PowerUp

A Business Plan

Team Founders:
Casey Cadenhead
Noah Deitch
Caleb Hayter
Jonathan Quinn
Shane Stevenson

Never stop running

 Table of Contents

Executive Summary..pg. 2

Business Model and Financial Goalspg. 3

Market Analysis....pg. 3

Solution.....pg. 4

Sales Plan..pg. 5

Operations and Production....pg. 5

Supply Chain.....pg. 6

Organization Plan..pg. 7

Major Milestones..pg. 7

Financial Projections...pg. 12

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EXECUTIVE SUMMARY

This document contains the business plan of PowerUp, our firm we are starting to provide solutions to the
need for electric power for electronic devices. In this business plan, we will discuss the need we see in the
market, and our proposed solution to fulfill that need. Then we will cover how we plan to provide that
solution, discussing our business model, a market analysis, a sales plan, financial goals, and organizational
and operations planning. We hope after you read this document you will fully understand the goals we have
in setting out on this venture.

Our Product
Our product is a protective case for smartphones with built-in technology that enables the user to
continually charge the phone and increase battery life, using kinetic energy drawn from physical movement.
The value this product delivers is twofold: first, smartphone users will have the positive benefit of having an
energy generating source for their smartphone, independent of an energy storage source, like their devices
internal battery, or an external battery pack. Second, this energy generating source will also be
self-contained, enabling the user to avoid drawing energy from electrical outlets.

How would such a product work in practice? Think of a self-winding mechanical watch, that generates
energy to run its movement through the transfer of kinetic energy generated by the movement of the wearer.
Through the action of a weight on a pendulum, (or similar mechanical machinery), kinetic energy can be
transformed into electrical energy, which in our product will then be routed into the smartphone to power it.
Given how often individuals look at their smartphones (a 2016 survey by Deloitte found that humans, on
average, look at their smartphones 46 times per day), presumably, there is a fair amount of physical
movement going on as users pick up their phones, look at them, and put them down. As a backup, we
believe a small hand crankable tool will allow users another option of generating the electrical charge,
should they need it. There may be questions of efficiency, i.e., how much power would our product be able
to generate, how much movement (in both distance and speed) would be required to begin the power
generation process, etc. It may be difficult conceptually to determine such efficiency levels, and in any case,
we believe it more important to act on our product concept and develop it, and focus on continuing
efficiency improvement throughout the products lifetime.

What is our value proposition? It is simple. We offer a product that has the promise of continuous
smartphone use, without as much of a need for external charging. This enables smartphone users to use their
smartphones more often, and in more environments, without fearing the low battery notification, and
without a hurried search for a charger and an electrical outlet. The value is greater use for ones smartphone.
The value is freedom from chargers.

BUSINESS MODEL AND FINANCIAL GOALS

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PowerUps revenue model, R&D, and manufacturing strategy all go hand in hand. Our goal is to have
product on shelves after twelve months. We have a four stage model encompassing our revenue, R&D, and
manufacturing strategy, along with our go-to-market and brand development plan. The first stage is research
and development. The founders raised $1,500 each and raised an additional $3,000 dollars as seed money.
We decided to outsource production to an established factory costing around $5,000. For several prototypes,
we allocated the factory six months to create a working prototype; thus far we have formed the company,
hired one employee, designed and produced a working prototype, and we have raised $22,500 and spent
$5,000.

Our second stage is to begin selling our product to customers and is where our go-to-market strategy comes
into play. The founders decided on testing out sales online to avoid slotting fees and retailers cutting into
our margins. Once we have established revenue through online sales, we wanted to partner up with
cell-phone retailers so they could assist in selling our phones as an addition to a phone purchase.

Our third stage is marketing and brand development. As sales steadily increase, we found that a low cost
way to garner the attention and relate to consumers is to establish a strong social media presence in
conjunction with cellular phone retailers. Since our item is demonstrable to an extent, social media will
allow us to efficiently provide a concise overview of our product and how it can benefit the lives of the
consumers. If companies such as Sprint, Verizon, and T-Mobile, post on their pages about our cases, we can
enhance our brand image. The legitimacy that these retailers provide is crucial in the place and promotion of
our product. Consumers know that if they do not want to purchase our product online without visually
experiencing it in real life, they can go to any of those retailers to see and purchase it.

Our fourth and final stage occurs once we have established a financial foothold. Our goal is to be profitable
by month 17. We utilized conservative estimates for the first few years, but with partnerships and
investment, we believe that in year 3 of company operations sales should grow by 50%, in year 4 sales
should grow by around 33% and in year 5 sales should grow by 25%. Our financial goals are also spoken by
our margins. We project, in a graph to be shown later, that by year 3, our margins will be placed at around
14% of revenue.

MARKET ANALYSIS

The industry for the phone charging case marketplace consist of two major companies: Apple Inc. and Zagg
Inc. These two companies are responsible for the two highest selling phone charging cases in the world. Per
Zagg, Inc. (2017), reported a 49% increase in Net Sales from $269.3 million in 2015 to $401.9 million in
2016. Evidently, this proves that the marketplace is currently growing and the need for charging phone
cases is increasing with each passing year. Apple Inc., also responsible for selling mobile devices and other
electronic devices, has increased their sales from 2014 to 2016 from $70.54 billion to $84.26 billion,
(AAPL Income Statement, n.d.). As the electronic devices maintain an increase in sales year in and year
out, the demand for phone charging will continue to rise. This is evident with the correlation in increased
sales with Zagg Inc. and Apple Inc. Phone charging case marketplace consumers, are looking for phone
cases that both protect their phone and maintain a charge throughout the day. It is important for our brand to
fulfill both of these needs for the consumer. If we can separate ourselves from our competitors in this

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regard, then we can maintain a high-level of customer satisfaction and maintain long-term customer
relations. Most phone charging cases treat this demand as mutually exclusive meaning a consumer can have
a phone charging case, but the device will not have that sense of protection. Our companys hope is to
satisfy the needs of the consumer by fulfilling both of these needs and also creating a case that the consumer
can use for long periods of time without the need to replace it.

The primary segment that we are wishing to target are those who own a smartphone. With new smart phone
devices being released constantly it is very likely that the trend will continue and demand for these cases
will rise. As more and more consumers buy smartphones, we will look to increase sales and find ways to
emerge as competitors in the marketplace. The barriers to enter the marketplace are not high, but the stakes
to remain in the marketplace are very high. Once into the marketplace companies must remain competitive
and look for advantages to uniquely distinguish themselves from other competitors through whatever means
necessary. What will make our product unique is the ability to charge your device simply by using kinetic
energy, while also providing an alternative source of charging capability in case consumers remain
sedentary throughout the day. A special rod will be attached to the back of the case that can be wound-up
and provide the device with a charge, which still fulfills the cases purpose while solving the issue of
sedentary movement by the consumer. There are no available phone cases in the marketplace like our
device, which is what will distinguish us from competitors and give that advanced edge we want in the
competitive landscape.

SOLUTIONS

Our intellectual property would be the technology implemented that allows individuals to maintain a
durable charge through kinetic movement. This technological advancement is new to the marketplace, and
therefore would only be unique to our company. The idea itself would have to be patented, to prevent our
competitors from implementing our concept into their production.

Consumers continually look for ways to maintain a durable charge on their smartphone device throughout
the duration of a day. This is a difficult demand for producers to meet because their products can only
maintain a finite charge. We look to solve this issue by creating a phone case that would have a infinite
battery life and charge through your own movement. This would allow consumers to maintain a continuous
charge throughout the day, while they navigate around. Even if consumers remain sedentary we have
implemented a rod that will be placed on the back of the device that would be able to be wound up to also
charge the device. This provides consumers with two ways to charge their device and maintain an infinite
charge throughout the day.

Our strategy to help put our venture into action would include spending the first stage of our product
development conducting research and development to help design our product. The second stage would be
an implemented prototype that would give others a visual representation of our product, and understanding
of the technology itself. The third stage would be shortly after placing our finalized product into production
and then creating a pre-sale of our product that would help us receive profit to fund our production costs.
The final stage that we will implement within the first three years of production is to create mass produced
economies of scale that would allow us to maintain a sense of scalability amongst the general public.

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The initial investment that we would use to start our venture would arise from our personal savings and
family and friends amounting to approximately $22,500. By stage 3, we are hoping to raise another $50,000
from an angel investor of some sort, which would then allow us to use $43,000 of the invested capital for
production costs, and making enough units to cover the pre-sale demand. We have estimated that our
conducted research and development costs should be $7,500 and another estimated $5,000 should be spent
on the production of several prototypes to showcase to investors. Several prototypes are needed because of
the risk of some prototypes failing. This process would take six months and would be in the early stages of
our venture, assuming that each prototype would cost approximately $100 to manufacture and produce and
take months to develop and manufacture a working prototype.

Since we are creating a new innovative piece of technology we understand that we will go through phases
of trial and error. This would slow down development of our product, but with good cause. If we fail to
create a viable product that would benefit consumers, then there would be no incentive for consumers to
purchase our product. The chance of failure is high given that if we fail to produce such a product that
satisfy consumers needs, then we would not excel in the marketplace compared to our competitors.

SALES PLAN

For our sales plan, we intend to provide direct to consumer sales through our online platform. Our customer
target is very broad due to our product being an accessory for an item that is ubiquitous, which allows us to
have a massive market. Our initial sales plan is to sell online direct to consumer, but after establishing a
proof of concept, we wanted to insert ourselves into retail through alliances with cellular phone providers.
Though our margins would not be as high, we feel this would boost our exposure and in turn sales. We
intend for this being a bundle or add on item with the purchase of a smartphone just like any other cell
phone case. We would price the product slightly higher than on our website, but not enough to lose
customers to competitors. As compensation, we intend on offering the retailers 5% of our sales on the
products sold in stores. This incentivizes selling on our behalf, and with our 14% margins, we can afford to
pay them that much with the slight pricing increase.

Our layout and merchandising plan does not entail anything when selling online and though we would enjoy
special treatment of our cases in the stores of the cellular retailers, we know it to be unlikely since all of the
accessories are in one place and as we increase positioning, so do the slotting fees or commissions we
would have to pay to the stores. We would prefer that our social media marketing allow us to have a
predetermined notion of the case the consumer might want to buy prior to entering the store.

OPERATIONS AND PRODUCTION

We plan to pre-sale our product on our main companys website in the early stages of our operations, and in
later stages we would look for a third-party retailer to also sell our products to consumers. We plan on
outsourcing production to a suitable partner, to avoid taking on manufacturing responsibility. Production
costs would gradually increase with each passing year as production would increase as a byproduct.
Production Costs were highlighted in our Business Model section of our business plan.

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We estimated that our pre-sale of our product would generate 1,000 units in the first month. This would
mean that by month 13, we would need to generate 1,000 units from production. By the end of our first
year, we estimate that a total of 100,000 units would be sold. Every year after that we are looking to
gradually increase sales by 50,000 units. As the company grows the percentage increase of sales would
decline, but sales overall would still increase just at not at the same exponential rate.

SUPPLY CHAIN

MATERIALS, Need kinetic energy model that is able to sense movement (i.e.
TECHNOLOGY, & nike+ kind of technology)
INFORMATION Manufacturing equipment that will be leased with the warehouse
SUPPLY

PRODUCTION OR Produce 20% more of predicted sales to account for increased

CONVERSION INTO demand
FINISHED GOODS Using manufacturing warehouse at $2,565/month
AND SERVICES 10 factory workers at $37,050 each a month
We will work our way up to this value. Start with 2
workers and then gradually increase as demand increases

FULFILLMENT AND Increase sales by at least 50,000 units per year

LOGISTICS Expected production costs will increase as production increases
(see breakdown above) making sure to keep expenses low to
maximize profit
Analyzing market trends to increase supplies to anticipate release of
new smartphone devices

CUSTOMER SERVICE Customers are offered a 30 day return policy after purchasing the
product
Representatives are trained to understand FAQ by customers, in
regards to the technology malfunctions
Support is offered through our website and our corporate hotline
during work hours (9 AM-5 PM). All emails/voicemails received
after work hours will be responded too within 48-hours of the next
business day.

SUPPORTING Need database that keeps track of customers order and their
INFORMATION information (i.e. payment method, shipping address, etc.)
TECHNOLOGY Predictive model that helps identify target areas with highest unit
sales and identify area regions with lower unit sales to help market
(geographic informational system)

ORGANIZATION PLAN

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We intend on organizing our company in a small fashion. The management team would solely consist of
the founders who each own a 20% stake in the business in the beginning. Even with outside investment, we
desire to run the company ourselves, but our equity can be parceled out to outside investors, as we will
likely need some outside capital to grow the firm.

Our staffing consists of 2 marketing associates and 3 mechanical engineers. Per Payscale and Glassdoor,
we found their salaries to be $41,711 and $60,000 respectively. Since we made the decision to outsource
production, there would be no other initial need to find other labor. Between the five founders and the five
other associates, we could sustainably run the company until our sales reach a point where we may need to
bring in additional employees to assist in satisfying demand. This initial staff should be sufficient for at
least five years, and could end up being variable dependent on sales.

MAJOR MILESTONES WITH FUNDING

Starting out, we will need to devote a large chunk of our resources to Research & Development, as
developing a product that will be valuable in the market is essential. This means that revenue will likely not
begin to flow for some time; possibly 1-2 years after the company is founded. Lets assume that each of us
as founders puts forward $1,500 from savings as seed money, coupled with each of us raising another
$3,000 or so from personal relationships and connections. That means we can have approximately $22,500
as seed money to start with.

We assume that we will have external sources of

income to live off of for the time being, with each
founder having equity in the company as
compensation. With each founder contributing time
and effort towards the R&D process, the need for
employees should be minimized. However, it may be
valuable to have expert knowledge on hand, in the
form of mechanical engineers, to assist with the
development process. As revenue is still zero at this
point, we can only offer equity in the company as a
form of compensation. Thus far, each founder has
a 20% stake in the company.

Now, questions about how to split the pie arise.

Lets assume that as founders, we want to
maintain control of our firm as much as possible.
This means that we need a majority, or failing
that, a plurality, of all equity holdings in the
company. Given the stage we are at currently, we
think a majority of ownership would be smart, as
it enables us to manage the control vs. wealth
dynamic, at this point in the life of the firm. If we

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consider all of us as a single ownership group, then that means we can afford to give away 49.9% of the
firms equity. Let's put 20% aside for initial employees, and the remaining 29.9% for outside investors,
should we be fortunate enough to obtain some.

Now, let's go back to the development process. Hiring a mechanical engineer at this point means equity
compensation, so let's give said engineer a 2% stake, leaving 18% of the total equity allocated to employees
remaining. At this point, we still have our initial $22,500 cash on hand, so we use that for a working
prototype. We have many options for the actual manufacture of said prototype; we can build our own
tooling and manufacturing equipment, we can outsource production of the prototype to a traditional factory,
or, depending on the design, potentially make the prototype using a 3D printer. Lets assume that the best
option is outsourcing to an established factory, and that doing so costs $5,000, to make several prototypes.
The assumptions underlying this figure are as follows:
Research online for the price of mechanical watches (a roughly comparable device, from a
technology standpoint) shows average price per watch to be in the neighborhood of several hundred
dollars. This figure is surely skewed upward, due to the status of many watches as luxury goods.
If we estimate the cost of a comparable device as being approximately $100 to manufacture, we
should be able to have several prototypes built, given that initial production will cost more, due to
designing the product and factory retooling, etc. As production progresses, the marginal cost of
production drops, due to increasing efficiency.
We want several prototypes, to better test them and have backups in case of product failure.
If it is fair to assume that this entire process takes six months, from day one to working prototype, thus far
we have formed the company, hired one employee, designed and produced a working prototype, and we
have raised $22,500 and spent $5,000. The next six months should consist of testing the prototype,
redesigning if necessary, doing further market research to assess demand, and attempting to attract outside
investment, if needed.

Stage 2
By the end of our first year in operation, we should have a solid product to sell to customers, through testing
our prototypes and further refining them as needed. Testing will cost money, and it may be fair to allocate
$7,500 of our funds for testing and further development. At this point, we would have $10,000 in funds
remaining, and (hopefully) a marketable product. Now we need to sell it. Given the low cost of selling
online, we think starting out selling the product online is wise, as it allows us to focus on marketing and
production. Once revenue is established, we can explore partnerships with cell-phone retailers that enable
them to sell the product, boosting sales.

Stage 3
If at this point we start making sales, production must ramp up to meet demand. However, we likely will
need an infusion of outside capital to meet costs, as revenue will likely be insufficient to cover costs. Lets
assume we raise $50,000 from an outside investor, in exchange for a roughly 20% stake in the company,
valuing our firm at $300,000. We use $43,000 of that capital for production, making enough units to cover
demand. Our goal is to grow our company as much as possible, so any earnings we make will be reinvested
back into the company. This means that our investor will likely not see any dividends for a while, but we
will give them an out of allowing them to sell their shares of stock if they so choose. Preferably, this will

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not take place for some time, perhaps at least six months after initial investment, for we do not desire to
have sources of capital dry up instantly

Stage 4
Once our firm has established a firm footing and has solid demand and revenue, hopefully by year 3, our
costs will increase as production ramps up. Based on previous analysis, our costs when fully up and running
would be as follows:
Initially, our findings in the marketplace found product variable costs, excluding depreciation and
amortization, to be on average 63% of revenue. This material costs aligned with our company due
to the expensive nature of our required materials.
For our manufacturing overhead costs, we found that on average over five years, the comparable
company had their overhead costs at 23% of their revenues. Based on Tucson estimates from real
estate listings, we found a warehouse in order to store inventory and serve as office space for
$2,565/mo or $30,780 a year. According to Payscale and Glassdoor, average salaries for marketing
associates and mechanical engineers are $41,711, and $60,000 respectively. We estimated our
company needed 2 marketing associates, and 3 mechanical engineers.This would put labor costs at
$263,242 per year, and total costs for overhead at $294,202 per year. We have no direct
manufacturing costs because if we outsource production, we can save on direct manufacturing
costs. Those costs can be roped into product variable costs, as covered above. For now, lets
maintain our baseline assumption of those costs being 63% of revenue.

The above analysis is reformatted in the following table:

Variable Costs 63% of revenue

- Direct Materials/ Production

Manufacturing Overhead Costs 23% of revenue

- Labor - $263,422
- Facilities - $30,780
Total... $294,202

EBITDA 14% of revenue

We found our EBITDA to be 14% after determining variable costs to take up 63% of our revenue and
manufacturing overhead to be 23% of our revenue. This EBITDA figure is variable depending on sales
levels, because if our sales figures post COGS do not cover the overhead or fixed costs, we will be
operating at a loss even though theoretically we should have a 14% margin. This is an assumption our team
made in determining costs of the project.

To account for the lack of excess funding, we decided to credit salaries initially to help decrease our overall
expenses. This would save us money in the short term and minimize losses that we would suffer. The
salaries would have to be accounted for later on, but as a result we would overall take a smaller hit than if
we decided to account for salaries in the first month of production.

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Revenue Projections
Time Period Revenue

Starting Capital $22,500

Month 1 $0 Research and Development, no sales

Month 2 $0 Research and Development, no sales

Month 3 $0 Research and Development, no sales

Month 4 $0 Research and Development, no sales

Month 5 $0 Research and Development, no sales

Month 6 $0 Research and Development, no sales

Month 7 $0 Research and Development, no sales

Month 8 $0 Research and Development, no sales

Month 9 $0 Research and Development, no sales

Month 10 $0 Research and Development, no sales

Month 11 $0 Research and Development, no sales

Month 12 $0 Research and Development, no sales

Capital infusion $50,000

Capital total $60,000

Month 13 1,000 Units * $65.00 per case= $65,000

Month 14 1,500 Units * $65.00 per case=$97,500

Month 15 2,000 Units * $65.00 per case=$130,000

Month 16 3,000 Units * $65.00 per case=$195,000

Month 17 4,000 Units * $65.00 per case=$260,000

Month 18 5,000 Units * $65.00 per case=$325,000

Month 19 6,500 Units * $65.00 per case=$422,500

Month 20 9,000 Units * $65.00 per case=$585,000

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 Month 21 11,000 Units * $65.00 per case=$715,000

Month 22 13,000 Units * $65.00 per case=$845,000

Month 23 19,000 Units * $65.00 per case=$1,235,000

Month 24 25,000 Units * $65.00 per case=$1,625,000

Year 3 150,000 Units * $65.00 per case=$9,750,000

Year 4 200,000 Units * $65.00 per case=$13,000,000

Year 5 250,000 Units * $65.00 per case=$16,250,000

Our first two years will consist of research, development, and finally sales. Our first year will be all
research and development. Our goal is to have product on shelves after twelve months. We will see little
costs during the first year due to at-home developement. This will help us to keep costs low and give us a
boost when we do start making sales. We have used conservative estimates starting out for the first few
years, and then move up dramatically in sales numbers. We expect to become profitable by month 17.

Each year after our initial mass market offering up until year 5 our goal would be to increase sales by
50,000 units. This unit increase accounts for the fact that our growth may slow as the market becomes more
saturated with our product. As users may not buy new phone cases until they get a new phone, we would
want to make sure that our projection accounted for the fact that it may take more than a year for a customer
to become a repeat consumer as long as we make quality cases. With this in mind, we believe that in year 3
of company operations sales should grow by 50%, in year 4 sales should grow by around 33% and in year 5
sales should grow by 25%. This is a steady maintainable growth that we should be able to keep up with
production-wise so that we can satisfy the sales that we are getting. Obviously, these numbers are an
estimate, and after the first 6 months of sales we would need to reevaluate our estimates.

Major Milestones table

The above data is consolidated into the following table.

Date Milestone

Year 1, Month 1 Company founded, $22,500 in capital

Year 1, Month 3 First employee hired

Year 1, Month 5 First working prototype, $17,500 in capital

Year 1, Month 12 Testing complete, $10,000 in capital

Year 2, Month 13 Capital infusion and first sale

Year 2, Month 17 First Profitable date

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FINANCIAL PROJECTIONS

All the above data is compiled into the following table, showing our revenue, costs, inflows of capital, and
the resulting profit or loss.

Profit/Loss table
Time Period Revenue Cost Profit/Loss

Starting Capital $22,500

Year 1 $0 $0
Month 1

Month 2 $0 $0

Month 3 $0 $0

Month 4 $0 $0

Month 5 $0 $0

Month 6 $0 $5,000 ($5,000)

Month 7 $0 $0

Month 8 $0 $0

Month 9 $0 $0

Month 10 $0 $0

Month 11 $0 $0

Month 12 $0 $7,500 ($7,500)

Capital infusion $50,000

Capital total $60,000

Year 2 1,000 Units * Salary and rent =$91,096 ($67,019)

Month 13 $65.00 per case= 63% of revenue(VC)= $40,950
$65,000 Total Costs= $132,019

Month 14 1,500 Units * Salary and rent =$91,096 ($54,994)

$65.00 per case= 63% of revenue(VC)= $61,425
$97,500 Total Costs= $152,494

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 Month 15 2,000 Units * Salary and rent =$91,096 ($42,969)
$65.00 per case= 63% of revenue(VC)= $81,900
$130,000 Total Costs= 172,969

Month 16 3,000 Units * Salary and rent =$91,096 ($18,919)

$65.00 per case= 63% of revenue(VC)= $122,850
$195,000 Total Costs= $213,919

Month 17 4,000 Units * Salary and rent =$91,096 $5,131

$65.00 per case= 63% of revenue(VC)= 163,800
$260,000 Total Costs= $254,869

Month 18 5,000 Units * Salary and rent =$91,096 $29,181

$65.00 per case= 63% of revenue(VC)= $204,750
$325,000 Total Costs= $295,819

Month 19 6,500 Units * Salary and rent =$91,096 $65,356

$65.00 per case= 63% of revenue(VC)= $266,175
$422,500 Total Costs= $357,244

Month 20 9,000 Units * Salary and rent =$91,096 $125,381

$65.00 per case= 63% of revenue(VC)= $368,550
$585,000 Total Costs= $459,619

Month 21 11,000 Units * Salary and rent =$91,096 $173,481

$65.00 per case= 63% of revenue(VC)= $450,450
$715,000 Total Costs= $541,519

Month 22 13,000 Units * Salary and rent =$91,096 $221,581

$65.00 per case= 63% of revenue(VC)= $532,350
$845,000 Total Costs= $623,419

Month 23 19,000 Units * Salary and rent =$91,096 $365,881

$65.00 per case= 63% of revenue(VC)= $778,050
$1,235,000 Total Costs= $869,119

Month 24 25,000 Units * Salary and rent =$91,096 $510,181

$65.00 per case= 63% of revenue(VC)=1,023,750
$1,625,000 Total Costs= $1,114,819

Year 3 150,000 Units * $1,093,152 $2,516,348

$65.00 per case= 63% of revenue(VC)= $6,140,500
$9,750,000 Total Costs= $7,233,652

Year 4 200,000 Units * $1,093,152 $3,716,848

$65.00 per case= 63% of revenue(VC)= $8,190,000
$13,000,000 Total Costs= $9,283,152

Year 5 250,000 Units * $1,093,152 $4,919,848

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 $65.00 per 63% of revenue= $10,237,000
case=$16,250,000 Total Costs= $11,330,152

Cash Flow Table

Year 1 Year 2 Year 3 Year 4 Year 5

Begin. Bal. 22,500.00 60,000.00 687,458.17 1,854,104.89 3,041,047.40

Revenue 50,000.00 6,500,000.00 9,750,000.00 13,000,000.0 16,250,000.0

0 0

Expense (12,500.00) (5,187,828.00 (7,235,652.00 (9,283,152.00 (11,330,652.0

) ) ) 0)

Profit 60,000.00 1,372,172.00 3,201,806.17 5,570,952.89 7,960,395.40

Non-Cash 29.9% Equity (684,713.83) (1,347,701.28 (2,529,905.49 (3,722,237.30

items Stake ) ) )
(Outside
Investors),
50.1% Equity
Stake
(Founders),
20.0% Equity
Stake (Initial
Employees)

Total Cash 60,000.00 687,458.17 1,854,104.89 3,041,047.40 4,238,158.09

Flow

These statements depict yearly cash flow statements as seen because it gave us the best analysis of seeing
dividends paid out to our early employees and investors who funded our venture concept in its early stages.
This was simpler than breaking down each monthly cash flow statement and provided us with an overview
of cash flowing in and out of our business on an annual process opposed to monthly. The overall results
allowed us to create a break-down of our percentages to help us better understand how our business is
doing. We notice that revenue has consistently been 50% or more of our overall cash, which is ideal given
that we would rather see a surplus of cash coming in rather than a deficit of cash coming in resulting in
consistent suffered losses. Instead, our company has maintained strong sales and allowed ourselves to
maintain a strong cash flow We also did not allow ourselves to take a salary from our venture until year
three, in which each founding member took a salary cut of $50,000 for the year. This is not exactly ideal

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given the work put into the company, but from an entrepreneurial standpoint we realize that by taking a
smaller salary now and saving money to put back into production, the firm will benefit.

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REFERENCES

"AAPL Income Statement." NASDAQ.com. N.p., n.d. Web. 05 July 2017.

<http://www.nasdaq.com/symbol/aapl/financials?query=income-statement>.
Inc, ZAGG. "ZAGG Reports 2016 Fourth Quarter & Full Year Results; Provides 2017 Outlook of $470 to
$500 Million in Net Sales." GlobeNewswire News Room. N.p., 07 Mar. 2017. Web. 05 July 2017.
<https://globenewswire.com/news-release/2017/03/07/933074/0/en/ZAGG-Reports-2016-Fourth-Q
uarter-Full-Year-Results-Provides-2017-Outlook-of-470-to-500-Million-in-Net-Sales.html>.

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