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AudioRush – Financials
The financial statements (US$) are included in Appendix 4 (starting page 29).
Required funds and uses. Prior to July of 1999, ar.com requires an initial investment of $330,000 in exchange for 10% of common shares. These funds will be used to finance the design of ar.com’s web site ($ 50,000), the rest of the proceeds will be used to acquire computer equipment, pay wages and salaries, and to provide working capital.
Assumptions. The following describes the major assumptions underlying ar.com’s projected financial statements. Please see Appendix 4, page 3, for market share and sales assumptions
- All revenues and expenses in Canadian dollars have been converted to US dollars at a 0.6689 rate of exchange (Tuesday April 22,1999)
- Depreciation Rates (CCA) and Tax rates are based on Canadian Generally Accepted Accounting Principles(GAAP)
- Expenses are paid as incurred (except for: a) telephone, fees to server host, Internet account and ‘Amino Radio’ alliance which are paid in 30 days, b) deferred taxes paid in March following the first year of positive net income in accordance with GAAP)
- All shipping costs of burned CDs will be paid by the customers
- Seasonal trends of sales have been assumed and estimated
- A complete CD is priced at $8.00 while individual tracks are priced at $1.00 each
- Surpluses of cash will be invested @ 4%/year starting in year 4 – 2002.
- Cost of goods sold: artists will be paid a 40% royalty. In 1999 ar.com will be licensing ‘Liquid Audio’ software / services (terms: 21% of net sales). In 2000, ar.com will buy the software ($30,000). At such time, ar.com will utilize an Internet credit card collector (terms: 4% of net sales) in order to process its transactions.
- ar.com will be paying a referral fee to all members of its associate program. 2.5% is based on estimated sales due to referrals at 25% net sales and a 10% referral fee
- Human resource and equipment needs are derived based on sales forecasts, please see Appendix 4, page 29
|Table of Contents||Appendices|
|1. Executive Summary
2. The Opportunity
4. Marketing Plan
5. Industry Analysis
6. Management Team
audiorush.com web site
|All information herein is confidential and belongs to AudioRush.com|