Business valuation, forensic accounting, exit planning - J. Richard … · 2016-04-13 · J. R...

J. Richard Claywell, CPA Business Valuation ! Forensic Accounting ! Exit Planning Strategies

J. Richard Claywell, CPA, ABV, ASA, CBA, CVA, CM&AA, CFFA, CFD, ABAR Ngoc Hanh Thi Ta, AVA Baria Y. Jaroudi, CPA, CVA Certified Public Accountant Accredited in Business Valuation Accredited Senior Appraiser Certified Business Appraiser Certified Valuation Analyst Certified Mergers & Acquisition Advisor Certified Forensic Financial Analyst Certified in Fraud Deterrence Accredited in Business Appraisal Review Accredited Valuation Analyst

Valuation of Closely Held Businesses, Professional Practices & Litigation Support Services

1560 W. Bay Area Boulevard, Suite 105"Friendswood, Texas 77546"(281)488-7531"Fax (281)286-8121 www.biz-valuation.com

August 20, 2012 Mr. Kenneth Higgins, Attorney at Law 1234 High Sierra South, Suite 420 Houston, Texas 77000 RE: SAMPLE COMPANY, and TONY LUC vs. JOHN E.S. MITCHELL. et al. CAUSE No. 2009-64444, IN THE DISTRICT COURT, HARRIS COUNTY, TEXAS, 334TH JUDICIAL DISTRICT Dear Mr. Higgins: I attended the deposition of The Expert, an employee of The Valuation Firm, LLC, (“TVF”) on July 26, 2012. While attending the deposition, I made five pages of notes.1 The analysis provided was marked as Exhibit 382 and Exhibit 393. The Expert has provided two sets of analysis of Sample Company. My comments are based on the revised analysis that was the basis of The Expert’s deposition testimony on July 26, 2012. The comments provided below are a summary of my analysis and impression of The Expert’s conclusions based on how his work compares to recognized business valuation practices. The following is divided into sections that agree to the workpapers prepared by The Expert. Sincerely, J. Richard Claywell, CPA, ABV, ASA, CBA, CVA, CM&AA, CFFA, CFD, ABAR

1 See Claywell’s Comments on The Expert Deposition Tab #2 2 See Claywell’s Comments on The Expert Deposition Tab #3 3 See Claywell’s Comments on The Expert Deposition Tab # 4 and Tab 4-1

Table of Contents 1. IMPLIED VALUE OF SAMPLE COMPANY ....................................................................................................................................................... 1

1.1 BASIC UNDERSTANDING OF APPROACHES AND METHODS .............................................................................................................................. 1 1.2 WEIGHTING OF “APPROACHES” ....................................................................................................................................................................... 1

1.2.1 Selecting Methods of Valuation .............................................................................................................................................................. 3 2. SAMPLE COMPANY – 5 YEAR DCF MODEL (12/31/07) ................................................................................................................................. 3

2.1 GROWTH RATE OF REVENUES .......................................................................................................................................................................... 4 2.2 ERROR IN CALCULATION OF REVENUE GROWTH RATES ................................................................................................................................. 5 2.3 RECESSION ........................................................................................................................................................................................................ 8 2.4 EARNINGS BEFORE INTEREST AND TAXES ....................................................................................................................................................... 9

2.4.1 Financial Trends ...................................................................................................................................................................................... 9 2.4.2 Normalizing Entries .............................................................................................................................................................................. 11

2.4.2.1 Conversion of Cash or Income Tax Basis to Generally Accepted Accounting Principles .......................................................... 12 2.4.2.2 Normalizing Adjustments for Expenses ...................................................................................................................................... 13 2.4.2.3 Normalizing Adjustments for Notes Payable .............................................................................................................................. 15 2.4.2.4 Benchmarking Analysis – Private Sector Industry Analysis ....................................................................................................... 16 2.4.2.5 Management Compensation and Perquisites ............................................................................................................................... 18

2.5 CASH FLOWS .................................................................................................................................................................................................. 19 2.5.1 Working Capital ..................................................................................................................................................................................... 21 2.5.2 Capital Expenditures and Depreciation ................................................................................................................................................ 22 2.5 3 Taxes ..................................................................................................................................................................................................... 23

2.6 TERMINAL VALUE .......................................................................................................................................................................................... 25 2.7 DISCOUNT RATE ............................................................................................................................................................................................. 26

2.7.1 Using Earnings versus Cash Flow Discount Rate ................................................................................................................................. 26 2.7.2 Fundamental Error in Discount Rate .................................................................................................................................................... 27 2.7.3 Weighted Average Cost of Capital ....................................................................................................................................................... 28 2.7.4 Guideline Company Analysis – Percentage of Debt in Capital Structure ............................................................................................ 31

2.8 DISCOUNT FOR LACK OF MARKETABILITY ..................................................................................................................................................... 32 3. COMPARABLE COMPANY MARKET APPROACH ....................................................................................................................................... 34

3.1 COMPARABILITY FACTORS ............................................................................................................................................................................. 34 3.2 ORDER OF MAGNITUDE .................................................................................................................................................................................. 37 3.3 SUBJECT COMPANY RISK DISCOUNT ............................................................................................................................................................. 39 3.4 CONTROL PREMIUM ....................................................................................................................................................................................... 40 3.5 DISCOUNT FOR LACK OF MARKETABILITY .................................................................................................................................................... 41

4. M&A TRANSACTIONS CAPITAL IQ SUMMARY ........................................................................................................................................... 42 4.1 COMPARABILITY FACTORS ............................................................................................................................................................................. 42 4.2 LOSS YEARS .................................................................................................................................................................................................... 44

4.2.1 Excluding Company’s with Current Year Net Operating Losses ......................................................................................................... 44 4.2.2 Out Of Control Employee Spending ..................................................................................................................................................... 44 4.2.3 No Standard Cost System ..................................................................................................................................................................... 44 4.2.4 Inefficiency ............................................................................................................................................................................................ 45 4.2.5 Poor Profit Margins ............................................................................................................................................................................... 45

4.3 SUBJECT COMPANY RISK DISCOUNT ............................................................................................................................................................. 46 4.4 DISCOUNT FOR LACK OF MARKETABILITY .................................................................................................................................................... 46

5. PRIVATE COMPANY TRANSACTIONS .......................................................................................................................................................... 47 6. ECONOMIC ANALYSIS ..................................................................................................................................................................................... 48 7. INDUSTRY ANALYSIS ...................................................................................................................................................................................... 49 8. THE VALUATION FIRM FIRM POLICIES ....................................................................................................................................................... 50 9. CREDIBILITY ANALYSIS ................................................................................................................................................................................... 51 10. SUPPORTING DOCUMENTS FOR WORKPAPER FILE ................................................................................................................................ 53 J. RICHARD CLAYWELL, CPA, ABV, ASA, CBA, CVA, CM&AA, CFFA, CFD, ABAR CURRICULUM VITAE ........................................ 56

1

1. Implied Value of Sample Company The Expert stated that he followed Revenue Ruling 59-604 in determining the Fair Market Value of Sample Company. 1.1 Basic Understanding of Approaches and Methods On the schedule titled “Implied Value, page 25 of the second set of data relating to Sample Company, The Expert states that he has used various Approaches to determine a “Weighted Value”. Exhibit 1

The Expert has not made clear and has not disclosed how he has weighted the various methods. This is not a recognized practice within the business valuation community. 1.2 Weighting of “Approaches” The Expert has not provided any empirical evidence as to any weights that were applied to the Capital IQ Public Company – Market Approach, Capital IQ M&A – Market Approach nor the DCF – Income Approach6. In fact Revenue Ruling 59-60 Averaging of Factors7 states “

Because valuations cannot be made on the basis of a prescribed formula, there is no means whereby the various applicable factors in a particular case can be assigned mathematical weights in deriving the fair market value. For this reason, no useful purpose is served by taking an average of several factors (for example, book value, capitalized earnings and capitalized dividends) and basing the valuation on the result. Such a process excludes active consideration of other pertinent factors, and the end result cannot be supported by a realistic application of the significant facts in the case except by mere chance. (emphasis added)

4 See Claywell’s Comments on The Expert Deposition Tab 5 5 See Claywell’s Comments on The Expert Deposition Tab 6 6 See Claywell’s Comments on The Expert Deposition Tab 6 7 See Claywell’s Comments on The Expert Deposition Tab 5

Analysis by TVF-Implied Value of Sample Company Workpaper # 2

Weighted Value-Calculated by TVF and

in Schedule by TVF TVF ReferenceCapital IQ - Public Company -Market Approach 543,153 TVF Workpaper 10

Capital IQ M& A- Market Approach 868,227 TVF Workpaper 13

DCF - Income Approach 461,019 TVF Workpaper 3

-------------------------------Weighted Value 493,873

=================

2

The Expert stated that in his direct testimony that he weighted the Capital IQ Public Company – Market Approach 40% and the DCF Income Approach 60% to arrive at a conclusion of value.8 The reader of the analysis should not be expected to accept critical elements such as weightings, adjustments to financial statements, the selected capitalization or discount rates without support – even in those instances where vicissitudes of the assignment dictate that support be primarily based on the informed judgment of the appraiser. Comment The Expert has no evidence in his analysis or workpaper file to support any weighting he has assigned to the various values. The Expert has no evidence of any kind in his analysis or workpapers as to his reconciliation of values. Dr. Shannon Pratt has a section in his business valuation books related to the reconciliation process.9 The Expert has not explained in his analysis why any of the three values are a more reliable value than the other values. The Expert has not provided any information on the value drivers of the company in order to make any comparisons to the various “Approaches” provided. The Expert has just proclaimed a weight without any supporting evidence. The point is to support, not proclaim the reconciled value.10 The Expert has not justified his final result considering the fact that there are wide variations in the Approaches he has considered and The Expert has provided no explanation or reconciliation as to why the values differ to such an extreme variance. This makes the Implied Value of Sample Company analysis not relevant, not reliable, not accepted as a general proactive in the business valuation community, lacks adequate disclosures, lacks completeness, and is not supportable. Opinion The Expert by just proclaiming a 60% and 40% weighting of the valuation methods has relieved himself of the burden of working through the reconciliation process. The Expert has a fundamental flaw in his analysis and workpapers. At the deposition, The Expert was unable to justify the weighting he applied to the various methods. He has no evidence, explanation or support for why the Approaches are significantly different.

8 See The Expert Testimony Tab 89, page 78 line 6 - 7 9 Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Appraisal and Analysis of Closely Held Companies”, McGraw Hill, © 2008, p. 472 – 476, See Claywell’s Comments on The Expert Deposition Tab 8 10 Bishop, David M. “Reconciling the Indicated Value”, Business Valuation Review, March 1998, p. 13 – 15, See Claywell’s Comments on The Expert Deposition Tab 9

3

1.2.1 Selecting Methods of Valuation The Expert has not used the asset method, as evidenced by no supporting documentation in his workpaper file, in his analysis of Sample Company. “Relative weighting of valuation multiples is similar to that used in the guideline publicly traded company method, except that assets may get a little more weight in a control valuation, since the control owner has discretion over their use or disposition”.11 One should recognize, of course, that an actual accomplished merger or acquisition observed in the market place usually has been consummated at the highest possible value to the seller, not some average of possible events. For every such transaction observed, many unsuccessful attempts at transactions were usually made. Many transactions reflect some synergistic value, which would contain elements of investment value over and above pure fair market value. All these factors must be considered when deciding on what multiples to apply to the subject transaction, and the relative weight to be accorded to each (emphasis added).12 Comment The Expert has no evidence in his analysis or workpapers to indicate that he has considered the Asset Approach or any Asset Methods. There is no analysis of the Asset Methods to determine if the analysis was completed. The Expert has no evidence in his analysis or workpaper files that would indicate that he has reviewed any of the sales transactions to determine if they contain any synergistic or investment value traits. Opinion The Expert has a fundamental flaw in his analysis, as he has not considered the Asset Approach as evidenced by his workpapers. The Expert has not made an adequate assessment as to the Standard of Value utilized in the sales transactions. This makes the weighting of the various values irrelevant and unreliable, nor generally accepted. There is a lack of disclosure, lacks completeness, lack of professional competence, lack of due professional care, lack of supervision of employees working on the engagement which makes the analysis unreliable. 2. Sample Company – 5 Year DCF Model (12/31/07) The Expert prepared a 5 year forecast for Sample Company to arrive at an implied value of $461,019. This analysis is in the second set of data received and is on page 3.

11 Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Appraisal and Analysis of Closely Held Companies”, McGraw Hill, © 2008, p. 322, See Claywell’s Comments on The Expert Deposition, Tab 10. 12 Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Appraisal and Analysis of Closely Held Companies”, McGraw Hill, © 2008, p. 322, See Claywell’s Comments on The Expert Deposition, Tab 10.

4

2.1 Growth Rate of Revenues The Expert states in his second set of workpapers on page 5 that the growth in revenues from 2007 to 2008 would be 16.49%.13 The Expert shows the increases starting in 2005. However, he is calculating a year-to-year percentage change so 2005 is a base year. The Expert calculated a year-to-year percentage change for 2005 to 2006 and 2006 to 2007. Per The Expert, this results in an increase in revenues of 16.49%. The Expert has not provided any supporting evidence to show the continued growth rate in revenues. There is a significant increase in revenues from 2007 to 2008 but, no justification for the revenues continuing to increase. There is no economic or industry analysis to support the proclamation of The Expert. Exhibit 2

Comment The Expert has no evidence, analysis or supporting schedules to support the 30% increase in sales, nor the 4.15% increase in services for 2008. The estimated long-term sustainable growth is estimated to be approximately 6%. The 6% is a substantial decrease from the short historical data that has been analyzed and has not been supported.

13 See Claywell’s Comments on The Expert Deposition Tab 12

Analysis by The Valuation Firm-Wor kpaper # 5Percentage Percentage

FYE FYE Change FYE Change Estimated Projected2005 2006 2005 - 2006 2007 2006 - 2007 Percentage 2008 Source

Sales 236,954 310,326 31.0% 420,013 35.3% 30.0% 546,017 TFV WP 3, p 5Services 445,975 372,989 -16.4% 459,812 23.3% 4.15% 478,894 TVF WP 3, p 5Uncategorized Income 14,000 -100.0%

--------------- --------------- --------------- ---------------Total Income 696,929 683,315 -2.0% 879,825 28.8% 16.49% 1,024,911 TVF WP 3, p 5

======== ======== ======== ========

5

Exhibit 3

The Expert states in his testimony that Sample Company added Hewlett-Packard as a client and that they have annual revenues from Exxon, Baylor College of Medicine and Texas Children’s.14 The Expert states that he has workpapers to support the revenue increases.15 Opinion The Expert has proclaimed that the revenues will grow at various growth rates. The workpapers only show some calculations but do not provide any supporting evidence to support the proclamation. The Expert proclaims an approximate 16.5% growth in Sales from 2007 through 2008, a 7.2% growth in revenues from 2008 through 2009 and a 6% growth in revenues from 2010 through 2012. There is no supporting evidence in the workpaper file to support the revenue growth. This makes the growth rates in revenues irrelevant and unreliable, nor generally accepted. There is a lack of disclosure, lacks completeness, lacks due professional care, lacks supervision of employees working on the engagement which makes the analysis unreliable. 2.2 Error in Calculation of Revenue Growth Rates The workpapers of The Expert states in the second set of data, on page 3 that the revenues increase in 2008 by 16.5%, 2009 by 7.2%, 2010 by 6%, 2011 by 6%, and 2012 by 6%.16 The following table shows the amount of revenues that are based on the conclusions of The Expert’s workpapers.

14 The Expert deposition page 100, line 18 – 21. 15 The Expert deposition page 101, line 3 – 5. 16 See Claywell’s Comments on The Expert Deposition Tab 14

-2.0%

28.8% 28.8%

16.5% 16.5%

5.9% 6.0% 6.0% 6.0% 4.15%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

2005 2006 2007 2008 2009 2010 2011 2012 2013

Revenue Growth Per TVF

Year to Year Change

Projected Year to Year Change

Projected Long-Term Sustainable Growth

6

Exhibit 4

In fact, the Revenues for each year of The Expert’s forecast contradict his conclusions in his workpapers. The Expert states in his deposition testimony that the 2008 are growing at 30% and 4.15%, indicating that the Sales and Services would grow at different rates.17 In fact, the 2007 Sales and Services are both increased at 16.5%, a direct contradiction of The Expert’s testimony.18 Comment The Expert has not provided any supporting evidence or thorough analysis that would support any of the growth rates used in his workpapers or in his contradicting testimony. His direct testimony contradicts the method of increasing revenues from 2007 to 2008.19 The Expert states in his deposition that the revenues would increase at 6% after 2008.20 21 There is no economic or industry analysis to support this position.

17 The Expert Deposition, page 94, lines 14 – 16. Tab 16 18 Ibid. 19 The Expert Deposition page 94, line 14 - 16 20 The Expert Deposition page 94, line 20 - 22 21 See Claywell Comments on The Expert Deposition Tab 15

Analysis Pr epar ed by TVF-Wor kpaper # 32007 2008 2009 2010 2011 2012

Growth Rate as Calculated by Mr. DeBenedictis 28.8% 16.5% 7.2% 6.0% 6.0% 6.0%(Growth Rate in Revenues-Formula is (cur r ent year -pr ior year )/pr ior year 16.5% 7.2% 6.0% 6.0% 6.0%

Sales 420,013 489,315 524,546 556,019 589,380 624,742Services 459,812 535,681 574,250 608,705 645,227 683,941

----------- ---------------- ---------------- ---------------- ---------------- ----------------Revenues 879,825 1,024,996 1,098,796 1,164,724 1,234,607 1,308,683 (Actual Gr owth Rate in Revenues) 16.5% 7.2% 6.0% 6.0% 6.0%

Revenues as Forecasted by Mr. DeBenedictis 1,024,911 1,085,736 1,150,458 1,219,340 1,292,666---------------- ---------------- ---------------- ---------------- ----------------

Difference in Revenues 85 13,060 14,266 15,267 16,017Cummulative Math Error 13,145 27,325 29,533 31,284

EBIT 74,081 85,034 90,081 95,451 101,166 107,249

Taxes 7,512 9,155 9,912 13,568 15,175 16,087----------- ---------------- ---------------- ---------------- ---------------- ----------------

Debt Free Cash Flow 66,569 75,879 80,169 81,883 85,991 91,162

====== ========= ========= ========= ========= =========

7

Exhibit 5

Opinion The method of increasing revenues by The Expert in his workpaper calculations are contradicted by his direct testimony. He increased both the Sales and Services by 16.5% and then attempts to explain that there is some separate weighting of the future revenues. This is inconsistent with the analysis provided in his workpapers where the Revenues are increased at 6% and there is no separate weighting of the Sales or Services. In my opinion, The Expert does not have intimate knowledge of the growth rates used and the calculations prepared in this schedule. This contradiction between the direct testimony and the workpapers provided makes the growth rates in revenues irrelevant and unreliable. There is a lack of disclosure, lack completeness, lack of due professional care, lack of supervision of employees working on the engagement which makes the analysis unreliable.

Analysis Pr epar ed byTVF-Wor kpaper # 32007 2008 2009 2010 2011 2012

Growth Rate as Calculated by Mr. DeBenedictis 28.8% 16.5% 6.0% 6.0% 6.0% 6.0%(Growth Rate in Revenues-Formula is (cur r ent year -pr ior year )/pr ior year 16.5% 6.0% 6.0% 6.0% 6.0%

Sales 420,013 489,315 518,674 549,794 582,782 617,749Services 459,812 535,681 567,822 601,891 638,005 676,285



Math Error 85 760 1,228 1,447 1,368Cummulative Math Error 845 1,988 2,674 2,815

EBIT 74,081 85,034 90,081 95,451 101,166 107,249

Taxes 7,512 9,155 9,912 13,568 15,175 16,087----------- ---------------- ---------------- ---------------- ---------------- ----------------


====== ========= ========= ========= ========= =========

8

2.3 Recession The Expert stated in his deposition testimony that he did not do any research to determine the probability of a recession22 and its impact on the industry or economy as of December 31, 2007.23 Comment The Expert has not developed sufficient facts and data to corroborate the estimates of management assumptions. The Expert should have supporting evidence that he has corroborated management’s assumptions. There is no supporting evidence in the workpaper file that this procedure was conducted. In fact, there is a 38.41% chance of a recession as of the valuation date used by The Expert. Exhibit 6

22 See Claywell’s Comments on The Expert Deposition Tab 13 23 The Expert deposition page 100, line 2 – 25.

Recession Predictor

www.newyorkfed.org/research/capital_markets/ycfaq.htmlwww.frbsf.org/publications/economics/letter/2006/el2006-32.html

10 Year 3 Month RecessionDate Treasury Yield Treasury Yield Spread Probability Date

Jan-05 4.22 2.38 1.84 0.13% 01/01/05Feb-05 4.17 2.59 1.58 0.17% 02/01/05Mar-05 4.5 2.8 1.7 0.32% 03/01/05Apr-05 4.34 2.84 1.5 0.10% 04/01/05

May-05 4.14 2.9 1.24 0.05% 05/01/05Jun-05 4 3.04 0.96 0.08% 06/01/05Jul-05 4.18 3.29 0.89 0.17% 07/01/05

Aug-05 4.26 3.52 0.74 0.41% 08/01/05Sep-05 4.2 3.5 0.7 0.79% 09/01/05Oct-05 4.46 3.79 0.67 1.05% 10/01/05

Nov-05 4.54 3.98 0.56 1.62% 11/01/05Dec-05 4.47 3.98 0.49 1.88% 12/01/05Jan-06 4.42 4.34 0.08 2.49% 01/01/06Feb-06 4.57 4.55 0.02 3.84% 02/01/06Mar-06 4.72 4.63 0.09 3.16% 03/01/06Apr-06 4.99 4.72 0.27 4.36% 04/01/06

May-06 5.11 4.84 0.27 6.44% 05/01/06Jun-06 5.11 4.92 0.19 9.47% 06/01/06Jul-06 5.09 5.08 0.01 10.37% 07/01/06

Aug-06 4.88 5.09 -0.21 12.50% 08/01/06Sep-06 4.72 4.93 -0.21 13.12% 09/01/06Oct-06 4.73 5.05 -0.32 13.60% 10/01/06

Nov-06 4.6 5.08 -0.48 15.44% 11/01/06Dec-06 4.56 4.98 -0.42 16.70% 12/01/06Jan-07 4.76 5.11 -0.35 25.35% 01/01/07Feb-07 4.72 5.16 -0.44 26.79% 02/01/07Mar-07 4.56 5.07 -0.51 25.11% 03/01/07Apr-07 4.69 5 -0.31 21.08% 04/01/07

May-07 4.75 4.86 -0.11 21.08% 05/01/07Jun-07 5.1 4.73 0.37 22.82% 06/01/07Jul-07 5 4.95 0.05 27.03% 07/01/07

Aug-07 4.67 4.31 0.36 32.65% 08/01/07Sep-07 4.52 3.99 0.53 32.65% 09/01/07Oct-07 4.53 3.99 0.54 35.62% 10/01/07

Nov-07 4.15 3.35 0.8 40.11% 11/01/07Dec-07 4.1 3.06 1.04 38.41% 12/01/07

9

The following chart indicates the increasing risk of a recession that was ignored in The Expert’s analysis. Exhibit 7

Opinion The forecast has not been corroborated by independent sources. By ignoring the probability of a recession, The Expert has not relied on sufficient facts or data in order to support the revenue projections. Because of ignoring the probability of a recession, The Expert has not reliably applied the principles and methods of preparing a forecast or projection. 2.4 Earnings Before Interest and Taxes On the second set of data, page 4, The Expert has normalized the 2007 Form 1065 Tax Return data to arrive at an Adjusted TTM (Trailing Twelve Months) EBIT (Earnings Before Interest and Taxes).24 The Expert states in his direct testimony that he normalized the legal fees and looked at trends to arrive at an 8% EBIT that was used in his DCF Model.25 2.4.1 Financial Trends Detailed profit-and-loss statements should be obtained and considered for a representative period immediately prior to the required date of appraisal, preferably five or more years. Such statements should show adjustments to, and reconciliation with, surplus as stated on the balance sheet. With profit and loss statements of this character available, the appraiser should be able to separate recurrent from nonrecurrent items of income and expense, to distinguish between operating income and investment income, and to ascertain whether or not any line of business in which the company is engaged is operated consistently at a loss and might be abandoned with benefit to the company. The percentage of earnings retained 24 See Claywell’s Comments on The Expert Tab 17 25 The Expert deposition page 184 line 8 – page 185 line 22. See Claywell’s Comments on The Expert Tab 18

0.000% 5.000%

10.000% 15.000% 20.000% 25.000% 30.000% 35.000% 40.000% 45.000%

01/0

1/05

03

/01/

05

05/0

1/05

07

/01/

05

09/0

1/05

11

/01/

05

01/0

1/06

03

/01/

06

05/0

1/06

07

/01/

06

09/0

1/06

11

/01/

06

01/0

1/07

03

/01/

07

05/0

1/07

07

/01/

07

09/0

1/07

11

/01/

07

Recession Probability Percentage

Probability Percentage

10

for business expansion should be noted when dividend-paying capacity is considered. Potential future income is a major factor in many valuations of closely-held stocks, and all information concerning past income which will be helpful in predicting the future should be secured. Prior earnings records usually are the most reliable guide as to the future expectancy, but resort to arbitrary five-or-ten-year averages without regard to current trends or future prospects will not produce a realistic valuation. If, for instance, a record of progressively increasing or decreasing net income is found, then greater weight may be accorded the most recent years' profits in estimating earning power. (emphasis added)26 Comment The Expert used only the 2007 year data to determine a $74,081 Adjusted TTM EBIT that is equivalent to 8% of the revenues.27 The Expert has no supporting calculations in his workpaper file to support any Adjustments to arrive at the $74,081 Adjusted TTM EBIT. The Expert has somehow determined the legal fees by making an adjustment of $3,750, with no supporting evidence. The following schedule shows the calculation to arrive at the Adjusted TTM EBIT as determined by The Expert. Exhibit 8

The Expert used only the 2007 year financial information to forecast the future profit percentage.28 The Expert has only used one year of financial data to determine the forecasted profit percentage. The time period most commonly used for analysis of operating data is three to five years. This conventional time period should not be blindly and mechanically adopted. The operative phrase is “relevant time period”. The reason for collecting and presenting several years of balance sheet information is to identify and interpret comparative trends among the guideline and subject companies, although the earlier years’ balance sheet data usually are not used directly in the computation of valuation multiples.29

26 Revenue Ruling 59-60, Section 4.06(d)(6), See Claywell Tab 5 27 See Claywell Comments on The Expert Tab 19 28 See Claywell’s Comments on The Expert Tab 20 29 See Claywell’s Comments on The Expert Tab 21, Pratt, Shannon P. , Niculita, Alina A. “Valuing a Business”, McGraw Hill, © 2008, page 33, 275

Sample CompanyAdjusted TTM EBIT

2007 PercenageTotal revenues 892,891 100.0%

Adjusted TTM EBIT Net Income 25,319 Interest Expense 20,696

Normalized Legal FeesLegal Fees 31,816Less Normal Legal Fees (3,750)

---------------Adjustment to Legal Fees 28,066

--------------- -----------------Adjusted TTM EBIT 74,081 8.3%

======== =========

11

Opinion The Expert has only used the 2007 year of financial data to forecast the future operating income percentage. This is not a customary business valuation practice. Business valuators typically use at least five years of data to normalize and develop historical trends so that the trends can be used to forecast expected future operations. The Expert has not developed sufficient facts or years of data in order to form an informed opinion and corroborate managements forecast. The Expert has not applied business valuation principles correctly by not using a sufficient number of years to develop trends in his analysis. This makes the use of a single year EBIT of 8% irrelevant, unreliable and violates generally accepted valuation practices, lacks completeness. The use of a single year when prior year’s financial data is available is not supported by any recognized valuation authority and is unsupportable. 2.4.2 Normalizing Entries In analyzing a company’s historical earnings as a guide to estimating the company’s earnings base, the analyst should make every reasonable effort to distinguish between past earnings that represent ongoing earning power and those that do not. The analyst should adjust the income statements to eliminate the effects of past items that would tend to distort the company’s current and future earning power. Implementation of this analysis and adjustments requires much judgment.30 Accounting Principles Board (APB) Opinion No. 30, issued in 1973, is very restrictive as to what may be reported as an “extraordinary” gain or loss. APB Opinion No. 30 states that an item must be both unusual in nature and infrequent in occurrence to be categorized as extraordinary. It defines these two requirements as follows:

Unusual nature—the underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity, taking into account the environment in which the entity operates.

Infrequency of occurrence—the underlying event or transaction should be of a type that would not reasonably be expected to recur in the foreseeable future, taking into account the environment in which the entity operates. If an item meets these definitions, it almost certainly cannot be considered representative of ongoing earning power. That does not necessarily mean it should be totally ignored, however, since an extraordinary item could indicate a risk that the company may face again in the future.

30 See Claywell’s Comments on The Expert Tab 22, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 145

12

Other Nonrecurring Items Since the use of the extraordinary designation is so restrictive, obviously many items do not meet the strict definition for accounting purposes but nevertheless should be regarded as nonrecurring for analytical purposes. Some examples of such items would be: 31

1. Gains or losses on the sale of assets, especially when the company clearly lacks a continuing supply of assets available for sale

2. Gains or losses on disposition of a segment of the business

3. Insurance proceeds from life insurance on a key person or from some type of property and casualty claim

4. Proceeds from the settlement of lawsuits

5. Effects of a strike or of an extended period in which critical raw materials are unavailable

6. Effects of abnormal price fluctuations, especially those of a very short-term nature that are due to regulatory, industry, or other aberrations that are not likely to be repeated

7. Write-offs and other expenses related to an acquisition

It is possible, of course, for most of these unusual events to recur, resulting in a greater or smaller effect on the company’s financial results. The analyst must carefully consider the likelihood of their recurrence and decide whether and how to adjust the financial statements to produce a best estimate of the company’s continuing earning power. The Expert has not adequately normalized the financial statements. 2.4.2.1 Conversion of Cash or Income Tax Basis to Generally Accepted Accounting Principles In assessing the quality of the company’s financial statement information, there may be times when adjustments are necessary to convert the information oriented to Generally Accepted Accounting Principles (“GAAP”). More often than not, this will prove to be an accounting exercise that may not add any value to the appraisal process. A large part of the determination as to the need to make this conversion will depend on the information that the appraiser will be using for comparison purposes. Most likely, the balance sheet will need to be adjusted for accounts receivable and accounts payable, but the impact on the income statement may be relatively immaterial.32

31 See Claywell’s Comments on The Expert Tab 22, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 146 32 See Claywell’s Comments on The Expert Tab 23, Trugman, Gary R. “Understanding Business Valuation”, AICPA © 2002, page 139 - 140

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Comment The Expert has failed to adjust the cash basis tax returns to be comparable to generally accepted accounting principles. The Expert is comparing cash basis income tax return with publicly traded companies that prepare financial statements on a generally accepted accounting principles basis. Because the analysis is not in the workpapers of The Expert, it is impossible to make an assessment as to how material any conversion would be. Opinion The Expert has a fundamental flaw in his public company comparative analysis. The Expert has not converted the financial statement to be comparable to the public companies. The Expert has not followed the generally accepted valuation practices by converting cash basis financial statements to generally accepted accounting principles based financial statements. This is critical as all the public company data is based on generally accepted accounting principles and Sample Company would not be on a comparable basis. This use of unreliable principles and methods would make the comparison of inconsistent data unreliable, it lacks relevance, lacks the completeness of the analysis. The analysis is not supported by any recognized authority and results in an unsupported position. 2.4.2.2 Normalizing Adjustments for Expenses Once all of the historical financial information has been analyzed, any potential adjustments should be made. Financial statement adjustments, frequently called “normalizing adjustments”, are intended to place the company’s financial information on an economic basis. During this process, a “cleansing” of the financial statements takes place. This cleansing is intended to remove those items that the willing buyer would not necessarily take into consideration in assessing the income or cash flow of the company. Another reason for these adjustments is to make the subject company’s financial statements more comparable to other companies that will be used in the analysis of the industry peer group.33 Discretionary adjustments are those that relate to expenses that are solely at the discretion of management, generally the owners. Some of the common items include the following:34 Officers and owners compensation Owner’s perquisites Entertainment expenses Automobile expenses Compensation to family members Rent expense Interest expense

33 See Claywell’s Comments on The Expert Tab 23, Trugman, Gary R. “Understanding Business Valuation”, AICPA © 2002, page 143 - 155 34 See Claywell’s Comments on The Expert Tab 23, Trugman, Gary R. “Understanding Business Valuation”, AICPA © 2002, page 146

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Additional perquisites could include: Country club dues, Meals and entertainment not business related, Vacation home and its expenses, Exorbitant vacations and expenses, Insurance on their personal residence, Maintenance and repairs of their personal residence, Personal gifts to others not business related, Children’s private school or college costs, Officer’s life insurance and/or for family members, Commissions paid to members of the household who do not work in the business, and Normal business cost of goods and overhead expenses that are taken home. The only normalizing made by The Expert was the legal fees in 2007. The Expert has ignored any potential adjustments for the years 2005 to 2006. The following table has highlighted expenses in yellow that should be considered as normalizing adjustments.35 Exhibit 9

35 See Claywell’s Comments on The Expert Tab 24

2005 2006 2007 2008 2009 2010Income Gross receipts or sales 681,942 663,936 892,891 248,055 95,040 42,366 Other income 63 10,029

--------------- --------------- --------------- --------------- --------------- ---------------Total income 682,005 673,965 892,891 248,055 95,040 42,366Cost of Goods Sold (432,370) (406,745) (613,106) (164,385) (40,685) (33,899)

--------------- --------------- --------------- --------------- --------------- ---------------Gross Profit 249,635 267,220 279,785 83,670 54,355 8,467

Deductions Salaries and wages 117,249 42,794 95,516 81,655 Repairs and maintenance 148 815 300 Rent 31,194 24,999 23,051 21,659 5,733 Taxes and Licenses 1,974 1,700 887 616 Interest 11,880 17,776 20,696 30,623 14,920 3,304 Depreciation 2,648 1,902 1,192 1,010 686 293 Accounting 3,700 5,500 4,035 7,850 500 Advertising 7,461 10,925 5,000 1,000 Automobile and truck expense 17,177 21,593 12,239 9,248 2,457 Bank charges 4,908 4,714 3,044 1,042 100 Computer service and supplies 59 750 Equipment rent 9,649 Dues and subscriptions 2,478 2,513 Insurance 3,155 2,825 3,878 2,129 (1,046) Legal and professional 3,555 3,498 31,816 1,000 15,752 Meals and entertainment 5,604 881 118 1,494 150 Office expense 4,085 1,851 1,114 450 161 Outside services/independent contractors 20,256 639 200 Postage 1,127 870 644 183 247 Printing 292 266 Supplies 849 Telephone 15,971 14,860 8,408 8,088 1,712 Training/continuing education 1,195 355 Travel 12,348 5,774 4,299 1,521 9,988 Utilities 367 Amortization expense 24,000 24,000 24,000 42,579 5,000 Computer equipment/parts 1,619 Web services 2,792 874 2,116 2,525 3,349 Software expense 464 551 547 174 Less inclusion amount (63) (340) Miscellaneous 1,917 675 8,988 Conference costs 4,568 Consulting services 13,000

--------------- --------------- --------------- --------------- --------------- ---------------Total Deductions 314,038 193,621 254,349 216,200 60,633 12,585

--------------- --------------- --------------- --------------- --------------- ---------------Ordinary Business Income (64,403) 73,599 25,436 (132,530) (6,278) (4,118)

======== ======== ======== ======== ======== ========Potential Normalizing Adjustments Not Considered 239,352 49,133 10,844

======== ======== ========

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Comment The Expert has a major flaw in his analysis in that he has not adequately normalized the historical financial data from 2005 through 2007. The only expense The Expert normalized was the 2007 legal fees.36 Opinion The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his inadequate normalizing of the financial statements. This incomplete analysis and misapplication renders the analysis of an 8% EBIT irrelevant, unreliable, and unsupportable. 2.4.2.3 Normalizing Adjustments for Notes Payable When preparing normalizing entries, the balance sheet items should also be adjusted to Fair Market Value.37 By definition, the Present Value of a loan is the loan payment times the market rate annuity discount factor.38 When we multiply the annuity discount factor at a market rate, this give us the present value of a loan.39 Comment The Expert has a fundamental flaw in his analysis because he has not followed generally accepted valuation practices by adjusting the note payable to their fair market value. The Expert has failed to use the correct present value of notes payable when he subtracts and/or adds back debt in the Discounted Cash Flow analysis, in the Weighted Average Cost of Capital, in the Comparable Company Market Approach, and in the M&A Transactions Capital IQ Summary.40 The Expert has not disclosed how much of the debt, if any, is from shareholders and what percentage of the debt is being charged interest. The Expert has not adjusted the notes payable to reflect the current interest rate as of the valuation date. The Expert has provided no information as to what the borrowing rate would be, over prime, for the company. Opinion The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his inadequate normalizing of the financial statements. The Expert has not applied the principles and methods of business valuation correctly. This inaccurate calculation of the notes payable’s net present value makes every calculation that relies on the information unreliable. This makes all of the calculations that rely on the notes 36 See The Expert Deposition Testimony, page 97, line 12 37 Trugman, Gary, “Understanding Business Valuations”, AICPA © 2002, page 141, See Claywell Comments on The Expert Tab 23 38 Abrams, Jay B. “Quantative Business Valuation: A Mathematical Approach for Today’s Professionals”, John Wiley & Sons, Inc., Second Edition © 2010, page 108., See Claywell’s Comments on The Expert Tab 25 39 Abrams, Jay B. “Quantative Business Valuation: A Mathematical Approach for Today’s Professionals”, John Wiley & Sons, Inc., © 2001, page 85., See Claywell’s Comments on The Expert Tab 26 40 See Claywell’s Comments on The Expert Tab 27

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payable irrelevant, unreliable, and produces an unsupportable position related to the notes payable. 2.4.2.4 Benchmarking Analysis – Private Sector Industry Analysis When used properly, analysis of financial statement ratios can be a useful tool in a business valuation. In particular, it can help identify and quantify some of the company’s strengths and weaknesses—both on an absolute basis and relative to other companies or industry norms. Accordingly, financial ratio analysis is an important process within the business valuation. One use of ratio analysis is to compare a company’s own figures over time, a method sometimes called trend analysis. In this way, aspects of the business that demonstrate any trends of improvement or deterioration can be identified. It can also indicate levels of the different variables that have been normal within the period studied, as well as ranges that reveal high and low points for each variable over time. Another way to use ratio analysis is to compare the subject company with other companies, either specific companies or industry averages. Patterns of strength in the subject company relative to guideline companies would tend to support a multiple in the high end of the industry range. Conversely, poor performance ratios relative to similar companies would suggest lower multiples for the subject company. In comparing ratios from one period to another or from company to company, the analyst should understand the extent to which comparative ratios are based on comparable accounting policies. 41 When making a comparative analysis of a company’s financial statements over time, the analyst should allow for any changes in accounting policies that occurred during the period. When comparing a company with others in its industry, the analyst should allow for any differences in accounting policies between the subject company and industry norms. The Expert has no evidence in his workpaper file that he has performed any common size analysis. Comment There is no supporting evidence in The Expert’s workpaper file that he performed any industry benchmark or ratio analysis to compare the company’s financial performance to the industry. The Expert has not performed any Short-Term Liquidity Measures analysis as compared to the industry for the Current Ratio, nor the Quick Ratio.42 The Expert has not performed any Activity Ratio analysis as compared to the industry for the Accounts Receivable Turnover, Inventory Turnover, Sales to Net Working Capital, or the Sales to Fixed Assets and Total Assets.43

41 See Claywell’s Comments on The Expert Tab 28, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 154 42 See Claywell’s Comments on The Expert Tab 28, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 155 - 156

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The Expert has no evidence in his workpaper to support any Business Risk analysis.44 The Expert has not performed any Leverage Ratio analysis as compared to the industry for the Total Debt to Total Assets, Equity to Total Assets, Long-Term Debt to Capital, Equity to Total Capital, Fixed Assets to Equity, nor the Debt to Equity.45 The Expert has not performed any Income Statement Coverage Ratios analysis as compared to the industry for the Interest Coverage or the Coverage for Fixed Charges.46 The Expert has not performed any Return on Investment Ratio analysis as compared to the industry for the Return on Equity, Return on Investment, and Return on Total Assets.47 The Expert states in his deposition testimony that “you use industry benchmarks as best practices.” However, The Expert has a fundamental flaw in his analysis as a result of not performing the industry benchmarks that are in fact best practices.48 Opinion The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his inadequate comparing of the company to the industry for comparison purposes. The Expert has not applied the principles and methods of business valuation correctly. This lack of sufficient data and industry analysis is a gross error in the analysis of the company. The Expert has not relied on industry benchmark comparative analysis that is available to every business valuator in the country. The gross exclusion of the industry comparison data is a complete disregard for all treatises published for individuals practicing in the business valuation industry. The lack of the data to make any comparison makes any analysis of a company useless. The lack of the industry analysis renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross exclusion or lack of analysis demonstrates a lack of Professional Competence, Lack of Due Professional Care, lack of Planning and a lack of Sufficient Relevant Data.

43 See Claywell’s Comments on The Expert Tab 28, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 156 - 160 44 See Claywell’s Comments on The Expert Tab 28, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 160 - 161 45 See Claywell’s Comments on The Expert Tab 28, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 162 - 164 46 See Claywell’s Comments on The Expert Tab 28, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 164 - 166 47 See Claywell’s Comments on The Expert Tab 28, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 1664 - 170 48 See Claywell’s Comments on The Expert Tab 29, Page 166, line 8 - 9

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2.4.2.5 Management Compensation and Perquisites In closely held companies, compensation and perquisites to owners and managers may be based on the owners’ personal desires and the company’s ability to pay rather than on the value of the services these individuals perform. How much to adjust the earnings base to reflect discrepancies between compensation paid and value of service performed depends on the valuation’s purpose. Owners of successful closely held businesses tend to take out what normally would be considered profits in the form of compensation and discretionary expenses. This practice, found primarily in corporations, may be an effort to avoid the double taxation that arises from paying a corporate income tax and then paying a personal income tax on what the closely held business pays to the owner in the form of dividends. It is not uncommon to find an owner/manager of a successful company with annual compensation greater than the amount an equivalent non-owner employee would earn as compensation. If the owner/manager wants to sell the business and retire, the difference between the compensation and the cost to replace the owner’s services will become available as a part of pretax profits, and the company’s earning power should be adjusted accordingly in establishing the business’s selling price. It is also common for management to be undercompensated because the company lacks the ability to pay. Usually the analyst should assume that the underpayment will be corrected when adequate resources are available and should make an appropriate upward adjustment to the management compensation expense in estimating the company’s earnings base. In general, adjustments for compensation, if appropriate, will be made when valuing controlling interests, because it will be within the power of the controlling interest’s owner to change such compensation.49 Comment The Expert, in his direct testimony stated, “Mr. Opera quit paying himself or minimized his salaries, but we picked up the extra salary of a consulting expert that was looking to drive the acquisition schedule.”50 The Expert also stated, “We had an added cost of somebody on payroll who in the normal course of business would not be receiving -- without going after the acquisition strategy, would not be on payroll. I netted those two out. It's not on a document.”51 There are no supporting documents, notes or research results that relate to any compensation analysis in the workpaper file. Since there is no sufficient relevant data to support the compensation analysis, it is impossible to determine if the employee was making the same level of compensation as the owner of the company. It is highly unlikely that an employee

49 See Claywell’s Comments on The Expert Tab 22, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, 5th Edition, © 2008, page 146 - 147 50 See Claywell’s Comments on The Expert Tab 30, page 217, line 17 - 20 51 See Claywell’s Comments on The Expert Tab 30, page 218, lines 1 - 5

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would be making the same amount as the reasonable compensation of the owner of a company. As evidenced by his workpaper file, The Expert has failed to do any research to determine the reasonable compensation for the owner of the company. Since the owner of the company has lowered his compensation, this would make the company more profitable. If a reasonable replacement salary were considered, the company would not be as profitable. The Expert has no evidence nor has he indicated in his deposition testimony that he did any formal analysis of management’s compensation. The Expert has failed to consider the factors for determining reasonable compensation as prescribed by Mayson Mfg. Co,52 Pulsar Components International, Inc.,53 Exacto Spring,54 and Elliots, Inc.55 Opinion The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his total lack of preparing any analysis for the determination of reasonable compensation for the owner of the company. This analysis and supporting evidence is always obtained when performing a business valuation. The Expert does not have sufficient relevant facts or data to support any position on what would or would not be a reasonable compensation for the owner of the company. The Expert has not applied the acceptable business valuation practices on a reliable basis to determine reasonable compensation for the owner of the company. The lack of analysis and data makes any comparison of any analysis of a company useless. The lack of the industry analysis renders any conclusions irrelevant, unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross exclusion or lack of analysis demonstrates a lack of Professional Competence, Lack of Due Professional Care, lack of Planning and a lack of Sufficient Relevant Data. 2.5 Cash Flows In the simplest sense, the theory surrounding the value of an interest in a business depends on the future benefits that will accrue to its owner. The value of the business interest, then, depends upon an estimate of the future benefits and the required rate of return at which those future benefits are discounted back to present value as of the valuation date.56 Thus, the theoretically correct approach is to project some category or categories of the future benefits of ownership (usually some measure of economic income, such as cash flow, earnings, or dividends) and estimate the present value of those future benefits by

52 See Claywell’s Comments on The Expert, Tab 31 53 See Claywell’s Comments on The Expert, Tab 32 54 See Claywell’s Comments on The Expert, Tab 33 55 See Claywell’s Comments on The Expert, Tab 34 56 See Claywell’s Comments on The Expert, Tab 35, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 56

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discounting them based upon the time value of money and the risks associated with ownership.57 The following table shows the calculation of Debt Free Cash Flow.58 Exhibit 10

The Expert states in his workpaper file that the 5 year DCF Model is on a Debt Free Cash Flow basis and he also states in his direct testimony that the 5 year DCF Model is a “discounted cash flow model.”59 In fact, the analysis used by The Expert is not cash flow but earnings. The following table summarized the procedures to determine cash flow as prescribed by Pratt’s 4th Edition,60 Pratt’s 5th Edition,61 Ibbotson (Morningstar).62 Morningstar is veryspecific in that the cash flows are after non-cash accounting entries, capital expenditures.63

57 Ibid. 58 See Claywell’s Comment on The Expert Tab 36 59 See Claywell’s Comment on The Expert Tab 37 60 See Claywell’s Comment on The Expert Tab 38, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2002, 4th Edition, page 158 61 See Claywell’s Comment on The Expert Tab 39, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 180 - 181 62 See Claywell’s Comment on The Expert Tab 40, Ibbotson SBBI 2008 Yearbook, © 2008, page 12 - 13 63 See Claywell’s Comment on The Expert Tab 41, Morningstar Email dated July 23, 2012

Analysis Pr epar ed by HSSK-Wor kpaper # 32007 2008 2009 2010 2011 2012

Growth Rate 28.8% 16.5% 7.2% 6.0% 6.0% 6.0%(Growth Rate in Revenues-Formula is (cur r ent year -pr ior year )/pr ior year

16.5% 5.9% 6.0% 6.0% 6.0%

Sales 420,013 546,017 586,968 630,990 678,315 729,188Services 459,812 478,894 498,768 519,467 541,025 563,478

----------- -------------- -------------- -------------- -------------- --------------Revenues 879,825 1,024,911 1,085,736 1,150,458 1,219,340 1,292,666

Revenues Calculated by Sum Formula 879,825 1,024,911 1,085,736 1,150,457 1,219,340 1,292,666

EBIT 74,081 85,034 90,081 95,451 101,166 107,249

Taxes 7,512 9,155 9,912 13,568 15,175 16,087----------- -------------- -------------- -------------- -------------- --------------


====== ======== ======== ======== ======== ========

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Exhibit 11 2.5.1 Working Capital A company’s working capital requirements can be estimated based on analysis of its past operations, industry data, guideline company data, and discussions with management. It is common to find companies with either excessive or inadequate working capital. Excesses or inadequacies in the valuation data can be treated in the valuation much as other capital requirements can be treated. If growth is anticipated, growth in working capital generally must also be anticipated. The analysis of changes in net working capital is a specific component in the discounted or capitalized net cash flow method. When using a market approach to valuation, working capital requirements that differ significantly from guideline companies may be reflected in valuation multiples.64 Comment – Working Capital The Expert has no supporting evidence in his workpaper file that he did any type of analysis in attempting to reconcile any changes in the growth rates of the public companies he used and the subject company. In fact, The Expert states in his direct testimony that he did no analysis of the working capital requirements.65 Opinion – Working Capital The Expert has a fundamental flaw in the Debt Free Cash Flow. The Expert has calculated a Debt Free Earnings After Taxes. This is not equivalent to a Debt Free Cash Flow. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his total lack of analysis in determining the future needs of the working capital. This analysis and supporting evidence is always obtained when performing a business valuation. The Expert does not have sufficient relevant facts or data to support any position on what would or would not be a reasonable working capital needs for the company. The Expert has not applied acceptable business valuation principles and methods on a reliable basis to determine the working capital requirements.

64 See Claywell’s Comment on The Expert Tab 42, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 89 65 See The Expert Testimony, page 230, lines 1 – 18 Tab 43

Cash Flow to Equity Net Cash Flow to Overall Invested Capital Dividends (or other payouts to security holders, such as partnership withdrawals Net Cash Flow to Equity Net Cash Flow to Overall Invested Capital

Net Income After Taxes Net Income (after taxes) available to common shareholders + Noncash charges (e.g. depreciation, amortization, deferred taxes) + Noncash charges (e.g. depreciation, amortization, deferred taxes) - Capital Expenditures - Capital Expenditures - Changes in Net Working Capital - Changes in Net Working Capital

+ Interest Expense, net of the tax effect (interest expense X (1-tax rate)) + Preferred Dividends, if any

+ Net changes in Long-Term Debt = Net Cash Flow to Equity = Net Cash Flow to Overall Invested Capital

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The lack of analysis and data makes any comparison of any analysis of a company useless. The lack of the working capital requirements renders any conclusion irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross exclusion or lack of working capital analysis demonstrates a lack of Professional Competence, Lack of Due Professional Care, lack of Planning and a lack of Sufficient Relevant Data. 2.5.2 Capital Expenditures and Depreciation Capital expenditures include replacements of worn-out or obsolete existing plant and equipment plus any additions to plant and equipment necessary to produce any revenues contemplated in the valuation. The latter category would include items needed to remain competitive and maintain the company’s position, plus anything needed to support whatever level of growth is contemplated in the valuation methodology and parameters used. As capital expenditures made for increasing capacity tend to be lumpy, it is important to understand the current capacity and increments to capacity that will be added from future additions to plant and equipment.66 Capital expenditures are a specific component in the discounted or capitalized net cash flow methods. When using a market comparison approach to valuation, capital expenditure requirements may influence valuation multiples chosen if the subject company’s capital expenditure requirements are significantly different relative to guideline companies. Alternatively, abnormal capital expenditure conditions may be treated as a direct decrement or increment to value determined through income or market valuation methods. There is little written in valuation literature about the relationship between capital expenditures and depreciation. It is a common error for valuators to calculate terminal value using a model with depreciation equal to capital expenditures. However, this assumption is only appropriate in a zero-growth scenario.67 The Expert has assumed a growth rate of approximately 4%. Comment – Capital Expenditures and Depreciation The Expert did not use capital expenditures to arrive at a Debt Free Cash Flow. In fact, The Expert netted the Capital Expenditures and Depreciation.68 The Expert has no supporting evidence in his workpaper files to indicate that any analysis of any type was considered for the capital expenditures or depreciation expense.

66 See Claywell’s Comment on The Expert Tab 44, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 88 - 89 67 See Claywell’s Comment on The Expert Tab 47, Matthews, Gil “CapX-depreciation is unrealistic assumption for most terminal values; Frequent errors causes overvaluation, Business Valuation Update, March 2002 68 See The Expert Testimony, page 145, line 6 Tab 48

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Opinion – Capital Expenditures and Depreciation The Expert has a fundamental flaw in the Capital Expenditure and Depreciation analysis. The Expert has netted the capital expenditures with the depreciation expense when The Expert has used a 4% growth rate for the company. The capital expenditures should exceed the depreciation expense in the terminal year when doing a business valuation. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his total lack of analysis in determining the capital expenditures and depreciation expense. This analysis and supporting evidence is always obtained when performing a business valuation. The Expert does not have sufficient relevant facts or data to support any position on what would or would not be a reasonable estimate for capital expenditures or depreciation expense. The Expert has not applied acceptable business valuation principles and methods on a reliable basis to determine the capital expenditures or depreciation expense. The lack of analysis and data makes any comparison of a company useless. The lack of the capital expenditures and depreciation expense renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross exclusion or lack of capital expenditures and depreciation expense demonstrates a lack of Professional Competence, Lack of Due Professional Care, lack of Planning and a lack of Sufficient Relevant Data. 2.5 3 Taxes There is consensus among appraisers that there is little or no difference in controlling interest market values between S corporations and C corporations under most circumstances, and that any difference depends on finding a buyer that can take advantage of certain potential tax savings. There is also consensus that there may be differences in value at the shareholder level for noncontrolling interests. This recognition set off a flurry of attempts to design models to quantify values of S corporation interest at the noncontrolling interest level. The result was the emergence of models by four leading business appraisers for valuing noncontrolling interests in S corporations. The specific models promulgated by Roger Grabowski, Chris Mercer, Chris Treharne, and Dan Van Vleet, are far too lengthy to be presented here. For the first time ever the Business Valuation Review dedicated an entire issue to a single topic: the September 2004 issue of that publication presented articles containing the models of all four practitioners. Also, a lengthy chapter in the book Business Valuation and Taxes presented all four of the models. It is important to recognize that both C corps and S corps pay taxes on corporate income. Whether that tax is actually paid by the corporation or the individual is absolutely irrelevant. What is relevant is the difference between the value of a company valued as a C corporation, valued using publicly traded C corporation data (because it is by reference to publicly traded C corporations that we value the S corporation), and an S corporation. It is for this reason that most S corporation models begin by valuing the company “as if ” a C corporation, using the rates of return derived from publicly traded C corporations, and then go on to recognize the benefits of the Subchapter S election. From the investor’s perspective, there are two primary benefits: (1) the avoidance of dividend tax on the receipt of distributions, and (2) the ability to build up their basis in their stock.

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Many analysts have confused the S corporation tax issue by focusing on the deductibility of corporate taxes. However, this is not the tax that an investor avoids, and is not the tax that is forgone when a corporation elects subchapter S. Ibbotson rates of return inherently include an investor’s expectation that when he or she receives his or her dividend from the publicly traded stock, the investor will have to pay a dividend tax on it. In the case of an S corporation, this tax is avoided; and since most S corporation models value the S corporations using Ibbotson rates of return, the benefit of the avoided dividend tax must be taken into consideration. (emphasis added) However, rates of return on the public markets are determined not only by an investor’s expectation of dividends, but also by their expectation of capital. To the extent funds are not distributed, they are retained and contribute to the investor’s basis in their stock. The analyst should consider whether it is appropriate to accumulate this benefit, and at what period it is appropriate to recognize it (e.g., an assumed exit 5, 10, or some other number of years hence).69 The Expert has applied federal income taxes to an entity that does not pay taxes. The expert has not justified why he would apply taxes to a non-taxable entity. There are a number of Court cases that have determined that there is a difference in valuing a C Corporation and a Pass-Through entity. Some of these cases are Walter L. Gross., et al. v. Commissioner, T.C. Memo 1999-254, No. 4460-97 (July 29, 1999), aff’d. 272 F.3d 333 (6th Cir. 2001), Estate of John E. Wall v. Commissioner, T.C. Memo. 2001-75),70 Estate of William G. Adams, Jr. v. Commissioner, T.C. Memo. 2002-80,71 Estate of Heck Heck v. Commissioner, T.C. Memo. 2002-34, 83 T.C.M. (CCH) 118172 and Delaware Open MRI Radiology Associates Delaware Open MRI Radiology Associates, P.A. v. Kessler, et al73. There is also an article by Nancy Fannon that explains the differences between a C Corporation and a Pass-Through entity.74 Comment The Expert has calculated the taxes as if the company were a C Corporation. The Expert has not valued the pass-through entity based on current valuation theory. The Expert has no supporting evidence in his workpaper file to support any tax calculations.

69 See Claywell’s Comment on The Expert Tab 55, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 618 - 619 70 See Claywell’s Comments Tab 50 71 See Claywell’s Comments Tab 51 72 See Claywell’s Comments Tab 52 73 See Claywell’s Comments Tab 53 74 See Claywell’s Comments Tab 54

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Opinion The Expert has a fundamental flaw in the Tax analysis. The taxes should be adjusted to recognize the tax benefits of being a pass-through entity. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his total lack of analysis in determining the taxes for a pass-through entity. This analysis and supporting evidence is always obtained when performing a business valuation. The Expert does not have sufficient relevant facts or data to support any position on what would or would not be a reasonable estimate for taxes related to a pass-through entity. The Expert has not applied acceptable business valuation principles and methods on a reliable basis to determine the taxes for a pass-through entity. The lack of analysis and data makes any comparison of any analysis of a company useless. The lack of the appropriate methodology of tax treatment for pass-through entities renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross exclusion or lack of any analysis or evidence demonstrates a lack of Professional Competence, Lack of Due Professional Care, lack of Planning and a lack of Sufficient Relevant Data. 2.6 Terminal Value The terminal value is the value at the end of the discrete projection period in a discounted future earnings model.75 Comment The Expert did not use Cash Flows to Invested Capital. The Expert used Earnings Before Interest as a proxy for Cash Flows. There is a fundamental flaw in the terminal value analysis prepared by The Expert. I am not an attorney and am not rendering any legal opinions with any of my comments. I do however attempt to keep abreast of what the Courts rule in relation to business valuation cases. In a 2006, a case called Nellson Nutraceuital, Inc the Court made the following comment:

“In determining the enterprise value of Chapter 11 debtors’ business under a discounted cash flow (DCF) analysis, the debtors’ valuation expert used the debtors’ projected earnings before interest, tax, depreciation, and amortization (EBITDA) minus capital expenditures as the metric of value for determining the debtors’ terminal value. The opposing experts testified that “while EBITDA minus Cap Ex [capital expenditures] is used as a ‘credit statistic’ to measure, among other things, whether a company can adequately service its debt, it has never been used by any expert before any court in the United States to determine a company’s terminal value under a DCF analysis.” Given the expert’s inability to identify any

75 See Claywell’s Comment on The Expert Tab 45, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 1074

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publications, treatises, or articles that validated his methodology, the Delaware Bankruptcy Court found that “the unprecedented use by the Debtors’ expert of EBITDA minus Cap Ex to determine the Debtors’ terminal value was so unreliable as to render the opinion of the Debtors’ expert witness as to the Debtors’ enterprise value inadmissible.” (In re Nellson Nutraceutical, Inc., 2006 WL 3479293).76

Opinion The Expert has used Earnings Before Interest as a proxy for Free Cash Flow. This is not a recognized valuation practice and is not equivalent to a Debt Free Cash Flow. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his total lack of analysis in determining the Debt Free Cash Flow. This analysis and supporting evidence is always obtained when performing a business valuation. The Expert does not have sufficient relevant facts or data to support any position on what would or would not be a Debt Free Cash Flow for the company. The Expert has not applied acceptable business valuation principles and methods on a reliable basis to determine the Debt Free Cash Flow. The lack of analysis and data makes any conclusions of terminal value useless. The lack of the working capital requirements and capital expenditures renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross exclusion or lack of working capital and capital expenditures demonstrates a lack of Professional Competence, Lack of Due Professional Care, lack of Planning and a lack of Sufficient Relevant Data. 2.7 Discount Rate The basic formula for developing a discount rate is Cash Flows / (1 + discount rate) ^ period used. The Expert has calculated a 20.1% discount rate to be used for discounting his future cash flows (actually earnings). 2.7.1 Using Earnings versus Cash Flow Discount Rate Common Error - Applying a Discount Rate to an Income Variable Defined Differently from That to Which the Discount Rate Is Applicable. This general error in itself has many variations. As discussed earlier, most of the methods and sources for developing discount rates used in the practical application of contemporary financial theory and discussed in this book produce a discount rate that is applicable to net cash flow, as defined in an earlier section.77 The SBBI Valuation Edition 2005 Yearbook makes the following point: “It is implicit that the market return data represents returns after corporate taxes but before personal taxes.”78 76 Daubert Challenges to Financial Experts Tab 46 77 See Claywell’s Comment on The Expert Tab 56, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 229 78 See Claywell’s Comment on The Expert Tab 57, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 225 - 227

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Comment The Expert has calculated the discount rate incorrectly. First, the discount rate should be based on cash flows since he is using the Ibbotson data to arrive at the discount rate. The Expert has not made a conversion from a cash flow discount rate to an earnings discount rate. In actuality, The Expert states in his workpapers that the discount is Earnings Before Interest, not cash flows. Opinion The Expert has used Earnings as a base for the Discount Rate but should have used a Cash Flow base for the discount rate. The Expert does not have any evidence in his workpaper file that he performed any reconciliation on the differences between using Earnings versus Cash Flows in developing a discount rate. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his total lack of analysis in determining the differences between Earnings versus Cash Flow base for determining a discount rate. This analysis and supporting evidence is always obtained when performing a business valuation if an earnings base is used to develop a discount rate. The Expert does not have sufficient relevant facts or data to support any position on what would or would not be a true Cash Flow discount rate for the company. The Expert has not applied acceptable business valuation principles and methods on a reliable basis to determine the Cash Flow discount rate. The lack of analysis and data makes any conclusions of present value factors, present value of “cash flows”, future value of cash flows and the present value of the company useless. The lack of the appropriate discount rate analysis renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted valuation methodology. This gross exclusion or lack of reconciliation of the two approaches demonstrates a lack of Professional Competence, Lack of Due Professional Care, lack of Planning and a lack of Sufficient Relevant Data. 2.7.2 Fundamental Error in Discount Rate The basic formula for developing a discount rate is (1 + discount rate) ^ period used. The present value factor derived from the formula can be translated as (1 + .201)^1.5. The present value factor for 2008 is .9125. The present value factor multiplied by the 2008 cash flows of 75,879 results in a Present Value Earnings Before Interest for 2008 of $69,239. This is an indication that the discount rate of 20.1% used by The Expert is incorrect.

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Exhibit 12

Comment The Expert has an incorrect discount rate of 20.1% that he has used to determine the Present Value of the company that is being carried forward to all future years’ present value calculations. Opinion The Expert has made an error in determining the discount rate used to determine the present value of the company. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his total lack of analysis and or reviewing the calculations in his analysis. The math error makes any conclusions of present value factors, present value of “cash flows”, future value of cash flows and the present value of the company useless. The lack of the appropriate discount rate analysis renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross error and lack of appropriate review of his work demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 2.7.3 Weighted Average Cost of Capital If the company is to be valued as it is (under the strict fair market value standard, assuming that the capital structure will remain intact), then the amount of debt in the company’s actual capital structure should be used.

Analysis Pr epar ed by TVF-Wor kpaper # 32007 2008 2009 2010 2011 2012

Growth Rate as Calculated by Mr. DeBenedictis 28.8% 16.5% 7.2% 6.0% 6.0% 6.0%(Growth Rate in Revenues-Formula is (cur r ent year -pr ior year )/pr ior year

16.5% 7.2% 6.0% 6.0% 6.0%

Sales 420,013 489,315 524,546 556,019 589,380 624,742Services 459,812 535,681 574,250 608,705 645,227 683,941



Math Error 85 13,060 14,266 15,267 16,017Cummulative Math Error 13,145 27,325 29,533 31,284

EBIT 74,081 85,034 90,081 95,451 101,166 107,249

Taxes 7,512 9,155 9,912 13,568 15,175 16,087----------- ---------------- ---------------- ---------------- ---------------- ----------------


====== ========= ========= ========= ========= =========

Discount Rate 20.1% 20.1% 20.1% 20.1% 20.1%Periods 6.0 18.0 30.0 42.0 54.0Present Value Factor 0.9125 0.7598 0.6326 0.5267 0.4386Cash Flows times Present Value Factor EqualsNet Present Value of Cash Flows (rounded) 69,239 60,910 51,801 45,295 39,983

========= ========= ========= ========= =========Net Present Value Per DeBenedictis 68,681 59,450 49,747 42,801 37,175

========= ========= ========= ========= =========

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The analyst should keep in mind that the weightings in the capital structure are at market value. Therefore, if there is a fixed amount of debt and the WACC is used to estimate the market value of equity, computations may need to be iterated with different assumed capital structures until the estimated market value of equity results in the assumed market value capital structure weights.79 Comment The Expert has a fundamental flaw in his computation of the Weighted Average Cost of Capital. The Expert should have started with the company’s debt and iterated the Weighted Average Cost of Capital until he achieved the market debt of zero, assuming that the company would not have any debt. The Expert stated that he did not iterate the Weighted Average Cost of Capital calculation.80 In fact, The Expert stated that he has never performed an iteration on a Weighted Average Cost of Capital analysis.81 This would indicate that every valuation that The Expert and his firm worked on had an initial debt and wanted to convert it to market values using a Weighted Average Cost of Capital, did not use the proper theory and application of the model. Because there is no market for the (closely held company) securities, we have to estimate the market values in order to compute the capital structure weightings. The weighting for each component of the capital structure becomes an iterative process for companies intending or assumed to operate with certain levels of debt.82 To “iterate” means to repeat. An “iterative process” is a repetitious one. We estimate market value weights because the actual market values are unknown. We may reestimate weights several times until the computed market value weights come close to the weights estimating WACC.83 If a company or an interest in a company is to be valued as it is, assuming the capital structure will remain intact, then the amount of debt in the company’s actual capital structure should be used.84 If a controlling interest is to be valued and the standard is fair market value or fair value, an argument can be made that an industry-average capital structure should be used, because a control buyer would have the power to change the capital structure and the industry average would represent the most likely result. However, it would be important to understand how the industry-average cost of capital structure is derived and whether it is reasonable to expect the subject company to achieve it, given the current conditions of the company itself and the financial market. If the industry-average capital structure is composed of public companies and the subject is closely held, the subject may not be able to achieve the public

79 See Claywell’s Comment on The Expert Tab 58, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 218 80 See The Expert Testimony, page 205, line 18 - 20 Tab 59 81 See The Expert Testimony, page 207, line 13 - 15 Tab 59 82 See Claywell’s Comment on The Expert Tab 90, Pratt, Shannon P., Grabowski, Roger J. “Cost of Capital:” Applications and Examples”, John Wiley & Sons, Inc. 3rd Edition © 2008, page 272 - 273 83 See Claywell’s Comment on The Expert Tab 90, Pratt, Shannon P., Grabowski, Roger J. “Cost of Capital:” Applications and Examples”, John Wiley & Sons, Inc. 3rd Edition © 2008, page 273 84 See Claywell’s Comment on The Expert Tab 90, Pratt, Shannon P., Grabowski, Roger J. “Cost of Capital:” Applications and Examples”, John Wiley & Sons, Inc. 3rd Edition © 2008, page 274

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company average because public companies often have greater access to lower-cost senior capital than do closely held companies.85 Similarly, when the value of the company decreases (e.g. expected cash flows have decreased), the company decreases its borrowings to maintain the same target capital structure (again at market value weights). Moreover, the public companies may have a higher debt/equity ratio than intended if their stock price is depressed.86 Most analysts estimate a single WACC and apply it to each increment of the cash flow forecast. However, that procedure implies an underlying assumption that may or may not be true. The implied assumption is that a company has a constant capital structure at market values over its lifetime. That is, when the value of the company increases (e.g. expected cash flows have increased), the company increases its borrowing to maintain the same proportion of debt capital to equity capital (at market value weights) as that implied by the “target” capital structure.87 To the extent that a company’s capital structure at market value weights vary over time, using a constant capital structure and constant WACC to discount each increment of the projected cash flows to invested capital will result in an incorrect value of the company. To the extent that the proportions of debt go down over time, using a constant WACC with the capital structures in the beginning period usually will overvalue the company and vice versa because the cost of debt is usually lower than the cost of equity, so a large assumed portion of debt will lower the WACC, this inflating the estimated value of the company.88 The Expert does not have any evidence in his workpaper files to demonstrate how he determined the interest bearing debt of $236,745. The Expert did not inquire about the terms of the total interest bearing debt but used the classifications from the Form 1065 US Partnership Tax Return for his information. The Expert did not do sufficient independent verification of the total debt. Each year’s change in debt would require an iteration for the WACC.

85 See Claywell’s Comment on The Expert Tab 90, Pratt, Shannon P., Grabowski, Roger J. “Cost of Capital:” Applications and Examples”, John Wiley & Sons, Inc. 3rd Edition © 2008, page 276 86 See Claywell’s Comment on The Expert Tab 90, Pratt, Shannon P., Grabowski, Roger J. “Cost of Capital:” Applications and Examples”, John Wiley & Sons, Inc. 3rd Edition © 2008, page 277 87 See Claywell’s Comment on The Expert Tab 90, Pratt, Shannon P., Grabowski, Roger J. “Cost of Capital:” Applications and Examples”, John Wiley & Sons, Inc. 3rd Edition © 2008, page 277 88 See Claywell’s Comment on The Expert Tab 90, Pratt, Shannon P., Grabowski, Roger J. “Cost of Capital:” Applications and Examples”, John Wiley & Sons, Inc. 3rd Edition © 2008, page 277

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Opinion The Expert has made an error in determining the discount rate used to determine the Weighted Average Cost of Capital. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his total lack of not iterating the Weighted Average Cost of Capital. The conceptual error makes any conclusions that are dependent on the Weighted Average Cost of Capital useless. The lack of the iterative process renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross error and lack of appropriate review of his work demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 2.7.4 Guideline Company Analysis – Percentage of Debt in Capital Structure The Expert has used public company data in an attempt to determine a Percentage of Debt in Capital Structure of zero. The Expert has not performed any statistical analysis to determine the reliability of the usage of the data. The Debt/Total Value has a skewness problem in four out of six years and a kurtosis problem in four out of six years. The data should be cleansed until the skewness and kurtosis problems are resolved. The 5 Year Beta (as of) a kurtosis problem in four out of six years. The data should be cleansed until the skewness and kurtosis problems are resolved. After utilizing data that is unreliable, The Expert proceeded to average the median ratios. You cannot take the average of an average (or median) and hope it will match the average.89 This is a common enough mistake for people working with databases and doing number crunching. It is only true if all of the averages are computed over sets having the same cardinality, otherwise it is false.90 This phenomenon has a name: the fact that averages of averages is not the average is an instance of Simpson’s Paradox (emphasis added). Exhibit 13

89 See Claywell’s Comment on The Expert Tab 67 90 See Claywell’s Comment on The Expert Tab 68

Income From Debt/Total Value 5 Year Beta (as of)Debt/Total Value Implied Interest RateStock Symbol Primary SIC Operations Average 12/31/2007 12/31/2006 12/31/2005 12/31/2004 12/31/2003 12/31/2002 Average 12/31/2007 12/31/2006 12/31/2005 12/31/2004 12/31/2003 Average 12/31/2007 12/31/2006 12/31/2005 12/31/2004 12/31/2003 12/31/2002TSRI 7371 1,392,793 0% 0% 0% 0% 0% 0% 0% 0.9 1.6 0.9 0.7 0.8 0.7CBR 7370 29,026,000 27% 36% 32% 35% 27% 24% 6% 1.5 1.8 1.4 1.4 1.4 1.3 5.2% 8.0% 4.0% 4.0% 3.0% 7.0%CTGX 7370 4,246,000 6% 0% 0% 22% 4% 0% 10% 1.6 1.7 1.5 2.0 1.6 1.3 11.0% 8.0% 10.0% 15.0%CSPI 7373 4,049,000 0% 0% 0% 0% 0% 0% 0% 0.8 1.3 1.0 0.8 0.4 0.5EDGW 7370 8,810,000 0% 1% 1% 0% 0% 0% 0% 0.6 1.2 0.6 0.8 0.4 0.2 9.7% 6.0% 7.0% 16.0%

90th Percentile 19% 22% 20% 30% 18% 14% 8% 1.6 1.8 1.5 1.8 1.5 1.3 8.4% 7.8% 7.6% 9.4% 3.0% 7.0% 15.8%75th Percentile 6% 1% 1% 22% 4% 0% 6% 1.4 1.7 1.4 1.4 1.4 1.3 8.1% 7.5% 7.0% 8.5% 3.0% 7.0% 15.5%

Median 0% 0% 0% 0% 0% 0% 0% 1.0 1.6 1.0 0.8 0.8 0.7 7.5% 7.0% 6.0% 7.0% 3.0% 7.0% 15.0%Average 7% 7% 7% 11% 6% 5% 3% 1.1 1.5 1.1 1.1 0.9 0.8 7.1% 7.0% 6.0% 7.0% 3.0% 7.0% 12.7%

25th Percentile 0% 0% 0% 0% 0% 0% 0% 0.8 1.3 0.9 0.8 0.4 0.5 6.3% 6.5% 5.0% 5.5% 3.0% 7.0% 11.0%10th Percentile 0% 0% 0% 0% 0% 0% 0% 0.7 1.2 0.7 0.7 0.4 0.3 5.6% 6.2% 4.4% 4.6% 3.0% 7.0% 8.6%

Correlation of Debt/Total Value and Implied Interest RateNoneStandard Deviation 0.16 0.14 0.16 0.12 0.11 0.05 0.26 0.37 0.55 0.56 0.49 0.01 0.03 0.04 #DIV/0! #DIV/0! 0.05Skewness 2.23 2.23 0.96 2.12 2.24 1.02 (0.36) (0.08) 1.19 0.34 0.02 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! (1.65)Kurtosis 4.99 4.98 (1.34) 4.54 5.00 (1.01) (2.41) (1.62) 0.11 (2.69) (2.30) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

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Comment The Expert has not relied on techniques available to him to test the reliability of the selected data used in his analysis. As a result, The Expert has made incorrect conclusions based on faulty data. The Expert has also averaged medians when the averaging of this type of data shatters the basis rules of mathematics. Opinion The Expert has made an error in determining the Percentage of Debt in the Capital Structure that is used in developing the Weighted Average Cost of Capital. The Expert has not relied on recognized principles and methods of mathematical techniques available to test and determine the reliability of data and has averaged medians, which is a shattering of basis mathematic principles. The conceptual error makes any conclusions that are dependent on the averages of the medians useless. The lack of testing the reliability of the data and averaging medians renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross error and lack of appropriate review of his work demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 2.8 Discount for Lack of Marketability The minority shareholder discount is designed to reflect the decreased value of shares that do not convey control of a closely held corporation. The lack of marketability discount, on the other hand, is designed to reflect the fact that there is no ready market for shares in a closely held corporation. Although there may be some overlap between these two discounts in that lack of control may reduce marketability, it should be borne in mind that even controlling shares in a nonpublic corporation suffer from lack of marketability because of the absence of a ready private placement market and the fact that flotation costs would have to be incurred if the corporation were to publicly offer its stock.91

91 See Claywell’s Comment on The Expert Tab 60, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 67 - 68

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Elements of Control Control shares are normally more valuable than minority shares because they contain a bundle of rights that minority shares do not enjoy. The following is a partial list of some of the rights that go with control shares that minority shares do not have: 92 1. Appoint or change operational management. 2. Appoint or change members of the board of directors. 3. Determine management compensation and perquisites. 4. Set operational and strategic policy and change the course of the business. 5. Acquire, lease, or liquidate business assets, including plant, property, and equipment. 6. Select suppliers, vendors, and subcontractors with whom to do business and award contracts. 7. Negotiate and consummate mergers and acquisitions. 8. Liquidate, dissolve, sell out, or recapitalize the company. 9. Sell or acquire Treasury shares. 10. Register the company’s equity securities for an initial or secondary public offering. 11. Register the company’s debt securities for an initial or secondary public offering. 12. Declare and pay cash and/or stock dividends 13. Change the articles of incorporation or bylaws 14. Set one’s own compensation (and perquisites) and the compensation (and perquisites) of related-party employees 15. Select joint venturers and enter into joint venture and partnership agreements 16. Decide what products and/or services to offer and how to price those products/ services. 17. Decide what markets and locations to serve, to enter into, and to discontinue serving. 18. Decide which customer categories to market to and which not to market to. 19. Enter into inbound and outbound license or sharing agreements regarding intellectual properties. 20. Block any or all of the above actions. A minority does not have any of these rights. The studies used by The Expert are studies of Minority interest shareholders, not controlling interest shareholders.93 In fact, there are no empirical studies that support a marketability discount for a controlling interest in a closely held company. The Expert has used a study that is irrelevant to any facts in this case. Dr. Shannon Pratt states:

“Examiners who conduct peer reviews of reports submitted for accreditation for both the American Society of Appraisers and the Institute of Business Appraisers say that a common failure is trying to support discounts for lack of marketability for controlling interests with empirical data from observed minority interest transactions.”

92 See Claywell’s Comment on The Expert Tab 61, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 385 93 See The Expert Workpapers, page 16 - 21 Tab 62

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“Extensive empirical studies are available, as detailed in this book, to help quantify discounts for lack of marketability for minority interests. However, starting with such data and somehow moving from there to a controlling interest discount for lack of marketability is an unacceptable leap of faith, not grounded in a logical connection. The rationale for discounts for lack of marketability for controlling interests is different from the reasons for discounts for lack of marketability for minority interests.”94

Comment The Expert has used the marketability studies for Minority interest shareholders to determine a Control interest marketability discount. A minority interest shareholder study does not take into consideration of the control characteristics of a controlling shareholder. In fact, the opposite is the case, the Minority interest marketability discount studies take into consideration the lack of control elements. Opinion The Expert has made a fundamental error in using minority interest marketability discount studies for a controlling interest. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his lack of understanding the differences between a minority interest marketability study and the fact that there are differences in the elements of control for a controlling shareholder. The Expert has not relied on sufficient facts related to the Lack of Marketability Discount. The conceptual error makes any conclusions that are dependent on the Marketability Discount useless. The reliance on minority interest studies when there are no empirical control studies render any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This gross error and lack of appropriate application of discounts demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 3. Comparable Company Market Approach 3.1 Comparability Factors The comparability of guideline publicly traded companies used in a valuation frequently has become a central issue in litigated valuations, partly because of the difficulty of choosing truly comparable companies. In Tallichet v. Commissioner, the Tax Court emphasized that there are “guideposts in determining comparability.”

94 See Claywell’s Comment on The Expert Tab 77, Pratt, Shannon P., “Business Valuation Discounts and Premiums”, John Wiley & Sons, © 2001, page 318

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According to the Court, the following factors are among those to consider in determining comparability:95 1. Capital structure 2. Credit status 3. Depth of management 4. Personnel experience 5. Nature of competition 6. Maturity of the business In Estate of Victor P. Clarke, the Tax Court reemphasized that it is “imperative that the characteristics of the subject company and the purportedly comparable company relevant to the question of value be isolated and examined so that a significant comparison can be made.” In that case, the Court cited the following as relevant factors: 1. Products 2. Markets 3. Management 4. Earnings 5. Dividend-paying capacity 6. Book value 7. Position of company in industry Although these lists seem comprehensive, depending on the nature of the industry, the analyst may need to consider additional factors, such as number and size of retail outlets, sales volume, product or service mix, territory of operations, and customer mix. Clearly, even this additional list is not exhaustive, and we cannot overemphasize the necessity of tailoring the list of factors to be considered to fit each valuation. Much of this information can be gathered in a thorough review of each public company’s Form 10-K, but it may also be necessary to consult additional sources such as industry and trade publications or to call the company for additional information. It is also useful to analyze the financial statements for both the subject company and the guideline companies to uncover similarities and differences to consider in the valuation. Bearing in mind the company being valued and the nature of the industry, we generally compare the performance of the subject company to the guideline companies by analyzing financial ratios that measure liquidity, leverage, activity, and profitability, as well as historical trends in revenues, expenses and profitability. Comment The Expert has no evidence or any supporting documents in his workpaper file to indicate that any of this analysis has been considered. There are no calculations in his worksheets that were provided indicating that any performance comparisons were made.

95 See Claywell’s Comment on The Expert Tab 69, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 271 - 272

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The Expert did not do any analysis to determine the comparability of the credit status with the public companies.96 The Expert did no research to determine the comparability of management with the public companies.97 The Expert did no research to determine the comparability of personnel expenses with the public companies.98 The Expert did not do any analysis to determine the comparability of the nature of competition with the public companies.99 The Expert did no research to determine the comparability of maturity of the business with the public companies.100 The Expert did not do any analysis to determine the comparability of the management with the public companies.101 The Expert did no research to determine the comparability of earnings with the public companies.102 The Expert did no research to determine the comparability of dividend paying capacity with the public companies.103 The Expert did not do any analysis to determine the comparability of the book value with the public companies.104 The summary below indicates the different items of comparability that were or were not considered by The Expert. Exhibit 14

96 See The Expert Testimony Tab 70 page 250, lines 15 - 20 97 See The Expert Testimony Tab 70 page 250, line 24 98 See The Expert Testimony Tab 70 page 251, line 4 - 5 99 See The Expert Testimony Tab 70 page 251, lines 6 - 13 100 See The Expert Testimony Tab 70 page 251, line 16 – page 254, line 5 101 See The Expert Testimony Tab 70 page 256, lines 22 - 24 102 See The Expert Testimony Tab 70 page 256, line 25 – page 257 line 2 103 See The Expert Testimony Tab 70 page 257, line 20- 22 104 See The Expert Testimony Tab 70 page 257, lines 23 - 25

Comparability Factors Per PrattFactors Yes No

Capital Structure XCredit Status XDepth of Management XPersonnel Expenses XNature of Competition XMaturity of the Company X

Products XMarkets XManagement XEarnings XDividend Paying Capacity XBook Value XPosition of Company in Industry X

--------------- ---------------Total Factors 5 10

======== ========Total Factors 15

Percentage Not Considered (rounded) 66.7%========

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Opinion The Expert has fundamental flaw in making a determination that the public companies selected for use as comparables has not been adequately performed. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his lack of not considering factors suggested by Dr. Shannon Pratt and is generally recognized as appropriate business valuation practices. The fundamental flaw makes any conclusions that are dependent on the Invested Capital/TTM EBITDA ratios useless. The lack of research and analysis in determining comparability does not automatically make the public companies comparable just because they are in the same industry. The Expert has ignored approximately 66.7% of the comparability factors indicated by Dr. Shannon Pratt, the Courts and relied on by other business valuation professionals. The analysis by The Expert lacks sufficient facts in order to make a determination that the public companies are comparable. The Expert has not relied on accepted principles and methods used by the business valuation community to determine the comparability of public companies and has not applied principles and methods that are reliable to the facts of this case. The reliance on the Invested Capital/TTM EBITDA for companies that have not been demonstrated to be comparable renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This fundamental flaw in not performing the analysis that is generally recognized in the business valuation community demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 3.2 Order of Magnitude As a company grows in size, it becomes more complex and becomes dissimilar to smaller companies. A good analogy is comparing the corner coffee shop to Starbucks. They are both in the same industry but are not similar because of the complexities of Starbucks. One technique for assisting in determining comparability of public companies to closely held companies is to look at the order of magnitude.105 One order of magnitude represents ten times.106 Dr. Shannon Pratt has recommended that one order of magnitude be used for determining comparability to public companies. This approach has been accepted and discussed at training classes and seminars since the early 1990’s.107 Mr. Gary Trugman has written that the “size restriction should be no more than ten to twenty-five times the sales volume of the appraisal subject.”108 105 See Claywell’s Comment on The Expert Tab 71, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 60 106http://whatis.techtarget.com/definition/0,,sid9_gci527311,00html, See Claywell’s Comments Tab 72 107 See Claywell Comments on The Expert Tab 73 Pratt, Shannon P, “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, Second Edition Dow Jones-Irwin, © 1981 and 1989, page 225 108 See Claywell’s Comments on The Expert Tab 74 Trugman, Gary R. “Understanding Business

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The table shows the public companies selected by The Expert. I have included an analysis of the order of magnitude for the public companies based on the Trailing Twelve Months Revenues. Exhibit 15 Comment When the calculations are made to address the issue of the order of magnitude, it can be seen that based on the actual sales of $42,366, TSR, Inc, is the closest in revenue size but is 1,214 times as large. The Expert stated that the company was a million dollar company.109 Based on having one million dollars in revenues, TSR, Inc. is the closest in revenue size but is 50 times as large. Based on the order of magnitude, the selection of these public companies would not meet the criteria of Dr. Shannon Pratt or Gary Trugman.110 The Expert ignored the advice of Mr. David Smith that “The ten-times magnitude” should be used.111 The ten times is a generally accepted business valuation practice. Opinion The Expert has fundamental flaw in making a determination that the public companies selected for use as comparables has not been adequately performed. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his lack of not eliminating public companies based on an order of magnitude, which is a generally accepted valuation practice. The Expert has ignored the advice of a coworker to use ten times revenues as a benchmark. The fundamental flaw makes any conclusions that are dependent on the Invested Capital /TTM EBITDA ratios useless. The lack of research and analysis in determining comparability does not automatically make the public companies comparable just because they are in the same industry regardless of revenue size. The analysis by The Expert lacks sufficient facts in order to make a determination that the public companies are comparable. The Expert has not relied on accepted principles and methods used by the business valuation community to determine the comparability of public companies and has not applied principles and methods that are reliable to the facts of this case.

Valuation”, American Institute of Certified Public Accountants, © 2002, page 171 – 172. 109 See The Expert Testimony Tab 70 page 262, lines 13 - 14 110 See Claywell’s Comments on The Expert Tab 75 111 See The Expert Testimony Tab 70 page 258, lines 14 – page 261 line 8

Invested Capital IQ Claywell Analysis - Actual Revenues and Assets Claywell Analysis - 1,000,000 Revenues and Actual AssetsIncome Most Market TTM TTM Capital/ Total DTSG Times Total DTSG Times DTSG Times Total DTSG Times

Stock Primary From Recent Price Revenues EBITDA TTM Enterprise Revenues Larger Assets Assets Larger Revenues Larger Assets Assets LargerSymbol SIC Operations Quarter 12.31.2007 ($000) ($000) EBITDA Value 42,366 (rounded) 198,095 (rounded) 1,000,000 (rounded) 198,095 (rounded)

TSR Inc. TSRI 7371 1,392,793 11/30/2007 8.18 51,454 2,037 9.2 18,740,400 42,366 1,214 85,721,000 198,095 432 1,000,000 50 85,721,000 198,095 432CIBER, Inc. CBR 7370 29,026,000 12/31/2007 6.11 1,081,975 71,392 8.2 585,414,400 42,366 25,538 18,058,995 198,095 90 1,000,000 1,081 18,058,995 198,095 90Computer Task Group Inc. CTGX 7370 4,246,000 12/31/2007 5.53 325,285 9,649 11.2 108,068,800 42,366 7,677 85,721,000 198,095 432 1,000,000 324 85,721,000 198,095 432CSP, Inc. CSPI 7373 4,049,000 12/31/2007 6.69 90,846 4,897 5.2 25,464,400 42,366 2,143 18,058,995 198,095 90 1,000,000 90 18,058,995 198,095 90

Edgewater Technology Inc. EDGW 7370 8,810,000 12/31/2007 7.3 68,490 6,763 13.5 91,300,500 42,366 1,616 849,113,000 198,095 4,285 1,000,000 67 849,113,000 198,095 4,285

High 25,538 High 4,285 High 1,081 High 4,285High 28.6 13.5 Low 1,214 Low 90 Low 50 Low 90Mean 14.2 9.5 Average 7,637 Average 1,066 Average 323 Average 1,066Median 10.2 9.20Low 5.2 5.2

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The reliance on the Invested Capital/TTM EBITDA for companies that have not been demonstrated to be comparable renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This fundamental flaw in not performing the analysis that is generally recognized in the business valuation community demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 3.3 Subject Company Risk Discount The public company multiples would represent the multiple for the group of public companies. Comment The public company multiples would be multiplied by the benefit stream of the closely held company to arrive at a value of a closely held company. It is apparent that The Expert is attempting to make a size adjustment for the public companies. However, there is no evidence or supporting documentation in the workpaper file to support any analysis or reasoning for a 45% reduction in the pricing multiple. The Expert has not used the recognized technique of adjusting for the size of public companies as discussed by James R. Hitchner. The size is adjusted by the following formula for earnings based multiple.112 1 / (1 / Price/Earnings + (Equity/Market Value if Invested Capital) + ((Equity Capitalization

Rate + Equity Capitalization Rate Larger than Comparable Rates)) The Expert has not use any recognized size adjustment techniques for the public companies. Any risk associated with the closely held company would have no impact on the public company’s multiples; the Subject Company Risk would only affect the closely held company. Opinion The Expert has fundamental flaw in making a determination of the size adjustment for the public companies. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his estimate of a Subject Company Risk Discount. The fundamental flaw makes any conclusions that are dependent on the “Subject Company Risk Discount” useless. The lack of research and analysis in determining a size adjustment indicates a lack of facts and sufficient data to rely on the analysis. The analysis by The Expert lacks sufficient facts in order to make a size adjustment. The Expert has not relied on accepted principles and methods used by the business valuation community to determine the size adjustment of public companies and has not applied principles and methods that are reliable to the facts of this case. 112 See Claywell’s Comments on The Expert Tab 76, Hitchner, James R. “Financial Valuation: Applications and Models”, John Wiley & Sons, Inc. © 2003, page 227 - 231

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The reliance on the 45% Subject Company Risk Discount companies that have not been demonstrated to be comparable renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This fundamental flaw in not performing the analysis that is generally recognized in the business valuation community demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 3.4 Control Premium The control premium comes into play when a guideline public company valuation method is used and the objective is to reach a control value result. The Control Premium Study usually is cited as empirical evidence to quantify this premium.113 Some have argued that the full premium paid in acquisitions is too high, on average, to represent the value of control because it often contains elements of synergistic value, which should not be part of either fair value or fair market value. Resources are now available that give the analysts the ability to adjust for these factors. Careful review of the control premium data (Pratt/Reilly/Schweihs would suggest “acquisition premium”) available to appraisers indicates they generally result from transactions motivated by strategic or synergistic considerations. Consequently, the available control premium data is more generally reflective of the combination of the financial control premium and the strategic control premium. 114 If there are no synergistic buyers in a particular market, it would likely not be appropriate to consider a control premium based on synergistic cash flows. If the likely buyers are synergistic, for example, in consolidating industries, it may be appropriate to consider potential synergistic benefits in the context of their overall analysis of a subject enterprise and the likely market for their enterprises.115 The question is, what accounts for control premiums?116

Premiums over marketable minority value may be paid in the process of acquiring control over enterprise cash flow.

An acquiring company’s desire to “get a deal done” can cause a price offered to increase a larger premium. If this occurs, there may be elements of compulsion involved in establishing the price.

Irrational buyers can pay any price that they can afford.

113 See Claywell’s Comments on The Expert Tab 78, Pratt, Shannon P. “Business Valuation Discounts and Premiums”, John Wiley & Sons, Inc. © 2001, page 71 114 See Claywell’s Comment on The Expert Tab 79, Mercer, Z. Christopher, “Valuing Enterprise and Shareholder Cash Flows”, Peabody Publishing © 2004, page 93 - 95 115 See Claywell’s Comment on The Expert Tab 79, Mercer, Z. Christopher, “Valuing Enterprise and Shareholder Cash Flows”, Peabody Publishing © 2004, page 164 116 See Claywell’s Comment on The Expert Tab 79, Mercer, Z. Christopher, “Valuing Enterprise and Shareholder Cash Flows”, Peabody Publishing © 2004, page 165

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The first element above relates to fair market value determinations; however, elements of compulsion and irrationality should not be considered in fair market value determinations according to the very definition of fair market value.

Comment According to Dr. Shannon Pratt, there has been a Control Premium Study available since the beginning of 2001 that allows an analyst to eliminate synergistic transactions. The Expert has no evidence or supporting analysis in his workpapers to support any such analysis to eliminate synergistic transactions. The Expert has no supporting evidence in his workpaper file to indicate that any analysis was performed on the Industry Premium Study. In fact, there are 63 transactions117 indicated on the Industry Premium Study used by The Expert but, there is no evidence of further analysis to determine if synergies exist. Opinion The Expert has fundamental flaw in making a determination of the Control Premium for the public companies. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his inadequate analysis and search for synergistic companies in the database of information he used. The fundamental flaw makes any conclusions that are dependent on the Control Premium useless. The lack of research and analysis in determining the Control Premium adjustment indicates a lack of facts and sufficient data to rely on the analysis. The analysis by The Expert lacks sufficient facts in order to make a Control Premium adjustment. The Expert has not relied on accepted principles and methods used by the business valuation community to determine the Control Premium adjustment for public companies and has not applied principles and methods that are reliable to the facts of this case. The reliance on the 37.5% Control Premium that has not been demonstrated to be representative of fair market value renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This fundamental flaw in not performing the analysis that is generally recognized in the business valuation community demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 3.5 Discount for Lack of Marketability The same errors made in Section 2.8 Discount for Lack of Marketability apply to Comparable Company Market Approach.

117 See Claywell’s Comments on The Expert Tab 80

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Comments My comments are the same as provided in Section 2.8 of my report. Opinion My opinions are the same as provided in Section 2.8 of my report. 4. M&A Transactions Capital IQ Summary The general notion of merger and acquisition analysis is the same as guideline public company analysis—one relates the price at which the transaction took place to financial fundamentals that affect the value. Also, it is common to consider transactions over a fairly long time. This might involve analyzing transactions in the subject company’s industry or similar industries over several years. This is partly because there are fewer transactions and also because acquisition pricing multiples generally fluctuate somewhat less over time than public stock market pricing multiples.118 Generally, the criteria for selection of merged and acquired guideline company transactions are similar to those for selecting publicly traded stock guideline companies. However, in situations where limited transaction data is available, the criteria may have to be broadened. 4.1 Comparability Factors The comparability of guideline publicly traded companies used in a valuation frequently has become a central issue in litigated valuations, partly because of the difficulty of choosing truly comparable companies. In Tallichet v. Commissioner, the Tax Court emphasized that there are “guideposts in determining comparability.” According to the Court, the following factors are among those to consider in determining comparability:119 1. Capital structure 2. Credit status 3. Depth of management 4. Personnel experience 5. Nature of competition 6. Maturity of the business In Estate of Victor P. Clarke, the Tax Court reemphasized that it is “imperative that the characteristics of the subject company and the purportedly comparable company relevant 118 See Claywell’s Comment on The Expert Tab 81, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 310 - 311 119 See Claywell’s Comment on The Expert Tab 69, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 271 - 272

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to the question of value be isolated and examined so that a significant comparison can be made.” In that case, the Court cited the following as relevant factors: 1. Products 2. Markets 3. Management 4. Earnings 5. Dividend-paying capacity 6. Book value 7. Position of company in industry Although these lists seem comprehensive, depending on the nature of the industry, the analyst may need to consider additional factors, such as number and size of retail outlets, sales volume, product or service mix, territory of operations, and customer mix. Clearly, even this additional list is not exhaustive, and we cannot overemphasize the necessity of tailoring the list of factors to be considered to fit each valuation. Much of this information can be gathered in a thorough review of each public company’s Form 10-K, but it may also be necessary to consult additional sources such as industry and trade publications or to call the company for additional information. It is also useful to analyze the financial statements for both the subject company and the guideline companies to uncover similarities and differences to consider in the valuation. Bearing in mind the company being valued and the nature of the industry, we generally compare the performance of the subject company to the guideline companies by analyzing financial ratios that measure liquidity, leverage, activity, and profitability, as well as historical trends in revenues, expenses and profitability. Comment The Expert has no evidence or any supporting documents in his workpaper file to indicate that any of this analysis has been considered. Opinion The Expert has a fundamental flaw in determining that the M&A Transactions selected for use as comparables has been adequately performed. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his lack of not considering factors suggested by Dr. Shannon Pratt and is generally recognized as appropriate business valuation practices. The fundamental flaw makes any conclusions that are dependent on the M&A Transactions ratios useless. The lack of research and analysis in determining comparability does not automatically make the M&A transactions comparable just because they are in the same industry. The analysis by The Expert lacks sufficient facts in order to make a determination that the M&A Transactions are comparable. The Expert has not relied on accepted principles and methods used by the business valuation community to determine the comparability of M&A

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Transactions and has not applied principles and methods that are reliable to the facts of this case. The reliance on the M&A Transactions for companies that have not been demonstrated to be comparable renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This fundamental flaw in not performing the analysis that is generally recognized in the business valuation community demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 4.2 Loss Years The Expert used Technisource, Inc.120, SARCOM, Inc.121, Inforte Corp122 and MAI Systems Corporation123 to determine a pricing multiple for the M&A Transactions. 4.2.1 Excluding Company’s with Current Year Net Operating Losses The management of all businesses desire and strive to make a profit. However, not all companies are successful at making a profit. Not paying attention to the details of running the company on a day-to-day basis can make the company go from being profitable to not being profitable almost overnight. The downturn will exist until management steps in and fixes it. But why does a company go from being profitable to having losses? There are a number of different issues that can make a company unprofitable and therefore not comparable to profitable companies. 4.2.2 Out Of Control Employee Spending It is not uncommon for the owners and even the employees to incur lavish and or unnecessary expenses. The company may be incurring losses because their employees (or even their founders) are spending corporate money excessively. This can take on any number of forms, including: 1) expensive restaurant meals, 2) new and unnecessary computer and other types of equipment, 3) paying personal expenses for owners and related parties, 4) taking “loans” from the company. The employees may rationalize these expenses as being “not a big deal” in light of the perceived overall good health of company. The longer they’ve been allowed to do this, the longer they’ll keep doing it. Its bad operating practice no matter what, but when times are tough, reckless spending can absolutely doom a business. 4.2.3 No Standard Cost System It is important to have a standard cost system. In other words: for every type of cost your business incurs (advertising, supplies, materials, etc.), should have a benchmark. Without the information, a manager cannot look at an expense and rationally assess it. Lacking any objective frame of reference, the manager can only make an emotional

120See Claywell’s Comments on The Expert Tab 82, Techniscope 121 See Claywell’s Comments on The Expert Tab 83, SARCOM Inc 122 See Claywell’s Comments on The Expert Tab 84, Inforte Corp 123 See Claywell’s Comments on The Expert Tab 85, MAI Systems Corporation

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decision about whether to pay it or not. The company should be able to identify its fixed and variable costs. A standard cost system permits managers to plan and control costs, prepare budgets and properly price their inventory. When and if the company loses money, the standard cost system will be an early warning system. 4.2.4 Inefficiency The unprofitable nature of the company may be caused by simple inefficiency. Is the company utilizing the most modern, up-to-date methods of production? Are the employees trained in the latest, most effective techniques? If not, this alone could be the major cause of the company’s unprofitability. Inefficiency can take several forms including: 1) employees using work time as productively as possible, and 2) tasks being completed in an efficient manner. 4.2.5 Poor Profit Margins Sometimes the answer to why your company is unprofitable is like finding your nose on your face. The problem may have nothing to do with employees or wasted costs associated with owners and related parties. The simple fact may be the fact that profit margins are too low to survive. The fundamental rule of profit-making is selling a good or service for more than production costs. Not every company allows this to happen. There may be times where illness or lack of interest by the owner can have a severe negative impact on the company. Interviews with management or reading financial statements may indicate what the company is paying for their materials. How are the competitors cost structure compared to the company being valued? Effective managers are considering these issues and are generating profits for their companies. For companies that are unprofitable, there is a significant difference in the mindset of management. When a company is operating at a loss, management will feel the stress and depending on the financial strength of the owner, may be forced into a distressed sale of the company. The distressed sale would not represent the Fair Market Value standard. As a result of these issues, unprofitable companies are not comparable to profitable companies and should not be considered in the analysis. Comment Each of these companies operated at a loss as of the date used by The Expert. It is customary in the business valuation community to exclude loss years from any analysis. These transactions should be eliminated from further consideration. Opinion The Expert has fundamental flaw in making determining that the M&A Transactions selected for use as comparables have been adequately performed.

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The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his lack of not considering and excluding companies with companies incurring losses and not considering multiple years of data. The fundamental flaw makes any conclusions that are dependent on the M&A Transactions ratios useless. The lack of research and analysis in determining profitability of the companies comparability does not automatically make the M&A transactions comparable just because they are in the same industry. The analysis by The Expert lacks sufficient facts in order to make a determination that the M&A Transactions are comparable. The Expert has not relied on accepted principles and methods used by the business valuation community to determine the comparability of M&A Transactions and has not applied principles and methods that are reliable to the facts of this case. The reliance on the M&A Transactions for companies that have not been demonstrated to be comparable renders any conclusions irrelevant and unreliable. The analysis also lacks completeness, which makes the analysis unsupported by any accepted methodology. This fundamental flaw in not performing the analysis that is generally recognized in the business valuation community demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 4.3 Subject Company Risk Discount The same errors made in Section 3.3 Subject Company Risk Discount apply to M&A Transactions. Comments My comments are the same as provided in Section 3.3 of my report. Opinion My opinions are the same as provided in Section 3.3 of my report. 4.4 Discount for Lack of Marketability The same errors made in Section 3.5 Discount for Lack of Marketability to the M&A Transactions. Comments My comments are the same as provided in Section 3.5 of my report. Opinion My opinions are the same as provided in Section 3.5 of my report.

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5. Private Company Transactions Practical application of the guideline transaction method for companies valued under $100 million has been enhanced significantly due to the development of databases covering “middle-market” and smaller company transactions. These databases are less expensive than those devoted to large company acquisitions. There are at least four databases devoted to middle-market and small company controlling ownership interest transactions:124 1. Pratt’s Stats 2. Done Deals 3. Bizcomps 4. IBA Market Database Comment The Expert has a fundamental flaw in that he did not consider the private transactions that are available for determining the value of a closely held company. This is a generally accepted business valuation practice. It is very common that comparable public companies cannot be found and the valuator has to use the private transactions to determine a value using the Market Approach. Opinion The Expert has fundamental flaw by not considering the private transaction method for valuing a company. This is a generally accepted business valuation practice. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his lack of not considering and possibly utilizing the private transactions that are available. The fundamental flaw leaves the stakeholder wondering if there is a more reliable value that could have been reached by using the private transactions. The inadequate research and analysis in searching for private transactions does not automatically make the public company and M&A Transactions comparable just because they are in the same industry. The inadequate analysis by The Expert lacks sufficient facts in order to make a determination that the Market Methods used are reliable. The Expert has not relied on accepted principles and methods used by the business valuation community to determine if private transactions are appropriate and has not applied principles and methods that are reliable to the facts of this case. The inadequate research for private transactions lacks completeness, which makes the Market Methods conclusions unsupported by any accepted methodology. This fundamental flaw in not performing the analysis that is generally recognized in the business valuation 124 See Claywell’s Comment on The Expert Tab 86, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 317 -318

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community demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees. 6. Economic Analysis It is difficult to overemphasize the importance of thorough and relevant economic and industry research for a well-prepared business valuation. First, Revenue Ruling 59-60 requires consideration of “the economic outlook in general and the condition and outlook of the specific industry in particular.” Second, an understanding of the economic and industry outlook is fundamental to developing reasonable expectations about the subject company’s prospects.125 Comment The Expert does not have any evidence in his workpaper file that he did any research on the national, regional or local economy. It is inconceivable to me that The Expert could work with management in developing any idea as to future operations of the company without having an understanding of the current and estimated economic conditions of the company and the markets it would operate in. The analysis of the economy is taught in every basic business valuation course. Opinion The Expert has fundamental flaw by not considering the economy and its impact on the company. The analysis of the economy is a generally accepted business valuation practice. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his lack of not considering the economic conditions and its impact on the company. This is a violation of the basic premise of Revenue Ruling 59-60 and the Professional Standards for a Certified Public Accountant, Statement on Standards of Valuation Services #1.126 The inadequate analysis of the economy by The Expert lacks sufficient facts in order to make a determination of the future operations of the company. The Expert has not relied on accepted principles and methods used by the business valuation community to determine strengths and weakness of the economy and has not applied principles and methods that are reliable to the facts of this case. The inadequate research for private transactions lacks completeness, which makes the Market Methods conclusions unsupported by any accepted methodology. This fundamental flaw in not performing the analysis that is generally recognized in the business valuation community demonstrates a lack of Professional Competence, Lack of Due Professional Care and possibly a lack of Adequate Supervision of employees.

125 See Claywell’s Comment on The Expert Tab 87, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 104 126 See Claywell’s Comments on The Expert Tab 98

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7. Industry Analysis It is difficult to overemphasize the importance of thorough and relevant economic and industry research for a well-prepared business valuation. First, Revenue Ruling 59-60 requires consideration of “the economic outlook in general and the condition and outlook of the specific industry in particular.” Second, an understanding of the economic and industry outlook is fundamental to developing reasonable expectations about the subject company’s prospects.127 Comment The Expert does not have any evidence in his workpaper file that he did any research on the industry in which the company operates. It is inconceivable to me that The Expert could work with management in developing any idea as to future operations of the company without having an understanding of the industry and the forces that impact the company. The five forces driving industry competition are 1) threats of new entrants, 2) bargaining power of suppliers, 3) rivalry among existing firms, 4) bargaining power of buyers and 5) threat of substitute products.128 The Expert stated in his testimony “I did not do analysis and take those into consideration, it’s part of my thought process. But did not do a full report or full analysis on the five forces of nature.”129 The analysis of the industry taught in every basic business valuation course. Opinion The Expert has fundamental flaw by not considering the industry and its impact on the company. The analysis of the industry is a generally accepted business valuation practice. The Expert has not relied on recognized principles and methods of business valuations as demonstrated by his lack of not considering the industry conditions and its impact on the company. This is a violation of the basic premise of Revenue Ruling 59-60 and the Professional Standards for a Certified Public Accountant, Statement on Standards of Valuation Services #1.130 The inadequate analysis of the industry by The Expert lacks sufficient facts in order to make a determination of the future operations of the company. The Expert has not relied on accepted principles and methods used by the business valuation community to determine the strengths and weakness of the industry and has not applied principles and methods that are reliable to the facts of this case.

127 See Claywell’s Comment on The Expert Tab 87, Pratt, Shannon P., Niculita, Alina V. “Valuing a Business: The Analysis and Appraisal of Closely Held Companies”, McGraw Hill, © 2008, 5th Edition, page 104 128 See Claywell’s Comments on The Expert Tab 88, Porter, Michael, “Competitive Strategy: Techniques for analyzing Industries and Competitors”, The Free Press © 1980, page 4 129 See The Expert Testimony Tab 89 page 275 lines 21- 24 130 See Claywell’s Comments on The Expert Tab 98

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8. The Valuation Firm Firm Policies The Expert testified that Mr. Alex Little provided assistance and therefore, The Expert has supervised Mr. Little and support staff in this engagement.131 Mr. Little is a Senior Associate in the Business Valuation group. Mr. Little has significant consulting experience as a financial and manager and in business advisory services to middle market, public and private companies for the purposes of business combination, goodwill impairment testing, SEC compliance, civil litigation and third-party valuation.132 The work product was review by Mr. David Brown who is a Director in the Business Valuation and Corporate Advisory Services practices in Houston. He has over twenty years of financial consulting and financial services experience including over twelve years in the appraisal of businesses, business interests, and intangible assets for corporate mergers and acquisitions, financial reporting, corporate tax, recapitalizations, estate and gift tax, estate planning, employee stock ownership plan and litigation services. Mr. Smith has earned the Accredited Senior Appraiser designation in Business Valuation from the American Society of Appraisers (ASA) and is a Chartered Financial Analyst (CFA) charter holder.133 The Expert stated in his testimony that Mr. Brown reviewed his work, it was consistent with the firm’s policies, and that no one, prior to this engagement, had reviewed the work of The Expert.

131 See The Expert Testimony Tab 63 page 47, lines 9 - 14 132 See Claywell’s Comment on The Expert Tab 65 133 See Claywell’s Comment on The Expert Tab 66

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9. Credibility Analysis Exhibit 16

Summary of Credibility Factors Reliability Credibility AICPA Code of Pr ofessional Conduct

Description

Lack of Sufficient

Facts or Data

Unreliable Principles

and Methods

Application of Principles and Methods

Reliably to the Facts of

the CaseLack of

RelevanceLack of

Reliability

Violates Generally Accepted Valuation Practices

Lack of Adequate

DisclosuresLack of

Completeness

Lack of General

Acceptance of Methodology

Not Supported by Recognized Authority

Unsupported Position

(27) Economic

Environment

(27) Industry Markets

ET Section 201.01 A Professional Competence

ET Section 201.01 B Due Professional

Case

ET Section 201.01 C

Planning and Supervision

ET Section 201.01 D Sufficient

Relevant DataWor kpaper #2 Implied Value of DTS Gr oup1.2 Weighting of "Approaches" 1 1 1 1 1 11.2.1 Selecting Methods of Valuation - Asset Method 1 1 1 1 1 1 1

Wor kpaper #3 DTS Gr oup - 5 year DCF Model (12/31/07)2.1 Growth Rate of Revenues 1 1 1 1 1 1 12.2 Math Errors in Growth Rates 1 1 1 1 1 12.3 Probability of a Recession 1 1

2.4.1 Financial Trends 1 1 1 1 1 1 1 12.4.2 Normalizing Entries2.4.2.1 Convert to GAAP Basis of Accounting 1 1 1 1 1 1 12.4.2.2 Normalizing Adjustments for Expenses 1 1 1 1 1 1 12.4.2.3 Notes Payable Not At Net Present Value 1 1 1 1 1 12.4.2.4 Benchmarking Analysis - Private Sector Industry Analysis 1 1 1 1 1 1 1 1 1 1 1 1 12.4.2.5 Management Compensation 1 1 1 1 1 1 1 1 1 1 1 1 1 1

2.5.1 Omission of Changes in Working Capital 1 1 1 1 1 1 1 1 1 1 1 1 1 12.5.2 Capital Expenditures and Depreciation Expense 1 1 1 1 1 1 1 1 1 1 1 1 1 12.5.3 Pass-Through Tax Adjustment 1 1 1 1 1 1 1 1 1 1 1 1 1 1

2.6 Terminal Value Using Earnings Before Interest 1 1 1 1 1 1 1 1 1 1 1 1 1 1

2.7.1 Using Earnings Base verses Cash Flow to Develop Discount Rate 1 1 1 1 1 1 1 1 1 1 1 1 1 12.7 2 Fundamental Error in Discount Rate 1 1 1 1 12.7.3 Fundamental Error in the Weighted Average Cost of Capital 1 1 1 1 1 1 1 12.7.4 Guideline Company Analysis - Percentage of Debt in Capital Structure 1 1 1 1 1 1 1 1 1 1 1 1

2.8 Discount for Lack of Marketability 1 1 1 1 1 1 1 1 1 1 1 1 1 1

3.1 Comparable Company Market Approach 1 1 1 1 1 1 1 1 1 1 1 1 1 13.2 Order of Magnitude 1 1 1 1 1 1 1 1 1 1 1 1 13.3 Subject Company Risk Discount 1 1 1 1 1 1 1 1 1 1 1 1 1 13.4 Control Premium 1 1 1 1 1 1 1 1 1 1 1 1 1 13.5 Discount for Lack of Marketability 1 1 1 1 1 1 1 1 1 1 1 1 1 1

4.1 M&A Transactions Market Approach 1 1 1 1 1 1 1 1 1 1 1 1 1 14.2.5 Poor Profit Margin 1 1 1 1 1 1 1 1 1 1 1 1 1 14.3 Subject Company Risk Discount 1 1 1 1 1 1 1 1 1 1 1 1 1 14.4 Discount for Lack of Marketability 1 1 1 1 1 1 1 1 1 1 1 1 1 1

5 Private Sales Transactions 1 1 1 1 1 1 1 1 1 1 1 1 1 1

6 Economic Analysis 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

7. Industry Analysis 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

------------------ ----------------- ------------------ -------------- --------------- --------------------- ---------------------- -------------------- -------------------- ------------------- ------------------------------------------------------ ---------------------------- ----------------------- ---------------------- -----------------------Total By Category 21 26 23 31 31 27 4 27 25 24 24 1 1 24 26 25 21

========== ========= ========== ======== ========= ============ ============ =========== =========== ========== ========== ========== ========= ================ ============= ============= =============Total of Categories 291

========

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Chart 1

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

Lack of Sufficient Facts or Data

Unreliable Principles and M

ethods

Application of Principles and M

ethods Reliably to

the Facts of the Case

Lack of Relevance

Lack of Reliability

Violates G

enerally Accepted Valuation Practices

Lack of Adequate D

isclosures

Lack of Com

pleteness

Lack of General A

cceptance of Methodology

Not Supported by R

ecognized Authority

Unsupported Position

(27) Economic Environm

ent

(27) Industry Markets

ET Section 201.01 A Professional C

ompetence

ET Section 201.01 B D

ue Professional Case

ET Section 201.01 C Planning and Supervision

ET Section 201.01 D Sufficient R

elevant Data

Summary of Credibility Factors

53

10. Supporting Documents for Workpaper File Tab 1 Anthony The Expert Deposition Tab 2 TVF Claywell Notes Taken at Deposition for Sample Company Tab 3 TVF Exhibit #38 Tab 4 TVF Exhibit 39 Tab 4-1 TVF Exhibit 39, part 2 Tab 5 Revenue Ruling 59-60 Tab 6 Sample Company Weighted Value Tab 7 Approaches and Methods, Pratt’s 5th Edition, Table of Contents Tab 8 The Reconciliation Process, Pratt 5th Edition Tab 9 Reconciling the Indicated Values by David Bishop Tab 10 Reaching the Value Conclusion, Pratt’s 5th Edition Tab 11 Weighting of Valuation Method Results Tab 12 Sample Company Increase in Revenues Tab 13 Probability of Recession Tab 14 Math Error Based on 7.2% Growth in Revenues Tab 15 Math Error Based on 6% Growth in Revenues Tab 16 The Expert Revenue Growth Tab 17 The Expert Adjusted TTM EBIT Tab 18 The Expert Testimony on 8% EBIT Tab 19 Adjusted TTM EBIT 74,081 at 8% Tab 20 Normalized Legal Fees TTM EBIT 74,081 Tab 21 Time Period to Consider – Trends Pratt 5th Edition Tab 22 Extraordinary or Nonrecurring Items Pratt 5th Edition Tab 23 Financial Statement Adjustments - Trugman Tab 24 Potential Normalizing Adjustments Tab 25 Notes Payable Net Present Value Jay Abrams Second Edition Tab 26 Notes Payable Net Present Value Jay Abrams First Edition Tab 27 Note Payable Not at Net Present Value Tab 28 Financial Statement Ratio Analysis Pratt 5th Edition Tab 29 The Expert Testimony Industry Benchmark as Best Practices Tab 30 The Expert Testimony Officers Compensation Tab 31 Officer Compensation Mayson Mfg Tab 32 Officer Compensation Pulsar Components International, Inc. Tab 33 Officer Compensation Exacto Spring Tab 34 Officer Compensation Eliotts, Inc. Tab 35 Generally Accepted Theory Cash Flows/Earnings Tab 36 Sample Company 5 Year DCF Model (12/31/2007) prepared by The Expert Tab 37 The Expert Affirms Cash Flow and Elements of Cash Flow Tab 38 Cash Flow Definition Pratt 4th Edition Tab 39 Cash Flow Definition Pratt 5th Edition Tab 40 Cash Flow Definition Ibbotson/Morningstar Tab 41 Morningstar Email Regarding Cash Flow Tab 42 Working Capital Requirements Pratt 5th Edition Tab 43 The Expert Testimony Stating He did no Working Capital Analysis Tab 45 Terminal Value Pratt 5th Edition Tab 44 Capital Expenditures Pratt 5th Edition Tab 46 Daubert Challenges to Financial Experts Tab 47 Depreciation and Capital Expenditure Relationship –Gil Matthews

54

Tab 48 The Expert Netted Depreciation and Capital Expenditures Tab 49 S Corporation Tax Affecting – Walter Gross v Commissioner Tab 50 S Corporation Tax Affecting – Wall v Commissioner Tab 51 S Corporation Tax Affecting – Adams v Commissioner Tab 52 S Corporation Tax Affecting Heck v Commissioner Tab 53 S Corporation MRI Open Radiology Tab 54 S Corporations and Value: Simplifying the Debate Nancy Fannon Tab 55 Models for Valuation of S Corporation Minority Interests Pratt 5th Edition Tab 56 Common Errors Mismatching Discount Rate Pratt 5th Edition Tab 57 Converting Cash and Net Income discount Rates Pratt 5th Edition Tab 58 Should an Actual or Hypothetical Capital Structure Be Used? Pratt 5th Edition Tab 59 The Expert Testimony No Iteration Tab 60 Minority and Control Discounts Pratt 5th. Tab 61 Elements of Control Pratt 5th Edition Tab 62 The Expert Marketability Discounts Tab 63 Alex Tittle worked on Engagement Tab 64 Smith Reviewed Work of The Expert Tab 65 Alex Tittle Website CV Tab 66 David Smith Website CV Tab 67 Average Averages Tab 68 Cardinality Tab 69 Comparability Factors Pratt 5th Edition Tab 70 The Expert Comparable Company Analysis Tab 71 Basic Variables Affecting Value, Pratt 5th Edition Size Adjustment Tab 72 Order of Magnitude – Internet Tab 73 Order of Magnitude Pratt Tab 74 Order of Magnitude Trugman Tab 75 The Expert Comparable Market Data Multiple Tab 76 Size Adjustment Hitchner Tab 77 Using Minority Interest Marketability Discount Data for Controlling Shareholder Marketability Discount Tab 78 Cases Applying Control Premium Pratt Business Valuation Discounts and Premiums Tab 79 Control Premium Mercer Tab 80 Industry Premiums Mergerstat Tab 81 Guideline Merged and Acquired Method Pratt 5th Edition Tab 82 Techniscope Capital IQ data Tab 83 SARCOM Inc Capital IQ data Tab 84 Inforte Corp Capital IQ data Tab 85 MAI Systems Corporation Capital IQ data Tab 86 Private Transactions Pratt 5th Edition Tab 87 Economy and Industry Analysis Pratt 5th Edition Tab 88 Competitive Strategies Michael Porter Tab 89 The Expert Testimony Weighting of Value Methods Tab 90 Weighted Average Cost of Capital Debt Structure Tab 91 The Expert CV Tab 92 The Expert Revised Second Report Tab 93 The Expert Defendants Notice of Deposition Tab 94 The Expert Plaintiff Second Designation of Expert Tab 95 The Expert Plaintiff Fourth Designation of Expert

55

Tab 96 The Expert Second Revised Report Tab 97 Sample Company 2007 Form 1065 Tab 98 SSVS#1 Tab 99 Known or Knowable The Valuation Date Pratt 5th Edition Tab 100 Known or Knowable Jay Fishman Standards of Value Tab 101 Known or Knowable Laro Pratt Tab 102 AICPA Professional Code of Conduct Tab 103 Extrapolation Introduction to Probability and Statistics Tab 104 Extrapolation Statistics Demystified Tab 105 Proclaiming a value or Position David Bishop Reconciling the Indicated Values Tab 106 Damodoran Long-Term Sustainable Growth Based on Earnings Tab 107 Damodaran Long-Term Growth for Cash Flows Tab 108 Damodaran Long-Term Sustainable Growth Cannot Exceed Safe Rate

56

J. RICHARD CLAYWELL, CPA, ABV, ASA, CBA, CVA, CM&AA, CFFA, CFD, ABAR CURRICULUM VITAE

First Certified Public Accountant in Texas to earn the Certified Valuation Analyst (CVA) designation-February 1994 Accredited Senior Appraiser (ASA) 2010. Per a Carl Steffen, CPA, ABV, ASA, CBA, CVA study there are approximately 20 individuals that hold all four business valuation designations. Certified in Merger & Acquisitions (CM&AA) (2001) Alliance of Merger and Acquisition Advisors Certified in Fraud Deterrence (CFD) (January 2004) (Chairman of Fraud Deterrence Committee, 2004 to 2005, instructor for the Fraud Deterrence Program) (Chairman of Fraud Deterrence Board 2006-2007) Certified Forensic Financial Analyst (CFFA) with specialized training in Fraud Prevention and Detection 2007 (Litigation Forensic Board 2007 to present) Accredited in Business Valuation (ABV) (AICPA) December 2006 Certified Business Appraiser (CBA), Institute of Business Appraisers (2010) Accredited in Business Appraisal Review (ABAR), Institute of Business Appraisers (2010) NACVA Fraud Deterrence Board – May 2005 to 2007 Executive Board - National Association of Certified Valuation Analysts - became a member of NACVA’s Executive Advisory Board (1994 to 1997) Appointed by the Executive Advisory Board to the Government Valuation Analyst Board, May 1997 to present, (IRS Certification for Business Valuations). Supervises the accreditation and continuing education of government officials (IRS) in the business valuation field, (Chairman 1999 to 2001). Chairman, Houston Chapter of CPA’s Litigation Support Committee (1997 – 1999) NACVA State Chapter President (1996 to 2007) NACVA Exam & Grading Committee (1998 to present, Chairman (1998 to 2000) Honored as NACVA Outstanding Member Award, May 1995 Honored as Outgoing Executive Advisory Board Member May 1997 Serves on the Certification Exam Grading Team (1995 to present) Exam and Grading Committee Chair (1998 to 2000) BS University of Houston - 1979 Valuing Businesses since 1985. Director of Education - International Association of Certified Valuation Analysis. Responsible for updating all educational materials and examinations for all International Charter countries. 2008 to present.

57

Practitioners Publishing Company (PPC) Contributing Editor – Guide to Practical Estate Planning, 2008 International Association of Consultants, Valuators and Analysts (IACVA) – Director of Education (2008) Responsible for business valuation materials and examinations for all IACVA Country members. Board of Directors, 2010 to Present Co-Presenter of weeklong business valuation course for the Chinese Appraisal Society, November 2008, Beijing, China. A partial list of some of the topics instructed include: (1) remaining useful life analysis, (2) survivor curves, (3) valuing customer relationships, (4) valuing brands, (5) allocation of goodwill, valuing software, (6) quantifying synergies. 2009 Taipei International Conference: Valuation and Forensic Accounting. Presenter, Fraud Prevention and Detection (November 2009). Chinese Appraisal Society in Seattle Washington, Presenter, Using Income Approaches and Using Guideline Companies, August 2, 2010. Shanghai University of Finance and Economics, Co-Presenter, The Relationships Between Risk and Value: The M & A Transaction, Value and The Valuation Report: What Do You See?, Value, Fraud, Risk: From Valuation to Fraud, September 19 – 21, 2010. Asian-Pacific Conference on Valuation and IFRS in Seoul South Korea, Presenter: Fraud, Risks and Valuations, December 3, 2010 Chinese Appraisal Society in Beijing China, Presenter, Fundamentals of Business Valuations and Co-Presenter, Valuing Intangible Assets, December 12-13, 2010. Areas of Special Competence Valuation and Litigation - Determination of value and economic damages and advice to litigants and legal counsel involving issues such as economic damages in areas of wrongful termination, business interruption, breach of contract, patents, trademarks, covenant not to compete, Estate and Gift Tax valuations, Family Limited Partnership valuations, buy-sell and merger and acquisitions and divorce property division. Engagements have involved construction, manufacturing, medical practices, accounting practices, financial institutions and retail businesses. Damage calculation for lost earning, lost profits and wrongful termination, computerized modeling and analysis, pension valuations for divorce, reasonable compensation analysis, valuations of various corporations, partnerships and litigation support services, tax research, planning and preparation (corporations, partnerships, individuals and not for profit), corporate reorganizations, economic, financial operational and management consulting for small to medium sized businesses Articles Published Quantifying Financial Risk in Capitalization Rates - The Valuation Examiner, 2nd Quarter 1994 Viewpoint on value, Business Today, January 1995 Ground Rules Unique For Deprivation Appraisals, Business Today, March 1995 Planning a Successful Succession, Business Today, June 1995

58

Determining the Quality of Earnings, Business Today, August 1995 The Family Limited Partnership: A Tax-Savings Strategy, Business Today, October 1995 What and When to Discount In Estate and Gift Tax Valuations, the Texas Law Reporter, March 1996 Private Equity International - PEI Magazine - How Is The Goodwill Accounted For After The Acquisition?, 2009 Family Business Magazine - Setting Up a Family Limited Partnership (FLP): Is it the Best Option? 2010 National Association of Certified Valuation Analysts – Quick Read Estimating Changes in Long-Term Debt January 2009 Terminal Value on Discounted Cash Flow Projections July 2009 Capitalized Earnings, When are they Stabilized? February 2010 Net Present Value of Notes Payable May 2010 Private Sales Transactions and Price to Earnings September 2010 Weighting of Earnings November 2009 Stub Year April 2011 Texas Law Reporter Safeguarding Success - Finding Value For Non Compete Agreements - 2002 How To Evaluate Your Business Valuator – 6/1/2003 Real Estate Appraisers v Business Valuators – 6/26/03 Defend Yourself, Creating FLP Discounts That Withstand IRS scrutiny – 7/28/03 The Difference Between Discount and Capitalization Rates – 8/29/03 How Damage Calculations Can Recoup Your Losses – 9/29/03 Greater than the Sum of its Parts – 12/1/03 Discount Rates and Capitalization Rates Differ, Don't Make Mistakes – 12/29/03 Minority or Control Interest? The Answer is Clear as Mud – 1/31/04 Books Published Capitalization and Discount Rates: The Value of Risk, an Advanced Course, Co-Author, Published by the National Association of Certified Valuation Analysts, 2001

Business Valuation Strategies, Co-Author with Practice Development Institute, Chicago, IL

Contributing author to the National Association of Certified Valuation Analysts NACVA Fundamentals Theory & Techniques training materials (2003)

“Wiley Guide to Fair Value Under International Financial Reporting Standards”, (IFRS) John Wiley, 2010, Author of Chapter 28 titled “Petroleum Properties” co-author of Chapter 3 The Market Approach and co-author of Chapter 10 Risk and Rewards . Valuation of Intangible Assets, International Association of Certified Valuators & Analysts, Second Edition, © 2011, Co-Author

59

American Institute of Certified Public Accountants – Certificate of Educational Achievement INSTRUCTOR for the Certificate of Educational Achievement in Business Valuations Introduction to the Valuation of Businesses & Professional Practices Data Research and the Market Approach to Valuation Software Development Responsible for all National Association of Certified Valuation Analysts software development (2002) Business Valuation Manager Pro was designed by J. Richard Claywell, CPA, CVA, CM&A, and is marketed though the National Association of Certified Valuation Analysts and Wiley ValuSource. Business Valuation Quality Control Editor was designed by J. Richard Claywell, CPA, CVA, CM&A and is marketed though the National Association of Certified Valuation Analysts. Areas of Litigation / Expert Witness Experience (Partial) Lender Liability Business interruption for grocery store resulting from fire damage Business interruption for appliance store resulting from fire damage Business interruption for dry cleaning store resulting from fire damage Loss of business value in contract dispute Lost profits resulting from software theft Business interruption for dental practice resulting from tropical storms Damage calculations in a DMSO contract dispute Lost profits in dispute over proprietary software contract dispute / trade secrets Lost profits from eminent domain Lost profits in cancellation of lease contract Value of businesses for divorces Value of business for dissenting shareholder disputes Damage calculation for dispute in sale of company Damage calculation for wrongful termination Tracing of assets Lost wages resulting from personal injury Tax evasion, kiting, lapping, fraudulent loans, mail fraud Have testified in: Federal Court, Bankruptcy Court, Texas State District Courts, Texas County Courts

60

Industry Expertise Valuing Closely Held Businesses since 1985. Responsible for firm’s litigation support and business valuation services. Some but not all of the industries in which he has performed business valuations are: Oil Processing Plant Natural Gas Traders Gas Well Operations Natural Gas Distribution Operators of Natural Gas Wells Natural Gas Transmission and

Distribution Lost Profits Tortillas manufacturing Mobil Home Dealerships Mechanic shops Equestrian Centers Instrumentation

manufacturing Restaurants Window screen / outside storm

blind manufacturing Printing companies

Beauty Salons Vending Machine Manufacturing

Travel Agencies

Remodeling contractors Accounting practices Medical Practices Pipe Manufacturing Tire dealerships Dental Practices Nurseries Automobile Dealerships Optometric Practices Supermarkets Air Conditioning contractors Hospitals Mortgage Companies Veterinarian practices Insulation Contractors Highway Construction Condiment Processing Paint Manufacturing Seafood Processing Plant Industrial Pipe Cleaning Fiber Optics Boiler Making Manufacturing Radiation Safety & Consulting Information Technology Brick Manufacturing Fugitive Gas Detection Food Processing Plant Computer Software Jewelry Stores Engineering Industrial Supply Companies Mineral Interests Timber Interests Employment Agencies Air Conditioning Manufacturers Professional Service

Companies Patents Trademarks Machine Shops Convenience Stores Ranches Roofing Contractors Limousine Service Retail appliance and TV stores Insurance Agencies Small tool rental companies Internet Service Provider Royalties from Copyrights Neurology Practice Orthodontists Car Wash Offshore Marine Transportation

Contractors Reasonable Compensation Studies

Offshore Underground Gas Storage Facility

Hedge Funds Restricted Rule 144 Stock Stock Options

Goodwill Allocation Beer Distributor & Liquor Stores

ESOP’s

National Association of Certified Valuation Analysts Outstanding Member Award reads “In recognition and appreciation of exceptional participation, through immeasurable contributions of advice and wisdom, always extending a hand as a reliable source of support, being dependable and responsive to the Association’s needs and demonstrating the qualities that breed confidence and success with all those he touches. His guidance and support have been instrumental in helping NACVA achieve national prominence. (Award dated May 8, 1995)

61

Teaching Texas Society of Certified Public Accountants, 2008 Advanced Estate Planning Conference Business Valuations in Estate Planning: Don’t Get Caught in a Trap Business Enterprise Incorporated – Annual Exit Planning Conference Driving Business Value Down For Insider Sale (PRESENTER) August 19, 2005 Creating Value Within a Clients Business (PRESENTER) August 20, 2005 Electing Subchapter S and Benefits of Flow Through Entities in Exit Planning (PRESENTER) August 2006 National Association of Certified Valuation Analysts State Chapter Meeting Business Appraisal Review, Goodwill in Divorce (Co-Presenter), How Experts Can Assist in Litigation, Guideline Company Methods (Presenter) and Small Group Questions and Answers (Moderator) July 16, 2010, 8 hours. Collaborative Practice – An Introduction for the Valuation Professional, Mergers and Acquisitions for Small Businesses – Pricing for Sale (Presenter), Equipment Appraisal and What You Need to Know, Determining the Discount for Lack of Marketability and Understanding the Restricted Stock Studies, Small Group Questions and Answers (Moderator), October 8, 2010, 8 hours National Association of Certified Valuation Analysts

Presenter at NACVA’s first Annual Business Valuation Conference Chicago – 1994 Topic: Quantifying Risk Using Graphing Techniques

Wrote an article for NACVA’s magazine—The Valuation Examiner® 1994 Subject: Quantifying Financial Risk in Capitalization Rates

Presenter at NACVA’s Semi-Annual Business Valuation Conference Orlando – 1995 Topic: Does a Covenant Not to Compete Ever Have Value?

Presenter at NACVA’s Annual Business Valuation Conference Atlanta - 1999 Professional v Enterprise Goodwill

Presenter at NACVA’s Regional Symposium Los Angeles - 1999 Topic: Documenting Discounts in Gift & Estate Tax Valuation

Presenter at NACVA’s Annual Business Valuation Conference Dallas - 2000 Points of View on Valuing Family Limited Partnerships (Reports that will withstand an IRS Audit)

Presenter at NACVA’s Regional Symposium Annapolis – 2000 Topic: Proper Documentation of Discounts in Valuation Reports Las Vegas – 2000

62

Courses taught at NACVA’s Advanced Learning Institutes, Career Development Institutes and Certification Training Centers: Development of Capitalization/Discount Rates St. Louis – May 1996 Development of Capitalization/Discount Rates Newport Beach – July 1996 Development of Capitalization/Discount Rates Chicago – August 1996 Development of Capitalization/Discount Rates Seattle – September 1996 Development of Capitalization/Discount Rates Salt Lake City – October 1996 Report Writing Salt Lake City – October 1996 Development of Capitalization/Discount Rates San Diego – December 1996 Black/Green Build-up Method of Determining Cap/Disc Rates Corpus Christi – November 1997 Black/Green Build-up Method of Determining Cap/Disc Rates Cincinnati – October 1998 Black/Green Build-up Method of Determining Cap/Disc Rates San Francisco – October 1999 Valuations Using Valuation Master 6.0 New Orleans - November 1999 Black/Green Build-up Method of Determining Cap/Disc Rates New Orleans – December 1999 Valuing Preferred Stock Las Vegas – November 2000 Valuing Family Limited Partnerships Las Vegas – November 2001 Valuing Family Limited Partnerships Orlando – October 2001 Business Valuation Manager Pro San Diego – May 2002 Business Valuation Manager Pro Toronto, Canada – August 2002 Business Valuation Manager Pro Phoenix – September 2002 Business Valuation Manager Pro Atlanta – November 2002 Business Valuation Manager Pro Las Vegas – February 2003 Business Valuation Manager Pro New York – May 2003 Business Valuation Manager Pro Washington DC – May 2003 Business Valuation Manager Pro New Orleans – September 2003 Business Valuation Manager Pro San Diego – December 2003 Capitalization/Discount Rates: Assessing the Alternatives New Orleans – October 2003 Business Valuation Manager Pro Miami – June 2004 Business Valuation Manager Pro Salt Lake – July 2004 Business Valuation Manager Pro Salt Lake – September 2004 Business Valuation Manager Pro Boston – September 2004 Business Valuation Manager Pro Chicago – October 2004 Business Valuation Manager Pro Salt Lake – November 2004 Business Valuation Manager Pro Las Vegas – December 2004 Business Valuation Quality Control Editor Salt Lake – July 2004 Business Valuation Quality Control Editor Salt Lake – September 2004 Business Valuation Quality Control Editor Salt Lake – July 2004 Business Valuation Manager Pro Philadelphia - 2005 Fraud Prevention Fundamentals, Identity Theft, IT Solutions, and Interview Techniques

63

Chicago - October 2004, Las Vegas – November 2004, Milwaukee, WI July 2005 NACVA’s Mentor Support Group—Technical Support to members in the areas of:1999–2002

Buy/Sell Agreements Printing Estate & Gift Taxes Construction Family Limited Partnerships Succession Planning Disruption of a Business Apparel Dissenting Shareholder Actions Food Stores Divorce Water Transportation Economic Loss Analysis Trucking Financing Supermarkets Mortgage Companies Partner Disputes Dental Practices Purchase of a Business Mediation Sale of a Business Medical Practices Retail Travel Agencies Restaurants Manufacturing NACVA’s Speakers Bureau Topics

Computerized Valuations Fundamentals of Valuations Strategies for the Family Owned Business Divorce Valuation Issues Valuing a Closely Held Business for Buy/Sell Purposes Excess Earnings Approaches Business Continuation Planning Professional Goodwill Build-Up Methods for Determining Capitalization Rates Normalizing Income Income/Asset based Valuation Approaches Valuation Theory Quantifying Financial Risk in capitalization Rates Valuing Professional Practices Quantifying Risk Using Graphing Techniques Valuing Closely Held Businesses Business Valuation and Litigation Support Business Planning Valuation Issues Alternative Dispute Resolution Determining Going Concern Value Quantifying Financial Risk Using Regression Analysis Valuation Issues Using Correlation Analysis in Determining the proper Method of Projecting Income Internal Revenue Service Developing Discount and Capitalization Rates, Houston Office – August 1999 Developing Discount and Capitalization Rates, Dallas Office – September 1999

Understanding Valuation Issues For Closely Held Businesses, Houston, September 10, 2003

Texas Society of Enrolled Agents - 1997 Annual Conference Understanding the Valuation Issues for Closely Held Businesses Center for Professional Education

Eight-hour continuing education on Valuation of Closely Held Companies and Partnerships

64

University of Houston School of Law - Guest Lecturer on Business Valuations

School of Optometry - Valuing an Optometric Practice: A Brief Overview for Buyers & Sellers

University of Houston Clear Lake Family Law for Non-Attorneys, Business Valuations Physicians MBA Program, Valuing Medical Practices National Business Institute Tax Aspects of Divorce in Texas (Valuation of a Closely Held Business Asset) Galveston County Family Bar Association Valuation of Retirement Plans Various Civic Groups Various Bar Associations Family Limited Partnership Reports That Will Withstand An IRS Challenge Understanding the Valuation Issues Of A Closely Held Business Estate Planning Council of North Texas Understanding the Valuation Issues Of A Closely Held Business Automatic Data Processing Business Valuation Methods and Uses Developing Discount & Capitalization Rates and Quantifying Marketability Discounts American Association of Hispanic Certified Public Accountants Business Valuation Methods and Uses, Houston, TX October 1999 Association of Latino Professionals in Finance and Accounting Business Valuation Methods and Uses, Las Vegas, NV September 2001 Aviation Instrument Association Building and Getting Value Out Of Your Business, Galveston, Texas October 23, 2003 College of the Mainland Office Accounting Accounting Principles Managerial Finance Business Mathematics Beginning Lotus 1-2-3 Advanced Lotus 1-2-3 Quarterly Payroll Tax Reporting San Jacinto Junior College Office Accounting

65

Accounting Principles Beginning Lotus 1-2-3 Memberships American Institute of Certified Public Accountants

Texas Society of Certified Public Accountants Houston Chapter of Certified Public Accountants Institute of Business Appraisers National Association of Certified Valuation Analysts

Certified Valuation Analyst's Texas State Advisory Board National Training Team National Exam Grading Team Technical Support Group National Association of Certified Valuation Analysts Executive Board (Past) Government Valuation Analyst Board

National Editorial Advisory Board for Viewpoint On Value Alliance of Merger & Acquisition Advisors Institute of Business Appraisers American Society of Appraisers

Continuing Professional Education Texas Society of Certified Public Accountants 1988 Houston Chapter of CPA’s – Litigation Support and Expert Testimony: A Growing Area of Service Introduction and Overview of Litigation Relationship Between the Trial Attorney and the CPA Types of Litigation Support Services Performed by a CPA in Civil Litigation Litigation Support in the Bankruptcy Context Advantages and Disadvantages of Litigation Support 1990 Houston Chapter of CPA’s - Valuation Issues in Taxation, Litigation and Bankruptcy (8 hrs) Key Valuation Court Cases and Revenue Rulings Valuation Issues in Estate Taxation Relating to Closely Held Businesses Selected Valuation Issues in Bankruptcy Cases Minority Level Discounts and Control Level Premiums Valuation Issues in Litigation 1994 Litigation Services Conference (16 hrs) A Litigation Services Overview Presenting Expert Testimony in Complex Business Disputes Effective Use of Video Depositions for Expert Witnesses Recent Bankruptcy Decisions Affecting the CPA’s Role in the Bankruptcy Process Valuation Issues in Bankruptcy Commercial Business Valuations and Damage Issues Family Law Overview

66

Tax Consequences of Divorce: Who Gets Custody of Uncle Sam? Reimbursement and Tracing: What the Attorney Needs Practice and Ethic Guidelines Testifying in Accountant’s Malpractice Cases The CPA and Probate Gifts and Death: Critical Valuation Issues Litigation Services Skills and Resources How CPA’s can be Involved with ADR in Family Law

Is The Family Law Version of Fair Market Value Something Other Than Fair Market Value?

Document Control in Complex Disputes: You Snooze, You Lose ADR for CPA’s – What Is The CPA’s Role? 1996 Texas Society of CPA’s (8 hrs) Advanced Estate Planning 1997 Houston Chapter of CPA’s - Litigation Support Symposium (8 hrs) Trade Secrets? New Issues in Intellectual Property Cases A Judge’s View of Financial Experts Due Care and Expert Risk in Litigation Engagements Financial Statements – Depiction or Deception Discount Rates – What’s Fair? Litigation Tactics: Making Sure the Numbers Don’t Lie How to Analyze a Business Valuation Report and Examine the Expert (INSTRUCTOR) Valuation of a Business in Divorce – An Attorney’s Perspective Market Penetration Issues in Lost Profit Cases How to Find an Expert? Discovering Hidden Assets The Future of Litigation Cases – Where is the Growth? 2003 Houston Chapter of CPA’s Use of “Practical Statistics in Damages Cases” (1 hr) 2004 Houston Chapter of CPA’s Calculating Damages in Patent & Trademark Infringement (1 hr) 1997 Texas Society of CPA’s (8 hrs) Estate Planning for the Small Business Owner The Institute of Business Appraisers 1995 - Using Transaction Data To Value Closely Held Businesses Theoretical Background: Why it Works Using Transaction Data Sanity Test Rebutting an Unreasonable Value Estimate Appraising a Business

67

2003 – Southeast Chapter Annual Regional Business Valuation Conference (12 hrs) Discounts & Premiums, When to Apply What Legal Requirements of ESOP Appraisals Appraisal of Fractional Interests Private Business Appraisal as Viewed Through “Value” Worlds The Daubert Challenge – How to Determine the Error Rate Current Thoughts on Synergistic Value 2004 Institute of Business Appraisers – Chicago Learning Institute Forecasting Net Cash Flow (16 hrs) National Association of Certified Valuation Analysts 1994 National Association of Certified Valuation Analysts Symposium “Financial and Statistical Modeling in Business Valuations” Qualifying and Quantifying Industry Risk Quantifying Financial Risk Using Regression Analysis (INSTRUCTOR) Multiple Regression Analysis in Earnings Projections and Other Areas Using Correlation Analysis – When Selecting Method to Project Earnings 1995 National Association of Certified Valuation Analysts Annual Business Valuation Conference “Tough Issues in Business Valuations” How to Approach Valuation Discounts & Premiums How You Can Achieve Efficient Industry & Economic Research What Does Federal Rule #26 Mean For You? 1995 NACVA Business Valuation Conference Ten Essential Things You Need to Know About ESOP Valuations Does a Covenant Not to Compete Ever Have Value? (INSTRUCTOR) Why Are Family-Owned Businesses So Tricky? What to Do and What Not to Do Giving Expert Testimony Do Valuation Discounts & Premiums Have to Be So Different? Who, What Where & When of Valuing Medical Practices Thriving in Divorce Valuation & Litigation Engagements Is There Any Consistent Way of Calculating Going Concern? 1996 National Association of Certified Valuation Analysts Annual Business Valuation Conference How Does the Purpose of a Valuation Relate to the Approach? Financial Statement Adjustments, Forming the Foundation of a Valuation! What Constitutes a Comparable Company? Why is Industry & Economic Research so Important? Methods and Approaches in Selecting & Projecting Income Capitalization & Discount Rates, Cutting Through the Maze The Importance of Selecting the Appropriate Valuation Method Is a Discount or Premium Applicable, and if so, How Much? The Nuts and Bolts of Report Writing

68

1996 National Association of Certified Valuation Analysts Fall Conference Building Your Practice Around Valuations for Divorce Litigation Support: How to Give & Get the Most in the Attorney Relationship Forensic Accounting: Forming the Foundation for a Sound Valuation

Community Property or Equitable Distribution: Why Should This Impact the Engagement?

Alternate Dispute Resolution: Maybe There is a Way to Work Things Out Current Case Law Affecting Valuations for Divorce: Doing Everything You Can For Your Client Separating Professional Goodwill from Enterprise Goodwill: How Difficult Can This Be? Standard of Value / Marketability Discounts: Is This Even Relevant? Expert Testimony: Chances Are You Will Find Yourself Here! Deferred Tax Adjustments: Where Does This Come Into the Picture? 1996 NACVA “CVA” Training Center Quantifying Financial and Non-Financial Risk (INSTRUCTOR) 1997 NACVA “CVA” Training Center Quantifying Financial and Non-Financial Risk (INSTRUCTOR) 1997 National Association of Certified Valuation Analysts Annual Business Valuation Conference The 3 Biggest Mistakes CPA’s Make in Selling Their Services Deferred Tax Adjustments in Business Valuation – Getting Over the Hurdles Estimating the Cost of Capital with Ibbotson Data Discounts in Family Limited Partnerships – Seeing the Forest Through the Trees

The IRS and Business Valuations – Before You Can Climb You’ve Got to Know Your Roots

Case Analysis – Digging in on the Path to the Top Determining and Adjusting the Value of Closely-Held Business for Transfer Tax Purposes 1997 National Association of Certified Valuation Analysts Spring Business Valuation Conference Black/Green Build-Up Method (INSTRUCTOR) Economic Damages Valuing Options & Warrants Valuing Computer Software Valuation Reports: Writing, Reviewing and Ethical Issues 1998 NACVA Business Valuation Learning Institute Valuing Medical Practices Quantifying Marketability Discounts Funding Mergers & Acquisitions 1999 NACVA Business Valuation Conference (19 hrs) Alternative Dispute Resolution Case Law Update

69

Superior Service Selling Value FLP’s – An IRS Perspective The Cost of Capital Finding & Valuing Intangible Assets Compliance to Consulting Professional vs. Enterprise Goodwill (2 hrs) – (INSTRUCTOR)

Build-Up Methods 1999 NACVA Regional Symposium (8 hrs) Ten Common Omissions In Structuring Buy/Sell Agreements The Value of Intangible Assets Issues & Developments in Fair Market Value Demystifying Business Valuation Defining the Scope of Economic Damages Expert Witness & Panel Discussion: The Care, Feeding & Destruction Of The Expert Witness and Effective Presentation of Complex Economic Issues in Court 1999 National Association of Certified Valuation Analysts Advanced Learning Institute

Valuing Auto Dealerships Valuations in Bankruptcy

2000 NACVA Business Valuation Conference (16 hrs)

Keynote: Daring, Caring and Sharing – To Maximize Your Performance Marketing Ideas – Brainstorm with the Experts Methods of Valuation – Pros & Cons Attracting and Retaining the Right Valuation Staff Valuing Medical Practices Supporting the Attorney in Issues of Intellectual Property Locating Industry Comparables & Salary Data Points of View in Valuing Family Limited Partnerships (INSTRUCTOR) Estate Planning: Creating Lifelong Clients Keynote: Celebrate Your Overflowing Life (Time/Stress Management)

2000 NACVA Regional Conference - Current Issues in Gift and Estate Tax Valuations (9 hrs)

Case Law Update: Church, Reinhardt, Simplot, and Winkler Effective Use of the Valuation Expert Proper Documentation of Discounts in Valuation Reports – (INSTRUCTOR) The IRS View on FLP’s and LLC’s

2000 NACVA Forensic Institute – Intellectual Property – Valuation, Economics & The Law (40 hrs) The Patent Statute Patent Example Standards of Patentability – Novelty Standards of Patentability – Statutory Bar Standards of Patentability – Non-Obviousness Patent Infringement Claim Interpretation Economics of Patents Patent Damages Law Patent/Antitrust Interface Copyrightable Subject Matter Copyright Statute Standards of Copyrightability Derivative Works

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Publication Ownership Infringement Rights of Copyright Owner Fair Use Economics of Copyright Damages Trade Secrets Unfair Competition Trademarks The Lanham (Trademark) Act Fundamentals Personal Names Color Incontestability Geographic Limitations Dilution Trademark Damages Trade Dress Protection Likelihood of Confusion Fair Use Defense False Advertising Economics of Trademarks 2000 NACVA Advanced Learning Institute

(audit to be an INSTRUCTOR next year) (8 hrs) Valuation of Discounts & Premiums Valuations: Using Market Data

2001 NACVA Business Valuation Conference The Attorney / Expert Team Commercial Damages: Lost Profits or Loss of Business Value Enterprise Goodwill vs. Professional Goodwill in Property Settlements Daubert Debate: Defending Your Method (Panelist) How to Calculate Patent Infringement Damages 2001 NACVA Advanced Learning Institute (8 hrs) Statistical Analysis 2001 NACVA Regional Symposium–Valuation Issues in a Divorce Setting: Point/Counterpoint (8 hrs) Valuation in Divorce: Expert or Advocate: Faux Pas in the Divorce Arena Valuation of Professional/Educational Licenses and Pensions in Divorce A Judge’s View of Valuation Issues in Divorce Professional vs. Enterprise Goodwill: How to Identify the Differences Marketability & Minority Interest Discounts in Divorce 2002 NACVA Business Valuation Conference (16 hrs) Case Study Review (INSTRUCTOR) Fair Value: Gaining Industry Consensus Empirical Studies on Discounts and Lack of Marketability FASB 141 & 142: How Do They Impact You? Current Trends in Medical Practice Valuations Case Law: What’s New and Relevant Quantifying Marketability Discounts: The Tenth Round Valuing a Minority Interest in an FLP Wrapper with Real Estate Identifying & Locating Hidden/Unreported Income: Impact on Valuation

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2002 NACVA Career Development Institute (12 hrs) FASB 141 & 142 Business Valuation Manager Pro Software Workshop (INSTRUCTOR) 2002 NACVA Forensic Institute (8 hrs) Economic Theory & Modeling 2002 NACVA Career Development Institute Phoenix, AZ (12 hrs) Normalizing & Then Projecting Earnings (4 hrs) (INSTRUCTOR) Valuing Dot Com Companies (2 hrs) (INSTRUCTOR) Business Valuation Manager Pro, Software Workshop (8 hrs) (INSTRUCTOR) 2002 NACVA Career Development Institute Atlanta, GA (12 hrs) Valuations: Using the Market Method (4 hrs) Capitalization and Discount rates: Assessing the Alternatives (4 hrs) The Mechanics of Buying/Selling a Business (4 hrs) Normalizing & Then Projecting Earnings (4 hrs) (INSTRUCTOR) Valuation Methods: Making the Right Determination (4 hrs) Valuation Discounts & Premiums: Covering the Bases (4 hrs) Business Valuation Manager Pro, Software Workshop (8 hrs) (INSTRUCTOR) 2002 NACVA’s Annual Divorce Conference, Atlanta, GA (8 hrs) Divorce: “Fair Value” or Fair Market Value” – What Is The Proper Standard Of Value Equity In Divorces: Does Marketability Matter? And What about a Minority Interest? Viewpoint From The Bench Valuations in Divorce: Expert or Advocate? Time Money & The Temporal Marketing Effort 2002 NACVA Business Valuation Conference (16 hrs) Case Law Update: What’s New and Impacts All of Us Tax Effecting S-Corps Vocational and Economic Loss Assessment New Empirical Data Indicates Higher Discounts for Lack of Marketability Value Enhancement 2003 NACVA Business Valuation Conference (16 hrs) Case Law Update: What’s New and Impacts All of Us Vocational and Economic Loss Assessment New Developments in Equity Risk Premium and Cost of Equity Estimation Common and Useful Statistical Applications to Business Valuations New Empirical Data Indicates Higher Discounts for Lack of Marketability Value Enhancement 2003 NACVA Career Development Institute San Diego, CA (16 hrs) Expert Witness Skills Valuing Fast Food Establishments Valuing Banks and Financial Institutions

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Valuing Construction Companies Valuing Trucking Companies 2003 NACVA’s Fraud Deterrence Training Center (40 hrs) Introduction and Course Objective Background and History Three Major Categories of Fraud Who Commits Fraud Fraud Prevention Risk Assessment Introduction of Case Fraud Schemes Internal Controls and Fraud Deterrence Basics Fraud Deterrence Engagement – Overview Fraud Deterrence Engagement – Control Documentation Fraud Deterrence Engagement – Actual Activities and GAP Analysis Fraud Deterrence Engagement – Action Planning and Follow Up Case Example Fraud Deterrence Engagement – Validation and Reporting Understanding the Perpetrator Detection and Prevention of Fraud in the Workplace Interview Techniques (INSTRUCTOR) Verbal Behavioral Analysis Nonverbal Behavioral Analysis Common Fraud Schemes Professional Responsibilities For Fraud Prevention/Detection Professional Standards For Fraud Examination Engagements Case Study – Evaluation of Evidence Reporting Process and Standards Case Study - Reporting Testimony as an Expert Witness Review of Internal Controls 2003 NACVA Career Training Institute Capitalization/Discount Rates: Assessing the Alternatives (4 hrs) 2004 NACVA Business Valuation Conference (18 hrs) Drafting a Good Report Case Law Update: What Works in Valuation Testimony Forensic Accounting Techniques How Experts Can Win Jurors and Influence Outcomes Exploring Investigative Techniques in Bankruptcy Fraud Cases The Art of the Steal Writing and Defending Your Expert Report WACC vs. Build-Up vs. CAPM vs. Common Sense SA99 – Will it Actually Deter Fraud? Motions to Strike Expert Testimony

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Industry Standards – Compare and Contrast 2005 NACVA Business Valuation Conference (24 hrs) Drafting a Good Report – Your Professional Signature Marketing and Managing Your Consulting Practice Emerging Industries in Valuation Case Law Update Companies with Changing Debt: The Common Sense APV Method Integrated Theory of Business Valuation WACC Overvaluation: Its Domino Effect and Solutions Deficiencies in Current Valuation Research Calculation of Lost Profits Damages: Methods, Deductible Costs and Other Key Issues Using Computers to Detect Fraud The Market Method – New Ideas for the Use of Public Company Industry Standards: Compare and Contrast Marketing and Managing Your Consulting Practice Getting the Most Out of NACVA The Radical Leap: Extreme Lessons in Leadership Common Success Characteristics of Top Performing Consulting Firms 2006 NACVA Business Valuation Conference (24 hrs) Industry & Company Analysis: How much Research is Enough? (CO-INSTRUCTOR) 2006 15th Annual National Expert Witness Conference (16 hrs) Reviewing and Comment on the Opposing Expert’s Report (INSTRUCTOR) Case Analysis in Person Drafting a Good Report Marketing and Managing Your Consulting Practice Valuation & Industry Research Corporate Buy Sell agreements The Litigation Forum Strategic Benchmarking for Value Challenges and Opportunities Facing Financial Reporting Domestic Litigation Damage Calculations in Complex Commercial Litigation Business Interruption Claims Business Valuation v. Lost Profits Fundamentals of Exit Planning (INSTRUCTOR) 2008 NACVA Business Valuation Conference (24 hrs) If It Aint’t Broke…Break It Case Law Update The Butler Pinkerton Model: Empirical Support for Company Specific Risk Knowing When You Have Performed Adequate Research Opportunities and Conflicts Resulting from Pension Protection Act The Future of the Valuation Profession What lawyers Do to Experts When They Can

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Business Valuations in Commercial Damages & Bankruptcy Cases Using the Statements of Cash Flow for Insightful Analysis and Fraud Detection

Family Law Forensics Beyond Business Valuation Beyond the What Using SPARC to Determine the Why and Add value for Clients Industry Standards Updates Using Business Valuation Manager Pro, INSTRUCTOR

2008 NACVA (6 hrs) Exploring Multiple Regression Analysis in Excel to Value Securities NACVA Online Learning Lecture Series - Using BizComps INSTRUCTOR NACVA Online Learning Lecture Series - Duff & Phelps Database

NACVA Online Learning Lecture Series - Using Done Deals and Mid Market Comps Database NACVA Online Learning Lecture Series -IRS Corporate Ratios Database INSTRUCTOR

2009 NACVA Business Valuation Conference (130 hrs) Direct Market Data Record Part 1 Direct Market Data Record Part 2 Direct Market Data Record Part 3 Direct Market Data Record Part 4 Direct Market Data Record Part 5

Developing Discounts & Cap Rates in a Troubled Economy: New & Emerging Views on Old Issues Current Update in Valuations Introduction to Fraud Deterrence, Detection & Investigation Influence, Impact, & Income – Your Receipt to Thrive in Today’s Economy Lost Profits Damages – Keeping the Expert in the Case Quantifying Company Specific Risk Using the Finison/Daily Model Tax Valuation in a Changing Environment Daubert Challenge: What Every Appraiser Needs to Know Introduction to Forensic Accounting Governance, Ethics, and Accountability The Big “3” Forensic Accounting Methodologies Case law Update Positive & Negative Indicators : Quantifying your Ratio Analysis and its Effect on Compliance Valuation Square Pegs in Round Holes, Adjusting Multiples from Public Guideline for Private Firms Industry Standards Update Direct Market Data Record Part 5- INSTRUCTOR 2008 Advanced Estate Planning Conference - INSTRUCTOR IBA Market Data Understanding and Using the largest transaction Database for Privately Held Business Sales- INSTRUCTOR IBA Market Data Understanding and Using the largest transaction Database for Privately Held Business Sales-Repeat INSTRUCTOR Examination Procedures for International Certification,- INSTRUCTOR Frankfurt Germany

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Business Valuations, Universal and Fundamentals Applications, INSTRUCTOR Beijing China Statistical Analysis, Economic Theory and Modeling

2009 NACVA CTI – Atlanta, Ga. Fundamentals of Financial Modeling & Forecasting INSTRUCTOR Analysis of Financial Statements & Financial Data- INSTRUCTOR

2004 Alliance of Merger and Acquisition Advisors (16 hrs) (The Certified in Merger & Acquisition Credentialing Program) Overview of the M&A Marketplace and the Transaction Advisory Process Business Analysis and Valuation for Merger and Acquisitions Advisory Professionals Legal and Tax Issues for Merger and Acquisitions Illinois CPA Society of Certified Public Accountants 1994 Annual Business Valuation Conference Alternative Dispute Resolution Estate & Gift Tax Valuation Overview and Update Judicial Review of Valuation Methods Update on CEA Curriculum AICPA Business Valuation Activities A Business Brokers Perspective on Business Valuations Valuation of ESOP’s 1995 Annual Business Valuation Conference Legal Update Panel Estate Freezes, Gifting and Dealing with the IRS Financial Modeling Issues Finding and Keeping Clients in the 90’s Business Valuation CEA Series Tax Issues and Valuation Considerations for Different Forms of Entities Valuing Health Care Professional Practices in a Changing Environment Intellectual Property Valuation Ethics USPAP & Professional Liability Using Ibbotson Associates Publications in Private Firm Valuations (8 hrs) November 15, 2000 International Business Valuations: Overview and Methodologies (4 hrs) November 16, 2000 American Institute of Certified Public Accountants 1995 National Conference on Business Valuation (16 hrs) Investigating Unreported Income in a Divorce Setting Valuing Different Classes of Stock Using Ibbotson’s Data in Appraisals

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Research Resources for Business Valuation Changing Environment in the Health Care Industry Family Limited Partnerships: The Dilemma of Discounts Using the Market Data Approach to Value Small and Medium-Sized Businesses Valuation Issues in Bankruptcy Strategies in Determining Damages Common Deficiencies in Valuation Reports Specific Risk Premium Quantifying Environmental Risks Intangible Assets in Litigation and Non-Litigation Settings 1997 Advanced Business Valuation Conference Dissecting Revenue Ruling 59-60 Procedures in Performing a Business Valuation Advanced Applications of Valuation Approaches, Methods, Concepts and Procedures Discounts, Premiums and Capitalization Rates Low Budget Valuation Engagements Excess Earnings Method of Valuation Forensic Auditing – Finding and Reporting Owner’s Perquisites and Common Financial

Statement Adjustments Rule of Thumb Valuations – Pros and Cons Employee Stock Ownership Plans (ESOP) Research of Valuation Data Sample Valuation Reports Case Study Revenue Rulings and Court Cases on Discounts 1999 AICPA National Business Valuation Conference Start-Ups in the New Millennium Insurance and Damage Issues in Business Valuation Business Valuation: A View From the U.S. Tax Court Current Court Case Update Ethics and Profits in Business Valuation Working With Advanced Wealth Transfer Techniques Daubert and Kumho Tire Chapter 14 The 10 Common Tax Mistakes of Divorce Lawyers Intellectual Property Valuation and Damages Valuation Issues in Mergers AICPA – Auditing Requirements and Valuation Issues in Financial Reporting (2 hrs) SFAS 141 & SFAS 142, November 28, 2001 AICPA – Implementing FASB 141: A Practical Case Study of a Business Combination (2 hrs) February 6, 2002 AICPA – Testing for Impairment Under SFAS 142: A Case Study March 7, 2002 (2 hrs)

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2003 AICPA National Business Valuation Conference (27 hrs) Practical Approach to Using Statistics in Business Valuation Engagements Pass-Through Entities – What’s All the Fuss About? Engagement Efficiencies and Effectiveness Economic Damages Real Options FLP & LLC Valuation Strategies – Minimizing IRS Attacks FAS 141/142 Developments in the Valuation of ESOP Shares AICPA Business Valuation Standards Practice Management Issues Valuation Issues: A Perspective From a U.S. Tax Court Judge Sarbanes-Oxley – What it Means to Business Appraisers Issues in Lack of Marketability Discounts Coaching Clients over the Value Bridge Mock Trial 2006 AICPA National Business Valuation Conference (21 hrs) The Creation and Destruction of the Valuation Expert The Commody Boom and Global Economics Financial Analysis - Beyond the Calculations Income Approach- Overview and Pitfalls FASB Emerging Issues SEC Perspective on Valuations in Financial Reporting Control Value: Key Factors in Determining a Control Premium Electronic Discovery & Evidence Spoliation Ins and Outs of Lost Profits Analysis S-Corps/Pass-Through Advanced Statistical Applications for BV Engagements Judging Valuation Experts & Their Reports: View From the Bench AICPA Town Hall Meeting - BV Section Update Business Valuation Standards Case Study: Anatomy of an Intangible Asset Valuation Engagement Part 1 Case Study: Anatomy of an Intangible Asset Valuation Engagement Part 2 2007 AICPA National Business Valuation Conference (21 hrs) The Economics of Disasters: The Economic Impact of Katrina & Rita Dream the Impossible Dream: Can Specific Company Risk Really Be Quantified? Calculating the Cost of Capital for Companies Less than $100 Million in Value

Discounts for Lack of Marketability Panel- Who’s on First, What’s on Second, I Don’t Know Who is on Third Town Hall Meeting- ABV Credential Holders Appraiser Professional Responsibility Quantitative Application in Valuation – Basic Statistical Measure IRC 409A and SFAS 123R Valuations Risks along the Technology Life Cycle Tax Valuation Trials- Dos and Don’ts

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Hardball with Hichner- Ask Experts Valuation Musical Works and Literary Rights BV Standards Update with Q & A Panel Developing Meaningful Discount Rates for Damage Analysis Cases A View from the Bench: The Biggest Mistake Experts Make and a Judge’s View on How to Avoid Them

2003 Alliance of Merger and Acquisition Advisors (24 hrs) The Certified in Merger and Acquisitions Credentialing Program How to be a Rainmaker Selling for the Most Profit Business Analysis and Valuation for M&A Advisory Professionals Legal Issues for M&A Tax Issues for M&A Pencor Mazur 1999 Fifth Annual Super Conference for CPA’s How Technology Will Forever Change the Accounting Industry How to Sell a Company for Maximum Value Street Value v. Textbook Value The Due Diligence Process Growing and Grooming: Preparing a Business to Sell for the Highest Price Corporate Finance: Finding the Money and Funding the Deal New Innovations for Business Development Mentor Plus 2003 Performance Measurement PLUS Skills & Systems Workshop (16 hrs) Performance Measurement: The Concept Performance Measurement: The Process Performance Measurement: The Service Northwestern Mutual Estate and Business Planning (5 hrs) 1990 Nichols Education Corporation Winning In Court II (8 hrs) Background and Overview Subject of Expert Testimony Insurance Investigations Business Interruption Business Valuations

Business valuation, forensic accounting, exit planning - J. Richard … · 2016-04-13 · J. R...

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