EXHIBIT C TO BOARD RESOLUTIONS PROPOSED FINANCIAL PLAN REVISED MINNPOST FINANCIAL PLAN (July 28, 2007) The financial plan dated July 24 (attached on pages 6-7) showed a loss of $400,000 in 2007-08, a loss of $240,000 in 2008-09, and a surplus of $159,000 in 2009-10. This memo describes a material revision of the plan, for two reasons: 1. Major financial commitment of thei ites 27 (EE enables us to simultaneously increase the resources available for both news and revenue-generation and reduce projected deficits. . 2. I've been advised to adopt a calendar fiscal year, so the numbers are converted to a startup period through Dec. 31, 2007, and then a full year in 2008 and 2009. KEY REVENUE ASSUMPTIONS 1 SABER ewards MinnPost a $250,000 grant, which I have heard they are planning to do. Thave assigned one half ofthis grant to the startup period, and one half to 2008. 2, BMD passes through to MinnPost the generous commitment by SEB of $40,000 a ‘month beginning September, 2007. This commitment is for one year. The 2008 budget assumes the grant is renewed (which fp has said he will do if things are going well), but ‘ contingent outcome is also noted in case the giving ends in August, 2008. The 2009 budget also assumes the $40K/mo. continues. If it does not, we will not allow news or admin expenses to rise (the admin in 09 includes $40K for the CEO on a phased path toward full compensation of $120K), Even with freezing those expense levels, the absence of the S99 gift would leave a $260K hole, which would have to be filled by other foundations or out of MinnPost startup reserves. 3, Ad/sponsorship revenue for 2007 is assumed to be just over 25% of the revenue estimate that was in the 2007-08 plan, based on the assumption that we can sell some sponsorships in the exciting startup period, which are not based on CPMs but on sponsors wanting to be associated with the enterprise based on its buzz. For 2008, the assumption is an average of 800K monthly page views at $20 effective CPM, a hybrid of the first two years in the old plan, Similar approach to estimating 2009, 4, Membership revenue for 2007 is estimated at 37.5% of what was in the 07-08 projection, rather than only 25%. We're assuming that startup buzz will get us 250 members averaging $300 apiece. That's $75,000, and we already have our first check for $5,000. For 08, we're assuming 1,100 members averaging $250, again a hybrid of the first two years in the old plan. 5, Pve assumed no other foundation revenue in 2007, 2008, or 2009. This is a very conservative assumption — I’m confident that we'll get additional foundation support. However, additional foundation grants received may be accompanied by some addi expenses to fulfill the grants’ purposes. Cl6 While the plan does not project 2010, if ad /sponsorship rose 50% to $1 million and membership rose 25% to $595K, then MinnPost will break even without the ongoing $40K/mo, from or any other foundation support. KEY EXPENSE ASSUMPTIONS Startup costs, defined as expenses incurred before we begin regular publication, are increased from $100K to $140K. This reflects the advice I've received to assume that they'll be higher, especially for web development. I'm proposing that we treat thea graft as follows: 48% applied to help finance our existing plan, and 52% to spend more on both news and revenue-generating capacity, since the initial plan — in the interest of fiscal prudence — was very tight in both areas. So the revised plan increases spending by $140K in news in the first year and $110K split between ad sales and admin to support sales, Added to the $990K annual spending inthe plan ($1,090K minus startup), that produces a 2008 expense budget of $1,240K. So the budget for October through December of 2007 would be $310K. But then I assumed promotion spending in 2007 would be $50K — i.e. half the 2008 total, not just 25%, because promotion at the outset is critical. This raises the quarter of 07 to $335K. Adding in $140K startup costs produces a 2007 spending total of $475K. (Go to next page) a ome C2REVISED PLAN FOR 2007 STARTUP AND 2008 AND 2009 FULL YEARS REVENUES 2007 2008 {kine 0 anes com 7 | indicated) ‘ADVERTISING ‘Avg pg views/mo _ 430, 800. 1600 Effective cpm (not 000) NA. $20 $30 Online rev $35 $192 3576 | (ads/sponsors) [PDF ads 33 $80 $100 ‘otal ad revenue 350 $272 ‘$676 MEMBER DONATIONS ‘Number (not 000) 230 1,100 1,700 ‘Avg donation (net 000) $300 $250 $250 | Event 0 $50, $50 Total donations 375 $325 3475 t FOUNDATION GRANTS = $125 ‘$125 0 $160 $480 $480 [assumes ongoing) | (4 months @ $40) | _(12 months@ $40) |_(12. months@ $40) Total grants $285 $605 $480 INTEREST ON 38 $33, $33 RESERVE FUND. TOTAL REVENUE $418 $1,235 $1,664 | EXPENSES News 3175 $690 $850 | [Ad sales $35 $140 $280 Promotion $50. $100 $100 Admin/other $75 $300 $360* Startup costs $140 0 | TOTAL EXPENSE $475 $1,230 ‘$1,590 [PROFIT (LOSS) ** (S57) $5 374 ‘PROFIT (LOSS) if ($70) ($55) sogee* rey is 10% short C3