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Start Up Costs

Cost per Unit No. of Units Total Cost


Legal Fees
Cost of Incorporating: $500.00
Creating Disclaimers/ Patents $5,000.00
Licensing and Permits $7,000.00

Machinery
Answering Machine $70.00 1 $70.00
Manufacturing Machinery $60,000.00 6 $360,000.00
Packaging Machinery $20,000.00 1 $20,000.00

Hardware Development
Prototype Design $504,530.00
Cost per Month Time
Office Setup and Rental
Space Rental (research space) $800.00 4 months $3,200.00
Equipment and Fixtures $270,000.00
Decoration and Remodelling $72,700.00
Installations $12,000.00
Deposits with public utilities $2,500.00
Internet Usage (during development) $40.00 4 months $160.00
Phone Usage (during development) $30.00 4 months $120.00
Postage (during development) $25.00 4 months $100.00
Utilities (during development) $60.00 4 months $240.00
Insurance (during development) $50.00 4 months $200.00
Office Supplies (during development) $230.00
Misc. $450.00
Salaries (during development) $69,166.67 4 months $276,666.67
Worker Health Care Benefits (during development) $840.00 4 months $3,360.00
Product Testing $1,500.00
Pre Release Advertising $120,000.00 2 months $240,000.00

Software Development
Keyboard and Mouse Drivers $12,000.00
Image Processing Software $11,000.00
OCR Software $8,000.00
Barcode Scanner Software $6,000.00
Business Card Scanner Software $2,500.00

Graphic Designer
Box and Manual Design $950.00
Website Setup $2,000.00

Startup Inventory $1,200,000.00

Unanticipated expenses $12,000.00

Total Start Up Costs $3,034,976.67


180000
10000
Investments

Invested Amount
Personal Investments
Ashley Penna $15,000.00
Chris Munshaw $23,000.00
Diana Ognko $12,000.00
Kevin Lockwood $25,000.00
Peter Chen $22,000.00
Raul Fernandes $20,000.00
Tilson Chung $10,000.00

Love Money
Mr Dad Lockwood $75,000.00

Angel Investors $1,200,000.00

Venture Capitalists $8,700,000.00

Total Investment $10,102,000.00


Assumptions
Percentage of units sold to individuals 25%
Percentage of units sold without scanner 95%

Selling Price to Individuals without Scanner $149.00


Selling Price to Companies without Scanner $134.00

Selling Price to Individuals with Scanner $649.00


Selling Price to Companies with Scanner $634.00

Separate Scanner attachment $569.00

Probability of Repairs/Replacement needed 5.00%

Health Care Cost / person $70.00

Depreciation Rate 5%

Average Cost of Repairs $45.00

Percentage of Out of Warranty Repairs 0.30%


Parts Costs
Part Description Price
Laser Light $10.91 (price break price at 100)
Keyboard and Mouse Projection Lenses $4.42
Infrared Sensors $17.27 (custom made, price break price at 250)
Infrared Emitters $0.27 (price break price at 5000)
Flash Memory Card $5.61 (price break price at 1000)
A/D converter $0.75 (price break price at 5000)
Image Processor Chip $7.62 (price break price at 250)
Data Transmitter Chip $2.80 (price break price at 1000)
Battery Management Chip $0.95 (price break price at 2500)
Master Processing Chip $7.70 (price break price at 1000)
Rechargeable Batteries $4.50 (price break price at 5000)
Recharging Circuitry $1.35
Cables $0.70
Bluetooth Connectivity $2.55 (price break price at 100)
Power Adaptor $2.45 (price break at 5000)
Blank CDs $0.25
Digital Camera $14.35 (price break at 5000)
LCD Display $23.73 (price break at 5000)
Plastic Casing $0.75
Circuit Boards $0.45
Product Packaging $0.30

Scanner (Optional) $430.75

Total Parts Costs (unit without scanner) $109.68

Total Parts Costs (unit with scanner) $540.43


Parts Costs
Part Number Supplier
Laser Module 650nm Class IIIA Sharp

Sensor IC MTRX Touch64Key 44TQFP Quantum


Emitter IR 940nm HO 6.0Mw SMD Sharp
IC Flash Mem 3V 120 MB 56-TSOP Intel
IC 10Bit 164KSPS ADC P/O 24-SOIC Texas Instruments
IC DGTL ImageProc 128LaminateCSP National SemiConductor
IC PANELBUS DVI RECEIVER 100TQFP Texas Instruments
IC Controller Lithium 4.2V 8-MSOP Texas Instruments
IC MPU W/DMA 16MHz 144-PQFP Motorola
Lithium 6V rechargeable battery Panasonic

IC Bluetooth LNA/PA 2.4GHz 20MLP Atmel


120VAC 60Hz 50mA Panasonic *******

LCD 1.6" TFT Mod MTSC/PAL Optrex America


WAY LESS**********

waiting on price quote******** known to be less in high volume


Productio
Jan-05 Feb-05 Mar-05
Total Number of Virtual Desktop Units Produced 6000 6000 6000
Without Scanner 5700 5700 5700
With Scanner 300 300 300
Scanner Units Produced 312 312 312

Inven
Virtual Desktop Units 6000 11850 17600
Scanner Units 312 616 917
Total Worth $792,474.00 $1,565,050.00 $2,325,365.75
Production (Year 1)
Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05
6000 6000 6000 6000 6000 15000
5700 5700 5700 5700 5700 14250
300 300 300 300 300 750
312 312 312 312 312 780

Inventory (Year 1)
23000 28000 31800 33800 32800 32800
1202 1469 1682 1814 1811 1916
$3,040,401.50 $3,703,811.75 $4,212,345.50 $4,488,564.50 $4,377,592.25 $4,422,821.00
Oct-05 Nov-05 Dec-05 Total
15000 15000 15000 108000
14250 14250 14250 102600
750 750 750 5400
780 780 780 5616

29800 22800 8000


1886 1676 1115
$4,080,858.50 $3,222,641.00 $1,357,726.25
Product Development Stage

Payment per
Position position/year No. of Positions

General and Administrative


CEO $150,000.00 1
Directors $120,000.00 0
HR Manager $80,000.00 1
Financial Analyst $80,000.00 0
Accountants $50,000.00 1
Secretary $45,000.00 1
Customer Service (Phone Support) $35,000.00 0
Total G&A Salaries

Sales and Distribution


Distribution Manager $60,000.00 0
Promotional Manager $60,000.00 0
Promotional Director $50,000.00 2
Website Developer/Networks Maintenance $30,000.00 1
Total S&D Salaries

Research and Development


Research and Development Manager $120,000.00 1
Researcher and Developers $100,000.00 3
Software Development Manager $80,000.00 0
Software Programmer (driver & s/w updates) $75,000.00 1
Total R&D Salaries

Manufacturing
Technical Manager $100,000.00 0
Technicians $60,000.00 0
Quality Control Personnel $35,000.00 0
Repair Technician $60,000.00 0
Packaging Personnel $38,400.00 0
Mechanic (Machine Maintenance) $60,000.00 0
Total Manufacturing Salaries

Bonus Pay

Total Cost in Salaries

Total Number of Employees


Sala
duct Development Stage Jan-05 Feb-05 Mar-05

Salary per No. of Salary per No. of Salary per No. of Salary per
division/mth Positions division/mth Positions division/mth Positions division/mth

$12,500.00 1 $12,500.00 1 $12,500.00 1 $12,500.00


$0.00 0 $0.00 0 $0.00 0 $0.00
$6,666.67 1 $6,666.67 1 $6,666.67 1 $6,666.67
$0.00 2 $13,333.33 2 $13,333.33 2 $13,333.33
$4,166.67 2 $8,333.33 2 $8,333.33 2 $8,333.33
$3,750.00 1 $3,750.00 1 $3,750.00 1 $3,750.00
$0.00 2 $5,833.33 2 $5,833.33 3 $8,750.00
$27,083.33 $50,416.67 $50,416.67 $53,333.33

$0.00 1 $5,000.00 1 $5,000.00 1 $5,000.00


$0.00 1 $5,000.00 1 $5,000.00 1 $5,000.00
$8,333.33 5 $20,833.33 5 $20,833.33 5 $20,833.33
$2,500.00 1 $2,500.00 1 $2,500.00 1 $2,500.00
$10,833.33 $33,333.33 $33,333.33 $33,333.33

$10,000.00 1 $10,000.00 1 $10,000.00 1 $10,000.00


$25,000.00 3 $25,000.00 3 $25,000.00 3 $25,000.00
$0.00 0 $0.00 0 $0.00 0 $0.00
$6,250.00 1 $6,250.00 1 $6,250.00 1 $6,250.00
$31,250.00 $31,250.00 $31,250.00 $31,250.00

$0.00 1 $8,333.33 1 $8,333.33 1 $8,333.33


$0.00 4 $20,000.00 4 $20,000.00 4 $20,000.00
$0.00 2 $5,833.33 2 $5,833.33 2 $5,833.33
$0.00 1 $5,000.00 1 $5,000.00 2 $10,000.00
$0.00 3 $9,600.00 3 $9,600.00 3 $9,600.00
$0.00 1 $5,000.00 1 $5,000.00 1 $5,000.00
$0.00 $53,766.67 $53,766.67 $58,766.67

$0.00 $20,500.00 $20,500.00 $21,200.00

$69,166.67 $189,266.67 $189,266.67 $197,883.33

12 34 34 36
Salaries (Year 1)
Apr-05 May-05 Jun-05 Jul-05

No. of Salary per No. of Salary per No. of Salary per No. of
Positions division/mth Positions division/mth Positions division/mth Positions

1 $12,500.00 1 $12,500.00 1 $12,500.00 1


0 $0.00 0 $0.00 0 $0.00 0
1 $6,666.67 1 $6,666.67 1 $6,666.67 1
2 $13,333.33 2 $13,333.33 2 $13,333.33 2
2 $8,333.33 2 $8,333.33 2 $8,333.33 2
1 $3,750.00 1 $3,750.00 1 $3,750.00 1
3 $8,750.00 3 $8,750.00 4 $11,666.67 4
$53,333.33 $53,333.33 $56,250.00

1 $5,000.00 1 $5,000.00 1 $5,000.00 1


1 $5,000.00 1 $5,000.00 1 $5,000.00 1
5 $20,833.33 5 $20,833.33 5 $20,833.33 5
1 $2,500.00 1 $2,500.00 1 $2,500.00 1
$33,333.33 $33,333.33 $33,333.33

1 $10,000.00 1 $10,000.00 1 $10,000.00 1


3 $25,000.00 3 $25,000.00 3 $25,000.00 3
0 $0.00 0 $0.00 0 $0.00 0
1 $6,250.00 1 $6,250.00 1 $6,250.00 1
$31,250.00 $31,250.00 $31,250.00

1 $8,333.33 1 $8,333.33 1 $8,333.33 1


4 $20,000.00 4 $20,000.00 4 $20,000.00 4
2 $5,833.33 2 $5,833.33 2 $5,833.33 2
2 $10,000.00 4 $20,000.00 4 $20,000.00 8
3 $9,600.00 3 $9,600.00 3 $9,600.00 3
1 $5,000.00 1 $5,000.00 2 $10,000.00 2
$58,766.67 $68,766.67 $73,766.67

$21,200.00 $22,600.00 $22,600.00

$197,883.33 $209,283.33 $217,200.00

36 38 40
Jul-05 Aug-05 Sep-05 Oct-05

Salary per No. of Salary per No. of Salary per No. of Salary per
division/mth Positions division/mth Positions division/mth Positions division/mth

$12,500.00 1 $12,500.00 1 $12,500.00 1 $12,500.00


$0.00 0 $0.00 0 $0.00 0 $0.00
$6,666.67 1 $6,666.67 1 $6,666.67 1 $6,666.67
$13,333.33 2 $13,333.33 2 $13,333.33 2 $13,333.33
$8,333.33 2 $8,333.33 2 $8,333.33 2 $8,333.33
$3,750.00 1 $3,750.00 1 $3,750.00 1 $3,750.00
$11,666.67 4 $11,666.67 5 $14,583.33 5 $14,583.33
$56,250.00 $56,250.00 $59,166.67 $59,166.67

$5,000.00 1 $5,000.00 1 $5,000.00 1 $5,000.00


$5,000.00 1 $5,000.00 1 $5,000.00 1 $5,000.00
$20,833.33 5 $20,833.33 5 $20,833.33 5 $20,833.33
$2,500.00 1 $2,500.00 1 $2,500.00 1 $2,500.00
$33,333.33 $33,333.33 $33,333.33 $33,333.33

$10,000.00 1 $10,000.00 1 $10,000.00 1 $10,000.00


$25,000.00 3 $25,000.00 3 $25,000.00 3 $25,000.00
$0.00 0 $0.00 0 $0.00 0 $0.00
$6,250.00 2 $12,500.00 2 $12,500.00 2 $12,500.00
$31,250.00 $37,500.00 $37,500.00 $37,500.00

$8,333.33 1 $8,333.33 1 $8,333.33 1 $8,333.33


$20,000.00 7 $35,000.00 7 $35,000.00 7 $35,000.00
$5,833.33 4 $11,666.67 4 $11,666.67 4 $11,666.67
$40,000.00 8 $40,000.00 8 $40,000.00 10 $50,000.00
$9,600.00 6 $19,200.00 6 $19,200.00 6 $19,200.00
$10,000.00 2 $10,000.00 2 $10,000.00 2 $10,000.00
$93,766.67 $124,200.00 $124,200.00 $134,200.00

$25,400.00 $31,000.00 $31,000.00 $32,400.00

$240,000.00 $282,283.33 $285,200.00 $296,600.00

44 53 54 56
Nov-05 Dec-05 Total

No. of Salary per No. of Salary per


Positions division/mth Positions division/mth

1 $12,500.00 1 $12,500.00
0 $0.00 0 $0.00
1 $6,666.67 1 $6,666.67
2 $13,333.33 2 $13,333.33
2 $8,333.33 2 $8,333.33
1 $3,750.00 1 $3,750.00
5 $14,583.33 5 $14,583.33
$59,166.67 $59,166.67 $693,333.33

1 $5,000.00 1 $5,000.00
1 $5,000.00 1 $5,000.00
5 $20,833.33 5 $20,833.33
1 $2,500.00 1 $2,500.00
$33,333.33 $33,333.33 $410,833.33

1 $10,000.00 1 $10,000.00
3 $25,000.00 3 $25,000.00
0 $0.00 0 $0.00
2 $12,500.00 2 $12,500.00
$37,500.00 $37,500.00 $437,500.00

1 $8,333.33 1 $8,333.33
7 $35,000.00 7 $35,000.00
4 $11,666.67 4 $11,666.67
10 $50,000.00 12 $60,000.00
6 $19,200.00 6 $19,200.00
2 $10,000.00 2 $10,000.00
$134,200.00 $144,200.00 $1,122,366.67

$32,400.00 $33,800.00 $314,600.00

$296,600.00 $308,000.00 $2,978,633.33

56 58
$1,856,266.67
Income Statement (First
Jan-05 Feb-05 Mar-05 Apr-05 May-05
Total Number of Units Sold 0 150 250 600 1000
Without Scanner 0 142 238 570 950
Individuals 0 35 59 142 237
Companies 0 107 179 428 713
With Scanner 0 8 12 30 50
Individuals 0 1 3 7 12
Companies 0 7 9 23 38
Scanner Units Sold Seperately 0 0 1 3 5
Out of Warranty Repairs 0 0 0 0 0
Gross Revenue $0.00 $24,640.00 $40,999.00 $99,342.00 $165,580.00

Direct Costs
Material Expenses $0.00 $19,898.00 $33,019.75 $80,022.75 $133,371.25
Distribution Costs $0.00 $0.00 $0.00 $0.00 $0.00
Total Direct Costs $0.00 $19,898.00 $33,019.75 $80,022.75 $133,371.25

GROSS MARGIN $0.00 $4,742.00 $7,979.25 $19,319.25 $32,208.75

Operating Expenses
General and Administrative
Salaries $50,416.67 $50,416.67 $53,333.33 $53,333.33 $53,333.33
Insurance $2,450.00 $2,450.00 $2,450.00 $2,450.00 $2,450.00
Office Supplies $390.00 $390.00 $390.00 $390.00 $390.00
Legal Expenses $400.00 $0.00 $0.00 $0.00 $0.00

Research and Development


Salaries $31,250.00 $31,250.00 $31,250.00 $31,250.00 $31,250.00

Sales and Distribution


Salaries $33,333.33 $33,333.33 $33,333.33 $33,333.33 $33,333.33
Advertisements $150,000.00 $150,000.00 $150,000.00 $140,000.00 $135,000.00
Tech fairs $25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00
Promotional Gifts $5,499.00 $5,499.00 $5,499.00 $5,499.00 $5,499.00

Manufacturing
Salaries $53,766.67 $53,766.67 $58,766.67 $58,766.67 $68,766.67
Production Space Rental $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00

Employee Bonuses $20,500.00 $20,500.00 $21,200.00 $21,200.00 $22,600.00


Health Coverage $2,380.00 $2,380.00 $2,520.00 $2,520.00 $2,660.00
Office Space Rental $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00
Storage Space Rental $500.00 $700.00 $900.00 $900.00 $900.00
Internet Charges $40.00 $40.00 $40.00 $40.00 $40.00
Phone Charges $300.00 $300.00 $300.00 $300.00 $300.00
Postage $65.00 $65.00 $65.00 $65.00 $65.00
Utilities $500.00 $500.00 $500.00 $500.00 $500.00
Transport $1,500.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00
Building Cleanup/Maintenance $450.00 $450.00 $450.00 $450.00 $450.00
Machine Maintenance $400.00 $400.00 $400.00 $400.00 $400.00
Warranty Replacement/Repair $0.00 $150.00 $250.00 $600.00 $1,000.00
Total Operating Expenses $385,140.67 $385,090.67 $394,147.33 $384,497.33 $391,437.33

EBIDTA -$385,140.67 -$380,348.67 -$386,168.08 -$365,178.08 -$359,228.58


Interest $0.00 $0.00 $0.00 $0.00 $0.00
Depreciation $3,061.54 $3,061.54 $3,061.54 $3,061.54 $3,061.54
Dividend Payments $0.00 $0.00 $0.00 $0.00 $0.00
Net Profit -$388,202.21 -$383,410.21 -$389,229.63 -$368,239.63 -$362,290.13
Taxes $0.00 $0.00 $0.00 $0.00 $0.00
Net Profit After Taxes -$388,202.21 -$383,410.21 -$389,229.63 -$368,239.63 -$362,290.13
Statement (First Year)
Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05
2200 4000 7000 15000 18000 22000 29800
2090 3800 6650 14250 17100 20900 28310
522 950 1662 3562 4275 5225 7077
1568 2850 4988 10688 12825 15675 21233
110 200 350 750 900 1100 1490
27 50 87 187 225 275 372
83 150 263 563 675 825 1118
11 20 35 75 90 110 149
0 0 0 0 0 0 0
$364,294.00 $662,380.00 $1,159,150.00 $2,483,910.00 $2,980,710.00 $3,643,090.00 $4,934,716.00

$293,416.75 $533,485.00 $933,598.75 $2,000,568.75 $2,400,682.50 $2,934,167.50 $3,974,463.25


$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$293,416.75 $533,485.00 $933,598.75 $2,000,568.75 $2,400,682.50 $2,934,167.50 $3,974,463.25

$70,877.25 $128,895.00 $225,551.25 $483,341.25 $580,027.50 $708,922.50 $960,252.75

$56,250.00 $56,250.00 $56,250.00 $59,166.67 $59,166.67 $59,166.67 $59,166.67


$2,450.00 $2,450.00 $2,450.00 $2,450.00 $2,450.00 $2,450.00 $2,450.00
$390.00 $390.00 $390.00 $390.00 $390.00 $390.00 $390.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

$31,250.00 $31,250.00 $37,500.00 $37,500.00 $37,500.00 $37,500.00 $37,500.00

$33,333.33 $33,333.33 $33,333.33 $33,333.33 $33,333.33 $33,333.33 $33,333.33


$130,000.00 $120,000.00 $120,000.00 $120,000.00 $140,000.00 $160,000.00 $160,000.00
$25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00
$5,499.00 $5,499.00 $5,499.00 $5,499.00 $5,499.00 $5,499.00 $5,499.00

$73,766.67 $93,766.67 $124,200.00 $124,200.00 $134,200.00 $134,200.00 $144,200.00


$4,000.00 $4,000.00 $8,000.00 $8,000.00 $8,000.00 $8,000.00 $8,000.00

$22,600.00 $25,400.00 $31,000.00 $31,000.00 $32,400.00 $32,400.00 $33,800.00


$2,800.00 $3,080.00 $3,710.00 $3,780.00 $3,920.00 $3,920.00 $3,422.00
$2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00
$1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,200.00 $1,200.00 $1,200.00
$40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00
$300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00
$65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00
$500.00 $500.00 $600.00 $800.00 $800.00 $800.00 $800.00
$1,500.00 $1,500.00 $1,500.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00
$450.00 $450.00 $500.00 $500.00 $500.00 $500.00 $500.00
$400.00 $400.00 $700.00 $700.00 $700.00 $700.00 $700.00
$2,200.00 $4,000.00 $7,000.00 $15,000.00 $18,000.00 $22,000.00 $29,800.00
$395,794.00 $410,674.00 $461,037.33 $474,474.00 $509,214.00 $533,214.00 $551,916.00

-$324,916.75 -$281,779.00 -$235,486.08 $8,867.25 $70,813.50 $175,708.50 $408,336.75


$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$3,061.54 $3,061.54 $4,103.21 $4,103.21 $4,103.21 $4,103.21 $4,103.21
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
-$327,978.29 -$284,840.54 -$239,589.29 $4,764.04 $66,710.29 $171,605.29 $404,233.54
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
-$327,978.29 -$284,840.54 -$239,589.29 $4,764.04 $66,710.29 $171,605.29 $404,233.54
Total
100000
95000
23746
71254
5000
1246
3754
499
0
$16,558,811.00

$13,336,694.25
$0.00
$13,336,694.25

$3,222,116.75

$666,250.00
$29,400.00
$4,680.00
$400.00

$406,250.00

$400,000.00
$1,675,000.00
$300,000.00
$65,988.00

$1,122,366.67
$68,000.00

$314,600.00
$37,092.00
$24,000.00
$11,500.00
$480.00
$3,600.00
$780.00
$7,300.00
$27,000.00
$5,650.00
$6,300.00
$100,000.00
$5,276,636.67

-$2,054,519.92
$0.00
$41,946.83
$0.00
-$2,096,466.75
$0.00
-$2,096,466.75
Balance Sh
Opening Jan-05 Feb-05 Mar-05
ASSETS
Start up Assets - Physical Assets
Physical Assets $734,770.00 $734,770.00 $734,770.00 $734,770.00
Depreciation $0.00 $3,061.54 $6,123.08 $9,184.63
Other Start up Assets $574,430.00 $574,430.00 $574,430.00 $574,430.00
Total Start up Physical Assets $1,309,200.00 $1,306,138.46 $1,303,076.92 $1,300,015.38
Current Assets
Inventory $0.00 $792,474.00 $1,565,050.00 $2,324,504.25
Cash in Hand $7,483,600.00 $6,302,923.79 $5,146,937.58 $3,998,253.71
Accounts Receivable $0.00 $0.00 $0.00 $0.00
Total Current Assets $7,483,600.00 $7,095,397.79 $6,711,987.58 $6,322,757.96
TOTAL ASSETS $8,792,800.00 $8,401,536.25 $8,015,064.50 $7,622,773.33

LIABILITIES AND OWNER'S EQUITY


Current Liabilities
Accounts Payable $0.00 $0.00 $0.00 $0.00
Taxes Owing $0.00 $0.00 $0.00 $0.00
Loan #1 - Principle Payment $0.00 $0.00 $0.00 $0.00
Loan #2 - Principle Payment $0.00 $0.00 $0.00 $0.00
Total Current Liabilities $0.00 $0.00 $0.00 $0.00
Long Term Debt
Loan Lockwood - Outstanding Debt $75,000.00 $75,000.00 $75,000.00 $75,000.00
Loan RBC - Outstanding Debt $0.00 $0.00 $0.00 $0.00
Total Long Term Debt $75,000.00 $75,000.00 $75,000.00 $75,000.00
Total Liabilities $75,000.00 $75,000.00 $75,000.00 $75,000.00
Equity
Owner's Contribution $127,000.00 $127,000.00 $127,000.00 $127,000.00
Angel's Contribution $1,200,000.00 $1,200,000.00 $1,200,000.00 $1,200,000.00
Venture Capitalist Contribution $8,700,000.00 $8,700,000.00 $8,700,000.00 $8,700,000.00
Net Earning/Loss $0.00 -$388,202.21 -$383,410.21 -$389,229.63
Retained Earning $0.00 $0.00 -$388,202.21 -$771,612.42
Total Equity $10,027,000.00 $9,638,797.79 $9,255,387.58 $8,866,157.96
TOTAL LIABILITIES AND EQUITY $10,102,000.00 $9,713,797.79 $9,330,387.58 $8,941,157.96
Balance Sheet (Year 1)
Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05

$734,770.00 $734,770.00 $734,770.00 $734,770.00 $984,770.00 $984,770.00


$12,246.17 $15,307.71 $18,369.25 $21,430.79 $25,534.00 $29,637.21
$574,430.00 $574,430.00 $574,430.00 $574,430.00 $574,430.00 $574,430.00
$1,296,953.83 $1,293,892.29 $1,290,830.75 $1,287,769.21 $1,533,666.00 $1,529,562.79

$3,036,955.50 $3,696,058.25 $4,195,115.50 $4,454,104.50 $4,312,979.75 $4,293,596.00


$2,917,562.83 $1,896,169.96 $1,069,134.42 $525,304.88 -$73,159.67 -$49,011.88
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$5,954,518.33 $5,592,228.21 $5,264,249.92 $4,979,409.38 $4,239,820.08 $4,244,584.13
$7,251,472.17 $6,886,120.50 $6,555,080.67 $6,267,178.58 $5,773,486.08 $5,774,146.92

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00


$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00

$75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00


$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00
$75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00

$127,000.00 $127,000.00 $127,000.00 $127,000.00 $127,000.00 $127,000.00


$1,200,000.00 $1,200,000.00 $1,200,000.00 $1,200,000.00 $1,200,000.00 $1,200,000.00
$8,700,000.00 $8,700,000.00 $8,700,000.00 $8,700,000.00 $8,700,000.00 $8,700,000.00
-$368,239.63 -$362,290.13 -$327,978.29 -$284,840.54 -$239,589.29 $4,764.04
-$1,160,842.04 -$1,529,081.67 -$1,891,371.79 -$2,219,350.08 -$2,504,190.63 -$2,743,779.92
$8,497,918.33 $8,135,628.21 $7,807,649.92 $7,522,809.38 $7,283,220.08 $7,287,984.13
$8,572,918.33 $8,210,628.21 $7,882,649.92 $7,597,809.38 $7,358,220.08 $7,362,984.13
Oct-05 Nov-05 Dec-05

$984,770.00 $984,770.00 $984,770.00


$33,740.42 $37,843.63 $41,946.83
$574,430.00 $574,430.00 $574,430.00
$1,525,459.58 $1,521,356.38 $1,517,253.17

$3,874,098.50 $2,921,116.00 $927,837.75


$437,195.92 $1,561,783.71 $3,959,295.50
$0.00 $0.00 $0.00
$4,311,294.42 $4,482,899.71 $4,887,133.25
$5,836,754.00 $6,004,256.08 $6,404,386.42

$0.00 $0.00 $0.00


$0.00 $0.00 $0.00
$0.00 $0.00 $0.00
$0.00 $0.00 $0.00
$0.00 $0.00 $0.00

$75,000.00 $75,000.00 $75,000.00


$0.00 $0.00 $0.00
$75,000.00 $75,000.00 $75,000.00
$75,000.00 $75,000.00 $75,000.00

$127,000.00 $127,000.00 $127,000.00


$1,200,000.00 $1,200,000.00 $1,200,000.00
$8,700,000.00 $8,700,000.00 $8,700,000.00
$66,710.29 $171,605.29 $404,233.54
-$2,739,015.88 -$2,672,305.58 -$2,500,700.29
$7,354,694.42 $7,526,299.71 $7,930,533.25
$7,429,694.42 $7,601,299.71 $8,005,533.25
C
Opening Jan-05
ASSUMPTIONS
Total Number of Complete Units Sold 0 units
Individuals - % of Sales 25%
Virtual Desktop without Scanner - % of sales 23.75%
Virtual Desktop with Scanner - % of sales 1.25%
Companies - % of Sales 75%
Virtual Desktop without Scanner - % of sales 71.25%
Virtual Desktop with Scanner - % of sales 3.75%

Scanner Units Sold Seperately (% of individual units sold) 0.00%

CASH INFLOW Avg Price


Cash Sale - VD w/o Scanner to Individuals $149.00 $0.00
Cash Sale - VD w/ Scanner to Individuals $649.00 $0.00
Cash Sale - VD w/o Scanner to Companies $134.00 $0.00
Cash Sale - VD w/ Scanner to Companies $634.00 $0.00
Cash Sale - Scanner Attachment $569.00 $0.00
Total Cash Sales $0.00
Sales - Accounts Receivable $0.00 $0.00
Owner's Investment $0.00 $0.00
Loan #1 - Source Name $0.00 $0.00
Loan #2 - Source Name $0.00 $0.00
Total Other Cash Inflow $0.00 $0.00
TOTAL CASH INFLOW $0.00 $0.00

CASH OUTFLOW
Direct Costs Avg Cost
Purchase Costs
Material Purchases - Virtual Desktop Components $109.68 6000 units
Material Purchases - Scanner Attachment $430.75 312 units
Total Purchase Costs $792,474.00
Distribution Costs $0.00
Total Direct Costs $792,474.00

Operating Expenses $525,776.67 $385,140.67

Capital Investments
Setup/Production Expansion Expenses $1,301,250.00 $0.00

Other Disbursements
Business Start up Costs $7,950.00
Income Tax $0.00 $0.00
Divident Payments $0.00 $0.00
Loan #1 Interest Payments $0.00 $0.00
Loan #1 Principle Payments $0.00 $0.00
Loan #2 Interest Payments $0.00 $0.00
Loan #2 Principle Payments $0.00 $0.00
Total Other Disbursements $7,950.00 $0.00
TOTAL CASH OUTFLOW $1,834,976.67 $1,177,614.67

NET CASH FLOW -$1,834,976.67 -$1,177,614.67

Cash From Previous Period $0.00 -$1,834,976.67

Cumulative Cash Flow -$1,834,976.67 -$3,012,591.33


Cash Flow Statement (Year 1)
Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05

150 units 250 units 600 units 1000 units 2200 units 4000 units
25% 25% 25% 25% 25% 25%
23.75% 23.75% 23.75% 23.75% 23.75% 23.75%
1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
75% 75% 75% 75% 75% 75%
71.25% 71.25% 75% 75% 75% 75%
3.75% 3.75% 71.25% 71.25% 71.25% 71.25%

0.00% 0.50% 0.50% 0.50% 0.50% 0.50%

$5,215.00 $8,791.00 $21,158.00 $35,313.00 $77,778.00 $141,550.00


$649.00 $1,947.00 $4,543.00 $7,788.00 $17,523.00 $32,450.00
$14,338.00 $23,986.00 $57,352.00 $95,542.00 $210,112.00 $381,900.00
$4,438.00 $5,706.00 $14,582.00 $24,092.00 $52,622.00 $95,100.00
$0.00 $569.00 $1,707.00 $2,845.00 $6,259.00 $11,380.00
$24,640.00 $40,999.00 $99,342.00 $165,580.00 $364,294.00 $662,380.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$24,640.00 $40,999.00 $99,342.00 $165,580.00 $364,294.00 $662,380.00

6000 units 6000 units 6000 units 6000 units 6000 units 6000 units
312 units 312 units 312 units 312 units 312 units 312 units
$792,474.00 $792,474.00 $792,474.00 $792,474.00 $792,474.00 $792,474.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$792,474.00 $792,474.00 $792,474.00 $792,474.00 $792,474.00 $792,474.00

$385,090.67 $394,147.33 $384,497.33 $391,437.33 $395,794.00 $410,674.00

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00


$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$1,177,564.67 $1,186,621.33 $1,176,971.33 $1,183,911.33 $1,188,268.00 $1,203,148.00

-$1,152,924.67 -$1,145,622.33 -$1,077,629.33 -$1,018,331.33 -$823,974.00 -$540,768.00

-$3,012,591.33 -$4,165,516.00 -$5,311,138.33 -$6,388,767.67 -$7,407,099.00 -$8,231,073.00

-$4,165,516.00 -$5,311,138.33 -$6,388,767.67 -$7,407,099.00 -$8,231,073.00 -$8,771,841.00


Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Total

7000 units 15000 units 18000 units 22000 units 29800 units 100000 units
25% 25% 25% 25% 25%
23.75% 23.75% 23.75% 23.75% 23.75%
1.25% 1.25% 1.25% 1.25% 1.25%
75% 75% 75% 75% 75%
75% 75% 75% 75% 75%
71.25% 71.25% 71.25% 71.25% 71.25%

0.50% 0.50% 0.50% 0.50% 0.50%

$247,638.00 $530,738.00 $636,975.00 $778,525.00 $1,054,473.00 $3,538,154.00


$56,463.00 $121,363.00 $146,025.00 $178,475.00 $241,428.00 $808,654.00
$668,392.00 $1,432,192.00 $1,718,550.00 $2,100,450.00 $2,845,222.00 $9,548,036.00
$166,742.00 $356,942.00 $427,950.00 $523,050.00 $708,812.00 $2,380,036.00
$19,915.00 $42,675.00 $51,210.00 $62,590.00 $84,781.00 $283,931.00
$1,159,150.00 $2,483,910.00 $2,980,710.00 $3,643,090.00 $4,934,716.00 $16,558,811.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$1,159,150.00 $2,483,910.00 $2,980,710.00 $3,643,090.00 $4,934,716.00 $16,558,811.00

6000 units 15000 units 15000 units 15000 units 15000 units 108000 units
312 units 780 units 780 units 780 units 780 units 5616 units
$792,474.00 $1,981,185.00 $1,981,185.00 $1,981,185.00 $1,981,185.00 $14,264,532.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$792,474.00 $1,981,185.00 $1,981,185.00 $1,981,185.00 $1,981,185.00 $14,264,532.00

$461,037.33 $474,474.00 $509,214.00 $533,214.00 $551,916.00 $5,276,636.67

$250,000.00 $0.00 $0.00 $0.00 $0.00 $1,551,250.00

$0.00 $0.00 $0.00 $0.00 $0.00


$0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$250,000.00 $0.00 $0.00 $0.00 $0.00 $0.00
$1,753,511.33 $2,455,659.00 $2,490,399.00 $2,514,399.00 $2,533,101.00 $9,993,558.00

-$594,361.33 $28,251.00 $490,311.00 $1,128,691.00 $2,401,615.00 $6,565,253.00

-$8,771,841.00 -$9,366,202.33 -$9,337,951.33 -$8,847,640.33 -$7,718,949.33

-$9,366,202.33 -$9,337,951.33 -$8,847,640.33 -$7,718,949.33 -$5,317,334.33 -$5,317,334.33


$15,162,175.00
Production (Y
Year 2
First Quarter Second Quarter Third Quarter Fourth Quarter
Total Number of Units Produced 60000 60000 115000 115000
Without Scanner 57000 57000 109250 109250
With Scanner 3000 3000 5750 5750
Scanner Units Produced 3120 3120 5980 6325

Inventory (Ye
Virtual Desktop Units 18000 18000 33000 18000
Scanner Units 1485 1305 1785 960
Total Worth $2,613,903.75 $2,536,368.75 $4,388,328.75 $2,387,760.00
Production (Year 2-5)
Year 3
Total First Quarter Second Quarter Third Quarter Fourth Quarter Total
350000 160000 160000 260000 260000 840000
332500 152000 152000 247000 247000 798000
17500 8000 8000 13000 13000 42000
18545 8800 8800 14300 14300 46200

Inventory (Year 2 - 5)
28000 8000 38000 18000
1510 410 2060 960
$3,721,472.50 $1,054,047.50 $5,055,185.00 $2,387,760.00
Year 4 Year 5

1250000 2420000
1187500 2299000
62500 121000
68750 133100

28000 48000
1510 2610
$3,721,472.50 $6,388,897.50
Year 2
First Quarter Second Quarter

Payment per No. of Salary per No. of


Position position/year Positions division/qtr Positions

General and Administrative


CEO $153,000.00 1 $38,250.00 1
Directors $122,400.00 0 $0.00 0
HR Manager $81,600.00 1 $20,400.00 1
Financial Analyst $81,600.00 2 $40,800.00 2
Accountants $51,000.00 2 $25,500.00 2
Secretary $45,900.00 1 $11,475.00 1
Customer Service (Phone Support) $35,700.00 5 $44,625.00 5
Total G&A Salaries $181,050.00

Sales and Distribution


Distribution Manager $61,200.00 1 $15,300.00 1
Promotional Manager $61,200.00 1 $15,300.00 1
Promotional Director $51,000.00 5 $63,750.00 5
Website Developer/Networks Maintenance $30,600.00 1 $7,650.00 1
Total S&D Salaries $102,000.00

Research and Development


Research and Development Manager $122,400.00 1 $30,600.00 1
Researcher and Developers $102,000.00 3 $76,500.00 3
Software Development Manager $81,600.00 0 $0.00 0
Software Programmer (driver & s/w updates) $76,500.00 2 $38,250.00 2
Total R&D Salaries $114,750.00

Manufacturing
Technical Manager $102,000.00 1 $25,500.00 1
Technicians $61,200.00 7 $107,100.00 7
Quality Control Personnel $35,700.00 4 $35,700.00 4
Repair Technician $61,200.00 12 $183,600.00 12
Packaging Personnel $39,168.00 6 $58,752.00 6
Mechanic (Machine Maintenance) $61,200.00 2 $30,600.00 2
Total Manufacturing Salaries $441,252.00

Bonus Pay $33,800.00

Total Cost in Salaries $872,852.00

Total Number of Employees 58


Salaries (Year 2 - 5)
Year 2
Second Quarter Third Quarter Fourth Quarter First Quarter

Salary per No. of Salary per No. of Salary per Payment per No. of
division/qtr Positions division/qtr Positions division/qtr position/year Positions

$38,250.00 1 $38,250.00 1 $38,250.00 $156,060.00 1


$0.00 0 $0.00 0 $0.00 $124,848.00 0
$20,400.00 1 $20,400.00 1 $20,400.00 $83,232.00 1
$40,800.00 2 $40,800.00 2 $40,800.00 $83,232.00 3
$25,500.00 2 $25,500.00 2 $25,500.00 $52,020.00 3
$11,475.00 1 $11,475.00 1 $11,475.00 $46,818.00 1
$44,625.00 9 $80,325.00 9 $80,325.00 $36,414.00 12
$181,050.00 $216,750.00 $216,750.00

$15,300.00 2 $30,600.00 2 $30,600.00 $62,424.00 2


$15,300.00 1 $15,300.00 1 $15,300.00 $62,424.00 1
$63,750.00 5 $63,750.00 5 $63,750.00 $52,020.00 5
$7,650.00 2 $15,300.00 2 $15,300.00 $31,212.00 2
$102,000.00 $124,950.00 $124,950.00

$30,600.00 1 $30,600.00 1 $30,600.00 $124,848.00 1


$76,500.00 3 $76,500.00 3 $76,500.00 $104,040.00 4
$0.00 1 $20,400.00 1 $20,400.00 $83,232.00 1
$38,250.00 2 $38,250.00 2 $38,250.00 $78,030.00 2
$114,750.00 $135,150.00 $135,150.00

$25,500.00 1 $25,500.00 1 $25,500.00 $104,040.00 1


$107,100.00 12 $183,600.00 12 $183,600.00 $62,424.00 15
$35,700.00 8 $71,400.00 8 $71,400.00 $36,414.00 8
$183,600.00 12 $183,600.00 12 $183,600.00 $62,424.00 14
$58,752.00 10 $97,920.00 10 $97,920.00 $39,951.36 15
$30,600.00 3 $45,900.00 3 $45,900.00 $62,424.00 3
$441,252.00 $607,920.00 $607,920.00

$33,800.00 $44,900.00 $44,900.00

$872,852.00 $1,129,670.00 $1,129,670.00

58 79 79
s (Year 2 - 5)
Year 3
First Quarter Second Quarter Third Quarter Fourth Quarter

Salary per No. of Salary per No. of Salary per No. of Salary per
division/qtr Positions division/qtr Positions division/qtr Positions division/qtr

$39,015.00 1 $39,015.00 1 $39,015.00 1 $39,015.00


$0.00 0 $0.00 0 $0.00 0 $0.00
$20,808.00 1 $20,808.00 1 $20,808.00 1 $20,808.00
$62,424.00 3 $62,424.00 3 $62,424.00 3 $62,424.00
$39,015.00 3 $39,015.00 3 $39,015.00 3 $39,015.00
$11,704.50 1 $11,704.50 1 $11,704.50 1 $11,704.50
$109,242.00 12 $109,242.00 15 $136,552.50 15 $136,552.50
$282,208.50 $282,208.50 $309,519.00 $309,519.00

$31,212.00 2 $31,212.00 2 $31,212.00 2 $31,212.00


$15,606.00 1 $15,606.00 1 $15,606.00 1 $15,606.00
$65,025.00 5 $65,025.00 5 $65,025.00 5 $65,025.00
$15,606.00 2 $15,606.00 2 $15,606.00 2 $15,606.00
$127,449.00 $127,449.00 $127,449.00 $127,449.00

$31,212.00 1 $31,212.00 1 $31,212.00 1 $31,212.00


$104,040.00 4 $104,040.00 4 $104,040.00 4 $104,040.00
$20,808.00 0 $0.00 1 $20,808.00 1 $20,808.00
$39,015.00 3 $58,522.50 3 $58,522.50 3 $58,522.50
$163,863.00 $162,562.50 $183,370.50 $183,370.50

$26,010.00 1 $26,010.00 1 $26,010.00 1 $26,010.00


$234,090.00 15 $234,090.00 19 $296,514.00 19 $296,514.00
$72,828.00 9 $81,931.50 9 $81,931.50 10 $91,035.00
$218,484.00 14 $218,484.00 14 $218,484.00 16 $249,696.00
$149,817.60 15 $149,817.60 20 $199,756.80 20 $199,756.80
$46,818.00 3 $46,818.00 4 $62,424.00 4 $62,424.00
$748,047.60 $757,151.10 $885,120.30 $925,435.80

$53,100.00 $53,800.00 $60,100.00 $62,200.00

$1,374,668.10 $1,383,171.10 $1,565,558.80 $1,607,974.30

95 96 110 113
Year 4 Year 5

Payment per No. of Salary per Payment per No. of Salary per
position/year Positions division/year position/year Positions division/year

$159,181.20 1 $159,181.20 $162,364.82 1 $162,364.82


$127,344.96 0 $0.00 $129,891.86 0 $0.00
$84,896.64 1 $84,896.64 $86,594.57 1 $86,594.57
$84,896.64 3 $254,689.92 $86,594.57 3 $259,783.72
$53,060.40 5 $265,302.00 $54,121.61 5 $270,608.04
$47,754.36 2 $95,508.72 $48,709.45 2 $97,418.89
$37,142.28 25 $928,557.00 $37,885.13 32 $1,212,324.02
$0.00 $1,788,135.48 $2,089,094.07
$0.00
$0.00
$63,672.48 3 $191,017.44 $64,945.93 4 $259,783.72
$63,672.48 1 $63,672.48 $64,945.93 1 $64,945.93
$53,060.40 5 $265,302.00 $54,121.61 5 $270,608.04
$31,836.24 3 $95,508.72 $32,472.96 3 $97,418.89
$0.00 $615,500.64 $692,756.58
$0.00
$0.00
$127,344.96 1 $127,344.96 $129,891.86 1 $129,891.86
$106,120.80 5 $530,604.00 $108,243.22 5 $541,216.08
$84,896.64 1 $84,896.64 $86,594.57 1 $86,594.57
$79,590.60 4 $318,362.40 $81,182.41 4 $324,729.65
$0.00 $933,863.04 $952,540.30
$0.00
$0.00
$106,120.80 1 $106,120.80 $108,243.22 1 $108,243.22
$63,672.48 26 $1,655,484.48 $64,945.93 32 $2,078,269.75
$37,142.28 12 $445,707.36 $37,885.13 18 $681,932.26
$63,672.48 14 $891,414.72 $64,945.93 14 $909,243.01
$40,750.39 28 $1,141,010.84 $41,565.39 35 $1,454,788.82
$63,672.48 4 $254,689.92 $64,945.93 6 $389,675.58
$4,494,428.12 $5,622,152.64

$75,200.00 $89,500.00

$7,907,127.28 $9,446,043.59

145 174
Income Statem
Year 2
First Quarter Second Quarter Third Quarter Fourth Quarter
Total Number of Units Sold 50000 60000 100000 130000
Without Scanner 47500 57000 95000 123500
Individuals 11875 14250 23750 30875
Companies 35625 42750 71250 92625
With Scanner 2500 3000 5000 6500
Individuals 625 750 1250 1625
Companies 1875 2250 3750 4875
Scanner Units Sold Seperately 250 300 500 650
Out of Warranty Repairs 150 180 300 390
Gross Revenue $8,286,500.00 $9,943,800.00 $16,573,000.00 $21,544,900.00

Direct Costs
Material Expenses $6,668,562.50 $8,002,275.00 $13,337,125.00 $17,338,262.50
Distribution Costs $0.00 $0.00 $0.00 $0.00
Total Direct Costs $6,668,562.50 $8,002,275.00 $13,337,125.00 $17,338,262.50

GROSS MARGIN $1,617,937.50 $1,941,525.00 $3,235,875.00 $4,206,637.50

Operating Expenses
General and Administrative
Salaries $181,050.00 $181,050.00 $216,750.00 $216,750.00
Insurance $17,400.00 $17,400.00 $17,400.00 $17,400.00
Office Supplies $1,170.00 $1,170.00 $1,170.00 $1,170.00
Legal Expenses $400.00 $0.00 $0.00 $0.00

Research and Development


Salaries $114,750.00 $114,750.00 $135,150.00 $135,150.00

Sales and Distribution


Salaries $102,000.00 $102,000.00 $124,950.00 $124,950.00
Advertisements $360,000.00 $360,000.00 $360,000.00 $360,000.00
Tech fairs $75,000.00 $75,000.00 $75,000.00 $75,000.00
Promotional Gifts $16,500.00 $16,500.00 $16,500.00 $16,500.00

Manufacturing
Salaries $441,252.00 $441,252.00 $607,920.00 $607,920.00
Production Space Rental $12,000.00 $12,000.00 $12,000.00 $12,000.00

Employee Bonuses $33,800.00 $33,800.00 $44,900.00 $44,900.00


Health Coverage $4,060.00 $4,060.00 $5,530.00 $5,530.00
Office Space Rental $3,000.00 $3,000.00 $3,000.00 $3,000.00
Storage Space Rental $1,400.00 $1,400.00 $1,600.00 $2,600.00
Internet Charges $160.00 $160.00 $160.00 $160.00
Phone Charges $1,920.00 $1,920.00 $1,920.00 $1,920.00
Postage $260.00 $260.00 $260.00 $260.00
Utilities $6,000.00 $6,000.00 $7,200.00 $7,200.00
Transport $15,000.00 $15,000.00 $28,750.00 $28,750.00
Building Cleanup/Maintenance $1,800.00 $1,800.00 $1,800.00 $1,800.00
Machine Maintenance $1,600.00 $1,600.00 $1,600.00 $1,600.00
Warranty Replacement/Repair $324,200.00 $60,000.00 $100,000.00 $130,000.00
Total Operating Expenses $1,714,722.00 $1,450,122.00 $1,763,560.00 $1,794,560.00

EBIDTA -$96,784.50 $491,403.00 $1,472,315.00 $2,412,077.50


Interest $0.00 $0.00 $0.00 $0.00
Depreciation $12,309.63 $12,309.63 $27,309.63 $27,309.63
Dividend Payments $0.00 $0.00 $0.00 $0.00
Net Profit -$109,094.13 $479,093.38 $1,445,005.38 $2,384,767.88
Taxes $0.00 $0.00 $0.00 $0.00
Net Profit After Taxes -$109,094.13 $479,093.38 $1,445,005.38 $2,384,767.88
Income Statement (Year 2 - 5)
Year 3
Total First Quarter Second Quarter Third Quarter Fourth Quarter Total
340000 150000 180000 230000 280000 840000
323000 142500 171000 218500 266000 798000
80750 35625 42750 54625 66500 199500
242250 106875 128250 163875 199500 598500
17000 7500 9000 11500 14000 42000
4250 1875 2250 2875 3500 10500
12750 5625 6750 8625 10500 31500
1700 750 900 1150 1400 4200
1020 450 540 690 840 2520
$56,348,200.00 $24,859,500.00 $29,831,400.00 $38,117,900.00 $46,404,400.00 $139,213,200.00

$45,346,225.00 $20,005,687.50 $24,006,825.00 $30,675,387.50 $37,343,950.00 $112,031,850.00


$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$45,346,225.00 $20,005,687.50 $24,006,825.00 $30,675,387.50 $37,343,950.00 $112,031,850.00

$11,001,975.00 $4,853,812.50 $5,824,575.00 $7,442,512.50 $9,060,450.00 $27,181,350.00

$578,850.00 $282,208.50 $282,208.50 $309,519.00 $309,519.00 $564,417.00


$69,600.00 $22,300.00 $22,300.00 $22,300.00 $22,300.00 $89,200.00
$4,680.00 $1,940.00 $1,940.00 $1,940.00 $1,940.00 $7,760.00
$400.00 $400.00 $0.00 $0.00 $0.00 $400.00

$364,650.00 $163,863.00 $162,562.50 $183,370.50 $183,370.50 $326,425.50

$328,950.00 $127,449.00 $127,449.00 $127,449.00 $127,449.00 $254,898.00


$1,440,000.00 $360,000.00 $360,000.00 $360,000.00 $360,000.00 $1,440,000.00
$300,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00 $300,000.00
$66,000.00 $16,500.00 $16,500.00 $16,500.00 $16,500.00 $66,000.00

$1,490,424.00 $748,047.60 $757,151.10 $885,120.30 $925,435.80 $1,505,198.70


$48,000.00 $18,000.00 $18,000.00 $24,000.00 $24,000.00 $84,000.00

$112,500.00 $53,100.00 $53,800.00 $60,100.00 $62,200.00 $106,900.00


$19,180.00 $6,650.00 $6,720.00 $7,700.00 $7,910.00 $28,980.00
$12,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $16,000.00
$7,000.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $10,400.00
$640.00 $200.00 $200.00 $200.00 $200.00 $800.00
$7,680.00 $2,240.00 $2,240.00 $2,240.00 $2,240.00 $8,960.00
$1,040.00 $380.00 $380.00 $380.00 $380.00 $1,520.00
$26,400.00 $10,000.00 $10,000.00 $12,800.00 $12,800.00 $45,600.00
$87,500.00 $40,000.00 $40,000.00 $65,000.00 $65,000.00 $210,000.00
$7,200.00 $2,200.00 $2,200.00 $2,200.00 $2,200.00 $8,800.00
$6,400.00 $1,600.00 $1,600.00 $1,600.00 $1,600.00 $6,400.00
$614,200.00 $150,000.00 $180,000.00 $230,000.00 $280,000.00 $840,000.00
$6,722,964.00 $2,088,678.10 $2,126,851.10 $2,394,018.80 $2,486,644.30 $9,096,192.30

$4,279,011.00 $2,765,134.40 $3,697,723.90 $5,048,493.70 $6,573,805.70 $18,085,157.70


$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$79,238.50 $57,309.63 $57,309.63 $61,097.13 $61,097.13 $236,813.50
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$4,199,772.50 $2,707,824.78 $3,640,414.28 $4,987,396.58 $6,512,708.58 $17,848,344.20
$0.00 $0.00 $1,565,378.14 $2,144,580.53 $2,800,464.69 $6,510,423.35
$4,199,772.50 $2,707,824.78 $2,075,036.14 $2,842,816.05 $3,712,243.89 $11,337,920.85
Year 4 Year 5

1240000 2400000
1178000 2280000
294500 570000
883500 1710000
62000 120000
15500 30000
46500 90000
6200 12000
3720 7200
$205,505,200.00 $397,752,000.00

$165,380,350.00 $320,091,000.00
$0.00 $0.00
$165,380,350.00 $320,091,000.00

$40,124,850.00 $77,661,000.00

$1,788,135.48 $2,089,094.07
$89,200.00 $89,200.00
$9,600.00 $10,800.00
$400.00 $400.00

$933,863.04 $952,540.30

$615,500.64 $692,756.58
$1,440,000.00 $1,440,000.00
$300,000.00 $300,000.00
$66,000.00 $66,000.00

$4,494,428.12 $5,622,152.64
$140,000.00 $200,000.00

$75,200.00 $89,500.00
$10,150.00 $12,180.00
$16,000.00 $16,000.00
$2,600.00 $2,600.00
$200.00 $200.00
$10,560.00 $14,880.00
$1,500.00 $1,740.00
$12,800.00 $12,800.00
$312,500.00 $605,000.00
$9,000.00 $11,880.00
$7,200.00 $10,800.00
$1,240,000.00 $2,400,000.00
$11,574,837.28 $14,640,523.59

$28,550,012.72 $63,020,476.41
$0.00 $0.00
$840,150.54 $1,142,120.54
$0.00 $0.00
$27,709,862.18 $61,878,355.87
$11,915,240.74 $26,607,693.02
$15,794,621.44 $35,270,662.85
Balance Sheet (Year 2 -
Year 2
First Quarter Second Quarter Third Quarter Fourth Quarter
ASSETS
Start up Assets - Physical Assets
Physical Assets $984,770.00 $984,770.00 $2,184,770.00 $2,184,770.00
Depreciation $54,256.46 $66,566.08 $93,875.71 $121,185.33
Other Start up Assets $574,430.00 $574,430.00 $574,430.00 $574,430.00
Total Start up Physical Assets $1,504,943.54 $1,504,943.54 $2,692,633.92 $2,638,014.67
Current Assets
Inventory $2,613,903.75 $2,536,368.75 $4,388,328.75 $2,387,760.00
Cash in Hand $4,260,602.13 $4,804,920.88 $1,982,966.25 $6,395,612.50
Accounts Receivable $0.00 $0.00 $0.00 $0.00
Total Current Assets $6,874,505.88 $7,341,289.63 $6,371,295.00 $8,783,372.50
TOTAL ASSETS $8,379,449.42 $8,846,233.17 $9,063,928.92 $11,421,387.17

LIABILITIES AND OWNER'S EQUITY


Current Liabilities
Accounts Payable $0.00 $0.00 $0.00 $0.00
Taxes Owing $0.00 $0.00 $0.00 $0.00
Loan #1 - Principle Payment $0.00 $0.00 $0.00 $0.00
Loan #2 - Principle Payment $0.00 $0.00 $0.00 $0.00
Total Current Liabilities $0.00 $0.00 $0.00 $0.00
Long Term Debt
Loan Lockwood - Outstanding Debt $75,000.00 $75,000.00 $75,000.00 $75,000.00
Loan RBC - Outstanding Debt $0.00 $0.00 $0.00 $0.00
Total Long Term Debt $75,000.00 $75,000.00 $75,000.00 $75,000.00
Total Liabilities $75,000.00 $75,000.00 $75,000.00 $75,000.00
Equity
Owner's Contribution $127,000.00 $127,000.00 $127,000.00 $127,000.00
Angel's Contribution $1,200,000.00 $1,200,000.00 $1,200,000.00 $1,200,000.00
Venture Capitalist Contribution $8,700,000.00 $8,700,000.00 $8,700,000.00 $8,700,000.00
Net Earning/Loss -$109,094.13 $479,093.38 $1,445,005.38 $2,384,767.88
Retained Earning $0.00 -$109,094.13 $369,999.25 $1,815,004.63
Total Equity $9,917,905.88 $10,396,999.25 $11,842,004.63 $14,226,772.50
TOTAL LIABILITIES AND EQUITY $9,992,905.88 $10,471,999.25 $11,917,004.63 $14,301,772.50
e Sheet (Year 2 - 5)
Year 3 Year 4 Year 5
First Quarter Second Quarter Third Quarter Fourth Quarter

$4,584,770.00 $4,584,770.00 $4,887,770.00 $4,887,770.00 $16,803,010.74 $22,842,410.74


$178,494.96 $235,804.58 $296,901.71 $357,998.83 $1,198,149.37 $2,340,269.91
$574,430.00 $574,430.00 $574,430.00 $574,430.00 $574,430.00 $574,430.00
$4,980,705.04 $4,923,395.42 $5,165,298.29 $5,104,201.17 $16,179,291.37 $21,076,570.83

$3,721,472.50 $1,054,047.50 $5,055,185.00 $2,387,760.00 $3,721,472.50 $6,388,897.50


$2,969,724.78 $10,842,942.19 $8,161,989.38 $21,638,421.39 $33,298,865.64 $95,123,448.80
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$6,691,197.28 $11,896,989.69 $13,217,174.38 $24,026,181.39 $37,020,338.14 $101,512,346.30
$11,671,902.32 $16,820,385.10 $18,382,472.67 $29,130,382.55 $53,199,629.51 $122,588,917.13

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00


$0.00 $1,565,378.14 $2,144,580.53 $2,800,464.69 $11,915,240.74 $26,607,693.02
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $1,565,378.14 $2,144,580.53 $2,800,464.69 $11,915,240.74 $26,607,693.02

$75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00


$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00 $75,000.00
$75,000.00 $1,640,378.14 $2,219,580.53 $2,875,464.69 $11,990,240.74 $26,682,693.02

$127,000.00 $127,000.00 $127,000.00 $127,000.00 $127,000.00 $127,000.00


$1,200,000.00 $1,200,000.00 $1,200,000.00 $1,200,000.00 $1,200,000.00 $1,200,000.00
$8,700,000.00 $8,700,000.00 $8,700,000.00 $8,700,000.00 $8,700,000.00 $8,700,000.00
$2,707,824.78 $3,640,414.28 $4,987,396.58 $6,512,708.58 $27,709,862.18 $61,878,355.87
$4,199,772.50 $6,907,597.28 $6,907,597.28 $15,535,408.13 $22,048,116.70 $49,757,978.88
$16,934,597.28 $20,575,011.55 $21,921,993.85 $32,075,116.70 $59,784,978.88 $121,663,334.75
$17,009,597.28 $22,215,389.69 $24,141,574.38 $34,950,581.39 $71,775,219.62 $148,346,027.78
Cash
Year 2
First Quarter Second Quarter
ASSUMPTIONS
Total Number of Complete Units Sold 50000 units 60000 units
Individuals - % of Sales 25% 25%
Virtual Desktop without Scanner - % of sales 23.75% 23.75%
Virtual Desktop with Scanner - % of sales 1.25% 1.25%
Companies - % of Sales 75% 75%
Virtual Desktop without Scanner - % of sales 71.25% 71.25%
Virtual Desktop with Scanner - % of sales 3.75% 3.75%

Scanner Units Sold Seperately (% of individual units sold) 0.50% 0.50%

CASH INFLOW Avg Price


Cash Sale - VD w/o Scanner to Individuals $149.00 $1,769,375.00 $2,123,250.00
Cash Sale - VD w/ Scanner to Individuals $649.00 $405,625.00 $486,750.00
Cash Sale - VD w/o Scanner to Companies $134.00 $4,773,750.00 $5,728,500.00
Cash Sale - VD w/ Scanner to Companies $634.00 $1,188,750.00 $1,426,500.00
Cash Sale - Scanner Attachment $569.00 $142,250.00 $170,700.00
Out of Warranty Repairs $45.00 $6,750.00 $8,100.00
Total Cash Sales $8,279,750.00 $9,935,700.00
Sales - Accounts Receivable $0.00 $0.00
Owner's Investment $0.00 $0.00
Loan #1 - Source Name $0.00 $0.00
Loan #2 - Source Name $0.00 $0.00
Total Other Cash Inflow $0.00 $0.00
TOTAL CASH INFLOW $8,279,750.00 $9,935,700.00

CASH OUTFLOW
Direct Costs Avg Cost
Purchase Costs
Material Purchases - Virtual Desktop Components $109.68 60000 units 60000 units
Material Purchases - Scanner Attachment $430.75 3120 units 3120 units
Total Purchase Costs $7,924,740.00 $7,924,740.00
Distribution Costs $0.00 $0.00
Total Direct Costs $7,924,740.00 $7,924,740.00

Operating Expenses $1,714,722.00 $1,450,122.00

Capital Investments
Setup/Production Expansion Expenses $0.00 $0.00

Other Disbursements
Income Tax $0.00 $0.00
Divident Payments $0.00 $0.00
Loan #1 Interest Payments $0.00 $0.00
Loan #1 Principle Payments $0.00 $0.00
Loan #2 Interest Payments $0.00 $0.00
Loan #2 Principle Payments $0.00 $0.00
Total Other Disbursements $0.00 $0.00
TOTAL CASH OUTFLOW $9,639,462.00 $9,374,862.00

NET CASH FLOW -$1,359,712.00 $560,838.00

Cash From Previous Period -$5,317,334.33 -$6,677,046.33

Cumulative Cash Flow -$6,677,046.33 -$6,116,208.33


Cash Flow Statement (Year 2 - 5)
Year 2 Year 3
Third Quarter Fourth Quarter Total First Quarter Second Quarter Third Quarter

100000 units 130000 units 340000 units 150000 units 180000 units 230000 units
25% 25% 25% 25% 25%
23.75% 23.75% 23.75% 23.75% 23.75%
1.25% 1.25% 1.25% 1.25% 1.25%
75% 75% 75% 75% 75%
71.25% 71.25% 71.25% 71.25% 71.25%
3.75% 3.75% 3.75% 3.75% 3.75%

0.50% 0.50% 0.50% 0.50% 0.50%

$3,538,750.00 $4,600,375.00 $12,031,750.00 $5,308,125.00 $6,369,750.00 $8,139,125.00


$811,250.00 $1,054,625.00 $2,758,250.00 $1,216,875.00 $1,460,250.00 $1,865,875.00
$9,547,500.00 $12,411,750.00 $32,461,500.00 $14,321,250.00 $17,185,500.00 $21,959,250.00
$2,377,500.00 $3,090,750.00 $8,083,500.00 $3,566,250.00 $4,279,500.00 $5,468,250.00
$284,500.00 $369,850.00 $967,300.00 $426,750.00 $512,100.00 $654,350.00
$13,500.00 $17,550.00 $45,900.00 $20,250.00 $24,300.00 $31,050.00
$16,559,500.00 $21,527,350.00 $56,302,300.00 $24,839,250.00 $29,807,100.00 $38,086,850.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$16,559,500.00 $21,527,350.00 $56,302,300.00 $24,839,250.00 $29,807,100.00 $38,086,850.00

115000 units 115000 units 350000 units 160000 units 160000 units 260000 units
5980 units 6325 units 18545 units 8800 units 8800 units 14300 units
$15,189,085.00 $15,337,693.75 $46,376,258.75 $21,339,400.00 $21,339,400.00 $34,676,525.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$15,189,085.00 $15,337,693.75 $46,376,258.75 $21,339,400.00 $21,339,400.00 $34,676,525.00

$1,763,560.00 $1,794,560.00 $6,722,964.00 $2,088,678.10 $2,126,851.10 $2,394,018.80

$1,200,000.00 $0.00 $1,200,000.00 $2,400,000.00 $0.00 $303,000.00


$0.00
$0.00
$0.00 $0.00 $0.00 $0.00 $1,565,378.14 $2,144,580.53
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00 $1,565,378.14 $2,144,580.53
$18,152,645.00 $17,132,253.75 $54,299,222.75 $25,828,078.10 $25,031,629.24 $39,518,124.33

-$1,593,145.00 $4,395,096.25 $2,003,077.25 -$988,828.10 $4,775,470.76 -$1,431,274.33

-$6,116,208.33 -$7,709,353.33 $0.00 -$988,828.10 $3,786,642.66

-$7,709,353.33 -$3,314,257.08 -$3,314,257.08 -$988,828.10 $3,786,642.66 $2,355,368.33


Year 3 Year 4 Year 5
Fourth Quarter Total

280000 units 840000 units 1240000 units 2400000 units


25% 25% 25%
23.75% 23.75% 23.75%
1.25% 1.25% 1.25%
75% 75% 75%
71.25% 71.25% 71.25%
3.75% 3.75% 3.75%

0.50% 0.50% 0.50%

$9,908,500.00 $29,725,500.00 $43,880,500.00 $84,930,000.00


$2,271,500.00 $6,814,500.00 $10,059,500.00 $19,470,000.00
$26,733,000.00 $80,199,000.00 $118,389,000.00 $229,140,000.00
$6,657,000.00 $19,971,000.00 $29,481,000.00 $57,060,000.00
$796,600.00 $2,389,800.00 $3,527,800.00 $6,828,000.00
$37,800.00 $113,400.00 $167,400.00 $324,000.00
$46,366,600.00 $139,099,800.00 $205,337,800.00 $397,428,000.00
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
$46,366,600.00 $139,099,800.00 $205,337,800.00 $397,428,000.00

260000 units 840000 units 1250000 units 2420000 units


14300 units 46200 units 68750 units 133100 units
$34,676,525.00 $112,031,850.00 $166,714,062.50 $322,758,425.00
$0.00 $0.00 $0.00 $0.00
$34,676,525.00 $112,031,850.00 $166,714,062.50 $322,758,425.00

$2,486,644.30 $9,096,192.30 $11,574,837.28 $14,640,523.59

$0.00 $2,703,000.00 $4,342,000.00 $6,039,400.00


$0.00
$0.00
$2,800,464.69 $6,510,423.35 $11,915,240.74 $26,607,693.02
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
$2,800,464.69 $6,510,423.35 $11,915,240.74 $26,607,693.02
$39,963,633.99 $130,341,465.65 $194,546,140.52 $370,046,041.62

$6,402,966.01 $8,758,334.35 $10,791,659.48 $27,381,958.38

$2,355,368.33 $8,758,334.35 $19,549,993.83

$8,758,334.35 $8,758,334.35 $19,549,993.83 $46,931,952.21