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 Table of Contents

This is a business plan. It does not imply an offering of securities.

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

1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
1.3 Keys to Success.........................................................................................................................2
Chart: Highlights...........................................................................................................................3
2.0 Organization Summary...............................................................................................................3
2.1 What Makes Bright House Unique......................................................................................3
2.2 Legal Entity..................................................................................................................................4
2.3 Start-up Summary....................................................................................................................4
Chart: Start-up..............................................................................................................................5
Table: Start-up..............................................................................................................................5
Table: Start-up Funding.............................................................................................................6
2.4 Locations and Facilities...........................................................................................................7
3.0 Services.............................................................................................................................................7
3.1 Service Description...................................................................................................................7
3.2 Alternative Providers...............................................................................................................8
3.3 Printed Collaterals.....................................................................................................................8
3.4 Technology...................................................................................................................................8
3.5 Future Services..........................................................................................................................8
4.0 Market Analysis Summary.........................................................................................................9
Chart: Market Analysis (Pie)...................................................................................................10
Table: Market Analysis..............................................................................................................10
4.1 Market Segmentation............................................................................................................10
4.2 Target Market Segment Strategy.....................................................................................11
4.2.1 Market Trends...................................................................................................................11
4.2.2 Market Needs....................................................................................................................11
4.3 Service Providers Analysis...................................................................................................12
4.3.1 Organization Participants.............................................................................................12
4.3.2 Alternatives and Usage Patterns...............................................................................13
4.3.3 Main Alternatives.............................................................................................................13
5.0 Management Summary.............................................................................................................13
5.1 Management Team Gaps.....................................................................................................14
5.2 Caregiving Organizational Chart.......................................................................................15
5.3 Personnel Plan..........................................................................................................................15
Table: Personnel..........................................................................................................................16
6.0 Strategy and Implementation Summary...........................................................................17
Chart: Milestones........................................................................................................................17
Table: Milestones........................................................................................................................17
7.0 Financial Plan................................................................................................................................18
7.1 Important Assumptions........................................................................................................18
7.2 Key Financial Indicators.......................................................................................................18
Table: Funding Forecast...........................................................................................................19
Chart: Funding Monthly............................................................................................................20
Page
 Table of Contents

Chart: Funding by Year.............................................................................................................20

7.3 Projected Surplus or Deficit................................................................................................21
Chart: Surplus Monthly.............................................................................................................21
Chart: Gross Surplus Yearly...................................................................................................21
Table: Surplus and Deficit.......................................................................................................22
7.4 Break-even Analysis...............................................................................................................23
Table: Break-even Analysis....................................................................................................23
Chart: Break-even Analysis....................................................................................................23
7.5 Projected Cash Flow...............................................................................................................24
Table: Cash Flow.........................................................................................................................24
Chart: Cash...................................................................................................................................25
7.6 Projected Balance Sheet......................................................................................................26
Table: Balance Sheet.................................................................................................................26
7.7 Standard Ratios.......................................................................................................................26
Table: Ratios.................................................................................................................................27
Table: Funding Forecast.....................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: Surplus and Deficit.................................................................................................................3
Table: Surplus and Deficit.................................................................................................................3
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................7
Table: Balance Sheet...........................................................................................................................7

Page
 Bright House

1.0 Executive Summary

Where would you want to live if you needed daily assistance? In your home, of course. Bright
House aims to be that home for 14 lucky full-time assisted living residents, offering medically-
skilled care in a respectful, self-sustaining community, and offering skilled nursing care for
short-term residents. On our beautiful, newly remodeled 6 acre property (the former Wayfield
Bed and Breakfast) in the small college town of Middletown, CT, Bright House brings together
decades of experience and innovative, alternative visions of the potential in our elderly family
members' latest years. In our first five years, we will establish a new kind of Elder Care model
based on the idea that the elderly are fully-realized persons, with ideas, thoughts, and
experiences which matter.

Can you help us to realize this goal?

1.1 Objectives

For our first year, we have four financial objectives:

 To raise adequate funding for start-up.

 To fill all of the rooms in the main house over the course of six months.
 To open the Skilled Nursing Facility, and maintain it at 9 to 10 rooms occupied for 25 days
per month thereafter.
 Begin development implementation for the ongoing funding needs of years two through five.

We have other, non-financial objectives as well:

 To provide a warm, comfortable, safe and engaging home for up to 14 permanent

residents. Ongoing feedback through the resident House Councils will give us a weekly
update on our progress.
 To provide skilled medical care in a similarly respectful atmosphere to our temporary
Medicare residents.
 To provide adequate training, mentoring and recompense to our caregiving staff to create
job satisfaction.

1.2 Mission

At Bright House, we promote the dignity and self-worth of all of our residents, and strive to give
them excellent quality of life, as defined by the residents, individually and as a group. To that
end, we encourage resident group decision-making through the House Councils, access to all
areas of their homes here at Bright House, and self-determination in activities, socialization,
and food preferences. Bright House is not just a caregiving facility—it is their home, and their
community.

We also value the time, skills, and expert opinions of our staff. We are committed to providing
fair and living wages, reasonable, structured work schedules, and clear duties and spheres of
rights and responsibilities for each team member. We do not expect staff to do work for which
they are not trained; we do expect them to share their suggestions for improving any aspect of
Bright House working operations or caregiving. We aim to provide jobs which not only provide
sustenance for our workers' families, but also allow them a space to make a difference in the
world around them, through caring and expert assistance to our community's most vulnerable
members.
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1.3 Keys to Success

We have identified four keys to success for Bright House:

 We offer more resident-oriented, small-scale, home-model care than our competitors;

 Our innovative use of Elder Assistants lowers the cost of providing this care considerably;
 Our fair wages and team structure lower dissatisfaction, and thus turnover rates among our
staff;
 Our on-site Skilled Nursing Facility ensures continuity of care when our residents need more
intensive assistance.

Chart: Highlights

Highlights

$900,000

$800,000

$700,000

$600,000 Funding
$500,000
Gross Surplus
$400,000 Net Surplus
$300,000

$200,000

$100,000

$0
Year 1 Year 2 Year 3

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 Bright House

2.0 Organization Summary

Bright House is chartered as a nonprofit 501(C)(3) corporation in Middletown, CT, with the goal
of providing holistic and respectful assisted living and skilled nursing home care to a small
group of elderly residents. Our primary location is the old Wayfield Bed and Breakfast, on
Farmer's Road, which we have spent the last five months converting into a two building nursing
home facility in line with Eden Alternatives "Greenhouse" model for enlightened elder living.
(See architectural drawing, attached.)

Our Medical Director, Doctor Mildred Johnson, M.D., M.S.W., of New Haven, is one of the most
respected gerontologists in New England. She will be supported by four licensed practical
nurses, and six Elder Assistants, who will perform all non-clinical duties such as daily
assistance, laundry, cooking, and cleaning. Once a month, our contracted Nutritionist will visit
the retreat to give cooking lessons and to review individual residents' dietary needs. The entire
staff will meet with our Board of Directors three times a year to assess the staffing and other
needs of the facility.

Our Financial operations will be overseen by Madeleine Morgan, who has managed nonprofit
funding and payroll departments for 27 years (see attached resume). She will be supported by
a full-time Medicare Liaison/Billing Specialist, and a part-time Development Officer.

2.1 What Makes Bright House Unique

Although the hospital model of care practiced in most nursing homes provides good results for
Medicaid and Medicare billing purposes—that is, easily quantifiable lists of procedures and
medicines administered, test results, and billable nursing hours—it does not provide good
quality of life for residents (or "patients," as they are referred to in the hospital model).

At Bright House, we see a different way of assisting our elderly members through a new stage
in their lives. Acknowledging that where they live is their home, and belongs to them, not to
the medical staff, we have established a facility that not only meets their medical and physical
needs, but one that also nourishes their social connections, individual dignity, and personal
preferences. Each resident has a private room with bath, opening onto a central shared
common area containing the kitchen, living room, and dining room, where all meals are shared
communally at our 15 foot farm-style dining table.

Far more devastating than physical illness to our elders, is lack of purpose. Studies have shown
over and over that seniors who are engaged in activities they find meaningful are far more
likely to retain mental acuity, physical health, and emotional well-being. Although the hospital
model tries to provide such stimulation, its "activities" are usually organized by staff, with little
or no input from "patients," and become just one more set of required tasks for all involved. At
Bright House, we have already begun working with prospective residents to identify areas of
interest and methods of community involvement that will appeal to them.

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 Bright House

2.2 Legal Entity

Bright House is chartered as a nonprofit 501(C)(3) corporation in Middletown, CT. Its Board of
Directors is drawn from the local medical and community-organization communities.

Board of Directors

 President: Dr. Michael Medical, M.D.

 Members: Laurie Law, Susie Social-Worker, M.P.H., John Leader.

2.3 Start-up Summary

Start-up Expenses

One of the largest items in our Start-up budget is a computerized medical records system.
Preliminary designs of this system have already been constructed by DigInfoMedTel. In addition
to the obvious benefit of allowing multiple care-team members to easily exchange information
as they change shifts, this system will allow our residents and staff to keep track of chronic
conditions, monitor gradual but serious changes in condition which might be overlooked in day-
to-day interactions, and corroborate quantifiable medical data for our Medicare patients in the
skilled nursing facility.

Start-up Assets

Current (Short-term) Assets include $6,000 of start-up inventory (bedding, cleaning and
disposable medical supplies) and non-expensed, smaller medical equipment that will depreciate
quickly, and will need to be replaced in year four or five.

Long-term assets include our existing location, the former Wayfield Bed and Breakfast,
currently assessed at $400,000 including renovations. The location was willed to us by Evelyn
and Jack Bright last February, with the condition that we include a small Medicare facility as
part of the overall plan. This category includes new Long-term Assets needed as follows:
$200,000 for (long-term, resalable) medical equipment, and $150,000 for initial furnishings,
after the renovation.

Medical Equipment:

 1 Fully-loaded Crash Cart

 Standard monitoring equipment (blood pressure, sugar, etc.)
 Call-button system

Furnishings:

For the common areas of both buildings, we will need couches, self-lifting recliners, tables, and
chairs suitable to our residents' needs. We have allocated $35,000 for furnishing the four
common rooms.

Each private room will need a hospital-capable bed, linens, a dresser, and a phone, at the
minimum. With the remaining funding, that leaves just over $6,000 per room. This budget will
allow us to provide attractive, functional, and comfortable surroundings to our residents in their

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 Bright House

new homes. Each bedroom in the main building will have enough remaining space that
residents can bring plenty of familiar furniture with them (up to two side tables and
wingback/reclining chairs, and a second dressing table or its equivalent).

Funding

To fund these start-up costs, we have secured a low-interest loan for $210,000, and have
collected donations and pledges in the amount of $291,500. We have also included the value
($400,000) of the Bright House property in the "donations collected" category to accurately
reflect our assets. We must raise an additional $7,650 by January 1st to begin operations.

Chart: Start-up

Start-up

$900,000

$800,000

$700,000

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0
Expenses Assets Investment Loans

Page 5
 Bright House

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $500
Stationery etc. $200
Advertising $2,450
Insurance $8,000
Computerized Medical Records System $20,000
Expensed Medical Equipment $13,000
Staff Training $5,000
Total Start-up Expenses $49,150

Start-up Assets
Cash Required $78,000
Start-up Inventory $6,000
Other Current Assets $31,000
Long-term Assets $750,000
Total Assets $865,000

Total Requirements $914,150

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 Bright House

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $49,150
Start-up Assets to Fund $865,000
Total Funding Required $914,150

Assets
Non-cash Assets from Start-up $787,000
Cash Requirements from Start-up $78,000
Additional Cash Raised $0
Cash Balance on Starting Date $78,000
Total Assets $865,000

Liabilities and Capital

Liabilities
Current Borrowing $5,000
Long-term Liabilities $210,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $215,000

Capital

Planned Investment
Donations Collected $597,000
Donations Pledged $94,500
Needed $0
Additional Investment Requirement $7,650
Total Planned Investment $699,150

Loss at Start-up (Start-up Expenses) ($49,150)

Total Capital $650,000

Total Capital and Liabilities $865,000

Total Funding $914,150

2.4 Locations and Facilities

We have now nearly completed the five-month renovation of the former Wayfield Bed and
Breakfast into our two main facilities. The main building will house our privately insured,
assisted-living residents. The skilled nursing facility across the courtyard offers more intensive
care for post-operative and recovering temporary residents, as well as providing a setting for
increased care for our residents as needed.

Each resident in our assisted living retreat will have a private bedroom and bath, opening onto
a central social area containing the living room, dining room, and kitchen. We have two larger
rooms that can accommodate married couples who move in at the same time, for a total of 12
rooms, holding up to 14 residents. Each room is wheelchair accessible, and can accommodate
maintenance machines such as oxygen.

The skilled nursing facility to the left of the main building can house up to eleven adults, and is
the only area of the facilities which will house residents receiving Medicare or Medicaid
payments. This part of Bright House has two purposes: as a short-term rehabilitation center for
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 Bright House

community members recovering from surgery or medical emergencies; and as a full-service

nursing facility for residents who can no longer take care of their own needs sufficiently in the
main building. The continuity of location, social contact, and quality of care ensures that our
residents will remain in the best possible surroundings when their needs are greatest.

Middletown, where we are situated, is centrally located 25 minutes from Hartford, and 30
minutes from New Haven. Middletown is a small college town, with an ethnically and
economically-varied population.

3.0 Services

We offer two services: Assisted Living and Skilled Nursing Care. We will begin providing
services in January of next year.

3.1 Service Description

Assisted Living
Our residents in the main building can expect respectful and caring assistance as they go
about the daily activities of their own choice—not those of an Activity Director, or nursing home
staff. The Elder Assistants, in addition to providing personal care, will also do their laundry,
cook all meals (with optional resident assistance), and clean. These residents can expect that
their new home will be just that—their own home, shared in community with other residents,
who come together to socialize, air grievances, plan activities, and share their knowledge and
wisdom with each other and all who choose to visit them. Our residents are welcome to have
visitors at any time between 7am and 9pm, and to plan outings whenever and wherever they
choose. In return, we expect them to keep us informed of their health, their concerns, their
enthusiasms, and their whereabouts, so that we can best assist them.

Skilled Nursing Care

For residents or temporary residents with more demanding health or care situations, our Skilled
Nursing Care Facility offers a more closely supervised and assisted lifestyle on the same
property—right across the courtyard. Our two full-time and two part-time Licensed Practical
Nurses (LPNs) are joined by the full-time Elder Assistants, who perform for our skilled nursing
residents many of the same services they do for our Assisted Living Residents.

Residents staying in our Skilled Nursing Care Facility will receive any necessary medications on
the schedule determined when they enter the facility, administered by our nursing staff, and
overseen by our Medical Director. They will be encouraged to take part in Bright House social
life, including physically non-demanding activities in the Bright House garden, to speed their
recovery and improve their sense of connection.

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 Bright House

3.2 Alternative Providers

The many facilities in our area serving this population offer only hospital-model care facilities.
Their strengths and weaknesses are described below, under Topic 4.3 - Service Providers
Analysis. Our nonprofit status and our alternative care model allow us to offer more resident-
oriented services at a better price, with a more satisfied and team-oriented staff, than these
facilities can.

For our privately insured residents, we offer respectful and nurturing care, viewing the resident
as a whole person, in a particular stage of their life's journey. For our Medicare residents, we
offer a more humane, but still medically-qualified, alternative to the drab prospects of a
standard nursing home. And for their families, we offer peace of mind, and the knowledge that
outside of in-home, full-time care, their loved ones are receiving the best possible daily
assistance in maintaining their preferred lifestyle. 

3.3 Printed Collaterals

Our brochure (attached, 1) describes the services offered and includes "before" and
(envisioned) "after" pictures of the Bed and Breakfast-turned-Elder Home.

Our fundraising packet (attached, 2) includes the brochure, Dr. Johnson's resume' and mission
statement, and testimonials from prospective residents and Dr. Johnson's colleagues.

Both of these will be reworked in June of next year, to bring donors and potential residents and
their families up-to-date on our progress during the first year.

3.4 Technology

In addition to our advanced medical equipment, the main use of technology at Bright House will
be the installation and use of our computerized medical record system. The benefits of this
system (described in the Start-up Summary, above) are numerous. The system will also allow
residents to access their own individual records with a password at will, to ensure that they
understand as much as they can about their own situation, and how to maintain their health.

We are working carefully with DigInfoMedTel to ensure that all of our technology meets Health
Insurance Portability and Accountability Act (HIPAA) standards before implementation. We will
hold a series of HIPAA trainings with the software in mid-December to ensure that our staff is
fully-knowledgeable in this area.

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 Bright House

3.5 Future Services

We hope that Bright House becomes a model for alternative Elder Care in our area. The local
population in this affluent state could support dozens of Elder Care Homes such as ours. In the
second year, with our residents and staff established, we plan to explore potential connections
with local alternative schools, who have expressed an interest in bi-monthly 'heritage trips,' for
their students to take lessons in areas of our residents' expertise, from gardening, to cooking,
to fishing, to electrical design (to name just a few of the many skills our current group of
prospective residents have to offer).

After our first five years, on a firm financial footing, we would also like to find ways to reduce
resident monthly costs to make such care available to families with more modest incomes.
We envision using these initial years to gain the experience and teamwork necessary for
establishing the best caregiver/resident proportion.

4.0 Market Analysis Summary

We are basing our Market Analysis on data from Middlesex and Hartford counties, affluent
portions of which, such as Glastonbury, are within a short drive of our facility.

Base Numbers for private residents:

The current total population of residents 65 and older, according to the 2000 U.S. Census, is
155,071 in Middlesex County, and 857,183 for the same group in nearby Hartford County. (The
percentage of elderly in both counties is slightly higher than the 12.4% of the overall
Connecticut population.) Our projections reduce that number by 70% to account for those
healthy enough to care for themselves, or with family members able to care for them, leaving
us with a total potential market of 303,676. We then reduce that number again by half to get
the total potential customers living within a 35 minute drive of Middletown (these are small
counties, and we are situated at their juncture), leaving us with 151,838. Of these, we estimate
roughly 8.5% will have the means ($150,000 or more family income) to pay for full-time
private care at our facility (based on the 2000 census data about Connecticut income).

This leaves us with roughly 12,906 nearby upper-income residents of Hartford and Middlesex
County who are 65 or older, and in need of medical or other daily assistance in their living
situation. To project into the future, we again looked to the 2000 Census. The Census'
Projected Population of Connecticut is as follows:

1995 2000 2005 2015 2025

467,000 461,000 456,000 526,000 671,000

While the overall population of Connecticut is projected to decline over the next five years,
before rising again, we know that the proportion of the overall population age 75 and older (our
target market age) is slowly rising. We therefore include a modest projected increase in
potential customers of 1% over the next five years.

Medicare residents and short stays:

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 Bright House

A study published recently in the journal Health Affairs by Morrissey, Sloan, and Valvona found
that the proportion of Medicare patients transferred to post-hospital care has doubled since the
Prospective Payment System (PPS) was introduced. Rather than staying in the hospital until
recuperated, the current system preferentially delegates recovery care to private non-hospital
facilities, leaving room in hospitals for urgent or crisis care. We base our projections for
Medicare residents on the same figures listed above, but looking at the percentage of elderly
with family incomes between $30,000 and $75,000 dollars,* rather than just the highest
bracket, we get 40% of the population, or 60,735. We apply the same conservative 1% growth
rate, below.

*This income range was chosen because it correlates with the kind of higher education levels
that most families choosing non-hospital model skilled nursing care report. Although residents
with lower incomes may have a need for our service, they are traditionally less likely to seek
out alternative care.

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Privately-paying Full-time Residents

Medicare Patients

Other

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Privately-paying Full-time
1% 12,906 13,035 13,165 13,297 13,430 1.00%
Residents
Medicare Patients 1% 60,735 61,342 61,955 62,575 63,201 1.00%
Other 0% 0 0 0 0 0 0.00%
Total 1.00% 73,641 74,377 75,120 75,872 76,631 1.00%

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 Bright House

4.1 Market Segmentation

Although we have broken our target population into two groups based on income, our
marketing strategies rely on another level of breakdown—marketing to potential residents, and
marketing to the families of potential residents, who may or may not have similar needs.

4.2 Target Market Segment Strategy

The overall populations we wish to serve are older people (65 and older), in need of daily
assistance, who value community and the contributions of their peers. Since Bright House will
become their home, we especially are seeking residents willing to make this house a home, and
learn from and teach each other.

We also recognize that we must meet the somewhat different needs of our residents' families,
who will help them make the decision to live with us, or recuperate here, and who will almost
certainly be contributing to the monthly payments necessary to provide for their care.

4.2.1 Market Trends

“In the old days, families just took care of families and that took care of the problem of aging,
but we can no longer do that. Churches and other organizations can’t always take up the slack
in this area, and so we are left with public policy decisions about what happens.”

-Senator John Glenn, April 27, 1998 “Elder Care Today and Tomorrow,” Fielding Hearing of the
U. S. Senate Special Committee on Aging, Columbus, Ohio

As mentioned in our Market Analysis, the percentage of the population over 75 is growing
rapidly, thanks to better nutrition, preventative health care, and living conditions in our country
over the course of the last century, not to mention the Baby Boomers. At the same time, the
increasing kinds of career opportunities for women, and the growing cost of health care, have
contributed to a nursing shortage which threatens the quality of professionally-provided elder
care.

Phyllis Moen and Emma Detinger of Cornell University point out, in a paper for the Sloan Work
Family Policy Center, that the quote above, "...reflects an issue emanating from structural lag,
as policies and practices fail to keep pace with changes in the workforce, in families, and in
gender roles (Riley and Riley 1994, 2000). The organization of both work and career paths
reflects a continued reliance on the male breadwinner template, assuming a workforce without
family responsibilities (Moen and Yu 2000). But the new reality is that almost half the workforce
is now female, meaning that most workers—male and female—have no one at home to provide
care to older ailing or infirm relatives, much less child care (see discussion in Harrington 1999
and Moen 1992). Moreover, most cannot afford to purchase comprehensive, round-the-clock
care. The 21st century will witness concerns over childcare policies and practices morphing into
concerns over dependent care policies and practices—an amalgam of both childcare and elder
care."

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 Bright House

4.2.2 Market Needs

The aging of the Baby Boomers is a well-known and much discussed fact of our times. More and
more of this population, many of whom were instrumental in creating the counter-culture of the
1960's and 70's, are unhappily surprised about the options available to them as they age.
Fortunately, just as AARP (formerly known as the American Association of Retired Persons) has
become a major representative of this non-traditional group, elder-care alternatives along the
Eden Care model are being founded.

Residents'/Patients' Needs

Our own experience, based on years of caring for elderly patients, is that people seeking
assisted living care and skilled nursing care have many of the same needs:

 To be treated with respect and dignity

 To be actively engaged in a community of some kind
 To be involved in his/her own treatment and living plan
 To be cared for by skilled, medically-knowledgeable clinicians and caregivers, working as a
team

You may notice that our list of "needs" seems to go in the opposite order to that of most
hospital-model nursing homes; this is not an accident. Unfortunately, most of our elderly
population who need care are treated with the billing system's needs, and not their own, in
mind. 

Families' Needs

Similarly, the families of people seeking caring environments have their own set of needs they
are seeking to fulfill:

 Peace of mind about their loved-ones' physical and mental state

 Relief from the time-consuming job of caring for their family members themselves
 Relief from the feelings of guilt which often overcome them when they find they do not have
the physical, emotional, or intellectual resources to personally provide appropriate care for
those they love

The big, unstated elephant-in-the-room for families seeking care is the feeling of being a bad
daughter or son or spouse, who is not willing or able to put her life on hold to take care of a
much-loved family member. At Bright House, we do not seek to dismiss this feeling, but to
reassure families in everything we do that the choice to let us take care of their family member
is a loving, kind, and generous act.

4.3 Service Providers Analysis

There are a number of different options for families seeking nursing home care, from in-hospital
recovery centers, to for-profit chains, to specialized care for people with Alzheimer's, AIDS,
diabetes, and so on. The specialized care facilities, which are usually nonprofit, and offer
individualized nursing care, come closest to our care model, but are usually reserved for people
with a particular ailment in need of intensive medical assistance.

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 Bright House

4.3.1 Organization Participants

There are 125 Medicare-licensed senior care providers within 25 miles of Middletown (out to
Hartford, Glastonbury, and Farmington). These can be broken down into four rough groups (in
descending order):

 Private, for-profit nursing homes

 Church-based nursing homes
 Veterans' Homes
 Others (like the Alzheimer's Resource Network)

Of these, 57 are part of a multi-home chain, and only 15 are nonprofit. None of them combine
both assisted living and skilled nursing care with the alternative, non-hospital model we use.

4.3.2 Alternatives and Usage Patterns

Families choose one elder care facility over another for a variety of reasons. The most common
issues involved in their decision are distance from their home(s), affordability, quality of staff
and facilities, and particular medical specialties necessary for their family member. Families will
usually choose the highest level of care affordable within 45 minutes to one hour of their
homes, in order to make visiting their family member easier.

4.3.3 Main Alternatives

The following three organizations are representative of the types described above:

Fox Hill Center, Rockville

 For-profit, part of a chain

 3.37 nursing staff hours/resident day
 150 beds (not 150 rooms)
 11 deficiencies in Medicare inspection

Fox Hill Center is typical of the hospital-model nursing home. It is large (150 beds), for-profit,
and has a fairly low rate of nursing hours per resident day. Its size makes it able to care for
many patients, but often at the expense of individual attention.

Sister Anne Virginie Grimes Health Center, New Haven

 Nonprofit, religious based, located in a hospital

 4.16 nh/rd
 125 beds
 3 deficiencies

The Grimes Health Center, like many religious care centers, is nonprofit, and has a slightly
higher rate of nursing hours per resident day than the for-profit centers, despite its large size.
Quality of care, however, is noticeably higher (3 deficiencies in inspection, compared to 11 at
Fox Hill).

Leeway, Inc., New Haven

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 Nonprofit
 5.04 nh/rd
 40 beds
 4 deficiencies

Leeway is a typical specialized private (not in a hospital) nonprofit care facility. It is much
smaller than the other two described, has the highest rate of nursing care per resident day, and
high quality marks in inspection. Its small size and nonprofit status allow it to focus on
providing individual attention. Leeway is Connecticut's first and only skilled nursing home
dedicated solely to the treatment of people living with AIDS.

5.0 Management Summary

Caregiving Management

Bright House offers a different management structure from that of the typical hospital-model
nursing home. Our primary caregivers, the 6 Elder Assistants, work as a self-managed team,
meeting with the Medical Director and the nurse on-call every morning to coordinate care for
the coming day.

Although the Medical Director has the ultimate responsibility for the health and well-being of all
residents and visitors, the nursing and caregiving staff, with their different kinds of knowledge
about the residents' physical, social, and mental well-being, are expected to note, discuss, and
recommend courses of action for all residents who, in their combined estimation, need help.

A 2001 study by the Robert Wood Johnson Foundation found that the small percentage of Chief
Nursing Officers reporting no nursing shortages in their facilities at the time of the study cited
formalized programs focused on the needs of, and professional recognition for, their nursing
staffs as the reason for their adequate staffing. Our compensation packages, management
structure, and caregiving requirements are designed to continually remind our LPNs and Elder
Assistants how very valuable they are. 

Dr. Mildred Johnson is our Medical Director. Dr. Johnson has served as the head of Gerontology
for six years at The Connecticut Hospital, and oversaw the creation, last year, of their Elder
Assistant training program, which provides certification for Certified Nursing Assistants (CNA) to
provide in-home hospice and respite care. Dr. Johnson has 20 years of experience working with
elderly patients in this area, and has been integral in designing the physical layout,
management structure, and priorities of Bright House.

The rest of our already-hired caregiving staff brings a whopping collective 75 years of
professional experience in caring for elderly patients.

Financial Management:

Madeleine Morgan has been overseeing financial management of nonprofit organizations in

Connecticut for 27 years. She became involved in our project when her mother developed a
long-term care plan with Dr. Johnson which included home-based hospice care. "I wish
everyone could have the same love and attention Dr. Johnson showed to my mother,"
Madeleine said. Ms. Morgan will be in charge of all financial operations at Bright House,
overseeing billing, personnel payment and benefits, and development efforts.

Advertising and Marketing:

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 Bright House

We are fortunate to have a skilled public relations officer in our group. Janice Ruthers is a
retired ad executive living in Middletown with her husband (a professor at the university). She
will be working 20 hours per week in our offices as a volunteer for the first two years of our
plan, helping us design advertisements and brochures, and to plan events like our Open House
in December to let the public see the results of our efforts.

5.1 Management Team Gaps

We still need to hire one swing-shift LPN, and one Elder Assistant. We are currently
recruiting through Dr. Johnson's connections at The Connecticut Hospital, and expect to
complete our team by mid-December, at the latest.

5.2 Caregiving Organizational Chart

5.3 Personnel Plan

One of the greatest stumbling blocks for traditional nursing homes is the dissatisfaction and
high turnover rate of its staff. Given the current and foreseeable nursing shortages, this is an
especially troubling tendency. Our Personnel Plan reflects our committment to offer
employment that is not only meaningful, but compensates our employees fairly for their time,
energy, and the emotional toll it takes to spend your days caring for others.

A study in 2000 by the Connecticut Legislative Program Review and Investigations Committee,
the first to measure resident outcomes in relation to nursing staff levels, found residents were
at increased risk for malnutrition, bedsores, dehydration, and preventable hospitalizations when
nursing staff levels dropped beneath 2.75 hours per resident day (this includes Certified
Nursing Assistants). In addition to its small size, which provides for individual attention, our
Skilled Nursing Care Facility's personnel plan will provide no less than 5 hours per resident day
of nursing attention.

Our assisted living retreat across the lawn will make use of these skilled nurses, but will rely for
the most part on the care and attention of our Elder Assistants, nursing aides with special
training for providing care in a holistic setting.

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 Bright House

Our committment to fair, living wages is evident in our personnel plan. To ensure the best
possible care for permanent and respite-care residents, all full-time staff positions include full
health benefits, sick leave, and two weeks paid vacation time per year, increasing with seniority
in years two and three. All benefits are included in the Personnel monthly payments. Our part-
time positions (1 Medicare Holistic/Billing Specialist, and a Development officer) offer benefits
with a higher employee contribution, and paid vacation in proportion to FTE (full-time
equivalent) worked (.5 FTE = one week paid vacation/year, etc.). Our Development Officer
already has a second part-time position with a local patients-rights advocacy group; we are
working with them to coordinate her hours and provide her with a full benefits package.

To meet our staffing goals, we need the following medical and caretaking staff:

 1 full-time Medical Director (Dr. Johnson)

 2 full-time LPNs (alternating 30- and 40-hour weeks—9pm to 7am, switching 4 and 3
days/week) (hired—will start training December)
 1 swing-shift LPN (35 hrs/week, 5-10pm) (still seeking)
 6 full-time Elder Assistants (5 CNAs with CPR and First Aid training are currently taking part
in our special Elder Care training; the sixth still needs to be hired)

We will also need administrative and development personnel:

 1 full-time Financial Manager (Madeleine Morgan)

 1 part-time (20 hours/week) Medicare Billing Specialist (Abby Hannah—currently helping
to plan our computerized medical records system)
 1 part-time Development officer (Jessica Breindel)

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 Bright House

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Medical/Clinical Personnel
Medical Director $66,000 $66,000 $67,000
LPNs - Full-time 35-40 hrs, night $117,000 $118,000 $119,000
LPNs - swing shift, 30 hours, day $34,125 $58,500 $59,000
Subtotal $217,125 $242,500 $245,000

Caretaking Personnel
Elder Assistants $221,520 $223,000 $255,000
Other $0 $0 $0
Subtotal $221,520 $223,000 $255,000

Administrative Personnel
Medicare Liason / Billing Specialist $33,600 $34,000 $34,500
Financial Manager $64,800 $65,000 $65,500
Janice Ruthers - Part-time Marketing $0 $0 $0
Subtotal $98,400 $99,000 $100,000

Fundraising Personnel
Development Officer - Part-time $14,400 $15,000 $15,500
Name or Title or Group $0 $0 $0
Name or Title or Group $0 $0 $0
Subtotal $14,400 $15,000 $15,500

Total People 14 14 14

Total Payroll $551,445 $579,500 $615,500

6.0 Strategy and Implementation Summary

We have set ourselves ambitious goals. The key to holding ourselves to these goals is to set
concrete, measurable milestones, with clear responsibilities and budgets, where applicable. We
have already mentioned the ongoing caregiver meetings, House Councils, and other feedback to
measure our caregiving performance.

The Milestones Chart, below, shows the concrete financial, marketing, and implementation
goals in graphic format. (Details can be found in the Milestones Table in the Appendix.)

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 Bright House

Chart: Milestones

Milestones

Collect Pledges for Remaining Funds

Finish All Remodeling

Inspection

Install-Test Computerized Medical System

Finish Brochures

Finish Hiring Process

Open House

First Operational Review

Assisted Living Facility Full

Jul
Aug
Sep
Jan
Oct
Nov
Dec
Feb
Mar
`05
Apr
May
Jun
Jul
Aug
Sep
Jan
Oct
Nov
Dec
Feb
`06
Mar
Apr
May
Jun
Jul
Aug
Sep
Jan
Oct
Nov
Dec
Feb
`07
Mar
Apr
May
Jun
Jul
Aug
Sep
Jan
Oct
Nov
Dec
Feb
`08
Mar
Apr
May
Jun
Jul
Aug
Sep
Jan
Oct
Nov
Dec
Feb
`09
Mar
Apr
May
Jun
Jul
Aug
Sep
Jan
Oct
Nov
Dec
Feb
Mar
`10
Apr
May
Jun
Jul
Aug

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Collect Pledges for Remaining
8/31/2010 8/30/2004 $0 Breindel Department
Funds
Finalize Agreements w/ Medical
7/30/2004 9/30/2004 $0 Morgan Department
Suppliers
Finish All Remodeling 6/23/2004 8/15/2004 $5,000 Morgan, Ruthers Department
Morgan, Ruthers,
Buy Furnishings 8/15/2004 11/1/2004 $0 Department
Johnson
Inspection 11/1/2004 11/15/2004 $0 Johnson Department
Collect Donations Pledged 7/26/2004 11/15/2004 $0 Breindel, Morgan Department
Install-Test Computerized Medical
9/1/2004 10/30/2004 $0 Hannah Department
System
Place Ads in Hartford Courant 10/1/2004 10/15/2004 $450 Ruthers Department
Finish Brochures 9/1/2004 11/1/2004 $2,000 Ruthers Department
Test Billing System 10/15/2004 11/10/2004 $0 Morgan, Hannah Department
Finish Hiring Process 8/1/2004 12/15/2004 $0 Morgan, Johnson Department
Alternative Care Model Staff
12/1/2004 1/1/2005 $5,000 Johnson Department
Training
Open House 12/10/2004 12/20/2004 $0 Ruthers Department
First Residents Move in 1/1/2005 1/5/2005 $0 ABC Department
First Operational Review 1/15/2005 1/30/2005 $0 Johnson, Morgan Department
Johnson, Elder
House Councils Begin 1/20/2005 1/20/2005 $0 Department
Assistants
Johnson, Morgan,
Assisted Living Facility Full 6/1/2005 6/1/2005 $0 Department
Ruthers
Add "What's New" Pamphlet to
6/1/2005 6/20/2005 $200 Ruthers Department
Brochures
Totals $12,650

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7.0 Financial Plan

As our Break-even Analysis (below) shows, Bright House would need 13 residents per month to
break-even at current funding levels. We intend, of course, to do better than this.

7.1 Important Assumptions

A "full" elder care facility is generally 90% to 95% full. Our non-standard model allows us to
forecast for full occupancy in the main building, since turnover rates for assisted living residents
are expected to be quite low (1-2 per year, at most). The skilled nursing facility, on the other
hand, requires a certain number of empty beds to offer the flexibility needed to accommodate
shorter stays. We therefore are projecting reaching "capacity" of our eleven-bed facility at 10
full beds.

Our resident monthly prices are based on the current Medicare nursing-hours-per-resident-day
rates for our kind of services. Medicare patients are billed at roughly $135/day for nursing care,
not including the cost of any medication to be administered by our staff. Our private patients
are billed at a slightly higher rate to account for the low Medicare reimbursement rate, but also
to pay for the extra benefits they receive as part of living at Bright House. Our rates are
roughly 2/3 of our nearest competitors, the difference being made up for in donations, and
savings gained through staff retention and the use of highly trained, flexible, Elder Assistants.

The small size of our facility allows us a cost savings on maintenance and grounds.

One other important assumption concerns payables: We have assumed collection days of 60,
which averages our private residents' monthly up-front payment, and the typical 60-90 day
reimbursement rate from Medicare.

7.2 Key Financial Indicators

We will be closely watching two things:

 Private Resident capacity

 Medicare Billing payment rates and collection days

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 Bright House

Table: Funding Forecast

Funding Forecast
Year 1 Year 2 Year 3
Units
Assisted Living Main Residents 150 150 150
Medicare Residents - Skilled Nursing Facility 94 96 98
Other 0 0 0
Total Units 244 246 248

Unit Prices Year 1 Year 2 Year 3

Assisted Living Main Residents $3,200.00 $3,200.00 $3,200.00
Medicare Residents - Skilled Nursing Facility $4,050.00 $4,050.00 $4,050.00
Other $0.00 $0.00 $0.00

Funding
Assisted Living Main Residents $480,000 $480,000 $480,000
Medicare Residents - Skilled Nursing Facility $380,700 $388,800 $396,900
Other $0 $0 $0
Total Funding $860,700 $868,800 $876,900

Direct Unit Costs Year 1 Year 2 Year 3

Assisted Living Main Residents $0.00 $0.00 $0.00
Medicare Residents - Skilled Nursing Facility $810.00 $931.50 $931.50
Other $0.00 $0.00 $0.00

Direct Cost of Funding

Assisted Living Main Residents $0 $0 $0
Medicare Residents - Skilled Nursing Facility $76,140 $89,424 $91,287
Other $0 $0 $0
Subtotal Direct Cost of Funding $76,140 $89,424 $91,287

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 3 Mont
2 Month 4
Bright House

1 Month
Month
Month
Chart: Funding Monthly

Funding Monthly
$90,000

$80,000

$70,000

$60,000 Assisted Living Main Residents

$50,000 Medicare Residents - Skilled Nursing Facility

$40,000
Other
$30,000

$20,000

$10,000

$0

Chart: Funding by Year

Funding by Year

$900,000

$800,000

$700,000

$600,000 Assisted Living Main Residents

$500,000 Medicare Residents - Skilled Nursing Facility

$400,000 Other

$300,000

$200,000

$100,000

$0
Year 1 Year 2 Year 3

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7.3 Projected Surplus or Deficit

The projected surplus and deficit follows, below.

Chart: Surplus Monthly

Surplus Monthly

$12,000

$8,000

$4,000

$0

($4,000)

($8,000)

($12,000)

($16,000)

($20,000)
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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 Bright House

Chart: Gross Surplus Yearly

Gross Surplus Yearly

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0
Year 1 Year 2 Year 3

Table: Surplus and Deficit

Surplus and Deficit

Year 1 Year 2 Year 3
Funding $860,700 $868,800 $876,900
Direct Cost $76,140 $89,424 $91,287
Medical/Clinical Payroll $217,125 $242,500 $245,000
Non-reusable Medical Equipment $4,800 $5,000 $5,000
#NAME? $0 $0 $0
Total Direct Cost $298,065 $336,924 $341,287

Gross Surplus $562,635 $531,876 $535,613

Gross Surplus % 65.37% 61.22% 61.08%

Operating Expenses

Caretaking Expenses
Caretaking Payroll $221,520 $223,000 $255,000
Groceries $16,800 $18,000 $20,000
Cleaning Supplies $1,200 $1,200 $1,300
Other Caretaking Expenses $0 $0 $0
Total Caretaking Expenses $239,520 $242,200 $276,300
Caretaking % 27.83% 27.88% 31.51%

Administrative Expenses
Administrative Payroll $98,400 $99,000 $100,000
Other Expense Account Name $0 $0 $0
Depreciation $1,200 $1,500 $1,800
Property Taxes $12,000 $13,000 $14,000
Utilities $24,000 $25,000 $26,000
Insurance $14,400 $15,000 $15,000
Payroll Taxes $82,717 $86,925 $92,325
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Grounds and Building Upkeep $4,800 $5,000 $5,000

Other $0 $0 $0
Total Administrative Expenses $237,517 $245,425 $254,125
Administrative % 27.60% 28.25% 28.98%

Fundraising Expenses:
Fundraising Payroll $14,400 $15,000 $15,500
Brochures, Marketing $800 $1,000 $500
Fundraising Expenses $0 $0 $0
Total Fundraising Expenses $15,200 $16,000 $16,000
Fundraising % 1.77% 1.84% 1.82%

Total Operating Expenses $492,237 $503,625 $546,425

Surplus Before Interest and Taxes $70,398 $28,251 ($10,812)

EBITDA $71,598 $29,751 ($9,012)
Interest Expense $20,479 $17,200 $13,450
Taxes Incurred $0 $0 $0

Net Surplus $49,919 $11,051 ($24,262)

Net Surplus/Funding 5.80% 1.27% -2.77%

7.4 Break-even Analysis

The following Break-even Analysis table shows that with our forecasted operating expenses,
including personnel, we need to serve 13 residents to cover costs. We plan to reach this fairly
conservative goal by the second month of operations (see the Resident Forecast, above).

Table: Break-even Analysis

Break-even Analysis

Monthly Units Break-even 13

Monthly Revenue Break-even $45,001

Assumptions:
Average Per-Unit Revenue $3,527.46
Average Per-Unit Variable Cost $312.05
Estimated Monthly Fixed Cost $41,020

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Chart: Break-even Analysis

Break-even Analysis
$30,000

$20,000

$10,000

$0

($10,000)

($20,000)

($30,000)

($40,000)
0 2 4 6 8 10 12 14 16 18 20 22

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7.5 Projected Cash Flow

Our projected Cash Flow follows. Of special note are plans to sell off two back acres at the far
south end of the property in July to local developers who have approached us about planning
two large, single-family residences. (Developers' sketches included in appendix.)
Also of note are future fundraising plans: With the help of our Development Officer, we plan
fundraising campaigns in years two and three of $35,000 and $40,000, respectively. These
funds will contribute to our forecasted long-term loan payments, since we plan to pay off the
principal ahead of schedule.
Our projected fundraising goals and anticipated expenses are conservative, including only a
modest expected increase in income from residents in years two and three; yet, even at these
levels, our plan maintains a healthy, positive cash balance throughout.

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Funding $645,525 $651,600 $657,675
Cash from Receivables $173,236 $216,805 $218,830
Subtotal Cash from Operations $818,761 $868,405 $876,505

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $5,000 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $25,000 $0 $0
New Investment Received $0 $35,000 $40,000
Subtotal Cash Received $848,761 $903,405 $916,505

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $551,445 $579,500 $615,500
Bill Payments $237,601 $277,357 $282,423
Subtotal Spent on Operations $789,046 $856,857 $897,923

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $5,500 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $25,000 $35,000 $40,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $819,546 $891,857 $937,923

Net Cash Flow $29,215 $11,549 ($21,418)

Cash Balance $107,215 $118,764 $97,346

Page 27
 MonthMo
3
Bright House

MonthMonth
1 2
Chart: Cash

Cash

$100,000

$80,000

$60,000
Net Cash Flow

$40,000 Cash Balance

$20,000

$0

($20,000)

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7.6 Projected Balance Sheet

Our Balance Sheet shows a continued high net worth, reflecting the value of our property,
facility, and medical and communication assets.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $107,215 $118,764 $97,346
Accounts Receivable $41,939 $42,334 $42,729
Inventory $8,100 $8,883 $7,882
Other Current Assets $31,000 $31,000 $31,000
Total Current Assets $188,254 $200,981 $178,957

Long-term Assets
Long-term Assets $725,000 $725,000 $725,000
Accumulated Depreciation $1,200 $2,700 $4,500
Total Long-term Assets $723,800 $722,300 $720,500
Total Assets $912,054 $923,281 $899,457

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $22,635 $22,811 $23,249
Current Borrowing $4,500 $4,500 $4,500
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $27,135 $27,311 $27,749

Long-term Liabilities $185,000 $150,000 $110,000

Total Liabilities $212,135 $177,311 $137,749

Paid-in Capital $699,150 $734,150 $774,150

Accumulated Surplus/Deficit ($49,150) $769 $11,820
Surplus/Deficit $49,919 $11,051 ($24,262)
Total Capital $699,919 $745,970 $761,708
Total Liabilities and Capital $912,054 $923,281 $899,457

Net Worth $699,919 $745,970 $761,708

7.7 Standard Ratios

The Ratios table which follows shows how we differ in asset and income structure from other
continuous care facilities.

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 Bright House

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Funding Growth n.a. 0.94% 0.93% 1.62%

Percent of Total Assets

Accounts Receivable 4.60% 4.59% 4.75% 14.37%
Inventory 0.89% 0.96% 0.88% 0.55%
Other Current Assets 3.40% 3.36% 3.45% 36.74%
Total Current Assets 20.64% 21.77% 19.90% 51.66%
Long-term Assets 79.36% 78.23% 80.10% 48.34%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 2.98% 2.96% 3.09% 20.58%

Long-term Liabilities 20.28% 16.25% 12.23% 28.02%
Total Liabilities 23.26% 19.20% 15.31% 48.60%
Net Worth 76.74% 80.80% 84.69% 51.40%

Percent of Funding
Funding 100.00% 100.00% 100.00% 100.00%
Gross Surplus 65.37% 61.22% 61.08% 100.00%
Selling, General & Administrative Expenses 59.57% 59.95% 63.85% 80.78%
Advertising Expenses 1.95% 2.07% 2.28% 0.39%
Surplus Before Interest and Taxes 8.18% 3.25% -1.23% 2.77%

Main Ratios
Current 6.94 7.36 6.45 1.61
Quick 6.64 7.03 6.17 1.20
Total Debt to Total Assets 23.26% 19.20% 15.31% 54.58%
Pre-tax Return on Net Worth 7.13% 1.48% -3.19% 5.88%
Pre-tax Return on Assets 5.47% 1.20% -2.70% 12.94%

Additional Ratios Year 1 Year 2 Year 3

Net Surplus Margin 5.80% 1.27% -2.77% n.a
Return on Equity 7.13% 1.48% -3.19% n.a

Activity Ratios
Accounts Receivable Turnover 5.13 5.13 5.13 n.a
Collection Days 57 71 71 n.a
Inventory Turnover 11.82 10.53 10.89 n.a
Accounts Payable Turnover 11.50 12.17 12.17 n.a
Payment Days 27 30 30 n.a
Total Asset Turnover 0.94 0.94 0.97 n.a

Debt Ratios
Debt to Net Worth 0.30 0.24 0.18 n.a
Current Liab. to Liab. 0.13 0.15 0.20 n.a

Liquidity Ratios
Net Working Capital $161,119 $173,670 $151,208 n.a
Interest Coverage 3.44 1.64 -0.80 n.a

Additional Ratios
Assets to Funding 1.06 1.06 1.03 n.a
Page 30
 Bright House

Current Debt/Total Assets 3% 3% 3% n.a

Acid Test 5.09 5.48 4.63 n.a
Funding/Net Worth 1.23 1.16 1.15 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Page 31
 Appendix

Table: Funding Forecast

Funding Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Units
Assisted Living Main Residents 0% 8 10 10 12 12 14 14 14 14 14 14 14
Medicare Residents - Skilled Nursing Facility 0% 3 4 4 6 8 9 10 10 10 10 10 10
Other 0% 0 0 0 0 0 0 0 0 0 0 0 0
Total Units 11 14 14 18 20 23 24 24 24 24 24 24

Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assisted Living Main Residents $3,200.00 $3,200.00 $3,200.00 $3,200.00 $3,200.00 $3,200.00 $3,200.00 $3,200.00 $3,200.00 $3,200.00 $3,200.00 $3,200.00
Medicare Residents - Skilled Nursing Facility $4,050.00 $4,050.00 $4,050.00 $4,050.00 $4,050.00 $4,050.00 $4,050.00 $4,050.00 $4,050.00 $4,050.00 $4,050.00 $4,050.00
Other $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Funding
Assisted Living Main Residents $25,600 $32,000 $32,000 $38,400 $38,400 $44,800 $44,800 $44,800 $44,800 $44,800 $44,800 $44,800
Medicare Residents - Skilled Nursing Facility $12,150 $16,200 $16,200 $24,300 $32,400 $36,450 $40,500 $40,500 $40,500 $40,500 $40,500 $40,500
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Funding $37,750 $48,200 $48,200 $62,700 $70,800 $81,250 $85,300 $85,300 $85,300 $85,300 $85,300 $85,300

Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assisted Living Main Residents 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
Medicare Residents - Skilled Nursing Facility 20.00% $810.00 $810.00 $810.00 $810.00 $810.00 $810.00 $810.00 $810.00 $810.00 $810.00 $810.00 $810.00
Other 20.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Direct Cost of Funding

Assisted Living Main Residents $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Medicare Residents - Skilled Nursing Facility $2,430 $3,240 $3,240 $4,860 $6,480 $7,290 $8,100 $8,100 $8,100 $8,100 $8,100 $8,100
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost of Funding $2,430 $3,240 $3,240 $4,860 $6,480 $7,290 $8,100 $8,100 $8,100 $8,100 $8,100 $8,100

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 Appendix

Table: Personnel

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Medical/Clinical Personnel
Medical Director 100% $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500
LPNs - Full-time 35-40 hrs, night 200% $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750
LPNs - swing shift, 30 hours, day 100% $0 $0 $0 $0 $0 $4,875 $4,875 $4,875 $4,875 $4,875 $4,875 $4,875
Subtotal $15,250 $15,250 $15,250 $15,250 $15,250 $20,125 $20,125 $20,125 $20,125 $20,125 $20,125 $20,125

Caretaking Personnel
Elder Assistants 600% $15,600 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $15,600 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720

Administrative Personnel
Medicare Liason / Billing Specialist 100% $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800
Financial Manager 100% $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400
Janice Ruthers - Part-time Marketing 100% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200

Fundraising Personnel
Development Officer - Part-time 100% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Name or Title or Group $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Name or Title or Group $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Total People 13 13 13 13 13 14 14 14 14 14 14 14

Total Payroll $40,250 $43,370 $43,370 $43,370 $43,370 $48,245 $48,245 $48,245 $48,245 $48,245 $48,245 $48,245

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 Appendix

Table: Surplus and Deficit

Surplus and Deficit

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Funding $37,750 $48,200 $48,200 $62,700 $70,800 $81,250 $85,300 $85,300 $85,300 $85,300 $85,300 $85,300
Direct Cost $2,430 $3,240 $3,240 $4,860 $6,480 $7,290 $8,100 $8,100 $8,100 $8,100 $8,100 $8,100
Medical/Clinical Payroll $15,250 $15,250 $15,250 $15,250 $15,250 $20,125 $20,125 $20,125 $20,125 $20,125 $20,125 $20,125
Non-reusable Medical Equipment $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
#NAME? $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Direct Cost $18,080 $18,890 $18,890 $20,510 $22,130 $27,815 $28,625 $28,625 $28,625 $28,625 $28,625 $28,625

Gross Surplus $19,670 $29,310 $29,310 $42,190 $48,670 $53,435 $56,675 $56,675 $56,675 $56,675 $56,675 $56,675
Gross Surplus % 52.11% 60.81% 60.81% 67.29% 68.74% 65.77% 66.44% 66.44% 66.44% 66.44% 66.44% 66.44%

Operating Expenses

Caretaking Expenses
Caretaking Payroll $15,600 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720 $18,720
Groceries $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400
Cleaning Supplies $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Other Caretaking Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Caretaking Expenses $17,100 $20,220 $20,220 $20,220 $20,220 $20,220 $20,220 $20,220 $20,220 $20,220 $20,220 $20,220
Caretaking % 45.30% 41.95% 41.95% 32.25% 28.56% 24.89% 23.70% 23.70% 23.70% 23.70% 23.70% 23.70%

Administrative Expenses
Administrative Payroll $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200
Other Expense Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreciation $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Property Taxes $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Utilities $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Insurance $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Payroll Taxes 15% $6,038 $6,506 $6,506 $6,506 $6,506 $7,237 $7,237 $7,237 $7,237 $7,237 $7,237 $7,237
Grounds and Building Upkeep 15% $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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Total Administrative Expenses $18,938 $19,406 $19,406 $19,406 $19,406 $20,137 $20,137 $20,137 $20,137 $20,137 $20,137 $20,137
Administrative % 50.17% 40.26% 40.26% 30.95% 27.41% 24.78% 23.61% 23.61% 23.61% 23.61% 23.61% 23.61%

Fundraising Expenses:
Fundraising Payroll $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Brochures, Marketing $800 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Fundraising Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Fundraising Expenses $2,000 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Fundraising % 5.30% 2.49% 2.49% 1.91% 1.69% 1.48% 1.41% 1.41% 1.41% 1.41% 1.41% 1.41%

Total Operating Expenses $38,038 $40,826 $40,826 $40,826 $40,826 $41,557 $41,557 $41,557 $41,557 $41,557 $41,557 $41,557

Surplus Before Interest and Taxes ($18,368) ($11,516) ($11,516) $1,365 $7,845 $11,878 $15,118 $15,118 $15,118 $15,118 $15,118 $15,118
EBITDA ($18,268) ($11,416) ($11,416) $1,465 $7,945 $11,978 $15,218 $15,218 $15,218 $15,218 $15,218 $15,218
Interest Expense $1,821 $1,808 $1,792 $1,775 $1,750 $1,725 $1,696 $1,671 $1,646 $1,621 $1,596 $1,579
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Surplus ($20,188) ($13,324) ($13,307) ($411) $6,095 $10,153 $13,422 $13,447 $13,472 $13,497 $13,522 $13,539

Net Surplus/Funding -53.48% -27.64% -27.61% -0.65% 8.61% 12.50% 15.74% 15.76% 15.79% 15.82% 15.85% 15.87%

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 Appendix

Table: Cash Flow

Pro Forma Cash Flow

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received

Cash from Operations

Cash Funding $28,313 $36,150 $36,150 $47,025 $53,100 $60,938 $63,975 $63,975 $63,975 $63,975 $63,975 $63,975
Cash from Receivables $0 $315 $9,525 $12,050 $12,171 $15,743 $17,787 $20,346 $21,325 $21,325 $21,325 $21,325
Subtotal Cash from Operations $28,313 $36,465 $45,675 $59,075 $65,271 $76,680 $81,762 $84,321 $85,300 $85,300 $85,300 $85,300

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $5,000 $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
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $25,000 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $33,313 $36,465 $45,675 $59,075 $65,271 $76,680 $106,762 $84,321 $85,300 $85,300 $85,300 $85,300

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending $40,250 $43,370 $43,370 $43,370 $43,370 $48,245 $48,245 $48,245 $48,245 $48,245 $48,245 $48,245
Bill Payments $505 $15,244 $17,734 $18,145 $21,314 $22,879 $23,588 $24,315 $23,507 $23,482 $23,457 $23,432
Subtotal Spent on Operations $40,755 $58,614 $61,104 $61,515 $64,684 $71,124 $71,833 $72,560 $71,752 $71,727 $71,702 $71,677

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $500 $500 $1,000 $1,000 $1,000 $1,000 $500 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $1,000 $1,000 $1,000 $1,000 $2,000 $2,000 $3,000 $3,000 $3,000 $3,000 $3,000 $2,000
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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 Appendix

Purchase Long-term Assets $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
Subtotal Cash Spent $42,255 $60,114 $63,104 $63,515 $67,684 $74,124 $75,333 $75,560 $74,752 $74,727 $74,702 $73,677

Net Cash Flow ($8,943) ($23,649) ($17,430) ($4,440) ($2,413) $2,556 $31,429 $8,761 $10,548 $10,573 $10,598 $11,623

Cash Balance $69,057 $45,408 $27,978 $23,539 $21,126 $23,682 $55,111 $63,873 $74,421 $84,994 $95,592 $107,215

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 Appendix

Table: Balance Sheet

Pro Forma Balance Sheet

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances

Current Assets
Cash $78,000 $69,057 $45,408 $27,978 $23,539 $21,126 $23,682 $55,111 $63,873 $74,421 $84,994 $95,592 $107,215
Accounts Receivable $0 $9,438 $21,173 $23,698 $27,323 $32,853 $37,423 $40,960 $41,939 $41,939 $41,939 $41,939 $41,939
Inventory $6,000 $3,570 $3,240 $3,240 $4,860 $6,480 $7,290 $8,100 $8,100 $8,100 $8,100 $8,100 $8,100
Other Current Assets $31,000 $31,000 $31,000 $31,000 $31,000 $31,000 $31,000 $31,000 $31,000 $31,000 $31,000 $31,000 $31,000
Total Current Assets $115,000 $113,065 $100,821 $85,917 $86,722 $91,458 $99,394 $135,171 $144,912 $155,460 $166,033 $176,631 $188,254

Long-term Assets
Long-term Assets $750,000 $750,000 $750,000 $750,000 $750,000 $750,000 $750,000 $725,000 $725,000 $725,000 $725,000 $725,000 $725,000
Accumulated Depreciation $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200
Total Long-term Assets $750,000 $749,900 $749,800 $749,700 $749,600 $749,500 $749,400 $724,300 $724,200 $724,100 $724,000 $723,900 $723,800
Total Assets $865,000 $862,965 $850,621 $835,617 $836,322 $840,958 $848,794 $859,471 $869,112 $879,560 $890,033 $900,531 $912,054

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities
Accounts Payable $0 $14,653 $17,133 $17,436 $20,552 $22,094 $22,776 $23,531 $22,724 $22,700 $22,676 $22,651 $22,635
Current Borrowing $5,000 $9,500 $9,000 $8,000 $7,000 $6,000 $5,000 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $5,000 $24,153 $26,133 $25,436 $27,552 $28,094 $27,776 $28,031 $27,224 $27,200 $27,176 $27,151 $27,135

Long-term Liabilities $210,000 $209,000 $208,000 $207,000 $206,000 $204,000 $202,000 $199,000 $196,000 $193,000 $190,000 $187,000 $185,000
Total Liabilities $215,000 $233,153 $234,133 $232,436 $233,552 $232,094 $229,776 $227,031 $223,224 $220,200 $217,176 $214,151 $212,135

Paid-in Capital $699,150 $699,150 $699,150 $699,150 $699,150 $699,150 $699,150 $699,150 $699,150 $699,150 $699,150 $699,150 $699,150
Accumulated Surplus/Deficit ($49,150) ($49,150) ($49,150) ($49,150) ($49,150) ($49,150) ($49,150) ($49,150) ($49,150) ($49,150) ($49,150) ($49,150) ($49,150)
Surplus/Deficit $0 ($20,188) ($33,512) ($46,819) ($47,230) ($41,135) ($30,982) ($17,560) ($4,112) $9,360 $22,858 $36,380 $49,919
Total Capital $650,000 $629,812 $616,488 $603,181 $602,770 $608,865 $619,018 $632,440 $645,888 $659,360 $672,858 $686,380 $699,919
Total Liabilities and Capital $865,000 $862,965 $850,621 $835,617 $836,322 $840,958 $848,794 $859,471 $869,112 $879,560 $890,033 $900,531 $912,054

Net Worth $650,000 $629,812 $616,488 $603,181 $602,770 $608,865 $619,018 $632,440 $645,888 $659,360 $672,858 $686,380 $699,919

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Appendix

Page 1