IGL

Business Plan

The Golf Lougne

805-232-2320

123 Anywhere

Virginia Beach, VA
 Confidentiality Agreement

The undersigned reader of IGLS Business Plan hereby acknowledges that the information provided is
completely confidential and therefore the reader agrees not to disclose anything found in the business
plan without the express written consent of IGL.

It is also acknowledged by the reader that the information to be furnished in this business plan is in all
aspects confidential in nature, other than information that is in the public domain through other means
and that any disclosure or use of the same by the reader may cause serious harm and or damage to IGL..

Upon request this business plan document will be immediately returned to IGL.

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

__________________________________________________

Signature

__________________________________________________

Printed Name
 Overview

IGL is an indoor golf center that will be based in Myrtle Beach, South Carolina. The following
business plan outlines the business model of the company, its proposed marketing plan, and a
projected financial forecast for a three-year period. An analysis of regional competitors for the
selected location and a market demand analysis has also been performed.
 Table of Contents

.Executive Summary .............................................................................................................. 6

Product & Service Summary ...........................................................................................................6
Market Summary ...........................................................................................................................6
Vision ............................................................................................................................................7
Objectives ......................................................................................................................................7
Keys to Success ..............................................................................................................................7
Start-up Summary ..........................................................................................................................7

IGL Indoor Golf Lounge ....................................................................................................... 8

Industry Overview ................................................................................................................. 9
Market Trends ...............................................................................................................................9
Market Growth ..............................................................................................................................9
Market Segmentation................................................................................................................... 10

Strategy & Implementation Summary .................................................................................. 11

Management Team ...................................................................................................................... 12
Organizational Chart .................................................................................................................... 13
SWOT Analysis ............................................................................................................................. 14
Competitive Comparison .............................................................................................................. 15
Marketing Plan............................................................................................................................. 16
Promotion Strategy ...................................................................................................................... 16

Financial Forecasts .............................................................................................................. 18

Start-up Summary ........................................................................................................................ 18
Financial Highlights ...................................................................................................................... 19
Financial Indicators ...................................................................................................................... 20
Revenues Forecast ....................................................................................................................... 21
Projected Profit and Loss .............................................................................................................. 22
Projected Cash Flow ..................................................................................................................... 23
Projected Balance Sheet ............................................................................................................... 24
Wages & Payroll ........................................................................................................................... 25
Break-Even Analysis ..................................................................................................................... 26
Sensitivity Analysis ....................................................................................................................... 27
 Table of Figures

Figure 1: Organizational Chart .................................................................................................................... 12

Figure 2: Post-Financing Expenses .............................................................................................................. 16
Figure 3: Financial Highlights ...................................................................................................................... 17
Figure 4: Financial Indicators ...................................................................................................................... 18
Figure 5: Revenue Forecast ......................................................................................................................... 19
Figure 6: Profit & Loss ................................................................................................................................. 20
Figure 7: Cash Flow ..................................................................................................................................... 21
Figure 8: Wages & Payroll ........................................................................................................................... 22
Figure 9: Balance Sheet............................................................................................................................... 23
Figure 10: Scenario Analysis........................................................................................................................ 24
Figure 11: Break-Even Analysis ................................................................................................................... 25
Figure 12: 12 Month Profit & Loss .............................................................................................................. 26
Figure 13: 12 Month Cash Flow Statement ................................................................................................ 27
.EXECUTIVE SUMMARY

IGL, the company, is an indoor golf center based in Myrtle Beach that will consist of ten indoor ranges.
The facility will also sell and rent professional golf equipment to players, supported by a staff well
educated on the companys product selection. Food and drinks will not be directly sold in the
establishment, but orders will be made from local eateries for pick-up with a service fee. The following
plan outlines the full scope of products and services offered by IGL relative to the financial forecasts.

PRODUCT & SERVICE SUMMARY

The companys core service is access to nine and eighteen round golf using the virtual indoor golfing
technology. The company will sell limited service accessibility to the technology and a lounge area where
players may relax when they are waiting for others. The full product and services provided by the company
will include:

9/18 Round Indoor Golf: Access to the platform will be granted for timed golf rounds.
Golf Equipment Rentals: Professional equipment will be available for rent during the rounds.
Golf Equipment Retail Sales: A limited selection of golf clubs, bags, and accessories.
Food & Beverage Service: Pickup from local restaurants; later phasing-in internal sales.

MARKET SUMMARY

The Golf Courses and Country Clubs industry is highly fragmented. The industry is made up of a few large
holding companies that operate hundreds of courses, several medium-size companies that own and
operate between five and 20 courses, dozens of companies that operate two to four courses and
thousands of independent or public establishments that operate a single course.

The total industry generated $24 Billion in revenue in 2015, with an annual growth rate of 1.7%. There are
many golf courses and country clubs in Myrtle Beach, however there is presently no virtual indoor golf
centers. This means that there is an unfulfilled market for people that wish to either play golf in an indoor
setting, during the night, or extreme weather conditions prohibiting outdoor play.
VISION

The vision of IGL is to become a staple in the community for indoor golf. It will accomplish this by
establishing and maintaining a fun and relaxing environment to play golf while enjoying the regions best
food & beverages. As the company scales, it will continue to deliver on this value proposition by
introducing cross-selling opportunities and potentially multiple locations.

OBJECTIVES

IGL has core objectives that it must fulfill in order to begin commercialization and scaling:

Acquire a 5,000 SF location in Myrtle Beach in an accessible location, along bypass 17.
Scale to maintain at least 60% capacity daily, up to 80% or more on the weekends.
Maintain a high profit margin and return on assets, with at least a 20% profit margin.
Establish a local consumer base that is loyal in order to minimize tourism seasonality impact.

KEYS TO SUCCESS

IGL must focus upon delivering the following points to achieve a successful business model.

Transform the atmosphere when shifting from daytime to nighttime playing.

Enable visitors to bring their own food & beverages, while also ordering locally.
Later introducing internal food & beverage sales, while also supporting outside orders.
Ensure preventative measures are taken to protect the value and useful life of equipment.
Hire and train staff that are enthusiastic about golfing and knowledgeable about the products.

START-UP SUMMARY

The startup period will take place immediately once the company has opened its doors for operation. This
will require an official market launch with public relations, coupled with a website launch and listing on
all directories and search engines, followed up by initial discounts and promotions.

The company will effectively have to markets that it may promote two including locals within a 60-mile
radius that may reside within or travel to Myrtle Beach frequently, and seasonal tourists. The first may be
immediately targeted through social media, partnerships with concierge services and travel agents, as
well as initial discounts using daily deals websites. As the initial round of customers is satisfied, demand
will build as the companys word of mouth marketing efforts will accelerate.
IGL INDOOR GOLF LOUNGE
The indoor golf lounge will be almost exclusively focused around playing golf, with some additional
supporting revenue streams being generated through product sales and food & beverage affiliates. This
will enable the company to focus on its core competency of nurturing an environment for golf enthusiasts
that is flexible and relaxing, as to simulate the actual clubhouse environment.

Golf Simulators: The indoor golf lounge will consist of ten indoor ranges using state of the art
equipment with infrared tracking technology by Full Swing using the S4 Simulator model. The
technologys unique combination of high speed and infrared cameras effectively tracks balls spin,
speed, and trajectory for superior measurement. This not only provides users with a more
accurate experience, but also enables the technology to be used for practice and improvement.

Professional Equipment Sales & Rentals: A small selection of premium golf products will be sold
including tees, clothing accessories, clubs, and bags. The brands will include Callaway,
TaylorMade, Titleist, Nike, and Cleveland. Visitors will be able to rent models for initial use and
then have the option to purchase the same model in-store or with same day delivery though the
online IGL store.

Golf Lessons: A professional PGA player will offer golf lessons in conjunction with the indoor golf
facility both directly to the customers, as well as having the ability to solicit services directly. This
generates a new revenue stream from customers that are not only seeking an indoor golfing
experience, but also a steady local market that is seeking golf lessons that may be too late in the
day to play outside.

Food & Beverage: In order to keep a lean operating model focused on access to golf simulators,
food & beverages will not be sold on site. Staff will take orders and pick-up from local food &
beverage establishments with a small markup for service charge and affiliate fee. An application
may eventually be made within the POS terminal in order to order from local restaurants and
deliver directly to visitors while they are playing.
INDUSTRY OVERVIEW
The Golf Courses and Country Clubs industry is highly fragmented. The industry is made up of a few large
holding companies that operate hundreds of courses, several medium-size companies that own and
operate between five and 20 courses, dozens of companies that operate two to four courses and
thousands of independent or public establishments that operate a single course. In fact, over 99.0% of
industry firms have fewer than 500 employees. The four largest golf course and country club operators
account for less than 10.0% of industry revenue in 2015.

MARKET TRENDS

Major sources of revenue for golf courses include membership dues (40% of industry revenue), green and
guest fees (20%), and sales of food and drinks (20%). Other sources of revenue include merchandise sales
and equipment rentals. These trends are likely to continue as they apply to indoor ranges, however the
membership dues are likely to be replaced with green and guest fees.

MARKET GROWTH

Golf is generally a sport that increases with consumption spending and affluence. The economic downturn
of 2006 has since driven a growth rate of 1.7% per year over the past five years. This growth is expected
to continue as United States consumption spending increases and more people enter the white collar
workforce in the United States, due to increasing college enrollment levels.
MARKET SEGMENTATION

According to a market research report by Statistic Brain, golfers generally over the age of 30 and have a
household income of $95,000 with a net worth over $100,000. Most golfers are males (77.5%) that have
graduated college (67%); the total population of golfers accounts for (9.6%) of the United States
population. Due to unwarranted approaches at golf course from a disproportional male to female ratio,
the indoor golf course may also attract women that wish to train within the facility with greater privacy.

There are several segments that IGT may target as it enters the market:

Casual Golfers: The casual segment will likely attract the largest market, focused on golfers that
are playing due to the incapability of playing outdoors, or to have a more controllable setting. This
demographic constitutes the majority of golfers.
 Professional Golfers: The virtual golf center is perfect for professionals that wish to improve their
game because of its ability to effectively track swings with real time analytics.

Trainees: There are many trainees in golf that may wish to practice at their own pace with
responsive dashboards rather than immediately going to a course, the virtual environment is
perfect for beginners. The privacy of the indoor golf stalls could be particularly appealing to the
female demographic, which is subject to receiving unwarranted approaches at the driving range.

STRATEGY & IMPLEMENTATION SUMMARY

The strategy of IGT is to establish an immersive indoor golfing environment using state of the art
technology to enable golfers from casual to professional to enjoy an indoor setting. It will serve as a place
that is both casual yet professional, such that each party may create their own setting by reserving a space
and choosing to order drinks and appetizers, or keep a more professional setting.

The atmosphere of the company will change depending upon the time of day as its daytime operations
will be more formal and quiet for business meetings, casual/family outings. The nighttime operation will
slightly change for a more adult casual setting with more drinks that will be for a more relaxed after-work
crowd.
MANAGEMENT TEAM

John Doe Chief Executive Officer

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Susan Miller Chief Operating Officer

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Kevin Jones -Chief Financial Officer

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Adrian Wilcourt Legal Compliance

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ORGANIZATIONAL CHART

Adrian
Board/Investors
Wilcourt/Legal

John Doe/CEO

Susan Kevin
Miller/COO Jones/CFO

Marketing
Sales Director Accounting
Director

Sales Reps Collections

SWOT ANALYSIS

Strengths

There are presently no indoor golfing options in Myrtle Beach, SC.

The seasonality of the region makes outdoor golf a seasonal sport.
There center will use best-in-class technology with infrared and high speed cameras.
The company will keep a lean business model by avoiding food & beverage preparation.
The company has measures in place to protect the value of its indoor golf assets.
A leasing model for the equipment will minimize startup overhead expenditures.

Weaknesses

There are several outdoor courses to compete with during daytime with pleasant weather.
Many of the tourists within Myrtle Beach are seasonal, avoiding the region during Winter.
The region is heavily focused on tourism from the surrounding area.
There are many competing indoor attractions within Myrtle Beach for tourists.
The business model may require investment in assets with very low salvage value.

Opportunities

There are many cross selling opportunities for the golfing market.
The indoor golf market offers year-round accessibility, unlike the outdoor market.
There are presently no indoor golf centers within the local environment.
The market for golf will increase with consumption spending levels.
The demographics of golf players are increasing with a more educated workforce.

Threats

The median household income within the city or Myrtle Beach is only $37,064.
Approximately 24.5% of people living in Myrtle Beach are at the poverty level.
Tourism demand could be inconsistent throughout the year, causing revenue volatility.
New competitors could enter the indoor golf market within Myrtle Beach.

DRAFT VERSION 1.0 | 14

COMPETITIVE COMPARISON

There are two classifications of competitors within Myrtle Beach including direct competitors and
substitutes. The direct competitors are outdoor golf courses within the city. The substitutes constitute
any entertainment event or venue that consumers may enjoy in lieu of indoor golfing. The company has
identified the distinct positioning for both classifications of competitors. There are also several websites
that support the golfing industry including golfdesk.com, myrtlebeachgolf.com, and GolfNow.com

Golf Courses

There are an estimated 50 + golf courses within Myrtle Beach, ranging in price from $33 to $162
with a median price of $50. The course amenities range depending upon the price and elegance
of the course. The golf courses may be appealing to golfers during the daytime with pleasant
weather, however the volatility with rain and abnormal temperatures will drive many to seek
indoor entertainment. There is a very limited window of accessibility to golf courses, which can
be very crowded during the peak hours they are accessible, so reservation of an exclusive indoor
range is preferable to many golfers.

Substitute Entertainment

The other entertainment options are focused the same demographic as golfers, predominately
males with a household income in excess of $90,000 per year with a bachelors degree or higher
in a white collar profession. This may include restaurants, bars/clubs, indoor sports clubs (E.g.
squash, tennis), and live performances.

DRAFT VERSION 1.0 | 15

MARKETING PLAN

Pricing Strategy

The pricing for access to the indoor golf lounge will have multiple levels including singles, parties, and
memberships. The pricing will be based on a recording of time in order to ensure that individual guests
do not extend their normal game well beyond the limit in order to remain in the facility longer than the
average guest.

Singles: $20 for the first 30 minutes, then $5 per 15 minutes thereafter
2 4 People: $20 for the first 30 minutes, then $5 per 15 minutes thereafter
Memberships: $2 per hour with a $100/month membership fee

PROMOTION STRATEGY

Public relations

The public relations will be focused upon during the companys initial launch, such that it may create
market awareness through its innovative business model. Since there are not presently any indoor golf
centers in the market, local media will be interested in covering the details of the company because it will
be of interest to local consumers. This will also enable the company to approach potential strategic
partners including travel agents, concierge services, and personal assistant agencies.

Advertising

The advertisement will mostly be done at the regional level, focusing on the middle to upper class
demographics within Myrtle Beach, as well as tourists in airports, hotels, and resorts. Consumers that live
locally will be most receptive to the facility given that they will be in the location long enough to react to
the marketing campaigns. Promoting to tourists will be lucrative based on a reputation management
approach and having high visibility all online/offline platforms where tourists are planning their
engagements. The company will place advertisements at airports and hotels, as well as digitally promote
online to visitors in the area searching for entertainment, particularly golf.

DRAFT VERSION 1.0 | 16

Parties & Events

The facility may host special events and parties including a golf competition and catering events for
business groups. Such events may drive additional regional demand on a more consistent basis and enable
the company to tailor to larger groups looking for entertainment in a controlled environment. For
instance, a business outing that is not subject to unforeseen weather and group dispersion.

Website/E-commerce Strategy

The website will initially focus on providing basic information and photos of the facility to provide guests
with adequate information to place a reservation or make a visitation. As the business scales, it may
include additional features such as an online reservation calendar with checkout and Ecommerce features
where guests may order products that they have rented while at the facility location.

The website will also enable easy integration with social media channels including Google Places and Yelp!
along with guest interaction through Facebook and Twitter. It will also form affiliate deals and strategic
partnerships with local golf itinerary/trip planning websites such as golfdesk.com and
myrtlebeachgolf.com and GolfNow.com. Such channels will not only build the brand identity, but also
convey that guests are having an enjoyable experience with guest photos being posted to the social media
page and positive reviews being incentivized on mainstream review and tourist websites.

DRAFT VERSION 1.0 | 17

FINANCIAL FORECASTS

START-UP SUMMARY

Startup Expenses Startup Liabilities

Startup Marketing 5,000 Liabilities and Capital
Professional Fees/Registration 1,200 Current Borrowing $0
Staff Training 1,200 Long-Term Liabilities $0
Disposables 500 Accounts Payable $0
Website Development 2,000 Other Current Liabilities $0
Total Startup Expenses $9,900
Startup Assets Startup Investments
Lease Deposit 3,500 Planned Investment
Furniture 4,000 Owner $0
Rental Equipment 2,000 Investor 250,000
Cash on Hand 230,600 Total Planned Investment $250,000
Total Startup Assets $240,100
Startup Funding
Total Requirements Total Liabilities $0
Total Startup Expenses 9,900 Total Planned Investment 250,000
Total Startup Assets 240,100 Total Funding $250,000
Total Requirements $250,000

Startup Expenses
6,000

5,000

4,000

3,000

2,000

1,000

-
Startup Marketing Professional Staff Training Disposables Website Development
Fees/Registration

DRAFT VERSION 1.0 | 18

FINANCIAL HIGHLIGHTS

The financial highlights are how the company is projected to perform over the course of the next twelve
months and three to five years. The projections are based on comparable facilities based on estimated
revenue range and size, along with geographic location. We have assumed that for at least the first six-
months of post-money financing that expenses may be greater than revenues while the company invests
into growth.

Financial Highlights ($000)

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 Year 2 Year 3
Revenue 59 68 76 59 51 51 60 60 68 77 105 105 838 928 1006
Gross Margin 58 67 75 59 50 50 59 59 67 76 103 103 826 912 988
Operating Expense 36 36 36 36 36 36 36 36 36 36 36 36 428 447 489
EBITDA 5 13 22 5 (3) (3) 5 5 14 22 50 50 184 239 262
Net Profit 5 13 22 5 (3) (3) 5 5 14 22 49 50 183 239 261

Gross Margin/Revenue 99% 99% 99% 99% 98% 98% 98% 98% 98% 98% 99% 99% 99% 98% 98%
EBITDA/Revenue 8% 20% 28% 8% -6% -6% 9% 9% 20% 29% 47% 47% 22% 26% 26%
Net Profit/Revenue 8% 20% 28% 8% -6% -6% 9% 9% 20% 29% 47% 47% 22% 26% 26%

Net Cash Flow 5 13 22 5 (3) (3) 5 5 14 22 50 50 184 239 262

Cash Balance - Ending 235 249 270 275 272 269 274 279 293 315 364 414 414 653 915

Projected Operating Highlights By Year ($000) Projected Revenues By Year ($000)

1200 1200

1000 Revenue 1000

800 800
Gross Margin
600 600

400 EBITDA 400

200 200
Net Profit
0 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
1000 300
900
800 250
700 Net Cash Flow
200
600
500 150
400
300 100
200 Cash Balance
50
100
0 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

DRAFT VERSION 1.0 | 19

FINANCIAL INDICATORS

. The company believes that it can reach an increasing net profit margin due to economies of scale.
Through investments in capital expenditures, it may decrease its general and administrative expenses.
Financial indicators are based upon the performance of comparable companies in the same asset class,
revenue range and age both from publicly available information and our internal database of research.

Financial Indicators
Year 1 Year 2 Year 3
Profitability %'s:
Gross Margin 99% 98% 98%
Net Profit Margin 22% 26% 26%
EBITDA to Revenue 22% 26% 26%
Return on Assets 42% 36% 28%
Return on Equity 42% 36% 28%

Financial Indicators
120%
Gross Margin

100%

80% Net Profit Margin

60%

EBITDA to Revenue
40%

20%
Return on Assets

0%
Year 1 Year 2 Year 3

DRAFT VERSION 1.0 | 20

REVENUES FORECAST

Revenue Forecast
Year 1 Year 2 Year 3
Revenue Forecast
Indoor Range Access $ 692,280 $ 761,508 $ 822,429
Equipment Rentals $ 103,842 $ 114,226 $ 125,649
Food & Beverage Commissions $ 25,961 $ 28,557 $ 31,412
PGA Pro Golf Lessons $ 16,038 $ 24,057 $ 26,463
Total Revenue $ 838,121 $ 928,348 $ 1,005,953

Direct Cost of Revenue

General COGS $ 11,654 $ 16,027 $ 17,618
Other $ - $ - $ -
Subtotal Cost of Revenue $ 11,654 $ 16,027 $ 17,618

Year 1 Revenue Monthly

120,000

100,000

80,000

60,000

40,000

20,000

-
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Revenue By Year
1200

1000

800

600

400

200

0
Year 1 Year 2 Year 3

DRAFT VERSION 1.0 | 21

PROJECTED PROFIT AND LOSS

The profit and loss assume that the company will have margins at a comparable level to companies within
its industry. While management might not have incurred exactly for future operating expenses, they have
been assumed to reasonable reach comparable profit margins to industry comparables. The management
will operate with minimal expenditures to focus on R&D and commercialization expenses until the
company has sufficient income to support dividend distribution.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Revenue $ 838,121 $ 928,348 $ 1,005,953
Subtotal Cost of Revenue $ 11,654 $ 16,027 $ 17,618
Total Cost of Revenue $ 11,654 $ 16,027 $ 17,618

Gross Margin $ 826,467 $ 912,321 $ 988,335

Gross Margin/Revenue 99% 98% 98%

Expenses
Advertising & Marketing $ 66,117 $ 72,986 $ 79,067
Facility Rental $ 36,000 $ 36,000 $ 36,000
Indoor Golf Lease $ 276,000 $ 276,000 $ 276,000
Maintenance $ 3,600 $ 7,200 $ 21,600
Office Supplies & Expenses $ 3,000 $ 6,000 $ 18,000
Bank Fees $ 1,560 $ 3,120 $ 9,360
Other SG&A $ 41,323 $ 45,616 $ 49,417
Total Operating Expenses $ 427,601 $ 446,922 $ 489,444
Wages & Payroll $ 215,348 $ 226,066 $ 237,321
Depreciation, Amortization & Taxes $ 486 $ 486 $ 486
Net Income $ 183,033 $ 238,848 $ 261,085
Net Income/Revenue 22% 26% 26%

DRAFT VERSION 1.0 | 22

PROJECTED CASH FLOW

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Beginning Cash Balance $ 230,600 $ 414,118 $ 653,452
Cash Inflows
Income from Sales $ 838,121 $ 928,348 $ 1,005,953
Accounts Receivable $ - $ - $ -
Total Cash Inflows $ 838,121 $ 928,348 $ 1,005,953

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ -
Cost of Sales $ 11,654 $ 16,027 $ 17,618

Operating Activities
Salaries and Wages $ 215,348 $ 226,066 $ 237,321
Fixed Business Expenses $ 427,601 $ 446,922 $ 489,444
Taxes $ - $ - $ -

Financing Activities
Loan Payments $ - $ - $ -
Line of Credit Interest $ - $ - $ -
Line of Credit Repayments $ - $ - $ -
Dividends Paid $ - $ - $ -

Total Cash Outflows $ 654,602.30 $ 689,014.77 $ 744,382.07

Cash Flow $ 183,518.41 $ 239,333.30 $ 261,570.65
Operating Cash Balance $ 414,118.41 $ 653,451.71 $ 915,022.35
Ending Cash Balance $ 414,118.41 $ 653,451.71 $ 915,022.35

Year 1 Cash
450,000
400,000
350,000
300,000
250,000 Net Cash
200,000 Flows
150,000
100,000
50,000 Cash
- Balance
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

(50,000)

DRAFT VERSION 1.0 | 23

PROJECTED BALANCE SHEET

The projected balance sheet assumes that there are no dividend draws and all cash flow is re-invested
back into the company at the end of the year. The balance sheet does not assume any line of credits or
account receivables that are outstanding at the end of the year and that the company will have paid off
all liabilities. Likewise, it assumes that all accounts will pay within thirty-days and there will be no
delinquency of payments.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash $ 414,118 $ 653,452 $ 915,022
Other Current Assets $ 9,900 $ 9,900 $ 9,900
Total Current Assets $ 424,018 $ 663,352 $ 924,922

Long-term Assets
Long-term Assets $ 9,500 $ 9,500 $ 9,500
Accumulated Depreciation $ 486 $ 971 $ 1,457
Total Long-term Assets $ 9,014 $ 8,529 $ 8,043
Total Assets $ 433,032 $ 671,880 $ 932,965

Liabilities and Capital

Current Liabilities
Accounts Payable $ - $ - $ -
Current Borowing $ - $ - $ -
Other Current Liabilities $ - $ - $ -
Subtotal Current Liabilities $ - $ - $ -

Long-term Liabilities $ - $ - $ -
Total Liabilities $ - $ - $ -

Common Stock $ 250,000 $ 250,000 $ 250,000

Retained Earnings $ 183,033 $ 421,880 $ 682,965
Total Capital $ 433,033 $ 671,880 $ 932,965
Total Liabilities and Capital $ 433,032 $ 671,880 $ 932,965

DRAFT VERSION 1.0 | 24

WAGES & PAYROLL

Most expenses will be allocated towards development and sales. The employees will be paid competitive
wages so that the company can acquire and retain top talent and compete with large competitors. As the
company grows, it may work in options and bonuses into the salaries, but will focus on a straight full-time
salary with benefits for employees.

Personnel Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Personnel Count
Sr. Developer 1 2 4 8 16
Developers 6 9 14 16 19
Sales 8 10 12 14 17
Administrative 1 1 1 2 2
Management 0 2 2 2 2

Total Personnel 16 24 32 42 56

Personnel Wage
Sr. Developer $ 100,000 $ 200,000 $ 400,000 $ 800,000 $ 1,600,000
Developers $ 450,000 $ 675,000 $ 1,012,500 $ 1,215,000 $ 1,458,000
Sales $ 280,000 $ 336,000 $ 403,200 $ 483,840 $ 580,608
Administrative $ 35,000 $ 42,000 $ 50,400 $ 60,480 $ 72,576
Management $ - $ 172,000 $ 172,000 $ 172,000 $ 172,000

Personnel Costs
Employer Expenses $ 34,600 $ 44,980 $ 89,960 $ 269,880 $ 809,640
Total Payroll $ 974,163 $ 1,591,863 $ 2,301,749 $ 3,233,467 $ 5,022,423

DRAFT VERSION 1.0 | 25

BREAK-EVEN ANALYSIS

CASES NET REVENUE FIXED COST VARIABLE COST TOTAL COST TOTAL PROFIT
- $0 $324,040 $0 $324,040 -$324,040
2,000 $96,000 $324,040 $28,800 $352,840 -$256,840
4,000 $192,000 $324,040 $57,600 $381,640 -$189,640
6,000 $288,000 $324,040 $86,400 $410,440 -$122,440
8,000 $384,000 $324,040 $115,200 $439,240 -$55,240
10,000 $480,000 $324,040 $144,000 $468,040 $11,960
12,000 $576,000 $324,040 $172,800 $496,840 $79,160
14,000 $672,000 $324,040 $201,600 $525,640 $146,360
16,000 $768,000 $324,040 $230,400 $554,440 $213,560
18,000 $864,000 $324,040 $259,200 $583,240 $280,760
20,000 $960,000 $324,040 $288,000 $612,040 $347,960
22,000 $1,056,000 $324,040 $316,800 $640,840 $415,160
24,000 $1,152,000 $324,040 $345,600 $669,640 $482,360
26,000 $1,248,000 $324,040 $374,400 $698,440 $549,560
28,000 $1,344,000 $324,040 $403,200 $727,240 $616,760
30,000 $1,440,000 $324,040 $432,000 $756,040 $683,960
32,000 $1,536,000 $324,040 $460,800 $784,840 $751,160

Breakeven Analysis

$1,800,000

$1,600,000
COST-VOLUME-PROFIT

$1,400,000

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0
20000

32000
0

10000

12000

14000

16000

18000

22000

24000

26000

28000

30000
2000

4000

6000

8000

CASES

DRAFT VERSION 1.0 | 26

SENSITIVITY ANALYSIS

Best Case Scenario (Revenue Increase by 15%)

Year 1 Year 2 Year 3
Revenue $ 963,839 $ 875,734 $ 945,793
Cost of Goods Sold $ 13,402 $ 18,431 $ 20,260
Gross Margin $ 950,437 $ 857,304 $ 925,532
Gross Margin/Revenue 99% 98% 98%
Operating Expenses $ 427,601 $ 446,922 $ 489,444
EBIT $ 522,836 $ 410,382 $ 436,089
EBIT/Revenue 54% 47% 46%

Worst Case Scenario (Revenue Decrease by 15%)

Year 1 Year 2 Year 3
Revenue $ 712,403 $ 647,282 $ 699,064
Cost of Goods Sold $ 9,906 $ 13,623 $ 14,975
Gross Margin $ 702,497 $ 633,659 $ 684,089
Gross Margin Revenue 99% 98% 98%
Operating Expenses $ 427,601 $ 446,922 $ 489,444
EBIT $ 274,896 $ 186,737 $ 194,646
EBIT/Revenue 39% 29% 28%

Revenue
$1,200,000

$1,000,000
Best Case

$800,000

$600,000 Most Likely

$400,000

$200,000 Worst Case

$-
Year 1 Year 2 Year 3

DRAFT VERSION 1.0 | 27

 Year 1 Profit & Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Revenue $ 59,104 $ 67,515 $ 75,934 $ 59,352 $ 51,116 $ 51,225 $ 59,682 $ 59,815 $ 68,298 $ 76,795 $ 104,545 $ 104,740
Subtotal Cost of Revenue $ 633 $ 707 $ 785 $ 757 $ 770 $ 825 $ 922 $ 989 $ 1,099 $ 1,216 $ 1,426 $ 1,524
Total Cost of Revenue $ 633 $ 707 $ 785 $ 757 $ 770 $ 825 $ 922 $ 989 $ 1,099 $ 1,216 $ 1,426 $ 1,524

Gross Margin $ 58,471 $ 66,808 $ 75,148 $ 58,595 $ 50,345 $ 50,400 $ 58,760 $ 58,827 $ 67,199 $ 75,579 $ 103,119 $ 103,216
Gross Margin/Revenue 99% 99% 99% 99% 98% 98% 98% 98% 98% 98% 99% 99%

Expenses
Advertising & Marketing $ 5,510 $ 5,510 $ 5,510 $ 5,510 $ 5,510 $ 5,510 $ 5,510 $ 5,510 $ 5,510 $ 5,510 $ 5,510 $ 5,510
Facility Rental $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000
Indoor Golf Lease $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000 $ 23,000
Maintenance $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300
Office Supplies & Expenses $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250
Bank Fees $ 130 $ 130 $ 130 $ 130 $ 130 $ 130 $ 130 $ 130 $ 130 $ 130 $ 130 $ 130
Other SG&A $ 3,444 $ 3,444 $ 3,444 $ 3,444 $ 3,444 $ 3,444 $ 3,444 $ 3,444 $ 3,444 $ 3,444 $ 3,444 $ 3,444
Total Operating Expenses $ 35,633 $ 35,633 $ 35,633 $ 35,633 $ 35,633 $ 35,633 $ 35,633 $ 35,633 $ 35,633 $ 35,633 $ 35,633 $ 35,633

EBIT $ 22,837 $ 31,174 $ 39,515 $ 22,961 $ 14,712 $ 14,767 $ 23,127 $ 23,193 $ 31,566 $ 39,945 $ 67,486 $ 67,583
EBIT/Revenue 39% 46% 52% 39% 29% 29% 39% 39% 46% 52% 65% 65%

DRAFT VERSION 1.0 | 28

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

Cash Received

Revenue
$ 59,103.8 $ 67,515.0 $ 75,933.8 $ 59,352.0 $ 51,115.6 $ 51,225.4 $ 59,682.4 $ 59,815.3 $ 68,297.7 $ 76,794.7 $ 104,545.3 $ 104,739.8
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Other Current Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 59,103.8 $ 67,515.0 $ 75,933.8 $ 59,352.0 $ 51,115.6 $ 51,225.4 $ 59,682.4 $ 59,815.3 $ 68,297.7 $ 76,794.7 $ 104,545.3 $ 104,739.8

Expenditures

Expenditures from Operations

$ 54,212.0 $ 54,286.4 $ 54,364.5 $ 54,336.2 $ 54,349.2 $ 54,404.1 $ 54,501.4 $ 54,567.8 $ 54,677.7 $ 54,795.0 $ 55,005.3 $ 55,102.6
Subtotal Spent on Operations
$ 54,212.0 $ 54,286.4 $ 54,364.5 $ 54,336.2 $ 54,349.2 $ 54,404.1 $ 54,501.4 $ 54,567.8 $ 54,677.7 $ 54,795.0 $ 55,005.3 $ 55,102.6

Additional Cash Spent

Current Borrowing Repay

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 54,212.0 $ 54,286.4 $ 54,364.5 $ 54,336.2 $ 54,349.2 $ 54,404.1 $ 54,501.4 $ 54,567.8 $ 54,677.7 $ 54,795.0 $ 55,005.3 $ 55,102.6

Net Cash Flow

$ 4,891.7 $ 13,228.6 $ 21,569.2 $ 5,015.8 $ (3,233.7) $ (3,178.7) $ 5,181.0 $ 5,247.5 $ 13,619.9 $ 21,999.7 $ 49,540.0 $ 49,637.3
Cash Balance
$ 235,491.7 $ 248,720.3 $ 270,289.5 $ 275,305.4 $ 272,071.7 $ 268,893.0 $ 274,074.0 $ 279,321.5 $ 292,941.4 $ 314,941.2 $ 364,481.2 $ 414,118.4

DRAFT VERSION 1.0 | 29