EcoClear

Home > Sample Business Plans > EcoClear

EcoClear Inc.
Financial Plan Assumptions

All figures are in real dollars;

All costs incurred during the initial six-month period of negative cashflows have been shown as January 1997 expenses;

Expenses for new R&D efforts are included in the Financial Statements. However, revenue for these efforts are not included;

Straight line growth has been assumed for the filter markets;

Market penetration is calculated as a five year cumulative normal distribution. The average diffusion rate for each year was used to calculate sales revenue;

Royalty payments from EcoClear Inc. to ABF ($1 per unit) are paid from year two onwards;

Royalty payments are received quarterly in arrears;

Dividend payments are 50% of Net Profits After Tax.

Summary Financial Results (Expected Scenario)

Years	1997	1998	1999	2000	2001
Sales($)	101,240	858,000	2,429,040	4,393,920	5,328,240
EBIT($)	(492,427)	199,090	1,398,463	2,820,320	3,457,077
NPAT($)	(313,756)	164,449	975,622	1,940,704	2,380,977
Cash Balance($)	51,660	207,330	1,414,649	3,312,691	4,856,680

The Internal Rate of Return (IRR) calculated from the projected profit streams and the end of year 5 valuation of the company (P/E = 10) is 112%. The Net Present Value (NPV) discounted at 40% is $4.5 million.

Key Performance Indicators

	1997	1998	1999	2000	2001
NPAT as % of Sales	-310	19	40	44	45
NPAT as % of Total Assets	-172	43	57	52	45
NPAT as % of Paid Capital	-46	24	145	288	353
NPAT as % Shareholder's Funds	-172	55	106	103	78

Proforma Financial Statements

The following tables show the forecast Profit and Loss statements, Cash Flows and Balance Sheets for the first five years of operation under the 'Expected Scenario'.

The Deal
EcoClear Inc. is seeking, in an Investor.,

$300,000 equity capital;
Pool industry experience (preferable); and
Harmonious relationship (personality fit).

The Investor will receive from EcoClear Inc.:

33% equity (200,000 shares);
Two seats on the Board, which has an independent Chairperson;
Shareholder agreement that protects all stockholders;
The shareholders' agreement requires unanimous consent for annual budgets, dividend policy, acquisition of debt and dilution of shareholding. Dispute resolution is through an agreed third party arbitrator, if required;
Performance contract with management team;
In the event that the management fails to exceed the 'worst case scenario' financials the management contract lapses. The future of the management team will then be decided by the board;
Five year exit value of equity approaching $8 million (assuming P/E = 10).
NPV to the investor of dividend stream and exit value (discounted at 40%) is $1.4 million, with an internal rate of return of 101%;
Payback from dividends alone in 3.1 years (see table below).

Dividend Streams ($)

Entities	Share of Equity	1997	1998	1999	2000	2001
ABF	14%	0	11,552	68,535	136,330	167,259
New Endeavour	20%	0	16,309	96,756	192,467	236,130
Degloss	16.5%	0	13,591	80,630	160,389	196,775
Port Bargo	16.5%	0	13,591	80,630	160,389	196,775
New Investor	33%	0	27,182	161,260	320,778	393,550
Total	100%	0	82,225	487,811	970,352	1,190,489

Conclusion

The EcoClear water filtration technology is truly innovative. It satisfies long felt needs in the US pool filtration industry. It also offers promising applications in other industries and geographical markets. The management team trusts you will agree that EcoClear Inc. represents an exciting and lucrative investment. The management team look forward to discussing this opportunity with you in greater detail.

EcoClear, Inc.
Table of Contents	Appendices
1. Executive Summary 2. The Company 3. Marketing Plan 4. Operational Plan 5. Financial Plan	Proforma Financial Statements Sources and Uses of Funds Sensitivity Analysis Break Even Analysis Worse Case Scenario Product Diagrams Direct Production Costs Resumes References
All information herein is confidential and belongs to EcoClear,Inc.