Foxboro Consulting Group, Inc. (“FCGI”) can assist your Company raise both equity and debt capital. We understand that a solid management team, combined with the right product and market idea or concept, as well as sufficient capital to fund operations and fixed asset acquisitions are the requisites for a successful company.

The preparation of a business plan, defining cash needs over the next five years is the next step in the financial planning process. Since your business plan is the first manifestation of your work product and capabilities that the investor sees, it is important that it be carefully prepared. This information package, which would be distributed to interested potential equity investors, allow prospective equity investors to evaluate both the potential return on investment, and the management team that will manage the operations of the Company.

We can assist you in this process through the utilization of our management consulting services, as well as our financial computer modeling techniques. In accordance with our discussions, our work typically includes the following tasks:

Phase I

• Preparation of the upfront offering memorandum including business plan and financial analysis, and develop marketing offering memorandum information packet;
• Identification of private equity investment companies, leveraged buy-out firms and other investor/buyers to market the Company and to engage in discussions with interested parties;
• Follow-up marketing efforts to private equity investment companies, leveraged buy-out firms and others and conduct interviews & meetings, and negotiation efforts with these potential investor/buyers and meet with their financial and legal advisors as necessary; and,

Phase II

• Valuation of the Company and development and evaluation of proposed equity buy-in transaction structures; and,
• Final deal structuring of equity participation.

Our Approach

We have designed an approach to achieve your Company’s objectives. Lending institutions that are seeking candidates for loans and equity investors have more business plans and related material to read than they can possibly digest. To make it easier, therefore, we recommend that a summary of what you are trying to accomplish appear as the first one or two pages of your plan.

We will prepare a summary of the salient reasons why someone should loan funds to your Company or invest capital as an equity shareholder, and will include a brief discussion of:

• Your Management Team � lending institutions and equity shareholders invest in people � people who have run or are likely to run successful operations. Potential creditors will look closely at the members of your management team. We will identify your talents and expertise in management disciplines, such as marketing and sales, materials management and operations. We will identify members of you management team, highlighting their track records, and prepare succinct resumes.
• Your Business – We will describe your Company, its products, and:
  • Your Company’s operating history, present ownership, and future objectives.
  • Your company’s services, products, and uniqueness.
  • Your Company’s role within your industry, and the trends in that industry.
• Assess Your Market Potential � Market potential is where creditors/investors separate inventors from entrepreneurs. Market potential needs to be followed up with market strategy in order to capitalize on the opportunity. This part of your Business Plan will be scrutinized carefully. We will make your market analysis as specific as possible, focusing on believable, and reasonable projections, including:
  • Size of the potential market and your market niche,
  • The market you anticipate achieving,
  • The competition – who and what,
  • The customers, who, where, how many, and pricing.

Identify Key Company Highlights

• Specify Your Marketing Strategy – The ability to market your product successfully is just as important as your product’s development. In presenting your market strategy, therefore, we will include a discussion of:
  • The specific marketing techniques you use, that is, how you identify, contact, and sell to customers.
  • Your pricing, demonstrating the value added to the customer versus the price paid.
  • Your sales force and selling strategies for various accounts, areas and markets.
  • Your customers, how many there are and where they are located.
  • Your customer service, which markets are covered by direct sales force. We will describe the approach for capitalizing on each channel and how they compare with other practices in your industry.
  • Your advertising and promotional plans.
• Present Your Product Development – We will present the status of your product development in broad fairly non-technical terms, so someone can conclude whether you have a product with continuity, with nation-wide potential. We will cover the following points in this section:
  • The proprietary aspects of the concept.
  • The reasons why your product is more advanced than existing competitors.
• Outline Your Operations – We will identify all facilities, locations and operations. In addition, we will outline work force by job category, extent of subcontracting, sources of supply, and service strategy.

Provide Financial Summary

We will prepare a detailed financial forecast supported with income statement, cash flow, balance sheet, and supporting footnote and assumptions.

Sales forecast will be based on prices that adequately consider the market for your products and its value to the customer.

Pricing will reflect cost considerations, and produce a return sufficient to cover costs and other expenses.

Cost of Sales is usually the Company’s largest expenditure. We will identify the significant materials components, integrate labor and overhead and demonstrate that employment levels are adequate to meet sales needs.

Expense categories will be reflected in the financial forecast.

Balance Sheet performance has an impact on cash flow, and will be a key concern to prospective investors. T he balance sheet will be integrated with assumptions in the income statement.

Cash Flow analysis is critical to prospective investors, and to the survival of the business, because businesses cannot operate without adequate cash. The cash flow statement will highlight cash receipts, and disbursements from operations, financing activities, and capital expenditures. This statement will enable you and prospective investors to quickly assess and evaluate your Company’s cash flow sensitivities.

We will summarize the detailed financial forecasts in a written report. Our detailed report will include analyses and forecasts and will be based on the assumptions and rational defined in the report.

Our report will detail the nature of the reservations (if any) we have with respect to the footnotes. Should any such reservations develop, we will discuss them with you before the report is issued.

You are responsible for representations about your plans and expectations and for disclosure of significant information that might affect the ultimate realization of the forecasted results.
There will usually be differences between the forecasted and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Our report will contain a statement to that effect.

We have no responsibility to update our report for events and circumstances occurring after the date of our report. At the conclusion of the engagement, you agree to supply us with a representation letter that, among other things, will confirm your responsibility for the underlying assumptions and appropriateness for the financial forecasts and their presentation.

Our engagement cannot be relied on to disclose errors, irregularities, or illegal acts, including fraud or defalcation, that may exist. We will inform you, however, of any such matters that come to our attention.

Performance Fee Arrangement

We propose an arrangement under which a “performance fee” will be paid to us for creditors/buyers/investors that we identify, and market the Company dependent on both the closing of a equity buy-in transaction, loan placement, as well as the economic value of the transaction.

Under such and arrangement, we would be paid a performance fee equal to a percentage of the value of the equity buy-in transaction, or loan placement transaction. In calculating our performance fee, transaction value will mean the total proceeds and other consideration paid or received (or to be paid or received or held in escrow) to the acquired party and/or its shareholders and executives or key employees in connection with the equity buy-in transaction, or loan placement.

This would include cash, notes, stock and other securities, existing liabilities assumed, the present value of payments for any lease of the acquired party’s assets, the present value of installment payments, the present value of amounts to be paid under consulting agreements or covenants not to compete, and the present value of salary guarantees in excess of historical salaries and the amount of net working capital retained by the acquired party. The performance fee is based on the value of any equity buy-in transaction, or loan placement consummated with any unrelated third party subsequent to the date of this letter. Our performance fee would be equal to 10.0% of the transaction value.

The performance fee would be earned net of (less) any professional fees for consulting services performed by us prior to the closing date of any transaction, which we identified for you.

Company Involvement

Company management will provide us with data relating to market information from national trade associations or groups and assumptions on staffing, annual routine capital expenditures, operating expenses, and revenue.

It is essential that these assumptions be well-defined and not subject to change. If they do change, we will be required to revise or update our forecast. Any changes will be discussed with management prior to continuing with the revisions to the Business Plan.

Any changes in project scope will be discussed with Company management prior to continuing with the engagement. To the extent project scope revisions and modifications occur, the Company will be billed separately for our additional efforts.