This sample business plan has been made available to users of Business Plan Pro, business planning software published by Palo Alto Software, Inc. Names, loc ations and numbers may have been changed, and substantial portions of the original plan text may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to resell, reproduce, publish, distribute or even c opy this plan as it exists here. Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright Palo Alto Software, Inc., 1995-2009 All rights reserved.

Confidentiality Agreement

The undersigned reader ac knowledges that the information provided by _________________________ in this business plan is confidential; therefore, reader agrees not to disc lose it without the express written permission of _________________________. It is ac knowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disc losure or use of same by reader, may cause serious harm or damage to _________________________. Upon request, this doc ument is to be immediately returned to _________________________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.

Table of Contents1.0 Executive Summary.............................................................................................................................1 Chart: Highlights ......................................................................................................................2 1.1 Objectives ...................................................................................................................................2 1.2 Mission........................................................................................................................................2 1.3 Keys to Success ........................................................................................................................3 2.0 Company Summary.............................................................................................................................3 2.1 Start-up Summary ......................................................................................................................3 Table: Start-up Funding ..........................................................................................................4 Chart: Start-up .........................................................................................................................5 Table: Start-up .........................................................................................................................5 2.2 Company Locations and Facilities ..........................................................................................5 2.3 Company Ownership .................................................................................................................6 3.0 Products ...............................................................................................................................................6 3.1 Product Description...................................................................................................................6 3.2 Competitive Comparison..........................................................................................................6 3.3 Sourcing ......................................................................................................................................6 3.4 Technology..................................................................................................................................6 3.5 Future Products ..........................................................................................................................6 3.6 Sales Literature ..........................................................................................................................7 4.0 Market Analysis Summary..................................................................................................................7 4.1 Market Segmentation ................................................................................................................7 Table: Market Analysis ...........................................................................................................8 Chart: Market Analysis (Pie) ..................................................................................................8 4.2 Industry Analysis .........................................................................................................................9 5.0 Strategy and Implementation Summary ............................................................................................9 5.1 Marketing Strategy.....................................................................................................................9 5.1.1 Promotion Strategy .......................................................................................................9 5.1.2 Distribution Strategy .....................................................................................................9 5.1.3 Service and Support...................................................................................................10 5.1.4 Marketing Programs ...................................................................................................10 5.1.5 Pricing Strategy...........................................................................................................10 5.2 Sales Strategy..........................................................................................................................11 Table: Sales Forecast ..........................................................................................................12 Chart: Sales Monthly.............................................................................................................13 Chart: Sales by Year.............................................................................................................13 5.3 Strategic Alliances...................................................................................................................14 5.4 Milestones ................................................................................................................................14 Table: Milestones..................................................................................................................14 Chart: Milestones ..................................................................................................................15 6.0 Management Summary ....................................................................................................................15 6.1 Personnel Plan.........................................................................................................................15 Table: Personnel ...................................................................................................................17 7.0 Financial Plan ....................................................................................................................................17 7.1 Important Assumptions............................................................................................................17 Table: General Assumptions ...............................................................................................18 7.2 Key Financial Indicators ..........................................................................................................18 Chart: Benchmarks ...............................................................................................................18Page 1

Table of Contents7.3 Break-even Analysis................................................................................................................18 Table: Break-even Analysis .................................................................................................19 Chart: Break-even Analysis .................................................................................................19 7.4 Projected Profit and Loss .......................................................................................................19 Table: Profit and Loss ..........................................................................................................20 Chart: Profit Monthly .............................................................................................................21 Chart: Profit Yearly................................................................................................................21 Chart: Gross Margin Monthly ...............................................................................................22 Chart: Gross Margin Yearly..................................................................................................22 7.5 Projected Cash Flow...............................................................................................................22 Table: Cash Flow..................................................................................................................23 Chart: Cash ...........................................................................................................................24 7.6 Projected Balance Sheet ........................................................................................................25 Table: Balance Sheet ...........................................................................................................25 7.7 Business Ratios .......................................................................................................................26 Table: Ratios .........................................................................................................................27 Table: Sales Forecast ...............................................................................................................................1 Table: Personnel ........................................................................................................................................3 Table: Profit and Loss ...............................................................................................................................4 Table: Cash Flow .......................................................................................................................................6 Table: Balance Sheet ................................................................................................................................7

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Elsewares Promotional Products1.0 Executive SummaryIntroduction A market exists within the advertising specialty industry for velour and leatherette drawstring bags, eyeglass bags, jewelry bags & pen bags to hold various promotional products to increase their perceived value. Elsewares Promotional Products & Packaging (EPPP) has been established to supply these logo imprinted products to advertising specialty distributors who, in turn, market these products to the end user. The Products Elsewares intends to develop an inventory of unique products and drawstring pac kaging products that can add perceived value to those products. These products, which will be sourced from Mexico and the Far East, will be imprinted in-house with various company logos before they are shipped to the distributors. By joining the Advertising Specialties Institute trade association, Elsewares will have print and electronic ac cess to a network of 13,000 to 14,000 ASI-listed advertising specialty distributors, part of a $7 billion a year industry. This ranks only behind television and newsprint in terms of advertising dollars spent. Elsewares will market their products exclusively through these distributors and will not sell directly to end users. Elsewares intends to reac h those distributors through advertisements in trade publications, through an in-house sales force, and a network of salaried and commission-based sales reps. Concurrent with our campaign to market these pac kaging products, we will showcase our line of unique promotional products to the same distributors, thus giving ourselves three sales opportunities: the sale of the promotional product by itself; the sale of some pac kaging products that the distributor can use with promotional items that are purchased from other suppliers; and the sale of our promotional product coupled with our pac kaging. The Market Sales in the advertising specialties industry have been growing at a rate of almost 7% per year for the past dec ade and reac hed over $7 billion in sales last year. This is a very mature industry that is crowded with suppliers and distributors. Within that industry, the three suppliers that offer only velour and leatherette drawstring bags did a combined $2,500,000 in sales. Those three suppliers are loc ated on the East Coast while some of largest advertising specialty distributors in the industry are Midwest and West Coast firms. We feel that by concentrating our efforts on marketing to the West Coast distributors, many of which already have had positive business relationships with our personnel, we will ac quire a significant market share of the pac kaging niche over the next three years. Financial Considerations A portion of our initial startup costs will be used to purchase inventory, office equipment, and imprinting mac hinery. The balance will be used for catalog costs and initial advertising expenses. Additionally, we project the need for additional financial commitment to finance receivables and payroll expenses for the first 12 months of operation. Elsewares intends to concentrate its sales force in the western United States and to reac h a respec table sales level by the end of Year 2. With our per month fixed cost estimate and Page 1

Elsewares Promotional Productsanticipated monthly unit sales we should hit running monthly break-even after the fourth month. Elsewares is seeking a financial pac kage based on a note due in five years, but amortized over 15 years. The note will be personally guaranteed by the founder's assets. By amortizing the note over 15 years, the company will be afforded the opportunity to establish a healthy trac k record which will enable the company to seek alternate financing for the balance. It should be noted that the owners of Elsewares do not intend to take any profits out of the business until the long-term debt has been satisfied. Whatever profits remain after the above debt payments will be used to finance growth, mainly through the ac quisition of additional inventory.

1.1 ObjectivesPresently, the three leading suppliers of imprinted pouches to advertising spec ialty distributors are loc ated on the East Coast and are doing a combined $2,500,000 solely in the sales of pouches. Elsewares intends to concentrate its sales force in the western United States and to reac h a respectable sales level by the end of Year 2. Elsewares intends to fac tor our growth by diversifying into unique promotional product offerings which will be attrac tive as advertising specialties in their own right, or pac kaged in a drawstring pouch which we can also provide.

1.2 MissionElsewares intends to develop an inventory of unique products and drawstring pac kaging products that can add perceived value to those products. These products, which will be sourced from Mexico and the Far East, will be imprinted in-house with various company logos before they are shipped to the distributors. By joining the Advertising Specialties Institute trade association, Elsewares will have print and Page 2

Elsewares Promotional Productselectronic ac cess to a network of 13,000 to 14,000 ASI-listed advertising specialty distributors, part of a $7 billion a year industry. This ranks only behind television and newsprint in terms of advertising dollars spent. Elsewares will market their products exclusively through these distributors and will not sell directly to end users. Elsewares intends to reac h those distributors through advertisements in trade publications, through an in-house sales force, and a network of salaried and commission-based sales reps.

1.3 Keys to SuccessElsewares management believes that it has the right products and the right people to attrac t a loyal customer base. But most importantly, it is our business philosophy that will ensure success. The advertising spec ialty industry demands that products be delivered on time and with high quality imprinting. Pursuant to these demands: Elsewares will satisfy this demand by maintaining ac ceptable inventory levels that will be delivered on time ac cording to pre-arranged shipping schedules. Elsewares will institute a quality control proc edure for overseeing the on-site imprinting fac ility to ensure an ac ceptable imprint quality. In addition to offering a complete line of velour pac kaging products, Elsewares will offer a unique line of promotional products that will encourage advertising specialty distributors to think of our company first when looking for original products.

2.0 Company SummaryElsewares is a new company to be established based on this plan.

2.1 Start-up SummaryOur initial startup costs will include the purchase of inventory, office equipment, and imprinting mac hinery, as well as catalog costs and initial advertising expenses. Additionally, we project the need for a further financial commitment to finance receivables and payroll expenses for the first 12 months of operation.

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Elsewares Promotional ProductsTable: Start-up FundingStart-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $17,600 $182,400 $200,000

$65,000 $117,400 $0 $117,400 $182,400

Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Owner Investor Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital

$0 $0 $0 $0 $0

$0 $200,000 $0 $200,000 ($17,600) $182,400

Total Capital and Liabilities Total Funding

$182,400 $200,000

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Elsewares Promotional Products

Table: Start-upStart-up Requirements Start-up Expenses Legal Stationery etc. Brochures Consultants Insurance Rent Accounting Other Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements

$1,500 $700 $4,000 $1,200 $600 $9,000 $600 $0 $17,600

$117,400 $40,000 $20,000 $5,000 $182,400 $200,000

2.2 Company Locations and FacilitiesThis is proprietary information, omitted on this sample plan, not relevant for purpose of examples.

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Elsewares Promotional Products2.3 Company OwnershipThis is proprietary information, omitted on this sample plan.

3.0 ProductsThe product and service description in this sample plan has been omitted bec ause it contains proprietary and strategic information. In the original plan, products and services were described in detail.

3.1 Product DescriptionThe product and service description in this sample plan has been omitted bec ause it contains proprietary and strategic information. In the original plan, products and services were described in detail.

3.2 Competitive ComparisonThe product and service description in this sample plan has been omitted bec ause it contains proprietary and strategic information. In the original plan, products and services were described in detail.

3.3 SourcingThe product and service description in this sample plan has been omitted bec ause it contains proprietary and strategic information. In the original plan, products and services were described in detail.

3.4 TechnologyThe product and service description in this sample plan has been omitted bec ause it contains proprietary and strategic information. In the original plan, products and services were described in detail.

3.5 Future ProductsThe product and service description in this sample plan has been omitted bec ause it contains proprietary and strategic information. In the original plan, products and services were described

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Elsewares Promotional Productsin detail.

3.6 Sales LiteratureThe product and service description in this sample plan has been omitted bec ause it contains proprietary and strategic information. In the original plan, products and services were described in detail.

4.0 Market Analysis SummaryBy definition, the advertising specialties industry deals with the sale of promotional products. These products can be prac tical, informative, entertaining and/or dec orative products most often imprinted with the sponsoring advertiser's name, logo, slogan, or message, and almost always retained and appreciated by the end recipients who received them free of charge. Sales in the advertising specialties industry have been growing at a rate of almost 7% per year since 1988 and reac hed over $7 billion in sales last year. Within that industry, the three suppliers that offer only velour and leatherette drawstring bags did a combined $2,500,000 in sales. Those three suppliers are loc ated on the East Coast while some of largest advertising spec ialty distributors in the industry are Midwest and West Coast firms. We feel that by concentrating our efforts on marketing to the West Coast distributors, many of which already have had positive business relationships with our personnel, we will ac quire a significant market share of the pac kaging niche over the next three years. Concurrent with our campaign to market these pac kaging products, we will showcase our line of unique promotional products to the same distributors, thus giving ourselves three sales opportunities: the sale of the promotional product by itself; the sale of some pac kaging products that the distributor can use with promotional items that are purchased from other suppliers; and the sale of our promotional product coupled with our pac kaging.

4.1 Market SegmentationBelow are the major product segments of the advertising specialties market and their corresponding percentage of the total market as measured by large distributor dollar sales: Wearables [i.e. T-shirts, jac kets, & caps]: 22.2% Writing Instruments [i.e. pens & pencils]: 13.1% Glassware & Ceramics [i.e. mugs]: 9.9% Recognition Awards [i.e. trophies, plaques, emblematic jewelry]: 9.8% Desk & Office Ac cessories: 9.2% Calendars: 7.8% Sporting Goods and Leisure Products: 6.9% Buttons, Badges, & Ribbons: 6.8% Auto Ac cessories [i.e. key fobs, sun screens]: 4.2%

There are presently some 2,800 suppliers listed by ASI that are selling over 390,000 different promotional products to over 13,000 advertising specialty distributors. This ASI listed distributor network serves as a large sales force for the suppliers by ac tively selling Page 7

Elsewares Promotional Productspromotional products to the public and then directing that business to ASI listed suppliers with whom they are familiar. The ASI listed distributors offer the suppliers' products to a multisegmented end-user market. Below are the major segments of this market listed in order of size as measured by dollars spent: Clubs, Associations, & Civic Groups Financial [i.e. banks, investor groups, financial professionals] Sc hools and Colleges Service Businesses Insurance Agencies Retail Stores Industrial Products Companies

Table: Market AnalysisMarket Analysis Year 1 Potential Customers Wearables Writing Instruments Recognition Awards Desk/Office Accessories Calendars Sporting Goods Button, Badge, Ribbon Auto Accessories Glassware & Ceramics Other Total Growth 12% 22% 10% 9% 8% 7% 7% 4% 10% 0% 9.43% 12,000 21,000 10,000 34,000 18,000 45,000 20,000 34,000 23,000 0 217,000 Year 2 13,440 25,620 11,000 37,060 19,440 48,150 21,400 35,360 25,300 0 236,770 Year 3 15,053 31,256 12,100 40,395 20,995 51,521 22,898 36,774 27,830 0 258,822 Year 4 16,859 38,132 13,310 44,031 22,675 55,127 24,501 38,245 30,613 0 283,493 Year 5 18,882 46,521 14,641 47,994 24,489 58,986 26,216 39,775 33,674 0 311,178 CAGR 12.00% 22.00% 10.00% 9.00% 8.00% 7.00% 7.00% 4.00% 10.00% 0.00% 9.43%

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Elsewares Promotional Products4.2 Industry AnalysisAs you may expec t, we will be entering a very mature industry that is crowded with suppliers and distributors. As with any product-oriented business, it is important to maintain a competitively priced product line. The safest way to increase overall margins will be to continuously introduce new products which will remain exclusive offerings for a period of time. When the competition has found a way to source similar products, the margins will adjust downward, driven by competitive market forces. It will be critical for Elsewares to keep one step ahead of the competition by having a new product ready for introduction when the margins slip. Thus, a new cycle of disc overy will begin. We intend to be the originators and not the imitators. Service and support may ac tually be more important to a majority of distributors than price points. After all, they are putting their reputations on the line when they afford our company the opportunity to fulfill their clients needs. On-time delivery of quality imprinted product will be crucial to our success.

5.0 Strategy and Implementation SummaryOur marketing strategy is to get our foot in the distributor's door by offering them drawstring pouches as pac kaging products to add to the perceived value and profit on the promotional products they have already sold. Once we have established a business relationship and they have had a positive customer service experience with our company, we intend to offer them products in addition to the pac kaging items.

5.1 Marketing StrategyWe intend to foc us on Midwest and West Coast distributors who have had to look to the East Coast as the only source of supply for their bag needs. Along with our on-time shipping commitment, we will foc us on the quality and durability of our imprinting proc ess, guaranteeing their quality so that distributors can ensure their clients that their message will be around for a while.

5.1.1 Promotion StrategyAll advertising will be disseminated through ASI publications. This will pinpoint the only market that we are attempting to reac h, ASI listed distributors. We must market the product successfully to the distributor so that it is appealing enough for him to turn around and market it to the end user.

5.1.2 Distribution StrategyElsewares will sell its products exclusively through ASI listed distributors. Because many specialty advertising distributors are wary of doing business with suppliers whom they believe to be Page 9

Elsewares Promotional Products"dealing direct", all direct inquiries will be directed to a distributor with whom we already have a business relationship. Distributors invest a significant portion of their selling time to finding, sc reening and qualifying spec ialty advertising buyers and convincing them that the suppliers products have a plac e and purpose in their ac tivities, and are consequently predisposed to avoid doing business with suppliers who compete with them.

5.1.3 Service and SupportOffering the highest level of customer service to our distributor network will be crucial to Elsewares' long-term success. Logo imprints will have to be of the highest quality and product shipping deadlines must be met. Because products will always be bought for a spec ific event or promotion, it will be important to support the distributors in resolving any legitimate conflicts between them and the end user.

5.1.4 Marketing ProgramsOur main marketing program will revolve around the plac ement of our full line, full color catalog and price list in The Counselor which is the industry's leading trade magazine of news, new products and market trends. This magazine is mailed to the over 13,0000 advertising specialty distributors listed with ASI. Reprints, with additional information about our company, will be mailed out approximately two weeks later to these same distributors as well as our own sales reps, offering samples of both our products and imprinting capabilities. Secondly, the same catalog will be plac ed in the next annual edition of Media File which is a compilation of full page ads of participating suppliers. This catalog is sent to the ASI distributors who in turn give it to their sales people to use when offering various products to the end user. In some cases, distributors also give these catalogs to buyers who do a large volume of business with them. Thirdly, as Elsewares brings new products into their line before the next annual catalog is printed and distributed, we will introduce these products to the advertising spec ialty industry through postcards featuring the product on one side and our mailing address on the other. These cards are bundled with other supplier cards for mailing and then bound into The Counselor magazine about six weeks later. Elsewares will also only hire industry experienced sales reps of the highest caliber. In many cases, they will be the only representatives to call on distributors in person and will subsequently leave a lasting impression of our company. They will not be expec ted to close sales, but will be expec ted to represent our products in a competitive atmosphere. Their loyalty will be courted and rewarded through a compensation pac kage combining both a salary and commission.

5.1.5 Pricing StrategyIn the fifty years of business experience that we have ac cumulated, one message rings true: someone can always beat you on price. Therefore, our pricing strategy is to be competitive within the various product categories, but not to rely on the selling price to overshadow the other advantages of doing business with our company. We will sell ourselves on the basis of a quality-made, unique product line which is reasonably priced and bac ked by an extraordinary Page 10

Elsewares Promotional Productscustomer service department. The products will be chec ked prior to shipment and all promised shipping deadlines will be met.

5.2 Sales StrategyBecause Elsewares is a new entity, we understand that we will have to prove our company's worth to distributors in order to earn their respec t and business. Elsewares will promptly honor all dealer requests for product and imprinting samples. We will offer a toll-free 800 number phone line and have a full-time, dedicated customer service person to meet distributors' needs. While the network of sales reps is bringing our product line to the attention of the ASI listed distributors, our in-house sales department will be calling on some of the larger West Coast distributors. We have hired a consultant who has had ongoing business relationships with many of these distributors over the last 24 years and we are counting on him to help us meet our sales objectives right from the start.

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Elsewares Promotional ProductsTable: Sales ForecastSales Forecast Year 1 Unit Sales Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Total Unit Sales Unit Prices Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Sales Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Total Sales Direct Unit Costs Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Direct Cost of Sales Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch 479,000 216,000 75,000 60,000 25,000 22,500 24,250 900,750 495 0 1,802,995 Year 1 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Year 2 574,800 259,200 90,000 72,000 30,000 27,000 29,100 1,080,900 618 0 2,163,618 Year 2 $0.24 $0.40 $0.84 $0.59 $0.66 $5.50 $0.48 $0.11 $41.25 $0.00 Year 3 689,760 311,040 108,000 86,400 36,000 32,400 34,920 1,297,080 742 0 2,596,342 Year 3 $0.27 $0.44 $0.88 $0.65 $0.73 $6.05 $0.53 $0.12 $45.38 $0.24

$105,380 $77,760 $60,000 $32,400 $15,000 $112,500 $10,670 $90,075 $18,563 $0 $522,348 Year 1 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00

$137,952 $103,680 $75,600 $42,480 $19,800 $148,500 $13,968 $118,899 $25,493 $0 $686,372 Year 2 $0.12 $0.19 $0.42 $0.28 $0.32 $2.63 $0.23 $0.07 $26.25 $0.00

$186,235 $136,858 $95,040 $56,160 $26,280 $196,020 $18,508 $155,650 $33,672 $0 $904,422 Year 3 $0.12 $0.20 $0.44 $0.30 $0.33 $2.76 $0.24 $0.08 $27.56 $0.00

$52,690 $38,880 $30,000

$68,976 $49,248 $37,800

$82,771 $62,208 $47,520

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Elsewares Promotional ProductsPen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Subtotal Direct Cost of Sales $16,200 $7,500 $56,250 $5,335 $63,053 $12,375 $0 $282,283 $20,160 $9,600 $71,010 $6,693 $75,663 $16,223 $0 $355,373 $25,920 $11,880 $89,424 $8,381 $103,766 $20,450 $0 $452,320

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Elsewares Promotional Products5.3 Strategic AlliancesThe performance of Elsewares will be indelibly linked to the performance of the distributors that purchase our product. It is therefore paramount to the fulfillment of our business objectives that we cultivate customer loyalty with a network of distributors that are both c redit worthy and ac tive in selling the types of products we offer. The Advertising Specialty Institute offers suppliers a subsc ription to a market and credit service that will help us to pinpoint our marketing effort along those lines.

5.4 MilestonesSample Milestones topic text. The milestones table and chart show the spec ific detail about ac tual program ac tivities that should be taking plac e during the year. Each one has its manager, starting date, ending date, and budget. During the year we will be keeping trac k of implementation against plan, with reports on the timely completion of these ac tivities as planned.

Table: MilestonesMilestones Milestone Sample Milestones Finish Business Plan Acquire Financing Ah HA! Event Ah Merde Alors! Event Grande Opening Marketing Program Starts Plan vs. Actual Review First Break-even Month Hire Employees Upgrade Business Plan Pro Totals Start Date 1/4/2008 6/4/2009 6/14/2009 6/24/2009 7/24/2009 8/3/2009 7/4/2009 11/29/2009 4/2/2010 3/1/2010 5/20/2010 End Date 1/4/2008 7/4/2009 8/3/2009 6/29/2009 7/29/2009 8/8/2009 7/29/2009 12/6/2009 5/2/2010 3/31/2010 5/22/2010 Budget $0 $100 $200 $60 $250 $500 $1,000 $0 $0 $150 $100 $2,360 Manager ABC Dude Dudette Marianne Marionette Gloworm Glower Galore Bouys Gulls Brass Department Department Boss Legumers Bosses Bouc missaire Nobs Marketeers Alles Salers HRM Bossies

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Elsewares Promotional Products

6.0 Management SummaryElsewares is organized into three main functional areas: product sourcing, sales, and marketing; production and shipping; and finance and administration. Edie Greenbaum: President and founder. Mrs. Greenbaum ran the financial department for a start-up retail operation whose sales rose to just under one million dollars in seven years. She has also spent the last year and a half heading up the sales department of an ASI listed advertising specialties supplier. Mrs. Greenbaum holds a B.A. from U.C.L.A., is married, and is the mother of one child. Gary Greenbaum: Co-founder. Mr. Greenbaum ran the day-to-day operations of the previously mentioned retail operation as a partner with Mrs. Greenbaum. Mr. Greenbaum holds a B.A. from Franklin & Marshal College, is married, and is the father of one child. Marvin Rosenbaum: Consultant. Mr. Rosenbaum has been associated with the Advertising Specialties industry for just under 25 years and holds the credentials of a C.A.S. or Certified Advertising Specialist. Over the years, Mr. Rosenbaum has been hired by both suppliers and distributors that are either starting a new company, as we are, or that are attempting to penetrate the advertising specialties market with products they are already distributing to other markets. Mr. Rosenbaum has been responsible for the successful entry of many companies into this industry and has maintained extensive business contac ts with many of the industry leaders. Mr. Rosenbaum is married and is the father of two children.

6.1 Personnel PlanThe cornerstone of the personnel plan is to maximize production and minimize the labor burden Page 15

Elsewares Promotional Productson the company's operating expenses. Pursuant to that goal, the initial payroll will consist of the following disbursements: Until increases in sales can support additional salaries, Edie Greenbaum will oversee the operations of Elsewares in an unsalaried position. Mrs. Greenbaum will be responsible for the day-to-day operations including personnel company policies, as well as overseeing the sales and marketing departments. The sales and marketing department will be headed by Marvin Rosenbaum who has been hired as an independent consultant. Mr. Rosenbaum will be responsible for initiating new leads with the ASI distributor network and for re-establishing existing contac ts with distributors with whom he has had a previous business relationship. Mr. Rosenbaum will also oversee the network of commissions based sales reps who will call on distributors in their pre-assigned territories. The sales department will be supplemented by Edie Greenbaum, who will also be responsible for calling on distributors as directed by Mr. Rosenbaum. Mr. Greenbaum will be responsible for running the customer service department, which will include handling phone orders and catalog requests. Additionally, Mr. Greenbaum will be responsible for running the company's computer operations and is expec ted to play an important role in sourcing new products. Until increases in sales justify the additional staffing of this department, Mr. Greenbaum will be responsible for assorted secretarial duties in addition to the previously mentioned duties. We are projecting the division of this department into two positions at approximately the fourteenth month of business. Mr. Greenbaum will then shift his duties to marketing and sourcing, and a new employee will take over the customer service department and its related duties. Elsewares will rely on part-time help for its imprinting, warehousing, and shipping labor requirements. Naturally, as the need arises, this all-encompassing area will be split into two departments. A full-time production person will run the imprinting department, while a second person will be hired to handle both shipping and receiving. We are projecting the need for this additional labor burden at approximately the eleventh month of business.

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Elsewares Promotional ProductsTable: PersonnelPersonnel Plan Year 1 Production Personnel Imprint Shipping Name or Title or Group Subtotal Sales and Marketing Personnel Marvin Sales Reps Name or Title or Group Subtotal General and Administrative Personnel Customer Service Name or Title or Group Name or Title or Group Subtotal Other Personnel Name or Title or Group Name or Title or Group Name or Title or Group Subtotal Total People Total Payroll $14,000 $14,000 $0 $28,000 Year 2 $15,000 $15,000 $0 $30,000 Year 3 $16,000 $16,000 $0 $32,000

$30,000 $24,000 $0 $54,000

$33,000 $26,000 $0 $59,000

$36,000 $28,000 $0 $64,000

$36,000 $0 $0 $36,000

$40,000 $0 $0 $40,000

$45,000 $0 $0 $45,000

$0 $0 $0 $0 0 $118,000

$0 $0 $0 $0 0 $129,000

$0 $0 $0 $0 0 $141,000

7.0 Financial PlanElsewares is seeking a financial pac kage based on a note due in five years, but amortized over 15 years. The note will be personally guaranteed by the Greenbaums' assets. By amortizing the note over 15 years, the company will be afforded the opportunity to establish a healthy trac k record which will enable the company to seek alternate financing for the balance. In light of that strategy, Elsewares proposes the following paybac k sc hedule: Months Months Months Months 1-12: No paybac k of principal or interest 13-24: 15% interest plus 10% net profit 25-48: 10% interest plus 15% net profit 49-60: 10% interest plus 20% net profit

It should be noted that the owners of Elsewares do not intend to take any profits out of the business until the long-term debt has been satisfied. Whatever profits remain after the above debt payments will be used to finance growth, mainly through the ac quisition of additional inventory.

7.1 Important Assumptions

Page 17

Elsewares Promotional ProductsGeneral assumptions for this plan are on the following table.

Table: General AssumptionsGeneral Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Year 1 1 10.00% 10.00% 0.00% 0 Year 2 2 10.00% 10.00% 0.00% 0 Year 3 3 10.00% 10.00% 0.00% 0

7.2 Key Financial IndicatorsThe most important indicator in our case is inventory turnover. We have to make sure that our inventory of drawstring bags and any other pac kaging products turns over a minimum of five times to avoid a negative impac t on our cost of goods sold and on our cash flow. Collection Days: These are very important. It may be nec essary to implement a variety of payment terms with different distributors, depending on their payment history. In extreme cases, prepayment of orders may be the only extendible terms. We will rely heavily on our subsc ription to the ASI Credit Service for this valuable pre-sale information. Gross Margins: We must maintain gross margins of 90% at the least, and hold marketing costs to no more than 20% of sales.

7.3 Break-even AnalysisPage 18

Elsewares Promotional ProductsThe following table and chart illustrate our break-even analysis with our per month fixed cost estimate, and what we need to sell to break-even in a month. Given the estimates, we hit running monthly break-even after the fourth month.

Table: Break-even AnalysisBreak-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 150,522 $43,608

$0.29 $0.16 $20,042

7.4 Projected Profit and LossThe following table shows the projected profits. Monthly projections are included in the appendix.

Page 19

Elsewares Promotional ProductsTable: Profit and LossPro Forma Profit and Loss Sales Direct Cost of Sales Production Payroll Other Costs of Sales Total Cost of Sales Gross Margin Gross Margin % Operating Expenses Sales and Marketing Expenses Sales and Marketing Payroll Advertising/Promotion Travel Miscellaneous Other Sales and Marketing Expenses Total Sales and Marketing Expenses Sales and Marketing % General and Administrative Expenses General and Administrative Payroll Marketing/Promotion Depreciation Rent Utilities Insurance Payroll Taxes Other General and Administrative Expenses Total General and Administrative Expenses General and Administrative % Other Expenses: Other Payroll Consultants Other Expenses Total Other Expenses Other % Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales Year 1 $522,348 $282,283 $28,000 $0 $310,283 $212,065 40.60% Year 2 $686,372 $355,373 $30,000 $0 $385,373 $300,999 43.85% Year 3 $904,422 $452,320 $32,000 $0 $484,320 $420,102 46.45%

$54,000 $44,000 $18,900 $6,000 $0 $122,900 23.53%

$59,000 $48,400 $20,790 $6,600 $0 $134,790 19.64%

$64,000 $53,240 $22,869 $7,260 $0 $147,369 16.29%

$36,000 $0 $0 $36,000 $42,000 $3,600 $0 $0 $117,600 22.51%

$40,000 $0 $0 $39,600 $46,200 $3,960 $0 $0 $129,760 18.91%

$45,000 $0 $0 $43,560 $50,820 $4,356 $0 $0 $143,736 15.89%

$0 $0 $0 $0 0.00% $240,500 ($28,435) ($28,435) $1,042 $0 ($29,477) -5.64%

$0 $0 $0 $0 0.00% $264,550 $36,449 $36,449 $13,750 $0 $22,699 3.31%

$0 $0 $0 $0 0.00% $291,105 $128,997 $128,997 $25,000 $0 $103,997 11.50%

Page 20

Elsewares Promotional Products

Page 21

Elsewares Promotional Products

7.5 Projected Cash FlowThe following table shows cash flow for the three years, and the chart illustrates monthly cash flow in the first year. Monthly cash flow projections are included in the appendix.

Page 22

Elsewares Promotional ProductsTable: Cash FlowPro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance Year 2 Year 3

$0 $329,034 $329,034

$0 $625,669 $625,669

$0 $823,725 $823,725

$0 $75,000 $0 $0 $0 $0 $100,000 $504,034 Year 1

$0 $125,000 $0 $0 $0 $0 $0 $750,669 Year 2

$0 $100,000 $0 $0 $0 $0 $0 $923,725 Year 3

$118,000 $388,415 $506,415

$129,000 $545,517 $674,517

$141,000 $661,145 $802,145

$0 $0 $0 $0 $0 $0 $0 $506,415 ($2,381) $115,019

$0 $0 $0 $0 $0 $0 $0 $674,517 $76,152 $191,171

$0 $0 $0 $0 $0 $0 $0 $802,145 $121,579 $312,750

Page 23

Elsewares Promotional Products

Page 24

Elsewares Promotional Products7.6 Projected Balance SheetThe projected balance sheet is shown in the following table, with monthly projections in the appendix.

Table: Balance SheetPro Forma Balance Sheet Year 1 Assets Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth Year 2 Year 3

$115,019 $193,314 $58,451 $20,000 $386,784

$191,171 $254,016 $48,568 $20,000 $513,756

$312,750 $334,714 $62,500 $20,000 $729,964

$5,000 $0 $5,000 $391,784 Year 1

$5,000 $0 $5,000 $518,756 Year 2

$5,000 $0 $5,000 $734,964 Year 3

$63,860 $75,000 $0 $138,860 $0 $138,860 $300,000 ($17,600) ($29,477) $252,923 $391,784 $252,923

$43,133 $200,000 $0 $243,133 $0 $243,133 $300,000 ($47,077) $22,699 $275,622 $518,756 $275,622

$55,344 $300,000 $0 $355,344 $0 $355,344 $300,000 ($24,378) $103,997 $379,619 $734,964 $379,619

Page 25

Elsewares Promotional Products7.7 Business RatiosThe table shows projected business ratios. The Industry Profile columns show statistics for Standard Industry Code (SIC) #5199, Nondurable Goods.

Page 26

Elsewares Promotional ProductsTable: RatiosRatio Analysis Sales Growth Percent of Total Assets Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Inventory Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth 0.75 35% 0.97 2.07 0.76 47% 0.87 2.49 0.81 48% 0.94 2.38 n.a n.a n.a n.a 2.79 2.36 35.44% -11.65% -7.52% Year 1 -5.64% -11.65% 2.11 1.91 46.87% 8.24% 4.38% Year 2 3.31% 8.24% 2.05 1.88 48.35% 27.40% 14.15% Year 3 11.50% 27.40% 1.87 1.00 57.19% 4.61% 10.77% Year 1 n.a. Year 2 31.40% Year 3 31.77% Industry Profile 6.22%

49.34% 14.92% 5.10% 98.72% 1.28% 100.00% 35.44% 0.00% 35.44% 64.56%

48.97% 9.36% 3.86% 99.04% 0.96% 100.00% 46.87% 0.00% 46.87% 53.13%

45.54% 8.50% 2.72% 99.32% 0.68% 100.00% 48.35% 0.00% 48.35% 51.65%

25.36% 29.49% 32.72% 87.57% 12.43% 100.00% 40.17% 13.54% 53.71% 46.29%

100.00% 40.60% 50.66% 8.41% -5.44%

100.00% 43.85% 46.18% 7.40% 5.31%

100.00% 46.45% 40.34% 6.17% 14.26%

100.00% 20.49% 7.02% 0.70% 1.79%

n.a n.a

2.70 54 9.21 7.08 27 1.33

2.70 119 6.64 12.17 37 1.32

2.70 119 8.14 12.17 27 1.23

n.a n.a n.a n.a n.a n.a

0.55 1.00

0.88 1.00

0.94 1.00

n.a n.a

$247,923 -27.30

$270,622 2.65

$374,619 5.16

n.a n.a

Page 27

Elsewares Promotional ProductsDividend Payout 0.00 0.00 0.00 n.a

Page 28

AppendixTable: Sales ForecastSales Forecast Month 1 Unit Sales Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Total Unit Sales Unit Prices Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Sales Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Total Sales $1,540 $540 $1,800 $972 $450 $3,375 $330 $1,473 $750 $0 $11,230 $1,540 $540 $1,800 $972 $450 $3,375 $330 $1,473 $750 $0 $11,230 $3,300 $1,080 $2,400 $1,296 $600 $4,500 $440 $2,530 $938 $0 $17,084 $5,500 $1,800 $3,000 $1,620 $750 $5,625 $550 $4,038 $1,125 $0 $24,008 $5,500 $1,800 $3,000 $1,620 $750 $5,625 $550 $4,038 $1,125 $0 $24,008 $11,000 $3,600 $6,000 $3,240 $1,500 $11,250 $1,100 $8,075 $1,875 $0 $47,640 $11,000 $3,600 $6,000 $3,240 $1,500 $11,250 $1,100 $8,075 $1,875 $0 $47,640 $11,000 $3,600 $6,000 $3,240 $1,500 $11,250 $1,100 $8,075 $1,875 $0 $47,640 $11,000 $3,600 $6,000 $3,240 $1,500 $11,250 $1,100 $8,075 $1,875 $0 $47,640 $11,000 $3,600 $6,000 $3,240 $1,500 $11,250 $1,100 $8,075 $1,875 $0 $47,640 $16,500 $27,000 $9,000 $4,860 $2,250 $16,875 $1,485 $18,075 $2,250 $0 $98,295 $16,500 $27,000 $9,000 $4,860 $2,250 $16,875 $1,485 $18,075 $2,250 $0 $98,295 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 7,000 1,500 2,250 1,800 750 675 750 14,725 20 0 29,470 Month 1 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 2 7,000 1,500 2,250 1,800 750 675 750 14,725 20 0 29,470 Month 2 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 3 15,000 3,000 3,000 2,400 1,000 900 1,000 25,300 25 0 51,625 Month 3 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 4 25,000 5,000 3,750 3,000 1,250 1,125 1,250 40,375 30 0 80,780 Month 4 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 5 25,000 5,000 3,750 3,000 1,250 1,125 1,250 40,375 30 0 80,780 Month 5 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 6 50,000 10,000 7,500 6,000 2,500 2,250 2,500 80,750 50 0 161,550 Month 6 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 7 50,000 10,000 7,500 6,000 2,500 2,250 2,500 80,750 50 0 161,550 Month 7 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 8 50,000 10,000 7,500 6,000 2,500 2,250 2,500 80,750 50 0 161,550 Month 8 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 9 50,000 10,000 7,500 6,000 2,500 2,250 2,500 80,750 50 0 161,550 Month 9 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 10 50,000 10,000 7,500 6,000 2,500 2,250 2,500 80,750 50 0 161,550 Month 10 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 11 75,000 75,000 11,250 9,000 3,750 3,375 3,375 180,750 60 0 361,560 Month 11 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00 Month 12 75,000 75,000 11,250 9,000 3,750 3,375 3,375 180,750 60 0 361,560 Month 12 $0.22 $0.36 $0.80 $0.54 $0.60 $5.00 $0.44 $0.10 $37.50 $0.00

Page 1

AppendixDirect Unit Costs Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Direct Cost of Sales Velour Drawstring Pouch Leather Drawstring Pouch Round Bottom Pouch Pen/Mug & Eyeglass Bag Metal Lip Eyeglass Bag Assorted Jewelry Rolls Satin Bags Message Imprinting Die Charges Other Subtotal Direct Cost of Sales $770 $270 $900 $486 $225 $1,688 $165 $1,031 $500 $0 $6,034 $770 $270 $900 $486 $225 $1,688 $165 $1,031 $500 $0 $6,034 $1,650 $540 $1,200 $648 $300 $2,250 $220 $1,771 $625 $0 $9,204 $2,750 $900 $1,500 $810 $375 $2,813 $275 $2,826 $750 $0 $12,999 $2,750 $900 $1,500 $810 $375 $2,813 $275 $2,826 $750 $0 $12,999 $5,500 $1,800 $3,000 $1,620 $750 $5,625 $550 $5,653 $1,250 $0 $25,748 $5,500 $1,800 $3,000 $1,620 $750 $5,625 $550 $5,653 $1,250 $0 $25,748 $5,500 $1,800 $3,000 $1,620 $750 $5,625 $550 $5,653 $1,250 $0 $25,748 $5,500 $1,800 $3,000 $1,620 $750 $5,625 $550 $5,653 $1,250 $0 $25,748 $5,500 $1,800 $3,000 $1,620 $750 $5,625 $550 $5,653 $1,250 $0 $25,748 $8,250 $13,500 $4,500 $2,430 $1,125 $8,438 $743 $12,653 $1,500 $0 $53,138 $8,250 $13,500 $4,500 $2,430 $1,125 $8,438 $743 $12,653 $1,500 $0 $53,138 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Month 1 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 2 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 3 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 4 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 5 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 6 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 7 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 8 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 9 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 10 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 11 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00 Month 12 $0.11 $0.18 $0.40 $0.27 $0.30 $2.50 $0.22 $0.07 $25.00 $0.00

Page 2

AppendixTable: PersonnelPersonnel Plan Month 1 Production Personnel Imprint Shipping Name or Title or Group Subtotal Sales and Marketing Personnel Marvin Sales Reps Name or Title or Group Subtotal General and Administrative Personnel Customer Service Name or Title or Group Name or Title or Group Subtotal Other Personnel Name or Title or Group Name or Title or Group Name or Title or Group Subtotal Total People Total Payroll $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $3,000 $0 $0 $3,000 $1,000 $1,000 $0 $2,000 Month 2 $1,000 $1,000 $0 $2,000 Month 3 $1,000 $1,000 $0 $2,000 Month 4 $1,000 $1,000 $0 $2,000 Month 5 $1,000 $1,000 $0 $2,000 Month 6 $1,000 $1,000 $0 $2,000 Month 7 $1,000 $1,000 $0 $2,000 Month 8 $1,000 $1,000 $0 $2,000 Month 9 $1,000 $1,000 $0 $2,000 Month 10 $1,000 $1,000 $0 $2,000 Month 11 $2,000 $2,000 $0 $4,000 Month 12 $2,000 $2,000 $0 $4,000

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$2,500 $2,000 $0 $4,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $9,500

$0 $0 $0 $0 0 $11,500

$0 $0 $0 $0 0 $11,500

Page 3

AppendixTable: Profit and LossPro Forma Profit and Loss Sales Direct Cost of Sales Production Payroll Other Costs of Sales Total Cost of Sales Gross Margin Gross Margin % Operating Expenses Sales and Marketing Expenses Sales and Marketing Payroll Advertising/Promotion Travel Miscellaneous Other Sales and Marketing Expenses Total Sales and Marketing Expenses Sales and Marketing % General and Administrative Expenses General and Administrative Payroll Marketing/Promotion Depreciation Rent Utilities Insurance Payroll Taxes Other General and Administrative Expenses Total General and Administrative Expenses General and Administrative % Other Expenses: Other Payroll 20% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 87.27% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 87.27% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 57.37% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 40.82% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 40.82% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 20.57% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 20.57% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 20.57% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 20.57% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 20.57% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 9.97% $3,000 $0 $0 $3,000 $3,500 $300 $0 $0 $9,800 9.97% Month 1 $11,230 $6,034 $2,000 $0 $8,034 $3,195 28.45% Month 2 $11,230 $6,034 $2,000 $0 $8,034 $3,195 28.45% Month 3 $17,084 $9,204 $2,000 $0 $11,204 $5,880 34.42% Month 4 $24,008 $12,999 $2,000 $0 $14,999 $9,009 37.52% Month 5 $24,008 $12,999 $2,000 $0 $14,999 $9,009 37.52% Month 6 $47,640 $25,748 $2,000 $0 $27,748 $19,893 41.76% Month 7 $47,640 $25,748 $2,000 $0 $27,748 $19,893 41.76% Month 8 $47,640 $25,748 $2,000 $0 $27,748 $19,893 41.76% Month 9 $47,640 $25,748 $2,000 $0 $27,748 $19,893 41.76% Month 10 $47,640 $25,748 $2,000 $0 $27,748 $19,893 41.76% Month 11 $98,295 $53,138 $4,000 $0 $57,138 $41,158 41.87% Month 12 $98,295 $53,138 $4,000 $0 $57,138 $41,158 41.87%

$4,500 $0 $300 $500 $0 $5,300 47.20%

$4,500 $4,000 $300 $500 $0 $9,300 82.82%

$4,500 $4,000 $2,000 $500 $0 $11,000 64.39%

$4,500 $4,000 $500 $500 $0 $9,500 39.57%

$4,500 $4,000 $4,000 $500 $0 $13,000 54.15%

$4,500 $4,000 $5,000 $500 $0 $14,000 29.39%

$4,500 $4,000 $500 $500 $0 $9,500 19.94%

$4,500 $4,000 $300 $500 $0 $9,300 19.52%

$4,500 $4,000 $500 $500 $0 $9,500 19.94%

$4,500 $4,000 $4,000 $500 $0 $13,000 27.29%

$4,500 $4,000 $500 $500 $0 $9,500 9.66%

$4,500 $4,000 $1,000 $500 $0 $10,000 10.17%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Page 4

AppendixConsultants Other Expenses Total Other Expenses Other % Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales $0 $0 $0 0.00% $15,100 ($11,905) ($11,905) $0 $0 ($11,905) -106.01% $0 $0 $0 0.00% $19,100 ($15,905) ($15,905) $0 $0 ($15,905) -141.63% $0 $0 $0 0.00% $20,800 ($14,921) ($14,921) $0 $0 ($14,921) -87.34% $0 $0 $0 0.00% $19,300 ($10,291) ($10,291) $0 $0 ($10,291) -42.87% $0 $0 $0 0.00% $22,800 ($13,791) ($13,791) $0 $0 ($13,791) -57.45% $0 $0 $0 0.00% $23,800 ($3,908) ($3,908) $0 $0 ($3,908) -8.20% $0 $0 $0 0.00% $19,300 $593 $593 $0 $0 $593 1.24% $0 $0 $0 0.00% $19,100 $793 $793 $0 $0 $793 1.66% $0 $0 $0 0.00% $19,300 $593 $593 $0 $0 $593 1.24% $0 $0 $0 0.00% $22,800 ($2,908) ($2,908) $0 $0 ($2,908) -6.10% $0 $0 $0 0.00% $19,300 $21,858 $21,858 $417 $0 $21,441 21.81% $0 $0 $0 0.00% $19,800 $21,358 $21,358 $625 $0 $20,733 21.09%

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AppendixTable: Cash FlowPro Forma Cash Flow Month 1 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $9,500 $253 $9,753 $9,500 $7,733 $17,233 $9,500 $11,657 $21,157 $9,500 $13,536 $23,036 $9,500 $20,634 $30,134 $9,500 $29,224 $38,724 $9,500 $55,454 $64,954 $9,500 $37,541 $47,041 $9,500 $37,354 $46,854 $9,500 $37,664 $47,164 $11,500 $42,862 $54,362 $11,500 $94,502 $106,002 0.00% $0 $0 $0 $0 $0 $0 $0 $0 Month 1 $0 $0 $0 $0 $0 $0 $0 $374 Month 2 $0 $0 $0 $0 $0 $0 $0 $11,230 Month 3 $0 $0 $0 $0 $0 $0 $50,000 $61,425 Month 4 $0 $0 $0 $0 $0 $0 $0 $17,314 Month 5 $0 $0 $0 $0 $0 $0 $50,000 $74,008 Month 6 $0 $0 $0 $0 $0 $0 $0 $24,795 Month 7 $0 $0 $0 $0 $0 $0 $0 $47,640 Month 8 $0 $0 $0 $0 $0 $0 $0 $47,640 Month 9 $0 $0 $0 $0 $0 $0 $0 $47,640 Month 10 $0 $50,000 $0 $0 $0 $0 $0 $97,640 Month 11 $0 $25,000 $0 $0 $0 $0 $0 $74,329 Month 12 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

$0 $0 $0

$0 $374 $374

$0 $11,230 $11,230

$0 $11,425 $11,425

$0 $17,314 $17,314

$0 $24,008 $24,008

$0 $24,795 $24,795

$0 $47,640 $47,640

$0 $47,640 $47,640

$0 $47,640 $47,640

$0 $47,640 $47,640

$0 $49,329 $49,329

$0 $0 $0 $0 $0 $0 $0 $9,753 ($9,753) $107,647

$0 $0 $0 $0 $0 $0 $0 $17,233 ($16,859) $90,788

$0 $0 $0 $0 $0 $0 $0 $21,157 ($9,927) $80,860

$0 $0 $0 $0 $0 $0 $0 $23,036 $38,389 $119,249

$0 $0 $0 $0 $0 $0 $0 $30,134 ($12,820) $106,430

$0 $0 $0 $0 $0 $0 $0 $38,724 $35,283 $141,713

$0 $0 $0 $0 $0 $0 $0 $64,954 ($40,158) $101,554

$0 $0 $0 $0 $0 $0 $0 $47,041 $599 $102,153

$0 $0 $0 $0 $0 $0 $0 $46,854 $786 $102,939

$0 $0 $0 $0 $0 $0 $0 $47,164 $476 $103,415

$0 $0 $0 $0 $0 $0 $0 $54,362 $43,278 $146,693

$0 $0 $0 $0 $0 $0 $0 $106,002 ($31,674) $115,019

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AppendixTable: Balance SheetPro Forma Balance Sheet Month 1 Assets Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth Starting Balances Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

$117,400 $0 $40,000 $20,000 $177,400

$107,647 $11,230 $33,966 $20,000 $172,842

$90,788 $22,085 $27,932 $20,000 $160,804

$80,860 $27,939 $18,728 $20,000 $147,527

$119,249 $40,522 $14,299 $20,000 $194,070

$106,430 $47,215 $14,299 $20,000 $187,943

$141,713 $70,847 $28,322 $20,000 $260,882

$101,554 $93,692 $28,322 $20,000 $243,568

$102,153 $93,692 $28,322 $20,000 $244,168

$102,939 $93,692 $28,322 $20,000 $244,953

$103,415 $93,692 $28,322 $20,000 $245,429

$146,693 $144,347 $58,451 $20,000 $369,491

$115,019 $193,314 $58,451 $20,000 $386,784

$5,000 $0 $5,000 $182,400

$5,000 $0 $5,000 $177,842 Month 1

$5,000 $0 $5,000 $165,804 Month 2

$5,000 $0 $5,000 $152,527 Month 3

$5,000 $0 $5,000 $199,070 Month 4

$5,000 $0 $5,000 $192,943 Month 5

$5,000 $0 $5,000 $265,882 Month 6

$5,000 $0 $5,000 $248,568 Month 7

$5,000 $0 $5,000 $249,168 Month 8

$5,000 $0 $5,000 $249,953 Month 9

$5,000 $0 $5,000 $250,429 Month 10

$5,000 $0 $5,000 $374,491 Month 11

$5,000 $0 $5,000 $391,784 Month 12

$0 $0 $0 $0 $0 $0 $200,000 ($17,600) $0 $182,400 $182,400 $182,400

$7,347 $0 $0 $7,347 $0 $7,347 $200,000 ($17,600) ($11,905) $170,495 $177,842 $170,495

$11,213 $0 $0 $11,213 $0 $11,213 $200,000 ($17,600) ($27,810) $154,591 $165,804 $154,590

$12,857 $0 $0 $12,857 $0 $12,857 $200,000 ($17,600) ($42,730) $139,670 $152,527 $139,670

$19,691 $0 $0 $19,691 $0 $19,691 $250,000 ($17,600) ($53,021) $179,379 $199,070 $179,379

$27,355 $0 $0 $27,355 $0 $27,355 $250,000 ($17,600) ($66,813) $165,588 $192,943 $165,587

$54,202 $0 $0 $54,202 $0 $54,202 $300,000 ($17,600) ($70,720) $211,680 $265,882 $211,680

$36,296 $0 $0 $36,296 $0 $36,296 $300,000 ($17,600) ($70,128) $212,273 $248,568 $212,272

$36,103 $0 $0 $36,103 $0 $36,103 $300,000 ($17,600) ($69,335) $213,065 $249,168 $213,065

$36,296 $0 $0 $36,296 $0 $36,296 $300,000 ($17,600) ($68,743) $213,658 $249,953 $213,657

$39,679 $0 $0 $39,679 $0 $39,679 $300,000 ($17,600) ($71,650) $210,750 $250,429 $210,750

$92,300 $50,000 $0 $142,300 $0 $142,300 $300,000 ($17,600) ($50,209) $232,191 $374,491 $232,191

$63,860 $75,000 $0 $138,860 $0 $138,860 $300,000 ($17,600) ($29,477) $252,923 $391,784 $252,923

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