Use data provided in the accompanying spreadsheet to create common-sized balance sheets and income statements based on the projected data.

Compare the common sized data for PWBI to the common sized data for the comparison sample of companies in Case Exhibit 10.

How do the common sized data for PWBI compare to that for each company in Exhibit 10?

How can you account for differences and/or similarities between PWBI and each of the companies in Exhibit 10?

How might the comparison affect your choice of a sample of comparative companies to be used when estimating multiples to be used to value PWBI?

Choose an appropriate MVIC ratio to be used to conduct a venture capital valuation of PWBI. The appropriate choice should be based on companies that are most similar to PWBI in terms of their business models and financial structures.

Value PWBI using a VC model and assumptions of a venture capital return of 45%.

Given the results of your model, estimate the share of equity PWBI would need to give in exchange for raising $950,000 from VC investors.

Based on your analysis of the balance sheet, income statement, and cash flow statement, assess the need for the $950,000 and offer an opinion as to whether it is even necessary at this time.

Written submission:

Submit a two-page (maximum) document supporting your choice of a benchmark multiple and the results of your valuation and estimate of the percentage of ownership that would be given in exchange for a $950,000 investment. Be sure to include your opinion as to the need for that amount of funding given their expected cash flow in the future.

PWBI Financial Statement Projections Income Statements 6/30/2007 Net Sales Cost of Goods Sold Gross Profit $ $ $ 4,341,600 2,637,924 1,703,676 SGA Expenses Commissions Salaries and wages Payroll expense Advertising Promotions and Marketing Trade show expense Miscellaneous Depreciation Total SGA $ $ $ $ $ $ $ $ $ 494,942 585,000 35,000 25,000 52,700 25,000 1,217,642 EBIT Interest Expense $ $ 486,034 29,548 Taxes $ 182,594 Net Income $ 273,892 Balance Sheets Current Assets Cash Accounts Receivable Inventory Total Current Assets End of Initial Year 6/30/2007 $ $ $ $ 15,558.96 1,732.80 17,291.76 $ 130,926.64 $ 613,920.00 $ 27,648.00 $ 772,494.64 Furniture and Equipment Furniture Equipment Gross Fixed Assets Less Accumulated Depreciation Net Fixed Assets $ $ $ $ $ 6,908.00 45,545.54 52,453.54 (5,889.32) 46,564.22 ### $ 95,545.54 $ 102,453.54 $ (30,889.32) $ 71,564.22 Total Assets $ 63,855.98 $ 844,058.86 Liabilities and Stockholder Equity Accounts Payable Loans Payable Total Liabilities $ $ $ - $ 506,311.34 369,350.76 ### 369,350.76 $ 875,662.10 Stockholder Equity Common Stock Retained Earnings Total Equity $ $ $ 600.00 ### (306,094.78) $ (32,203.24) (305,494.78) $ (31,603.24) Total Liabilities and Equity $ 63,855.98 $ 844,058.86 nt Projections 6/30/2008 $ $ $ 6/30/2009 21,124,800 13,311,026 7,813,774 100.00% 60.76% 39.24% 100.00% 61.95% 38.05% 100.00% 63.01% 36.99% $ $ $ $ $ $ $ $ $ 2,408,227 575,000 115,000 800,000 42,000 133,150 21,900 4,095,277 11.40% 0.00% 0.00% 13.47% 0.81% 0.58% 1.21% 0.58% 28.05% 11.40% 2.33% 0.47% 6.78% 0.36% 0.00% 0.70% 0.20% 22.24% 11.40% 2.72% 0.54% 3.79% 0.20% 0.00% 0.63% 0.10% 19.39% $ $ 1,864,459 $ 29,548 $ 3,718,497 28,484 11.19% 0.68% 15.81% 0.25% 17.60% 0.13% $ 733,964 $ 1,476,005 4.21% 6.22% 6.99% $ 1,100,947 $ 2,214,008 6.31% 9.34% 10.48% $ $ $ $ $ $ $ $ $ 11,793,600 $ 7,306,571 $ 4,487,029 $ 6/30/2007 6/30/2008 6/30/2009 1,344,470 275,000 55,000 800,000 42,000 82,900 23,200 2,622,570 6/30/2008 6/30/2009 $ 1,000,451.23 $ 1,413,552.00 $ 64,074.24 $ 2,478,077.47 $ 2,655,393.71 $ 2,533,296.00 $ 87,995.29 $ 5,276,685.00 15.51% 72.73% 3.28% 91.52% 39.60% 55.95% 2.54% 98.09% 49.65% 47.37% 1.65% 98.66% $ $ $ $ $ $ $ $ $ $ 6,908.00 140,545.54 147,453.54 (75,989.32) 71,464.22 0.82% 11.32% 12.14% -3.66% 8.48% 0.27% 3.78% 4.06% -2.14% 1.91% 0.13% 2.63% 2.76% -1.42% 1.34% $ 2,526,441.69 $ 5,348,149.22 100.00% 100.00% 100.00% 6,908.00 95,545.54 102,453.54 (54,089.32) 48,364.22 $ 1,101,047.19 $ 2,038,747.33 $ 356,050.76 $ 26,050.76 $ 1,457,097.95 $ 2,064,798.09 59.99% 43.76% 103.74% 43.58% 14.09% 57.67% 38.12% 0.49% 38.61% $ 600.00 $ 600.00 $ 1,068,743.74 $ 3,282,751.14 $ 1,069,343.74 $ 3,283,351.14 0.07% -3.82% -3.74% 0.02% 42.30% 42.33% 0.01% 61.38% 61.39% $ 2,526,441.69 $ 5,348,149.23 100.00% 100.00% 100.00% PWBI Multiple Estimates Private Sales Transactions Comparable Company MVIC to Sales MVIC to Gross Profits MVIC to EBIT MVIC to EBITDA MVIC to Book Value Equity Master 0.53 1.85 Finish Trinity Excelsior Line Springs 0.31 1.53 1.15 1.13 5.98 2.16 57.04 47.92 23.06 10.53 2.17 9.50 Aloha 1.39 2.20 20.12 Public Sales Transaction Comparable Company MVIC to Sales MVIC to Gross Profits MVIC to EBIT MVIC to EBITDA MVIC to Book Value Equity Vermont Eldorado 1.12 1.96 10.95 5.63 2.17 1.92 2.50 87.66 19.42 10.54 Jones 12.16 30.02 173.98 137.14 11.36 Hansen National Natural 6.44 1.11 19.50 3.55 34.42 17.74 22.15 12.56 28.36 4.55 Comparative Sample Comparable Sample MVIC to Sales MVIC to Gross Profits MVIC to EBIT MVIC to EBITDA MVIC to Book Value Equity Trinity 1.53 5.98 2.17 Excelsior Essentia Vermont Eldorado 1.15 2.16 47.92 10.53 9.50 11.81 45.08 1.12 1.96 10.95 5.63 2.17 1.92 2.50 87.66 19.42 10.54 BI Multiple Estimates ansactions Essentia 11.81 45.08 Median Average 1.27 2.18 52.48 16.80 9.50 2.79 9.73 52.48 16.80 10.60 StDev 4.45 17.40 6.45 8.86 9.03 CV 1.60 1.79 0.12 0.53 0.85 Public Sales Transactions Cott 0.84 6.92 652.69 9.65 3.07 Cadbury Coca-Cola 2.56 5.12 22.48 14.26 4.02 5.06 7.94 20.05 15.79 7.47 Pepsi DANONE Median Average America 3.51 4.64 3.04 3.94 6.48 9.75 6.70 9.37 19.49 35.38 28.45 107.48 14.58 27.19 15.19 27.84 8.12 11.21 7.80 9.09 ple Median 1.53 2.50 47.92 10.53 5.84 Average 3.51 11.54 48.84 11.86 6.10 StDev 4.65 18.82 38.36 6.99 4.55 CV 1.33 1.63 0.79 0.59 0.75 StDev 3.45 8.82 197.93 38.89 7.58 CV 0.88 0.94 1.84 1.40 0.83 PWBI Financial Statement Projections and Valuation-0 Mean Values for Multiples Valuation Object Net Sales Gross Profit EBITDA EBIT Total Equity Average Values Valuation Object Net Sales Gross Profit EBITDA EBIT Total Equity Average Values 6/30/2009 $21,124,800.00 $7,813,774.00 $3,740,397.00 $3,718,497.00 $3,283,351.14 6/30/2009 $21,124,800.00 $7,813,774.00 $3,740,397.00 $3,718,497.00 $3,283,351.14 Private Multiple Public Multiple 2.79 9.73 52.48 16.80 10.60 3.94 9.37 107.48 27.84 9.09 Median Values for Multiples Private Multiple Public Multiple 1.27 2.18 52.48 16.80 9.50 3.04 6.70 28.45 15.19 7.80 Comparable Multiple 3.51 11.54 48.84 11.86 6.10 Comparable Multiple 1.53 2.50 47.92 10.53 5.84 Private Valuation Public Valuation Comparable Valuation Average $58,938,192.00 $83,231,712.00 $74,148,048.00 $78,689,880.00 $76,028,021.02 $73,215,062.38 $90,170,951.96 $79,804,678.45 $196,296,034.56 $402,017,869.56 $182,680,989.48 $260,331,631.20 $62,470,749.60 $103,522,956.48 $44,101,374.42 $70,031,693.50 $34,803,522.08 $29,845,661.86 $20,028,441.95 $28,225,875.30 $92,399,581.82 ### $82,225,961.16 ### Private Valuation Public Valuation Comparable Valuation Average $26,828,496.00 $64,219,392.00 $32,320,944.00 $41,122,944.00 $17,034,027.32 $52,352,285.80 $19,534,435.00 $29,640,249.37 $196,296,034.56 $106,414,294.65 $179,239,824.24 $160,650,051.15 $62,470,749.60 $56,483,969.43 $39,155,773.41 $52,703,497.48 $31,191,835.83 $25,610,138.89 $19,174,770.66 $25,325,581.79 $66,764,228.66 $61,016,016.15 $57,885,149.46 $61,888,464.76 NA0028 PowerWater Beverages, Inc. Jeffrey P. Shay, Washington and Lee University Tony Crawford, University of Montana Bambi Douma, University of Montana Joshua Herbold, University of Montana O n June 22, 2006, Kent Mawhinney and Chris Murphy sat side-by-side in a golf cart as they cruised down the 463 yard par five fairway of the fourth hole. Playing a round of golf at the Quarry Ridge Golf Course in Portland, Connecticut, had become an annual outing for the two former roommates who graduated from Babson College in 1987. Much had changed since their college years. Mawhinney had gone on to earn his law degree, had spent some time working in a prestigious Connecticut law firm, and most recently had become a founding partner in the law firm Markowitz & Mawhinney. Murphy had gone on to start his own consulting firm, then earned his MBA and eventually a Ph.D. Recently he had been promoted to an associate professor of entrepreneurship at a state university in the Northwest U.S. This year, in addition to catching up and reminiscing, Mawhinney and Murphy had some serious business to discuss. Mawhinney had contacted Murphy in September 2005 to discuss a business opportunity and ask if Murphy was available to write a business plan. Murphy completed the first version of the plan for PowerWater Beverages, Incorporated a few months later. He was then asked to join the startup's board of directors and he continued to provide consulting services to the company. From September 2005 until June 2006 Mawhinney negotiated terms with his senior management team, secured commitments from independent representatives who now comprised the company's national sales force, and signed contracts with co-packers, suppliers, and distributors. The company now faced significant challengeschallenges that Mawhinney would need to address at the board meeting the next morning. Mawhinney explained the urgency of these specific challenges to Murphy: We're really facing two major issues that need to be addressed tomorrow, Chris. First, David [Angliss, PowerWater Beverages' CPA] estimates that we need to raise $950,000. We need to determine the valuation for our company, whether this is the appropriate amount that we should be seeking, and we should assess the various alternatives that we've proposed for investors. Second, the senior management team believes that there are many other opportunities for PowerWater Beverages' distilled, oxygenated water product and would like to hear your recommendations regarding potential markets that we might consider beyond the traditional bottled water segment. Kent paused for a moment. \"And, Chris, do you still think this whole thing is a good idea? Should we revisit the entire opportunity with the board?\" Copyright 2009 by the Case Research Journal and by Jeffrey P. Shay, Tony Crawford, Bambi Douma, and Joshua Herbold PowerWater Beverages, Inc. 1 This document is authorized for use only by Niharika Bajad (bajad.niharika@gmail.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 8009880886 for additional copies. INTERNATIONALBOTTLEDWATERMARKET Bottled water, as a beverage product, started primarily in Western Europe, whe long been part of the daily consumption ritual. Between 1994 and 2004, in alm region of the world, bottled water was one of the most dynamic beverage cate Bottled water was often seen as an ideal category by beverage manufacturers the high gross margins, the ease of market segmentation, the possibility of con trading up to higher-end products, and the resulting potential for high growth. tion, the bottled water market remained highly fragmented, leaving opportunit acquisition and investment. By 2005, bottled water had become a truly global found in some of the more remote corners of the globe. In 2004, global bottled water consumption was estimated to have approach billion gallons, raising the global rate of consumption by 6.5 percent from the p year. Per capita consumption was 6.4 gallons, up three-tenths of a gallon from Several European countries boasted per capita consumption levels of well ove five gallons, but much of the developing world had per capita consumption figu in the low single-digits. While Europe was the leading regional consumer of bottled water on a coun North America contained the two largest markets, the U.S. and Mexico. Togeth countries accounted for 28.2 percent of the world market in 2004. Mexico acco for 11.5 percent of the global volume at 4.7 billion gallons. In 2004, China stoo third largest market with 3.1 billion gallons. Chinese bottled water volume had by double digits in four of the last five years. Brazil slid from third place in 200 fourth place in 2004, even though bottled water volume increased by 15.4 per nearly 3.1 billion gallons. Italy and Germany grew by 3.0 percent and 3.6 perce respectively. Italy ended 2004 at 2.8 billion gallons, and Germany at 2.7 billion In 2004, the top ten per capita bottled water consumers were European cou Italy had the most established bottled water consumption tradition at more tha eight gallons per person, consuming about four gallons more per capita than M the country with the second highest per capita consumption at 44.5 gallons. T Arab Emirates was the only other country with per capita consumption greater gallons, although Belgium-Luxembourg and France were close. Spain and Germ per capita consumption rates of 36.1 and 33 gallons, respectively. The United S ranked eleventh in per capita consumption. Bottled water companies were able to make massive volume gains during th by successfully tapping into consumer trends around the world. In developed c such as the U.S., Canada, and Japan, bottled water became the fastest growing beverage category through marketing to the growing health and well-being co ness of consumers. Many viewed bottled water as not only a way of achieving but also as a functional beverage, a healthy alternative to carbonated soft drin and juice drinks. In developing countries, bottled water was increasingly positi safe and relatively affordable alternative to the often unclean and unsafe tap w Moreover, since the two largest countries, China (1.3 billion people) and India lion people), were considered developing countries, these national markets an significant size presented highly attractive markets for bottled water companie Table 1). 2 Case Research Journal Volume 29 Issue 3 and 4 Summer/Fall 2009 This document is authorized for use only by Niharika Bajad (bajad.niharika@gmail.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 8009880886 for additional copies. Table 1 July 2005 Population Estimate (United Nations) Rank Country/Territory World Population (in 000,000s) 1 People's Republic of China 1,315,8 2 India 1,103.4 3 United States of America 298.2 4 Indonesia 222.8 5 Brazil 186.4 6 Pakistan 157.9 7 Russia 143.2 8 Bangladesh 141.8 9 Nigeria 131.5 10 Japan 128.1 11 Mexico 107.0 12 Vietnam 84.2 13 Phillippines 83.1 14 Germany 82.7 15 Ehtiopia 77.4 16 Egypt 74.0 17 Turkey 73.2 18 Iran 69.6 19 Thailand 64.2 20 France 60.5 6,464.8 While much of the world's bottled water market remained highly fragmented and controlled by local brands, consolidation was rapidly occurring. Four large beverage companies dominated much of the market. Nestl and Danone were the perennial leaders of the industry; both centered their operations around the core markets of Western Europe and the United States. Recently, with growth increasing in the developing world, Nestl and Danone took their rivalry to Asia, Latin America, and other areas. Danone appeared to have partially retreated from the U.S. market to focus on some of these other developing markets. CSD giants PepsiCo and Coca-Cola claimed the top two spots in the U.S. bottled water market. Both companies were increasingly devoting resources and energy to developing their global bottled water businesses. While they did not pose an immediate threat to Nestl and Danone in Europe, they had to be considered serious threats in the less developed and often high-growth bottled water markets of Asia, Eastern Europe and South America. THE U.S. O BTTLEDWATERMARKET Bottled water was the second largest commercial beverage category by volume in the United States in 2005. Total U.S. bottled water volume exceeded 7.5 billion gallons, a 10.7 percent advance over 2004, which translates into 26.1 gallons per person, up over two gallons from 23.8 gallons per capita the year before. Additionally, wholesale dollar sales for bottled water exceeded $10 billion in 2005, a 9.2 perent increase over 2004. In recent years, U.S. volume growth increased more rapidly than dollar sales and the industry's performance remained unrivaled. This reflects the impact of polyethylene PowerWater Beverages, Inc. 3 This document is authorized for use only by Niharika Bajad (bajad.niharika@gmail.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 8009880886 for additional copies. terephthalate (PET) bottled water multi-pack promotions, which were increasin ular sales promotions and were central to volume growth. Domestic non-sparkling water's 7.2 billion gallons represented 95 percent o volume in 2005. The segment, which comprises diverse components with very performances, grew at a faster rate than the overall market in 2005. The most of the non-sparkling segment is the retail PET segment. PET bottled water was of the U.S. packaged water industry and consistently outperformed all other se It was primarily the single-serve PET segment that drove overall category enla Leading companies have formed new distribution arrangements in order to cap the growing PET segment while attempting to revive other segments. PET volu increased from 1.4 billion gallons in 2000 to almost 4 billion gallons in 2005, in ing its share of volume from 29 to 53 percent. In 2005, Nestl Waters North America remained the largest bottled water co in the country, with $3.1 billion in wholesale dollar sales. Nestl owned major r brands like Poland Spring, Arrowhead, and Zephyrhills, which accounted for mo 31 percent of total bottled water sales in 2005. Pepsi-Cola's Aquafina, the num brand for the last several years, became the U.S. bottled water business's first dollar brand in 2004. The brand sustained strong growth in 2005, when wholes dollar sales neared $1.3 billion. In 2005, Coca-Cola's retail PET brand, Dasani, Aquafina with sales greater than $1 billion. Both companies began offering flav sions of their flagship waters; these products are developing and comprise onl portion of sales. U.S. bottled water sales fluctuated according to a seasonal cycle that follow temperatures. During warmer months people tend to engage in more outdoor and consume greater quantities of water. There was a core target market grou cised indoors and outdoors year-round regardless of the temperature. Accordin vey conducted by the International Bottled Water Association in 2000, thirty-th cent of what U.S. consumers drink every day can cause dehydration. And, whil people were aware of the importance of water consumption to their overall he percent of U.S. consumers didn't know that the U.S. Food and Drug Administra (FDA) regulated bottled water as a food product. In general, U.S. consumers ch tled water because it was perceived to be safer and of higher quality than tap survey found that 56 percent of bottled water users cited taste and 55 percent venience as the strongest influence on their decision to drink bottled water. Mo a third of bottled water users cited trust in its treatment (37 percent) and sour cent) as reasons that influenced them strongly. Seventy-one percent of U.S. co felt that the quality of bottled water was high and half believed that using bott to prepare tea, coffee, and powdered beverages improved the taste. U.S. residents drank more bottled water annually than any other beverage, than CSDs. The gap between the two top categories was narrowing as bottled tinued to advance and CSDs either barely grew or declined. Average per capita bottled water grew by at least one gallon annually and has more than doubled decade. Per capita consumption of CSDs decreased slightly for several consecu Bottled water users were significantly more health conscious and cited health for beverage consumption twice as often as others (15 versus 7 percent). Geog in the U.S., residents of Los Angeles (3.2 eight-ounce servings) and San Diego drank the most bottled water during the course of a day. Detroit residents dran least bottled water (1.3). Residents of San Diego drank the most bottled and ta 4 Case Research Journal Volume 29 Issue 3 and 4 Summer/Fall 2009 This document is authorized for use only by Niharika Bajad (bajad.niharika@gmail.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 8009880886 for additional copies. overall (6.9 servings), followed by Dallas (6.5), Los Angeles (6.4), and New York (6.4). The least amount of total water was consumed in Detroit (5.4) and Seattle (5.6). Bottled water's share of the U.S. beverage market was poised to grow, while CSDs were projected to lose ground. Bottled water's share of the non-alcoholic beverage market could advance from less than 22 percent in 2005 to nearly 29 percent in 2010. The CSD market would remain larger, with a 38 percent share (down from 43 percent in 2005), but bottled water should make major gains on the largest beverage category (see Exhibit 1 for specific U.S. market statistics). According to life-stage statistics the largest percentage of dollars spent annually on bottled water was by maturing families with children between the age of six and twelve at 22 percent, middle-aged childless couples between age thirty-five and fifty-four at 18 percent, and empty-nesters over fifty-five with no children at home at 9 percent. Exhibit 1. U.S. Bottled Water Market Statistics Volume and Producer Revenues 20012005 Year Millions of Gallons Annual % Change Millions of Dollars 2001 5,185.3 2002 5,795.7 Annual % Change $6,880.6 11.8% $7,901.4 14.8% 2003 6,269.8 8.2% $8,526.4 7.9% 2004 6,806.7 8.6% $9,169.5 7.5% 2005 7,537.1 10.7% $10,012.5 9.2% Source:Beverage Marketing Corporation Per Capita Consumption 20012005 Year Gallons Per Capita 2001 18.7 Annual Change 2002 20.7 10.8% 2003 22.1 7.0% 2004 23.8 7.6% 2005 26.1 9.6% Source:Beverage Marketing Corporation POWERWATERBEVERAGES , INCORPORATED Recognizing increased consumer demand for pure water and concerns regarding contaminated natural water supplies, former Olympic swimmer and software entrepreneur Duncan Cleworth founded PowerWater Systems, Inc. in 1999 in Toronto, Canada. Cleworth believed that there was a niche opportunity in the bottled water industry for a super-premium bottled water. After rigorous research he realized that market penetration would require a product differentiated from competitors based on characteristics that extended beyond being \"pure.\" As a result, Cleworth obtained the rights to a unique proprietary process that dissolves medical grade oxygen molecules into distilled (i.e., PowerWater Beverages, Inc. 5 This document is authorized for use only by Niharika Bajad (bajad.niharika@gmail.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 8009880886 for additional copies. pure) water. Cleworth began marketing his company's super-premium, oxygen distilled bottled water product called PowerWater later that year in Canada. In 2005, Kent Mawhinney and a group of investors recognized growing U.S. c sumer demand for bottled water and, more specifically, for \"pure\" water. For e several studies reported in the popular press and on television that the bottled being sold on the market was no better than normal tap water. Consumers wer shocked by these reports and became more discriminating on the bottled wate were willing to purchase. In an effort to capitalize on growing consumer deman super-premium water, Mawhinney and his investors founded PowerWater Beverages Incorporated (PWBI), a C-Corporation with headquarters in Rocky Hill, Connecti to pursue this opportunity. PWBI began by negotiating an agreement with Powe Systems, Inc. Under the agreement, PWBI owned the rights, title, and interest secret industrial design to produce pure distilled oxygenated water. PWBI's exc license allowed the company to produce and distribute PowerWater throughou world, except Canada. PWBI aimed to become the premier bottled water provid name brand for active and health conscious consumers in the United States an the world by offering optimally hydrating, pure, great tasting water that outper alternatives available on the market Exhibit (see 2 for the full mission statement). Exhibit 2 PWBI's Mission Statement PowerWater Beverages aims to become the premier bottled water provider and name brand for active and healthconscious consumers in the United States and around the world by offering optimally hydrating, pure, great tasting water that outperforms alternatives available on the market. PowerWater Beverages will establish, build, and maintain a reputation in the marketplace for producing and delivering the best quality bottled water. PowerWater Beverages will achieve this by leveraging its unique propri etary process, its rigorous efforts to maintain an understanding of market trends and needs, and its abilities to continually develop innovative water products and packaging to meet the diverse needs of specific market seg ments. In pursuit of PowerWater Beverages' goals, the company resolves to treat shareholders, strategic outsourcing partners, retailers, and end customers, with the utmost care and concern. These groups see PowerWater Beverages as the vehicle for significant benefits through wealth and better health creation. The PowerWater Product PowerWater was produced through a unique proprietary and patented process solves medical grade oxygen molecules into distilled (i.e., pure) water. This pro duced water that optimized hydration, had significantly low levels of total disso solids (TDS), and was designed to improve taste. While all bottled waters are purified to some degree in order to remove cont nants, PWBI's rigorous purification system provided the purest water available explanation of the process and theExhibit results,3). seePowerWater's unique four-step process:filtration, distillation, purification and oxygenationset a new standa water purity. This process produced a product with the following characteristics Removed of micro-sized particles, heavy metals, inorganic and organic impu and micro-organisms and bacteria from the water. Super-oxygenated pure distilled water with medical-grade oxygen by means prietary process that hydrates the body over twice as fast as most drinking 6 Case Research Journal Volume 29 Issue 3 and 4 Summer/Fall 2009 This document is authorized for use only by Niharika Bajad (bajad.niharika@gmail.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 8009880886 for additional copies. Exhibit 3 PowerWater Beverages' Rigorous Purification Process The Importance of Bottled Water Purity One of the most widely accepted measures of purity in water is the level of total dissolved solids (TDS). TDS includes any minerals, salts, metals, cations, or anions dissolved in water (i.e., anything present in water other than pure water molecules). TDS is meas ured in units of parts per million (PPM). The TDS measure represents the total amount of impurities dissolved in the water and is unaffected by simple filtration. The chart below provides a TDS scale and corresponding ratings of common waters. Water purity is critical for the hydration process. The body must process and filter out all solids from water before it can deliver clean, pure water to the cells. PowerWater's Unique Production Process PowerWater starts its journey from the source. It is then fed through food grade polymer piping to a Carbon filter. This removes any foul taste, chlorides, and some heavy metals. The treated water then passes through a dual salter and filtration unit. This softens the water as well as removes any organic matter, inorganic matter and remaining metals. The water then passes through another filter to ensure that the TDS is less than 10 ppm. Now the water enters the distiller. This process removes all remaining impurities, including micro organisms and bacteria. The result is TDS under 1 ppm. Finally, the water is chilled and infused with medical grade oxygen under pressure by a proprietary \"Oxy Transfer Process\" resulting in PowerWater. The Oxy Transfer Process (OTP), a proprietary process, enables small streams of oxygen bubbles to be stripped down to molecules and dispersed within the stream of distilled water. Prior to bottling, PowerWater is treated with ultraviolet light to ensure elimination of any microorganisms and bacteria. PowerWater, with TDS