In the Pipeline

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In the Pipeline
Financial Plan Assumptions

Six month set-up costs shown as January 1998 expenses.
No allowance has been allowed for inflation.
Competitive markets reduce margins from 50% to 37% over a five year period.
2/3 credit sales are received within 60 days, and 1/3 within 90 days, after invoicing.
Substantial legal and research and development expenditure from 1999 onwards. No revenue from Volsnaps and Ezifix Anchors are included in financials.
All assets are leased where possible to minimize cash outflows in the early years. Major asset purchases in 1998 are dyes and moulds for use in the extrusion and injection moulding manufacturing process for Snapfix.
An average rate of Federal and State taxation of 40%.
Dividends have not been declared in years 1 to 2 (despite available cash flow) so as to give ITP necessary funds to develop future new product and other opportunities.
NPV and IRR are calculated on the first five years' cash flow.
No interest is earned from positive cash balances.
Dividends paid after year two - 50% of Net Profits After Tax.

Financial Results - Summary (Expected Scenario)

Years	1998	1999	2000	2001	2002
Sales($)	2,414,203	5,032,623	10,107,251	15,348,591	23,329,825
EBIT($)	502,664	1,206,789	2,565,332	956,531	6,069,547
NPAT($)	65,568	389,662	1,078,481	1,868,308	2,917,454
Cash Balance($)	337,972	470,906	1,434,146	2,296,628	3,404,092

ITP's Internal Rate of Return (IRR) is 157%. It has been calculated using the adjusted profits to arrive at a net cash flow stream and an end of year five valuation using a price/earnings ratio of 10. The net present value (NPV) is $6.9 million, discounted-at 40%. The IRR of the convertible note holder has been calculated using an average of the first two years' earnings and a price/earnings ratio of 10. An IRR of 89% and an NPV of $2.1 million is achieved.

Proforma Financial Statements (Expected Scenario)

The following tables show that forecast Income Statements, Cash Flows, Balance Sheets for the first five years operating under the Expected Scenario

Consolidated Income Statement (Expected Scenario)

	Qtr 1	Qtr 2	Qtr 3	Qtr 4	Total Yr 1	Qtr 1	Qtr 2	Qtr 3	Qtr 4	Total Yr 2	Year 1	Year 2	Year 3	Year 4	Year 5
	1998	1998	1998	1998	1998	1999	1999	1999	1999	1999	1998	1999	2000	2001	2002
SALES	482,841	555,267	651,835	724,261	2,414,203	1,006,525	1,157,503	1,358,808	1,509,787	5,032,623	2,414,203	5,032,623	10,107,251	15,348,591	23,329,825
Less Cost of Goods Sold
Opening Inventory	0	2,909	5,593	9,868	0	14,685	22,902	32,131	43,752	14,685	0	14,685	57,009	202,960	296,466
Add Manufacturing Costs	242,420	279,633	328,917	367,130	1,207,101	558,583	642,620	754,337	838,374	2,767,915	1,207,101	2,767,915	5,969,426	9,563,432	14,863,885
	242,420	282,542	334,510	376,"8	1,207,101	573,268	665,522	786,469	882,126	2,782,600	1,207,101	2,792,600	6,026,436	9,766,392	15,160,351
Less Closing Stock	2,909	5,593	9,868	14,685	14,685	22,902	32,131	43,752	57,009	57,009	14,685	57,009	202,960	296,466	520,236
TOTAL COST OF GOODS SOLD	239,511	276,950	324,642	362,313	1,203,416	550,~66	633,391	742,716	825,117	2,751,591	1,203,416	2,751,591	5,823,475	9,469,926	14,640,115
GROSS PROFIT	243,329	278,317	327,192	361,948	1,210,786	456,158	524,112	616,092	694,670	2,281,032	1,210,786	2,281,032	4,283,776	5,878,666	8,689,710
Gross Margins %	50%	50%	50%	50%	50%	45%	45%	45%	45%	45%	50%	45%	42%	38%	37%
LESS EXPENSES
Administration Expenses	169,995	84,906	81,023	94,798	430,622	144,470	147,981	165,393	164,899	622,743	430,622	622,743	968,143	1,103,845	1,453,994
Research & Development	38,000	4,000	4,500	3,500	50$000	25,500	2,000	7,000	8,5()0	43,000	50,000	43,000	44,000	70,000	97,500
Sales & Marketing	103,500	42,000	41,000	41,000	227,5	96,375	96,375	97,375	118,375	408,500	227,500	409,500	706,300	748,290	1,068,680
TOTAL EXPENSES	311,495	130,806	126,523	139,298	708,122	266,345	246,356	269,768	291,774	1,074,243	708,122	1,074,243	1,719,443	1,922,135	2,620 163
% of Total Sales	65%	24%	19%	19%	29%	26%	21%	20%	19%	21%	29%	21%	17%	13%	11%
Earnings Before Interest & Tax	(68,166)	147,511	200,669	222,650	502,664	189,813	277,756	346,324	392,896	1,206,789	502,664	1,206,789	2,565,332	3,956,531	6,069,547
Less Interest Expense	43,750	43,750	43,750	43,750	175,000	43,750	43,750	43,750	43,750	175,000	175,000	175,000	97,500	0	0
NET INCOME BEFORE TAX	(111,916)	103,761	156,919	178,900	327,664	1446,063	234,006	302,574	349,146	1,031,789	327,664	1,031,789	2,477,832	3,956,531	6,069,547
Less Income Tax Expense @ 40%	44,766	(41,504)	(62,768)	(71,560)	(131,066)	(58,425)	(93,602)	(121,030)	(139,659)	(412,716)	(131,066)	(412,716)	(991,133)	(1,582,612)	(2,427,819)
NET INCOME AFTER TAX	(67,149)	62,257	94,151	107,340	19615"	87,639	140,403	191,544	209,488	619,073	196,5"	619,073	1,486,6"	2,373,919	3,641,729
Less Minority Interest	(26,417)	(30,107)	(35,429)	(39,077)	(131,030)	(45,874)	(52,670)	(61,979)	(68,888)	(229,411)	(131,030)	(229,411)	(407,219)	(505,611)	(724,274)
NET INCOME to ITP SHAREHOLDERS	(93,566)	32,149	58,723	68,263	65,568	41,764	87,733	119,565	140,600	389,662	65,S68	389,662	1,079,481	1,868,308	2,917454
% of Total Sales	-19%	6%	9%	9%	3%	4%	8%	9%	9%	8%	3%	8%	11%	12%	13%
Retained Earnings - Opening Balance	0	(93,566)	(61,417)	(2,694)	0	65,568	107,333	195,066	314,631	65,568	0	65,568	455,230	767,356	1,317,832
Total Available for Distribution	(93,556)	(61,417)	(2,694)	65,568	65,568	107,333	195,066	314,631	455,230	455,230	65,568	455,230	1,534,711	2,635,664	4,235,296
Dividends Provided	0	0	0	0	0	0	0	0	0	0	0	0	767,356	1,317,832	2,117,643
Retained Earnings - Closing Balance	(93,566)	(61,417)	(2,694)	65,568	65,568	107,333	195,066	314,631	455,230	455,230	65,568	455,230	767,356	1,317,832	2,117,643

Consolidated Cash Flow Statement (Expected Scenario)

	Qtr 1	Qtr 2	Qtr 3	Qtr 4	Total Yr 1	Qtr 1	Qtr 2	Qtr 3	Qtr 4	Total Yr 2	Year 1	Year 2	Year 3	Year 4	Year 5
	1998	1998	1998	1998	1998	1999	1999	1999	1999	1999	1998	1999	2000	2001	2002
RECEIPTS
Sales	202,793	513,259	595,825	682,254	1,994,131	842,812	1,069,936	1,242,051	1,422,219	4,577,018	1,994,131	4,577,018	9,062,550	14,352,737	21,813,391
JV (MNF/DIST) Subscriptions	64,300	0	0	0	64,300	0	0	0	0	0	64,300	0	0	0	0
Common Stock Subscriptions	150,000	0	0	0	150,000	0	0	0	0	0	150,000	0	0	0	0
Venture Capital Loan	500,000	0	0	0	500,000	0	0	0	0	0	500,000	0	0	0	0
Sale Proceeds, Plant & Equipment	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
TOTAL CASH RECEIPTS	917,093	513,259	595,925	682,254	2,708,431	842,812	1,069,936	1,242,051	1,422,219	4,577,018	2,708,431	4,577,018	9,062,550	14,352,737	21,813,391
DISBURSEMENTS
Total Cost of Goods Sold	101,817	258,050	300,333	344,967	1,005,166	447,540	593,879	689,541	789,633	2,520,593	1,005,166	2,520,593	5,321,492	8,880,571	13,956,799
Administration Expenses	169,995	84,806	81,023	94,798	430,622	144,470	147,981	165,393	164,899	622,743	430,622	622,743	968,143	1,103,845	1,453,984
Less: Depreciation & Amortization	-10,000	-9,953	-9,905	-9,856	-39,713	-16,305	-16,206	-16,105	-16,001	-64,617	-39,713	-64,617	-87,011	-91,133	-105,090
Add: Lease payments	3,379	3,379	3,379	3,379	13,516	6,758	6,758	6,758	6,758	27,032	13,516	27,032	40,549	45,054	54,063
Research & Development	38,000	4,000	4,500	3,500	50,000	25,500	2,000	7,000	8,500	43,000	50,000	43,000	44,000	70,000	97,500
Sales & Marketing	103,500	42,000	41,000	41,000	227,500	96,375	96,375	97,375	118,375	408,500	227,500	408,500	706,300	749,290	1,068,680
Interest Expense	43,750	43,750	43,750	43,750	175,000	43,750	43,750	43,750	43,750	175,000	175,000	175,000	87,500	0	0
Cash Payments to JV (MNF/DIST)	26,417	23,175	25,919	31,679	107,190	27,607	38,254	42,905	53,263	162,029	107,190	162,029	244,403	383,661	504,339
Tax Paid on Income of JV Co	59,704	66,905	78,730	86,838	291,178	101,941	117,045	137,732	153,085	509,803	291,178	153,085	904,930	1,123,579	1,609,498
Tax Paid on Income of ITP	0	0	0	0	0	0	0	0	0	0	0	0	-170,997	459,033	818,321
Capital Purchases	110,000	0	0	0	110,000	40,000	0	0	0	40,000	110,000	40,000	40,000	0	30,000
TOTAL CASH DISBURSEMENTS	645,562	516,112	568,729	640,056	2,370,459	917,638	1,029,835	1,174,349	1,322,262	4,444,084	2,370,459	4,097,366	8,099,310	12,722,899	19,398,094
Cash Dividends Paid	0	0	0	0	0	0	0	0	0	0	0	0	0	767,356	1,317,832
Net Cash Flow	271,531	-2,853	27,096	42,198	337,972	-74,826	40,101	67,702	99,957	132,934	337,972	132,934	963,240	862,482	1,107,465
Add Opening Balance	0	271,531	268,678	295,775	0	337,972	263,146	303,247	370,949	337,972	0	337,972	470,906	1,434,146	2,296,628
CLOSING CASH BALANCE	271,531	268,678	295,775	337,972	337,972	263,146	303,247	370,949	470,906	470,906	337,972	470,906	1,434,146	2,296,628	3,404,092

Consolidated Balance Sheet (Expected Scenario)

	Qtr 1	Qtr 2	Qtr 3	Qtr 4	Total Yr 1	Qtr 1	Qtr 2	Qtr 3	Qtr 4	Totat Yr 2	Year 1	Year 2	Year 3	Year 4	Year 5
	1998	1998	1998	1998	1998	1999	1999	1999	1999	1999	1998	1999	2000	2001	2002
ASSETS
Current Assets
Cash	271,531	268,678	295,775	337,972	337,972	263,146	303,247	370,949	470,906	470,906	337,972	470,906	1,434,146	2,296,628	3,404,092
Accounts Receivable JV Co	290,047	322,055	378,064	420,071	420,071	583,794	671,352	788,109	875,676	875,676	420,071	875,676	1,920,378	2,916,232	4,437,667
Inventory	2,909	5,593	9,868	14,685	14,685	22,902	32,131	43,752	57,009	57,009	14,685	57,009	202,960	296,466	520,236
Other	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Total Current Assets	554,487	596,125	693,706	772,729	772,729	869,133	1,006,730	1,202,809	1,403,592	1,403,592	772,729	1,403,592	3,557,454	5,50,326	8,356,995
Long Term Assets
Plant & equipment	110,000	110,000	110,000	110,000	110,000	150,000	150,000	150,000	150,000	150,000	110,000	150,000	190,000	190,000	220,000
Less Accumulated Depreciation	-5,500	-11,000	-16,500	-22,000	-22,000	-29,500	-37,000	-44,500	-52,000	-52,000	-22,000	-52,000	-90,000	-128,000	-172,000
	104,500	99,000	93,500	88,000	88,000	120,500	113,000	105,500	98,000	98,000	98,000	98,000	100,000	62,000	48,000
Leased Plant & Equipment	60,000	60,000	60,000	60,000	60,000	120,000	120,000	120,000	120,000	120,000	60,000	120,000	180,000	200,000	240,000
Less Accumulated Amortization	-3,000	-6,000	-9,000	-12,000	-12,000	-18,000	-24,000	-30,000	-36,000	-36,000	-12,000	-36,000	-72,000	-112,000	-160,000
	57,000	54,000	51,000	48,000	48,000	102,000	96,000	90,000	84,000	84,000	48,000	84,000	108,000	88,000	80,000
Future Income Tax Benefit	103,471	128,872	144,834	160,113	160,113	203,629	227,071	243,773	257,200	257,200	160,113	257,200	0	0	0
Total Long Term Assets	264,971	281,872	289,334	296,113	296,113	4,269,129	436,071	439,273	439,200	439,200	296,113	439,200	208,000	158,000	128,000
TOTAL ASSET	819,458	878,197	973,040	1,068,842	1,068,842	1,295,961	1,442,801	1,642,083	1,842,792	1,842,792	1,068,942	1,842,792	3,765,484	5,659,326	8,484,995
LIABILITIES
Current Liabilities
Overdraft	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Trade Creditors	140,604	162,187	190,772	212,936	212,936	323,978	372,720	437,515	486,257	486,257	212,936	486,257	1,134,191	1,817,052	2,824,138
Provision for Dist'n to JV (MNF/DIST)	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Leased Liability	58,121	56,195	54,221	52,197	52,197	108,244	104,192	100,039	95,781	95,781	52,197	95,781	128,243	116,323	115,347
Other	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Total Current Liabilities	193,725	218,382	244,993	265,133	265,133	432,222	476,912	537,554	582,039	592,039	265,133	582,839	1,262,434	1,933,375	2,939,486
Long Term Liabilities
Venture Capital Facility	50,000	500,000	500,000	500,000	500,000	500,000	500,000	500,000	500,000	500,000	500,000	500,000	0	0	0
Minority Equity in JV Co	64,300	71,232	80,742	88,140	88,140	106,407	120,823	139,898	155,523	155,523	88,140	155,523	318,338	440,288	660,224
Provision for Dividend	0	0	0	0	0	0	0	0	0	0	0	0	767,356	1,317,832	2,117,643
Shareholders' Loans	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Total Long Term Liabilites	564,300	571,232	580,742	588,140	588,140	606,407	620,823	639,898	644,523	655,523	588,140	655,523	1,085,694	17,581,201	2,777,866
TOTAL LIABILITIES	763,025	789,614	825,735	853,273	853,273	1,038,629	1,097,735	1,177,452	1,237,561	1,237,561	853,273	1,237,561	2,348,128	3,691,495	5,717,952
NET ASSETS	56,434	88,583	1,473,016	215,568	215,568	257,333	345,066	464,631	605,230	605,230	215,568	605,230	1,417,356	11,967,232	2,767,643
SHAREHOLDERS' EQUITY
Common Stock	150,000	150,000	150,000	150,000	150,000	150,000	150,000	150,000	150,000	150,000	150,000	150,000	650,000	650,000	650,000
Reserves	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Retained Profits	-93,566	-61,417	-2,694	65,568	65,568	107,333	195,066	314,631	455,230	455,230	65,568	455,230	767,356	1,317,932	2,117,643
TOTAL SHAREHOLDERS' EQUITY	56,434	88,583	147,306	215,568	215,568	257,333	345,066	464,631	605,230	605,230	215,568	605,230	1,417,356	1,967,832	2,767,643

Key Performance Indicators

Years	1998	1999	2000	2001	2002
NPAT as % of Sales	3%	8%	11%	12%	13%
NPAT as % of Total Assets	6%	21%	29%	33%	34%
NPAT as % of Paid Capital	44%	260%	166%	287%	449%
NPAT as % of Shareholders' Funds	30%	64%	76%	95%	105%

Sources and Uses of Funds

Admin Expenses	1997	1998	1999	2000	2001	2002
Casual Wages	0	22,000	22,000	24,000	28,000	34,000
Courier	0	4,000	4,000	5,000	6,000	8,000
Depreciation	0	22,000	30,000	38,000	38,000	44,000
Set Up Cost	0	0	0	0	0	0
Insurance	1,200	4,000	6,000	7,500	8,500	9,500
Lease Amortization	0	12,000	24,000	36,000	40,000	48,000
Lease Finance Charges	0	5,713	10,617	13,011	13,133	13,090
Legal & Accounting Costs	27,000	35,000	49,000	80,000	75,000	95,000
Motor Vehicle Expenses	0	12,000	22,800	35,500	39,000	48,700
Office Servicing Costs	3,000	5,200	7,200	13,500	14,000	21,750
Office Set Up	0	7,000	0	5,000	0	6,000
Patent Cost USA	0	10,000	15,000	20,000	25,000	30,000
Patent Insurance	0	13,000	16,000	20,000	22,000	24,000
Patent Protection Trust	0	6,000	20,000	40,000	80,000	120,000
Relocation	0	16,000	0	0	0	0
Rent	6,000	32,000	33,600	70,560	74,088	116,689
Royalty Costs 1 % of Sales	0	24,142	50,326	101,073	153,486	233,298
Salaries & Wages	10,000	80,000	220,000	317,500	335,875	405,544
Salaries On-Costs 30%	0	24,000	66,000	95,250	100,763	121,663
Travel	0	4,000	6,000	15,000	18,000	27,500
Utilities	3,600	12,600	16,200	31,250	33,000	47,250
Two Months Interest Cost	29,167	0	0	0	0	0
	79,967	350,655	622,743	968,143	1,103,845	1,453,984

Research & Development	1997	1998	1999	2000	2001	2002
Consultants	4,000	10,500	17,800	27,000	35,000	42,500
Other R & D Costs	2,500	6,500	6,000	8,000	10,000	14,000
Prototypes	1,000	1,000	1,000	9,000	20,000	25,000
R&D Performance Contract	0	10,000	10,000	0	0	10,000
Set Up Costs	0	0	18,000	0	0	0
US/Can Standards Approval	10,500	4,000	4,000	0	5,000	6,000
	18,000	32,000	43,000	44,000	70,000	97,500

Sales & Marketing	1997	1998	1999	2000	2001	2002
Marketing Consultants	0	5,000	9,000	15,000	24,000	37,500
Set Up Costs	0	0	20,000	85,000	20,000	125,000
Promotion & Entertainment	10,000	50,000	57,000	97,000	103,000	159,000
Advertising & Promotion	9,500	17,000	18,000	20,000	25,000	32,000
Salaries	20,000	40,000	195,000	321,000	378,300	473,215
Salaries on-costs 30%	0	12,000	58,500	96,300	113,490	141,960
Trade Shows	22,000	10,000	14,000	30,000	35,000	45,000
Travel	3,000	29,000	37,000	42,000	49,500	55,000
	64,500	163,000	408,500	706,300	748,290	1,068,680
TOTAL EXPENSES:	162,467	545,655	1,074,243	1,718,443	1,922,135	2,620,163

Worst Case Scenario - Summary
In the Worst Case Scenario an IRR of 94% and NPV of $3.1 million are achieved, As debt holders do not convert their debt to equity, their IRR remains at the coupon rate of 32%. The Worst Case Scenario outcomes are summarized in the table below and a detailed Income Statements, Cash-flow Statements and Balance Sheets are shown in Appendix D.

Years	1998	1999	2000	2001	2002
Sales	1,448,522	3,019,574	5,295,046	8,177,558	11,906,333
EBIT	726,370	1,661,217	3,179,162	5,206,178	7,740,823
N PAT	(168,629)	72,653	111,858	461,807	776,797
Cash Balance	110,400	(82,192)	258,215	586,263	400,529

In the Worst Case Scenario ITP will use its line of credit to meet a shortfall of cash in 1999.

Worst Case Scenario - Key Performance Indicators

Years 1998 1999 2000 2001 2002

NPAT as % of Sales (12%) 2% 2% 6% 7%

NPAT as % of Total Assets (23%) 7% 7% 19% 26%

NPAT as % of Paid Capital (112%) 48% 75% 308% 518%

NPAT as % of Shareholders' Funds 905% 34% 71% 20% 118%

In the Pipeline
Table of Contents	Appendices
1. Executive Summary 2. Company & Product 3. Marketing 4. Operational Plan 5. Financial Plan 6. Offer to Investors	Product Diagrams Executive Resumes Action Plan Financial Statements
The information and ideas herein are the confidential, proprietary, sole, and exclusive property of the company's founders.