Confidentiality Agreement

The undersigned reader of MONSTERs Business Plan hereby acknowledges that the information provided
is completely confidential and therefore the reader agrees not to disclose anything found in the business
plan without the express written consent of Preppy Planet.

It is also acknowledged by the reader that the information to be furnished in this business plan is in all
aspects confidential in nature, other than information that is in the public domain through other means
and that any disclosure or use of the same by the reader may cause serious harm and or damage to Preppy
Planet..

Upon request this business plan document will be immediately returned to Preppy Planet.

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

__________________________________________________

Signature

__________________________________________________

Printed Name
 Overview

Preppy Planet LLC will consist of two e-commerce websites including Preppy Princess
focusing exclusively on a wide range of products for females and a larger website, Preppy
Planet, which will include a wider range for both men and women of all ages. Both
websites sell products that are focused around the preppy American fashion style under
a powerful leadership team.
 Table of Contents

Executive Summary ............................................................................................................... 5

Product & Service Summary ...........................................................................................................6
Market Summary ...........................................................................................................................6
Vision ............................................................................................................................................7
Objectives ......................................................................................................................................7
Keys to Success ..............................................................................................................................8
Post Financing Summary.................................................................................................................8

Preppy Planet Fashion Brand ................................................................................................. 9

Industry Overview ................................................................................................................. 9
Market Trends ............................................................................................................................. 10
Market Growth ............................................................................................................................ 10
Market Segmentation................................................................................................................... 11

Strategy & Implementation Summary .................................................................................. 12

Management Team ...................................................................................................................... 13
SWOT Analysis ............................................................................................................................. 15
Competitive Comparison .............................................................................................................. 16
Marketing Plan............................................................................................................................. 16
Promotion Strategy ...................................................................................................................... 16

Financial Forecasts .............................................................................................................. 17

Financial Highlights ...................................................................................................................... 18
Financial Indicators ...................................................................................................................... 19
Revenues Forecast ....................................................................................................................... 20
Projected Profit and Loss .............................................................................................................. 21
Projected Cash Flow ..................................................................................................................... 22
Projected Balance Sheet ............................................................................................................... 23
Sensitivity Analysis ....................................................................................................................... 24
 Table of Figures

Figure 1: Organizational Chart .................................................................................................................... 12

Figure 2: Post-Financing Expenses .............................................................................................................. 16
Figure 3: Financial Highlights ...................................................................................................................... 17
Figure 4: Financial Indicators ...................................................................................................................... 18
Figure 5: Revenue Forecast ......................................................................................................................... 19
Figure 6: Profit & Loss ................................................................................................................................. 20
Figure 7: Cash Flow ..................................................................................................................................... 21
Figure 8: Wages & Payroll ........................................................................................................................... 22
Figure 9: Balance Sheet............................................................................................................................... 23
Figure 10: Scenario Analysis........................................................................................................................ 24
Figure 11: Break-Even Analysis ................................................................................................................... 25
Figure 12: 12 Month Profit & Loss .............................................................................................................. 26
Figure 13: 12 Month Cash Flow Statement ................................................................................................ 27
EXECUTIVE SUMMARY

The preppy American style of clothing has been increasing since 2006 with the primary focus on the United
States, Canada and United Kingdom markets according to Google Insights. This is a growing fashion style
that is extremely likely to continue growth within the United States, along with gaining popularity within
Western Europe and the Asia-Pacific. Through the Preppy Planet websites, the company will capitalize on
this growing fashion style and adapt to changes that may incur within the market through its diversified
and experienced management team.

PRODUCT & SERVICE SUMMARY

The current website, Preppy Princess, sells clothing and accessories under the Preppy style. The website
includes information about how to be a preppy girl, about the preppy style in general and thousands of
products that helps buyers to adopt the preppy style. In the future, the company will expand into branded
items such as jewelry and clothing under the Preppy Princess brand serving as private label brand.

Currently most of the products under Preppy Princess are drop shipped due to the high customizability
options. The new website, Preppy Planet will offer less customizability in exchange for a wider selection
and more competitive prices by stocking information rather than requiring drop shipping due to
customization.

MARKET SUMMARY

In 2012, the estimated equity of the fashion industry is $37.7 Billion (USD), the industry growth is expected
to be in-line with national GDP performance, according to a research report conducted by Yale University.
The largest appeal market in the world is the United States, holding an estimated market share of 29.26%,
followed by Europe and Asia. It is currently focused around the United States with the future entrance
into the Asian market in 2016 and the Europe market within 2017.
However, emerging markets such as Asia-Pacific are very encouraging for the fashion industry. Although
the market is very large, research indicates that there is a very high degree of competition and substitute
products in the fashion industry. Because of this, Preppy Planet must emphasize distinguishing its brand
and creating a fashion line that is distinctive enough to be recognized with uniqueness, but confirmative
to the Preppy Style as it changes and adapts.

VISION

The vision is for Preppy Planet is to dominate the Preppy style globally by selling products that are included
within the Preppy American style and creating its own products under the successfully growing style.

OBJECTIVES

Preppy Planet has core objectives that it must fulfill in order to scale successfully:

Acquire investment to create the Preppy Planet website and synergize with Preppy Princess.
Maintain most of the process in-house an integrated with the owners other e-commerce stores.
Scale the companys US operations into Western Europe and the Asia-Pacific.
Design and manufacture the companys branded products for higher profit margin and distinction.
KEYS TO SUCCESS

Preppy Planet must focus upon delivering the following points to achieve a successful business model.

Ensure that designs are comparable in aesthetics and performance to comparable luxury labels.
Promote the new private label fashion to the existing visitors of Preppy Planet.
Leverage the success of the companys existing website through SEO and online reputation.
Utilize online marketing channels that the management team has already mastered.
The company has hosting in-house to maintain security, stability and lower hosting cost.

POST FINANCING SUMMARY

The immediate post financing period of Preppy Planet will consist of investment into the existing Preppy
Princess Website and introduction of the new Preppy Planet website and marketing the products. It will
also facilitate backward vertical integration so the company may design and produce its own brand.

During this period, a website will be developed and optimized through the in-house development/design
team. The owners have a significant background within IT and e-commerce, owning several other online
stores. The initial marketing will focus on SEO along with content strategy on social media to position
Preppy Planet as a thought leader within the Preppy fashion industry.

Financial historical data

2010 - Gross Sales $ 143,577 with a Net Profit of $ 24,736
2011 - Gross Sales $ 230,970 with a Net Profit of $ 44,234
2012 - Gross Sales $ 148,000 with a Net Profit of $ 35,000
2013 - Gross Sales $ 80,709 with a Net Profit of $ 41,627
PREPPY PLANET FASHION BRAND
The products introduced will move away from custom dropshipped items and into a more vertical supply
chain. This will increase profits and also the competitive edge of the company. The current owners have
access to a fashion manufacturer in Mainland-China and designers that will enable the design and
production of a new company owned product line.

INDUSTRY OVERVIEW

The Online Designer Clothing Sales industry has grown furiously for more than a decade as consumers
increasingly shift toward shopping online. Every year, more than 100 million Americans purchase goods
from the online retail marketplace, one of the fastest-growing sectors in the United States. A recent survey
by Nielsen indicates that clothing, accessories and shoes are the second-most popular category of items
(after books) that consumers consider purchasing online.

Furthermore, as traditional (i.e. brick-and-mortar) retailers have entered the online realm to recapture
sales that exclusively online retailers have claimed, industry revenue has continued to expand. IBISWorld
estimates that industry revenue increased at an annualized rate of 16.4% to $6.8 billion over the five years
to 2014, including an astronomical revenue boost of 13.5% in 2014.
MARKET TRENDS

Mobile web usage is growing exponentially year over year and has been for the past eight years. This
growth is because of the increased capability of smartphones and relative decline of desktop PC sales.
According to Pew Research, 56% of adults own a smartphone in the United States.

A 2012 article in Business Insider forecasted that by the end of 2013, global smartphone penetration has
exploded from 5% of the global population in 2009, to 22%. Preppy Planet may develop a mobile
application in the future to fully capitalize on all the channels of e-commerce growth.

MARKET GROWTH: THE PREPPY STYLE

One of the most enduring styles in modern American dress is the preppy style. The term preppy derives
from the expensive pre-college preparatory or prep schools that upper-middle-class White Anglo-Saxon
Protestant children on the United States's East Coast J. Press represented the quintessential Ivy League
style, stemming from the collegiate traditions of Ivy League schools. In the mid-twentieth century, J. Press
and Brooks Brothers both had stores on Ivy League school campuses, including Harvard, Princeton, and
Yale. Preppy fashion emerged in the 1970s with cues from the original Ivy League style, along with
influences from traditional Northeastern culture.

Some typical preppy styles also reflect traditional upper class New England leisure activities, such as polo,
sailing, hunting, fencing, crew rowing, lacrosse, golf, and rugby. This association with New England
outdoor activities can be seen in preppy fashion, through stripes and colors, equestrian clothing, plaid
shirts, field jackets, and nautical-themed accessories. By the 1980s, a slew of brands such as Lacoste, Izod,
and Dooney & Bourke became associated with preppy style.
For professional women, preppy-influenced fashions became dominant beginning in the 1960s, a trend
led by designers such as Perry Ellis, and influenced by designers such as Oleg Cassini.[7] The classic
ensembles often seen worn by professional women in East Coast cities and elsewhere include tailored
skirt suits, low heels, wrap dresses, shift dresses, silk or cotton blouses, and jewelry with a refined style.
Such clothing often includes elements drawn from typical preppy style, such as nautical stripes, pastel
colours, or equestrian details. Some "cultural icons" of preppy style for professional women include
Audrey Hepburn, Grace Kelly, Jacqueline Kennedy Onassis, and 20th century New York socialites Gloria
Guinness, Babe Paley, Slim Keith, and C. Z. Guest, all women whose style is often referenced by designers.

In recent years, newer outfitters such as Ralph Lauren, J. Crew, Vineyard Vines, and Elizabeth McKay are
also frequently perceived as having preppy styles, with designers such as Marc Jacobs and Luella Bartley
adding the preppy style into their clothes in the 1990s. New York City maintains itself as the headquarters
for most preppy clothing lines, such as J. Press, Daniel Cremieux, Ralph Lauren, and Kate Spade New York,
and demonstrates prep subculture as a reflection of Northeastern culture.

Aspects of Preppy culture:

Today, the term preppy is far looser and a term regularly used in high schools across North America and
parts of Europe. It still describes a subculture, but that of a social circle of well brought up men and women
who have adopted a manner of speech, vocabulary, dress, manners and etiquette that becomes an
integral part of their lifestyle reflective of the traditions adopted from those historic upper-class
Northeastern families.

MARKET SEGMENTATION

We have segmented the market into three main categories that we will target and believe that it will hold
relatively stable within major cities internationally. The first consists of higher income individuals that
have a conservative style for their career and lifestyle, but have very high fashion budgets and purchase
high quality items. The second consists of a younger demographic that is more focused on self-expression
through clothing that closely follows fashion trends. The final demographic is less focused on fashion and
more on practicality and functionality. They have a smaller budget and spend less time searching, but we
believe that we may still target them with a reasonable price point, as outlined in the pricing strategy.

Conservative Big Spenders

This category includes groups ages 36-55 that have high income that may have children, generally ones
who are older. They contribute to the highest total spending category in the fashion market, generally buy
many items of higher quality and spend the most on shoes, jewelry and formal wear. This segment prefers
a classic and tailored or customized look something trendier. They dont want to spend an excessive time
shopping and are not averse to buying in the sales, although it is not a key feature in their buying decision.
They may shop on the Internet for fashion and are keen shoppers in retailers like John Lewis, Monsoon
and Bloomingdales, Harvey Nichols.
Urban Trends

This includes a slightly younger demographic of 18-35 that generally are located in urban areas and have
an interest in keeping up on fashion trends. They have above average shopping budgets and enjoy self-
expression through their clothes, considering their wardrobes an extension of their personality. While
they shop at mainstream fashion stores, they are also likely to shop at boutique outlets to help them stand
out from the crowd. Their Internet usage is above average with 32% surveyed having researched clothing
within the past four months online.

Big Spenders

The big spenders are focused on high fashion and trendy clothing featured on modern runways by top
designers. They often carry similar demographics of the conservative big spenders, but prefer more stylish
designs that stand-out and are trendy, as opposed to the higher end conservative formal wear. Brands
may include high end boutique fashion stores, tailored clothing and colorful fashion from top trending
designers internationally.

STRATEGY & IMPLEMENTATION SUMMARY

The company benefits from its strategy with three main parts, the first being synergies from other
companies, the second being backward vertical integration and the third diversification. The management
team already owns over thirty proprietary domains and several e-commerce websites with its own
storage/fulfillment center and IT experts. These in-house resources not only enable greater operating
efficiency, but improve the profit margin to enable more flexible pricing and greater spent towards
building the brand online.

The second benefit is the strategy of having a designer create products for the specific style specifically
under the Preppy Princess brand and manufacturing them in an owners manufacturing facility. This will
enable the company to have a wider selection of unique products that buyers cannot find anywhere else,
greater profit margins and diversification into fashion design/manufacturing.

The third key benefit is diversification by not being dependent on any one website or product line. By the
introduction of the Preppy Planet website, the company will expand the brand into men and double its
market share potential. It will also increase the product selection of non-customizable options that will
not require dropshipping and result in an increase of profits and shipping efficiency.
MANAGEMENT TEAM

John Doe Chief Executive Officer

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Susan Miller Chief Operating Officer

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Kevin Jones -Chief Financial Officer

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Adrian Wilcourt Legal Compliance

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ORGANIZATIONAL CHART

Adrian
Board/Investors
Wilcourt/Legal

John Doe/CEO

Susan Kevin
Miller/COO Jones/CFO

Marketing
Sales Director Accounting
Director

Sales Reps Collections

SWOT ANALYSIS

Strengths

A popular brand with fashion lovers is already starting to grow.

The owners have a network of fashion designers and manufacturers.
The site is already successfully drawing profits and has good SEO ranking.
The high traffic of the website easily enables cross-selling of a private brand.
Existing synergies of the company enable greater overall efficiency and higher profit margins.
The management team is bilingual which aids entrance into the Mainland-China market.

Weaknesses

The site may need to improve its structure and design to outline a stronger brand image.
The brand of Preppy Planet still needs to grow and gain international recognition.
The brand still needs considerable outside PR and marketing efforts outside the United States.
The initial margins will be low due to dependence of drop shipping and high customization.

Opportunities

The fashion market is of limitless size and will always exist.

Potential exists to expand and develop new product lines leveraging the brand image.
There is a growing interest in the Preppy style within Western Europe and Asia-Pacific.
The designs are not specific to any one brand or high concentration in the industry.
Customers with this style are more likely to remain loyal to the style for a long period of time.

Threats

The fashion industry is extremely competitive with both boutique and household name designers.
It is relatively easy for new competitors to enter the market and hard to win more market share.
Many competitors have economies of scale in manufacturing with higher profit margins.
The fashion industry may be subject to high volatility with economic performance as a luxury item.

15
COMPETITIVE COMPARISON

Because of the considerable size of the market and many competitors, we have instead grouped
categories of competitors to focus on how Preppy Planet is uniquely positioned in the entire industry:

E-Commerce Competitors

There are several e-commerce competitors within both the preppy fashion niche and broader online
stores that carry the style. While broader stores may cross sell and benefit from economies of scale, the
smaller niche stores receive higher search rankings and more targeted advertising. A few key competing
websites of the preppy style include the companies listed below:

CountryClubPrep.com
VineyardVines.com
Tnuck.com
Modcloth.com
AE.com

Fashion Designers

This market will be our largest competitor. It includes well-positioned preppy fashion designers that back
brick & mortar stores, along with their own e-commerce websites. These brands carry incredible clout in
the market and their brands will be difficult to compete with initially. However we believe that we can be
well positioned against them by building a strong brand and focusing on web marketing strategies.

MARKETING PLAN
Pricing Strategy

The pricing of retail products are comparable with competing websites, set at the price of wholesalers
with a standard retail markup. The companys new private label line will range depending on the specific
product and manufacturing cost, however it will be priced at the high-middle structure such that it can
construct a brand associated with quality, while still making prices affordable for mainstream fashion
customers. This will serve as at a price point comparable to dresses on major fashion retailers such as
Bloomingdales.

PROMOTION STRATEGY
Public relations

There will be very a heavy focus on public relations, with a firm covering the PR initiatives for each region
introduced. This will open channels for our brand to get coverage by Glamour, Cosmopolitan and other

16
top magazines regionally and nationally. It will also enable access to product placements, strategic
celebrity usage and access to runway shows. We believe that PR will play a key to a successful market
introduction, especially during the launch in the United States.

Digital Advertising

The advertising will consist of web-based and mass media advertising. We will place advertisements to
target our consumer demographic on Preppy style websites and fashion blogs. This advertising will
resemble top fashion brands and Preppy Planet will orchestrate all digital marketing initiatives internally
with the collaboration of outside affiliate partners through CJ and Share-A-Sale.

Website/E-commerce Strategy

The website is running on Magento CMS hosted internally by the company on its proprietary servers with
updated SSL compliance; design and updates are all handled internally with the management team. The
website does not only provide preppy style clothing, but serves as a key hub for all things Preppy.

The Preppy Planet LLC websites will continue to be optimized using SEO/SEM techniques in-house by
hiring and managing interns for implementation. The company will utilize resources from other websites
including affiliate partnerships and re-seller agreements to more easily introduce its private label fashion
line and the new Preppy Planet website.

FINANCIAL FORECASTS
The financial growth forecasts estimate an increase in sales that will nearly double in years two and three
due to the introduction of an additional website. Moreover, profit margins will increase with the
introduction of a private label fashion line that allows retail products to be acquired at manufacturing
cost. Finally, revenue will increase with the introduction of the brand into the Asia-Pacific market and
Western European market in 2016 and 2017, respectively. The profit margins are higher than competing
e-commerce companies because of the management teams ownership of other e-commerce websites
that allow synergies and shared expenses.

Financial historical data

2010 - Gross Sales $ 143,577 with a Net Profit of $ 24,736
2011 - Gross Sales $ 230,970 with a Net Profit of $ 44,234
2012 - Gross Sales $ 148,000 with a Net Profit of $ 35,000
2013 - Gross Sales $ 80,709 with a Net Profit of $ 41,627

17
FINANCIAL HIGHLIGHTS

The financial highlights are how the company is projected to perform over the course of the next twelve
months and three to five years. The projections are based on comparable facilities based on estimated
revenue range and size, along with geographic location. We have assumed that for at least the first six-
months of post-money financing that expenses may be greater than revenues while the company invests
into growth.
Financial Highlights ($000):
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 2015 2016 2017
Revenue 22 26 26 26 26 26 26 26 26 26 26 29 315 944 1887
Gross Margin 15 18 18 18 18 18 18 18 18 18 18 20 220 660 1321
Operating Expense 19 19 19 19 19 19 19 19 19 19 19 19 226 358 495
EBITDA (3) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) 1 (6) 303 826
Net Profit (3) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) 1 (6) 242 660

Gross Margin/Revenue 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70%
EBITDA/Revenue -16% -1% -1% -1% -1% -1% -1% -1% -1% -1% -1% 4% -2% 32% 44%
Net Profit/Revenue -16% -1% -1% -1% -1% -1% -1% -1% -1% -1% -1% 4% -2% 26% 35%

Net Cash Flow (3) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) 1 (6) 242 660
Cash Balance - Ending 97 96 96 95 95 95 94 94 94 93 93 94 94 336 997

Projected Operating Highlights By Year ($000) Projected Revenues By Year ($000)

2000 2000
1800
1500 1600
1400
1000 1200
1000
500
800
600
0
Year 1 Year 2 Year 3 400

(500) 200
0
Revenue Gross Margin EBITDA Net Profit Year 1 Year 2 Year 3

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
1200 700

1000 600

800 500
600 400
400 300
200 200
0 100
Year 1 Year 2 Year 3
(200) 0
Net Cash Flow Cash Balance
Year 1 Year 2 Year 3
(100)

18
FINANCIAL INDICATORS

The company believes that it can reach an increasing net profit margin due to economies of scale. Through
investments in capital expenditures, it may decrease its general and administrative expenses. Financial
indicators are based upon the performance of comparable companies in the same asset class, revenue
range and age both from publicly available information and our internal database of research.

Financial Indicators
2015 2016 2017
Profitability %'s:
Gross Margin 7 0% 7 0% 30%
Net Profit Margin -2% 26% 35%
EBITDA to Rev enue -2% 32% 44%
Return on Assets -3% 56% 60%
Return on Equity 1 00% 1 03% 7 4%

Financial Indicators
80%

70%

60%

50%

40%

30%

20%

10%

0%
Year 1 Year 2 Year 3

-10%

Gross Margin Net Profit Margin EBITDA to Revenue Return on Assets

19
REVENUES FORECAST

Revenue Forecast
2014 2015 2016
Rev enue Forecast
Clothing & Accessories $ 31 4,500 $ 943,500 $ 1 ,887 ,000
T otal Rev enue $ 314,500 $ 943,500 $ 1,887 ,000

Direct Cost of Rev enue

Clothing & Accessories $ 94,3 50 $ 283,050 $ 566,1 00
Subtotal Cost of Rev enue $ 94,350 $ 283,050 $ 566,100

Year 1 Revenue Monthly

30,000

25,000

20,000

15,000

10,000

5,000

-
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12
Revenue By Year
2000

1800

1600

1400

1200

1000

800

600

400

200

0
2015 2016 2017

20
PROJECTED PROFIT AND LOSS

The profit and loss assume that the company will have margins at a comparable level to companies within
its industry. While management might not have incurred exactly for future operating expenses, they have
been assumed to reasonable reach comparable profit margins to industry comparables. The management
will operate with minimal expenditures to focus on R&D and commercialization expenses until the
company has sufficient income to support dividend distribution.

Pro Forma Profit and Loss

Y ear 1 Y ear 2 Y ear 3
Rev enue $ 31 4,500 $ 943,500 $ 1 ,887 ,000
Subtotal Cost of Rev enue $ 94,350 $ 283,050 $ 566,1 00
Total Cost of Rev enue $ 94,350 $ 283,050 $ 566,1 00

Gross Margin $ 220,1 50 $ 660,450 $ 1 ,320,900

Gross Margin/Rev enue 7 0% 7 0% 7 0%

Ex penses
Accounting and Legal $ 1 ,500 $ 2,000 $ 2,000
Adv ertising $ 60,000 $ 7 2,000 $ 86,400
Depreciation $ 1 ,000 $ 1 ,000 $ 1 ,000
Dues and Subscriptions $ - $ - $ -
Insurance $ 300 $ 400 $ 500
Interest Ex pense $ 200 $ 200 $ 200
Maintenance and Repairs $ 500 $ 500 $ 500
Office Supplies $ 2,000 $ 2,500 $ 3,000
Labor (wages and pay roll) $ 1 00,000 $ 200,000 $ 300,000
Pay roll Ex penses $ 1 0,000 $ 20,000 $ 30,000
Postage $ 20 $ 40 $ 60
Rental $ 1 2,000 $ 1 2,000 $ 1 2,000
Research and Dev elopment $ 20,000 $ 20,000 $ 20,000
Tax es and Licenses $ 3,1 45 $ 9,435 $ 1 8,87 0
Telephone $ 1 ,200 $ 1 ,200 $ 1 ,200
Trav el $ 3,000 $ 4,000 $ 5,000
Utilities $ 3,600 $ 3,600 $ 4,800
Web Hosting and Domains $ 4,800 $ 4,800 $ 4,800
Other $ 3,000 $ 4,000 $ 5,000
T otal Operating Ex penses $ 226,265 $ 357 ,67 5 $ 495,330

Net Income $ (6,1 1 5) $ 242,220 $ 660,456

Net Income/Rev enue -2% 26% 35%

21
PROJECTED CASH FLOW

Pro Forma Cash Flow

Y ear 1 Y ear 2 Y ear 3
Beginning Cash Balance $ 100,000 $ 93,885 $ 336,1 05
Cash Inflows
Income from Sales $ 314,500 $ 943,500 $ 1 ,887 ,000
Accounts Receivable $ - $ - $ -
Total Cash Inflows $ 314,500 $ 943,500 $ 1 ,887 ,000

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ -
Cost of Sales $ 94,350 $ 283,050 $ 566,1 00

Operating Activities
Salaries and Wages $ - $ - $ -
Fixed Business Expenses $ 226,265 $ 357 ,67 5 $ 495,330
Taxes $ - $ 60,555 $ 1 65,1 1 4

Financing Activities
Loan Payments $ - $ - $ -
Line of Credit Interest $ - $ - $ -
Line of Credit Repayments $ - $ - $ -
Dividends Paid $ - $ - $ -

Total Cash Outflows $ 320,61 5.00 $ 7 01 ,280.00 $ 1 ,226,544.00

Cash Flow $ (6,1 1 5.00) $ 242,220.00 $ 660,456.00
Operating Cash Balance $ 93,885.00 $ 336,1 05.00 $ 996,561 .00
Ending Cash Balance $ 93,885.00 $ 336,1 05.00 $ 996,561 .00

Year 1 Cash
120,000

100,000

80,000

60,000

40,000

20,000

-
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

(20,000)

Net Cash Flows Cash Balance

22
PROJECTED BALANCE SHEET

The projected balance sheet assumes that there are no dividend draws and all cash flow is re-invested
back into the company at the end of the year. The balance sheet does not assume any line of credits or
account receivables that are outstanding at the end of the year and that the company will have paid off
all liabilities. Likewise, it assumes that all accounts will pay within thirty-days and there will be no
delinquency of payments.

Pro Forma Balance Sheet

2015 2016 2107
Assets
Current Assets
Cash $ 93,885 $ 336,105 $ 996,561
Other Current Assets $ - $ - $ -
T otal Current Assets $ 93,885 $ 336,105 $ 996,561

Long-term Assets
Long-term Assets $ - $ - $ -
Accumulated Depreciation $ - $ - $ -
T otal Long-term Assets $ - $ - $ -
T otal Assets $ 93,884 $ 336,105 $ 996,561

Liabilities and Capital

Current Liabilities
Accounts Payable $ - $ - $ -
Current Borowing $ - $ - $ -
Other Current Liabilities $ - $ - $ -
Subtotal Current Liabilities $ - $ - $ -

Long-term Liabilities $ - $ - $ -
T otal Liabilities $ - $ - $ -

Common Stock $ 100,000 $ 100,000 $ 100,000

Retained Earnings $ (6,115) $ 236,105 $ 896,561
T otal Capital $ 93,885 $ 336,105 $ 996,561
T otal Liabilities and Capital $ 93,885 $ 336,105 $ 996,561

23
SENSITIVITY ANALYSIS

Best Case Scenario (Revenue Increase by 15%)

Y ear 1 Y ear 2 Y ear 3
Rev enue $ 361 ,67 5 $ 1 ,085,025 $ 2,1 7 0,050
Cost of Goods Sold $ 1 08,503 $ 325,508 $ 651 ,01 5
Gross Margin $ 253,1 7 3 $ 7 59,51 8 $ 1 ,51 9,035
Gross Margin/Rev enue 7 0% 7 0% 7 0%
Operating Ex penses $ 2 2 6,2 65 $ 3 57 ,67 5 $ 495,3 3 0
EBITDA $ 26,908 $ 401 ,843 $ 1 ,023,7 05

Worst Case Scenario (Revenue Decrease by 15%)

Y ear 1 Y ear 2 Y ear 3
Rev enue $ 267 ,325 $ 801 ,97 5 $ 1 ,603,950
Cost of Goods Sold $ 80,1 98 $ 240,593 $ 481 ,1 85
Gross Margin $ 1 87 ,1 28 $ 561 ,383 $ 1 ,1 22,7 65
Gross Margin Rev enue 7 0% 7 0% 7 0%
Operating Ex penses $ 2 2 6,2 65 $ 357 ,67 5 $ 495,330
EBITDA $ (39,1 38) $ 203,7 08 $ 627 ,435

Scenario Analysis of EBIT

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$-
Year 1 Year 2 Year 3

$(200,000)

Best Case Most Likely Worst Case

24
Appendices

Year 1 Cash Flow: $2.0 M Investment

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

Cash Received

Revenue
$ 22,000.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 28,500.0
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Other Current Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 22,000.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 26,400.0 $ 28,500.0

Expenditures

Expenditures from Operations

$ 25,455.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 27,405.4
Subtotal Spent on Operations
$ 25,455.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 27,405.4

Additional Cash Spent

Current Borrowing Repay

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 25,455.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 26,775.4 $ 27,405.4

Net Cash Flow

$ (3,455.4) $ (375.4) $ (375.4) $ (375.4) $ (375.4) $ (375.4) $ (375.4) $ (375.4) $ (375.4) $ (375.4) $ (375.4) $ 1,094.6
Cash Balance
$ 96,544.6 $ 96,169.2 $ 95,793.8 $ 95,418.3 $ 95,042.9 $ 94,667.5 $ 94,292.1 $ 93,916.7 $ 93,541.3 $ 93,165.8 $ 92,790.4 $ 93,885.0

25
 Year 1 Profit & Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Revenue $ 22,000 $ 26,400 $ 26,400 $ 26,400 $ 26,400 $ 26,400 $ 26,400 $ 26,400 $ 26,400 $ 26,400 $ 26,400 $ 28,500
Subtotal Cost of Revenue $ 6,600 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 8,550
Total Cost of Revenue $ 6,600 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 7,920 $ 8,550

Gross Margin $ 15,400 $ 18,480 $ 18,480 $ 18,480 $ 18,480 $ 18,480 $ 18,480 $ 18,480 $ 18,480 $ 18,480 $ 18,480 $ 19,950
Gross Margin/Revenue 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70%

Expenses
Accounting and Legal $ 125 $ 125 $ 125 $ 125 $ 125 $ 125 $ 125 $ 125 $ 125 $ 125 $ 125 $ 125
Advertising $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000
Depreciation $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83
Dues and Subscriptions $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Insurance $ 25 $ 25 $ 25 $ 25 $ 25 $ 25 $ 25 $ 25 $ 25 $ 25 $ 25 $ 25
Interest Expense $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17
Maintenance and Repairs $ 42 $ 42 $ 42 $ 42 $ 42 $ 42 $ 42 $ 42 $ 42 $ 42 $ 42 $ 42
Office Supplies $ 167 $ 167 $ 167 $ 167 $ 167 $ 167 $ 167 $ 167 $ 167 $ 167 $ 167 $ 167
Labor (wages and payroll) $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333
Payroll Expenses $ 833 $ 833 $ 833 $ 833 $ 833 $ 833 $ 833 $ 833 $ 833 $ 833 $ 833 $ 833
Postage $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2
Rental $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000
Research and Development $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667
Total Operating Expenses $ 18,855 $ 18,855 $ 18,855 $ 18,855 $ 18,855 $ 18,855 $ 18,855 $ 18,855 $ 18,855 $ 18,855 $ 18,855 $ 18,855

EBIT $ (3,455) $ (375) $ (375) $ (375) $ (375) $ (375) $ (375) $ (375) $ (375) $ (375) $ (375) $ 1,095
EBIT/Revenue -16% -1% -1% -1% -1% -1% -1% -1% -1% -1% -1% 4%

26