ESTIMATED COSTS/BUDGET FOR CHAPMAN HOUSE 44 BEDS

No. of No. of Positions @

Personnel Positions % Project Time Monthly Salary First Year Ongoing Annual 100% Occupancy

Program Director 1 100% $ 8,333 $ 100,000 $ 100,000 1

*Clinical Therapist (Licensed) 3 100% $ 4,000 $ 144,000 $ 192,000 4
*Counselor 3 100% $ 2,167 $ 78,000 $ 104,000 4
Detox Manager 1 100% $ 3,000 $ 36,000 $ 36,000 1
Detox Specialist/Client Care 1 100% $ 1,750 $ 21,000 $ 21,000 1
Weekend Counselor 2 50% $ 2,167 $ 26,000 $ 26,000 2
Client Care Staff (w/Rover) 4 100% $ 1,750 $ 84,000 $ 105,000 5
Chef 1 100% $ 2,167 $ 26,000 $ 26,000 1
Prep Cook 1 100% $ 1,750 $ 21,000 $ 21,000 1
Maintenance Specialist 1 100% $ 2,167 $ 26,000 $ 26,000 1
Intake/UR/EMR Mgr 1 100% $ 3,000 $ 36,000 $ 72,000 2
Salary Subtotal $ 23,917 $ 498,000 $ 629,000
Benefits, Workman's Comp, etc (32% of Total Staff Salaries) $ 7,653 $ 159,360 $ 201,280
Total Personnel Costs $ 31,570 $ 657,360 $ 830,280

SUPPORT SERVICES Monthly First Year Ongoing Annual

Psychologist A On-call $ 7,500 $ 67,500 $ 90,000
Professional
Staff TrainingMedical (Detox)
& Education (Initial + A On-call $ 6,000 $ 54,000 $ 72,000
Ongoing) $ 30,000 $ 500 $ 36,000 $ 6,000
Total Sub-Contractors /Consultants $ 30,000 $ 14,000 $ 157,500 $ 168,000
Costs
Operating Costs Initial Cost Monthly First Year Ongoing Annual
Tenant Improvements (one time
expense) $ - $ - $ - $ -
Furnishings (Initial Upgrade + Ongoing) $ 25,000 $ 500 $ 31,000 $ 6,000
Food & Related ($20/day 44 Clients) A $ - $ 17,788 $ 160,089 $ 213,452
Utilities A $ - $ 1,500 $ 13,500 $ 18,000
Facility Maintenance and Repair $ - $ 1,000 $ 12,000 $ 12,000
Vehicle Lease (2 large & 2 Reg Vans) A $ 4,000 $ 4,000 $ 39,000 $ 48,000
Insurance (facility, vehicle, liability) $ - $ 2,000 $ 24,000 $ 24,000
Travel (Gas & Staff related) A $ - $ 1,000 $ 9,000 $ 12,000
Communication (New Phone system) $ 3,000 $ 500 $ 9,000 $ 6,000
Printer/Copier (lease expense) $ - $ 75 $ 900 $ 900
Supplies/Expendible Equipment $ - $ 1,000 $ 12,000 $ 12,000
Computers(Initial + Ongoing lease) $ 2,000 $ 600 $ 9,200 $ 7,200
Software (UR, Invoicing, etc) $ 2,500 $ 600 $ 9,700 $ 7,200
Client Related Supplies A $ - $ 800 $ 7,200 $ 9,600
Recreation Therapy
Bedding/Linen Activities
(Initial Upgrade + A $ - $ 500 $ 4,500 $ 6,000
Ongoing) $ 500 $ 75 $ 1,400 $ 900
Miscellaneous $ 50,000 $ 5,000 $ 110,000 $ 60,000
Total Operation Costs $ 87,000 $ 36,938 $ 452,489 $ 443,252

Other Start up Costs Initial Cost Monthly First Year Ongoing Annual
Call Center Start-up and Marketing
Costs A $ 50,000 $ 500,000 $ 600,000
Business Development Consultant $ 17,500 $ 17,500 $ 210,000
Adminstrative Start-up (I.T. & Consultants) $ 100,000 $ - $ -
Total Start Up Costs $ 100,000 $ 67,500 $ 517,500 $ 810,000

Monthly 1st Year Ongoing Annual

*Monthly Indirect Expenses $ 10,652 $ 127,828 $ 180,122

Description Year One Year Two

Subtotal Annual Direct Expenses $1,784,848 $ 2,251,531

8% of Direct Expenses $ 127,828 $ 180,122

Total Expenditures at Carfax ### $ 2,431,654

Per Diem "Cost" Rate (@ 44 Clients) $ 119 $ 151

Notes: *Denotes Personnel Hiring Adjusted for Year One Program

Ramp-up
A - Denotes Operating Cost Adjusted for Year One Program Ramp-up
 CHAPMAN HOUSE FIVE YEAR PROJECTIONS & PRO-FORMA DATA
TUSTIN FACILITY -- 44 BEDS

Year One Year Two

*REVENUE AT $450 PER CLIENT/PER DAY REVENUE AT $500 PER CLIENT/PER DAY
Month # Clients Rate/day Revenue Cost (Loss) & Profit Month # Clients Rate/day Revenue Cost GP
1 22 $ 450 $ 301,125 $159,390 $ 141,735 13 43 $ 500 $ 653,958 $ 202,638 $ 451,321
2 22 $ 450 $ 301,125 $159,390 $ 141,735 14 43 $ 500 $ 653,958 $ 202,638 $ 451,321
3 27 $ 450 $ 369,563 $159,390 $ 210,173 $ 971,813 15 43 $ 500 $ 653,958 $ 202,638 $ 451,321
4 32 $ 450 $ 438,000 $159,390 $ 278,610 $ 1,533,000 16 43 $ 500 $ 653,958 $ 202,638 $ 451,321
5 37 $ 450 $ 506,438 $159,390 $ 347,048 17 43 $ 500 $ 653,958 $ 202,638 $ 451,321
6 43 $ 450 $ 588,563 $202,638 $ 385,925 18 43 $ 500 $ 653,958 $ 202,638 $ 451,321
7 43 $ 450 $ 588,563 $202,638 $ 385,925 19 43 $ 500 $ 653,958 $ 202,638 $ 451,321
8 43 $ 450 $ 588,563 $202,638 $ 385,925 20 43 $ 500 $ 653,958 $ 202,638 $ 451,321
9 43 $ 450 $ 588,563 $202,638 $ 385,925 21 43 $ 500 $ 653,958 $ 202,638 $ 451,321
10 43 $ 450 $ 588,563 $202,638 $ 385,925 22 43 $ 500 $ 653,958 $ 202,638 $ 451,321
11 43 $ 450 $ 588,563 $202,638 $ 385,925 23 43 $ 500 $ 653,958 $ 202,638 $ 451,321
12 43 $ 450 $ 588,563 $202,638 $ 385,925 24 43 $ 500 $ 653,958 $ 202,638 $ 451,321
Annual Revenue $ 6,036,188 Annual Revenue $ 7,847,500
Annual Expenses $ 2,215,413 Annual Expenses $ 2,431,654
Gross Profit $ 3,820,774 Gross Profit $ 5,415,846

*Discounted Rate of 10%

Year Three Year Four

*REVENUE AT $525 PER CLIENT/PER DAY *REVENUE AT $525 PER CLIENT/PER DAY
Month # Clients Rate/day Revenue Cost GP Month # Clients Rate/day Revenue Cost GP
25 43 $ 525 $ 686,656 $208,717 $ 477,939 37 43 $ 525 $ 686,656 $ 214,796 $ 471,860
26 43 $ 525 $ 686,656 $208,717 $ 477,939 38 43 $ 525 $ 686,656 $ 214,796 $ 471,860
27 43 $ 525 $ 686,656 $208,717 $ 477,939 39 43 $ 525 $ 686,656 $ 214,796 $ 471,860
28 43 $ 525 $ 686,656 $208,717 $ 477,939 40 43 $ 525 $ 686,656 $ 214,796 $ 471,860
29 43 $ 525 $ 686,656 $208,717 $ 477,939 41 43 $ 525 $ 686,656 $ 214,796 $ 471,860
30 43 $ 525 $ 686,656 $208,717 $ 477,939 42 43 $ 525 $ 686,656 $ 214,796 $ 471,860
31 43 $ 525 $ 686,656 $208,717 $ 477,939 43 43 $ 525 $ 686,656 $ 214,796 $ 471,860
32 43 $ 525 $ 686,656 $208,717 $ 477,939 44 43 $ 525 $ 686,656 $ 214,796 $ 471,860
33 43 $ 525 $ 686,656 $208,717 $ 477,939 45 43 $ 525 $ 686,656 $ 214,796 $ 471,860
34 43 $ 525 $ 686,656 $208,717 $ 477,939 46 43 $ 525 $ 686,656 $ 214,796 $ 471,860
35 43 $ 525 $ 686,656 $208,717 $ 477,939 47 43 $ 525 $ 686,656 $ 214,796 $ 471,860
36 43 $ 525 $ 686,656 $208,717 $ 477,939 48 43 $ 525 $ 686,656 $ 214,796 $ 471,860
Annual Revenue $ 8,239,875 Annual Revenue $ 8,239,875
Annual Expenses $ 2,504,603 Annual Expenses $ 2,577,553
Annual Gross Profit $ 5,735,272 Gross Profit $ 5,662,322

YEAR FIVE
*REVENUE AT $550 PER CLIENT/PER DAY
Month # Clients Rate/day Revenue Cost GP
49 43 $ 550 $ 719,354 $220,875 $ 498,479
50 43 $ 550 $ 719,354 $220,875 $ 498,479
51 43 $ 550 $ 719,354 $220,875 $ 498,479
52 43 $ 550 $ 719,354 $220,875 $ 498,479
53 43 $ 550 $ 719,354 $220,875 $ 498,479
54 43 $ 550 $ 719,354 $220,875 $ 498,479
55 43 $ 550 $ 719,354 $220,875 $ 498,479
56 43 $ 550 $ 719,354 $220,875 $ 498,479
57 43 $ 550 $ 719,354 $220,875 $ 498,479
58 43 $ 550 $ 719,354 $220,875 $ 498,479
59 43 $ 550 $ 719,354 $220,875 $ 498,479
60 43 $ 550 $ 719,354 $220,875 $ 498,479
Annual Revenue $ 8,632,250
Annual Expenses $ 2,650,503
Gross Profit $ 5,981,747
 CHAPMAN HOUSE FIVE YEAR PROJECTIONS & PRO-FORMA DATA
FORTY-FOUR (44) BED CAPACITY

Description Year 1 Year 2 Year 3 Year 4 Year 5

Annual Revenue $ 6,008,813 $ 7,847,500 $ 8,239,875 $ 8,239,875 $ 8,632,250
Cost of Goods Sold 0 0 0 0 0
Gross Profit $ 6,008,813 $ 7,847,500 $ 8,239,875 $ 8,239,875 $ 8,632,250
*Operating Costs $ 1,538,180 $ 1,751,979 $ 1,804,538 $ 1,858,675 $ 1,914,435
*Finance & Admin @ 8% $ 127,828 $ 180,122 $ 185,526 $ 191,091 $ 196,824
*Sales & Marketing $ 500,000 $ 600,000 $ 618,000 $ 636,540 $ 655,636
Total Expenses $ 2,166,008 $ 2,532,101 $ 2,608,064 $ 2,686,306 $ 2,766,895
Net Income Before Tax $ 3,842,805 $ 5,315,399 $ 5,631,811 $ 5,553,569 $ 5,865,355
Less Income Tax 0 0 0 0 0
Debt Service @ 5% Interest $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000
Net Income $ 3,842,805 $ 5,315,399 $ 5,631,811 $ 5,553,569 $ 5,865,355
Income After Debt Service $ 3,242,805 $ 4,715,399 $ 5,031,811 $ 4,953,569 $ 5,265,355

FIVE YEAR PROJECTIONS & PRO-FORMA DATA

TWENTY-TWO (22) BEDS

Description Year 1 Year 2 Year 3 Year 4 Year 5

Revenue at 22 Beds $ 3,613,500 $ 4,015,000 $ 4,215,750 $ 4,215,750 $ 4,416,500
Cost of Goods Sold 0 0 0 0 0
Gross Profit $ 3,613,500 $ 4,015,000 $ 4,215,750 $ 4,215,750 $ 4,416,500
**Operating Costs $ 1,216,774 $ 1,213,599 $ 1,250,007 $ 1,287,508 $ 1,326,133
*Finance & Admin @ 8% $ 105,806 $ 108,981 $ 112,250 $ 115,618 $ 119,086
*Sales & Marketing $ 260,000 $ 267,800 $ 275,834 $ 284,109 $ 292,632
Total Expenses $ 1,582,580 $ 1,590,380 $ 1,638,091 $ 1,687,234 $ 1,737,851
Net Income Before Tax $ 2,030,920 $ 2,424,620 $ 2,577,659 $ 2,528,516 $ 2,678,649
Less Income Tax 0 0 0 0 0
Debt Service @ 5% Interest $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000
Net Income $ 2,030,920 $ 2,424,620 $ 2,577,659 $ 2,528,516 $ 2,678,649
Income After Debt Service $ 1,430,920 $ 1,824,620 $ 1,977,659 $ 1,928,516 $ 2,078,649

*Reflects 3% COLA each year

**Reflects 3% COLAs and cost allocation for 22 beds, only
______________________________________________________SALES FORECAST_________________________________________________________

PER DIEM RATE OCCUPANCY YEAR MONTH 1 1ST QTR 2ND QTR MONTH 7 3RD QTR 4TH QTR ANNUALLY

425 *84% One 301,125 971,813 1,533,000 588,563 ### ### 6,036,189
500 98% Two 653,958 ### 1,961,875 653,958 ### ### 7,847,500
_____________________________________________________________________________________________________________________________________
525 80% Three - Worst 549,325 ### 1,647,975 549,325 ### ### 6,591,901
100% Three - Best 700,389 ### 2,101,168 700,389 ### ### 8,404,674
98% Three - Expected 686,656 ### 2,059,969 686,656 ### ### 8,239,876
_____________________________________________________________________________________________________________________________________
525 80% Four - Worst 549,325 ### 1,647,975 549,325 ### ### 6,591,901
100% Four - Best 700,389 ### 2,101,168 700,389 ### ### 8,404,674
98% Four - Expected 686,656 ### 2,059,969 686,656 ### ### 8,239,876
_____________________________________________________________________________________________________________________________________
550 80% Five - Worst 575,483 ### 1,726,450 575,483 ### ### 6,905,802
100% Five - Best 733,741 ### 2,201,224 733,741 ### ### 8,804,897
98% Five - Expected 719,354 ### 2,158,063 719,354 ### ### 8,632,252

*Average utilization percentage for first year ramp-up