Download - EARN MONEY MONTHLY (EMM) - Canada Business Hub · business and will trade under the name of Earn Money Monthly. The information herein has been compiled from the principals’ experience,

EARN MONEY MONTHLY (EMM) BUSINESS PLAN

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TABLE OF CONTENTS

STATEMENT OF NON-DISCLOSURE & CONFIDENTIALITY ......................................................................... ..5

EXECUTIVE SUMMARY ...................................................................................................................................... ..6

USE OF START-UP FUNDS ................................................................................................................................ 10

BUSINESS DESCRIPTION .................................................................................................................................. 10

BUSINESS OVERVIEW ....................................................................................................................................... 10

HISTORY OF THE BUSINESS ............................................................................................................................ 10

VISION AND MISSION STATEMENT ................................................................................................................. 10

BUSINESS GOALS………………………………………………………………………………………………..…..11

OBJECTIVES ............................................................................................................................................... 11

SHORT-TERM GOALS ............................................................................................................................... 11

INTERMEDIATE GOALS ............................................................................................................................ 11

LONG-TERM GOALS.................................................................................................................................. 11

CRITICAL SUCCESS FACTORS ...................................................................................................................... 12

LOCATION AND FACILITIES OF THE BUSINESS ......................................................................................... 13

SERVICES ........................................................................................................................................................... 13

DESCRIPTION OF THE SERVICES ................................................................................................................. 13

DESCRIPTION OF THE SERVICES.......................................................................................................... 13

DESCRIPTION OF FUTURE SERVICES .................................................................................................. 17

STAGE OF DEVELOPMENT ...................................................................................................................... 17

COMPETITIVE ADVANTAGES ......................................................................................................................... 17

COMPETITIVE LANDSCAPE ............................................................................................................................ 18

INDUSTRY OVERVIEW ..................................................................................................................................... 20

INDUSTRY TRENDS .......................................................................................................................................... 24

ECONOMIC FACTORS IN THE INDUSTRY .................................................................................................... 25

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SOCIO-CULTURAL FACTORS .......................................................................................................................... 25

GOVERNMENT REGULATIONS ....................................................................................................................... 25

FINANCE NORMS & PATTERNS...................................................................................................................... 26

MARKETING ........................................................................................................................................................ 26

OVERALL MARKET SIZE .................................................................................................................................. 26

MARKETING ........................................................................................................................................................ 26

MARKET INITIATIVES ........................................................................................................................................ 28

MARKET SEGMENTATION, DEMOGRAPHICS AND TARGET MARKET .................................................... 28

MARKETING/ADVERTISING STRATEGY........................................................................................................ 30

OPERATIONS ..................................................................................................................................................... 30

OPERATIONS PLAN .......................................................................................................................................... 30

STRUCTURAL OVERVIEW ........................................................................................................................ 30

COMPANY ORGANIZATION...................................................................................................................... 30

MANAGEMENT TEAM ................................................................................................................................ 30

ORGANIZATIONAL CHART ............................................................................................................................... 31

IMPLEMENTATION PLAN.................................................................................................................................. 32

SWOT ANALYSIS ............................................................................................................................................... 33

STRENGTHS ............................................................................................................................................... 33

WEAKNESSES ............................................................................................................................................ 33

OPPORTUNITIES ........................................................................................................................................ 33

THREATS ..................................................................................................................................................... 34

FINANCE.............................................................................................................................................................. 34

FINANCIAL NARRATIVE .................................................................................................................................... 34

ASSUMPTIONS ........................................................................................................................................... 35

FINANCIAL PROJECTIONS .............................................................................................................................. 36

START UP FUNDING.................................................................................................................................. 36

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SALES FORECAST ..................................................................................................................................... 37

BREAK-EVEN ANALYSIS........................................................................................................................... 37

INCOME STATEMENT FOR 5 YEARS ..................................................................................................... 38

CASH FLOW FOR 5 YEARS ..................................................................................................................... 39

OPENING BALANCE SHEET ..................................................................................................................... 39

BALANCE SHEET FOR 5 YEARS ............................................................................................................. 40

MONTHLY INCOME STATEMENT FOR 5 YEARS .................................................................................. 41

MONTHLY CASHFLOW FOR 5 YEARS.................................................................................................... 46

CONCLUSION ..................................................................................................................................................... 47

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STATEMENT OF NON-DISCLOSURE & CONFIDENTIALITY

The purpose of this document is to illustrate the feasibility of commencing an online Esports venture in

Toronto, Ontario (referred to as “the company” or “EMM” in this business plan). The company is a registered

business and will trade under the name of Earn Money Monthly.

The information herein has been compiled from the principals’ experience, industry - related materials and

extensive market research. It is provided on an utmost of good faith basis. This business plan contains

forward looking information, statements and projections pertaining to future events, operational performance

and financial performance. Inasmuch as there will be circumstances, changing circumstances and events that

are beyond the company’s control, these are presented on an utmost best efforts basis and the company

cannot guarantee such future performance or events.

This document is not, nor should it be construed to be, a prospectus or an advertisement of any sort for a

public offering of shares. This document does not create, and should not be construed as creating any type of

agency relationship, joint venture, partnership or any similar type of relationship between the company and

the recipient.

The information in this document is private, confidential and proprietary to the company (“confidential

information”). Information that is generally available to the public and/or information developed on an

independent basis by the recipient is not deemed to be confidential information. Disclosure, sharing or

reproduction of the confidential information in any manner, in whole, or in part, directly or indirectly, without

the express written consent of the company or its principals is strictly prohibited.

The terms of this STATEMENT OF NON-DOSCLOSURE AND CONFIDENTIALITY represent the entire

agreement between the company and the recipient at this time.

BY ACCEPTANCE OF THIS DOCUMENT, THE RECIPIENT AGREES TO BE BOUND BY THE

TERMS OF THIS STATEMENT.

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EXECUTIVE SUMMARY

Esports (also known as electronic sports, e-sports, or eSports) is a form of competition using video games.

The segment has displayed astounding growth over the last few years. People can now stream Esports

tournaments on services like Google, Twitch and Youtube. Many of these videos have tens of millions of

views. The world has recognized Esports as a “traditional” sport, and Esports is the fastest growing sport.

Esports has become a major economic segment. More than 300,000 log-ins to Esports occur daily globally

and this is anticipated to exceed 500,000 by the year 2020. The 2018 Esport world championship drew

over 100 Million viewers. Esports events are carried by such majors as ESPN and Turner Broadcasting.

Several Esports teams are now owned by major corporations and pro sports franchises. Growth is fuelled

by recent increases in disposable income levels, increased levels of leisure time, new innovative games

and improved technologies. The Esport economy segment reported 2018 revenues at $869 Million Dollars

and this is expected to exceed 1 Billion Dollars in 2019.

In 2018, more than 23 million Canadians were considered active “gamers” (the global marketing

exceeding 165 million players). Several Canadian companies have entered the Esports segment and

enjoyed considerable success.

Predominant industry trends at this time include: (1) Revenues will continue to skyrocket (2) Competition

will remain brisk(3) Esports will open up to wider demographics profiles – seniors / all ages, a diversity of

students, etc. (4) VR and class learning will increase – a positive image continues to evolve (5) More

players will turn professional (6) The stigma of “video games” is disappearing (7) There is an increase in

industry standards and appropriate regulations (8) Technology continues to improve, and, (9) An intense

focus on security continues

The company is going to be a state of the art online Esports provider. It will carry an attractive inventory of

10 high-quality games: Fortnite, League of legend, Apex legends, CS.GO, Minecraft, PUBG, DOTA 2,

Battlefield, FIFA 19/20, Call of duty (Both Modern Warefare and Black ups)

The company is distinctive inasmuch as its revenue model is subscription based. The company’s vision

statement is to build a profitable and sustainable venture whilst becoming the ‘gold standard” in online Esport

gaming. Its mission is to provide its market with distinctively excellent services and games, thereby achieving

a superb level of client satisfaction whilst developing loyal and long-term relationships. The company’s short

term (36 months) objectives include: (1) aggressively establishing the foothold (2) accomplishing minimum

revenues of $2,000,000 for Fiscal Year End 1 (“FYE 1”), $3,500,000 for FYE 2, and $ 5,000,000 for FYE 3

(3) maintaining net profit margins of at least 25% of sales, and (4) continuously increasing the company’s

goodwill and client base. The primary long-term objectives are to expeditiously build up its menu of games

and gaming options, add sponsors, advertisers and media fees as added channels of revenue.

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Per the resumes herein, company management is experienced, well credentialed and savvy in the Esports

segment. Per the Summary of Start Up Costs, they are making a substantial financial commitment to the

company. The company will develop an outstanding website, marketing system and brand and the

company will exploit this while aggressively employing such strategies as: (1) maintaining a professional

image (2) utilizing social media (3) joining strategically selected associations / affiliations, (4) attending

strategically selected events and, (5) using other traditional media initiatives as deemed to be worthwhile

by management

The company will be run on a “hands-on” and financially disciplined manner. Accordingly, at minimum,

monthly reports will include: (1) Sales (2) Marketing audit (3) Client satisfaction audit, client database (4)

games inventory (including purchasing) (5) Equipment and systems audit, and (6) Financial / operating

statements (including bank reconciliations).

CHART OF TOTAL SALES OVER 5 YEARS

$2.3M

$3.6M

$5.3M

$7.8M

$9.8M

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Year 1 Year 2 Year 3 Year 4 Year 5

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FINANCIAL HIGHLIGHTS

FINANCIAL SYNOPSIS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

SALES 2,320,000 3,610,500 5,307,000 7,843,500 9,798,000

SALES INCREASE

1,290,500 1,696,500 2,536,500 3,719,500

COST OF GOODS SOLD ("COGS") 193,200 302,400 446,400 662,400 979,800

GROSS MARGIN ("GM")

2,126,800 3,308,100 4,860,600 7,181,100 10.973M

OWNER DRAWS (UNDER "PAYROLL")

240,000 240,000 240,000 240,000 240,000

OWNER PAYBACK

121,488 121,488 121,488 121,488 121,488

TAXES 303,222 526,577 820,112 1,258,847 1,902,072

TOTAL OPERATING EXPENSES ("TOE") 913,910 1,201,790 1,580,150 2,145,710 2,974,910

NET INCOME ("NI") 1,212,890 2,106,310 3,280,450 5,035,390 7,608,290

NI % OF SALES 52.28% 58.34% 61.81% 64.20% 77.65%

CASH ON HAND AT YEAR END 1,302,890 3,499,200 6,869,650 11.995M 19.693M

Recent demographics and most popular games

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Start-up funding will be applied towards the following:

TOTAL Owner

invests Other Loans

INCORPORATION / LEGAL

100,000 100,000

SOFTWARE 80,000 80,000

LEASEHOLDS/ RENOS

24,000 24,000

EQUIPMENT 10,000 10,000

POS / FURNITURE/SIGN

5,000 5,000

COPORATION SET UP COST

21,000 21,000

WEBSITE 70,000 70,000

MARKETING / SALES 120,000 120,000

UNEXPECTED COSTS

20,000 20,000

GRAND OPENING

MISCELLANEOUS / OTHER

11,000 11,000

CONTINGENCY (cash)

TOTAL $450,000 $450,000

BUSINESS DESCRIPTION

BUSINESS OVERVIEW

The company is a start-up business, owned and operated by XXXXXX. It is incorporated and is being

established as a state of the art online Esports company that offers a wide variety of online gaming

options as well as tournaments.

HISTORY OF THE BUSINESS The principals have many years of Esports and Esports tournament experience. Per the Summary of Start Up

Costs herein, they have made a substantial commitment to this business.

VISION AND MISSION STATEMENT

The mission of the company is to promote and provide diverse online Esports gaming options via

excellent facilities, services, competitions and tournaments to clients on an anytime and anywhere

basis.

USE OF START-UP FUNDS

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The vision statement is to build a sound, profitable and sustainable venture over a long-term perspective

and to the “gold standard” in Esports operations and best practices.

BUSINESS GOALS

OBJECTIVES

The objectives of company are:

(1) To introduce the company to its target market and to initiate highly effective marketing strategies

(2) To achieve robust prospect-to-client rates

(3) To cultivate increasing brand awareness and goodwill

(4) To establish a superb customer retention rate

(5) To increase the company’s client base on an ongoing basis

SHORT-TERM GOALS

The short-term (within 36 months) goals of the Company are:

(1) To achieve minimum sales of $ 2,000,000 for Fiscal Year End 1 (“FYE 1”), $ 3,000,000 for FYE 2, and

$ 5,000,000 for FYE 3

(2) To maintain excellent margins (net income 25% of sales)

(3) To continuously solidify the company’s foothold in the industry

(4) To have 7,000 clients by FYE1, 10,000 by FYE 2 and 20,000 by FYE 3

(5) To continuously increase the company’s client base by at least 40% per annum

(6) To continuously increase the company’s brand identification

INTERMEDIATE GOALS

The intermediate (three to four years) goals of the Company are:

(1) To expand its games inventory, facilities and gaming options to increased markets

(2) To consider a company owned Esports arena

(3) To solidify financial disciplines and build the financial worth of the company

LONG-TERM GOALS

The long-term (in four to five years) goals of the Company are:

(1) To expand facilities and gaming options to increased markets

(2) To continue to solidify the company’s financial position

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CRITICAL SUCCESS FACTORS – KEYS TO SUSTAINABLITY

• Marketing - Increasing awareness and motivating prospects, distinction from competition, solidifying the

reputation of being a distinctively excellent e-gaming choice

• Sales – building rapport, turning prospects into “regulars” and keeping regulars happy

• Image – the company is honest and efficient and offers highly enjoyable options

• Diversity – a wide variety of Esports options

• Quality Control – uncompromised standards and performance for customer experiences

• Communication - complete customer satisfaction and being properly responsive to situations as well as

opportunities

• Cultivating a loyal and “frequent-visitor” customer base

• Controlling costs properly at all times and maintaining cash and financial discipline

• Adherence to all e-gaming regulations

• Dedication - to the mission and to the success of the business – keeping proven best practices whilst

endeavoring to always improve operations

• Attitude – a strong work ethic combined with a determined, “never-give-up” mindset

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LOCATION AND FACILITIES OF THE BUSINESS

Initially, the business will be an online business only. Company administration and storage of patron

information on servers will be held at a secure facility in Malta.

.

All requisite business licenses, by-laws, zonings, registrations, fees, etc., will be completed prior to

business kick-off.

SERVICES

In recent years, Esports, as a leisure activity, has virtually exploded into economic prominence

(please see Industry Analysis section herein). Numerous success stories abound, and, per its

mission statement, the company intends to become a premiere “player” in the industry.

DESCRIPTION OF THE SERVICES The company’s menu of games may be accessed by PCs for now, but there are future plans to have players

play EMM games on consoles, tablets and other mobile devices. Joining EMM is free, but for playing to play via

the website tournaments, all players should join by subscribing to one of our subscriptions: Beginner, Silver,

Gold, Platinum and Sapphire.

EMM is using a subscription based model for remuneration, the company is participating as another company

that is leading-edge who like other innovative companies is going to disrupt the gaming industry. There are not

many online gaming tournament subscription companies out there. EMM subscription services offer an “all-you-

can-eat buffet” of games for a single monthly price. Players benefit from the vast repertoire of available games,

convenient payment terms with a variety of available options and the ability to cancel with minimal financial risk.

The biggest benefit is to a good player who can make a decent living earning money through EMM by winning

many of the tournaments.

EMM offers players an online gaming platform to enjoy a revenue stream, the ability to quickly update content,

price flexibility, the ability to designate multiple levels of subscriptions, the ability to facilitate loyalty and referral

rewards programs. The company is currently distinctively unique from the perspective of offering a subscription

fees model for online tournaments and for enabling personal selection of tournament players.

Many iconic companies have embraced the “new wave” of the subscription services model These include Apple,

Google and Microsoft, all promising more innovative gaming services (while Amazon, EA and Verizon are all

rumored to be working on their own versions of client-centric offerings).

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Initially, EMM will start with the following 10 games (each game has a license – API). Esports API is the single

source for all esports data and statistics. In the future EMM will acquire more games based on the popularity.

Here are the following 10 games:

1.FORTNITE 2.LEAGUE OF LEGENDS 3.APEX LEGENDS 4.CS. GO 5.MINECRAFT

6.PUBG 7.DOTA 2 8.BATTLEFIELD 9.FIFA 19/20 10. CALL OF DUTY (BOTH MODERN WARFARE AND BLACK UPS)

For the first 5 games, there are weekly tournaments that player can participate. For the rest of games, there are

some private rooms that members are able play games every day.

TOURNAMENTS Each Esport game available on the EMM platform will have 22 tournaments. To start EMM will launch 5

popular games which means there will be 5 games x 22 tournaments equal 110 tournaments per month. The

next stage all games will be launched which means a total of 220 tournaments will be available per month.

Below is a chart to show the breakdown of tournaments for one game and how much money can be won.

PRIVATE ROOMS

In addition to tournaments, where players can participate on a weekly basis, there are private rooms that

members can subscribe to/join and play with their friends. They can choose the game, the prize for tournament,

the number of players, time - virtually everything. These rooms are available every day for players. Tournament

fees due to the website vary according to the prize given.

Generally, the private rooms are extra and there is no set price set for these rooms. EMM gives its players the

flexibility to set their own prices, however there is a fixed service fee of $1.99 plus transaction fee per game

played.

TOURNAMENT PRIZE NUMBER OF TOURNAMENTS TOTAL WINNINGS

$25 2 $50

$50 6 $300

$100 12 $1200

$550 1 $550

$1000 1 $1000

Total 22 $3100

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The private rooms will be popular, because there is no set minimum or maximum number of players that can

play against each other in these rooms. There will be a total of 10 games in total. Players can play as many

games as they want against each other.

PRIVATE ROOM COST PER GAME TO PLAY IN A PRIVATE ROOM:

$25

$50

$100

$150

Max 500

EMM has 5 subscription levels and each type of subscription has different benefits: Beginner: it is a free membership; members can play free in the website however if they want play in a tournament, they have to pay tournament fees separately each time it depends on prize.

Monthly Cost $4.99 3 months -

6 months -

12 months -

Number of Tournaments 2 free Tournaments up to $25

Details ● No points collection ● Access to private rooms 2 in a month only up to $25 plus service fee. ● Chance to win $100 a month ● Only lose to lose $4.99

Silver: members can play free for limited number of tournaments and win prizes

Monthly Cost $9.99 3 months $25.97 16% Save

6 months $47.35 21% Save



Details ● Points collection ● Starting with 100 Bonus points ● Unlimited Access to private rooms up to $200 plus service fee. (2 entries

free of service fees) ● 1 tournament for $550 ● Chance to win $2500+ a month ● Chance to lose $9.99

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Gold: members can play free for limited number of tournaments and win prizes

Monthly Cost $14.99



12 months $124.11 31% Save


Details ● Points collection ● Starting with 300 Bonus points ● Unlimited Access to private rooms up to $350 plus service fee. (4

entries free of service fees) ● 1 tournament for $1000 ● Chance to win $4000+ a month ● Chance to lose $14.99

Platinum: members can play free for limited number of tournaments and win prizes

Monthly Cost $27.99



12 months $214.96 36% Save


Details ● Points collection ● Starting with 800 Bonus points ● Unlimited Access to private rooms up to $500 plus service fee. (8

entries free of service fees) ● 2 tournaments for $1000 ● Chance to win $8000+ a month ● Chance to lose $27.99

Sapphire: members can play free for limited number of tournaments and win prizes

Monthly Cost $99.99 3 months - 6 months $413.96 31% Save 12 months $707.93 41% Save Number of Tournaments 100 free Tournaments Details ● Points collection

● Starting with 3500 Bonus points ● Unlimited access to private room ● Chance to win $15000+ a month ● Chance to lose $99.99 ● No service fees

Non-Subscribers: are non-member that can play for free, but pay tournament fees

PRIZES NUMBER OF TOURNAMENTS

TOTAL WINNINGS NON-SUBSCRIBER FEES

$25 2 $50 $3

$50 6 $300 $5

$100 12 $1200 $10

$550 1 $550 $15

$1000 1 $1000 $20

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As we want to make sure players are playing with commensurate skill levels, reduce the level of chance in the

gaming room and show each player’s skill level, 2 types of points will differentiate players, the first being General

Points, and the second being Skilled Points that reflect points for each game separately.

General Points: included are all points that a player gains from all games - by gaining more points, the player

is able to use some benefits in our site, such as playing in the specific tournament even if his level is lower than

the level of the tournament. These tournaments will take place every season (every 3 months) or every 6

months. Players in these tournaments here qualify to win prizes such as gift cards when players use their

general points to play tournaments.

Skill Points: Players can gain points for each game and it helps them participate in tournaments with same

level players - they can also take advantage from some additional benefits (to be introduced later). These

tournaments will take place every season (every 3 months) or every 6 months. Players in these tournaments

here qualify to win money when players use their skill points to pay tournaments.

The Points System is allocated twice a year based on tournament performance which dictates bonus points

for players to be able to redeem.

Patrons also gain points for each game they play in private rooms (e.g. - winner could win +20). The point

system for each tournament are: Winners Private room skills points winner gets 10 points added and Private

room skills points loser will minus 5 points.

Also, for online tournaments winners 1 place winner will receive 500 points, 2nd place winner will receive 200

points and 3rd place will receive 150 points. All other placements from 4th place to 50th will get added 15 skill

points and 51 and lower placement winners will minus 5 points.

DESCRIPTION OF FUTURE SERVICES

The Company will expand its services to include additional games, host local tournaments and expand

to non-domestic and eventually global operations.

STAGE OF DEVELOPMENT Initial research has been done and planning and strategizing has commenced. A comprehensive

Business Plan has been commissioned.

COMPETITIVE ADVANTAGES

The company’s competitive edge lies in adeptly introducing itself as a fresh, new and exciting option,

in attractive pricing levels, attractive prizes and game availability. It employs a subscription fee model.

The company is distinctive from the perspective that it operates with monthly subscriptions.

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COMPETITIVE LANDSCAPE

The Company has conducted thorough research and is cognizant of potential competitive pressures.

2018 featured more than 165 million Esports and annual revenues were forecast to exceed 1 Billion

Dollars in 2019. The money involved is huge. For instance, Riot Games (creator of League of Legends)

started selling franchises for $10 million dollars each and a Riot Games franchise is now valued at $50

million dollars and upwards. Overwatch franchises are now valued at in and around $60 million dollars.

Over the last 2 years, scores of companies have “entered the fray” in a variety of niches and business

models and revenues are increasing at an astounding rate. The following chart briefly describes the top

five in the world (at this moment):

Top 5 Esports companies in value 2018

In 2018, more than 23 million Canadians were considered active “gamers”. Several Canadian companies

have entered the Esports segment over the last few years. The following are companies that have gone

public (each being very well capitalized) and all having managed strong growth in revenues. It appears

none have adopted a subscription fee model for a revenue channel.

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NAME DESCRIPITION

AXION GAMES EST. 5/2011 – HIGH QUALITY GAMES ACCESS VIA GOOGLE FREE GAMES – HIGH RETENTION RATE *** - THAI PARTNERSHIP IN CREATING GAMES – MANY GAMES AND MANY BEST-SELLING GAMES – AXION GAMES ACADEMY GAMES TRAINING

ENTHUSIAST GAMING EST. 2014 – REPORTEDLY RECEIVING OVER 1 BILLION DOLLARS IN AD REQUESTS PER WEEK – OVER 150 MILLION VIEWS MONTHLY – OWN OVER 80 VIDEO GAMING SITES – RUN TOURNAMENTS AND LIVE EVENTS AS WELL – FAST GROWING CLIENT BASE

E-PLAY DIGITAL EST 2013 - ESPORTS AND AUGMENTED REALITY (AR) AND MOBILE - MANY GAMES CREATED (BIG SHOT) - VERY BROAD INTEGRATIONS AND LIVE STREAMS

FANDOM SPORTS EST 2007 – MOBILE APPS AND LIVE EVENTS AND TOURNAMENTS – USE “FANCOINS” FOR CLIENT REWARDS SYSTEM – FAN BLOG

GLOBAL GAMING TECHNOLOGIES

STRONG IN TECHNOLOGY AND CLIENT STATISTICS – LAUNCHING MOBILE APPS AND DESKTOP AT THE PRESENT TIME – AR, VR, AI INCLUDED – EST. 2010

MILLENNIAL ESPORTS EST. 2011 – VERTICALLY INTEGRATED, INCLUDING MOBILE – VR PLUS LIVE GAMES, EVENTS AND TOURNAMENTS – MANY GAMING OPTIONS AND PRIZES – LAS VEGAS H.Q.

VERSUS SYSTEMS EXPERT AT CONNECTING ADS WITH PLAYERS – EST. 2018 – ADVERTISERS PROVIDE PRIZES (OFTEN MAJOR) AND A FEW ICONIC ADVERTISERS ON BOARD – VARIES GAMES & CONTESTS, ETC.

VICTORY SQUARE TECHNOLOGIES

MORE FOCUSED ON INVESTING / PARTNERING IN ESPORTS VENTURES THROUGH V2 GAMES – INVEST IS START-UPS AND EARLY-STAGE (“TECHNOLOGY ACCELERATOR”) - > 20 COMPANIES

YDX INNOVATIONS EST. 2001 – ESPORTS, VR, AR AND INTERACTIVE EXHIBITIONS (“IE”) – MANY LIVE EVENTS AND FESTIVALS (“GAME ON FESTIVAL) = DIVERSE AND FORWARD-LOOKING

CANADA ESPORTS LEAGUE (“CEL”)

RUN TOURNAMENTS (INCLUDING TEAMS) IN THEIR OWN ARENA – REP. RIOT GAMES (LEAGUE OF LEGENDS) – CANADA’S FIRST DEDICATED ESPORTS ARENA

ESPORTS CENTRAL

MONTREAL BASED ESPORTS ARENA (LARGEST IN CANADA AT 13,000 SQ. FT.) – ALMOST 100 PC’S, 20 CONSOLES AND 6 RACING SIMULATORS

NUMEROUS IN GTA AND ONTARIO

MANY SMALLER, LIMITED SCOPE FACILITIES IN SPORTS BARS, PUBS, CAMPUS GAMING CENTERS AND SOME ARCADES

N.B. – some of the foregoing do not operate directly, or operate on a very small scale, in the company’s niche, but all touch on the company’s market and represent a place a prospect can go as opposed to patronizing the company’s site.

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INDUSTRY OVERVIEW

BACKGROUND Esports (also known as electronic sports, e-sports, or eSports) is a form of competition using video games.

Most commonly, Esports takes the form of organized, multiplayer video game competitions or tournaments

particularly between professional players, individually or as teams. Games are played between players or

teams. Esports are essentially the organized sports world of gaming. Similar to traditional sports, most

participants are not professionals, however, in the past few years, there has been a rapid rise of professional

Esports athletes. The market has grown exponentially, with dramatically increasing numbers of players and

fans. This increased popularity and funding has led to greater organization, more Esports teams, and

attractive huge prize money purses for tournaments, spectators and Esports leagues. People can now stream

Esports tournaments on services like Twitch and Youtube. Many of these videos have tens of millions of

views. High Schools and even governments around the world are recognizing Esports as a “traditional” sport.

Video games have changed from a hobby to an industry and Esports is the fastest growing sport.

Esports has become a major economic segment. 2018 revenues for online gaming in the USA alone

exceeded $18 Billion Dollars – this is forecast to exceed $43 Billion Dollars by the end of 2019. The 2013 to

2018 and the annualized growth rate was an astounding 7.2%, AND, it is growing, with 10% plus annualized

growth rates forecast for the next several years. The segment features more than 44,000 participating

businesses in one form or another and more than 230,000 employees. It is reported that, now, on a global

basis, more than 300,000 log-ins to Esports occur daily and this is anticipated to exceed 500,000 by the year

2020. The 2018 Esport world championship drew over 100 Million viewers. Esports events are carried by

such majors as ESPN and Turner Broadcasting. Several Esports teams are now owned by major pro sports

franchises. A recent Esports championship actually sold out Madison Square Gardens. Growth is fuelled by

recent increases in disposable income levels, increased levels of leisure time, new innovative games and

improved technologies. The Esport economy segment reported 2018 revenues at $869 Million Dollars and

this is expected to exceed 1 Billion Dollars in 2019. The following images illustrate the profound growth and

impact of Esports:

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Increased popularity of hot yoga

ESPORTS OFFERS REAL BENEFITS TO ITS PLAYERS:

Social skills: Esports allows players, students, et al, to make friends from all over the world. The shared gaming

interest, passions, and skills allow all ages to make real connections, often, very quickly.

Life Skills: Esports have proven to offer the same type of benefits as traditional sports. Things like being

committed, disciplined practice, dedication, working on a team and leadership

Strategic thinking and collaboration: These are great skills and many of the games involve a lot of strategic

thinking, planning and team work

23

Becoming More Mainstream: The rising popularity in Esports has resulted in many places making Esports an

officially sanctioned sport in high schools – a student can join a team (or even start a team), but they could also

get college scholarships. There are just more opportunities for players and that trend is going to continue.

Resolving Competition: The path to a professional gamer isn't necessarily easy. Many pros state that they

practice up to 12 hours a day! It's important, however to continue to be well rounded, to get exercise and find

some other interests

Professional Play: Esports now offers the opportunity to make a living, and sometimes a very good living, being

a professional gamer – events and tournaments are proliferating and prizes are significant, with several

individuals realizing millions of dollars in annual earnings.

SITUATIONAL ANALYSIS – ESPORTS 2019

• Esports is a still nascent industry filled with commercial opportunity.

• There are a variety of revenue streams that industry participants can avail.

• The market has significant room to grow.

• The dynamism of this market distinguishes it from traditional sports.

• The audience is high-value and global, and its numbers are rising.

• Brands can prosper in Esports by executing a well strategized game plan.

• Game publishers approach their Esport ecosystems in different ways.

• Successful Esport games are all comprised of the same basic ingredients.

• Digital streaming platforms are spearheading the popularity of Esports.

• Media icons are investing in Esports - and seeing encouraging results.

• Traditional sports franchises have a clear opportunity to exploit in Esports.

• Virtual and augmented reality ventures also stand to benefit from eSports.

Key Metrics: Besides the immense growth in revenues of late, growth in the eSports industry can be gauged by

looking at two key parameters, being viewership and prize money. Statistics for industry giant Twitch (an Amazon

subsidiary) fairly represent recent industry growth trends:

Viewership Data: Twitch primarily focuses on broadcasting eSports competitions along with providing a platform

for video game streamers. In the last three years, it has seen a 21.3% compound annualized growth rate in

viewership. In 2017 alone, viewers watched almost 6 billion hours of content on Twitch.

Prize Money: In the early years of Esports, prize money was fairly low. However, with the overall growth in

viewership and other revenues, prize money has grown by over 30% annually of late. Prize money comes from

either game publishers (such as Valve) or Esports organizations (such as ESL).

24

Viewership and prize money statistics – Twitch

INDUSTRY TRENDS

As mentioned, the industry segment continues to grow at a robust pace and will continue to do so

for years to come. Industry trends also include:

• Revenues will continue to skyrocket – 15% of internet users engage in Esports

• Competition will remain brisk

• Esports will open up to wider demographics profiles – seniors / all ages, a diversity of students, etc.

• VR and class learning will increase – a positive image continues to evolve

• More players will turn professional

• The stigma of “video games” is disappearing

• There is an increase in industry standards and appropriate regulations

• Technology continues to improve

• An intense focus on security continues

25

ECONOMIC FACTORS IN THE INDUSTRY

As mentioned, improving levels of disposable income (predominantly due to improved economic

conditions) and increased available leisure time has acted to fuel industry growth. Esports reported

in excess of 655 Million Dollars in global revenues in 2017 and growth since then has been

extraordinary, with 1 Billion Dollars anticipated for the year 2019. Online gaming in the USA is

predicted to exceed $43 Billion Dollars in aggregate revenues for the year 2019. As the segment

image continues to improve and a wider expanse of potential players evolves, these numbers will

increase. As previously mentioned, daily log-ins for Esports is now in the hundreds of millions.

SOCIO-CULTURAL FACTORS

Esports is truly inclusive. There are few social or cultural barriers to being an “E-gamer”, but one

does need the capacity for a PC / console / mobile device and certain fees if online tournaments are

desired. This is really not too prohibitive, considering excellent used hardware is available at ‘budget-

friendly” prices and fees can be selected from quite small and up.

GOVERNMENT REGULATIONS

It is important to distinguish between online gaming and online gambling in Canada. Online Esports

are not betting sites. There are no government regulations for online gaming in Canada, however,

online gambling carries strict regulations, but these are in a state of change as governments (e.g. –

Ontario) now strive to “get in on the action”. In Canada, there is no entity that serves to regulate

Esports or dictate policy. Certain enterprises, such as Esports Canada (a NFP) have opened in order

to promote the best interests of e-gamers and the industry, while others, such as Ontario Esports

League and Canadian Gaming Association co-mingle interest in the gambling segment. The

Entertainment Software Association of Canada promotes the best interests of video games. Gaming

Esports demographics and most popular games

26

and gambling are often “huddled under the same umbrella” but the gaming segment does avail such

peripheral benefits as advocacy and best practices modalities. A prevailing, if unwritten, rule is that

uncompromised integrity is expected from all players.

FINANCE NORMS & PATTERNS

There are numerous channels of revenue and financial models vary greatly. With more than 23 million

reported “e-gamers” in Canada (over 8 million on Ontario) demand is flush and ubiquitous.

MARKETING The company will use proven strategies and methods.

Core strategies include:

1. Generate immediate and increasing awareness

2. Create interest in visiting the site

3. Emphasize choices / options

4. Emphasize a commitment to superior customer satisfaction

5. Continue to build a strong relationship business - have a business customers trust and love to patronize

6. Create ongoing goodwill, customer appreciation and loyalty programs

OVERALL MARKET SIZE OF ESPORTS SEGMENT

With hundreds of millions of daily Esports log-ins and astounding growth rates-15% of internet users

patronize Esports - the market is global and virtually unlimited:

Esports revenues statistics:

• eSports had over $492 million in revenue in 2016.

• Revenue is expected to increase over 32% by 2020 with an estimated revenue of $1.48 billion in the U.S.

alone.

• eSports revenue topped $696 million in 2017.Of the revenue made in the year 2017

• 38% came from sponsorship with $266 million spent.

• 22% came from advertising at around $155 million.

• 17% was earned from game publishing fees that accounted for $116 million.

• 14% was earned from the media rights which accounted for $95 million.

• 9% came from merchandise and tickets that came in around $64 million.

The North American Esports Market

• The North American eSports market earned $257 million in 2017.

• The revenue in North America is expected to double by 2020 to $607 million.

• Most of the North American revenue came from sponsorships which had a total of $113 million in 2017.

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• The 25 million eSports enthusiasts in North America spend almost twice as much as other regions with

an average of $10.36 each in revenue.

• North America is also expected to see a growth of the export of content licenses up to $95 million which

will be an 82% increase from 2016.

Who watches Esports?

• There were over 323 million viewers in 2016

• In 2017, the total number of hours watched was 2,077,897,606

• Total views in 2017 were 29,853,993.

• The average viewer will typically watch for at least 84 minutes.

• Viewership is comparable to other sport airings with 43 million viewers tuning into the 2017

championship of League of Legends, just 1.5 million less than the amount of viewers game 7 of the NBA

finals had.

• Out of the 385 million viewers in 2017, 191million were Esports fans and enthusiasts, and 194 million

were occasional viewers.

• The sports enthusiasts are expected to see the biggest growth with a 50% in the next three years. They

are also expected to spend the most money with an average of $3.64 per watcher. This figure is

expected to increase to $5.20 by 2020.

• Millennial’s are one of the highest growing demographics with millennial-aged viewers twice as likely to

watch gaming events on a streaming platform.

• 22% of male millennials watch competitive gaming.

• 22% of women are involved in Esports and 18% of men.

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MARKETING INITIATIVES

“Tried and true” marketing techniques will include the following:

• Exploiting various social media channels, including joining Facebook groups, Pinterest, Snapchat,

Instagram and Twitter

• Advertise through Google AdWords, Twitch, social media channels, Youtube

• Collaborate with social media influencers in the industry.

• Collaborate with Youtube gaming stars

• Write blog posts and guest posts

• Start EMM Youtube channel

• Hire freelancers using Upworks or Fiverr

• Hire a digital marketing company

• Utilize Search Engine Optimization (SEO)

• Create affiliate partnerships

• Develop a campaign surrounding EMM slogan – “Great Games – Great Fun – Great Prizes”, etc.

Website Strategy:

The website will be the company’s conduit for business but also its “virtual “home”, a virtual business card,

and a virtual display album. It is an important component of prospect generation. It will showcase: (1) high

quality and diversity of games and events (2) sociable approach to business (3) serving clients with the

highest responsiveness and respect (4) a convenient and enjoyable process, and (5) the fact that the

company is owned and operated by experienced and committed professionals – partners who really enjoy

the business

Website implementation needs to be dynamic, eye-catching, informative and well-structured. The HOME

section should feature an opening impact of “unique selling proposition” - “Best Games – Best Prizes”. The

CONTACT section should feature a closing “call to action” – “Enjoy a game or tournament today!”

Promotion Strategy:

All marketing materials and initiatives are to be professionally crafted. Emphasis will be placed on exciting

and varied game choices, the sociable and secure environment, and specials as stipulated by

management. Each and every client should be treated like a “part of the family”. Per the Financial

Projections section herein 3% of gross revenues will be dedicated to promotion.

MARKET SEGMENTATION, DEMOGRAPHICS AND TARGET MARKET

The core of Esports demand has emanated from “Generation Z” individuals (typically now denoted as

ages from 4 to 24 years). As a percentage of the global population of 7.7 billion, this represents a market

of in and around 2 billion people. Reports indicate that 89% of Gen Z people own consoles, with 56% of

Esports gamers being male and 44% being female. 61% of Esports viewers are 35 years old or younger.

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The evolving trend to accommodate “all ages” has opened the market for literally billions of additional

prospects feeding demand. Canadians are avid “gamers” (projected to be more than 23 million) and

online gaming accounted for $3.7 Billion in 2018 GPD. Northern Arena was Canada’s first pro Esports

league, commenced in 2016. The typical “e-gamer” spends at least 10 hours per week playing.

Some additional gaming marketplace statistics: Clearly, market potential evolves from the widest expanse of demographics.

• The average age of today’s gamer is 31.

• The average number of years gamers have been playing is 14.

• 71% of gamers are age 18 or older.

• 48% of gamers are female.

• 62% of gamers play games with others, either in-person or online.

• 53% of gamers play games on their smart phones / mobile devices

• 41% of gamers play on their wireless device.

• 87% of parents believe that the parental controls available in all new video game consoles are useful.

• 68% of parents believe game play provides mental stimulation or education.

• 55% of parents believe game play helps the family to spend to time together.

GEOGRAPHICS The market is global in nature – there are no restrictions to potential

LIFESTYLE Esports gamers come from every walk of life and include students, beginners, occasional players up to

professional players (regular money winning pros involve 1% of all players).

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MARKETING/ADVERTISING STRATEGY

Brand awareness, enthusiasm and brand loyalty must be cultivated from inception (please see core

strategies and marketing initiatives herein).

PROMOTIONAL BUDGET

The company estimates it will use 3% of its revenues towards marketing /advertising / promotion.

OPERATIONS

OPERATIONS PLAN

STRUCTURAL OVERVIEW

The shareholders X and Y (also called members) own the company by owning its shares and the

directors (CEO, COO, CFO) manage it.

COMPANY OVERVIEW

A Board of Directors will be appointed and the board will duly appoint XXXXXXXXXXX as CEO,

XXXXXXXXXXX as COO, XXXXXXXXXXX as CFO, XXXXXXXXXXX as Vice President of Marketing

Operations, XXXXXXXXXXX as Manager CTO and XXXXXXXXXXX as Accountant.

MANAGEMENT TEAM XXXXXXXXXXX will be the chief executive officer (CEO) of the EMM company, whose

primary responsibilities will include making major corporate decisions, managing the overall

operations and resources of a company, acting as the main point of communication

between the board of directors (the board) and corporate operations, and being the

public face of the company.

XXXXXXXXXXX will be the chief financial officer (CFO) of the EMM company, who will primarily be

responsible for managing the company's finances, including financial planning, management of financial

risks, record-keeping, and financial reporting.

XXXXXXXXXXX will be the chief operating officer (COO) of the EMM company, who will be responsible

for the day-to-day administrative and operational functions of a business. The COO typically reports

directly to the chief executive officer (CEO) and is considered to be second in the chain of command.

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XXXXXXXXXXX will be the VP, Marketing Operations and will oversee marketing strategies and tactics to

strengthen EMMs market position and achieve desired business objectives.

XXXXXXXXXXX will be the chief technology officer (CTO) of the EMM company who will be responsible

for scientific and technological issues within the company.

XXXXXXXXXXX will be the primary accountants who will prepare and examine financial records and make

sure that records are accurate and that taxes are paid properly and on time.

ORGANIZATIONAL CHART

CEO / Managing partner

COOVice President of

Marketing Operations

Manager CTO Accountant

CFO / Managing partner

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DESCRIPTION OF FUTURE RECRUITMENT PLANS Recruitment Plan: The main methods for recruiting staff are anticipated to be word-of-mouth / referrals from existing

relationships and online sites. Staff will be selected on the basis of credentials and a proven track record of

good work habits, teamwork, adaptability and attitude. References will be required and thorough interview

process will be conducted.

Hiring:

• formulate job description

• establish employment parameters and conditions

• review and document policies and procedures

• screen applicant

• interview applicant

• test / challenge / investigate

• hire or decline

Training:

Training will be conducted according to policies and procedures established by management. Annual

performance evaluations will be conducted and documented for all staff members.

IMPLEMENTATION PLAN

The sequence for Start-up requirements will be:

1) Research and select optimum “i-gaming” software - the software provider should offer the following

features:

• an advanced gaming management system

• payment options with multi-currency support

• large coverage of gaming markets

• access to a large selection of top international games

• a customizable front-end

• any required license(s)

• customer support

2) Establish initial inventory of available games

3) Work with legal firm to structure company and legal status

4) Design and institute website – see marketing section herein

5) Establish payment system provider - one whose complete services feature:

• payment processing

• integration with all major e-merchants

• multi-currency support

• advanced risk management

• fraud detection

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6) Marketing plan and institute same - the main goal is to position the company as a quality, trustworthy

business. Inasmuch as the online gaming market is a highly competitive one, the best approach is to only

feature quality games from trusted providers, with users enjoying an excellent experience.

Considerable strategy, effort and focus must be expended in announcing the launch of the new online

Esports business. Ongoing marketing efforts are required to keep players coming back and to attract new

ones on a consistent basis (see marketing strategies).

7) Referral, loyalty and retention rewards system

8) Company IT, SMS and all ongoing operating systems

SWOT ANALYSIS

STRENGTHS

• Industry is enormous with ubiquitous demand - on a global basis

• Global market is easily accessible – market potential is virtually unlimited

• Industry growth is phenomenal and projected to grow at 10% or more per annum for many years

• Highly profitable segment

• Demonstrated sound business model

• Many channels of revenue – fees, ads, sponsorships, T.V., tutorials, merchandise…

• Inroads into the market already established

• Viable, credible and secure software and service providers available

• Experienced, professional and capable management – company management are forward-thinking and

at the leading edge of the segment

• Significant capital commitment from principals

• Expenses easily controlled – a compact business to operate

• Once totally operational, nominal or zero need for ongoing capital investment

• Stable and undoubted year-round demand

WEAKNESSES

• Start-up mode, so “growing pains” need to be resolved along the way

• To a moderate degree, market niche is somewhat narrow at the moment

• Loyal client base needs to be established and increased

• Revenue growth rate to be increased steadily

• Competition must be overcome

OPPORTUNITIES

• To improve existing industry modalities to achieve optimum revenues and profitability

• Significant opportunities to expand platform in order to optimize revenues

• Huge opportunity to develop added initiatives, services, service areas and clients – such things as

advertising, sponsorships and franchising will complement streams of revenue

• Costs for additional/derivative products proportionately low

34

• To expand upon networking, affiliation and strategic alliance opportunities

• To be alert to merger and acquisition opportunities

THREATS

• Segmented Fanbase: there are many games that fall under the extremely broad ‘esports’ term creating

a very segmented and spread out fan base which results in different esports to struggle if they are only

popular in specific markets

• Competition: the market offers massive demand and the company can establish distinctive

competencies (e.g. – pricing, client loyalty) – company management can exploit the leading edge of this

segment

• Game Disruption: many games have been around for a while, and as graphics and designs to continue

to improve any game can lose popularity at any time

• Downturn in economy: market demand is ubiquitous, the demand for online gaming has become

virtually economy-proof.

• Supply Chain risk: this is a service business – other than games access, there is no inventory.

• Underperforming staff: the business is being run as a hands-on manner – replacements, if so required,

can be recruited and trained in a swift and efficient manner – it is a “buyer’s market” regarding staffing.

FINANCE

FINANCIAL NARRATIVE

The financial portion of this plan details this data for the first 3 years and spotlights the revenue and

profits during this period. The projections in this business plan are based on an evaluation of the

potential market, the growth of the market, and the potential growth of an entity developed with the

proposed business model and strategies.

The most important financial indicators are “bottom line” and cash. The Company will constantly monitor

the flow of revenue and operating profits, carefully control the expenses, and accumulate cash to repay

debt. This is reflected in the cash flow and the income statements.

The projected profit and loss statement for the company highlights the relation between the sales

forecast and the operating expenses forecast.

The projected cash flow statement for the company represents the cash balance remaining at the end

of each year after deducting the expenses from the gross profit (revenue minus direct costs) and any

other uses of cash and adding back non-cash items such as depreciation.

Cash flow is crucial to business survival. With the investment requested, the company is confident that

it will have the resources to build the business, handle contingencies, take advantage of new

opportunities, and make capital improvements as needed.

35

The company believes that its long-‐term prospects for growing a successful business are excellent. The company will

break through the startup barriers, acquire the capital needed, and develop a loyal client base in the target

market. Under the leadership of the experienced principals, and coupled with the business model, value

propositions and the customer-‐centric strategy, the company expects to clearly differentiate itself from the

competition and to reach its growth goals.

ASSUMPTIONS

• Business commencement date is April 2020.

• Per Use of Start Up Funds, $450,000 originally invested by principals and the cash is

deployed as specified in Use of Start Up Funds ($450,000)

• Monthly subscription fees are comprised of 15% Basic / beginners (at $4.99 per month), 25% for

Silver, Gold and Platinum (at $9.99, $14.99 and $27.99 per month respectively) and 10% Sapphire (at

$99.99 per month) – N.B. – per pro forma, this averages $23.99 per month per subscriber

• Monthly tournaments average twice per subscriber at $1.99 per tournament which means each subscriber

goes in 2 tournaments a month at $ 1.99 a tournament

• Sponsorship, advertising and other revenues assumed at 0% of total subscription fees –

Although these will evolve over time, projections do not include at this time to start

• Merchandise sales assumed at 0% of subscription fees to start

• Private room income based on 50% of tournaments at average of $100 per tournament Year

1 and increasing by $25 per tournament for each subsequent year

• Cost of Goods Sold (COGS) assumed at 10% of subscription fees

• Payroll = OWNERS as business management, including support

• Miscellaneous staff = 5% of payroll

• Depreciation based on $450,000 amortized over 60 months (= $7,500 per month)

• Marketing / promotion assumed at 3% of sales

• Repairs / maintenance assumed at 1% of sales

• Credit card expense = 1% of sales

• Accruals are legal and accounting (at $500 per month)

• OWNERS assumed to be remunerated for Return on Investment (“ROI”) per: $450,000

amortized over 60 months at a simple interest rate of 12.5% = monthly payment (principal +

interest) of $10,124 - Owners also entitled to any bonuses and/or dividends as agreed upon

• Taxes assumed at 20% of net income

• Total Expenses include all operating costs, depreciation payroll (owners as managers), owners ROI and

taxes

• No loans or leases and no rent to start

36

TOTAL REVENUES include Member subscription fees, private room fees, tournament participation fees, advertising fees, sponsorship investment and “other” income (e.g. – merchandise)

TOTAL EXPENSES include Payroll, rent, miscellaneous staff (benefits, etc.), depreciation, normal operating expenses (phone, utilities, insurance, etc.), accruals (legal and accounting), shareholders’ return-on-investment (“ROI”) payment and taxes

CASH FLOW from operations Cash flow is calculated by taking net income for a period and adding back any non-cash expense (such as depreciation) and then deducting non-operating cash uses such as principal pay-down on loans and dividends

COMPANY NET WORTH at inception The company net worth starts at $450,000, being the original owners’ investment and reflecting no loans, leases or other liabilities

FINANCIAL PROJECTIONS

START-UP FUNDING START-UP EXPENSES TO FUND $ 0 START-UP ASSETS TO FUND $ 450,000 TOTAL FUNDING REQUIRED 450,000

ASSETS

NON-CASH ASSETS AT START-UP (SEE CHART)

$450,000

CASH REQUIREMENTS FROM START-UP $450,000 ADDITIONAL CASH RAISED $0 CASH BALANCE ON STARTING DATE TOTAL ASSETS $ 450,000

LIABILITIES AND CAPITAL

LIABILITIES

CURRENT BORROWING $0 LONG-TERM LIABILITIES $0 ACCOUNTS PAYABLE (OUTSTANDING BILLS) $0 OTHER CURRENT LIABILITIES (INTEREST-FREE)

$0

TOTAL LIABILITIES $0

CAPITAL

PLANNED INVESTMENT

OWNER $450,000 GRANT/INVESTMENT FUNDING $0 ADDITIONAL INVESTMENT REQUIREMENT $0 TOTAL PLANNED INVESTMENT $450,000

LOSS AT START-UP (START-UP EXPENSES) $0 TOTAL CAPITAL

$450,000

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SALES FORECAST

Year 1 Year 2 Year 3 Year 4 Year 5 SALES 2,320,000 3,610,500 5,307,000 7,843,500 9,798,000 OTHER TOTAL SALES 2,320,000 3,610,500 5,307,000 7,843,500 9,798,000

DIRECT COST OF SALES 193,200 302,400 446,400 662,400 979,800 SUBTOTAL DIRECT COST OF SALES

193,200 302,400 446,400 662,400 979,800

BREAK-EVEN ANALYSIS

MONTHLY REVENUE BREAK-EVEN (MONTH1)

$61,750

ASSUMPTIONS:

AVERAGE PERCENT VARIABLE COST

10%

ESTIMATED MONTHLY FIXED COST

$56,139

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INCOME STATEMENT


SALES 2,320,000 3,610,500 5,307,000 7,843,500 9,798,000 DIRECT COST OF SALES 193,200 302,400 446,400 662,400 979,800 OTHER COSTS OF SALES

TOTAL COST OF SALES 193,200 302,400 446,400 662,400 979,800

GROSS MARGIN 2,126,800 3,308,100 4,860,600 7,181,100 10.973M GROSS MARGIN % 92% 92% 92% 92% 92%

EXPENSES PAYROLL 240000 240000 240000 240000 240000 MARKETING/PROMOTION 11894 26386 40878 55380 66870

DEPRECIATION 90000 90000 90000 90000 90000 AUTOMOTIVE EXPENSES

BANK CHARGES

EQUIPMENT PURCHASES

FRINGE BENEFITS 1500 3000 4500 6000 7500

INSURANCE 5500 6000 6000 6000 6000

INVENTORY PURCHASES $0 $0 $0 $0 $0

LEASEHOLD IMPROVEMENTS

$0 $0 $0 $0 $0

ROI PAYMENTS 121,488 121,488 121,488 121,488 121,488

OFFICE/STORE SUPPLIES

PROFESSIONAL FEES 11500 11500 11500 11500 11500 MORTGAGE & RELATED COSTS

$0 $0 $0 $0 $0

RENT

REPAIRS AND MAINTENANCE

TELEPHONE 1200 1200 1200 1200 1200

TRAVEL

UTILITIES 12000 12000 12000 12000 12000

MISCELLEANEOUS 111,384 163639 232,472 343,295 516,269 TOTAL OPERATING EXPENSES

909,668 1,201,790 1,580,150 2,145,710 2,974,910

PROFIT BEFORE INTEREST AND TAXES

EBITDA

INTEREST EXPENSE

TAXES INCURRED 303,222 526,577 820,112 1,258,847 1,902,072

NET PROFIT 1,212,890 2,106,310 3,280,450 5,035,390 7,608,290

NET PROFIT/SALES 52.28% 58.34% 61.81% 64.20% 77.65%

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CASH FLOW


CASH RECEIVED

CASH FROM OPERATIONS 1,302,890 3,499,200 6,869,650 11.995M 19.693M

CASH SALES CASH FROM RECEIVABLES

SUBTOTAL CASH FROM OPERATIONS

1,302,890 3,499,200 6,869,650 11.995M 19.693M

ADDITIONAL CASH RECEIVED

SALES TAX, VAT, HST/GST RECEIVED

NEW INVESTMENT RECEIVED

SUBTOTAL CASH RECEIVED 1212890 3,409,200 6,779,650 11,905,000 19,603,000

ADD BACK DEPRECIATION 9000 9000 9000 9000 9000

CASH BALANCE 1,302,890 3,499,200 6,869,650 11,995,000 19,693,000

OPENING BALANCE SHEET ($’s CDN) ASSETS LIABILITIES Current Assets Current Liabilities Cash 20,000 Deposits Inventory Long Term Assets Long Term Liabilities Equipment 10,000 Loan POS / furniture (incl.) 5,000 Leaseholds 24,000 Other/intangibles 391,000 Total Assets 450,000 Total Liabilities Owner’s Equity 450,000 Total Equities 450,000

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BALANCE SHEET Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS

CURRENT ASSETS

CASH 1,302,890 3,499,200 6,869,650 11.995,000 19.693,000

ACCOUNTS RECEIVABLE

OTHER CURRENT ASSETS

TOTAL CURRENT ASSETS 1,302,890 3,499,200 6,869,650 11.995,000 19.693,000

LONG-TERM ASSETS

LONG-TERM ASSETS 450000 360000 270000 180000 90000

ACCUMULATED DEPRECIATION

82500 90000 90000 90000 90000

TOTAL LONG-TERM ASSETS

TOTAL ASSETS 1670490 3859200 7139650 12,265,000 19,873,000

LIABILITIES AND CAPITAL 450,000 450,000 450,000 450,000 450,000

CURRENT LIABILITIES

ACCOUNTS PAYABLE

CURRENT BORROWING

OTHER CURRENT LIABILITIES

SUBTOTAL CURRENT LIABILITIES

0 0 0 0 0

LONG-TERM LIABILITIES

TOTAL LIABILITIES 0 0 0 0 0

PAID-IN CAPITAL 450,000 450,000 450,000 450,000 450,000

RETAINED EARNINGS 0 1,302,890 3,409,200 6,689,650 11,815,000

EARNINGS 1,220,490 2,106,310 3,280,450 5,125,350 7,608,000

TOTAL CAPITAL

TOTAL LIABILITIES AND CAPITAL

450,000 450,000 450,000 450,000 450,000

NET WORTH 1,670,490 3,859,200 7,139,650 12,265,000 19,873,000

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INCOME STATEMENT MONTHLY YEAR 1

Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

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

# CLIENTS 3500 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000

REVENUE

INITIAL FEES 0 0 0 0 0 0 0 0 0 0 0 0

MONTHLY FEES 84000 168000 168000 168000 168000 168000 168000 168000 168000 168000 168000 168000

PRIVATE ROOM 5500 5500 5500 5500 5500 5500 5500 5500 5500 5500 5500 5500

SPONSOR 0 0 0 0 0 0 0 0 0 0 0 0

TOURNAMENT FEES 14000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000

ADS 0 0 0 0 0 0 0 0 0 0 0 0

OTHER 0 0 0 0 0 0 0 0 0 0 0 0

TOTAL REVENUE 103,500 201,500 201,500 201,500 201,500 201,500 201,500 201,500 201,500 201,500 201,500 201,500

COGS 8,400 16,800 16,800 16,800 16,800 16,800 16,800 16,800 16,800 16,800 16,800 16,800

GROSS MARGIN 95,100 184,700 184,700 184,700 184,700 184,700 184,700 184,700 184,700 184,700 184,700 184,700

EXPENSES

PAYROLL 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000

MISC. STAFF 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

RENT

DEPRECIATION 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

INSURANCE 500 500 500 500 500 500 500 500 500 500 500 500

UTILITIES 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

PHONE 100 100 100 100 100 100 100 100 100 100 100 100

MARKETING 3105 6045 6045 6045 6045 6045 6045 6045 6045 6045 6045 6045

LICENSE/PERMITS

MAINT 1035 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015

MISC. /FEES

CRED CARD 1035 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015

LEGAL 500 500 500 500 500 500 500 500 500 500 500 500

ACCOUNTING 500 500 500 500 500 500 500 500 500 500 500 500

LOAN

EXPENSE

SUB-TOTAL 36,275 41,175 41,175 41,175 41,175 41,175 41,175 41,175 41,175 41,175 41,175 41,175

OWNERS 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124

EXPENSE

TOTAL 46,399 51,299 51,299 51,299 51,299 51,299 51,299 51,299 51,299 51,299 51,299 51,299

NET EBIT 48,701 133,401 133,401 133,401 133,401 133,401 133,401 133,401 133,401 133,401 133,401 133,401

TAXES 9740.2 26680.2 26680.2 26680.2 26680.2 26680.2 26680.2 26680.2 26680.2 26680.2 26680.2 26680.2

INTEREST

EXPENSE

TOTAL 56,139 77,979 77,979 77,979 77,979 77,979 77,979 77,979 77,979 77,979 77,979 77,979

NET INCOME 38,961 106,721 106,721 106,721 106,721 106,721 106,721 106,721 106,721 106,721 106,721 106,721

42



13 14 15 16 17 18 19 20 21 22 23 24

# CLIENTS 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500

REVENUE

INITIAL FEES 0 0 0 0 0 0 0 0 0 0 0 0

MONTHLY FEES 252000 252000 252000 252000 252000 252000 252000 252000 252000 252000 252000 252000

PRIVATE ROOM 6875 6875 6875 6875 6875 6875 6875 6875 6875 6875 6875 6875

SPONSOR 0 0 0 0 0 0 0 0 0 0 0 0

TOURNAMENT FEES 42000 42000 42000 42000 42000 42000 42000 42000 42000 42000 42000 42000

ADS 0 0 0 0 0 0 0 0 0 0 0 0

OTHER 0 0 0 0 0 0 0 0 0 0 0 0

TOTAL REVENUE 300,875 300,875 300,875 300,875 300,875 300,875 300,875 300,875 300,875 300,875 300,875 300,875

COGS 25,200 25,200 25,200 25,200 25,200 25,200 25,200 25,200 25,200 25,200 25,200 25,200

GROSS MARGIN 275,675 275,675 275,675 275,675 275,675 275,675 275,675 275,675 275,675 275,675 275,675 275,675

EXPENSES

PAYROLL 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000

MISC. STAFF 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

RENT

DEPRECIATION 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

INSURANCE 500 500 500 500 500 500 500 500 500 500 500 500

UTILITIES 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

PHONE 100 100 100 100 100 100 100 100 100 100 100 100

MARKETING 9026.25 9026.25 9026.25 9026.25 9026.25 9026.25 9026.25 9026.25 9026.25 9026.25 9026.25 9026.25

LICENSE/PERMITS

MAINT 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75

MISC. /FEES

CRED CARD 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75 3008.75

LEGAL 500 500 500 500 500 500 500 500 500 500 500 500

ACCOUNTING 500 500 500 500 500 500 500 500 500 500 500 500

LOAN

EXPENSE

SUB-TOTAL 46,144 46,144 46,144 46,144 46,144 46,144 46,144 46,144 46,144 46,144 46,144 46,144

OWNERS 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124

EXPENSE

TOTAL 56,268 56,268 56,268 56,268 56,268 56,268 56,268 56,268 56,268 56,268 56,268 56,268

NET EBIT 219,407 219,407 219,407 219,407 219,407 219,407 219,407 219,407 219,407 219,407 219,407 219,407

TAXES 43,881 43,881 43,881 43,881 43,881 43,881 43,881 43,881 43,881 43,881 43,881 43,881

INTEREST

EXPENSE

TOTAL 100,149 100,149 100,149 100,149 100,149 100,149 100,149 100,149 100,149 100,149 100,149 100,149

NET INCOME 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526

43



25 26 27 28 29 30 31 32 33 34 35 36

# CLIENTS 15500 15500 15500 15500 15500 15500 15500 15500 15500 15500 15500 15500

REVENUE

INITIAL FEES 0 0 0 0 0 0 0 0 0 0 0 0

MONTHLY FEES 372000 372000 372000 372000 372000 372000 372000 372000 372000 372000 372000 372000

PRIVATE ROOM 8250 8250 8250 8250 8250 8250 8250 8250 8250 8250 8250 8250

SPONSOR 0 0 0 0 0 0 0 0 0 0 0 0

TOURNAMENT FEES 62000 62000 62000 62000 62000 62000 62000 62000 62000 62000 62000 62000

ADS 0 0 0 0 0 0 0 0 0 0 0 0

OTHER 0 0 0 0 0 0 0 0 0 0 0 0

TOTAL REVENUE 442,250 442,250 442,250 442,250 442,250 442,250 442,250 442,250 442,250 442,250 442,250 442,250

COGS 37,200 37,200 37,200 37,200 37,200 37,200 37,200 37,200 37,200 37,200 37,200 37,200

GROSS MARGINS 405,050 405,050 405,050 405,050 405,050 405,050 405,050 405,050 405,050 405,050 405,050 405,050

EXPENSES

PAYROLL 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000

MISC. STAFF 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

RENT

DEPRECIATION 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

INSURANCE 500 500 500 500 500 500 500 500 500 500 500 500

UTILITIES 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

PHONE 100 100 100 100 100 100 100 100 100 100 100 100

MARKETING 13267.5 13267.5 13267.5 13267.5 13267.5 13267.5 13267.5 13267.5 13267.5 13267.5 13267.5 13267.5

LICENSE/PERMITS

MAINT 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5

MISC. /FEES

CRED CARD 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5 4422.5

LEGAL 500 500 500 500 500 500 500 500 500 500 500 500

ACCOUNTING 500 500 500 500 500 500 500 500 500 500 500 500

LOAN

EXPENSE

SUB-TOTAL 53,213 53,213 53,213 53,213 53,213 53,213 53,213 53,213 53,213 53,213 53,213 53,213

OWNERS 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124

EXPENSE

TOTAL 63,337 63,337 63,337 63,337 63,337 63,337 63,337 63,337 63,337 63,337 63,337 63,337

NET EBIT 341,714 341,714 341,714 341,714 341,714 341,714 341,714 341,714 341,714 341,714 341,714 341,714

TAXES 68,343 68,343 68,343 68,343 68,343 68,343 68,343 68,343 68,343 68,343 68,343 68,343

INTEREST

EXPENSE

TOTAL 131,679 131,679 131,679 131,679 131,679 131,679 131,679 131,679 131,679 131,679 131,679 131,679

NET INCOME 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371

44



37 38 39 40 41 42 43 44 45 46 47 48

# CLIENTS 23000 23000 23000 23000 23000 23000 23000 23000 23000 23000 23000 23000

REVENUE

INITIAL FEES 0 0 0 0 0 0 0 0 0 0 0 0

MONTHLY. FEES 552000 552000 552000 552000 552000 552000 552000 552000 552000 552000 552000 552000

PRIVATE ROOM 9625 9625 9625 9625 9625 9625 9625 9625 9625 9625 9625 9625

SPONSOR 0 0 0 0 0 0 0 0 0 0 0 0

TOURNAMENT FEES 92000 92000 92000 92000 92000 92000 92000 92000 92000 92000 92000 92000

ADS 0 0 0 0 0 0 0 0 0 0 0 0

OTHER 0 0 0 0 0 0 0 0 0 0 0 0

TOTAL REVENUE 653,625 653,625 653,625 653,625 653,625 653,625 653,625 653,625 653,625 653,625 653,625 653,625

COGS 55,200 55,200 55,200 55,200 55,200 55,200 55,200 55,200 55,200 55,200 55,200 55,200

GROSS MARGINS 598,425 598,425 598,425 598,425 598,425 598,425 598,425 598,425 598,425 598,425 598,425 598,425

EXPENSES

PAYROLL 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000

MISC. STAFF 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

RENT

DEPRECIATION 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

INSURANCE 500 500 500 500 500 500 500 500 500 500 500 500

UTILITIES 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

PHONE 100 100 100 100 100 100 100 100 100 100 100 100

MARKETING 19608.75 19608.75 19608.75 19608.75 19608.75 19608.75 19608.75 19608.75 19608.75 19608.75 19608.75 19608.75

LICENSE/PERMITS

MAINT 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25

MISC. /FEES

CRED CARD 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25 6536.25

LEGAL 500 500 500 500 500 500 500 500 500 500 500 500

ACCOUNTING 500 500 500 500 500 500 500 500 500 500 500 500

LOAN

EXPENSE

SUB-TOTAL 63,781 63,781 63,781 63,781 63,781 63,781 63,781 63,781 63,781 63,781 63,781 63,781

OWNERS 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124

EXPENSE

TOTAL 73,905 73,905 73,905 73,905 73,905 73,905 73,905 73,905 73,905 73,905 73,905 73,905

NET EBIT 524,520 524,520 524,520 524,520 524,520 524,520 524,520 524,520 524,520 524,520 524,520 524,520

TAXES 104,904 104,904 104,904 104,904 104,904 104,904 104,904 104,904 104,904 104,904 104,904 104,904

INTEREST

EXPENSE

TOTAL 178,809 178,809 178,809 178,809 178,809 178,809 178,809 178,809 178,809 178,809 178,809 178,809

NET INCOME 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616

45



49 50 51 52 53 54 55 56 57 58 59 60

# CLIENTS 34250 34000 34000 34000 34000 34000 34000 34000 34000 34000 34000 34000

REVENUE

INITIAL FEES 0 0 0 0 0 0 0 0 0 0 0 0

MONTHLY FEES 822000 816000 816000 816000 816000 816000 816000 816000 816000 816000 816000 816000

PRIVATE ROOM 11000 11000 11000 11000 11000 11000 11000 11000 11000 11000 11000 11000

SPONSOR 0 0 0 0 0 0 0 0 0 0 0 0

TOURNAMENT FEES 137000 136000 136000 136000 136000 136000 136000 136000 136000 136000 136000 136000

ADS 0 0 0 0 0 0 0 0 0 0 0 0

OTHER 0 0 0 0 0 0 0 0 0 0 0 0

TOTAL REVENUE 970,000 963,000 963,000 963,000 963,000 963,000 963,000 963,000 963,000 963,000 963,000 963,000

COGS 82,200 81,600 81,600 81,600 81,600 81,600 81,600 81,600 81,600 81,600 81,600 81,600

GROSS MARGIN 887,800 881,400 881,400 881,400 881,400 881,400 881,400 881,400 881,400 881,400 881,400 881,400

EXPENSES

PAYROLL 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000

MISC. STAFF 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

RENT

DEPRECIATION 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

INSURANCE 500 500 500 500 500 500 500 500 500 500 500 500

UTILITIES 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

PHONE 100 100 100 100 100 100 100 100 100 100 100 100

MARKETING 29100 28890 28890 28890 28890 28890 28890 28890 28890 28890 28890 28890

LICENSE/PERMITS

MAINT 9700 9630 9630 9630 9630 9630 9630 9630 9630 9630 9630 9630

MISC. /FEES

CRED CARD 9700 9630 9630 9630 9630 9630 9630 9630 9630 9630 9630 9630

LEGAL 500 500 500 500 500 500 500 500 500 500 500 500

ACCOUNTING 500 500 500 500 500 500 500 500 500 500 500 500

LOAN

EXPENSE

SUB-TOTAL 79,600 79,250 79,250 79,250 79,250 79,250 79,250 79,250 79,250 79,250 79,250 79,250

OWNERS 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124 10,124

EXPENSE

TOTAL 89,724 89,374 89,374 89,374 89,374 89,374 89,374 89,374 89,374 89,374 89,374 89,374

NET EBIT 798,076 792,026 792,026 792,026 792,026 792,026 792,026 792,026 792,026 792,026 792,026 792,026

TAXES 159,615 158,405 158,405 158,405 158,405 158,405 158,405 158,405 158,405 158,405 158,405 158,405

INTEREST

EXPENSE

TOTAL 249,339 247,779 247,779 247,779 247,779 247,779 247,779 247,779 247,779 247,779 247,779 247,779

NET INCOME 638,461 633,621 633,621 633,621 633,621 633,621 633,621 633,621 633,621 633,621 633,621 633,621

46

MONTHLY CASH FLOW YEAR 1 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

CASH IN

CAPITAL 45000

LEASE

LOAN

PROFIT 38,96 106,721 106,721 106,721 106,721 106,721 106,721 106,721 106,721 106,721 106,721 106,721

DEPRECIATION 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500

CASH OUT

LOAN

OP'S 45000

OTHER

CASH

TO DATE 46,461 160,682 274,902 389,123 503,344 617,565 731,786 846,006 960,227 1,074,448 1,188,669 1,302,890


CASH IN

CAPITAL

LEASE

LOAN

PROFIT 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526 175,526

DEPRECIATION 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

CASH OUT

LOAN

OP'S

OTHER

CASH

TO DATE 1,485,916 1,668,942 1,851,967 2,034,993 2,218,019 2,401,045 2,584,071 2,767,096 2,950,122 3,133,148 3,316,174 3,499,200


CASH IN

Capital

Lease

Loan

Profit 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371 273,371

Depreciation 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

CASH OUT

Loan

Op's

Other

CASH

TO DATE 3,780,071 4,060,942 4,341,812 4,622,683 4,903,554 5,184,425 5,465,296 5,746,166 6,027,037 6,307,908 6,588,779 6,869,650

47

MONTHLY CASH FLOW YEAR 4


CASH IN

CAPITAL

LEASE

LOAN

PROFIT 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616 419,616

DEPRECIATION 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

CASH OUT

LOAN

OP'S

OTHER

CASH

TO DATE 7,296,766 7,723,882 8,150,997 8,578,113 9,005,229 9,432,345 9,859,461 10,286,576 10,713,692 11,140,808 11,567,924 11,995,040

MONTHLY CASH FLOW YEAR 5


CASH IN

CAPITAL

LEASE

LOAN

PROFIT 638,461 633,621 633,621 633,621 633,621 633,621 633,621 633,621 633,621 633,621 633,621 633,621

DEPRECIATION 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500

CASH OUT

LOAN

OP'S

OTHER

CASH

TO DATE 12,641,001 13,282,122 13,923,242 14,564,363 15,205,484 15,846,605 16,487,726 17,128,846 17,769,967 18,411,088 19,052,209 19,693,330

CONCLUSION

In conclusion, EMM is assured of a strong and successful business performance by standing behind its

unique subscription services. The Company thinking is new, and client focused that will create a strong

customer loyalty brand. Thereby, EMM is poised for a sustainable profitable business in the long term.