2

0
0
0

1 GF1_rK0q
1 GF1_rK0q

1
1

$0.00
14560
14560
14560
14560
14560
0
0

6497.5
6497.5
6497.5
6497.5
6497.5

9440
9440
9440
9440
9440

0
0
0
0
0

10

0.95

1
0

10
0

GF1_Z0Cm>75%
>75%

<25%
<25%

>90%
>90%

1
2

1
1

0
0

Inputs
Market Size
$
Sales Year 1
Market Share Year 1
Sales Growth Years 2-6
Gross Margin Year 1
Gross Margin Year 2
Gross Margin Year 3+
CCA Manufactring Line Rate
SR&ED Rate
Loan Duration (year)
Salvage Value(Assume)

Taxable Income
Tax rate
Debt ratio (initially)
Equity portion
Debt portion
Ce
Cc
Cr
Po
g
D1
f
Ke
Kr
ie
MARR
Ks
Id
Loan Interst
Debt ratio (after lunch)

$
$
$
$
$
$

38,000,000
#NAME?
14%
6%
#NAME?
44%
46%
30%
25%
4
0

10,975,000
26.0%
50.17%
2,018,215
2,031,785
4,050,000
2,018,215
2,031,785
9.40
9.75%
0.64
10%
17.27%
16.52%
17.27%
16.52%
8.35%
6.18%
6.18%
50.17%

Option B
Option A
Manufacturing line installatio$
4,050,000 $
4,780,000
R&D expenses after lunch
7.5%
5%
Increase in SG&A After Lunch
15%
13%
Year
Gross Margin
Year
Revenue

0
0%
0

1
#NAME?
1
#NAME?

2
44%
2
#NAME?

COGS

#NAME?

Option B
Manufacturing line installatio $
R&D expenses after lunch
Increase in SG&A After Lunch
Depreciation Schedule (Ye
CCA
UCC
$
Debt Repayment Schedule
In
PPn
Bn
$
Year
Income Statement
Revenues
Expenses
COGS
SG&A
R&D
Debt Interest
CCA
Taxable Income
SR&ED tax rate
Income Taxes
Net Income
Year
Statement of Cash Flows
Operating Activities
Net Income
CCA
SR&ED
Investement Activities
Investement & Salvag
Disposal Tax Effect
Financing Activities
Debt Payments
Stock Issue Fee
Net Cash Flow
MARR

(4,050,000)
#NAME?
#NAME?
$ (1,287,750) $ (1,287,750)
0
$
4,050,000 $
0
$
$
2,031,785 $

1
607,500 $
3,442,500 $

2
1,032,750
2,409,750

1
125,562 $
507,946 $
1,523,839 $

2
94,171
507,946
1,015,892

0
$

$
$
$
$
$
$
$
$
$

#NAME?

#NAME?

#NAME?
#NAME?
$ (1,287,750) $ (1,287,750)
#NAME?
#NAME?
$
(125,562) $
(94,171)
$
(607,500) $ (1,032,750)
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?

$
$
$

#NAME?

(4,050,000)

$
$
$

2,031,785 $
(224,246)
(2,242,461)
16.52%

#NAME?
607,500 $

#NAME?
1,032,750
#NAME?

(507,946) $

(507,946)

#NAME?

#NAME?

NPW
IRR
Firm Market Value
Net Proceeds
$
2,018,215
Flotation Cost per Share
$
0.94
Number of Shares
238,560
Total Flotation cost
$
224,246
Total Common Stock
$
1,686,560
New Stock Price
Discounted Payback Analysis
Year
0
Cumulative Investment
$
4,050,000 $
Cumulative Revenues
$
-

1
4,050,000 $
#NAME?

2
4,050,000
#NAME?

Discounted Payback Analysis

Cumulative Investment

Cumulative Revenues

$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$-

Cash Flow Diagram

Year
Net Expenses
Net Revenues

0
$
$

1
#NAME?
#NAME?

2
#NAME?
#NAME?

Cash Flow Diagram

Net Expenses
$1
$1
$1
$1
$1
$1
$0
$0
$0
$0

Net Revenues

$1
$1
$1
$1
$0
$0
$0
$0
$-

Net Cash Flow

Year
Net Cash Flow

0
(2,242,461)

1
#NAME?

2
#NAME?

Net Cash Flow

$$(500,000)
$(1,000,000)
$(1,500,000)
$(2,000,000)
$(2,500,000)

3
46%
3
#NAME?

4
46%
4
#NAME?

5
46%
5
#NAME?

6
46%
6
#NAME?

7
46%
7
#NAME?

#NAME?

#NAME?

#NAME?

#NAME?

#NAME?
#NAME?
#NAME?
$ (1,287,750) $ (1,287,750) $ (1,287,750) $

$
$

3
722,925 $
1,686,825 $

$
$
$

3
62,781 $
507,946 $
507,946 $

4
506,048 $
1,180,778 $
4
31,390
507,946
-

#NAME?

#NAME?
(1,287,750) $

#NAME?
(1,287,750)

5
354,233 $
826,544 $

6
247,963 $
578,581 $

7
173,574
405,007

#NAME?

#NAME?

#NAME?

#NAME?

#NAME?

#NAME?
#NAME?
#NAME?
$ (1,287,750) $ (1,287,750) $ (1,287,750) $
#NAME?
#NAME?
#NAME?
$
(62,781) $
(31,390) $
$
$
(722,925) $
(506,048) $
(354,233) $
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
(1,287,750) $
#NAME?
$
(247,963) $
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
(1,287,750)
#NAME?
(173,574)
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
722,925 $
#NAME?

#NAME?
506,048 $
#NAME?

#NAME?
354,233 $
#NAME?

#NAME?
247,963 $
#NAME?

#NAME?
173,574
#NAME?

(507,946) $

(507,946) $

#NAME?

#NAME?

#NAME?

#NAME?

#NAME?

3
4,050,000 $
#NAME?

4
4,050,000 $
#NAME?

5
4,050,000 $
#NAME?

6
4,050,000 $
#NAME?

7
4,050,000
#NAME?

ayback Analysis

nt

Cumulative Revenues

3
#NAME?
#NAME?

ow Diagram

nses

Net Revenues

10

4
#NAME?
#NAME?

12

5
#NAME?
#NAME?

6
#NAME?
#NAME?

7
#NAME?
#NAME?

3
#NAME?

10

4
#NAME?

5
#NAME?

11

6
#NAME?

Cash Flow
6

10

11

7
#NAME?

MSI Balance sheet

Assets

Total current assets

Long-term investments
Capital assets

Liabilities

Long-term
debt

Shareholder's e qu ity

MSI Income Statement

Net revenue
Cost of goods sold
Gross Margin
Gross Margin (%)
Expenses

8
46%
8
#NAME?

9
46%
9
#NAME?

10
46%
10
#NAME?

Earnings (loss) before taxes

Income taxes
Net earnings (loss)
Net earnings (loss) per share
Shares outstanding (100% common stock

#NAME?

#NAME?

#NAME?

#NAME?
(1,287,750) $

#NAME?
(1,287,750) $

#NAME?
(1,287,750)

$
$

8
121,502 $
283,505 $

9
85,051 $
198,453 $

10
59,536
138,917

10

MSI Statement of cash flows

Cash flows from operating activities
Net income
Items not requiring an outlay of cash Ammortiz
Change in net working capital
Net cash provided by operating activities
Cash flows from financing activities
Net cash provided by financing activities
Cash flows from investing activities

Net cash used in investing activities

Effect of foreign exchange
Net increase in cash and cash equivalents

$
$
$

10

#NAME?

#NAME?

#NAME?

#NAME?
(1,287,750) $
#NAME?
$
(121,502) $
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
(1,287,750) $
#NAME?
$
(85,051) $
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
121,502 $
#NAME?

#NAME?
85,051 $
#NAME?

10

$
$
$

#NAME?

#NAME?
(1,287,750)
#NAME?
(59,536)
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?

#NAME?
59,536
#NAME?
36,125
#NAME?

8
4,050,000 $
#NAME?

9
4,050,000 $
#NAME?

8
#NAME?
#NAME?

9
#NAME?
#NAME?

10
4,050,000
#NAME?

10
#NAME?
#NAME?

8
#NAME?

9
#NAME?

10
#NAME?

Cash and cash equivalents

Short-term investments
Accounts receivable
Inventory

$ 3,860,000
$
544,000
$ 3,922,000
$ 5,959,000
$ 14,285,000

Total assets

$ 18,244,000
$ 32,529,000

Accounts payable
Current portion of long term debt
Total current liabilities

$
$
$

Total liabilities

$ 12,414,000
$ 18,102,000

Capital stock
Retained earnings
Paid-in capital
Total equity

$ 8,636,000
$ 4,159,000
$ 1,632,000
$ 14,427,000

3,578,000
2,110,000
5,688,000

$ 56,648,000
$ 31,447,000
$ 25,201,000
44%
Selling, General and Administrative
Research and Development
Ammortization
Interest
Total Expenses

ore taxes

per share
g (100% common stock)

$ 8,585,000
$ 3,566,000
$
862,000
$ 1,213,000
$ 14,226,000
$ 10,975,000
$ 2,854,000
$ 8,122,000
$
5.61
$ 1,448,000

MSI Historical Dividends

2011
2012
2013
2014
2015

MSI Stock Price and Divid

MSI Historical Share Pri
2-Jan-11
31-Dec-11
31-Dec-12
31-Dec-13
31-Dec-14
31-Dec-15
Market Share Error
Standard Deviation
Mean
Gross Margin Error
Standard Deviation
Mean

ash flows
erating activities

n outlay of cash Ammortization

by operating activities
ancing activities
by financing activities
vesting activities
Acquisition of capital assets
Acquisition of short term investments
vesting activities

h and cash equivalents

$
$
$
$
$
$

8,122,000
862,000
(255,000)
8,729,000
-

$ (2,444,000)
$
(121,000)
$ (2,565,000)
$
52,000
$ 6,216,000

Historical Dividends
$
0.40
$
0.43
$
0.48
$
0.52
$
0.58

SI Stock Price and Dividend History

MSI Historical Share Prices
$
6.00
$
6.53
$
7.10
$
7.76
$
8.55
$
9.40

ket Share Error

12.37%
1.06%

ss Margin Error
4.87%
1.44%

Product
A
B
C
D
E
F
G
H

Year
2011
2011
2012
2013
2013
2014
2014
2015

MSI Product Launch

Market share after 1 year
Projected
9.2%
13.5%
12.6%
22.0%
14.3%
19.1%
5.5%
17.2%

MSI Product Launch History

Market share after 1 year
Gross Margin after 1 year
Actual
Error
Projected
Actual Error
8.6%
(0.07)
44.0%
41.0%
(0.07)
14.0%
0.04
38.0%
36.0%
(0.05)
10.7%
(0.15)
39.0%
41.0%
0.05
25.2%
0.15
32.0%
33.0%
0.03
16.2%
0.13
46.0%
49.0%
0.07
15.9%
(0.17)
51.0%
52.0%
0.02
5.8%
0.05
45.0%
47.0%
0.04
18.9%
0.10
41.0%
42.0%
0.02

Inputs
Market Size
$
Sales Year 1
Market Share Year 1
Sales Growth Years 2-6
Gross Margin Year 1
Gross Margin Year 2
Gross Margin Year 3+
CCA Manufactring Line Rat
SR&ED Rate
Loan Duration (year)
Salvage Value(Assume)

Taxable Income
Tax rate
Debt ratio (initially)
Equity portion
Debt portion
Ce
Cc
Cr
Po
g
D1
f
Ke
Kr
ie
MARR
Ks
Id
Loan Interst
Debt ratio (after lunch)

$
$
$
$
$
$

38,000,000
#NAME?
14%
6%
#NAME?
44%
46%
30%
25%
4
0

10,975,000
26.0%
50.17%
2,381,992
2,398,008
4,780,000
2,381,992
2,398,008
9.40
9.75%
0.64
10%
17.27%
16.52%
17.27%
16.52%
8.35%
6.18%
6.18%
50.17%

Option A
Option B
Manufacturing line installa $
4,780,000 $
4,050,000
R&D expenses after lunch
5%
7.5%
Increase in SG&A After Lun
13%
15%
Year
Gross Margin
Year
Revenue

0
0%
0

1
#NAME?
1
#NAME?

2
44%
2
#NAME?

COGS

#NAME?

Option A
Manufacturing line installa $
R&D expenses after lunch
Increase in SG&A After Lunch
Depreciation Schedule (
CCA
UCC
$
Debt Repayment Schedul
In
PPn
Bn
$
Year
Income Statement
Revenues
Expenses
COGS
SG&A
R&D
Debt Interest
CCA
Taxable Income
SR&ED tax rate
Income Taxes
Net Income

MARR

(4,780,000)
#NAME?
#NAME?
$ (1,116,050) $ (1,116,050)
0
$
4,780,000 $
0
$
$
2,398,008 $

1
717,000 $
4,063,000 $

2
1,218,900
2,844,100

1
148,194 $
599,502 $
1,798,506 $

2
111,145
599,502
1,199,004

0
$

$
$
$
$
$
$
$
$
$

Year
Statement of Cash Flows
Operating Activities
Net Income
$
CCA
$
SR&ED
$
Investement Activities
Investement & Salv $
Disposal Tax Effect
Financing Activities
Debt Payments
$
Stock Issue Fee
$
Net Cash Flow
$

#NAME?

#NAME?

#NAME?

#NAME?
#NAME?
$ (1,116,050) $ (1,116,050)
#NAME?
#NAME?
$
(148,194) $
(111,145)
$
(717,000) $ (1,218,900)
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
717,000 $

#NAME?
1,218,900
#NAME?

(599,502) $

(599,502)

(4,780,000)

2,398,008 $
(264,666)
(2,646,658)
16.52%

#NAME?

#NAME?

NPW
IRR
Firm Market Value
Net Proceeds
$
Flotation Cost per Share $
Number of Shares
Total Flotation cost
$
Total Common Stock
$
New Stock Price
Discounted Payback Analysis
Year
Cumulative Investment
$
Cumulative Revenues
$

2,381,992
0.94
281,559
264,666
1,729,559

0
4,780,000 $
-

1
4,780,000 $
#NAME?

2
4,780,000
#NAME?

Discounted Payback Analysis

Cumulative Investment

Cumulative Revenues

$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-

Cash Flow Diagram

Year
Net Expenses
Net Revenues

0
$
$

1
#NAME?
#NAME?

2
#NAME?
#NAME?

Cash Flow Diagram

Net Expenses
$1
$1
$1
$1
$1
$1
$0
$0
$0
$0

Net Revenues

$1
$1
$1
$1
$0
$0
$0
$0
$-

Net Cash Flow

Year
Net Cash Flow

0
(2,646,658)

1
#NAME?

2
#NAME?

Net Cash Flow

$$(500,000)
$(1,000,000)
$(1,500,000)
$(2,000,000)
$(2,500,000)
$(3,000,000)

3
46%
3
#NAME?

4
46%
4
#NAME?

5
46%
5
#NAME?

6
46%
6
#NAME?

7
46%
7
#NAME?

#NAME?

#NAME?

#NAME?

#NAME?

#NAME?
#NAME?
#NAME?
$ (1,116,050) $ (1,116,050) $ (1,116,050) $

$
$

3
853,230 $
1,990,870 $

$
$
$

3
74,097 $
599,502 $
599,502 $

4
597,261 $
1,393,609 $
4
37,048
599,502
-

#NAME?

#NAME?
(1,116,050) $

#NAME?
(1,116,050)

5
418,083 $
975,526 $

6
292,658 $
682,868 $

7
204,861
478,008

#NAME?

#NAME?

#NAME?

#NAME?

#NAME?

#NAME?
#NAME?
#NAME?
$ (1,116,050) $ (1,116,050) $ (1,116,050) $
#NAME?
#NAME?
#NAME?
$
(74,097) $
(37,048) $
$
$
(853,230) $
(597,261) $
(418,083) $
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
(1,116,050) $
#NAME?
$
(292,658) $
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
(1,116,050)
#NAME?
(204,861)
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
853,230 $
#NAME?

#NAME?
597,261 $
#NAME?

#NAME?
418,083 $
#NAME?

#NAME?
292,658 $
#NAME?

#NAME?
204,861
#NAME?

(599,502) $

(599,502) $

#NAME?

#NAME?

#NAME?

#NAME?

#NAME?

3
4,780,000 $
#NAME?

4
4,780,000 $
#NAME?

5
4,780,000 $
#NAME?

6
4,780,000 $
#NAME?

7
4,780,000
#NAME?

ayback Analysis

nt

Cumulative Revenues

3
#NAME?
#NAME?

ow Diagram

nses

Net Revenues

10

4
#NAME?
#NAME?

12

5
#NAME?
#NAME?

6
#NAME?
#NAME?

7
#NAME?
#NAME?

3
#NAME?

10

4
#NAME?

5
#NAME?

11

6
#NAME?

Cash Flow
6

10

11

7
#NAME?

MSI Balance sheet

Assets

Total current assets

Long-term investments
Capital assets

Liabilities

Long-term
debt

Shareholder's e qu ity

MSI Income Statement

Net revenue
Cost of goods sold
Gross Margin
Gross Margin (%)
Expenses

8
46%
8
#NAME?

9
46%
9
#NAME?

10
46%
10
#NAME?

Earnings (loss) before taxes

Income taxes
Net earnings (loss)
Net earnings (loss) per share
Shares outstanding (100% common stock

#NAME?

#NAME?

#NAME?

#NAME?
(1,116,050) $

#NAME?
(1,116,050) $

#NAME?
(1,116,050)

$
$

8
143,402 $
334,606 $

9
100,382 $
234,224 $

10
70,267
163,957

10

MSI Statement of cash flows

Cash flows from operating activities
Net income
Items not requiring an outlay of cash Ammortiz
Change in net working capital
Net cash provided by operating activities
Cash flows from financing activities
Net cash provided by financing activities
Cash flows from investing activities

Net cash used in investing activities

Effect of foreign exchange
Net increase in cash and cash equivalents

$
$
$

10

#NAME?

#NAME?

#NAME?

#NAME?
(1,116,050) $
#NAME?
$
(143,402) $
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
(1,116,050) $
#NAME?
$
(100,382) $
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?
143,402 $
#NAME?

#NAME?
100,382 $
#NAME?

10

$
$
$

#NAME?

#NAME?
(1,116,050)
#NAME?
(70,267)
#NAME?
#NAME?
#NAME?
#NAME?

#NAME?

#NAME?
70,267
#NAME?
42,636
#NAME?

8
4,780,000 $
#NAME?

9
4,780,000 $
#NAME?

8
#NAME?
#NAME?

9
#NAME?
#NAME?

10
4,780,000
#NAME?

10
#NAME?
#NAME?

8
#NAME?

9
#NAME?

10
#NAME?

Cash and cash equivalents

Short-term investments
Accounts receivable
Inventory

$ 3,860,000
$
544,000
$ 3,922,000
$ 5,959,000
$ 14,285,000

Total assets

$ 18,244,000
$ 32,529,000

Accounts payable
Current portion of long term debt
Total current liabilities

$
$
$

Total liabilities

$ 12,414,000
$ 18,102,000

Capital stock
Retained earnings
Paid-in capital
Total equity

$ 8,636,000
$ 4,159,000
$ 1,632,000
$ 14,427,000

3,578,000
2,110,000
5,688,000

$ 56,648,000
$ 31,447,000
$ 25,201,000
44%
Selling, General and Administrative
Research and Development
Ammortization
Interest
Total Expenses

ore taxes

per share
g (100% common stock)

$ 8,585,000
$ 3,566,000
$
862,000
$ 1,213,000
$ 14,226,000
$ 10,975,000
$ 2,854,000
$ 8,122,000
$
5.61
$ 1,448,000

MSI Historical Dividends

2011
2012
2013
2014
2015

MSI Stock Price and Dividend

MSI Historical Share Prices
2-Jan-11
31-Dec-11
31-Dec-12
31-Dec-13
31-Dec-14
31-Dec-15
Market Share Error
Standard Deviation
Mean
Gross Margin Error
Standard Deviation
Mean

ash flows
erating activities

n outlay of cash Ammortization

by operating activities
ancing activities
by financing activities
vesting activities
Acquisition of capital assets
Acquisition of short term investments
vesting activities

h and cash equivalents

$
$
$
$
$
$

8,122,000
862,000
(255,000)
8,729,000
-

$ (2,444,000)
$
(121,000)
$ (2,565,000)
$
52,000
$ 6,216,000

MSI Historical Dividends

$ 0.40
$ 0.43
$ 0.48
$ 0.52
$ 0.58

Stock Price and Dividend History

SI Historical Share Prices
$ 6.00
$ 6.53
$ 7.10
$ 7.76
$ 8.55
$ 9.40

t Share Error
12.37%
1.06%
Margin Error
4.87%
1.44%

Product
A
B
C
D
E
F
G
H

Year
2011
2011
2012
2013
2013
2014
2014
2015

MSI Product Launch Hist

Market share after 1 year
Projected
Actual
9.2%
8.6%
13.5%
14.0%
12.6%
10.7%
22.0%
25.2%
14.3%
16.2%
19.1%
15.9%
5.5%
5.8%
17.2%
18.9%

oduct Launch History

re after 1 year
Gross Margin after 1 year
Error
Projected
Actual Error
(0.07)
44.0%
41.0%
(0.07)
0.04
38.0%
36.0%
(0.05)
(0.15)
39.0%
41.0%
0.05
0.15
32.0%
33.0%
0.03
0.13
46.0%
49.0%
0.07
(0.17)
51.0%
52.0%
0.02
0.05
45.0%
47.0%
0.04
0.10
41.0%
42.0%
0.02