A1. Though thedata is based upon 1997 data, it is representative of the local market's potential.

Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Retail trade 8% 2,925 3,159 3,412 3,685 3,980 8.00%

Professional, scientific, &

technical services

8% 3,128 3,378 3,648 3,940 4,255 8.00%

Health care & social assistance 8% 1,705 1,841 1,988 2,147 2,319 7.99%

Total 8.00% 7,758 8,378 9,048 9,772 10,554 8.00%



Austin KineticAustin Kinetic is in the business of satisfying companies' information technology infrastructure

needs. We will provide service at various levels from consulting to installation. Services will besold on a per-customer/case basis with heavy personal interaction between Austin Kinetic sales

representatives and prospective customers.

4.3.1 Competition and Buying Patterns

In this industry that Austin Kinetic, word of mouth and reputation are king. While a limited

amount of highly focused marketing will be effec tive, most contracts are gleaned from socialcontacts and networking.

5.0 Strategy and Implementation Summary

Austin Kinetic's initial funding will be from its founders' personal funds. Word-of-mouth andindustry networking will be Austin Kinetic's key source of clients. The company's success will

be based upon the service and satisfaction of customers to the point that they willingly refernew business.

5.1 Competitive Edge

From the onset, Austin Kinetic will have over 20 years of cumulative experience in theinformation technology field with a very broad range of hands-on experience. This, combined

with a keen sense of customer service and satisfaction, will differentiate Austin Kinetic from itscompetitors.



Austin Kineticwe will be primarily occupied in conducting short-term one-day to one-week projects while

building Austin Kinetic's reputation and brand name. Within the first six months, Austin Kinetic willhave signed three annual service contracts, doubling that by the end of the year and each

semi-annual period thereafter. Sales contracts will be set period contracts paid by monthlyinstallments.

As a service business, our only direct costs would relate to the time spent by employees inresponding to customers' needs. Our employees are all paid a set salary, and not by hourly

billing, so we have no direct costs of sales; these salaries can be found in the Personnel Plan.

Table: Sales Forecast

Sales Forecast


Sales

Project related $309,600 $705,600 $1,051,200 $1,396,800 $1,742,400

Service contract $30,000 $108,000 $180,000 $252,000 $324,000

Total Sales $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5

Technician Salary $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $0 $0 $0 $0 $0



Austin Kinetic

5.4 Milestones

Austin Kinetic will have very simple marketing milestones geared toward industry networking

and beginning to build name recognition.

Table: Milestones



Austin Kinetic

6.0 Web Plan Summary

Austin Kinetic's Web presence will not only serve as a medium for the company's marketing

message, but also will serve as an important tool for our customers. Customers will beprovided with the ability to manage and monitor their accounts from anywhere that has accessto the Internet. Additionally, c onsultants in the field will be able to track time and work journals

through the site as well as develop and print immediate job estimates.



Austin Kineticemployees will be responsible for all aspects of the business and serve in both managerial as well

as technical roles. As the business grows, additional engineers will be hired. We antic ipatethat during the fourth year of operation, the original five employees will be free from any

technical duties and concentrate solely on their management responsibilities. At this time, Aust inKinetic will look to add a full-time sales and marketing manager as well.

7.1 Personnel Plan

Business permitting, Austin Kinetic will maintain a staff of five engineers through most of FY2007. A secretary will be hired at the start of FY 2006 to assist with telephone and office

management. At the end of FY 2007, an additional engineer will be brought on board as workloaddictates. Beginning FY 2008, the original founding members will be transitioned from field workand into management, replaced by additional engineers. Additionally, a full time marketing/

sales representative will be hired.

Compensation projections were made with annual merit increases of 5% for staff and 15% forthe founders. The table also shows a profit sharing plan starting in the second year, based on

5% of the previous year's net profits. These bonuses will be divided equally among staff members, including owners.

Table: Personnel

Personnel Plan


Profit Sharing - 5% net profits $0 $0 $0 $0 $0

Adam Authorti sement (CEO) $14,400 $55 ,000 $63,000 $73 ,000 $83,600Edgar Extension (COO) $14,400 $55,000 $63,000 $73,000 $83,600

Cary Curry (CIO) $14,400 $55,000 $63,000 $73,000 $83,600

Dean Dri (CFO) $14,400 $55,000 $63,000 $73,000 $83,600

Bob Borgware (CTO) $14 400 $55 000 $63 000 $73 000 $83 600



Austin Kineticcash flow of the business, remaining debt-free.

8.1 Important Assumptions

At the onset, the founding members of Austin Kinetic will take on much of the financial burden of running the company. There will be no need for dedicated office space until FY 2006 when we

expect to open an office in Austin. Until then, Austin Kinetic will compensate travel-relatedexpenses, if any, incurred in the course of business. The only foreseen recurring expenses will

be voice mail services, marketing, insurance, Internet access, and Web presence. The lion'sshare of funds will be held by Austin Kinetic to develop cash reserves for future expansion and

a business climate buffer.

Customers will be billed on an hourly basis of $120. Engineers will be paid a salary, plus $25 per

hour for on-call and overtime. Employees who establish the new project/contract will be paid a5% bonus of the total project / contract price. Business call time of cell phones will be

reimbursed.

Table: General Assumptions

General Assumptions


Plan Month 1 2 3 4 5

Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00%

Other 0 0 0 0 0

8.2 Break-even Analysis



Austin Kinetic

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $7,325

Assumpti ons:

Average Percent Variabl e Cost 0%

Estimated Monthly Fixed Cost $7,325



Austin Kineticand year's sales.



Austin Kinetic



Austin Kinetic

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Direct Cost of Sales $0 $0 $0 $0 $0

Other Costs of Sales $0 $0 $0 $0 $0

Total Cost of Sales $0 $0 $0 $0 $0

Gross Margin $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Gross Margin % 100.00% 100.00% 100.00% 100.00% 100.00%

Expenses

Payroll $72,000 $305,000 $360,250 $853,688 $1,022,839

Marketing/Promotion $200 $0 $0 $0 $0

Depreciation $0 $714 $2,038 $2,464 $3,540

Rent $0 $45,000 $45,000 $50,000 $50,000

Moving Expenses $5,000 $0 $0 $0 $0

Util ities $2,700 $2,000 $2,500 $2,500 $3,000

Insurance $3,000 $10,000 $10,000 $10,000 $10,000

Payroll Taxes $0 $0 $0 $0 $0

Expensed Computer Equipment $5,000 $15,000 $15,000 $15,000 $15,000

Charity (5% of previous year net profit) $0 $0 $0 $0 $0

Total Operating Expenses $87,900 $377,714 $434,788 $933,652 $1,104,379

Profit Before Interest and Taxes $251,700 $435,886 $796,412 $715,148 $962,021

EBITDA $251,700 $436,600 $798,450 $717,612 $965,561

Interest Expense $0 $0 $0 $0 $0

Taxes Incurred $75,510 $130,766 $238,924 $214,544 $288,606

Net Profit $176,190 $305,120 $557,488 $500,604 $673,415

Net Profit/Sales 51.88% 37.50% 45.28% 30.36% 32.59%



Austin Kinetic



Austin Kinetic

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Subtotal Cash from Operations $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Addit ional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0

New Other Liabil ities (interest-free) $0 $0 $0 $0 $0

New Long-term Liabil ities $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0

Subtotal Cash Received $339,600 $813,600 $1,231,200 $1,648,800 $2,066,400

Expenditures Year 1 Year 2 Year 3 Year 4 Year 5

Expenditures from Operations

Cash Spending $72,000 $305,000 $360,250 $853,688 $1,022,839

Bill Payments $76,482 $201,028 $302,493 $293,637 $360,478

Subtotal Spent on Operations $148,482 $506,028 $662,743 $1,147,325 $1,383,317

Addit ional Cash Spen t

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0

Other Liabil ities Principal Repayment $0 $0 $0 $0 $0Long-term Liabili ties Principal Repayment $0 $0 $0 $0 $0

Purchase Other Current Assets $0 $0 $0 $0 $0

Purchase Long-term Assets $0 $5,000 $10,000 $5,000 $10,000



Austin Kinetic

8.5 Projected Balance Sheet

Our Balance Sheet is quite solid. We will build our asset base slowly over the f irst five years,

expensing most of our computer and hardware equipment to offset taxes, since they will needreplacing every two to three years.

Table: Balance Sheet

Pro Forma Bal ance Sheet


Assets

Current Assets

Cash $195,668 $498,240 $1,056,697 $1,553,172 $2,226,255

Other Current Assets $0 $0 $0 $0 $0

Total Current Assets $195,668 $498,240 $1,056,697 $1,553,172 $2,226,255

Long-term AssetsLong-term Assets $0 $5,000 $15,000 $20,000 $30,000

Accumulated Deprecia tion $0 $714 $2,752 $5,216 $8,756

Total Long-term Assets $0 $4,286 $12,248 $14,784 $21,244

Total Assets $195,668 $502,526 $1,068,945 $1,567,956 $2,247,499

Liabil ities and Capital Year 1 Year 2 Year 3 Year 4 Year 5

Current Liabilities

Accounts Payab le $14,928 $16 ,666 $25 ,596 $24,004 $30 ,132

Current Borrowing $0 $0 $0 $0 $0Other Current Liabili ties $0 $0 $0 $0 $0

Subtotal Current Liabil ities $14,928 $16,666 $25,596 $24,004 $30,132



Austin Kinetic

8.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the

Standard Industrial Classification (SIC) code 7379.02, Computer Related Consulting Services, areshown for comparison.



Austin Kinetic

Table: RatiosRatio Anal ysis

Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profi le

Sales Growth n.a. 139.58% 51.33% 33.92% 25.33% 16.45%

Percent of Total Assets

Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 61.43%

Total Current Assets 100.00% 99.15% 98.85% 99.06% 99.05% 87.72%

Long-term Assets 0.00% 0.85% 1.15% 0.94% 0.95% 12.28%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabil i ties 7.63% 3.32% 2.39% 1.53% 1.34% 34.35%

Long-term Liabili ties 0.00% 0.00% 0.00% 0.00% 0.00% 20.47%

Total Liabili ties 7.63% 3.32% 2.39% 1.53% 1.34% 54.82%

Net Worth 92.37% 96.68% 97.61% 98.47% 98.66% 45.18%

Percent of Sal es

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Gross Margin 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Sel li ng, General & Administrati ve Expenses 47.42% 59.67% 73.67% 70.43% 69.19% 76.51% Advertising Expenses 0.21% 0.09% 0.17% 0.15% 0.17% 1.17%

Profit Before Interest and Taxes 74.12% 53.57% 64.69% 43.37% 46.56% 1.40%

Main Ratios

Current 13.11 29.90 41.28 64.71 73.88 1.85

Quick 13.11 29.90 41.28 64.71 73.88 1.53

Total Debt to Total Assets 7.63% 3.32% 2.39% 1.53% 1.34% 61.46%

Pre-tax Return on Net Worth 139.26% 89.71% 76.33% 46.32% 43.39% 2.74%

Pre-tax Return on Assets 128.64% 86.74% 74.50% 45.61% 42.80% 7.10%

Addit ional Ratios Year 1 Year 2 Year 3 Year 4 Year 5

Net Profit Margin 51.88% 37.50% 45.28% 30.36% 32.59% n.a

Return on Equity 97.48% 62.80% 53.43% 32.42% 30.37% n.a



Austin KineticAustin Kinetic anticipates maintaining a steady profit percentage and plans to build cash

reserves to an amount which would cover operating expenses for twelve months should anycatastrophic event occur. This will be a moving target and be recalculated on an annual basis

as the business cash flow changes. There has been no pre-set limit placed upon AustinKinetic. Its founders see the possibility of expanding the company into a global force ranked

equal to today's top Fortune 500 companies.



Appendix

Page 1

Table: Sales Forecast

Sales Forecast

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

Sales

Project related 0% $2,400 $4,800 $9,600 $19,200 $24,000 $26,400 $31,200 $33,600 $36,000 $38,400 $40,800 $43,200

Service contract 0% $0 $0 $0 $0 $0 $3,000 $3,000 $4,000 $4,000 $5,000 $5,000 $6,000

Total Sales $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Technician Salary $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0



Appendix

Page 2

Table: Personnel

Personnel Plan


Profit Sharing - 5% net profits 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Adam Authortisement (CEO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100

Edgar Ex tension (COO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100

Cary Curry (CIO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100

Dean Dri (CFO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100

Bob Borgware (CTO) 0% $100 $200 $400 $800 $1,000 $1,250 $1,450 $1,600 $1,700 $1,850 $1,950 $2,100

Secretary 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales/Marketing 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-1 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-2 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-3 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-4 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-5 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-6 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-7 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-8 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Technician-9 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total People 5 5 5 5 5 5 5 5 5 5 5 5

Total Payroll $500 $1,000 $2,000 $4,000 $5,000 $6,250 $7,250 $8,000 $8,500 $9,250 $9,750 $10,500



Appendix

Page 3

Table: General Assumptions

General Assumptions


Plan 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

Page 4

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Gross Margin $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

Gross Margin % 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Expenses

Payroll $500 $1,000 $2,000 $4,000 $5,000 $6,250 $7,250 $8,000 $8,500 $9,250 $9,750 $10,500

Marketing/Promotion 5% $200 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Moving Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000

Utilities $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225

Insurance $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Expensed Computer Equipment 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000 $0 $0

Charity (5% of previous year net

profit)

5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $1,175 $1,475 $2,475 $4,475 $5,475 $6,725 $7,725 $8,475 $8,975 $14,725 $10,225 $15,975

Profit Before Interest and Taxes $1,225 $3,325 $7,125 $14,725 $18,525 $22,675 $26,475 $29,125 $31,025 $28,675 $35,575 $33,225

EBITDA $1,225 $3,325 $7,125 $14,725 $18,525 $22,675 $26,475 $29,125 $31,025 $28,675 $35,575 $33,225

Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Taxes Incurred $368 $998 $2,138 $4,418 $5,558 $6,803 $7,943 $8,738 $9,308 $8,603 $10,673 $9,968

Net Profit $858 $2,328 $4,988 $10,308 $12,968 $15,873 $18,533 $20,388 $21,718 $20,073 $24,903 $23,258

Net Profit/Sales 35.73% 48.49% 51.95% 53.68% 54.03% 53.99% 54.19% 54.22% 54.29% 46.25% 54.37% 47.27%



Appendix

Page 5

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

Subtotal Cash from Operations $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

Additional Cash Received

Sales Tax , VAT, HST/GST Received 0.00% $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 Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Long-term Assets $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 $2,400 $4,800 $9,600 $19,200 $24,000 $29,400 $34,200 $37,600 $40,000 $43,400 $45,800 $49,200

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

Expenditures from Operations

Cash Spending $500 $1,000 $2,000 $4,000 $5,000 $6,250 $7,250 $8,000 $8,500 $9,250 $9,750 $10,500

Bill Payments $35 $1,057 $1,511 $2,689 $4,931 $6,074 $7,316 $8,444 $9,232 $9,926 $13,980 $11,291

Subtotal Spent on Operations $535 $2,057 $3,511 $6,689 $9,931 $12,324 $14,566 $16,444 $17,732 $19,176 $23,730 $21,791

Additional Cash Spent

Sales Tax , VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Long-term Assets $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 $535 $2,057 $3,511 $6,689 $9,931 $12,324 $14,566 $16,444 $17,732 $19,176 $23,730 $21,791

Net Cash Flow $1,865 $2,743 $6,090 $12,512 $14,070 $17,076 $19,635 $21,156 $22,269 $24,224 $22,070 $27,409

Cash Balance $6,415 $9,158 $15,248 $27,759 $41,829 $58,905 $78,539 $99,695 $121,964 $146,188 $168,258 $195,668



Appendix

Page 6

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Curren t Assets

Cash $4,550 $6,415 $9,158 $15,248 $27,759 $41,829 $58,905 $78,539 $99,695 $121,964 $146,188 $168,258 $195,668

Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Current Assets $4,550 $6,415 $9,158 $15,248 $27,759 $41,829 $58,905 $78,539 $99,695 $121,964 $146,188 $168,258 $195,668

Long -term Assets

Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Accumulated Depr eciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Assets $4,550 $6,415 $9,158 $15,248 $27,759 $41,829 $58,905 $78,539 $99,695 $121,964 $146,188 $168,258 $195,668

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 12

Current Liabilities

Accounts Payable $0 $1,008 $1,423 $2,525 $4,729 $5,831 $7,035 $8,137 $8,905 $9,456 $13,608 $10,776 $14,928

Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Current Liabilities $0 $1,008 $1,423 $2,525 $4,729 $5,831 $7,035 $8,137 $8,905 $9,456 $13,608 $10,776 $14,928

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Liabilities $0 $1,008 $1,423 $2,525 $4,729 $5,831 $7,035 $8,137 $8,905 $9,456 $13,608 $10,776 $14,928

Paid-in Capital $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100 $12,100

Retained Earnings ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550) ($7,550)

Earnings $0 $858 $3,185 $8,173 $18,480 $31,448 $47,320 $65,853 $86,240 $107,958 $128,030 $152,933 $176,190

Total Capital $4,550 $5,408 $7,735 $12,723 $23,030 $35,998 $51,870 $70,403 $90,790 $112,508 $132,580 $157,483 $180,740

Total Liabilities and Capital $4,550 $6,415 $9,158 $15,248 $27,759 $41,829 $58,905 $78,539 $99,695 $121,964 $146,188 $168,258 $195,668

Net Worth $4,550 $5,408 $7,735 $12,723 $23,030 $35,998 $51,870 $70,403 $90,790 $112,508 $132,580 $157,483 $180,740

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