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Table of Contents
1.0 Executive Summary.............................................................................................................................1
Chart: Highlights ......................................................................................................................1
1.1 Keys to Success ........................................................................................................................1
1.2 Mission........................................................................................................................................1
1.3 Objectives ...................................................................................................................................2
2.0 Organization Summary .......................................................................................................................2
2.1 Legal Entity .................................................................................................................................2
2.2 Start-up Summary ......................................................................................................................3
Table: Start-up Funding ..........................................................................................................3
Table: Start-up .........................................................................................................................4
Chart: Start-up .........................................................................................................................4
2.3 Program Location ......................................................................................................................4
3.0 Services................................................................................................................................................5
4.0 Market Analysis Summary..................................................................................................................5
4.1 Market Segmentation ................................................................................................................6
Table: Market Analysis ...........................................................................................................6
Chart: Market Analysis (Pie) ..................................................................................................6
4.2 Target Market Segment Strategy.............................................................................................7
4.3 Service Providers Analysis .......................................................................................................7
5.0 Strategy and Implementation Summary ............................................................................................7
5.1 Competitive Edge ......................................................................................................................7
5.2 Marketing Strategy.....................................................................................................................8
5.3 Fundraising Strategy .................................................................................................................8
5.3.1 Funding Forecast ..........................................................................................................8
Table: Funding Forecast ...............................................................................................8
Chart: Funding by Year..................................................................................................9
5.4 Milestones...................................................................................................................................9
Table: Milestones ....................................................................................................................9
6.0 Management Summary.......................................................................................................................9
6.1 Personnel Plan.........................................................................................................................10
Table: Personnel ...................................................................................................................10
7.0 Financial Plan ....................................................................................................................................10
7.1 Break-even Analysis................................................................................................................10
Chart: Break-even Analysis .................................................................................................11
Table: Break-even Analysis .................................................................................................11
7.2 Projected Surplus or Deficit....................................................................................................12
Chart: Surplus Yearly ............................................................................................................12
Table: Surplus and Deficit....................................................................................................13
7.3 Projected Cash Flow...............................................................................................................13
Chart: Cash ...........................................................................................................................14
Table: Cash Flow..................................................................................................................15
7.4 Standard Ratios .......................................................................................................................15
Table: Ratios .........................................................................................................................16
Table: Funding Forecast ...........................................................................................................................1
Table: Personnel ........................................................................................................................................2
Table: Surplus and Deficit .........................................................................................................................3
Table: Cash Flow .......................................................................................................................................4
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Table of Contents
Table: Balance Sheet ................................................................................................................................5
Break-even Analysis ..................................................................................................................................6

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ASTI
1.0 Executive Summary
The Advanced Sc ience and Technology Institute (ASTI) supports research fac ulty and staff at
**State University, University of AnyState, AnyState Health Sciences University and AnyCity
State University in its management of new disc overies. This support includes the management of
new disc overies having commercial applications, as well as the management of corporate
research agreements leading to new disc overy.
**(Editor's Note: Names disguised for confidentiality.)

1.1 Keys to Success

Building a strong support base with the private sector within State and the Northwest.
Creating an effective network between researchers to fac ilitate cross- disc iplinary
contac t.
Raising the viability of ASTI as the one- stop resource for all transferable technology
that is being developed on the campuses of State's four largest universities.

1.2 Mission
The mission of the ASTI is to bring technologies from **State University, University of AnyState,
AnyState Health Sciences University and AnyCity State University into public use; thereby
providing economic development assistance to state and federal agencies and companies to
benefit State constituents, providing service to the technology transfer staff of eac h
institution by assisting in identifying, protecting, developing and transferring technology to the
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ASTI
private sector and generating income. ASTI's unique perspective is in its ability to link
researchers from various institutions to create new technologies that can then be marketed to
the private sector.
Historically, State has received less attention from companies that develop long-term
relationships with the university research c ommunity. With SouthernState universities to the
south and the University of AnyState to the north, State has had a difficult time reac hing the
level of viability nec essary to draw the interest of companies outside the state.
It is a problem of economy of sc ale. Currently, State University, University of AnyState,
AnyState Health Sciences University and AnyCity State University have 128 technologies
available for licensing. One university in SouthernState, The University of Southern State (USS),
has over 200 technologies available for licensing. In addition, USS has received $20 million in
corporate research funding last year. This far exceeds the total for all corporate research
funding for the four State sc hools ($3 million) during the same period. In State, the State
Technology Center has secured $91 million in private funding for technology transfer from the
University of State. It is critical that the four major universities in State pool its resources in
order to be competitive in drawing corporate attention to the excellent researchers working
within their institutions.
It is ASTI's mission to create a resource for the private sector that rivals USC by providing an
aggressive one- stop center for all the pivotal research that is oc curing in State.

1.3 Objectives

Establish a 42-member corporate research support council and increase corporate

membership in ASTI's Technology Development Council by 20% eac h year.
Fac ilitate two new industry sponsored research agreements the first year and increase
the number of agreements eac h year.
Create new research linkages between the four campuses and develop new
collaborative relationships between researchers.
Develop a cross- disc iplinary research database that will link researchers throughout the
state.

2.0 Organization Summary

ASTI is a foc used program that offers a powerful resource to researchers who are seeking
corporate support for research and corporations seeking new technologies. The program also
seeks linkages between the four campus researchers in developing new partnerships that will
generate additional corporate interest.

2.1 Legal Entity

State University, University of AnyState, AnyState Health Sciences University, and AnyCity
State University are all share holders in ASTI.

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ASTI
2.2 Start-up Summary
Start-up costs and initial financing are shown on the following table. Each institution will
contribute $40,000 to ASTI's operating budget.

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$5,800
$154,200
$160,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$0
$154,200
$0
$154,200
$154,200

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)

$0
$0
$0

Other Current Liabilities (interest-free)

Total Liabilities

$0
$0

Capital
Planned Investment
State University
University of State
AnyCity State University

$40,000
$40,000
$40,000

AnyState Health Sciences University

Additional Investment Requirement
Total Planned Investment

$40,000
$0
$160,000

Loss at Start-up (Start-up Expenses)

Total Capital

($5,800)
$154,200

Total Capital and Liabilities

$154,200

Total Funding

$160,000

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ASTI
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Consultants
Insurance
Rent
Research and Development
Expensed Equipment
Other
Total Start-up Expenses

$500
$300
$4,000
$0
$0
$1,000
$0
$0
$0
$5,800

Start-up Assets
Cash Required
Other Current Assets

$154,200
$0

Long-term Assets
Total Assets

$0
$154,200

Total Requirements

$160,000

2.3 Program Location

ASTI will be loc ated in AnyCity, AnyState. This is a good central loc ation for a state-wide
program. AnyCity State University is loc ated in AnyCity. AnyState Health Sciences University
and State University are loc ated in NewTown 60 miles to the north. The University of State is
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ASTI
loc ated in OldTown which is 40 miles south of AnyCity.

3.0 Services
ASTI's services include:
New Technology
Assist in identifying new invention disc losures for new disc overies and evaluation of these new
disc overies to determine commercial potential. A research database will be created and
maintained by ASTI in order to respond quickly to requests for information from the private
sector, especially when it links researchers on multiple campuses. Companies will have a quick
and ac cessible resource that will identify researchers that match their interest areas. ASTI will
also assist in the establishment of new businesses to develop emerging technologies.
Research Collaborations
ASTI will ac tively seek cross-disc iplinary collaboration opportunities between researchers on
the four member campuses.
Technology Conferences
ASTI will sponsor two conferences in Portland eac h year foc using on the areas of Biotechnology,
Material Sc ience, Computer Sc ience, and Medical Technology.
Newsletter and Promotional Publications
ASTI will produce a monthly newsletter and quarterly promotional publications directed toward
the private sector which will foc us on current research on the four campuses and researcher
profiles. This material will also highlight researchers seeking corporate support.

4.0 Market Analysis Summary

The research enterprise at State University, University of AnyState, AnyState Health Sciences
University and AnyCity State University is remarkably broad, deep and diverse, spanning
ac tivities in twenty-two ac ademic colleges and more than 40 multidisc iplinary programs, centers,
programs, and institutes.
ASTI will first foc us on creating the information base nec essary to satisfy high-technology
corporations that are currently prospec ting for new technologies. These are mostly larger
companies, but also include medium- to small-sized companies.
Our most important group of potential customers are the researchers in these companies. They
do not want to waste their time or resources looking for a needle in a haystac k. It is critical that
they find ASTI an excellent tool in quickly identifying technologies and researchers that will
lead to profitable products.
ASTI will provide a two-tier service that will correspond to a company's membership in ASTI's
Technology Development Council. There will be both a full and assoc iate membership option in
the Technology Development Council. We anticipate that larger companies will select the full
membership option bec ause it will offer additional research services. An associate membership is
tailored for the medium- to small-sized companies whose contac ts will be less frequent.

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ASTI
4.1 Market Segmentation
Larger Companies: It is critical to create major stakeholders in the development of a better
delivery system for technology transfer. Currently, there are several large companies that have
an ongoing relationship with researchers on the four major campuses. Recruiting these
companies as full members of the Technology Development Council is an important first step in
improving corporate interest in high-tech members in State. These companies will be
responsive to ASTI's ability to ferret out the research and researchers that they are interested
in reviewing. ASTI will also fac ilitate any cross- disc iplinary linkages that will lead to the pursuit
of research that these companies are interested in. Involvement in the growth of ASTI will
attrac t companies of simular size and stature.
Medium to Small Companies: These companies are critical to the growth of ASTI bec ause they
represent the state's developing high-tech industries. Their foc us in not only on a specific
technology that is being developed at one of the member campuses but also on the graduate
students that are working on the research. As associate members of the Technology
Development Council, these companies will gain greater ac cess to all the research opportunities
that will meet their technology and staff needs.

Table: Market Analysis

Market Analysis
Potential Customers
Large Companies
Medium to Small Companies
Other
Total

Growth
20%
20%
0%
20.17%

Year 1

Year 2

Year 3

Year 4

Year 5

20
15
0
35

24
18
0
42

29
22
0
51

35
26
0
61

42
31
0
73

CAGR
20.38%
19.90%
0.00%
20.17%

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ASTI
4.2 Target Market Segment Strategy
As indicated by the previous table, we must first foc us on all companies that have current
relationships with researchers on the member campuses.

4.3 Service Providers Analysis

The private sector's ac cess to researchers at the member campuses range from excellent in
selected disc iplines, to completely chaotic and frustrating in most others areas.
ASTI's goal is to assure ac cess to all critical research through a streamlined proc ess that
leaves the company both satisfied with the results as well as the time invested in the search.

5.0 Strategy and Implementation Summary

The initial funding from the four member institutions will provide the foundation for launching
ASTI. Its survival will depend on the program's ability to grow a membership base to its
Technology Development Council. The program will not survive if it is unable to meet its goal of
increasing membership in the Council by 20% eac h year.
ASTI's information products and services will add real value to the companies search for
emerging technology. As stated before, our most important group of potential customers are the
researchers in these companies. Their input into the kind of services they want will be critical to
the evolution of ASTI. Our foc us will be to add value in everything connected with ASTI.

5.1 Competitive Edge

ASTI's competitive advantage is their comprehensive approach to providing unequalled ac cess to
researchers. ASTI's foc us is to support the companies in their successful pursuit of emerging
technologies. The most critical component is the responsiveness of the program to company
inquiries into selected research areas.
The best sc enario is the company responding to research highlights provided by ASTI before
initial inquires are made. ASTI will strive to open doors for companies so that long-term
relationships will develop and companies will bec ome members of the Technology Development
Council.
The approach is dec idedly sales-oriented in foc us. This is a critical advantage when in
competition with universities in SouthernState and NorthernState. Companies will find State
research viable and easy to ac cess.
Yet the key to ASTI's success will be in how the program evolves in response to companies
demands. ASTI's Technology Development Council was a vehicle for that evolution. The Council
will provide companies with the ac cess to fine-tune services to improve the program's ability

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ASTI
to meet industry demands.

5.2 Marketing Strategy

ASTI's marketing strategy will be to build the Technology Development Council as a base of
support for technology transfer. The plan is to use existing members of the Council as lead
contac t for other companies. The best description of the strategy is the everwidening ripples when a stone is thrown in a pond. The first step is to capture all the companies
the are currently quite aware of the excellent researchers at the four member institutions.
From that base, begin to recruit new companies that current members will invite into the Council.
Though it is possible that fresh contac ts to ASTI, from inquiries about technology highlighted
in promotional material, can lead to companies joining the Council, it will be the membership of
the Council that will drive the success of the program.

5.3 Fundraising Strategy

The fund raising strategy will be the payment of annual membership fees in the Technology
Development Council. A full membership will be $3,000 a year. An associate membership will
be $1,000.

5.3.1 Funding Forecast

During the first year, ASTI will recruit 20 full members and 21 associate members to the
Technology Development Council.

Table: Funding Forecast

Funding Forecast
Funding
University Funding
Full Memberships
Associate Memberships
Total Funding
Direct Cost of Funding
University Funding
Full Memberships
Associate Memberships
Subtotal Cost of Funding

Year 1

Year 2

Year 3

$160,000
$90,000
$36,000
$286,000

$160,000
$75,000
$26,000
$261,000

$160,000
$93,000
$32,000
$285,000

Year 1
$0

Year 2
$0

Year 3
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

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ASTI

5.4 Milestones
ASTI's milestones are as follows:
1.
2.
3.
4.

Within the first six months of operation to assemble the Technology Development
Council membership.
Publish the first ASTI monthly newsletter in December.
Stage high tech c onferences in AnyCity during the month of March and September in
2002.
Ac hieve two new industry sponsored research agreements with researchers at the
member institutions during the first year of operation.

Table: Milestones
Milestones
Milestone
Council Membership
Newsletter

Start Date
11/1/2001
12/1/2001

End Date
5/1/2002
12/1/2001

Budget
$0
$1,000

Manager
ABC
ABC

Department
Marketing
Marketing

First High-Tech Conference

Second High-Tech Conference
Two New Research Agreements
Totals

3/15/2002
9/21/2002
11/1/2001

3/17/2002
9/23/2002
1/1/2001

$8,000
$8,000
$0
$17,000

ABC
ABC
ABC

Web
Web
Department

6.0 Management Summary

ASTI's director is John Doe. He is excited about the state's vision of establishing a technology
transfer consortium involving the state's strongest corporate citizens. "These are ideas that
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ASTI
many people have shared and promoted," Doe said. "I'm hoping to work with units around the
state to implement these and other ideas related to research agreements with industry."
Doe understands the need for State to strengthen connections with the private sector.
He joins ASTI from Pacific Northwest National Laboratory in MoneyCity, State, where he
worked as technology transfer manager in the Environmental Technology Division. He has a Ph.D.
in low-temperature geochemistry from The Johns Hopkins University in Baltimore, Md., and a
post-doc toral fellow from Yale University.
He believes the technology transfer consortium is a natural mechanism to allow large and small
enterprises to make use of the expertise at the member institutions and allow fac ulty to
participate in entrepreneurial pursuits. "I will promote ideas such as an entrepreneurial sabbatical
for fac ulty where they could pursue business start-ups and the universities will receive some
benefit in return," Doe said. "I'm excited about the opportunities and look forward to working with
the Technology Development Council and promoting the critical research efforts oc curing at the
institutions that ASTI represents."

6.1 Personnel Plan

ASTI's director position is full-time. In addition, ASTI will also have three full-time
employees; a research associate that will be responsible for research data collection, a
communication associate who will be responsible for the program's publications, and a full-time
administrative assistant.

Table: Personnel
Personnel Plan
Director
Research Associate
Communication Associate

Year 1
$60,000
$30,000
$30,000

Year 2
$65,000
$33,000
$33,000

Year 3
$70,000
$36,000
$36,000

Administrative Assistant
Total People

$24,000
4

$26,000
4

$26,000
4

$144,000

$157,000

$168,000

Total Payroll

7.0 Financial Plan

The following sections will outline important financial information.

7.1 Break-even Analysis

The following table shows what our break-even point will be to cover our montuhly costs.

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ASTI

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$22,033

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

0%
$22,033

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ASTI
7.2 Projected Surplus or Deficit
The following table will indicate projected surplus and deficit.

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ASTI
Table: Surplus and Deficit
Surplus and Deficit
Year 1
$286,000
$0

Year 2
$261,000
$0

Year 3
$285,000
$0

$0
$0

$0
$0

$0
$0

Gross Surplus
Gross Surplus %

$286,000
100.00%

$261,000
100.00%

$285,000
100.00%

Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other

$144,000
$83,000
$0
$0
$2,000
$1,800
$12,000
$21,600
$0

$157,000
$39,000
$0
$0
$2,000
$1,800
$12,000
$23,550
$0

$168,000
$39,000
$0
$0
$2,000
$1,800
$12,000
$25,200
$0

Total Operating Expenses

$264,400

$235,350

$248,000

Surplus Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

$21,600
$21,600
$0
$0

$25,650
$25,650
$0
$0

$37,000
$37,000
$0
$0

Net Surplus
Net Surplus/Funding

$21,600
7.55%

$25,650
9.83%

$37,000
12.98%

Funding
Direct Cost
Other Production Expenses
Total Direct Cost

7.3 Projected Cash Flow

The following table and chart illustrate the projected cash flow.

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ASTI

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ASTI
Table: Cash Flow
Pro Forma Cash Flow
Year 1

Year 2

Year 3

$286,000
$286,000

$261,000
$261,000

$285,000
$285,000

$0

$0

$0

$0
$0
$0
$0
$0
$0
$286,000

$0
$0
$0
$0
$0
$0
$261,000

$0
$0
$0
$0
$0
$0
$285,000

Year 1

Year 2

Year 3

$144,000
$110,701
$254,701

$157,000
$81,609
$238,609

$168,000
$79,864
$247,864

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing

$0
$0

$0
$0

$0
$0

Other Liabilities Principal Repayment

Long-term Liabilities Principal Repayment
Purchase Other Current Assets

$0
$0
$0

$0
$0
$0

$0
$0
$0

Purchase Long-term Assets

Dividends
Subtotal Cash Spent

$0
$0
$254,701

$0
$0
$238,609

$0
$0
$247,864

Net Cash Flow

Cash Balance

$31,299
$185,499

$22,391
$207,890

$37,136
$245,025

Cash Received
Cash from Operations
Cash Funding
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations

7.4 Standard Ratios

The following table compares our standard ratios with the Standard Industry Code #8748,
Other Management Consulting Services.

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ASTI
Table: Ratios
Ratio Analysis
Funding Growth
Percent of Total Assets
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Funding
Funding
Gross Surplus
Selling, General & Administrative Expenses
Advertising Expenses
Surplus Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios
Net Surplus Margin
Return on Equity
Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.

Year 1
n.a.

Year 2
-8.74%

Year 3
9.20%

Industry Profile
7.29%

0.00%
100.00%
0.00%
100.00%

0.00%
100.00%
0.00%
100.00%

0.00%
100.00%
0.00%
100.00%

51.87%
75.02%
24.98%
100.00%

5.23%
0.00%
5.23%
94.77%

3.10%
0.00%
3.10%
96.90%

2.68%
0.00%
2.68%
97.32%

31.06%
17.80%
48.86%
51.14%

100.00%
100.00%
92.45%
10.49%
7.55%

100.00%
100.00%
90.17%
11.49%
9.83%

100.00%
100.00%
87.02%
10.53%
12.98%

100.00%
100.00%
74.84%
1.60%
2.61%

19.13
19.13
5.23%
12.29%
11.64%

32.28
32.28
3.10%
12.73%
12.34%

37.26
37.26
2.68%
15.52%
15.10%

1.80
1.49
58.30%
6.19%
14.83%

Year 1
7.55%

Year 2
9.83%

Year 3
12.98%

n.a

12.29%

12.73%

15.52%

n.a

12.41
27
1.54

12.17
38
1.26

12.17
30
1.16

n.a
n.a
n.a

0.06
1.00

0.03
1.00

0.03
1.00

n.a
n.a

$175,800
0.00

$201,450
0.00

$238,450
0.00

n.a
n.a

0.65
5%
19.13
1.63
0.00

0.80
3%
32.28
1.30
0.00

0.86
3%
37.26
1.20
0.00

n.a
n.a
n.a
n.a
n.a

Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Funding
Current Debt/Total Assets
Acid Test
Funding/Net Worth
Dividend Payout

Page 16

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

Funding
University Funding

0%

$160,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Full Memberships

0%

$9,000

$9,000

$9,000

$9,000

$9,000

$9,000

$6,000

$6,000

$6,000

$6,000

$6,000

$6,000

Associate Memberships
Total Funding

0%

$3,000
$172,000

$3,000
$12,000

$3,000
$12,000

$3,000
$12,000

$3,000
$12,000

$3,000
$12,000

$3,000
$9,000

$3,000
$9,000

$3,000
$9,000

$3,000
$9,000

$3,000
$9,000

$3,000
$9,000

Month 1
$0

Month 2
$0

Month 3
$0

Month 4
$0

Month 5
$0

Month 6
$0

Month 7
$0

Month 8
$0

Month 9
$0

Month 10
$0

Month 11
$0

Month 12
$0

Full Memberships
Associate Memberships

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Subtotal Cost of Funding

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Direct Cost of Funding

University Funding

Page 1

Appendix
Table: Personnel
Personnel Plan
Director
Research Associate
Communication Associate

0%
0%
0%

Administrative Assistant
Total People

0%

Total Payroll

Month 1
$5,000
$2,500
$2,500

Month 2
$5,000
$2,500
$2,500

Month 3
$5,000
$2,500
$2,500

Month 4
$5,000
$2,500
$2,500

Month 5
$5,000
$2,500
$2,500

Month 6
$5,000
$2,500
$2,500

Month 7
$5,000
$2,500
$2,500

Month 8
$5,000
$2,500
$2,500

Month 9
$5,000
$2,500
$2,500

Month 10
$5,000
$2,500
$2,500

Month 11
$5,000
$2,500
$2,500

Month 12
$5,000
$2,500
$2,500

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$2,000
4

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

Page 2

Appendix
Table: Surplus and Deficit
Surplus and Deficit
Month 1
$172,000
$0

Month 2
$12,000
$0

Month 3
$12,000
$0

Month 4
$12,000
$0

Month 5
$12,000
$0

Month 6
$12,000
$0

Month 7
$9,000
$0

Month 8
$9,000
$0

Month 9
$9,000
$0

Month 10
$9,000
$0

Month 11
$9,000
$0

Month 12
$9,000
$0

Other Production Expenses

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Direct Cost

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Gross Surplus
Gross Surplus %

$172,000
100.00%

$12,000
100.00%

$12,000
100.00%

$12,000
100.00%

$12,000
100.00%

$12,000
100.00%

$9,000
100.00%

$9,000
100.00%

$9,000
100.00%

$9,000
100.00%

$9,000
100.00%

$9,000
100.00%

Funding
Direct Cost

Expenses
Payroll

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

Sales and Marketing and Other

Expenses
Depreciation
Leased Equipment

$6,917

$6,917

$6,917

$6,917

$6,917

$6,917

$6,917

$6,917

$6,917

$6,917

$6,917

$6,917

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Utilities
Insurance
Rent

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$167
$150
$1,000

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

Surplus Before Interest and Taxes

$149,967

($10,033)

($10,033)

($10,033)

($10,033)

($10,033)

($13,033)

($13,033)

($13,033)

($13,033)

($13,033)

($13,033)

EBITDA
Interest Expense

$149,967
$0

($10,033)
$0

($10,033)
$0

($10,033)
$0

($10,033)
$0

($10,033)
$0

($13,033)
$0

($13,033)
$0

($13,033)
$0

($13,033)
$0

($13,033)
$0

($13,033)
$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$149,967
87.19%

($10,033)
-83.61%

($10,033)
-83.61%

($10,033)
-83.61%

($10,033)
-83.61%

($10,033)
-83.61%

($13,033)
-144.81%

($13,033)
-144.81%

($13,033)
-144.81%

($13,033)
-144.81%

($13,033)
-144.81%

($13,033)
-144.81%

Payroll Taxes
Other
Total Operating Expenses

Taxes Incurred
Net Surplus
Net Surplus/Funding

15%

Page 3

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

$172,000
$172,000

$12,000
$12,000

$12,000
$12,000

$12,000
$12,000

$12,000
$12,000

$12,000
$12,000

$9,000
$9,000

$9,000
$9,000

$9,000
$9,000

$9,000
$9,000

$9,000
$9,000

$9,000
$9,000

Cash Received
Cash from Operations
Cash Funding
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing

New Other Liabilities (interest-free)

$0
$0

$0
$0

$0
$0

$0
$0

$0
$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

Sales of Other Current Assets

Sales of Long-term Assets
New Investment Received

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$172,000

$12,000

$12,000

$12,000

$12,000

$12,000

$9,000

$9,000

$9,000

$9,000

$9,000

$9,000

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

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

Bill Payments
Subtotal Spent on Operations

$334
$12,334

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

$10,033
$22,033

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

$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

Long-term Liabilities Principal Repayment

Purchase Other Current Assets

$0
$0

$0
$0

$0
$0

$0
$0

$0
$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

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$12,334

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

$22,033

Net Cash Flow

$159,666

($10,033)

($10,033)

($10,033)

($10,033)

($10,033)

($13,033)

($13,033)

($13,033)

($13,033)

($13,033)

($13,033)

Cash Balance

$313,866

$303,832

$293,799

$283,766

$273,732

$263,699

$250,666

$237,632

$224,599

$211,566

$198,532

$185,499

Subtotal Cash Received

Subtotal Cash Spent

0.00%

Page 4

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting Balances

Current Assets
Cash
Other Current Assets

$154,200
$0

$313,866
$0

$303,832
$0

$293,799
$0

$283,766
$0

$273,732
$0

$263,699
$0

$250,666
$0

$237,632
$0

$224,599
$0

$211,566
$0

$198,532
$0

$185,499
$0

Total Current Assets

$154,200

$313,866

$303,832

$293,799

$283,766

$273,732

$263,699

$250,666

$237,632

$224,599

$211,566

$198,532

$185,499

Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Accumulated Depreciation
Total Long-term Assets

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$154,200

$313,866

$303,832

$293,799

$283,766

$273,732

$263,699

$250,666

$237,632

$224,599

$211,566

$198,532

$185,499

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Long-term Assets

Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable

$0

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$0
$0
$0

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

$0
$0
$9,699

Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Liabilities

$0

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

$9,699

Paid-in Capital
Accumulated Surplus/Deficit

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

$160,000
($5,800)

Surplus/Deficit
Total Capital

$0
$154,200

$149,967
$304,167

$139,933
$294,133

$129,900
$284,100

$119,867
$274,067

$109,833
$264,033

$99,800
$254,000

$86,767
$240,967

$73,733
$227,933

$60,700
$214,900

$47,667
$201,867

$34,633
$188,833

$21,600
$175,800

Total Liabilities and Capital

$154,200

$313,866

$303,832

$293,799

$283,766

$273,732

$263,699

$250,666

$237,632

$224,599

$211,566

$198,532

$185,499

Net Worth

$154,200

$304,167

$294,133

$284,100

$274,067

$264,033

$254,000

$240,967

$227,933

$214,900

$201,867

$188,833

$175,800

Page 5

Appendix
Break-even Analysis
The following table shows what our break-even point will be to cover our montuhly costs.

Page 6