January 2001

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 Table of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

3.0 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4.0 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4.1 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

5.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3 Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

6.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

6.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

7.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

7.1 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.2 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.3 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.4 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.5 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.6 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
 Wy'East Law Firm

1.0 Executive Summary

Wy'East Law Firm (WLF) is a boutique technology law firm located in Portland, Oregon. The
firm will be lead by Richard Bloom, a seasoned attorney previously with (name omitted)'s e-
group. WLF will service all needs generated by technology firms, with specialization on
mergers and acquisitions and qualified stock option plans; and handles both start-up and
established companies.

In addition to WLF's technology practice, we will offer public interest legal work at subsidized
rates. The technology practice will allow the firm to be able to provide public interest
organizations legal help at the cost of overhead. By the end of year one, we will have
projected sales in excess of $190,000.

WLF is a limited liability company founded and lead by Richard Bloom.

Highlights (Planned)

$250,000

$200,000

$150,000 Sales
Gross Margin
$100,000 Net Profit

$50,000

$0
2001 2002 2003

1.1 Objectives

The objectives for WLF for the first three years of operation include:

1. To create a law firm whose primary goal is to exceed customer's expectations.

2. To develop a client list that includes at least 20 companies, each with revenues of over
$3 million.
3. To increase the ability to serve public interest organizations by over 15% per year.
4. To be able to offer in excess of $50,000 per year of legal services at a subsidized rate.

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 Wy'East Law Firm

1.2 Mission

The mission of Wy'East Law Firm is to provide the Portland community with technological and
public interest legal guidance. We exist to attract and maintain customers and to support the
public interest community. When we adhere to this maxim, everything else will fall into place.

2.0 Company Summary

WLF is a law firm serving technology companies and public interest organizations, and will
subsidize its public interest work with local companies. WLF specializes in mergers and
acquisitions as well as stock option plans, but can handle most legal needs for a technology
company.

The technology work will subsidize the company's public interest work which will be billed out
at the cost of overhead.

2.1 Company Ownership

WLF is a limited liability company, owned solely by Richard Bloom.

2.2 Start-up Summary

WLF's start-up costs will include all equipment needed for the home office, website creation,
and advertising.

The home office equipment will be the largest chunk of the start-up expenses. This equipment
includes 4 computers, a fax machine, copier, cellular phone, office supplies, additional land
line, a DSL connection, and office furniture.

Start-up expenses will also include advertising. Two methods will be used: a content-only
website and the Yellow Pages.

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 Wy'East Law Firm

Start-up

$25,000

$20,000

$15,000

$10,000

$5,000

$0
Expenses Assets Investment Loans

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Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $0
Stationery etc. $100
Website creation $500
DSL installation $150
Office equipment $500
Rent $0
Research and development $0
Expensed equipment $0
Other $0
Total Start-up Expense $1,250

Start-up Assets Needed

Cash Balance on Starting Date $18,750
Other Short-term Assets $0
Total Short-term Assets $18,750

Long-term Assets $5,000

Total Assets $23,750
Total Requirements $25,000

Funding

Investment
Investor 1 $25,000
Investor 2 $0
Other $0
Total Investment $25,000

Short-term Liabilities
Accounts Payable $0
Current Borrowing $0
Other Short-term Liabilities $0
Subtotal Short-term Liabilities $0

Long-term Liabilities $0
Total Liabilities $0

Loss at Start-up ($1,250)

Total Capital $23,750
Total Capital and Liabilities $23,750

3.0 Services

WLF will provide provide law services to two different groups of customers.

1. Technology law services. WLF will provide legal services to high technology clients, to
both start-up companies and established firms. While the firm excels in mergers,
acquisitions, and qualified stock option plans, we also have experience in almost any
legal field that a tech firm encounters. These clients, billed at market rate, will
subsidize the public interest clients.
2. Public interest law. WLF will serve regional public interest organizations, with a
concentration on environmental and civil rights organizations. For most public interest
organizations, good legal help is expensive. By using technology clients to subsidize the
cost of legal fees for public interest firms, WLF is able to make significant contributions
back to the community.

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4.0 Market Segmentation

WLF's customers can be divided into two groups, technology firms and public interest
organizations.

1. Technology firms. New clients are likely to be from small technology firms or start-up
companies. The reason for this is that the larger tech firms usually will go with one of
the larger law firms in town because a large firm can offer them a wide range of
services and do all of the different types of work that is needed. This type of customer
sees an advantage for one firm handling all of their needs, and rightfully so. A smaller
company has fewer overall legal needs and can be serviced by a boutique firm. A start-
up might also be attracted to us because of our willingness to accept equity as partial
payment for services rendered. Clients that were brought over to WLF from Richard's
old firm are typically small firms, but there are a few larger companies that are using
this firm for some services and kept some other work at (name omitted), where
Richard practiced before.
2. Public interest organizations. These clients will be diversified, some are environmental
organizations others are civil rights groups. While some public interest organizations
receive their legal services for free (pro bono) from some attorneys, there is an
extreme shortage of legal help for these organizations. Therefore, it is quite attractive
to these organizations to have the possibility of receiving top legal help at a subsidized
rate. Attracting these clients will not be the problem, the difficulty will be for Richard to
select which organization will receive his help.

Market Analysis (Pie)

Technology companies
Public interest organizations
Other

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 Wy'East Law Firm

Table: Market Analysis

Market Analysis
Potential Customers Growth 2001 2002 2003 2004 2005 CAGR
Technology companies 9% 345 376 410 447 487 9.00%
Public interest organizations 8% 278 300 324 350 378 7.98%
Other 0% 0 0 0 0 0 0.00%
Total 8.55% 623 676 734 797 865 8.55%

4.1 Target Market Segment Strategy

WLF will be targeting high technology companies for two reasons.

1. Although the economy has taken a recent plummet, particularly technology firms,
technology is still a growing sector of the economy. This is evidenced by the fact that
17 out of the top 25 fastest growing companies are technology firms, according to The
Business Journal of Portland.
2. Technology is Richard's area of expertise. Richard practiced law at one of the top three
law firms in Portland and was in their e-group, concentrating on technology firms. His
experience, coupled with his network of colleagues within the industry, makes
technology firms attractive customers.

WLF will be targeting public interest organizations for one simple reason, a desire to give back
to the community. Public interest work is inherently altruistic to some degree. Generally, the
person performing the work receives a good feeling for his/her contribution, but in today's
capitalistic society, someone who donates his/her time at far below market wages should be
considered altruistic.

4.2 Competition and Buying Patterns

The technology law practice is fairly competitive in Portland. Most larger, more prestigious
firms have attorneys who specialize in technology. Some smaller firms also have attorneys
who do work for technology companies. Lastly, there are boutique firms, like WLF. As a service-
based industry, the practice of law is driven by personal relationships and reputation. Potential
clients choose attorneys based on reputation and who they are familiar with or are
recommended to. Therefore, if the attorney is providing better service to a client, the client is
likely to form a long lasting business relationship with the client.

Clients typically switch attorneys only if they are unhappy with their current attorney. New
companies find attorneys through networking: who they know or who their friends know.

WLF has the advantage that when Richard left (name omitted) he brought 15 of his clients,
which, for now, are almost enough to survive on.

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 Wy'East Law Firm

5.0 Strategy and Implementation Summary

WLF will be courting new technology clients through networking and advertisements in the
Yellow Pages, Business Journal of Portland, and other technology specific regional journals. As
stated earlier, WLF has a sufficient amount of business at day one, however, more technology
clients means the ability to perform more public interest work.

Richard will be attending the Portland Venture Group meetings as well as other informal
gatherings of technology companies to network with the different technology firms in the
region. These networking activities along with advertisements in appropriate media forms will
allow WLF to steadily grow their list of clients.

5.1 Competitive Edge

WLF's competitive advantage will be based on two factors, experience and specialization:

1. Experience. Richard brings to WLF three years of practicing technology law at a top
firm in Portland. Reputation carries a lot of weight and Richard's time at (name
omitted) means a lot in the Portland legal community and is very attractive to
prospective clients. Additionally, beyond the reputation of working for a coveted firm, is
the fact that the three years spent at (name omitted) provided Richard with big name
clients.
2. Specialization. As a boutique firm that concentrates on technology companies, WLF is in
a desirable situation because it's knowledge base is considerable, relative to other firms
that practice a wide range of law.

5.2 Sales Strategy

WLF's sales strategy will begin with months two through five with the goal of serving the
existing customer base of clients. The absence of bringing in new clients during this time is
purposeful, it allows WLF and the existing clients to form a new relationship at WLF, different
from their previous relationship at (name omitted).

Month six will signal WLF's conscious effort to generate new clients. Using the previously
mentioned networking techniques, Richard, through personal communications, will convince
prospective clients of the value of a boutique technology law firm, specifically the depth of
knowledge and the close attention that the client will get when dealing with a small firm.

Regarding the public interest organizations, there will be less of a sale strategy, more of a
choosing of the organizations that Richard wants to represent. There are so many needy public
interest organizations that Richard will have to pick and choose those that he wishes to help
out.

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 Wy'East Law Firm

5.2.1 Sales Forecast

The first month will be spent setting up the home office. This will include setting up the office,
a conference room, and all of the computer equipment. During the first month, Richard will
also be serving some existing technology clients and some public interest clients. We project
that if we spend 1/3 of our time on the technology clients, this would sufficiently subsidize the
public interest clients so we would only have to cover overhead expenses.

By month six, Richard will begin actively soliciting new clients. Between months one and five
he will continue networking, though will not be actively seeking customers. From month seven
on and there will be a slight increase in clients taken aboard. There will be only a slight
increase so as to create solid relationships with the new and existing clients. Richard will be
cognizant of the possibility of growing too fast and not being able to offer the same quality
service to his clients.

Sales Monthly (Planned)

$25,000

$20,000

$15,000
Technology companies
$10,000 Public Interest organizations

$5,000

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Table: Sales Forecast (Planned)

Sales Forecast
Sales 2001 2002 2003
Technology companies $174,096 $189,525 $195,747
Public Interest organizations $16,839 $22,578 $24,547
Total Sales $190,935 $212,103 $220,294

Direct Cost of Sales 2001 2002 2003

Technology companies $0 $0 $0
Public Interest organizations $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0

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 Wy'East Law Firm

5.3 Milestones

WLF will have several milestones early on:

1. Business plan completion.

2. Set up home office.
3. First month of total technology subsidy.

Table: Milestones (Planned)

Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/01 1/1/01 $0 Richard
Set up ofifce 1/1/01 1/1/01 $0 Richard
First month of total technology 4/1/01 4/1/01 $0 WLF
subsidy
Totals $0

6.0 Management Summary

Wy'East Law Firm is an Oregon Corporation founded and run by Richard Bloom. Richard has a
degree in Political Science from the University of Colorado, Boulder, and a J.D. from Lewis and
Clark University. While at Lewis and Clark, Richard was the President of the school's Public
Interest Student Organization. It was through this organization that Richard became fond of
public interest law. After graduation, Richard went to work for (name omitted) for three years
in the e-group which concentrated on technology. While working in the e-group, Richard
worked on technology issues with a number of well known start-up organizations and
established companies.

One of the perks working at (name omitted) was his ability to do pro bono work which counted
toward his required yearly billable hours requirement. Richard has spent a fair amount of time
with 1000 Friends of Oregon and other public interest organizations. After three years
however, Richard was feeling constrained and desired more autonomy. He decided to leave
and start his own firm. Richard was able to bring a fair number of his clients from (name
omitted) to his new firm, helping the transition from leaving an established practice to hanging
out his own shingle and starting over.

6.1 Personnel Plan

The staff will consist of Richard working full time. In addition to Richard, a part-time secretary
and part-time paralegal will join WLF by month two. Month four will bring WLF a law clerk, and
a second law clerk by month eight.

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 Wy'East Law Firm

Table: Personnel (Planned)

Personnel Plan
2001 2002 2003
Richard $66,000 $66,000 $66,000
Receptionist/ secretary $11,550 $12,500 $13,500
Paralegal $22,000 $23,000 $24,000
Law clerk $8,100 $11,000 $12,000
Law clerk $4,500 $11,000 $12,000
Total Payroll $112,150 $123,500 $127,500

Total Headcount 5 5 5
Payroll Burden $16,823 $18,525 $19,125
Total Payroll Expenditures $128,973 $142,025 $146,625

7.0 Financial Plan

The following sections will outline important financial information.

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 Wy'East Law Firm

7.1 Important Assumptions

The following table details important assumptions.

Table: General Assumptions

General Assumptions
2001 2002 2003
Short-term Interest Rate % 10.00% 10.00% 10.00%
Long-term Interest Rate % 10.00% 10.00% 10.00%
Tax Rate % 25.00% 25.00% 25.00%
Expenses in Cash % 10.00% 10.00% 10.00%
Sales on Credit % 75.00% 75.00% 75.00%
Personnel Burden % 15.00% 15.00% 15.00%

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 Wy'East Law Firm

7.2 Break-even Analysis

The Break-even Analysis indicates that WLF will need 125 hours a month to reach the break-
even point.

Break-even Analysis

$10,000

$5,000

$0

($5,000)

($10,000)

($15,000)
$0 $4,000 $8,000 $12,000 $16,000 $20,000

Monthly break-even point

Break-even point = where line intersects with 0

Table: Break-even Analysis

Break-even Analysis:
Monthly Units Break-even 125
Monthly Sales Break-even $12,500

Assumptions:
Average Per-Unit Revenue $100.00
Average Per-Unit Variable Cost $0.00
Estimated Monthly Fixed Cost $12,500

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 Wy'East Law Firm

7.3 Projected Profit and Loss

The following table indicates the projected profit and loss.

Table: Profit and Loss (Planned)

Pro Forma Profit and Loss

2001 2002 2003
Sales $190,935 $212,103 $220,294
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
------------ ------------ ------------
Total Cost of Sales $0 $0 $0
Gross Margin $190,935 $212,103 $220,294
Gross Margin % 100.00% 100.00% 100.00%
Operating Expenses:
Advertising/Promotion $240 $240 $240
Website maintenance $720 $720 $720
Bar dues and PLF insurance $1,200 $1,200 $1,200
Payroll Expense $112,150 $123,500 $127,500
Payroll Burden $16,823 $18,525 $19,125
Depreciation $1,668 $1,668 $1,668
Leased Equipment $0 $0 $0
Utilities $1,500 $1,500 $1,500
Rent $2,400 $2,400 $2,400
Contract/Consultants $0 $0 $0
------------ ------------ ------------
Total Operating Expenses $136,701 $149,753 $154,353
Profit Before Interest and Taxes $54,235 $62,350 $65,941
Interest Expense Short-term $0 $0 $0
Interest Expense Long-term $0 $0 $0
Taxes Incurred $13,559 $15,588 $16,485
Extraordinary Items $0 $0 $0
Net Profit $40,676 $46,763 $49,456
Net Profit/Sales 21.30% 22.05% 22.45%

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 Wy'East Law Firm

7.4 Projected Cash Flow

The following chart and table will indicate anticipated cash flow.

Cash (Planned)

$50,000

$40,000

$30,000

$20,000 Net Cash Flow

Cash Balance
$10,000

$0

($10,000)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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 Wy'East Law Firm

Table: Cash Flow (Planned)

Pro Forma Cash Flow 2001 2002 2003

Cash Received
Cash from Operations:
Cash Sales $47,734 $53,026 $55,074
From Receivables $120,443 $156,554 $164,244
Subtotal Cash from Operations $168,177 $209,580 $219,318

Additional Cash Received

Extraordinary Items $0 $0 $0
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of other Short-term Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
Capital Input $0 $0 $0
Subtotal Cash Received $168,177 $209,580 $219,318

Expenditures 2001 2002 2003

Expenditures from Operations:
Cash Spent on Costs and Expenses $1,962 $2,165 $2,255
Wages, Salaries, Payroll Taxes, etc. $128,973 $142,025 $146,625
Payment of Accounts Payable $14,364 $19,142 $20,140
Subtotal Spent on Operations $145,298 $163,332 $169,020

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Short-term Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Adjustment for Assets Purchased on Credit $0 $0 $0
Subtotal Cash Spent $145,298 $163,332 $169,020

Net Cash Flow $22,879 $46,248 $50,298

Cash Balance $41,629 $87,877 $138,175

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 Wy'East Law Firm

7.5 Projected Balance Sheet

The following table indicates the projected balance sheet.

Table: Balance Sheet (Planned)

Pro Forma Balance Sheet

Assets
Short-term Assets 2001 2002 2003
Cash $41,629 $87,877 $138,175
Accounts Receivable $22,758 $25,281 $26,258
Other Short-term Assets $0 $0 $0
Total Short-term Assets $64,387 $113,158 $164,432
Long-term Assets
Long-term Assets $5,000 $5,000 $5,000
Accumulated Depreciation $1,668 $3,336 $5,004
Total Long-term Assets $3,332 $1,664 ($4)
Total Assets $67,719 $114,822 $164,428

Liabilities and Capital

2001 2002 2003
Accounts Payable $3,293 $3,634 $3,784
Current Borrowing $0 $0 $0
Other Short-term Liabilities $0 $0 $0
Subtotal Short-term Liabilities $3,293 $3,634 $3,784

Long-term Liabilities $0 $0 $0
Total Liabilities $3,293 $3,634 $3,784

Paid-in Capital $25,000 $25,000 $25,000

Retained Earnings ($1,250) $39,426 $86,188
Earnings $40,676 $46,763 $49,456
Total Capital $64,426 $111,188 $160,644
Total Liabilities and Capital $67,719 $114,822 $164,428
Net Worth $64,426 $111,188 $160,644

7.6 Business Ratios

Industry profile ratios based on the Standard Industrial Classification (SIC) code 8111, Legal
Services, are shown in the table below.

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 Wy'East Law Firm

Table: Ratios (Planned)

Ratio Analysis
2001 2002 2003 Industry Profile
Sales Growth 0.00% 11.09% 3.86% 8.50%

Percent of Total Assets

Accounts Receivable 33.61% 22.02% 15.97% 8.60%
Inventory 0.00% 0.00% 0.00% 0.00%
Other Short-term Assets 0.00% 0.00% 0.00% 66.90%
Total Short-term Assets 95.08% 98.55% 100.00% 75.50%
Long-term Assets 4.92% 1.45% 0.00% 24.50%
Total Assets 100.00% 100.00% 100.00% 100.00%

Other Short-term Liabilities 0.00% 0.00% 0.00% 50.20%

Subtotal Short-term Liabilities 4.86% 3.16% 2.30% 37.40%
Long-term Liabilities 0.00% 0.00% 0.00% 12.90%
Total Liabilities 4.86% 3.16% 2.30% 50.30%
Net Worth 95.14% 96.84% 97.70% 49.70%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 78.70% 77.95% 77.55% 58.20%
Advertising Expenses 0.13% 0.11% 0.11% 0.50%
Profit Before Interest and Taxes 28.40% 29.40% 29.93% 3.40%

Main Ratios
Current 19.55 31.14 43.45 1.54
Quick 19.55 31.14 43.45 1.09
Total Debt to Total Assets 4.86% 3.16% 2.30% 63.10%
Pre-tax Return on Net Worth 84.18% 56.08% 41.05% 12.30%
Pre-tax Return on Assets 80.09% 54.30% 40.10% 33.40%

Business Vitality Profile 2001 2002 2003 Industry

Sales per Employee $38,187 $42,421 $44,059 $0
Survival Rate 0.00%

Additional Ratios 2001 2002 2003

Net Profit Margin 21.30% 22.05% 22.45% n.a
Return on Equity 63.14% 42.06% 30.79% n.a

Activity Ratios
Accounts Receivable Turnover 6.29 6.29 6.29 n.a
Collection Days 29 55 57 n.a
Inventory Turnover 0.00 0.00 0.00 n.a
Accounts Payable Turnover 5.36 5.36 5.36 n.a
Total Asset Turnover 2.82 1.85 1.34 n.a

Debt Ratios
Debt to Net Worth 0.05 0.03 0.02 n.a
Short-term Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios
Net Working Capital $61,094 $109,524 $160,648 n.a
Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.35 0.54 0.75 n.a
Current Debt/Total Assets 5% 3% 2% n.a
Acid Test 12.64 24.18 36.51 n.a
Sales/Net Worth 2.96 1.91 1.37 n.a
Dividend Payout $0 0.00 0.00 n.a

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 Appendix

Appendix Table: Sales Forecast (Planned)

Sales Forecast
Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003
Technology companies $0 $8,005 $9,514 $13,587 $16,547 $16,874 $16,854 $17,525 $18,547 $18,752 $18,887 $19,004 $174,096 $189,525 $195,747
Public Interest organizations $0 $1,100 $1,200 $1,500 $1,545 $1,587 $1,584 $1,654 $1,666 $1,548 $1,741 $1,714 $16,839 $22,578 $24,547
Total Sales $0 $9,105 $10,714 $15,087 $18,092 $18,461 $18,438 $19,179 $20,213 $20,300 $20,628 $20,718 $190,935 $212,103 $220,294

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003
Technology companies $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Public Interest organizations $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Page 1
 Appendix

Appendix Table: Personnel (Planned)

Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003
Richard $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $66,000 $66,000 $66,000
Receptionist/ secretary $0 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050 $11,550 $12,500 $13,500
Paralegal $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $22,000 $23,000 $24,000
Law clerk $0 $0 $0 $900 $900 $900 $900 $900 $900 $900 $900 $900 $8,100 $11,000 $12,000
Law clerk $0 $0 $0 $0 $0 $0 $0 $900 $900 $900 $900 $900 $4,500 $11,000 $12,000
Total Payroll $5,500 $8,550 $8,550 $9,450 $9,450 $9,450 $9,450 $10,350 $10,350 $10,350 $10,350 $10,350 $112,150 $123,500 $127,500

Total Headcount 1 3 3 4 4 4 4 5 5 5 5 5 5 5 5
Payroll Burden $825 $1,283 $1,283 $1,418 $1,418 $1,418 $1,418 $1,553 $1,553 $1,553 $1,553 $1,553 $16,823 $18,525 $19,125
Total Payroll Expenditures $6,325 $9,833 $9,833 $10,868 $10,868 $10,868 $10,868 $11,903 $11,903 $11,903 $11,903 $11,903 $128,973 $142,025 $146,625

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 Appendix

Appendix Table: General Assumptions

General Assumptions
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003
Short-term Interest Rate % 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate % 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate % 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Expenses in Cash % 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Sales on Credit % 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00%
Personnel Burden % 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00%

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 Appendix

Appendix Table: Profit and Loss (Planned)

Pro Forma Profit and Loss

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003
Sales $0 $9,105 $10,714 $15,087 $18,092 $18,461 $18,438 $19,179 $20,213 $20,300 $20,628 $20,718 $190,935 $212,103 $220,294
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Gross Margin $0 $9,105 $10,714 $15,087 $18,092 $18,461 $18,438 $19,179 $20,213 $20,300 $20,628 $20,718 $190,935 $212,103 $220,294
Gross Margin % 0.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Operating Expenses:
Advertising/Promotion $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $240 $240 $240
Website maintenance $60 $60 $60 $60 $60 $60 $60 $60 $60 $60 $60 $60 $720 $720 $720
Bar dues and PLF insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $1,200 $1,200 $1,200
Payroll Expense $5,500 $8,550 $8,550 $9,450 $9,450 $9,450 $9,450 $10,350 $10,350 $10,350 $10,350 $10,350 $112,150 $123,500 $127,500
Payroll Burden $825 $1,283 $1,283 $1,418 $1,418 $1,418 $1,418 $1,553 $1,553 $1,553 $1,553 $1,553 $16,823 $18,525 $19,125
Depreciation $139 $139 $139 $139 $139 $139 $139 $139 $139 $139 $139 $139 $1,668 $1,668 $1,668
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $1,500 $1,500 $1,500
Rent $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $2,400 $2,400 $2,400
Contract/Consultants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Operating Expenses $6,969 $10,477 $10,477 $11,512 $11,512 $11,512 $11,512 $12,547 $12,547 $12,547 $12,547 $12,547 $136,701 $149,753 $154,353
Profit Before Interest and Taxes ($6,969) ($1,372) $238 $3,576 $6,581 $6,950 $6,927 $6,633 $7,667 $7,754 $8,082 $8,172 $54,235 $62,350 $65,941
Interest Expense Short-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest Expense Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred ($1,742) ($343) $59 $894 $1,645 $1,737 $1,732 $1,658 $1,917 $1,938 $2,020 $2,043 $13,559 $15,588 $16,485
Extraordinary Items $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($5,227) ($1,029) $178 $2,682 $4,935 $5,212 $5,195 $4,974 $5,750 $5,815 $6,061 $6,129 $40,676 $46,763 $49,456
Net Profit/Sales 0.00% -11.30% 1.66% 17.77% 27.28% 28.23% 28.17% 25.94% 28.45% 28.65% 29.38% 29.58% 21.30% 22.05% 22.45%

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 Appendix

Appendix Table: Cash Flow (Planned)

Pro Forma Cash Flow Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003

Cash Received
Cash from Operations:
Cash Sales $0 $2,276 $2,679 $3,772 $4,523 $4,615 $4,610 $4,795 $5,053 $5,075 $5,157 $5,180 $47,734 $53,026 $55,074
From Receivables $0 $0 $3,642 $7,472 $9,785 $12,517 $13,717 $13,837 $14,125 $14,798 $15,195 $15,356 $120,443 $156,554 $164,244
Subtotal Cash from Operations $0 $2,276 $6,321 $11,244 $14,308 $17,133 $18,326 $18,631 $19,178 $19,873 $20,352 $20,536 $168,177 $209,580 $219,318

Additional Cash Received

Extraordinary Items $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Capital Input $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $2,276 $6,321 $11,244 $14,308 $17,133 $18,326 $18,631 $19,178 $19,873 $20,352 $20,536 $168,177 $209,580 $219,318

Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003
Expenditures from Operations:
Cash Spent on Costs and Expenses ($124) $16 $56 $140 $215 $224 $224 $216 $242 $244 $253 $255 $1,962 $2,165 $2,255
Wages, Salaries, Payroll Taxes, etc. $6,325 $9,833 $9,833 $10,868 $10,868 $10,868 $10,868 $11,903 $11,903 $11,903 $11,903 $11,903 $128,973 $142,025 $146,625
Payment of Accounts Payable ($1,114) ($1,072) $158 $533 $1,282 $1,938 $2,018 $2,011 $1,955 $2,180 $2,201 $2,274 $14,364 $19,142 $20,140
Subtotal Spent on Operations $5,088 $8,777 $10,047 $11,540 $12,364 $13,030 $13,109 $14,130 $14,099 $14,327 $14,357 $14,431 $145,298 $163,332 $169,020

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Adjustment for Assets Purchased on Credit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $5,088 $8,777 $10,047 $11,540 $12,364 $13,030 $13,109 $14,130 $14,099 $14,327 $14,357 $14,431 $145,298 $163,332 $169,020

Net Cash Flow ($5,088) ($6,501) ($3,726) ($296) $1,944 $4,103 $5,217 $4,502 $5,079 $5,546 $5,995 $6,105 $22,879 $46,248 $50,298
Cash Balance $13,662 $7,161 $3,435 $3,139 $5,082 $9,185 $14,402 $18,904 $23,983 $29,529 $35,524 $41,629 $41,629 $87,877 $138,175

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 Appendix

Appendix Table: Balance Sheet (Planned)

Pro Forma Balance Sheet

Assets
Short-term Assets Starting Balances Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003
Cash $18,750 $13,662 $7,161 $3,435 $3,139 $5,082 $9,185 $14,402 $18,904 $23,983 $29,529 $35,524 $41,629 $41,629 $87,877 $138,175
Accounts Receivable $0 $0 $6,829 $11,222 $15,065 $18,849 $20,178 $20,290 $20,838 $21,872 $22,300 $22,576 $22,758 $22,758 $25,281 $26,258
Other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Short-term Assets $18,750 $13,662 $13,990 $14,657 $18,204 $23,932 $29,363 $34,692 $39,741 $45,855 $51,828 $58,100 $64,387 $64,387 $113,158 $164,432
Long-term Assets
Long-term Assets $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Accumulated Depreciation $0 $139 $278 $417 $556 $695 $834 $973 $1,112 $1,251 $1,390 $1,529 $1,668 $1,668 $3,336 $5,004
Total Long-term Assets $5,000 $4,861 $4,722 $4,583 $4,444 $4,305 $4,166 $4,027 $3,888 $3,749 $3,610 $3,471 $3,332 $3,332 $1,664 ($4)
Total Assets $23,750 $18,523 $18,712 $19,240 $22,648 $28,237 $33,529 $38,719 $43,629 $49,604 $55,438 $61,571 $67,719 $67,719 $114,822 $164,428

Liabilities and Capital

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2002 2003
Accounts Payable $0 $0 $1,217 $1,567 $2,293 $2,947 $3,027 $3,022 $2,958 $3,183 $3,202 $3,273 $3,293 $3,293 $3,634 $3,784
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Short-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Short-term Liabilities $0 $0 $1,217 $1,567 $2,293 $2,947 $3,027 $3,022 $2,958 $3,183 $3,202 $3,273 $3,293 $3,293 $3,634 $3,784

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $0 $1,217 $1,567 $2,293 $2,947 $3,027 $3,022 $2,958 $3,183 $3,202 $3,273 $3,293 $3,293 $3,634 $3,784

Paid-in Capital $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Retained Earnings ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) ($1,250) $39,426 $86,188
Earnings $0 ($5,227) ($6,255) ($6,077) ($3,396) $1,540 $6,752 $11,947 $16,921 $22,671 $28,486 $34,547 $40,676 $40,676 $46,763 $49,456
Total Capital $23,750 $18,523 $17,495 $17,673 $20,354 $25,290 $30,502 $35,697 $40,671 $46,421 $52,236 $58,297 $64,426 $64,426 $111,188 $160,644
Total Liabilities and Capital $23,750 $18,523 $18,712 $19,240 $22,648 $28,237 $33,529 $38,719 $43,629 $49,604 $55,438 $61,571 $67,719 $67,719 $114,822 $164,428
Net Worth $23,750 $18,523 $17,495 $17,673 $20,354 $25,290 $30,502 $35,697 $40,671 $46,421 $52,236 $58,297 $64,426 $64,426 $111,188 $160,644

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