Metastasis Magnetics Corp. (MMC) is now completing its first year of operations. The Company has raised the Series A round of financing as determined in Part 1. The three founders are at a crossroads. At the end of their first year, they will be close to running out of cash. Their current financial projections are quite aggressive. The projections suggest they need to raise additional capital of $14 million in a Series B to get to profitability and cash break even. But their current investor group is tired and are actively seeking a buyer with the hope of a return of their original capital. There is a bottom fishing investor willing to price the company as a fire sale. The CEO recently pitched a private equity firm that may be willing invest the needed $14m based on the projections assuming that it can be later sold for a 3x market cap based on exit revenue rate using the same discount rate used in Part 1. The founders, as a group, believe there is an equal probably of each outcome. You have been approached by the company to become their investment banker. Your contingency fee is dependent on the sale price or investment. Before you take on this engagement to either sell the company or convince the private equity firm to invest, you must decide what is the companys value today. The companys historical and projected financials are attached. 1) What are the probable values that the current investor group and the bottom fisher have placed on the company? (2 pts) 2) Based on the information provided why would the private equity investor invest? Justify it with numerical support. (7 pts) 3) Using the Lehman formula what will be your fee in each case (return of capital, fire sale or investment)? (1 pt)
Balance Sheet Year 3 Year 4 Year 5 Year 2 1 1 1 1 Accounts receivable Inventory Accounts payable Year 1 months months months 1 3 3 3 3 3 1 1 1 1 1 Income Statement 500% 50% 50% 30% 30% 20% 20% 500% Revenue growth rate H1 D1 Cost of Goods H1 D1 35% 45% 35% 45% 35% 45% 35% 45% 35% 45% S&M Dept Expense per Head Eng Dept Expense per Head G&A Dept Expense per head growth rate 10% 10% 10% $ 500,000 $ $ 250,000 $ $ 250,000 $ 550,000 $ 275,000 $ 275,000 $ 605,000 $ 302,500 $ 302,500 $ 665,500 332,750 332,750 Venture debt interest rate Taxes 7.25% 21% rate 21% 21% 21% 21% Fixed Assets Fixed Assets/Head Depreciation $5,000 3 years Cash Accounts Receivable Inventories Total Current Assets $552,754 $3,000,000 $2,500,000 6,052,754 $4,631,395 3,375,000 10,125,000 18,131,395 $621,752 5,062,500 15,187,500 20,871,752 $1,842,204 $6,456,717 6,581,250 7,897,500 19,743,750 23,692,500 28,167,204 38,046,717 0 Fixed Assets Accumulated Depreciation Deposits Total Assets $90,000 295,000 300,000 305,000 310,000 ($23,472) (121,805) (221,805) (305,000) (310,000) $47,250 47,250 47,250 47,250 47,250 $6,166,532 $18,351,840 $20,997,196 $28,214,454 $38,093,967 $0 Liabilities Accounts Payable Total Current Liabilities $1,578,850 1,578,850 $3,614,583 3,614,583 $4,809,375 4,809,375 $5,931,354 $6,963,854 5,931,354 6,963,854 0 10 Venture Debt Total Liabilities 1,628,380 3,207,230 843,609 4,458,192 0 4,809,385 5,931,354 6,963,854 $3,920,000 Shareholders' Equity Series A Preferred Stock Series B Preferred Stock Common Stock Total Paid in Capital $3,920,000 $3,920,000 $3,920,000 $3,920,000 14,000,000 14,000,000 14,000,000 14,000,000 $3,000 $3,000 $3,000 $3,000 17,923,000 17,923,000 17,923,000 17,923,000 $3,000 3,923,000 0 0 Retained Earnings (Deficit) Total Shareholders' Equity Total Liabilities & Shareholders Equity Check balance ($1,417,583) (4,483,237) (2,189,073) 3,906,215 12,753,228 2,505,417 13,439,763 15,733,927 21,829,215 30,676,228 $5,712,647 $17,897,955 $20,543,312 $27,760,570 $37,640,082 -453884.56 -453884.56 -453884.56 -453884.56 -453884.56 $0 0.00 Revenue Year 1 Year 2 Year 3 Year 4 Year 5 Hi D1 Total Revenue $2,250,000 $13,500,000 $20,250,000 $26,325,000 $31,590,000 $4,500,000 $27,000,000 $40,500,000 $52,650,000 $63,180,000 $6,750,000 $40,500,000 $60,750,000 $78,975,000 $94,770,000 H1 D1 $787,500 $8,775,000 $13,162,500 $17,111,250 $20,533,500 $2,025,000 $14,850,000 $22,275,000 $28,957,500 $34,749,000 $2,812,500 $23,625,000 $35,437,500 $46,068,750 $55,282,500 $3,937,500 $16,875,000 $25,312,500 $32,906,250 $39,487,500 Gross Margin Sales & Marketing $1,698,950 $10,000,000 $11,550,000 $13,310,000 $15,306,500 Engineering $1,972,500 $6,250,000 $6,875,000 $7,562,500 $8,318,750 G&A $1,066,850 $3,500,000 $3,850,000 $4,235,000 $4,658,500 Oper. Expenses EBITDA Depreciation Interest Inc./(Exp.) Taxes Net Income/(Loss) $4,738,300 $19,750,000 $22,275,000 $25,107,500 $28,283,750 ($800,800) ($2,875,000) $3,037,500 $7,798,750 $11,203,750 ($23,472) ($98,333) ($100,000) ($83,195) ($5,000) ($139,426) ($92,321) ($33,495) $0 $0 ($609,841) ($1,620,267) ($2,351,738) ($963,699) ($3,065,654) $2,294,164 $6,095,289 $8,847,013 H1 D1 Total Revenue $2,250,000 $13,500,000 $20,250,000 $26,325,000 $31,590,000 $4,500,000 $27,000,000 $40,500,000 $52,650,000 $63,180,000 $6,750,000 $40,500,000 $60,750,000 $78,975,000 $94,770,000 H1 D1 $787,500 $8,775,000 $13,162,500 $17,111,250 $20,533,500 $2,025,000 $14,850,000 $22,275,000 $28,957,500 $34,749,000 $2,812,500 $23,625,000 $35,437,500 $46,068,750 $55,282,500 $3,937,500 $16,875,000 $25,312,500 $32,906,250 $39,487,500 Gross Margin Sales & Marketing $1,698,950 $10,000,000 $11,550,000 $13,310,000 $15,306,500 Engineering $1,972,500 $6,250,000 $6,875,000 $7,562,500 $8,318,750 G&A $1,066,850 $3,500,000 $3,850,000 $4,235,000 $4,658,500 Oper. Expenses EBITDA Depreciation Interest Inc./(Exp.) Taxes Net Income/(Loss) $4,738,300 $19,750,000 $22,275,000 $25,107,500 $28,283,750 ($800,800) ($2,875,000) $3,037,500 $7,798,750 $11,203,750 ($23,472) ($98,333) ($100,000) ($83,195) ($5,000) ($139,426) ($92,321) ($33,495) $0 $0 ($609,841) ($1,620,267) ($2,351,738) ($963,699) ($3,065,654) $2,294,164 $6,095,289 $8,847,013 w Headcount Sales & Marketing Engineering G&A Total Headcount 5yr 20 25 21 25 10 22 25 14 61 23 25 14 62onfi 4 14 59 14 60 17 Percent of Revenue Year 2 Year 3 Year 4 YOY Change Year 3 Year 4 Year 5 Year 1 Year 5 Year 2 Year 5 33% 33% 20% $31,590,000 $63,180,000 $94,770,000 33% 67% 100% 67% 100% 33% 67% 100% 33% 67% 100% 67% 100% 500% 500% 500% 50% 50% 50% 30% 30% 30% 20% 20% 22% 1014% $20,533,500 ) $34,749,000 ) $55,282,500 $39,487,500 12% 30% 42% 58% 22% 37% 58% 42% 37% 58% 42% 22% 37% 58% 42% 22% 37% 58% 633% 740% 329% 50% 50% 50% 30% 30% 30% 20% 20% 20% 20% 42% 50% 30% $15,306,500 25% 25% 19% 17% 16% 489% 16% 15% 15% $8,318,750 29% 15% 11% 10% 9% 217% 10% 10% 10% $4,658,500 16% 9% 6% 5% 5% 228% 10% 10% 10% 70% 32% $28,283,750 $11,203,750 ($5,000) 37% 5% 10% -12% 0% 49% -7% 0% 0% 30% 12% 0% 0% 5) 0% 0% 317% 13% 259% -206% 319% 2% -34% -64% #DIV/0! #DIV/0! 218% -175% 13% 13% 157% 44% -17% -94% -100% #DIV/0! 166% 45% 166% 45% 0% 0% -2% 0% -14% 7) ($2,351,738) 3 $8,847,013 -2% 0% -8% -1% 4% -2% 8% 9% Cash Flows Year 2 Year 1 Year 3 Year 4 Year 5 Operating Cash Flows Net Income (963,699) (3,065,654) 2,294,164 6,095,289 8,847,013 Adjs to Reconcile Net Income Depr & Amort Expense Accounts Receivable Inventories Deposits Accounts Payable Total Adjustments Net Operating Cash Flows 23,472 98,333 100,000 83,195 5,000 ##### ###### (375,000) (1,687,500) (1,518,750) (1,316,250 ######### (7,625,000) (5,062,500) (4,556,250) (3,948,750 (47,250) 0 0 0 1,578,850 2,035,733 1,194,792 1,121,979 1,032,500 ######### (5,865,933) (5,455,208) (4,869,826) (4,227,500 ######### (8,931,587) (3,161,045) 1,225,463 4,619,513 Investing Cash Flows Fixed Asset Additions (90,000) (205,000) (5,000) (5,000) (5,000 Net Investing Cash Flows (90,000) (205,000) (5,000) (5,000) (5,000 C Financing Cash Flows Changes in Venture Debt Changes in Capital Stock Net Financing Cash Flows Net Change In Cash Beginning Cash Balance Ending Cash Balance 1,628,380 (784,771) (843,599) (10) C 3,923,000 14,000,000 0 0 5,551,380 13,215,229 (843,599) (10) C 552,754 4,078,641 (4,009,643) 1,220,453 4,614,513 $0 $552,754 $4,631,395 $621,752 $1,842,204 $552,754 $4,631,395 $621,752 $1,842,204 $6,456,717 Financial plan Ratios Year 3 4.34 4.00 30.00 2.89 Year 4 4.75 4.00 30.00 2.80 Year 5 5.46 4.00 30.00 2.49 Current Ratio Inventory Turns DSO Total Asset Turnover Debt-to-Total Capital Times Interest Earned Return on total Assets (ROA) Return on Common Equity (ROE) Return on Invested Capital (ROIC) Year 1 3.83 2.70 160.00 1.09 0.29 5.744 -0.16 -0.38 -0.15 Year 2 5.02 4.00 30.00 2.21 0.04 31.141 -0.17 -0.23 -0.16 0.11 0.15 0.15 0.22 0.28 0.28 0.23 0.29 0.29 19 Months remaining Beg Balance Payment Interest Principal End Balance Yearly Interest 24 23 22 21 20 18 17 $ 1,628,380 $1,565,127 $ 1,501,492 $ 1,437,473 $ 1,373,066 $ 1,308,271 $ 1,243,084 $ 1,177,503 $ ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) $ 9,838 $ 9,456 $ 9,072 $ 8,685 8,296 $ 7,904 $ 7,510 $ 7,114 $ $ 63,253 $ 63,635 $ 64,019 $ 64,406 $ 64,795 $ 65,187 $ 65,581 $ 65,977 $ $ 1,565,127 $1,501,492 $ 1,437,473 $ 1,373,066 $ 1,308,271 $ 1,243,084 $ 1,177,503 $ 1,111,526 $ Financial Plan Venture Debt 17 16 15 14 13 12 1,177,503 $ 1,111,526 $ 1,045,151 $ 978,374 $ 911,194 $ 843,609 $ ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) 7,114 $ 6,715 $ 6,314 $ 5,911 $ 5,505 $ 5,097 $ 65,977 $ 66,376 $ 66,777 $ 67,180 $ 67,586 $ 67,994 $ 1,111,526 $ 1,045,151 $ 978,374 $ 911,194 $ 843,609 $ 775,614 $ $ 92,321 11 10 9 775,614 $ 707,209 $ 638,391 ($73,091) ($73,091) ($73,091) 4,686 $ 4,273 $ 3,857 68,405 $ 68,818 $ 69,234 707,209 $ 638,391 $ 569,157 1 8 7 6 569,157 $ 499,505 $ 429,432 $ ($73,091) ($73,091) ($73,091) 3,439 $ 3,018 $ 2,594 $ 69,652 $ 70,073 $ 70,497 $ 499,505 $ 429,432 $ 358,935 $ 5 4 3 358,935 $ 288,013 $ 216,662 $ ($73,091) ($73,091) ($73,091) 2,169 $ 1,740 $ 1,309 $ 70,922 $ 71,351 $ 71,782 $ 288,013 $ 216,662 $ 144,880 $ 2 144,880 $ ($73,091) 875 $ 72,216 $ 72,664 $ $ 72,664 ($73,091) 439 72,652 12 33,495 Venture Debt Share Allocation Option Pool Investors Founders 1,109,589 3,287,671 3,000,000 7,397,260 5 year return Rate Period Investor's Future Value Company Value 50% 5 $30,375,000 $68,343,750 Balance Sheet Year 3 Year 4 Year 5 Year 2 1 1 1 1 Accounts receivable Inventory Accounts payable Year 1 months months months 1 3 3 3 3 3 1 1 1 1 1 Income Statement 500% 50% 50% 30% 30% 20% 20% 500% Revenue growth rate H1 D1 Cost of Goods H1 D1 35% 45% 35% 45% 35% 45% 35% 45% 35% 45% S&M Dept Expense per Head Eng Dept Expense per Head G&A Dept Expense per head growth rate 10% 10% 10% $ 500,000 $ $ 250,000 $ $ 250,000 $ 550,000 $ 275,000 $ 275,000 $ 605,000 $ 302,500 $ 302,500 $ 665,500 332,750 332,750 Venture debt interest rate Taxes 7.25% 21% rate 21% 21% 21% 21% Fixed Assets Fixed Assets/Head Depreciation $5,000 3 years Cash Accounts Receivable Inventories Total Current Assets $552,754 $3,000,000 $2,500,000 6,052,754 $4,631,395 3,375,000 10,125,000 18,131,395 $621,752 5,062,500 15,187,500 20,871,752 $1,842,204 $6,456,717 6,581,250 7,897,500 19,743,750 23,692,500 28,167,204 38,046,717 0 Fixed Assets Accumulated Depreciation Deposits Total Assets $90,000 295,000 300,000 305,000 310,000 ($23,472) (121,805) (221,805) (305,000) (310,000) $47,250 47,250 47,250 47,250 47,250 $6,166,532 $18,351,840 $20,997,196 $28,214,454 $38,093,967 $0 Liabilities Accounts Payable Total Current Liabilities $1,578,850 1,578,850 $3,614,583 3,614,583 $4,809,375 4,809,375 $5,931,354 $6,963,854 5,931,354 6,963,854 0 10 Venture Debt Total Liabilities 1,628,380 3,207,230 843,609 4,458,192 0 4,809,385 5,931,354 6,963,854 $3,920,000 Shareholders' Equity Series A Preferred Stock Series B Preferred Stock Common Stock Total Paid in Capital $3,920,000 $3,920,000 $3,920,000 $3,920,000 14,000,000 14,000,000 14,000,000 14,000,000 $3,000 $3,000 $3,000 $3,000 17,923,000 17,923,000 17,923,000 17,923,000 $3,000 3,923,000 0 0 Retained Earnings (Deficit) Total Shareholders' Equity Total Liabilities & Shareholders Equity Check balance ($1,417,583) (4,483,237) (2,189,073) 3,906,215 12,753,228 2,505,417 13,439,763 15,733,927 21,829,215 30,676,228 $5,712,647 $17,897,955 $20,543,312 $27,760,570 $37,640,082 -453884.56 -453884.56 -453884.56 -453884.56 -453884.56 $0 0.00 Revenue Year 1 Year 2 Year 3 Year 4 Year 5 Hi D1 Total Revenue $2,250,000 $13,500,000 $20,250,000 $26,325,000 $31,590,000 $4,500,000 $27,000,000 $40,500,000 $52,650,000 $63,180,000 $6,750,000 $40,500,000 $60,750,000 $78,975,000 $94,770,000 H1 D1 $787,500 $8,775,000 $13,162,500 $17,111,250 $20,533,500 $2,025,000 $14,850,000 $22,275,000 $28,957,500 $34,749,000 $2,812,500 $23,625,000 $35,437,500 $46,068,750 $55,282,500 $3,937,500 $16,875,000 $25,312,500 $32,906,250 $39,487,500 Gross Margin Sales & Marketing $1,698,950 $10,000,000 $11,550,000 $13,310,000 $15,306,500 Engineering $1,972,500 $6,250,000 $6,875,000 $7,562,500 $8,318,750 G&A $1,066,850 $3,500,000 $3,850,000 $4,235,000 $4,658,500 Oper. Expenses EBITDA Depreciation Interest Inc./(Exp.) Taxes Net Income/(Loss) $4,738,300 $19,750,000 $22,275,000 $25,107,500 $28,283,750 ($800,800) ($2,875,000) $3,037,500 $7,798,750 $11,203,750 ($23,472) ($98,333) ($100,000) ($83,195) ($5,000) ($139,426) ($92,321) ($33,495) $0 $0 ($609,841) ($1,620,267) ($2,351,738) ($963,699) ($3,065,654) $2,294,164 $6,095,289 $8,847,013 H1 D1 Total Revenue $2,250,000 $13,500,000 $20,250,000 $26,325,000 $31,590,000 $4,500,000 $27,000,000 $40,500,000 $52,650,000 $63,180,000 $6,750,000 $40,500,000 $60,750,000 $78,975,000 $94,770,000 H1 D1 $787,500 $8,775,000 $13,162,500 $17,111,250 $20,533,500 $2,025,000 $14,850,000 $22,275,000 $28,957,500 $34,749,000 $2,812,500 $23,625,000 $35,437,500 $46,068,750 $55,282,500 $3,937,500 $16,875,000 $25,312,500 $32,906,250 $39,487,500 Gross Margin Sales & Marketing $1,698,950 $10,000,000 $11,550,000 $13,310,000 $15,306,500 Engineering $1,972,500 $6,250,000 $6,875,000 $7,562,500 $8,318,750 G&A $1,066,850 $3,500,000 $3,850,000 $4,235,000 $4,658,500 Oper. Expenses EBITDA Depreciation Interest Inc./(Exp.) Taxes Net Income/(Loss) $4,738,300 $19,750,000 $22,275,000 $25,107,500 $28,283,750 ($800,800) ($2,875,000) $3,037,500 $7,798,750 $11,203,750 ($23,472) ($98,333) ($100,000) ($83,195) ($5,000) ($139,426) ($92,321) ($33,495) $0 $0 ($609,841) ($1,620,267) ($2,351,738) ($963,699) ($3,065,654) $2,294,164 $6,095,289 $8,847,013 w Headcount Sales & Marketing Engineering G&A Total Headcount 5yr 20 25 21 25 10 22 25 14 61 23 25 14 62onfi 4 14 59 14 60 17 Percent of Revenue Year 2 Year 3 Year 4 YOY Change Year 3 Year 4 Year 5 Year 1 Year 5 Year 2 Year 5 33% 33% 20% $31,590,000 $63,180,000 $94,770,000 33% 67% 100% 67% 100% 33% 67% 100% 33% 67% 100% 67% 100% 500% 500% 500% 50% 50% 50% 30% 30% 30% 20% 20% 22% 1014% $20,533,500 ) $34,749,000 ) $55,282,500 $39,487,500 12% 30% 42% 58% 22% 37% 58% 42% 37% 58% 42% 22% 37% 58% 42% 22% 37% 58% 633% 740% 329% 50% 50% 50% 30% 30% 30% 20% 20% 20% 20% 42% 50% 30% $15,306,500 25% 25% 19% 17% 16% 489% 16% 15% 15% $8,318,750 29% 15% 11% 10% 9% 217% 10% 10% 10% $4,658,500 16% 9% 6% 5% 5% 228% 10% 10% 10% 70% 32% $28,283,750 $11,203,750 ($5,000) 37% 5% 10% -12% 0% 49% -7% 0% 0% 30% 12% 0% 0% 5) 0% 0% 317% 13% 259% -206% 319% 2% -34% -64% #DIV/0! #DIV/0! 218% -175% 13% 13% 157% 44% -17% -94% -100% #DIV/0! 166% 45% 166% 45% 0% 0% -2% 0% -14% 7) ($2,351,738) 3 $8,847,013 -2% 0% -8% -1% 4% -2% 8% 9% Cash Flows Year 2 Year 1 Year 3 Year 4 Year 5 Operating Cash Flows Net Income (963,699) (3,065,654) 2,294,164 6,095,289 8,847,013 Adjs to Reconcile Net Income Depr & Amort Expense Accounts Receivable Inventories Deposits Accounts Payable Total Adjustments Net Operating Cash Flows 23,472 98,333 100,000 83,195 5,000 ##### ###### (375,000) (1,687,500) (1,518,750) (1,316,250 ######### (7,625,000) (5,062,500) (4,556,250) (3,948,750 (47,250) 0 0 0 1,578,850 2,035,733 1,194,792 1,121,979 1,032,500 ######### (5,865,933) (5,455,208) (4,869,826) (4,227,500 ######### (8,931,587) (3,161,045) 1,225,463 4,619,513 Investing Cash Flows Fixed Asset Additions (90,000) (205,000) (5,000) (5,000) (5,000 Net Investing Cash Flows (90,000) (205,000) (5,000) (5,000) (5,000 C Financing Cash Flows Changes in Venture Debt Changes in Capital Stock Net Financing Cash Flows Net Change In Cash Beginning Cash Balance Ending Cash Balance 1,628,380 (784,771) (843,599) (10) C 3,923,000 14,000,000 0 0 5,551,380 13,215,229 (843,599) (10) C 552,754 4,078,641 (4,009,643) 1,220,453 4,614,513 $0 $552,754 $4,631,395 $621,752 $1,842,204 $552,754 $4,631,395 $621,752 $1,842,204 $6,456,717 Financial plan Ratios Year 3 4.34 4.00 30.00 2.89 Year 4 4.75 4.00 30.00 2.80 Year 5 5.46 4.00 30.00 2.49 Current Ratio Inventory Turns DSO Total Asset Turnover Debt-to-Total Capital Times Interest Earned Return on total Assets (ROA) Return on Common Equity (ROE) Return on Invested Capital (ROIC) Year 1 3.83 2.70 160.00 1.09 0.29 5.744 -0.16 -0.38 -0.15 Year 2 5.02 4.00 30.00 2.21 0.04 31.141 -0.17 -0.23 -0.16 0.11 0.15 0.15 0.22 0.28 0.28 0.23 0.29 0.29 19 Months remaining Beg Balance Payment Interest Principal End Balance Yearly Interest 24 23 22 21 20 18 17 $ 1,628,380 $1,565,127 $ 1,501,492 $ 1,437,473 $ 1,373,066 $ 1,308,271 $ 1,243,084 $ 1,177,503 $ ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) $ 9,838 $ 9,456 $ 9,072 $ 8,685 8,296 $ 7,904 $ 7,510 $ 7,114 $ $ 63,253 $ 63,635 $ 64,019 $ 64,406 $ 64,795 $ 65,187 $ 65,581 $ 65,977 $ $ 1,565,127 $1,501,492 $ 1,437,473 $ 1,373,066 $ 1,308,271 $ 1,243,084 $ 1,177,503 $ 1,111,526 $ Financial Plan Venture Debt 17 16 15 14 13 12 1,177,503 $ 1,111,526 $ 1,045,151 $ 978,374 $ 911,194 $ 843,609 $ ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) ($73,091) 7,114 $ 6,715 $ 6,314 $ 5,911 $ 5,505 $ 5,097 $ 65,977 $ 66,376 $ 66,777 $ 67,180 $ 67,586 $ 67,994 $ 1,111,526 $ 1,045,151 $ 978,374 $ 911,194 $ 843,609 $ 775,614 $ $ 92,321 11 10 9 775,614 $ 707,209 $ 638,391 ($73,091) ($73,091) ($73,091) 4,686 $ 4,273 $ 3,857 68,405 $ 68,818 $ 69,234 707,209 $ 638,391 $ 569,157 1 8 7 6 569,157 $ 499,505 $ 429,432 $ ($73,091) ($73,091) ($73,091) 3,439 $ 3,018 $ 2,594 $ 69,652 $ 70,073 $ 70,497 $ 499,505 $ 429,432 $ 358,935 $ 5 4 3 358,935 $ 288,013 $ 216,662 $ ($73,091) ($73,091) ($73,091) 2,169 $ 1,740 $ 1,309 $ 70,922 $ 71,351 $ 71,782 $ 288,013 $ 216,662 $ 144,880 $ 2 144,880 $ ($73,091) 875 $ 72,216 $ 72,664 $ $ 72,664 ($73,091) 439 72,652 12 33,495 Venture Debt Share Allocation Option Pool Investors Founders 1,109,589 3,287,671 3,000,000 7,397,260 5 year return Rate Period Investor's Future Value Company Value 50% 5 $30,375,000 $68,343,750
