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Wireless Medical Alert Systems, Inc.
Budget Assumptions
Assumptions FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Accounts Receivable:
Credit Terms Net 30 Days Net 30 Days Net 30 Days Net 30 Days Net 30 Days
Freight Terms FOB Factory FOB Factory FOB Factory FOB Factory FOB Factory
Percentage of Sales on Credit 100% 100% 100% 100% 100%
Average Collection Period 90 Days 80 Days 70 Days 65 Days 60 Days
Days of Inventory Stocked 120 Days 120 Days 110 Days 110 Days 110 Days
Interest Rate on A/R Financing 8% 8% 8% 8% 8%
Accounts Payable:
Accounts Payable Terms Net 30 Days Net 30 Days Net 30 Days Net 30 Days Net 30 Days
Percentage of Purchases on Credit 100% 100% 100% 100% 100%
Average Payment Period 30 Days 30 Days 30 Days 30 Days 30 Days
Capital Equipment:
Depreciation Period 5 Years 5 Years 5 Years 5 Years 5 Years
Equipment Purchases - % Financed 25% 25% 25% 25% 25%
Interest Rate on Equipment Loans 10% 10% 10% 10% 10%
Income Taxes:
Fiscal Year End Sept. 30, 2004 Sept. 30, 2005 Sept. 30, 2006 Sept. 30, 2007 Sept. 30, 2008
Income Tax Rate (State & Federal) 37% 37% 37% 37% 37%
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Gross Margin Calculations
Product Sug. List Dist. Net Cost of Goods Gross Margin
WILMA 101 $199.00 $119.40 $65.00 45.6%
WILMA 101-RFID $229.00 $137.40 $70.00 49.1%
WILMA 901 $299.00 $179.40 $100.00 44.3%
WILMA 901-RFID $329.00 $197.40 $105.00 46.8%
RFID Reader $799.00 $479.40 $242.00 49.5%
Average Gross Margin 47.0%
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Sales and Gross Margin Projection
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Sales Projections
$ Units $ Units $ Units $ Units $ Units
Total Sales $300,000 2,000 $6,000,000 40,000 $18,000,000 120,000 $36,000,000 240,000 $60,000,000 400,000
Cost of Sales $159,000 53.0% $3,180,000 53.0% $9,540,000 53.0% $19,080,000 53.0% $31,800,000 53.0%
Gross Margin $141,000 47.0% $2,820,000 47.0% $8,460,000 47.0% $16,920,000 47.0% $28,200,000 47.0%
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Sales Projections - Fiscal Years 2004 - 2008
Sales
(Million USD)
$60
$50
$40
$30
$20
$10
$0
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Sales (Million USD)
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Sales (Million USD) $0 $6 $18 $36 $60
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc. Profit and Loss Projection
Profit & Loss Projection FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Sales $300,000 100% $6,000,000 100% $18,000,000 100% $36,000,000 100% $60,000,000 100%
Cost of Sales $159,000 53.0% $3,180,000 53.0% $9,540,000 53.0% $19,080,000 53.0% $31,800,000 53.0%
Gross Margin $141,000 47.0% $2,820,000 47.0% $8,460,000 47.0% $16,920,000 47.0% $28,200,000 47.0%
Expenses:
Administrative $90,000 30.0% $599,000 10.0% $1,712,000 9.5% $3,323,000 9.2% $5,435,000 9.1%
Sales & Marketing $243,000 81.0% $605,000 10.1% $1,703,000 9.5% $3,302,000 9.2% $5,390,000 9.0%
Engineering/ Licensing $450,000 150% $550,000 9.2% $720,000 4.0% $890,000 2.5% $1,060,000 1.8%
Total Expenses $783,000 261% $1,754,000 29.2% $4,135,000 23.0% $7,515,000 20.9% $11,885,000 19.8%
EBITDA ($642,000) -214% $1,066,000 17.8% $4,325,000 24.0% $9,405,000 26.1% $16,315,000 27.2%
Interest $3,700 1.2% $65,300 1.1% $162,700 0.9% $140,600 0.4% $10,700 0.0%
Depreciation $17,000 5.7% $54,600 0.9% $71,700 0.4% $89,300 0.2% $107,500 0.2%
Pre-Tax Earnings ($662,700) -221% $946,100 15.8% $4,090,600 22.7% $9,175,100 25.5% $16,196,800 27.0%
Income Taxes $0 0.0% $104,900 1.7% $1,513,500 8.4% $3,394,800 9.4% $5,992,800 10.0%
Net Earnings ($662,700) -221% $841,200 14.0% $2,577,100 14.3% $5,780,300 16.1% $10,204,000 17.0%
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc. Expense Budget
Expense Budget FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Administration:
Rent & Utilities $12,000 $25,000 $50,000 $75,000 $100,000
Salaries $50,000 $500,000 $1,500,000 $3,000,000 $5,000,000
Telephone $6,000 $15,000 $30,000 $50,000 $70,000
Insurance $2,000 $20,000 $50,000 $75,000 $100,000
Office Supplies $2,000 $5,000 $10,000 $15,000 $20,000
Postage/ Courier Services $2,000 $5,000 $10,000 $15,000 $20,000
Consulting Fees $6,000 $10,000 $15,000 $20,000 $25,000
Accounting/ Audit Fees $3,000 $6,000 $12,000 $15,000 $20,000
Legal Fees $5,000 $10,000 $30,000 $50,000 $70,000
Corporate Fees & Licenses $2,000 $3,000 $5,000 $8,000 $10,000
Total Administration Exp. $90,000 $599,000 $1,712,000 $3,323,000 $5,435,000
Sales & Marketing:
Advertising $200,000 $500,000 $1,500,000 $3,000,000 $5,000,000
Travel $20,000 $40,000 $80,000 $120,000 $150,000
Literature $15,000 $50,000 $100,000 $150,000 $200,000
Trade Shows $5,000 $10,000 $15,000 $20,000 $25,000
Internet $3,000 $5,000 $8,000 $12,000 $15,000
Total Sales & Marketing Exp. $243,000 $605,000 $1,703,000 $3,302,000 $5,390,000
Engineering/ Licensing:
Contract Engineering $300,000 $350,000 $450,000 $550,000 $650,000
IP Licensing Fees $50,000 $150,000 $200,000 $250,000 $300,000
Testing $50,000 $25,000 $35,000 $45,000 $55,000
Certification $50,000 $25,000 $35,000 $45,000 $55,000
Total Engineering/ Licensing Exp. $450,000 $550,000 $720,000 $890,000 $1,060,000
Total Expenses $783,000 $1,754,000 $4,135,000 $7,515,000 $11,885,000
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Capital Equipment Expenditures
and Depreciation Schedule
P & E Capital Expenditures FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Asset Value at Beginning of Year $5,000 $153,000 $218,400 $286,700 $357,400
Tooling Purchases:
Tooling - Injection Molds $100,000 $50,000 $50,000 $50,000 $50,000
Tooling - Other Components $20,000 $10,000 $10,000 $10,000 $10,000
Tooling - Fixtures and Jigs $10,000 $5,000 $5,000 $5,000 $5,000
Equipment Purchases:
Computers & Peripherals $10,000 $20,000 $30,000 $40,000 $50,000
Computer Software $10,000 $20,000 $30,000 $40,000 $50,000
Office Equipment $5,000 $5,000 $5,000 $5,000 $5,000
Furniture & Fixtures $5,000 $5,000 $5,000 $5,000 $5,000
Leasehold Improvements $5,000 $5,000 $5,000 $5,000 $5,000
Total Tooling & Equip. Purchases $165,000 $120,000 $140,000 $160,000 $180,000
Total Capital Equipment Value $170,000 $273,000 $358,400 $446,700 $537,400
Depreciation ($17,000) ($54,600) ($71,700) ($89,300) ($107,500)
Asset Value at Year End $153,000 $218,400 $286,700 $357,400 $429,900
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc. Cash Flow Projection
Cash Flow FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Cash and Equivalents - Beginning of Year $5,000 $99,500 $145,300 $299,500 $432,400
Cash Flow from Operating Activities:
Net Earnings ($662,700) $841,200 $2,577,100 $5,780,300 $10,204,000
Depreciation $17,000 $54,600 $71,700 $89,300 $107,500
Changes in Assets and Liabilities:
Accounts Receivable ($75,000) ($1,245,000) ($2,100,000) ($3,060,000) ($3,120,000)
Inventory ($52,000) ($997,000) ($1,813,000) ($2,862,000) ($3,816,000)
Accounts Payable and Accrued Expenses $65,300 $146,200 $344,600 $626,300 $990,400
Net Cash Provided by Operating Activities ($707,400) ($1,200,000) ($919,600) $573,900 $4,365,900
Cash Flow from Investing Activities:
Additions to Property, Plant and Equipment $165,000 $120,000 $140,000 $160,000 $180,000
Net Cash Used by Investing Activities $165,000 $120,000 $140,000 $160,000 $180,000
Cash Flow from Financing Activities:
Proceeds from Issuance of Stock $930,000 $600,000 $ - $ - $ -
Proceeds from A/R Financing $ - $ 750,000 $ 1,200,000 $ - $ -
A/R Financing Reductions $ - $ - $ - $ (300,000) $ (1,650,000)
Long-Term Debt Borrowings (Equipment) $41,000 $30,000 $35,000 $40,000 $45,000
Long-Term Debt Reductions (Equipment) ($4,100) ($14,200) ($21,200) ($21,000) ($24,000)
Net Cash Provided by Financing Activities $966,900 $1,365,800 $1,213,800 ($281,000) ($1,629,000)
Cash and Equivalents - End of Year $99,500 $145,300 $299,500 $432,400 $2,989,300
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Break-Even Analysis
EBITDA
EBITDA Projection
(Million USD)
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
$18.0
$16.0
$14.0
$12.0
$10.0
$8.0
$6.0
$4.0
$2.0
$0.0
-$2.0
(Million USD) FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
EBITDA -$0.6 $1.1 $4.3 $9.4 $16.3
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc. Valuation Projection
Valuation Projection FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Sales $300,000 100% $6,000,000 100% $18,000,000 100% $36,000,000 100% $60,000,000 100%
Cost of Sales $159,000 53.0% $3,180,000 53.0% $9,540,000 53.0% $19,080,000 53.0% $31,800,000 53.0%
Gross Margin $141,000 47.0% $2,820,000 47.0% $8,460,000 47.0% $16,920,000 47.0% $28,200,000 47.0%
Expenses $783,000 261% $1,754,000 29.2% $4,135,000 23.0% $7,515,000 20.9% $11,885,000 19.8%
EBITDA ($642,000) -214% $1,066,000 17.8% $4,325,000 24.0% $9,405,000 26.1% $16,315,000 27.2%
Interest $3,700 1.2% $65,300 1.1% $162,700 0.9% $140,600 0.4% $10,700 0.0%
Depreciation $17,000 5.7% $54,600 0.9% $71,700 0.4% $89,300 0.2% $107,500 0.2%
Pre-Tax Earnings ($662,700) -221% $946,100 15.8% $4,090,600 22.7% $9,175,100 25.5% $16,196,800 27.0%
Income Taxes $0 0.0% $104,900 1.7% $1,513,500 8.4% $3,394,800 9.4% $5,992,800 10.0%
Net Earnings ($662,700) -221% $841,200 14.0% $2,577,100 14.3% $5,780,300 16.1% $10,204,000 17.0%
Net Cash Flow ($645,700) $895,800 $2,648,800 $5,869,600 $10,311,500
Total of Operating Cash Flows $19,080,000
Multiplier 3.0
Multiplier times last year's EBITDA $48,945,000
Projected Value of Wireless Medical Alert Systems, Inc. as of Sept. 30, 2008 $68,025,000
Projected Price per Share as of Sept. 30, 2008 $9.32
Present Value Discount Rate 50%
Present Value of Wireless Medical Alert Systems, Inc. $9,715,200
Current Price per Share $1.33
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Investment Proposal
Settlement Price No. Shares Investment Ownership %
Dates per Share to be Issued Amount (After Purchase)
March 1, 2004 $0.10 500,000 $50,000 8.93%
July 1, 2004 $0.80 1,100,000 $880,000 23.88%
January 1, 2005 $1.00 600,000 $600,000 30.14%
Total 2,200,000 $1,530,000 30.14%
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Share Ownership Projection
Total Shares
%
(projected)
First Round Investor 2,200,000 30.14%
Present Shareholders 5,100,000 69.86%
Projected Total Shares as of Jan. 1, 2005 7,300,000 100.0%
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Return on Investment Projection
As of End of Fiscal Year 2008
Shares Issued and Outstanding 7,300,000
Projected Valuation $68,025,000
Projected Price per Share $9.32
Basic Earnings per Share $1.40
P/E Ratio 6.67
Investment Amount (Total) $1,530,000
Projected Redemption Amount $20,500,700
Projected IRR 73.5%
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
ROI - Projected Redemption Amount
(Million USD)
$25
$20
$15
$10
$5
$0
1 6 11 16 21 26 31 36 41 46 51 56
Month
(All Values in Million USD)
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Date Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05
Value of Investment at Beg. of Month $0.000 $0.052 $0.055 $0.057 $0.980 $1.026 $1.073 $1.750 $1.831 $1.915 $2.004 $2.096 $2.820
New Investment -$0.050 $0.000 $0.000 -$0.880 $0.000 $0.000 -$0.600 $0.000 $0.000 $0.000 $0.000 -$0.600 $0.000
Value of Investment at End of Month $0 $0 $0 $1 $1 $1 $2 $2 $2 $2 $2 $3 $3
Multiplier 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611
IRR % 73.55%
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06
$2.950 $3.086 $3.229 $3.378 $3.533 $3.696 $3.867 $4.045 $4.231 $4.427 $4.631 $4.844 $5.068 $5.301 $5.546 $5.801 $6.069 $6.349
$0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000
$3 $3 $3 $4 $4 $4 $4 $4 $4 $5 $5 $5 $5 $6 $6 $6 $6 $7
1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08
$6.642 $6.948 $7.268 $7.603 $7.954 $8.321 $8.704 $9.106 $9.526 $9.965 $10.424 $10.905 $11.408 $11.934 $12.484 $13.060 $13.662 $14.292
$0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000
$7 $7 $8 $8 $8 $9 $9 $10 $10 $10 $11 $11 $12 $12 $13 $14 $14 $15
1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
Wireless Medical Alert Systems, Inc.
Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08
$14.951 $15.641 $16.362 $17.117 $17.906 $18.731 $19.595
$0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $20.499
$16 $16 $17 $18 $19 $20 $20
1.04611 1.04611 1.04611 1.04611 1.04611 1.04611 1.04611
193409ad-6980-4b1d-9888-62bca1b5619c.xls 8/7/2012
