3. What is the implied value of equity of Cenabal if she accepts a $200,000 investment in return for 50% stake in the company?

L M N 1 Exhibit A 2 Cenabal Addition al Information ompetitor Information Pro Forma Income Statement(2007) Actual Income Statements of Competitors (2006) Organic As % Dressin As % of Mary Ranch As % of of Healthy As % of Industry Average Cenabal sal es Dressin 6 Net sales(a) 7 Cost of goods sold 255,000 4,200,000 50,000,000 2,700,000 186,000 73% 69,000 27% 40,000 16% 2,730,000 1,470,000 840,000 65% 28,000,000 56% 35% 22,000,000 44% 20% 15,000,000 30% 1.809.000 67% 891,000 33% 810,000 30% 63% 37% 27% Gross profit 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Operating expenses Interest expense 30,000 1% 1,000,000 2% 100,000 2% Profit (loss) before ta Income taxes(35%) 29,000 11% 10,150 1% 0% 14% 6,000,000 12% 600,000 210,000 19,000 -6,650 9% 4% 2,100,000 4% 3% Net Income 18,850 7% 390,000 996 3.900,000 8% 12,350 -0% 6% (a) Assuming Cenabal sells 5000 cases with 12 bottles per case at $4.25 Latest Share Price Shares Outstandin g(in millions) 20.1 5.6 10.2 5.46 0.9 24 25 Debt($ from balance sheet) Cash ($ from balance sheet) 375,000 420,000 12,500,000 5,000,000 1,250,000 135,000 L M N 1 Exhibit A 2 Cenabal Addition al Information ompetitor Information Pro Forma Income Statement(2007) Actual Income Statements of Competitors (2006) Organic As % Dressin As % of Mary Ranch As % of of Healthy As % of Industry Average Cenabal sal es Dressin 6 Net sales(a) 7 Cost of goods sold 255,000 4,200,000 50,000,000 2,700,000 186,000 73% 69,000 27% 40,000 16% 2,730,000 1,470,000 840,000 65% 28,000,000 56% 35% 22,000,000 44% 20% 15,000,000 30% 1.809.000 67% 891,000 33% 810,000 30% 63% 37% 27% Gross profit 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Operating expenses Interest expense 30,000 1% 1,000,000 2% 100,000 2% Profit (loss) before ta Income taxes(35%) 29,000 11% 10,150 1% 0% 14% 6,000,000 12% 600,000 210,000 19,000 -6,650 9% 4% 2,100,000 4% 3% Net Income 18,850 7% 390,000 996 3.900,000 8% 12,350 -0% 6% (a) Assuming Cenabal sells 5000 cases with 12 bottles per case at $4.25 Latest Share Price Shares Outstandin g(in millions) 20.1 5.6 10.2 5.46 0.9 24 25 Debt($ from balance sheet) Cash ($ from balance sheet) 375,000 420,000 12,500,000 5,000,000 1,250,000 135,000