Chemalite, Inc.Income Statement from January 1, 2003 to June 30, 2003

Sales $0 Cost of Sales $0 Gross Profit $0 Depreciation Expenses $0 Operating Expense ($7,500)Net Income ($7,500)

Chemalite, Inc.Cash Flows Statement from January 1, 2003 to June 30, 2003

Cash flows from Operating ActivitiesCash collectionsCash payments for purchasesCash payments for operating expensesInterest and taxes

Total cash paymentsNet cash provided by operating activities

Cash flows from InvestingPurchase of hard assets (machinery)

Total Cash flows from investing

Cash flows from FinancingSale of stock

Total cash flow from financing

Cash SummaryCash on January 1, 2003Net Change in CashCash on June 30, 2003

Chemalite, Inc.Cash Flows Statement from January 1, 2003 to June 30, 2003

$0 ($75,000)

($7,500)$0

($82,500)($82,500)

($62,500)($62,500)

$375,000 $375,000

$375,000 ($145,000)$230,000

Chemalite, Inc.Balance Sheet for June 30, 2003

AssetsCurrent Assets

CashAccounts ReceivableInventory

Total current assets

Fixed AssetsEquipmentPatent

Total fixed assetsIntangible assetsTotal assets

Liabilities and Shareholders EquityLiabilitiesCurrent Liabilities

Accounts payableTaxes payable

Total Current Liabilities

Long-term liabilitiesLong-term loans

Total liabilities

Shareholders' EquityCommon StockRetained Earnings

Total shareholders' equityTotal liabilities and shareholders' equity

Chemalite, Inc.Balance Sheet for June 30, 2003

$230,000 $0

$75,000 $305,000

$62,500 $125,000 $187,500

$0 $492,500

$0 $0 $0

$0 $0

$500,000 ($7,500)

$492,500 $492,500

Chemalite, Inc.Income Statement for the year ending Deceber 31, 2003

Sales $754,500 Cost of Sales

Materials ($195,000)Manufacturing ($350,000)

Total COGS ($545,000)Gross Profit $209,500

Gross Margin 28%Depreciation Expense ($25,000)Operating Expense ($133,750)Operating Income $50,750 Interest Expense ($750)Net Income before Taxes $50,000

Income TaxesNet Income after Taxes $50,000

Chemalite, Inc.Balance Sheet for the year ending Deceber 31, 2003

AssetsCurrent Assets

CashAccounts ReceivableInventory

Total current assets

Fixed AssetsEquipmentPatent

Total fixed assetsIntangible assetsTotal assets

Liabilities and Shareholders EquityLiabilitiesCurrent Liabilities

Accounts payableTaxes payable

Total Current Liabilities

Long-term liabilitiesLong-term loans

Total liabilities

Shareholders' EquityCommon StockRetained Earnings

Total shareholders' equityTotal liabilities and shareholders' equity

Chemalite, Inc.Balance Sheet for the year ending Deceber 31, 2003

$113,000 $69,500 $55,000

$237,500

$212,500 $100,000 $312,500

$0 $550,000

$0 $0 $0

$0 $0

$500,000 $50,000

$550,000 $550,000

Chemalite, Inc.Cash Flows Statement for the year ending Deceber 31, 2003

Cash flows from Operating ActivitiesCash collections

Cash payments for purchasesCash payments for operating expensesInterestTax

Total cash paymentsNet cash provided by operating activities

Cash flows from InvestingPurchase of hard assets (machinery)

Total Cash flows from investing

Cash flows from FinancingSale of stock

Total cash flow from financing

Cash SummaryNet Change in CashCash on January 1, 2003Cash on June 30, 2003

Chemalite, Inc.Cash Flows Statement for the year ending Deceber 31, 2003

$685,000 ($600,000)($133,750)

($750)$0

($734,500)($49,500)

($212,500)($212,500)

$375,000 $375,000

$113,000 $0

$113,000