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 Momentex – Financials

Key Assumptions

The financial projections model the basic Gulp & Go service at the tollbooth and do not account for revenue from “rights fees,” product expansion, or additional service platforms. The specific critical assumptions are highlighted in the appendix. Momentex assumes that a pilot begins in September 1999 and the first state will be rolled out at the beginning of 2000.

Revenue Drivers. Key drivers for revenues are the number of locations with Gulp & Go service, the hit or usage rate, and the number of beverages purchased in each transaction.

Margin Drivers. Gross margins reflect commissions paid to toll road operators and route drivers, as well as raw material costs. In addition, as some expenses are fixed, there is some operating leverage at the operating income level. Hence, as revenues increase, margins will increase disproportionately.

Cash Flow. Momentex will strive to manage working capital efficiently by negotiating favorable terms with suppliers and creditors and keeping inventory levels to a minimum. Momentex will seek capital to fund the purchase and installation of beverage dispensers necessary for Gulp & Go service roll out.

Required Investment and Uses of Capital

The financial projections center around funding the “Plan for Service Roll Out.” This involves winning approval for a demonstration site, networking with major toll road executives, developing hardware and software, launching and testing the pilot operation, live demonstrations for prospective toll road executives, negotiating contracts and permission for demonstration sites at major toll roads and rights to roll out Gulp & Go service upon successful completion of pilot, and building-out operations on early adopter roads. Momentex anticipates that this stage of operations will require $2 million and seeks the necessary funding to cover this. The appendix provides detailed information on the financial projections and on the development stage that corresponds to the funding need. Refer to Major Milestone appendix for details.

Financial Resources

To date, Chadwick and Khan have self-funded the business. To raise the required investment, Momentex will introduce the Gulp & Go business model to Small Business Investment Companies (SBIC), “angel” investors and other zero stage venture capital firms, as well as the major beverage companies, to look for loans and/or equity financing. Momentex has identified certain firms that specialize in consumer related businesses and/or transportation. Financial investors should find the Gulp & Go business model attractive given the high margin and high volume potential, the Gulp & Go services’ high visibility, and Momentex’s competitive advantages.

Summary Income Statement

The following chart depicts a summary income statement for Momentex. A full income statement, balance sheet, and statement of cash flows are in the appendix along with a monthly, quarterly, and annual profit and loss analysis with assumptions and model drivers.

Income Statement

1999 2000 2001 2002 2003 2004
Beverage Sales 50,465 3,095,518 26,909,900 69,860,379 77,491,282 85,517,164
Commissions and Sales Tax (11,102) (681,014) (5,920,178) (15,369,283) (17,048,082) (18,813,776)
Total Revenues 39,363 2,414,504 20,989,722 54,491,095 60,443,200 66,703,388
Raw Materials 12,112 742,924 6,458,376 16,300,755 18,081,299 19,954,005
Operating Expenses 374,939 4,534,601 8,939,114 9,297,322 8,041,672 8,417,283
Research and Development 469,500 400,000 400,000 400,000 400,000 400,000
Total Expenses 854,051 5,677,526 15,797,490 25,998,078 26,522,971 28,771,288
Operating Profit (814,688) (3,263,022) 5,192,231 28,493,018 33,920,229 37,932,100
Taxes 276,994 1,109.42 (1,765,359) (9,687,626) (11,532,878) (12,896,914)
Net Profit (537,694) (2,153,594) 3,426,873 18,805,392 22,387,351 25,035,186

Momentex LLC
Table of Contents Appendices
1. Executive Summary
2. Company Overview
3. Service Description
4. Market & Strategy
5. Business Model
6. Management
7. Financials
8. Capitalization
9. Risk Factors
Market Research Survey
Hardware Integration
Software Integration
Internet Integration
Traffic Flow Analysis
Financial Assumptions
Income Statement
Balance Sheet
Cash Flow Statement
All information herein is confidential and belongs to Momentex

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