2007 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Total Net Sales (less returns & allowances) $92 $185 $277 $305 $342 $740 $3,210 $8,920 $13,250 $15,800 $19,200 $20,560 $82,881 Cost of Goods Sold $50 $50 $75 $85 $90 $110 $410 $560 $1,100 $1,200 $1,320 $1,800 6,850 Gross Income 42 135 202 220 252 630 2,800 8,360 12,150 14,600 17,880 18,760 76,031 Operating Expenses Advertising 2,552 2,552 2,552 2,552 2,552 2,552 5,584 5,584 5,584 5,584 5,584 5,584 48,816 Marketing & Promotion 4,740 4,740 4,740 4,740 4,740 4,740 11,083 11,083 11,083 11,083 11,083 11,083 94,933 Outside Services 265 265 265 265 265 265 1,250 1,250 1,250 1,250 1,250 1,250 9,090 Payroll Expenses -Payroll Taxes (8%) ------2,800 2,800 2,800 2,800 2,800 2,800 16,800 Salaries & Wages ------35,000 35,000 35,000 35,000 35,000 35,000 210,000 Professional Fees 645 645 645 645 645 645 3,232 3,232 3,232 3,232 3,232 3,232 23,259 Office 1,390 1,390 1,390 1,390 1,390 1,390 1,900 1,900 1,900 1,900 1,900 1,900 19,740 Total Operating Expenses 9,592 9,592 9,592 9,592 9,592 9,592 60,848 60,848 60,848 60,848 60,848 60,848 422,638 Operating Income (9,550) (9,457) (9,390) (9,372) (9,340) (8,962) (58,048) (52,488) (48,698) (46,248) (42,968) (42,088) (346,607) Interest Expense ------4,150 4,150 4,150 4,150 4,150 4,150 24,900 Other Income (interest, royalties, etc.) -------------Income Before Taxes (9,550) (9,457) (9,390) (9,372) (9,340) (8,962) (62,198) (56,638) (52,848) (50,398) (47,118) (46,238) (371,507) Taxes Income (30%) -Total Taxes ------2,800 2,800 2,800 2,800 2,800 2,800 16,800 Net Income (9,550) (9,457) (9,390) (9,372) (9,340) (8,962) (64,998) (59,438) (55,648) (53,198) (49,918) (49,038) (388,307) 2008 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Total Net Sales (less returns & allowances) $28,950.00 $33,392.50 $37,890 $43,565 $50,875 $58,320 $65,720 $71,040 $75,340 $82,560 $88,800 $102,900 $739,353 Cost of Goods Sold 2,000 2,200 2,200 2,200 2,200 2,200 2,500 2,500 2,500 2,500 2,500 2,500 28,000 Gross Income 26,950 31,193 35,690 41,365 48,675 56,120 63,220 68,540 72,840 80,060 86,300 100,400 711,353 Operating Expenses Technical 8,920 8,920 8,920 8,920 8,920 8,920 11,240 11,240 11,240 11,240 13,800 13,800 126,080 Marketing & Promotion 10,400 10,400 10,400 10,400 10,400 10,400 10,800 10,800 10,800 10,800 11,290 11,290 128,180 Outside Services 1,450 1,450 1,450 1,450 1,450 1,450 1,675 1,675 1,675 1,675 1,675 1,675 18,750 Payroll Expenses Payroll (8%) 2,800 2,800 2,800 2,800 4,180 4,180 4,180 4,180 4,180 4,180 4,180 4,180 44,640 Salaries & Wages 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 420,000 Professional Fees 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 48,600 Office 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 42,000 Total Operating Expenses 66,120 66,120 66,120 66,120 67,500 67,500 70,445 70,445 70,445 70,445 73,495 73,495 828,250 Operating Income (39,170) (34,928) (30,430) (24,755) (18,825) (11,380) (7,225) (1,905) 2,395 9,615 12,805 26,905 (116,898) Interest Expense 4,150 4,150 4,150 4,150 4,150 4,150 8,300 8,300 8,300 8,300 8,300 8,300 74,700 Other Income (interest, royalties, etc.) -------------Income Before Taxes (43,320) (39,078) (34,580) (28,905) (22,975) (15,530) (15,525) (10,205) (5,905) 1,315 4,505 18,605 (191,598) Taxes Income (30%) -Total Taxes 2,800 2,800 2,800 2,800 4,180 4,180 4,180 4,180 4,180 4,180 4,180 4,180 44,640 Net Income (46,120) (41,878) (37,380) (31,705) (27,155) (19,710) (19,705) (14,385) (10,085) (2,865) 325 14,425 (236,238) 2009 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Total Net Sales (less returns & allowances) $112,450 $119,000 $132,090 $145,089 $157,990 $184,000 $205,900 $233,840 $267,830 $294,000 $309,782 $324,000 $2,485,971 Cost of Goods Sold $5,100 5,500 5,500 5,500 5,500 5,500 8,100 8,100 8,100 8,100 11,400 11,400 $87,800 Gross Income 107,350 113,500 126,590 139,589 152,490 178,500 197,800 225,740 259,730 285,900 298,382 312,600 2,398,171 Operating Expenses Technical 13,800 13,800 13,800 15,780 15,780 15,780 15,780 15,780 15,780 20,200 20,200 20,200 196,680 Marketing & Promotion 11,290 11,290 11,290 13,350 13,350 13,350 13,350 13,350 13,350 16,890 16,890 16,890 164,640 Outside Services 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 20,100 Payroll Expenses Payroll (8%) 4,180 4,180 4,180 4,180 4,180 6,800 6,800 6,800 6,800 6,800 6,800 6,800 68,500 Salaries & Wages 65,250 65,250 65,250 65,250 65,250 105,000 105,000 105,000 105,000 105,000 105,000 105,000 1,061,250 Professional Fees 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 75,000 Office 6,525 6,525 6,525 6,525 6,525 10,500 10,500 10,500 10,500 10,500 10,500 10,500 106,125 Total Operating Expenses 108,970 108,970 108,970 113,010 113,010 159,355 159,355 159,355 159,355 167,315 167,315 167,315 1,692,295 Operating Income (1,620) 4,530 17,620 26,579 39,480 19,145 38,445 66,385 100,375 118,585 131,067 145,285 705,876 Interest Expense 12,450 12,450 12,450 12,450 12,450 12,450 12,450 12,450 12,450 12,450 12,450 12,450 149,400 Other Income (interest, royalties, etc.) -------------Income Before Taxes (14,070) (7,920) 5,170 14,129 27,030 6,695 25,995 53,935 87,925 106,135 118,617 132,835 556,476 Taxes Income (30%) (4,221) (2,376) 1,551 4,239 8,109 2,009 7,799 16,181 26,378 31,841 35,585 39,851 166,943 Total Taxes (41) 1,804 5,731 8,419 12,289 8,809 14,599 22,981 33,178 38,641 42,385 46,651 235,443 Net Income (18,332) (8,492) 12,452 26,786 47,428 17,512 48,392 93,096 147,480 176,616 196,587 219,336 958,862 2010 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Total Net Sales (less returns & allowances) $346,420 $361,720 $401,900 $425,540 $459,540 $619,485 $748,200 $854,700 $872,000 $893,000 $901,300 $908,400 $7,792,205 Cost of Goods Sold 14,500 14,500 17,500 17,500 18,930 19,240 21,000 21,000 21,000 23,500 24,600 24,900 238,170 Gross Income $360,920 $376,220 $419,400 $443,040 $478,470 $638,725 $769,200 $875,700 $893,000 $916,500 $925,900 $933,300 8,030,375 Operating Expenses Technical 20,200 20,200 20,200 24,300 24,300 24,300 24,300 24,300 24,300 28,900 28,900 28,900 293,100 Marketing & Promotion 16,890 16,890 16,890 18,500 18,500 18,500 18,500 18,500 18,500 22,400 22,400 22,400 228,870 Outside Services 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 1,675 20,100 Payroll Expenses -Salaries & Wages 126,000 126,000 126,000 126,000 126,000 126,000 225,000 225,000 225,000 225,000 225,000 225,000 2,106,000 Payroll (8%) 10,080 10,080 10,080 10,080 10,080 10,080 18,000 18,000 18,000 18,000 18,000 18,000 168,480 Professional Fees 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 75,000 Office 12,600 12,600 12,600 12,600 12,600 12,600 22,500 22,500 22,500 22,500 22,500 22,500 210,600 Total Operating Expenses 193,695 193,695 193,695 199,405 199,405 199,405 316,225 316,225 316,225 324,725 324,725 324,725 3,102,150 Operating Income $167,225 $182,525 $225,705 $243,635 $279,065 $439,320 $452,975 $559,475 $576,775 $591,775 $601,175 $608,575 4,928,225 Interest Expense 16,600 16,600 16,600 16,600 16,600 16,600 16,600 16,600 16,600 16,600 16,600 16,600 199,200 Other Income (interest, royalties, etc.) -Income Before Taxes 150,625 165,925 209,105 227,035 262,465 422,720 436,375 542,875 560,175 575,175 584,575 591,975 4,729,025 Taxes Income (30%) 45,188 49,778 62,732 68,111 78,740 126,816 130,913 162,863 168,053 172,553 175,373 177,593 1,418,708 Total Taxes 55,268 59,858 72,812 78,191 88,820 136,896 148,913 180,863 186,053 190,553 193,373 195,593 1,587,188 Net Income 95,358 106,068 136,294 148,845 173,646 285,824 287,463 362,013 374,123 384,623 391,203 396,383 3,141,838 Pro-Forma Income Statement 2007 2008 2009 2010 Net Sales (less returns & allowances) $82,881 $739,353 $2,485,971 $7,792,205 Cost of Goods Sold 6,850 28,000 $87,800 238,170 Gross Income 76,031 711,353 2,398,171 7,554,035 Operating Expenses Technical 48,816 126,080 196,680 293,100 Marketing & Promotion 94,933 128,180 164,640 228,870 Outside Services 9,090 18,750 20,100 20,100 Payroll Expenses Payroll Taxes (8%) 16,800 44,640 68,500 168,480 Salaries & Wages 210,000 420,000 1,061,250 2,106,000 Professional Fees 23,259 48,600 75,000 75,000 Office 19,740 42,000 106,125 210,600 Total Operating Expenses 422,638 828,250 1,692,295 3,102,150 Operating Income (346,607) (116,898) 705,876 4,451,885 Interest Expense 24,900 74,700 149,400 199,200 Income Before Taxes (371,507) (191,598) 556,476 4,252,685 Taxes Income (30%) --166,943 1,275,806 Total Taxes 16,800 44,640 235,443 1,587,188 Net Income (388,307) (236,238) 321,033 2,665,498