TEXXI

TRANSIT EXCHANGE FOR THE XXI CENTURYTHE TAXI YOU TEXTTM

AN ENERGY EFFICIENT TRANSPORT SYSTEM

www.texxi.com

Texxi LimitedRegistered Office:

The Old Tavern, Market Square,Petworth, West Sussex, GU28 0AH United Kingdom.

+44 (0) 0270 993 2324+44 (0) 0845 127 5037

eric.masaba@texxi.com

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by _________________________ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious

harm or damage to _________________________.

Upon request, this document is to be immediately returned to _________________________.

___________________ Signature

___________________Name (typed or printed)

___________________Date

This is a business plan. It does not imply an offering of securities.

1. Executive Summary 21.1. Objectives 21.2. Mission 2

2. Company Summary 22.1. Company Ownership 22.2. Company History 2

3. Services 24. Market Analysis Summary 2

4.1. Market Segmentation 24.2. Target Market Segment Strategy24.3. Competition and Buying Patterns 24.4. Service Business Analysis 2

5. Strategy and Implementation Summary 25.1. Competitive Edge 25.2. Milestones 25.3. Texxi Franchise Model 2

6. Management Summary 27. Financial Plan 2

7.1. Important Assumptions 27.2. Break-even Analysis 27.3. Projected Profit and Loss 27.4. Projected Cash Flow 27.5. Projected Balance Sheet 27.6. Business Ratios 2

1. Executive Summary

Road traffic congestion, parking congestion, CO2 emmissions, noise pollution and road rage have all been created by high traffic levels. Improvements in public transport are frequently claimed to be the best solution to reducing traffic levels. However, the private car is unbeatable in terms of convenience, security and flexibility. Public transport is based on fixed routes and fixed timetables.

Question: How can today's public transport be made more attractive so as to compete with the private car?

Answer: By eliminating the pre-planning, waiting time, and inflexibility of the itinerary of public transport.

It's 2 o'clock on a cold and damp winter's night and there are not many free taixs to be found. All the revellers have had a great night out but other than walking for miles, how do they get home quickly?

The police and local authorities are severely stretched and want to speed up the dispersion of large groups at these peak times.

Question: How can clubbers get home quickly, safely and economically?

Answer: Texxi is the breakthrough that solves late night transport challenges.

Texxi is the breakthrough that solves transport problems and traffic congestion.

HOW IT WORKS

123

TEXXI: The taxi you textTM

CUSTOMER DATABASECustomer and location identified& order taken according to filters

Filters:Texxi Groups

Customer Profiles (luxury vehicle, women only)Loyalty schemes

Customer andVehicle Ratings

Vehicledetails, time

& pick-uppoint textedto Customer

Customer texts for a taxi

Trip Optimisation

Dispatch and Administration

Legend

Texxi

Customer

Customerconfirms

acceptance bytext

The system optimises groups and routes based onService Rules

VEHICLE SELECTIONTexxi chooses the best vehiclebased on cost, fuel efficiency,

driver rankings

DISPATCHNew or updated route

sent to vehicle'ssatellite navigation

system

Trip Quality,Productivity,Performance

Systems

TRIP COMBININGTexxi automatically combinesnew trip with existing route

where feasible

Customer(N) texts

reservationcentreCustomer 2texts

reservationcentreCustomer 1texts

reservationcentre

Billing andAdministration

THE 7 MODES OF TEXXI

1. Evening Economy: Clubbers and pub-goers travel home quickly and safely. Single women a key market for Texxi.

2. Corporate: Virtual Private Travel, enabling executives and clients to have a luxury fleet at their service

3. Commuter: ride-sharing "hub and spoke" transport between a central transit point (train station) and a business district

4. Shopping: on-the-fly, door-to-door budget travel from supermarkets or shopping centres

5. School Run: Virtual Private Travel, enabling children to travel together to their school

6. Large Event: transport solutions for large scale festivals and events, particularly

where parking is limited

7. Tourist: economical transit beyond fixed routes with optional Language Operator filter

1.1. Objectives

Texxi's objective is to become the branded Demand Responsive Transit (DRT) broker of choice in the world.

Following the successful trial of Texxi in Liverpool, England, the objectives for the next three years of operation include:

1. securing additional financing of $10 million for systems development and capacity expansion, network and operation support, TV advertisement production costs, advertising and marketing costs, and franchise business development

2. having 2,500 vehicles operating under the "Night" mode schemes globally

3. operating three franchise agreements in each of three countries

4. Negotiating branding agreements with at least one mobile telephone company, one train operator, and one automobile company

1.2. Mission

The mission of Texxi is to provide public transport without fixed routes and timetables. Texxi aims to get people out of their private cars and into shared vehicle services for the majority of their journeys. This will reduce traffic jams, ease parking congestion and reduce air polution and greenhouse gas emissions without governments resorting to large infrastructure transport projects. Texxi's mission is also to provide a safe, reliable, community-oriented, inclusive mode of transport for senior citizens, young adults, and late night travellers who otherwise do not have easy access to flexible, safe and economical transport.

2. Company Summary

Texxi is a UK-registered company which provides Demand Responsive Transit (DRT) brokerage systems, enabling ride-sharing on-the-fly using users' mobile phones.

Using his experience of credit contagion algorithms in investment banking, the founder (one of the founders???) developed a system to combine people travelling at approximately the same time and direction to a single vehicle. Texxi is a radical departure from existing ride-sharing schemes such as "dial-a-ride", "paratransit" and "airport shuttle" services which are booked up by telephone usually hours or days in advance. With the advent of mobile (cell) phones, text (SMS) facilities, Global Postioning Systems (GPS) and in-car satellite navigation systems, Texxi's real-time text-based DRT Brokerage System is the breakthrough solution to transport problems and traffic congestion.

2.1. Company Ownership

Texxi was founded in March 2005 as a registered Limited Company with registered offices in Petworth, West Sussex, England and its first operations in Liverpool. It is

owned by the founders, its principal investors and principal operators.

2.2. Company History

The idea for Texxi came about several years ago when the founder (one of the founders???) realised that he was paying $40 a day for taxis from the train station to his office, despite several other people he knew working in the same vicinity and going to work at the same time. As this annoyance grew, his thought crystallised on the design of a system to make use of these unheeded correlative effects and partnered this with his knowledge of information and mobile (cell) phone technology.

Having built the foundations of the Texxi DRT Brokerage System, Texxi ran a trial in Liverpool, England between January and September 2006.

A Demand Mapping Exercise was conducted to assess the demographics and opportunites for a Texxi service (see XXXX for more on Demand Mapping Exercises). "Evening Economy" mode was chosen, with the target market being 18-30 year olds, who go clubbing on a Friday and Saturday night. The existing Liverpool taxi infrastructure was not meeting the 100,000-passenger midnight to 4am demand, despite there being 1500 "black cabs" and 20,000 private hire vehicles in Liverpool. It was not uncommon to see young people making their own way home alone on foot at least 2 miles (and in some cases 15 miles).

Negotiations were held with the local council and the police to get permission for trial pick-up points and XXX taxi drivers were engaged. A marketing plan was implemented (radio advertising, in-club media, ground force marketing, Texxi website videos, etc). Finally, once the service had been operating for 3 months, performance (revenue passenger mile, average time to pick-up, on-time performance, load factor, average time to pick-up, etc) and costs (per passenger mile, per trip, etc) were measured. So far the trial has provided an experience of:

· confirming robustness of hardward and software systems

· systems implementation: text processing, driver alerts, administration and billing, Texxi Groups

· level of interest from the local council (low) and the police (high)

· negotiations with the local council, police, taxi firms, clubs, mobile phone service providers

· marketing: local radio, nightclub advertising, street marketers

· pricing bands

· taxi driver education

· getting people to text "to hire", rather than using text only "to communicate"

· the degree of resistance to ride-sharing

· functionality of user "Groups" for ride-sharing

It seemed that:

· Most people would not try something new of their own accord--leaders, demonstrators and queue marshals were needed.

· Most people were naturally incurious--Texxi's message would have to appeal to base human instincts of fear, greed or sex.

· Texxi had to compete with many other media messages--as an innovative service Texxi would need edgey marketing, employing viral marketing methods.

FINANCIAL FACTS ETC

Following the successful trial in Liverpool, Texxi is now pursuing opportunities to set up operations in other cities in the U.K. and other countries. Texxi is developing a franchise model for rollout as soon as possible.

Past Performance FY 2003 FY 2004 FY 2005Sales £0 £0 £0Gross Margin £0 £0 £0Gross Margin % 0.00% 0.00% 0.00%Operating Expenses £0 £0 £0 Balance Sheet FY 2003 FY 2004 FY 2005 Current Assets Cash £0 £0 £0Other Current Assets £0 £0 £0Total Current Assets £0 £0 £0 Fixed Assets Capital Assets £0 £0 £0Accumulated Depreciation £0 £0 £0Total Fixed Assets £0 £0 £0 Total Assets £0 £0 £0 Current Liabilities Accounts Payable £0 £0 £0Current Borrowing £0 £0 £0Other Current Liabilities (interest free)

£0 £0 £0

Total Current Liabilities £0 £0 £0 Fixed Liabilities £0 £0 £0Total Liabilities £0 £0 £0 Paid-in Capital £0 £0 £0Retained Earnings £0 £0 £0Earnings £0 £0 £0Total Capital £0 £0 £0 Total Capital and Liabilities £0 £0 £0 Other Inputs Payment Days 0 0 0

Past Performance

£0

£0

£0

£0

£0

£1

£1

£1

£1

£1

£1

FY 2003 FY 2004 FY 2005

Sales

Gross

Net

3. Services

HOW IT WORKS

Users text (SMS) their required destination postcode to Texxi. The Texxi comuter system searches its database for a nearby vehicle whose current itinerary is compatible with the passenger's itinerary. Within two minutes the passenger is sent a text with the driver's details and boarding point. If the passenger texts back "YES", then another text will be sent to the passenger confirming the arrival of the vehicle (less than 15 minutes). Once the new passenger is picked up and pays (cash or Texxi credit), the driver is directed along the custom route by GPS in-car satellite navigation technology. In essence, a Texxi is likea regular bus, but with a completely flexible, computer-generated route weaving through a sequence of passenger points, rather than along a rigid bus route with fixed stops. Users can create a Texxi Group, an invitation-only online community, designed for those who already have strong connections with one another and choose to travel, as a first choice, with each other.

THE 7 MODES OF TEXXI:

Evening Economy

This scheme provides passengers with shared transport home from bars, restaurants, and nightclubs when transport resources are limited. This scheme usually runs on Friday and Saturday nights, between 10:30pm and 4:00am. This service gets people home more quickly by using vehicles more efficiently. Passengers save money compared to a normal taxi (£5 fare versus £9 fare) and at the same time taxi drivers earn more per journey (e.g. £25 versus £9). Importantly, this scheme provides a safe journey home. In Liverpool, it has not been uncommon to see young women making their way alone on foot at least 2 miles before they can get transport. "NightSafety" groups and the police support this mode because it reduces the numbers of evening-goers milling around the city centre unable to return home promptly.

Corporate

This scheme allows large companies to provide transport to employees at a reduced cost by combining trips. Staff can rideshare on demand as little as 15 minutes beforehand. For corporations with multiple sites, "Corporate" mode can move employees quickly and flexibly between locations.

Additionally, under "Corporate" mode, a company can contract for a certain minimum standard of vehicle to be used and a Virtual Private Travel (VPT) mask can be applied to the mode, enabling executives and their clients to have a luxury fleet at their service.

Companies with nightshift workers or with employees in the bar and restaurant industry can provide a safe and reliable way home for their workers, making them an attractive employer to work for.

A combination of Texxi and public transport (trains, flights, etc) can be formed to create a trip chain by aligning itineraries and timetables.

Commuter

This scheme provides "hub and spoke" transport between a central transit point (e.g. train station) and a business district, or between a catchment area (e.g. a suburban pick-up point) and a transit point (e.g. a train station). A combination of Texxi and public transport (trains, flights, etc) can be formed to create a trip chain by aligning itineraries and timetables.

Shopping

This scheme provides people who live far from a supermarket or shopping centre with transport without relying on others or on public transport. This helps to eleviate social excusion by providing a flexible service that is cheaper than a regular taxi and by providing a "door to door" service not available from a bus service. Local councils, or indeed shopping centre operators, might licence this mode.

School Run

This scheme allows children from a particular area to all travel together to their school. In reverse mode, this scheme allows children with varying aftershool activities to text for a ride home on demand in as little as 15 minutes beforehand. Parents' Associations or school boards can contract for a certain minimum standard of vehicle (e.g. Mercedes Viano/Renault Espace) to be used and a Virtual Private Travel (VPT) mask can be applied to the mode, enabling children to travel in a "virtual school bus".

Large Event

This scheme provides organisers of large scale festivals and events (e.g. Creamfields, Global Gathering, Glastonbury, V2, Gyndebourne, Silverstone, Henley, Cowes, Cartier Polo, British Open, etc) with a transport solution. This mode eleviates significant headaches for local and regional police and provides a solution for the young (and less affluent) who populate the raves and festivals. A fun way to travel would be a Volkswagen Type 2 as a festival commuter vehicle. Even better would be one running on sunflower oil of some other

renewable energy.

Tourist

This scheme provides economical transit beyond fixed routes and can include a Language Operator. This allows visitors to a city to text for a taxi driver who speaks their language. Even if the driver is not a great conversationalist, the basic greetings can make all the difference to tourists. In many capital cities taxi drivers oftern double as tour guides, offering for a fixed fee to drive tourists around the city's landmarks but with no "hop-on, hop-off" option. And many cities have "open-top double decker" tour buses but these services run to a fixed route. "Tourist" mode provides the hop-on hop-off flexibility and economy of the city tour bus, plus it gives the freedom to explore off the beaten path that a regular taxi provides.

4. Market Analysis Summary

Texxi is faced with the exciting opportunity to be the first-mover in the DRT market using mobile technology. Solutions to the problems of traffic congestion and CO2 emissions are in high demand. Texxi is particularly attractive as it doesn't require any investment in transport infrastructures. Market testing of the Texxi DRT Brokerage Service has been successfully trialled for 6 months in Liverpool, England. Interest has already been expressed by several other local councils in the UK. Currently, expressions of interest are being pursued in Australia, Hong Kong, China and the USA (California).

4.1. Market Segmentation

Texxi's Total Available Market is the sum of passengers who travel by road. The market segment that Texxi will focus on are those passengers traveling within urban or suburban areas (min. pop. density 2500/km2) because vehicle sharing needs a critical mass of passengers and vehicle density (Texxi vehicles 6/km2) to operate effectively. Texxi is not restricted to journeys within city limits; inter-city operation are practicable. However, Texxi's early development will focus on travellers in conurban areas.

Initially, Texxi is focusing on the market segment of late-night travellers in cities with a population of 1 million or more. By the end of the three year projections, Texxi expects to be serving all "7 Modes" (Evening Economy, Corporate, Commuter, School Runs, Shopping, Tourist, and Large Events) either directly or via franchise businesses.

4.2. Target Market Segment Strategy

Texxi's initial focus on late-night travellers will include pub-goers at "closing time" and 18-30 year old clubbers. Texxi will particularly target single women travellers for whom safety is a key concern.

GRAPH OF DEMAND ACROSS 10:30pm to 4am needed

The 18-30 year old segment are savvy users of mobile (cell) phone technology and mobile phone ownership is high among this group. They are early adopters of new technologies and services: from blogging, downloading music, to rating videos on YouTube, etc. These young people are relatively cash-poor but spend a large proportion of their disposible income on their nights out. They normally walk home, take a taxi or have a designated driver. They readily form overlapping social networks and can be open and flexible about who they travel with within those networks. Most say that they have experienced the frustration of getting split off from their group on a night out which leads to problems getting home.

MARKETING STRATEGY

Market Segment Characteristic Texxi Advantage

high mobile (cell) phone ownership Texxi operates solely by mobile text (SMS)experienced text (SMS) users Texxi operates solely by text (SMS)Early adopters Texxi breaks the travel molddisposable income spent on nights out willing to pay taxi-like pricesdanger of walking home alone, especially women Texxi is safehave overlapping social groups create Texxi Groupstaxi users cheaper than a taxispontaneity real-time booking

grouping to go home like herding catsTexxi Group "text to all in group" when group ride ready

used to queuing for taxi on-the-fly availabilitydesignated drivers no need to drive or park

4.3. Competition and Buying Patterns

Depending on which of the 7 Texxi modes are being compared, the competition is: car, taxi and/or bus

Customers choose between these alternatives based on convenience and price.

Factors that makes the most difference are:

· trusted sharing: getting into a vehicle with trusted passengers, through Texxi Groups

· speed of response: pick-up time of 15 minutes or less

· speed of journey: a door-to-door journey that is no more that one and a half times the length of time taken in a car or unshared taxi. (Note Department of Transport statistics show that for truips less than 25 miles, the door-to-door journey time by bus or train is twice as slow as a car.)

· cost: less than cost of private car plus parking or cost of unshared taxi

4.4. Service Business Analysis

COMPILE STATISTICS ABOUT TAXI REVENUE (PER HOUR OR PER MONTH). SHOW HOW MUCH HIGHER THE MARGINS FOR TEXXI DRIVERS ARE.

5. Strategy and Implementation Summary

DEMAND MAPPING EXERCISE

Whilst there are numerous quality data gathering exercises and studies undertaken to make decisions about transport requirements for any given area, there is not yet any analysis that extends to a DRT scheme. Ensuring that Texxi is applied in the best possible way starts with a client paying for a Texxi Demand Mapping Exercise (DME) in the relevant urban area. The DME will confirm which modes of Texxi are relevant to the area and establish the basis for implementation of the scheme, including:

· the fare structure

· initial location of meeting/muster points

· quantity and hours of drivers needed

Scope of data gather includes:

· volumes, flow and clusters of people, hour by hour (real-time footfall)

· existing transport capabilities, vehicle sizes, disability coverage and routes

· existing bus stops and taxi ranks

· existing bus and taxi passenger numbers

· current taxi and private hire fares from centre to postcode districts

· parking facilities and pricing

· key destinations (businesses, clubs, theatres, sports facilities, train stations, etc)

· policing and transport initiatives

· existing social networking

· media survey (local/regional newspapers, radio stations,etc) and demographics

· economic survey (disposable income by age and area)

IMPLEMENTATION

5.1. Competitive Edge

The Texxi business is designed as a brokerage system. Texxi does not own the vehicles, navigation systems or mobile phones that are used in order for Texxi transit to take place. In almost all cases the vehicles, navigation systems and mobile phones are all already owned by passenger and Texxi partners. It is a very light business model with franchise scalability. As with all brokerage business Texxi is reliant on network effects to grow and compete. The costing for the yearly licence has been worked out to be about 1/20th of the cost to a council/organisation of supplying the infrastructure of equivalent capacity. There are no techonolgical constraints on where and how Texxi operates. With a minimum of manpower Texxi can serve 100 cities almost as effectively as it can serve 10 locales.

DESCRIBE OR HINT AT PROPRIETARY ALGORYTHMS AND INCREMENTAL CODING METHODOLOGY.

DESCRIBE PATENT PENDING.

One of Texxi's competitive advantages in the UK is simply having the UK phone number 83994 for texting, which spells TEXXI on the user's phone, making it easy to remember.

"Texxi Groups", where passengers travel with people they know, creates barriers to entry.

Texxi can maintain and develop its value over time by developing additional innovations:

Texxi Predictive Broking": Text (SMS) users ahead of them needing a vehicle based on their itinerary histories (with opt-in consent); place vehicles in locations ahead of demand.

"Texxi-tell": inform loved ones when passenger boards and alights from transport vehicles; tell users when Texxi Group of friends are going in case use wants to join in (with opt-in consent).

"Texxi Time-Domain Transit Maps": Manchester may be 30 miles away from Liverpool in the "spatial domain", but is further away in "time domain" at 08:00-10:00 than at 22:00 - 06:00.

Texxi Dynamic Parking Solutions: car drivers check ahead and pre-book parking; councils create temporary car parks or dynamic parking zones and allow parking wardens to check enforcement with hand-held cameras (existing Texxi application written).

5.2. Milestones

The Texxi team has established some basic milestones to keep the overall business plan priorities in place. Responsibility for implementation falls on the shoulders of Eric Masaba and Matthew Burden. By way of explanation, Texxi has operated the "one-to-many" transit points system in Liverpool, and equally "one-to-one" transit (train station to event drop-off) is obviously a subset of that system and therefore doable. It will be one of Texxi's milestones to trial the "many-to-one" transit point system to see if this is feasible, e.g. how operations are effected when passengers say they are ready to be picked up and they are not.

Milestones Milestone Start Date End Date Budget Manager Departme

ntLiverpool "Evening Economy" Pilot

1/1/2006 1/9/2006 £0 Eric Masabe

XXX

Secure $10 million financing 1/11/2006 1/3/2007 £0 ABC XXX2nd UK city with "Evening Economy" started

1/1/2007 1/3/2007 £0 ABC XXX

Trial of "many-to-one" point transport

1/1/2007 1/11/2007 £0 ABC XXX

1st non-UK operation 1/1/2007 1/11/2007 £0 ABC XXX

1st multi-mode franchisee 1/1/2008 1/6/2008 £0 ABC XXX1st country master franchise 1/6/2008 1/12/2008 £0 ABC XXXTotals £0

5.3. Texxi Franchise Model

FRANCHISE MODEL

FRANCHISE STRUCTURE

FRANCHISE FEES AND OUTLAYS

6. Management Summary

Our company philosophy is based on mutual respect for all contributions made by our founders, investors, consultants, and employees without regard to the position held in the company. The initial management team depends on the founders themselves. As we grow, we will take on the following staff: sales, marketing,.....

MANAGEMENT SUMMARY and CREDENTIALS

Founders

Management

Advisors

Boards

7. Financial Plan

The following sections will detail important financial information.

REVENUE MODEL AND PRICING

1) INDIVIDUAL OPERATION (like revenue model on website)

2) FRANCHISE

3) WHOLE OF TEXXI (for investors)

7.1. Important Assumptions

The following table highlights some of the important financial assumptions for TEXXI.

General Assumptions FY 2006 FY 2007 FY 2008Plan Month 1 2 3Current Interest Rate 10.00% 10.00% 10.00%Long-term Interest Rate 10.00% 10.00% 10.00%Tax Rate 25.42% 25.00% 25.42%Other 0 0 0

7.2. Break-even Analysis

Explain the break-even assumptions from the Break-even Analysis table and chart that will normally print right after this topic. Include whatever detail you think is appropriate.

You might also cover the implications of the break-even. For a start-up company, you should compare the break-even point with your sales prospects. For an ongoing company, the break-even analysis should show that you are running comfortably above the break-even point.

For example:

The Break-even Analysis indicates that TEXXI must have $19,500 in revenue to break even.

Break-even Analysis Monthly Revenue Break-even £15,131 Assumptions: Average Percent Variable Cost 20%Estimated Monthly Fixed Cost £12,105

Break-even Analysis

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Break-even point = where line intersects with 0

7.3. Projected Profit and Loss

The following table will indicate projected profit and loss.

Pro Forma Profit and Loss FY 2006 FY 2007 FY 2008Sales £168,824 £282,759 £319,748Direct Cost of Sales £33,765 £56,552 £63,950Other £0 £0 £0 ------------ ------------ ------------Total Cost of Sales £33,765 £56,552 £63,950 Gross Margin £135,059 £226,207 £255,798Gross Margin % 80.00% 80.00% 80.00% Expenses Payroll £111,700 £138,900 £138,900Sales and Marketing and Other Expenses

£3,100 £3,600 £3,600

Depreciation £504 £498 £498Web site maintenance £600 £600 £600Utilities £1,200 £1,200 £1,200Insurance £5,400 £5,400 £5,400Rent £6,000 £0 £0Payroll Taxes £16,755 £20,835 £20,835Other £0 £0 £0 ------------ ------------ ------------Total Operating Expenses £145,259 £171,033 £171,033 Profit Before Interest and Taxes

(£10,200) £55,174 £84,765

EBITDA (£9,696) £55,672 £85,263

Interest Expense £0 £0 £0Taxes Incurred £0 £13,794 £21,545 Net Profit (£10,200) £41,381 £63,221Net Profit/Sales -6.04% 14.63% 19.77%

7.4. Projected Cash Flow

The following chart and table will indicate projected cash flow.

Pro Forma Cash Flow FY 2006 FY 2007 FY 2008Cash Received Cash from Operations Cash Sales £168,824 £282,759 £319,748Subtotal Cash from Operations

£168,824 £282,759 £319,748

Additional Cash Received VAT Received (Output Tax) £29,544 £49,483 £55,956HMRC VAT Repayments £204 £0 £0New Current Borrowing £0 £0 £0New Other Liabilities (interest-free)

£0 £0 £0

New Fixed Liabilities £0 £0 £0Sales of Other Current Assets £0 £0 £0Sales of Fixed Assets £0 £0 £0New Investment Received £0 £0 £0Subtotal Cash Received £198,572 £332,242 £375,704 Expenditures FY 2006 FY 2007 FY 2008 Expenditures from Operations Cash Spending £111,700 £138,900 £138,900Bill Payments £57,893 £102,525 £115,884Subtotal Spent on Operations £169,593 £241,425 £254,784 Additional Cash Spent VAT Paid Out (Input Tax) £10,285 £13,922 £15,216HMRC VAT Payments £12,362 £42,663 £40,739Principal Repayment of Current Borrowing

£0 £0 £0

Other Liabilities Principal Repayment

£0 £0 £0

Fixed Liabilities Principal Repayment

£0 £0 £0

Purchase Other Current Assets £0 £0 £0Purchase Fixed Assets £0 £0 £0Dividends £0 £0 £0Subtotal Cash Spent £192,239 £298,010 £310,740 Net Cash Flow £6,333 £34,232 £64,964Cash Balance £6,333 £40,565 £105,529

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7.5. Projected Balance Sheet

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet FY 2006 FY 2007 FY 2008Assets Current Assets Cash £6,333 £40,565 £105,529Other Current Assets £0 £0 £0Total Current Assets £6,333 £40,565 £105,529 Fixed Assets Fixed Assets £0 £0 £0Accumulated Depreciation £504 £1,002 £1,500Total Fixed Assets (£504) (£1,002) (£1,500)Total Assets £5,829 £39,563 £104,029 Liabilities and Capital FY 2006 FY 2007 FY 2008 Current Liabilities Accounts Payable £8,927 £8,382 £9,627Current Borrowing £0 £0 £0Other Current Liabilities £7,102 £0 £0Subtotal Current Liabilities £16,029 £8,382 £9,627 Fixed Liabilities £0 £0 £0Total Liabilities £16,029 £8,382 £9,627 Paid-in Capital £0 £0 £0

Retained Earnings £0 (£10,200) £31,181Earnings (£10,200) £41,381 £63,221Total Capital (£10,200) £31,181 £94,402Total Liabilities and Capital £5,829 £39,563 £104,029 Net Worth (£10,200) £31,181 £94,402

7.6. Business Ratios

The business ratios table below is generated by the planning software using the interconnected tables. Standard industry ratios, based upon Standard Industrial Classification Code (SIC) 4111, Local and Suburban Transit, are shown for comparison.

Ratio Analysis FY 2006 FY 2007 FY 2008 Industry

ProfileSales Growth 0.00% 67.49% 13.08% 3.70% Percent of Total Assets Other Current Assets 0.00% 0.00% 0.00% 45.30%Total Current Assets 108.65% 102.53% 101.44% 64.40%Fixed Assets -8.65% -2.53% -1.44% 35.60%Total Assets 100.00% 100.00% 100.00% 100.00% Current Liabilities 274.99% 21.19% 9.25% 31.20%Fixed Liabilities 0.00% 0.00% 0.00% 25.20%Total Liabilities 274.99% 21.19% 9.25% 56.40%Net Worth -174.99% 78.81% 90.75% 43.60% Percent of Sales Sales 100.00% 100.00% 100.00% 100.00%Gross Margin 80.00% 80.00% 80.00% 66.70%Selling, General & Administrative Expenses

86.04% 65.37% 60.12% 46.50%

Advertising Expenses 0.36% 0.21% 0.19% 0.50%Profit Before Interest and Taxes

-6.04% 19.51% 26.51% 2.90%

Main Ratios Current 0.40 4.84 10.96 1.61Quick 0.40 4.84 10.96 1.17Total Debt to Total Assets 274.99% 21.19% 9.25% 56.40%Pre-tax Return on Net Worth 100.00% 176.95% 89.79% 4.60%Pre-tax Return on Assets -174.99% 139.46% 81.48% 10.50% Additional Ratios FY 2006 FY 2007 FY 2008 Net Profit Margin -6.04% 14.63% 19.77% n.aReturn on Equity 0.00% 132.71% 66.97% n.a Activity Ratios Accounts Payable Turnover 7.49 12.17 12.17 n.aPayment Days 27 31 28 n.aTotal Asset Turnover 28.96 7.15 3.07 n.a Debt Ratios

Debt to Net Worth 0.00 0.27 0.10 n.aCurrent Liab. to Liab. 1.00 1.00 1.00 n.a Liquidity Ratios Net Working Capital (£9,696) £32,183 £95,902 n.aInterest Coverage 0.00 0.00 0.00 n.a Additional Ratios Assets to Sales 0.03 0.14 0.33 n.aCurrent Debt/Total Assets 275% 21% 9% n.aAcid Test 0.40 4.84 10.96 n.aSales/Net Worth 0.00 9.07 3.39 n.aDividend Payout 0.00 0.00 0.00 n.a

Sales Forecast Ma

rApr May Jun Jul Aug Sep Oct

Sales VAT Rate

Car users 17.50%

£0 £1,578

£1,874

£3,958

£6,645

£7,345

£8,287

£9,258

Clubbers 0.00% £0 £0 £0 £0 £0 £0 £0 £0Shoppers 0.00% £0 £0 £0 £0 £0 £0 £0 £0Commuters 0.00% £0 £0 £0 £0 £0 £0 £0 £0School Runs 0.00% £0 £0 £0 £0 £0 £0 £0 £0Inserted Row 0.00% £0 £0 £0 £0 £0 £0 £0 £0Large Event Organisers 0.00% £0 £0 £0 £0 £0 £0 £0 £0Business travelers 17.50

%£0 £1,11

4£1,35

8£3,22

5£4,75

4£5,51

4£6,95

8£8,12

5Total Sales £0 £2,69

2£3,23

2£7,18

3£11,3

99£12,8

59£15,2

45£17,3

83 Direct Cost of Sales VAT

RateMa

rApr May Jun Jul Aug Sep Oct

Individuals/families 17.50%

£0 £316 £375 £792 £1,329

£1,469

£1,657

£1,852

Business travelers 17.50%

£0 £223 £272 £645 £951 £1,103

£1,392

£1,625

Subtotal Direct Cost of Sales £0 £538 £646 £1,437

£2,280

£2,572

£3,049

£3,477

Personnel Plan Mar Apr May Jun Jul Aug Sep OctPerson 0% £3,00

0£3,00

0£3,00

0£3,00

0£3,00

0£3,00

0£3,00

0£3,00

0Person 0% £0 £1,50

0£1,50

0£1,50

0£1,50

0£1,50

0£1,50

0£1,50

0Person 0% £0 £2,20

0£2,20

0£1,80

0£1,80

0£1,80

0£1,80

0£1,80

0Person 0% £0 £2,20

0£2,20

0£1,80

0£1,80

0£1,80

0£1,80

0£1,80

0Person 0% £0 £0 £0 £0 £1,80

0£1,80

0£1,80

0£1,80

0Person 0% £0 £0 £0 £0 £0 £0 £0 £0

Total People 1 4 4 4 5 5 5 5 Total Payroll £3,00

0£8,90

0£8,90

0£8,10

0£9,90

0£9,90

0£9,90

0£9,90

0

General Assumptions Mar Apr May Jun Jul Aug Sep OctPlan Month 1 2 3 4 5 6 7 8Current Interest Rate 10.00

%10.00

%10.00

%10.00

%10.00

%10.00

%10.00

%10.00

%Long-term Interest Rate 10.00

%10.00

%10.00

%10.00

%10.00

%10.00

%10.00

%10.00

%Tax Rate 30.00

%25.00

%25.00

%25.00

%25.00

%25.00

%25.00

%25.00

%Other 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss Mar Apr May Jun Jul Aug Sep OctSales VAT

Rate£0 £2,692 £3,232 £7,183 £11,39

9£12,85

9£15,2

45£17,3

83Direct Cost of Sales £0 £538 £646 £1,437 £2,280 £2,572 £3,04

9£3,47

7Other 17.50

%£0 £0 £0 £0 £0 £0 £0 £0

------------

------------

------------

------------

------------

------------

------------

------------

-

Total Cost of Sales £0 £538 £646 £1,437 £2,280 £2,572 £3,049

£3,477

Gross Margin £0 £2,154 £2,586 £5,746 £9,119 £10,28

7£12,1

96£13,9

06Gross Margin % 0.00% 80.00

%80.00

%80.00

%80.00

%80.00

%80.00

%80.00

% Expenses VAT

Rate

Payroll £3,000 £8,900 £8,900 £8,100 £9,900 £9,900 £9,900

£9,900

Sales and Marketing and Other Expenses

17.50%

£150 £175 £200 £225 £250 £300 £300 £300

Depreciation £42 £42 £42 £42 £42 £42 £42 £42Web site maintenance 0.00% £50 £50 £50 £50 £50 £50 £50 £50Utilities 0.00% £100 £100 £100 £100 £100 £100 £100 £100Insurance 5.00% £450 £450 £450 £450 £450 £450 £450 £450Rent 17.50

%£500 £500 £500 £500 £500 £500 £500 £500

Payroll Taxes 15.00%

£450 £1,335 £1,335 £1,215 £1,485 £1,485 £1,485

£1,485

Other 17.50%

£0 £0 £0 £0 £0 £0 £0 £0

------------

------------

------------

------------

------------

------------

------------

------------

-

Total Operating Expenses

VAT Rate

£4,742 £11,552

£11,577

£10,682

£12,777

£12,827

£12,827

£12,827

Profit Before Interest and Taxes

(£4,742)

(£9,398)

(£8,991)

(£4,936)

(£3,658)

(£2,540)

(£631) £1,079

EBITDA (£4,700)

(£9,356)

(£8,949)

(£4,894)

(£3,616)

(£2,498)

(£589) £1,121

Interest Expense £0 £0 £0 £0 £0 £0 £0 £0Taxes Incurred £0 £0 £0 £0 £0 £0 £0 £0 Net Profit (£4,74

2)(£9,39

8)(£8,99

1)(£4,93

6)(£3,65

8)(£2,54

0)(£631) £1,07

9Net Profit/Sales 0.00% -349.1

2%-278.2

0%-68.71

%-32.09

%-19.75

%-4.14

%6.21%

Pro Forma Cash Flow Mar Apr May Jun Jul Aug Sep OctCash Received Cash from Operations

Cash Sales £0 £2,692 £3,232 £7,183 £11,399

£12,859

£15,245

£17,383

£1

Subtotal Cash from Operations

£0 £2,692 £3,232 £7,183 £11,399

£12,859

£15,245

£17,383

£1

Additional Cash Received

VAT Rate

VAT Received (Output Tax)

£0 £471 £566 £1,257 £1,995 £2,250 £2,668 £3,042 £3

HMRC VAT Repayments

£0 £204 £0 £0 £0 £0 £0 £0

New Current Borrowing

£0 £0 £0 £0 £0 £0 £0 £0

New Other Liabilities (interest-free)

£0 £0 £0 £0 £0 £0 £0 £0

New Fixed Liabilities

£0 £0 £0 £0 £0 £0 £0 £0

Sales of Other Current Assets

17.50%

£0 £0 £0 £0 £0 £0 £0 £0

Sales of Fixed Assets

17.50%

£0 £0 £0 £0 £0 £0 £0 £0

New Investment Received

£0 £0 £0 £0 £0 £0 £0 £0

Subtotal Cash Received

£0 £3,367 £3,798 £8,440 £13,394

£15,109

£17,913

£20,425

£2

Expenditures Mar Apr May Jun Jul Aug Sep Oct Expenditures from Operations

Cash Spending £3,000 £8,900 £8,900 £8,100 £9,900 £9,900 £9,900 £9,900 £9

Bill Payments £57 £1,748 £3,153 £3,305 £4,015 £5,126 £5,473 £5,948 £6

Subtotal Spent on Operations

£3,057 £10,648

£12,053

£11,405

£13,915

£15,026

£15,373

£15,848

£1

Additional Cash Spent

VAT Rate

VAT Paid Out (Input Tax)

£204 £435 £458 £583 £775 £835 £919 £994 £1

HMRC VAT Payments

£0 £0 £0 £0 £817 £0 £0 £4,383

Principal Repayment of Current Borrowing

£0 £0 £0 £0 £0 £0 £0 £0

Other Liabilities Principal Repayment

£0 £0 £0 £0 £0 £0 £0 £0

Fixed Liabilities Principal Repayment

£0 £0 £0 £0 £0 £0 £0 £0

Purchase Other Current Assets

17.50%

£0 £0 £0 £0 £0 £0 £0 £0

Purchase Fixed Assets

17.50%

£0 £0 £0 £0 £0 £0 £0 £0

Dividends £0 £0 £0 £0 £0 £0 £0 £0Subtotal Cash Spent

£3,260 £11,083

£12,511

£11,988

£15,507

£15,862

£16,292

£21,225

£1

Net Cash Flow (£3,26

0)(£7,717

)(£8,714

)(£3,548

)(£2,113

)(£752) £1,621 (£800) £5

Cash Balance (£3,260)

(£10,977)

(£19,691)

(£23,238)

(£25,352)

(£26,104)

(£24,482)

(£25,283)

(£2

Pro Forma Balance Sheet Mar Apr May Jun Jul Aug Sep Oct NAssets Startin

g Balances

Current Assets

Cash £0 (£3,260)

(£10,977)

(£19,691)

(£23,238)

(£25,352)

(£26,104)

(£24,482)

(£25,283)

(£20

Other Current Assets

£0 £204 £0 £0 £0 £0 £0 £0 £0

Total Current Assets

£0 (£3,057)

(£10,977)

(£19,691)

(£23,238)

(£25,352)

(£26,104)

(£24,482)

(£25,283)

(£20

Fixed Assets Fixed Assets £0 £0 £0 £0 £0 £0 £0 £0 £0Accumulated Depreciation

£0 £42 £84 £126 £168 £210 £252 £294 £336 £3

Total Fixed Assets

£0 (£42) (£84) (£126) (£168) (£210) (£252) (£294) (£336) (£3

Total Assets £0 (£3,099)

(£11,061)

(£19,817)

(£23,406)

(£25,562)

(£26,356)

(£24,776)

(£25,619)

(£20

Liabilities and Capital

Mar Apr May Jun Jul Aug Sep Oct N

Current Liabilities

Accounts Payable

£0 £1,643 £3,043 £3,172 £3,844 £4,944 £5,275 £5,736 £6,150 £6,4

Current Borrowing

£0 £0 £0 £0 £0 £0 £0 £0 £0

Other Current Liabilities

£0 £0 £36 £143 £817 £1,219 £2,634 £4,383 £2,048 £4,3

Subtotal Current Liabilities

£0 £1,643 £3,079 £3,315 £4,661 £6,164 £7,909 £10,120

£8,198 £10

Fixed Liabilities

£0 £0 £0 £0 £0 £0 £0 £0 £0

Total Liabilities

£0 £1,643 £3,079 £3,315 £4,661 £6,164 £7,909 £10,120

£8,198 £10

Paid-in Capital

£0 £0 £0 £0 £0 £0 £0 £0 £0

Retained Earnings

£0 £0 £0 £0 £0 £0 £0 £0 £0

Earnings £0 (£4,742)

(£14,140)

(£23,132)

(£28,067)

(£31,725)

(£34,265)

(£34,896)

(£33,817)

(£31

Total Capital £0 (£4,742)

(£14,140)

(£23,132)

(£28,067)

(£31,725)

(£34,265)

(£34,896)

(£33,817)

(£31

Total Liabilities and Capital

£0 (£3,099)

(£11,061)

(£19,817)

(£23,406)

(£25,562)

(£26,356)

(£24,776)

(£25,619)

(£20

Net Worth £0 (£4,74

2)(£14,14

0)(£23,13

2)(£28,06

7)(£31,72

5)(£34,26

5)(£34,89

6)(£33,81

7)(£31