Docstoc

Financials

Document Sample
Financials Powered By Docstoc
					CHERUB MEDIA, LTD. PROSPECTIVE STATEMENT OF OPERATIONS (in thousands, except per share amounts)

Years Ending December 31 2009 Total Revenue Sales & marketing Research & development General & administrative Depreciation Amortization of intangibles Other expense, net Total Operating Expenses Operating Income Interest income (expense), net Other income (expense), net Income from continuing operations before income taxes Income taxes Net Income Basic earnings per share Income from continuing operations Net Income Shares Outstanding $ $ 6 5 102 0 113 (113) (113) (40) (74) $ $ 2010 Total 4,378 1,069 268 2,591 1 36 134 4,099 279 39 317 111 206 $ $ 2011 Total 53,038 6,977 1,948 10,185 2 296 2,165 21,573 31,464 224 31,688 11,091 20,597 $ $ 2012 Total 158,452 16,838 5,821 24,226 5 1,072 8,084 56,047 102,405 492 102,897 36,014 66,883 $ $ 2013 Total 296,596 30,201 10,895 42,117 10 2,525 18,159 103,908 192,688 799 193,487 67,721 125,767

$ $

(0.03) (0.03) 2,400

$ $

0.09 0.09 2,400

$ $

8.58 8.58 2,400

$ $

27.87 27.87 2,400

$ $

52.40 52.40 2,400

CHERUB MEDIA, LTD. PROSPECTIVE BALANCE SHEET (in thousands)

Years Ending December 31 2009 Total ASSETS Current Assets Cash and cash equivalents Accounts receivable, net Current assets held for sale Prepaid & other current assets Total Current Assets Property, plant and equipment, net Intangibles, net Other assets Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable Accrued expenses and other liabilities Unearned Subscription Revenue Income taxes payable Total Current Liabilities Deferred income taxes Other long-term liabilities Total Liabilities Stockholders' equity Class A Common stock $.001 par value, 2,400,000 shares, issued and outstanding Additional paid-in capital Retained earnings (deficit) Total Stockholders' Equity Total Liabilities and Stockholders' Equity 4 1 (36) (30) (4) (34) 230 84 14,896 100 15,309 11 67 15,387 1,690 758 58,974 9,982 71,404 1,109 1,082 73,595 4,430 2,466 87,597 32,413 126,906 3,601 4,042 134,549 8,266 4,994 102,810 60,948 177,018 6,772 9,079 192,869 13 4 16 3 19 17,024 21 17,045 9 145 17,200 94,815 25 94,840 17 1,148 96,005 219,815 29 219,844 42 3,956 223,842 399,117 36 399,153 82 8,695 407,929 2010 Total 2011 Total 2012 Total 2013 Total

2.4 125 (74) 54 19

2.4 1,678 133 1,813 17,200

2.4 1,678 20,730 22,410 96,005

2.4 1,678 87,613 89,293 223,842

2.4 1,678 213,380 215,060 407,929

CHERUB MEDIA, LTD. PROSPECTIVE STATEMENT OF CASH FLOWS (in thousands)

Years Ending December 31 2009 Total Operating Activities Net Income Adjustments to reconcile net income to net cash from operating activities Depreciation Amortization Deferred income tax expense Other Changes Decrease (increase) in other current assets Increase (decrease) in accounts payable Increase (decrease) in unearned revenue Increase (decrease) in accrued expenses and other current liabilities Net cash provided by operating activities Investing Activities Additions to property, plant, and equipment Proceeds from sale of assets Net cash used by investing activities Financing Activities Dividends Paid Issuances of common stock Purchases of common stock Net cash provided by financing activities Increase (decrease) in cash Cash - Beginning of Year Cash - End of Year $ (74) 0 (4) (4) (32) 1 (111) $ 206 1 36 15 (18) 361 14,896 150 15,648 $ 20,597 2 296 1,098 (4) 11,342 44,078 1,689 79,100 $ 66,883 5 1,072 2,492 (4) 25,171 28,623 4,668 128,910 $ 125,767 10 2,525 3,171 (6) 32,372 15,212 7,565 186,616 2010 Total 2011 Total 2012 Total 2013 Total

(3) (3)

(189) (189)

(1,309) (1,309)

(3,910) (3,910)

(7,314) (7,314)

127 127 13 13

1,553 1,553 17,011 13 17,024

77,791 17,024 94,815

125,000 94,815 219,815

179,302 219,815 399,117

CHERUB MEDIA, LTD. KEY FINANCIAL STATISTICS (in thousands)

Years Ending December 31 2009 Total Profitability Profit Margin Operating Margin Management Effectiveness Return on Assets Return on Equity US Market Share EU5 Market Share Total Market Share Income Statement Revenue per Share Yearly Revenue Growth EBITDA Yearly Earnings Growth Internal Rate of Return Balance Sheet Total Cash Total Cash per Share Total Current Ratio 13 0.01 -0.54 17,024 7.09 1.11 94,815 39.51 1.33 219,815 91.59 1.73 399,117 166.30 2.25 0.00 N/A -113 N/A N/A 1.82 N/A 316 N/A 2% 22.10 1112% 31,762 9889% 436% 66.02 199% 103,483 225% 517% 123.58 87% 195,223 88% 535% -378% -137% 0.0% 0.0% 0.0% 1% 11% 0.7% 0.1% 0.4% 21% 92% 2.6% 1.5% 2.0% 30% 75% 5.2% 3.0% 4.0% 31% 58% 7.8% 4.6% 6.0% N/A N/A 5% 6% 39% 59% 42% 65% 42% 65% 2010 Total 2011 Total 2012 Total 2013 Total

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF CASH RECEIPTS AND REVENUE RECOGNITION (in thousands)

Market Share Projections Market Segments / Size Lesbian, Gay & Bisexual Internet Users - USA Lesbian, Gay & Bisexual Internet Users - EU5 Lesbian, Gay & Bisexual Internet Users - English Speaking Other Lesbian, Gay & Bisexual Internet Users - Spanish Speaking Other Heterosexual Male & Female Internet Users - Chinese Speaking Heterosexual Male & Female Internet Users - Hindi Speaking Total Projected World Market Lesbian, Gay & Bisexual Customers - USA Lesbian, Gay & Bisexual Customers - EU5 Lesbian, Gay & Bisexual Customers - English Speaking Other (post 2013) Lesbian, Gay & Bisexual Customers - Spanish Speaking Other (post 2013) Heterosexual Male & Female Customers - Chinese Speaking (post 2013) Heterosexual Male & Female Customers - Hindi Speaking (post 2013) Total Projected New Customers Total New + Previous Customers Total US Customers (New + Renewal) Total EU5 Customers (New + Renewal) Total Customers Projected Share of US Market Projected Share of EU5 Market Total Projected Share of Market Quarterly Mkt Gain Weight (BasicAssumpt*7) (BasicAssumpt*8) Empirical Research (BasicAssumpt*1) (BasicAssumpt*2) (BasicAssumpt*3) (BasicAssumpt*4) (BasicAssumpt*5) (BasicAssumpt*6)

Projected Cash Flows From Sales Basic Membership - USA (test + EyeKandy) Full Membership - USA (test + EyeKandy + DNA) (BasicAssumpt*10) (BasicAssumpt*10)

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF CASH RECEIPTS AND REVENUE RECOGNITION (in + scent/voice) Premium Membership - USA (test + EyeKandy + DNAthousands) (BasicAssumpt*10) Basic Membership - EU5 (test + EyeKandy) Full Membership - EU5 (test + EyeKandy + DNA) Premium Membership - EU5 (test + EyeKandy + DNA + scent/voice) Total Cash Flows From Sales (BasicAssumpt*10) (BasicAssumpt*10) (BasicAssumpt*10)

Amortization of Cash Flow Payments Basic Membership - Global Full Membership - Global Premium Membership - Global

Projected Revenue - Memberships Total Projected Revenue Refunds & Allowances Net Revenue

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF CASH RECEIPTS AND REVENUE RECOGNITION (in thousands)

Years Ending December 31 2009 Total 2010 Total 2011 Total 2012 Total 2013 Total

13,000 0 0 0 0 0 13,000 0 0 0 0 0 0 0 0 0 0 0 0.0% 0.0% 0.0%

13,500 12,500 0 0 0 0 26,000 95 18 0 0 0 0 112 112 95 18 113 0.7% 0.1% 0.4%

14,000 14,300 0 0 0 0 28,300 294 200 0 0 0 0 494 606 360 213 573 2.6% 1.5% 2.0%

14,600 16,500 0 0 0 0 31,100 511 347 0 0 0 0 858 1,464 763 495 1,259 5.2% 3.0% 4.0%

15,000 19,000 0 0 0 0 34,000 630 532 0 0 0 0 1,162 2,626 1,164 879 2,043 7.8% 4.6% 6.0%

$ $

-

$ $

9,049 5,070

$ $

25,931 26,471

$ $

54,944 56,088

$ $

83,820 85,567

$

-

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF CASH RECEIPTS AND REVENUE RECOGNITION $ 1,985 $ 18,008 (in thousands) $ 38,155 $ 58,209 $ $ $ 1,296 1,323 550 19,273 $ $ $ $ 15,322 15,641 10,640 112,012 $ $ $ $ 35,673 36,416 24,773 246,049 $ $ $ $ 63,275 64,593 43,941 399,406

$

-

$

$ $ $ $ $ $

-

$ $ $ $ $ $ $ $ $ $

10,345 6,393 2,535 19,273 958 1,556 1,540 413

$ $ $ $

41,252 42,112 28,648 112,012

$ $ $ $

90,617 92,505 62,928 246,049

$ $ $ $

147,096 150,160 102,150 399,406

$ $ $ $ $ $ $ $

252 1,317 3,741 9,497 15,352 13,368 9,057 1,537

$ $ $ $ $ $ $ $

4,040 11,311 21,996 35,351 35,962 30,243 19,542 3,241

$ $ $ $ $ $ $ $

9,464 25,590 47,459 74,549 59,344 49,472 31,569 5,203

$ $ $ $

-

$ $ $ $

4,467 4,467 (89) 4,378

$ $ $ $

54,120 54,120 (1,082) 53,038

$ $ $ $

161,686 161,686 (3,234) 158,452

$ $ $ $

302,649 302,649 (6,053) 296,596

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF CASH RECEIPTS AND REVENUE RECOGNITION (in thousands)

Market Share Legend Year 1 US Additional Market Share Members Signed up (per year) EU5 Additional Market Share Members Signed up(per year) Subscriber Attrition Rate (per year) 0.0% 0.0% 30% Year 2 1.0% 0.5% 30% Year 3 3.0% 2.0% 30% Year 4 5.0% 3.0% 30%

Revenue Legend 2009 Basic Membership Full Membership 160 210

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF CASH RECEIPTS AND REVENUE RECOGNITION (in thousands) Premium Membership 250 Customers offered free tests per location (000s) Percentage retained for additional year Percentage retained who keep basic (2010) Percentage retained who upgrade to full (2010) Percentage retained who upgrade to premium (2010) Users able to upgrade to full in Q3 2010 Users able to upgrade to premium in Q4 2010 Trial Period w/ Personality Test Purchase (months) N/A 70% 45% 35% 20% Y Y 1

Aging Schedule - Period of Revenue Recognition Q1 0.5 Q2 3 Q3 3 Q4 3

Quarter Cash Received

Refund %

2.0%

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF CASH RECEIPTS AND REVENUE RECOGNITION (in thousands) Y N

Year 5 6.0% <- change from 1,3,7,10,13% 4.0% <- change from 0,1,3,7,10% 30%

<- no charge for basic test as it is done inhouse <-change price from $10 per month

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF CASH RECEIPTS AND REVENUE RECOGNITION <-change price from $15 per month (in thousands)

Q1 2.5

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands)

Market Share Projections Market Segments / Size Lesbian, Gay & Bisexual Internet Users - USA Lesbian, Gay & Bisexual Internet Users - EU5 Lesbian, Gay & Bisexual Internet Users - English Speaking Other Lesbian, Gay & Bisexual Internet Users - Spanish Speaking Other Heterosexual Male & Female Internet Users - Chinese Speaking Heterosexual Male & Female Internet Users - Hindi Speaking Total Projected World Market Lesbian, Gay & Bisexual Customers - USA Lesbian, Gay & Bisexual Customers - EU5 Lesbian, Gay & Bisexual Customers - English Speaking Other (post 2013) Lesbian, Gay & Bisexual Customers - Spanish Speaking Other (post 2013) Heterosexual Male & Female Customers - Chinese Speaking (post 2013) Heterosexual Male & Female Customers - Hindi Speaking (post 2013) Total Projected New Customers Total Customers Projected Share of US Market Projected Share of EU5 Market Total Projected Share of Market Quarterly Mkt Gain Weight (BasicAssumpt*7) (BasicAssumpt*8) Empirical Research (BasicAssumpt*1) (BasicAssumpt*2) (BasicAssumpt*3) (BasicAssumpt*4) (BasicAssumpt*5) (BasicAssumpt*6)

Total Projected Revenue Refunds & Allowances Net Revenue

Operating Expenses

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands) (BasicAssumpt*11) (BasicAssumpt*12) (BasicAssumpt*13) PPD PPD E PPD LIA E LIA E E LIA E LIA (BasicAssumpt*14) (BasicAssumpt*15)

Sales & marketing Research & development General & administrative Server Cost & Maintenance Customer Service Accounting & Tax Misc. Licenses & Software Upgrades Personality Test License Genepartner Partnership Study Cognitec Royalty Fee Legal Fees Salaries Credit Card Processing Other Misc. Startup Costs Other G&A Expenses Depreciation Amortization of intangibles Other expense, net Total Operating Expenses Net Operating Income Interest income (expense), net Other income (expense), net Income from continuing operations before tax Income Tax Net Income

(BasicAssumpt*16) (BasicAssumpt*16)

(BasicAssumpt*17)

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands)

2009 Q3 Q4 Total Q1 Q2

2010 Q3 Q4 Total

13,000 0 0 0 0 0 13,000 0.00 0 1.00 0 0 0 0 0 0 0 0 0 0 0 0 0.0% 0.0% 0.0% 8 18 36 51 0.08 8 0 0.19 18 0 0.31 29 7 0.42 40 11

13,500 12,500 0 0 0 0 26,000 95 18 0 0 0 0 112 112 0.7% 0.1% 0.4%

$ $ $

- $ - $ - $

- $ - $ - $

-

$ $ $

50 $ (1) $ 49 $

422 $ 1,241 $ 2,754 $ (8) $ (25) $ (55) $

4,467 (89) 4,378

414 $ 1,216 $ 2,699 $

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6 5 102 5 2 2 16 14 45 18 0 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6 5 102 5 2 2 16 14 45 18 0 113 (113) (113) (40) (74) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 72 3 381 10 5 32 1 6 4 8 160 67 86 2 0 9 2 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 171 25 498 10 5 32 1 14 4 8 160 159 86 19 0 9 13 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 345 74 796 10 5 32 1 29 8 160 295 200 56 0 9 37 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 482 165 916 10 5 32 1 41 8 160 536 124 0 9 83 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,069 268 2,591 39 19 129 4 90 8 31 640 1,057 373 201 1 36 134 4,099 279 39 317 111 206

- $ - $ - $ - $ - $ - $ - $

113 $ (113) $ - $ - $ (113) $ (40) $ (74) $

467 $ (417) $ 2 $ - $ (415) $ (145) $ (270) $

716 $ 1,261 $ 1,655 $ (302) $ 6 $ - $ (296) $ (104) $ (193) $ (46) $ 1,044 $ 11 $ - $ 20 $ - $

(35) $ 1,063 $ (12) $ (23) $ 372 $ 691 $

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands)

Years Ending December 31 2011 Q1 Q2 Q3 Q4 Total Q1 Q2 2012 Q3 Q4

14,000 14,300 0 0 0 0 28,300 0.19 56 38 0.23 68 46 0.27 79 54 0.31 91 62 294 200 0 0 0 0 94 114 133 153 494 606 2.6% 1.5% 2.1% 163 197 232 266 0.19 97 66 0.23 118 80 0.27 138 94 0.31 158 107

$ 5,576 $ 10,272 $ 15,889 $ 22,383 $ $ (112) $ (205) $ (318) $ (448) $

54,120 (1,082) 53,038

$ 29,088 $ 35,810 $ 43,798 $ 52,991 $ (582) $ (716) $ (876) $ (1,060)

$ 5,464 $ 10,067 $ 15,571 $ 21,935 $

$ 28,506 $ 35,093 $ 42,922 $ 51,931

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands) $ 1,167 $ 1,514 $ 1,952 $ 2,345 $ $ 201 $ 370 $ 572 $ 806 $ $ 1,673 $ 2,203 $ 2,831 $ 3,478 $ $ 11 $ 11 $ 11 $ 11 $ $ 16 $ 16 $ 16 $ 16 $ $ 62 $ 62 $ 62 $ 62 $ $ 2 $ 2 $ 2 $ 2 $ $ 75 $ 91 $ 107 $ 123 $ $ - $ - $ - $ - $ $ - $ - $ - $ - $ $ 10 $ 10 $ 10 $ 10 $ $ 175 $ 175 $ 175 $ 175 $ $ 1,044 $ 1,323 $ 1,655 $ 1,961 $ $ - $ - $ - $ - $ $ 279 $ 514 $ 794 $ 1,119 $ $ 1 $ 1 $ 1 $ 1 $ $ 74 $ 74 $ 74 $ 74 $ $ 223 $ 411 $ 636 $ 895 $ $ 3,338 $ 4,572 $ 6,065 $ 7,598 $ $ 2,126 $ 5,495 $ 9,506 $ 14,337 $ $ $ 39 $ - $ 49 $ - $ 62 $ - $ 74 $ - $ 6,977 1,948 10,185 42 64 248 8 395 39 700 5,983 2,706 2 296 2,165 21,573 31,464 224 31,688 11,091 20,597 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 3,040 1,047 4,552 12 41 128 3 130 12 238 2,389 1,600 1 268 1,454 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 3,782 1,289 5,494 12 41 128 3 158 12 238 2,933 1,970 1 268 1,790 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4,614 1,577 6,542 12 41 128 3 185 12 238 3,515 2,409 1 268 2,190 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 5,402 1,908 7,638 12 41 128 3 213 12 238 4,078 2,915 1 268 2,650

$ 10,364 $ 12,624 $ 15,192 $ 17,866 $ 18,142 $ 22,469 $ 27,729 $ 34,065 $ $ 91 $ - $ 112 $ - $ 134 $ - $ 156 -

$ 2,165 $ 5,545 $ 9,568 $ 14,411 $ $ 758 $ 1,941 $ 3,349 $ 5,044 $

$ 18,233 $ 22,581 $ 27,863 $ 34,220 $ 6,382 $ 7,903 $ 9,752 $ 11,977 $ 11,852 $ 14,677 $ 18,111 $ 22,243

$ 1,407 $ 3,604 $ 6,219 $ 9,367 $

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands)

2013 Total Total

14,600 16,500 0 0 0 0 31,100 511 347 0 0 0 0 858 1,464 5.2% 3.0% 4.7% 221 267 314 360 0.19 120 101 0.23 145 122 0.27 170 144 0.31 195 165

15,000 19,000 0 0 0 0 34,000 630 532 0 0 0 0 1,162 2,626 7.8% 4.6% 7.7%

$ $ $

161,686 (3,234) 158,452

$ 62,743 $ 70,375 $ 79,489 $ 90,042 $ $ (1,255) $ (1,408) $ (1,590) $ (1,801) $

302,649 (6,053) 296,596

$ 61,488 $ 68,968 $ 77,899 $ 88,241 $

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 16,838 5,821 24,226 47 163 513 12 686 49 950 12,914 8,893 5 1,072 8,084 56,047 102,405 492 102,897 36,014 66,883 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 5,579 2,259 8,409 13 77 164 5 177 15 300 3,894 3,765 3 631 3,765 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6,855 2,534 9,753 13 77 164 5 214 15 300 4,743 4,223 3 631 4,223 $ 8,222 $ 9,544 $ $ 2,862 $ 3,242 $ $ 11,212 $ 12,744 $ $ 13 $ 13 $ $ 77 $ 77 $ $ 164 $ 164 $ $ 5 $ 5 $ $ 251 $ 288 $ $ - $ - $ $ - $ - $ $ 15 $ 15 $ $ 300 $ 300 $ $ 5,617 $ 6,479 $ $ - $ - $ $ 4,769 $ 5,403 $ $ 3 $ 3 $ $ 631 $ 631 $ $ 4,769 $ 5,403 $ 30,201 10,895 42,117 51 307 656 20 930 61 1,200 20,733 18,159 10 2,525 18,159 103,908 192,688 799 193,487 67,721 125,767

$ 20,645 $ 23,998 $ 27,699 $ 31,566 $ $ 40,843 $ 44,970 $ 50,201 $ 56,675 $ $ $ 150 $ - $ 183 $ - $ 216 $ - $ 250 $ - $

$ 40,993 $ 45,153 $ 50,417 $ 56,925 $ $ 14,347 $ 15,803 $ 17,646 $ 19,924 $ $ 26,645 $ 29,349 $ 32,771 $ 37,001 $

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands)

Market Share Legend 2009 Additional Market Share (per year) EU5 Additional Market Share Members Signed up(per year) Subscriber Attrition Rate (per year) 0% 0% 30% 2010 1% 1% 30% 2011 3% 2% 30% 2012 5% 3% 30% 2013 6% 4% 30%

Refund %

2.0%

Expense Assumptions Legend

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands) 2009 Sales & Marketing Cost Per Subscriber: Anticipated R&D Spend as % of Gross Revenue Capitalizable R&D as Intangible Asset Server Maintenance Cost Per Year Customer Service Cost per Reps Customer Service Reps Accounting & Tax Cost per Employee Accounting & Tax Employees $7.50 15% 40% 35 17.5 1 37.5 1

2010 $9.50 10% 39 19.3 1 43.1 3

2011 $11.50 6% 42 21.2 3 49.6 5

2012 $13.50 6% 47 23.3 7 57.0 9

Misc Licenses & Software purchases Test License fee per test taken Genepartner Study Costs $ 59.0 Legal Fees Salaries TAS Credit Card Payment Services 4.9% Startup Costs (misc + PPM fees + offering exp + Darrin buyout) Other G&A Expenses as % of Gross Revenue Potential Fixed Asset Purchases Fixed Asset Depreciation Rate per Year Intangible Asset (Capitalized R&D) Intangible Asset Amortization Rate per Year Other Expenses as % of Gross Revenue Income From Operations Held as Cash Interest Rate on Held Cash Income Tax Rate 10% 2% 35%

4 $0.80 7.9 25 16 0 45 4.0% 0 10% 3 20%

4 $0.80 31.3 640 1,056 372.5 4.5% 10

8 $0.80 39.1 700 5,983 5.0% 20

12 $0.80 48.8 950 12,914 5.5% 50

182

1,481

5,361

3.0%

4.0%

5.0%

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands)

2013 $15.50 6% 51 25.6 12 65.6 10

CHERUB MEDIA, LTD. PROSPECTIVE SCHEDULE OF EXPENSES (in thousands)

20 $0.80 61.0 1200 20,733 6.0% 100

12,625

6.0%

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands)

Projected Cash Flows From Sales Basic Membership - USA (test + EyeKandy) Full Membership - USA (test + EyeKandy + DNA) Premium Membership - USA (test + EyeKandy + DNA + scent/voice) Basic Membership - EU5 (test + EyeKandy) Full Membership - EU5 (test + EyeKandy + DNA) Premium Membership - EU5 (test + EyeKandy + DNA + scent/voice) Total Cash Flows From Sales (BasicAssumpt*10) (BasicAssumpt*10) (BasicAssumpt*10) (BasicAssumpt*10) (BasicAssumpt*10) (BasicAssumpt*10)

Amortization of Cash Flow Payments #REF! Basic Membership - Global Premium Membership - Global

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands) Projected Revenue - Memberships Total Projected Revenue Refunds & Allowances Net Revenue Unearned Subscription Liability

Operating Expenses Sales & marketing Accounts Payable Research & development Accrued Expenses (Accrued R&D) General & administrative Server Cost & Maintenance Customer Service Accounting & Tax Misc. Licenses & Software Upgrades Personality Test License Cognitec Royalty Fee Legal Fees Salaries Credit Card Processing Other Misc. Startup Costs Other G&A Expenses Other Current Assets (Prepaid Server/Licenses)

(BasicAssumpt*11)

(BasicAssumpt*12)

(BasicAssumpt*13) PPD LIA E PPD LIA LIA E E E E LIA

Accounts Payable (Customer Service/Credit Card/Other G&A/Test License/Cognitec Royalty) Depreciation Fixed Assets Accumulated Depreciation Amortization of intangibles (BasicAssumpt*14)

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands) Intangibles Accumulated Amortization Other expense, net Other Liabilities (Miscellaneous Accrual/Reserves) Other Long-Term Liabilities Total Operating Expenses Net Operating Income Interest income (expense), net Other income (expense), net Income from continuing operations before tax Income Tax Income Tax Payable (Current) Deferred Income Tax Liability (BasicAssumpt*17) (BasicAssumpt*16) (BasicAssumpt*16) (BasicAssumpt*15)

Net Income Retained Earnings

IRR

$

(127)

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands)

2009 Q3 Q4 Total Q1 Q2

2010 Q3 Q4 Total

$ $ $ $ $ $ $

-

$ $ $ $ $ $

-

$ $ $ $ $ $

-

$ 1,210 $ 2,873 $ 2,109 $ 2,858 $ $ - $ - $ 2,153 $ 2,917 $ $ - $ - $ - $ 1,985 $ $ - $ - $ 504 $ 792 $ $ - $ - $ 515 $ 809 $ $ - $ - $ - $ 550 $ $ 1,210 $ 2,873 $ 5,281 $ 9,910 $

9,049 5,070 1,985 1,296 1,323 550 19,273

- $

- $

#REF! $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ - $ - $ - $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

#REF! - $ - $ - $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

#REF! -

#REF!

#REF!

#REF!

#REF!

#REF! 10,345 2,535 19,273 958 1,556 1,540 413 -

$ 1,210 $ 2,873 $ 2,613 $ 3,650 $ $ - $ - $ - $ 2,535 $ $ 1,210 $ 2,873 $ 5,281 $ 9,910 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 50 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 302 120 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 302 718 220 $ - $ $ - $ $ 302 $ $ 718 $ $ 1,320 $ $ 413 $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $

$ $ $ $ $ $ $

- $ - $ - $ - $ - $ - $ - $

- $ - $ - $ - $ - $ - $ - $

-

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands) $ $ - $ $ $ $ $ $ - $ 50 $ 50 $ (1) $ 49 $

- $ - $ - $ - $ - $ 422 $ 1,241 $ 2,754 $ 422 $ 1,241 $ 2,754 $ (8) $ (25) $ (55) $

4,467 4,467 (89) 4,378 14,896

414 $ 1,216 $ 2,699 $

$ 1,160 $ 2,459 $ 4,065 $ 7,211 $

$

- $

6 $ $

6 1 5 1 102 5 2 2 16 14 45 18 4 3 0

$

72 $

171 $

345 $

482 $ $

1,069 178 268 67 2,591 39 19 129 4 90 31 640 1,057 373 201 21 52 1 10 (1) 36

$

- $

5 $ $

$

3 $

25 $

74 $

165 $ $

$ $ $ $ $ $ $ $ $ $ $ $

-

$ $ $ $ $ $ $ $ $ $ $ $

102 5 2 2 16 14 45 18

$ $ $ $ $ $ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $ $ $ $ $

381 10 5 32 1 6 8 160 67 86 2

$ $ $ $ $ $ $ $ $ $ $ $

498 10 5 32 1 14 8 160 159 86 19

$ $ $ $ $ $ $ $ $ $ $ $

796 10 5 32 1 29 8 160 295 200 56

$ $ $ $ $ $ $ $ $ $ $ $

916 10 5 32 1 41 8 160 536 124

$ $ $ $ $ $ $ $ $ $ $ $ $ $

$

- $

- $ $ $

$

0 $

0 $

0 $

0 $ $ $

$

- $

0 $

$

9 $

9 $

9 $

9 $

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands) $ $ $ - $ - $ $ $ $ $ $ $ $ $ - $ - $ - $ - $ - $ - $ 113 $ (113) $ - $ - $ (113) $ (40) $ $ $ 3 (0) 113 (113) (113) (40) (36) (4) $ $ $ $ $ $ 467 $ (417) $ 2 $ - $ (415) $ (145) $ $ 2 $ 13 $ 37 $ $ $ 83 $ $ $ 716 $ 1,261 $ 1,655 $ (302) $ 6 $ - $ (296) $ (104) $ (46) $ 1,044 $ 11 $ - $ 20 $ - $ 182 (37) 134 17 67 4,099 279 39 317 111 100 11

(35) $ 1,063 $ (12) $ 372 $ $ $

$

- $

(74) $ $

(74) (74)

$

(270) $

(193) $

(23) $

691 $ $

206 133

$

(74)

$

206

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands)

Years Ending December 31 2011 Q1 Q2 Q3 Q4 Total Q1 Q2 2012 Q3 Q4

$ $ $ $ $ $

4,403 4,495 3,058 2,739 2,796 1,902

$ $ $ $ $ $

5,774 5,894 4,009 3,315 3,384 2,302

$ $ $ $ $ $

7,192 7,342 4,994 4,245 4,333 2,948

$ $ $ $ $ $

8,562 8,741 5,946 5,023 5,128 3,488

$ $ $ $ $ $

25,931 26,471 18,008 15,322 15,641 10,640 112,012

$ $ $ $ $ $

10,073 10,282 6,995 6,657 6,796 4,623

$ $ $ $ $ $

12,504 12,764 8,683 8,059 8,227 5,596

$ $ $ $ $ $

14,968 15,280 10,395 9,707 9,909 6,741

$ $ $ $ $ $

17,399 17,762 12,083 11,250 11,484 7,812

$ 19,392 $ 24,679 $ 31,053 $ 36,888 $

$ 45,426 $ 55,833 $ 67,000 $ 77,790

#REF!

#REF!

#REF!

#REF!

#REF! 41,252 28,648 112,012 252 1,317 3,741 9,497 15,352 13,368 9,057 1,537 -

#REF!

#REF!

#REF!

#REF!

$ 7,142 $ 9,089 $ 11,437 $ 13,585 $ $ 4,960 $ 6,312 $ 7,942 $ 9,434 $ $ 19,392 $ 24,679 $ 31,053 $ 36,888 $ $ - $ - $ - $ $ - $ - $ - $ $ 252 $ - $ - $ $ 718 $ 599 $ - $ $ 1,320 $ 1,320 $ 1,100 $ $ 2,477 $ 2,477 $ 2,477 $ $ 808 $ 4,848 $ 4,848 $ $ - $ 1,028 $ 6,170 $ $ - $ - $ 1,294 $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ 2,065 4,848 6,170 7,763 1,537 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

$ 16,730 $ 20,562 $ 24,675 $ 28,649 $ 11,618 $ 14,279 $ 17,136 $ 19,895 $ 45,426 $ 55,833 $ 67,000 $ 77,790 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4,040 6,170 7,763 9,222 1,893 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 5,141 7,763 9,222 11,356 2,326 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6,469 9,222 11,356 13,958 2,792 $ $ $ $ $ $ $ $ $ $ 7,685 $ 11,356 $ 13,958 $ 16,750 $ 3,241 $ $ $ $ -

$ - $ - $ - $ $ - $ - $ - $ - $ $ 5,576 $ 10,272 $ 15,889 $ 22,383 $ $ 5,576 $ 10,272 $ 15,889 $ 22,383 $ $ (112) $ (205) $ (318) $ (448) $

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING - $ (in thousands) $ 54,120 54,120 (1,082) 53,038 58,974

- $ - $ - $ $ - $ - $ - $ $ 29,088 $ 35,810 $ 43,798 $ 52,991 $ 29,088 $ 35,810 $ 43,798 $ 52,991 $ (582) $ (716) $ (876) $ (1,060)

$ 5,464 $ 10,067 $ 15,571 $ 21,935 $ $ 13,927 $ 14,612 $ 15,482 $ 14,953 $

$ 28,506 $ 35,093 $ 42,922 $ 51,931 $ 16,920 $ 20,739 $ 24,079 $ 25,859

$ 1,167 $ 1,514 $ 1,952 $ 2,345 $ $ $ 201 $ 370 $ 572 $ 806 $ $ $ 1,673 $ 2,203 $ 2,831 $ 3,478 $ $ 11 $ 11 $ 11 $ 11 $ $ 16 $ 16 $ 16 $ 16 $ $ 62 $ 62 $ 62 $ 62 $ $ 2 $ 2 $ 2 $ 2 $ $ 75 $ 91 $ 107 $ 123 $ $ - $ - $ - $ - $ $ 10 $ 10 $ 10 $ 10 $ $ 175 $ 175 $ 175 $ 175 $ $ 1,044 $ 1,323 $ 1,655 $ 1,961 $ $ - $ - $ - $ - $ $ 279 $ 514 $ 794 $ 1,119 $ $ $ $ 1 $ 1 $ 1 $ 1 $ $ $ $ 74 $ 74 $ 74 $ 74 $

6,977 1,163 1,948 487 10,185 42 64 248 8 395 39 700 5,983 2,706 25 527 2 20 (3) 296

$ 3,040 $ 3,782 $ 4,614 $

5,402

$ 1,047 $ 1,289 $ 1,577 $

1,908

$ 4,552 $ 5,494 $ 6,542 $ 12 $ 12 $ 12 $ 41 $ 41 $ 41 $ 128 $ 128 $ 128 $ 3 $ 3 $ 3 $ 130 $ 158 $ 185 $ - $ - $ $ 12 $ 12 $ 12 $ 238 $ 238 $ 238 $ 2,389 $ 2,933 $ 3,515 $ - $ - $ $ 1,600 $ 1,970 $ 2,409

$ $ $ $ $ $ $ $ $ $ $ $

7,638 12 41 128 3 213 12 238 4,078 2,915

$

1 $

1 $

1 $

1

$

268 $

268 $

268 $

268

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands) $ $ $ 223 $ 411 $ 636 $ 895 $ $ $ $ 3,338 $ 4,572 $ 6,065 $ 7,598 $ $ 2,126 $ 5,495 $ 9,506 $ 14,337 $ $ $ 39 $ - $ 49 $ - $ 62 $ - $ 74 $ - $ 1,481 (333) 2,165 271 1,082 21,573 31,464 224 31,688 11,091 9,982 1,109 $ 10,364 $ 12,624 $ 15,192 $ 17,866 $ 18,142 $ 22,469 $ 27,729 $ 34,065 $ $ 91 $ - $ 112 $ - $ 134 $ - $ 156 $ 1,454 $ 1,790 $ 2,190 $ 2,650

$ 2,165 $ 5,545 $ 9,568 $ 14,411 $ $ 758 $ 1,941 $ 3,349 $ 5,044 $ $ $

$ 18,233 $ 22,581 $ 27,863 $ 34,220 $ 6,382 $ 7,903 $ 9,752 $ 11,977

$ 1,407 $ 3,604 $ 6,219 $ 9,367 $ $

20,597 20,730

$ 11,852 $ 14,677 $ 18,111 $ 22,243

$

20,597

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands)

2013 Total Q1 Q2 Q3 Q4 Total

$ $ $ $ $ $ $

54,944 56,088 38,155 35,673 36,416 24,773 246,049

$ $ $ $ $ $

15,669 15,996 10,881 11,938 12,187 8,290

$ $ $ $ $ $

19,185 19,585 13,323 14,451 14,752 10,035

$ $ $ $ $ $

22,725 23,198 15,781 17,137 17,494 11,901

$ $ $ $ $ $

26,241 26,788 18,223 19,749 20,161 13,715

$ $ $ $ $ $

83,820 85,567 58,209 63,275 64,593 43,941 399,406

$ 74,961 $ 91,332 $ 108,236 $ 124,876 $

#REF! $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 90,617 62,928 246,049 4,040 11,311 21,996 35,351 35,962 30,243 19,542 3,241 -

#REF!

#REF!

#REF!

#REF!

#REF! 147,096 102,150 399,406 9,464 25,590 47,459 74,549 59,344 49,472 31,569 5,203

$ 27,607 $ 33,636 $ 39,862 $ 45,990 $ $ 19,172 $ 23,359 $ 27,682 $ 31,938 $ $ 74,961 $ 91,332 $ 108,236 $ 124,876 $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ - $ - $ - $ $ 9,464 $ - $ - $ $ 13,958 $ 11,632 $ - $ $ 16,750 $ 16,750 $ 13,958 $ $ 19,448 $ 19,448 $ 19,448 $ $ 3,123 $ 18,740 $ 18,740 $ $ - $ 3,806 $ 22,833 $ $ - $ - $ 4,510 $ $ - $ - $ - $ 16,206 18,740 22,833 27,059 5,203 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $

161,686 161,686 (3,234) 158,452 87,597

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands) - $ $ - $ - $ - $ $ - $ - $ - $ - $ $ 62,743 $ 70,375 $ 79,489 $ 90,042 $ $ 62,743 $ 70,375 $ 79,489 $ 90,042 $ $ (1,255) $ (1,408) $ (1,590) $ (1,801) $

302,649 302,649 (6,053) 296,596 102,810

$ 61,488 $ 68,968 $ 77,899 $ 88,241 $ $ 13,473 $ 22,365 $ 30,337 $ 36,635 $

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

16,838 2,806 5,821 1,455 24,226 47 163 513 12 686 49 950 12,914 8,893 29 1,624 5 50 (8) 1,072

$

5,579 $

6,855 $

8,222 $

9,544 $ $

30,201 5,034 10,895 2,724 42,117 51 307 656 20 930 61 1,200 20,733 18,159 36 3,233 10 100 (18) 2,525

$

2,259 $

2,534 $

2,862 $

3,242 $ $

$ $ $ $ $ $ $ $ $ $ $ $

8,409 13 77 164 5 177 15 300 3,894 3,765

$ $ $ $ $ $ $ $ $ $ $ $

9,753 13 77 164 5 214 15 300 4,743 4,223

$ 11,212 $ 12,744 $ $ 13 $ 13 $ $ 77 $ 77 $ $ 164 $ 164 $ $ 5 $ 5 $ $ 251 $ 288 $ $ - $ - $ $ 15 $ 15 $ $ 300 $ 300 $ $ 5,617 $ 6,479 $ $ - $ - $ $ 4,769 $ 5,403 $ $ $

$

3 $

3 $

3 $

3 $ $ $

$

631 $

631 $

631 $

631 $

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands) $ $ $ $ $ $ $ $ $ $ $ $ $ 5,361 (1,405) 8,084 1,011 4,042 56,047 102,405 492 102,897 36,014 32,413 3,601 $ 3,765 $ 4,223 $ 4,769 $ $ $ 5,403 $ $ $ $ 20,645 $ 23,998 $ 27,699 $ 31,566 $ $ 40,843 $ 44,970 $ 50,201 $ 56,675 $ $ $ 150 $ - $ 183 $ - $ 216 $ - $ 250 $ - $ 12,625 (3,930) 18,159 2,270 9,079 103,908 192,688 799 193,487 67,721 60,948 6,772

$ 40,993 $ 45,153 $ 50,417 $ 56,925 $ $ 14,347 $ 15,803 $ 17,646 $ 19,924 $ $ $

$ $

66,883 87,613

$ 26,645 $ 29,349 $ 32,771 $ 37,001 $ $

125,767 213,380

$

66,883

$

125,767

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands)

Balance Sheet Notes (Basic Assumption*18)

Assumptions

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands)

Cash Paid minus Revenue Recognized

Accounts Payable - 2 month incurred-to-paid lag

17%

Other Liabilities - 3 month accrual-to-paid lag

25%

Other Current Assets - Pay Server & License for full year, 6 month deferral Accounts Payable - 2 month incurred-to-paid lag

50% 17%

CHERUB MEDIA, LTD. BALANCE SHEET MAPPING (in thousands)

Other Liabilities- 50% current reserve, 3 month incurred-to-paid lag Other LT Liabilities- 50% LT contingency reserve

13% 50%

Income Tax Payable- 90% of financial statement income tax expense Deferred Income Tax Liability- 10% favorable deferral of IT expense

90% 10%

Basic Assumptions
(*1) 2009, 2010, 2011 Source - eMarketer.com . 2012, 2013 Source - Cherub Media extrapolation . (*2) The EU5 Market comprises the United Kingdom, Germany, France, Spain and Russia.
As of Dec08 it has 204mio internet subscribers from a total population of 946mio. Source - internetworldstats.com . Growth in these markets Jun07 to Jun08 were 6% in Germany, 10% in UK, 15% in Spain, 21% in France and 27% in Russia. Source - comscore.com . Weighted for different internet penetrations, the EU5 Market will grow by 15% yoy. Source - Cherub Media calculation . Same methodology was applied to the US Market which resulted in larger projected market size than eMarketer.com. For consistency a ratio between eMarketer.com and Cherub Media US Market sizes was calculated and applied to Cherub Media's EU5 results. The result was 12.5 million potential EU5 users in 2010 * 115% growth per annum, rounded to nearest million or half million people. (*3) As yet unquantified but there will be English speaking subscribers from outside the USA/UK who will become customers. There will be 1.15bio primary and secondary speakers of English globally. Source - The University of Basel, http://www.ehistling-pub.meotod.de/01_lec06.php

(*4) As yet unquantified but there will be Spanish speaking subscribers from outside Spain who will become customers. There are 322mio primary speakers of Spanish globally. Source - The University of Basel, http://www.ehistling-pub.meotod.de/01_lec06.php (*5) A post-2010 expansion market. Market size is assumed to be 661mio at the start of 2011.
There are currently over 320mio internet subscribers in China, Hong Kong, Taiwan and Singapore from a population of over 1.35bio. The market in China grew by 32% between Jun07 and Jun08. Source - internetworldstats.com .

(*6) A post-2010 expansion market. Market size is assumed to be 143mio at the start of 2011.
There are currently over 81mio internet subscribers in India from a population of over 1.15bio. The market in India grew by 33% between Jun07 and Jun08. Source - internetworldstats.com .

(*7) Four month number for 2009. Match first year market penetration is assumed to 7%. Source - match.com average annual penetration .
In the first 5 years growth is expected to follow an identical shaped curve at half the rate that Gaydar achieved in it's first 5 years. Source - superbrands.com. [In Gaydar's first year Jun99->Jun00 (growth was 10% monthly or 285% annually) and subsequently 250%, 230%, 210%, 195%, 185% annually]. Source - superbrands.com . Following the Gaydar extrapolation would result in a market share growth of 1%, 3%, 7%, 10% and 13% for years 1-5, respectively. Subscriber attrition rate is 30% pa. (i.e. Success Rate plus minor Non-renewals.) No-one who unsubscribes re-subscribes, because their relationship lasts beyond 2013. Result: Gaydar growth extrapolation curtailed to 0%, 1%, 3%, 5%, and 6%, and subsequently reduced by attrition rate for years 1-5, respectively. (*8) No market penetration in 2009. Match first year market penetration is assumed to 7%. Source - match.com average annual penetration . In the first 5 years growth is expected to follow an identical shaped curve at half the rate that Gaydar achieved in it's first 5 years. Source - superbrands.com. [In Gaydar's first year Jun99->Jun00 (growth was 10% monthly or 285% annually) and subsequently 250%, 230%, 210%, 195%, 185% annually]. Source - superbrands.com . Following the Gaydar extrapolation would result in a market share growth of 1%, 3%, 7%, and 10% for years 2-5, respectively. Subscriber attrition rate is 30% pa. (i.e. Success Rate plus minor Non-renewals.) No-one who unsubscribes re-subscribes, because their relationship lasts beyond 2013. Result: Gaydar growth extrapolation curtailed to 0.5%, 2%, 3%, and 4%, to account for EU5 market uncertainties, potential launch delays, unforeseen competition and other barriers to entry, and subsequently reduced by attrition rate for years 2-5, respectively. (*9) No longer used as there will be no charge for the personality test.

(*10) 75% of test takers are expected to become members. The 25% that don't are known as Trial Members.
Basic Membership is $15 per month on a 12 month basis, paid in full at start, totaling $160 (lncl $20 off). Full Membership is $20 per month on a 12 month basis, paid in full at start, totaling $210 (lncl $30 off). Premium membership will be offered for $25 per month on 12 month basis, totalling $250 (Incl $50 off). Full membership will be offered in Q3 2010, Premium membership will be offered in Q4 2010. The Ratio between Basic, Full, and Premium Memberships is expected to be 45:35:20. Renewal rate is 70% per year, meaning that 30% of subscribers from each prior year will choose not to renew. (*11) Amount includes all marketing expenses. Sources - datingsitereviews.com . onlinedatingpost.com "$25-$30k pcm". seekingalpha.com "jdate.com subscriber acquisition cost $7.50 each". $7.50 per subscriber increased by $2.00 each year to account for increased cost to draw late adopting customers. (*12) Source - Cherub Media . Based on competitor's spend and increased to account for development of disruptive technology development. Calculated as a % of Revenue: 2009 @ 15%, 2010 @ 10%, 2011 @ 6%, 2012 @ 6%, 2013 @ 6%. (*13) G& A Expenses includes: Server Setup Costs including Maintenance: 'GoGrid' $35k (increased by 10% per annum). Outsourced Customer Representative Service: $17,500 pa per person (incr 10% per annum), (1 call person per 0.5mio customers: 2009 = 1 Rep, 2010 = 1 Rep, 2011 = 3 Reps, 2012 = 7 Reps, 2013 = 12 Reps). Outsourced Accounting and Tax Services: $37,500 pa per person (incr 15% per annum), (1.5 accountants per targeted country: 2009 = 1, 2010 = 3, 2011 = 5, 2012 = 9, 2013 = 10). Accounting Licenses and Training: 'QuickBooks 3' x 2 licenses + 5 x Days training in 2009 = $4,000, scaling up (2010-2013): $4,000, $8,000, $12,000, $20,000 Test licensing fee $0 - updated as we are moving the test in house there will be no license fee Cognitec Royalty Fee: $0 - updated as we have brought all facial recognition in house. Legal Fees: $300 ph ~$25,000 per annum (plus incr of 25% per annum). Staff Salaries: (see HR Plan Tab, 2009 = $248k, 2010 = $640k, 2011 = $659k, 2012 = $680k, 2013 = $702k). ECSuite Credit Card Payment Services: 4.9% + $1 for each payment processed. Startup Costs: Includes costs paid to Growthink for PPO capital raise, patent & incorporation filings, and other miscellaneous startup costs Other Startup Costs: Miscellaneous category to capture unanticipated costs at rate of 4% of gross revenues (plus .5% per annum) (*14) 40% of R&D expenditures required to be capitalized and amortized over five years.

(*15) Additional "Other Expense" beyond miscellaneous operating expenses (increasing by 1% per annum). (*16) 2% Interest earned on 10% of the 'Income from Operations' (which is held in the bank as a cash buffer against unexpected events).
Does not include any other investment income on the 90% balance - though given the large amount of cash remaining, this is obviously another area of potential high income generation. (*17) Income tax rate of 35% on all taxable income. (*18) See "Balance Sheet Mapping" for payment/receipt assumption terms which generate deferrals, accruals, & capitalization for balance sheet purposes.

Total Shares Issued & Outstanding (8.3.09) PPO Shares

2,400,000 1,537,500 862,500 Share Structure (11.27.09) On Hand 655,000 Earning 150,000 Incentive Plan 732,500

Chris Ovide Ian Smith Mike Steele COO (TBD) Psychologist (TBD) Don Lindsay Darren Spain Pam Brumley Derek Smith Chris Ovide, Sr. Kenneth Brumley Stock Incentive Plan Total

Granted Shares 330,000 100,000 50,000

Purchased Shares 25,000 50,000

50,000 50,000 75,000 70,000 5,000 10,000

Total Shares 330,000 125,000 100,000 0 0 50,000 50,000 75,000 70,000 5,000 10,000 722,500

$ Per Share $ $ 0.50 0.50 $ $

Contribution 12,500 25,000

$ $ $ $ $

0.20 0.20 0.50 0.50 0.50

$ $ $ $ $

10,000 15,000 35,000 2,500 5,000

% Owned 21.5% 8.1% 6.5% 0.0% 0.0% 3.3% 3.3% 4.9% 4.6% 0.3% 0.7% 47.0%

1,552,500 91,000 1,643,500 (2,400) 1,641,100 1537.5 $ 103,462.5

530,000

285,000 40750

1,537,500

$

105,000

100.0%

Share Allocation Chris Ovide Mike Steele Ian Smith Angelo Pazzeto Bonnie Knight Don Lindsay Other Founders Remaining 350,000 100,000 100,000 50,000 50,000 50,000 37,500 800,000

2009 30,000 25,000 20,000 20,000 10,000 10,000 0 685,000

2010 35,000 30,000 25,000 25,000 15,000 15,000 30,000 510,000

2011 40,000 35,000 30,000 30,000 20,000 20,000 40,000 295,000

2012 45,000 40,000 35,000 35,000 25,000 25,000 40,000 50,000

Total 500,000 230,000 210,000 160,000 120,000 120,000 147,500 0

US Additional Market Share (per year) EU5 Additional Market Share (per year)

2009 0.0% 0.0% 2009

2010 1.0% 0.5% 2010

2011 3.0% 2.0% 2011
360 213 573

2012 5.0% 3.0% 2012
763 495 1259

2013 6.0% 4.0% 2013
1,164 879 2043

US Total Market Share Members (000's) EU5 Total Market Share Members (000's) Total

0 0 0

95 18 113


				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:96
posted:12/24/2009
language:English
pages:42