Mobrand Business Plan

Balan Subramanian 9/1/2009

Contents
INDUSTRY OVERVIEW COMPANY DESCRIPTION MOBRANDS SERVICES MARKET RESEARCH AND ANALYSIS MARKETING STRATEGY MANAGEMENT TEAM FINANCIAL MODEL AND PROJECTIONS 5 7 9 11 13 15 16

Appendices
A. High level financial projections B. Monthly budget for 2010 C. Monthly cash flow statement for 2010 D. Quarterly budget 2011 to 2013 E. Quarterly cash flow statements 2011 to 2013 F. Income statement projections G. Balance sheet projections

Mobrand
Executive Summary
The Company Mobrand enables companies big and small to gain, build and extend a brand presence in the mobile world through the customized, research driven development of innovative applications built for various mobile platforms like iPhone, Blackberry, Palm OS, Android, Windows Mobile and Symbian. These applications are supported by a backend framework that is hosted, managed and supported by Mobrand. The company also builds social networks around these applications and hence around the clients brand. The company exists to serve two key audiences corporate clients who wish to extend their brand presence and end consumers who are looking for innovative, interactive applications built around their brands. The Opportunity The mobile applications market is exploding. Anecdotal and empirical evidence1 all point to exponential growth in the Smartphone market. With estimated sales of 400 million units per year and growing, Mobrand seeks to exploit this growth by building applications that are homogenous across devices and seamlessly integrated with other users irrespective of device homogeneity due to an indigenous backend that supports these applications. The industry trend evidenced by the increasing number of Mobile app stores and control over application distribution, points to an increased reliance on mobile applications vs. traditional information communications mechanisms such as web pages and even the Internet. While viewing web pages is entirely possible and acceptable with recent advances in rendering technology, consumers thirst for applications that fully use the interactive features of each device be in through multimedia capabilities or touch screen paradigms or networking technologies employed. We see this as a big opportunity. Given the size of the consumer base, companies across industries are looking for a mobile presence much like they looked for a web presence around the turn of the century. While web development is a commodity now we believe truly innovative and interesting mobile applications will remain a rarity for more than 5 years given the wide variety and creative functional capability various devices and platforms offer. Marketing Strategy Mobrands marketing strategy moves with the overall business strategy. Mobrands initial objective is to build a services business that caters to medium sized corporations (revenues between $1M to $100M a year) that enables it to build a backend platform that will be used by mobile application developers in the future much like the various PaaS (Platform as a Service) providers. Towards that end, the marketing strategy is multi-pronged. Initially Mobrand will focus on personal marketing exploiting our existing industry contacts in
1

http://www.bizjournals.com/triangle/stories/2009/08/31/daily68.html

various corporations looking for IT solutions in general. Building a network around applications enables us to market the application on behalf of the client across our networks: cross-selling across established networks. To differentiate ourselves, we will not market ourselves as a buildapps-for-hire firm. We will establish an image of a company that provides a full innovative solution with appropriate research and technology leverage. Pilot Program and Sales Strategy Mobrand has a dual objective of building client focused applications and a backend framework of patterns for different industries that can be customized and extended within the framework. Consequently the pilot program will seek to establish some presence on either of these fronts. We will run two pilots one for university basketball teams and another for companies wishing to support their products by providing information that enables the use of their products. Our sales strategy is to start building patterns and then prioritize deals that reuse and refine patterns higher over ones that require the development of new patterns. Our sales model consists of two revenue streams a transactional stream that comes with development of new applications and a continuous stream that comes with the hosting of such applications. Once we have built the framework, our sales strategy will shift to a utility computing model where we will allow applications to leverage and be hosted on our framework and charge for usage and licensing of the toolkit that enables the development of application backends. Revenues and Profitability Mobrands financial projections are based on conservative assumptions of potential penetration and ability to differentiate in the mobile applications development market, capability to build applications while supporting existing hosted applications and building a portfolio of templates/patterns for the backend framework. Based on these assumptions, Mobrand will achieve revenues of $6 million and net income of $2.7 million in 2013. Startup Costs and Offering Mobrand is seeking a strategic partner to provide $300,000 in capital, to finance acquisition, development and deployment of initial customer applications. After this initial financing, Mobrand will be engaged in building the customer base and as a byproduct build the portfolio of templates will be a huge asset on Mobrands balance sheet. Mobrand will require an additional $300,000 in early 2011 to fund marketing, and full fledged development of the backend platform as the industry backend platform for mobile applications. An additional funding of $200,000 later in 2012 will be required to support marketing of the platform and achieving a big jump in applications developed and hosted. Based on the current assumptions, without any initial funding, after the company develops 160 applications, it will achieve positive operating cash flows, which are estimated to occur in the first quarter of 2012. Will the funding requested above, our cash flow will remain positive from 2010 onwards.

Industry overview
Smartphones and mobile devices Smartphones enable consumers to make more than calls with their cellular devices. They open up a world of information that allows consumers access to information wherever they are. Information hence is what makes the phone smart. Smart phones have been around for a while now as early as the 90s. However major advances in their capabilities and supporting ecosystem of network providers, cellular networks, and application providers has been instrumental in positioning them at a point where the number of smartphones is poised to overtake the number of regular cell phones and even PCs. An industry in transition Until a few years back, the primary purpose of a Smartphone was to enable the retrieval of critical business information regardless of location at premium prices paid typically by businesses for such access. The Smartphone was reserved for corporate road warriors and dominated by providers such as RIM for the business segment and Nokia and others for the much smaller consumer segment. Advances in media delivery over various mediums particularly the Internet and the ability to build large amounts of content largely available for free through the phenomenon of social networking and web 2.0 have changed the landscape dramatically. Mobile applications As smartphones and mobile devices in general became more powerful they started to replace laptops and PCs as the primary means of getting content. However they reached a point where there was essentially no differentiation between devices from various providers. While various PDA like devices offered some differentiating user experiences, the Apple iPhone was a true industry changer and brought with it the phenomenon of application stores. The iPhone was a device primarily built for the consumer market and in that sense, the first of its kind. The iPhone is synonymous with interactive, design centered smart phones with mass appeal and truly innovative features built creatively with the customer in mind. However there are other equally interesting devices including from RIM, the Palm Pre, the Google Android platform which is not restricted to a single device manufacturer and the long standing Symbian and Windows Mobile platforms. Over the next few years, we see the grip of the iPhone as the market dominator relaxing and a wide choice of smartphones made available. Mobile applications development As the mobile market exploded, various needs for mobile application development emerged. The need for building mobile applications far exceeds the demands for web development at the turn of the century and enterprise application development soon thereafter. There are now two primary classes of application developers. Developers who build standalone or mildly networked applications sold directly to consumers, and custom application developers

who are available for hire to build applications that a company wants to provide to its current and potential customers/patrons. Most development firms build individual applications for each platform/device with very little asset reuse between versions built for separate devices. When there is asset reuse it is usually in widgets and the like. The reason for this is largely their direct reliance on existing data sources through web services. However this strategy does not present a uniform experience across devices and more importantly restricts the use of the application to a limited subset of smart phones. Typically, most applications are built only for one or two platforms because there are no cost savings for subsequent expansion to cover other smart phones .i.e. the new application will have to be built from scratch and provide the same functionality as the version before that for other platforms.

Mobrand and the industry Mobrands vision is to address current needs while preparing and equipping the industry for future needs. Mobrand wishes to solve current needs in application development while driving towards a backend infrastructure, MOBI for MObile Backend Infrastructure that will enable standardized creation of cross-device applications.

Figure 1: Mobrands solution to industry needs

Company Description
Company Purpose Mobrand is a company built for the purpose of making innovative, creative, indigenous mobile applications that provide real value to consumers who wish to stay connected with a brand. It enables the development of a community around the brand and the application through incorporation of social networking aspects in each application. And most importantly, regardless of which device a consumer has Mobrand applications will function on each of them with a universal user experience customized for each device only to take advantage of unique features provided that particular device platform. Differentiating factors Mobrand is built on solid technical and business foundations. The architecture we have designed is a good example of simplicity is the ultimate sophistication. Our business model is multi pronged and follows a well formed vision of ultimately being the backend platform of choice to power interactive, homogenous mobile applications and a set of short term strategies to get us there. Mobrand also relies on local talent and provides clients with a local presence to work closely with them in identifying requirements and development of creative applications and communities around them. Geographical organization Mobrand is an international firm based in the East Coast with employees in India and China. Local employees will focus on company operations, primarily with strategic execution and design services entailing the creative aspects of application development. Our employees in India and China will possess the necessary skills to build applications for different device platforms by exploiting our backend. Over time, we expect further growth in the local employee pool primarily in the development of the backend infrastructure. Our team in India will also grow significantly to support backend infrastructure development while our China team will focus on device development. A focus on innovation and creativity Mobrand will continuously innovate in a systemic fashion. However our innovation will be focused on what we can provide customers and consumers, that others cannot and not so much on how many patents we can produce. The only intellectual property we will seek will be around our backend infrastructure. Mobrand recognizes that any IP protection in this space can be easily circumvented and given the speed at which the market moves, continuous innovation is the key to our success. We fully expect all our applications, templates and patterns to be mimicked but will continuously improve upon them and leverage our backend platform to provide new function and capabilities that competitors will take a lot of time and money to mimic.

Immediate goals Our vision of being the provider of choice for a platform to build mobile applications begins will building the platform. However instead of looking for funding to completely fund the platform and spend time on its development without regard to the speed at which the market is moving, we are looking to organically build the platform and evolve it through real applications we build for clients. Our immediate goals are, 1. Prototype development Build at least 2 applications for clients by year end 2009 to establish a presence in the identified beachheads and create the basics of the templates for these industries. We have already identified 2 potential clients who are interested in building an application to support their brand. 2. Employee hiring Currently Mobrand has the management team of 2 in place; the founders of the company will act in the capabilities of CEOs. We have identified a key creative resource in the US whose services we would like to engage immediately before losing him to other opportunities. We have identified employees in India and China and would like to make offers to them as soon as possible. 3. Marketing Our initial marketing activities are primarily human driven but would require creation of some collateral such as demos, brochures, a web presence etc. We would like to spend our initial marketing efforts in promoting the idea of a backend driven mobile application and positioning Mobrand as the provider of such a solution. 4. Template creation As our activity on new application creation gets into full swing, we will engage our technical talent in building same applications to create template for other industries and test consumer reaction by testing these applications with end customer input.

Mobrands services
Mobrands services are targeted towards 2 segments corporations/organizations looking to extend their brand and developers/development firms looking to build backend driven mobile solutions. Corporations/organizations: For this segment, the following services are provided, 1. Market research to determine application needs Unlike its competitors, Mobrand does not expect that the customer fully understands the mobile application needs of its customers. Using our expertise in technology, user behavior and market research, we will work with our customers customers to understand what kind of devices they use or will use in the future and what their primary information and interaction needs are. We will work with our clients branding and marketing departments to take their input and provide our input based on our market research so that the application development strategy is in line with the overall marketing strategy of our client. 2. Return on investment We will help our clients understand and set the right expectations for return on investment from these applications. Some ROIs are intangible and cannot be measured or attributed accurately. Others, particularly ones, that tie into existing business processes that the customer has, can provide an outlook on potential revenue uptick and associated costs. Mobrand will help our clients build a business model around the proposed application. 3. Application development Using an iterative, agile development process, we will build applications that the client can choose to release at any time during the development process. In this way, we do not spend a lot of upfront time on design and negotiating with customers on when and what will be released to the end consumer. We can continue development based on a prioritized list, with the customer being charged on the time spent on their application, until the customer is satisfied with the application at which time it will be released and future improvements will be negotiated with the customer. 4. Application onboarding Since our applications are built for multiple device platforms we will work through the process of getting them onto end consumers devices. For example, the Apple iPhone App Store has a set process for getting applications approved and available. Also important is the provisioning of the backend components in our backend infrastructure. 5. Application hosting Most of our applications will be tightly coupled with our backend. Any loose coupling with sources of data will be within the backend infrastructure. Hence customers will need to retain our services to continue to provide the application to the masses. However this also allows the customer to pull out at any time they feel their application is obsolete or

no longer needed otherwise. On a continuous basis, customers applications will be hosted on our backend so that the customers upfront investment in the application is restricted to the initial development and continuous hosting charges. Application developers For this segment, we primarily provide a backend platform which has the following characteristics, 1. Scalable platform available as a service Deployment and management of an applications backend is simplified through user interfaces and programmatic interfaces to the backend infrastructure. 2. Built in scalability Similar to many PaaS providers available today, Mobrands backend infrastructure (MOBI for short) will automatically scale as new users request the application and provide various features such as prediction based provisioning, statistical analyses etc. 3. Metered usage Users of our backend platform infrastructure need only pay for the amount of time it is used and the number of functional invocations on an application business backend hosted in our infrastructure. Together with 2, this enables application development firms to reduce costs of acquiring, deploying and managing their own hardware or virtual systems. 4. Application templates to address common industry patterns Rather than create applications from scratch, development firms and individual developers can leverage our existing templates and customize them with their own business logic. These templates are a combination of on-device client code and backend business processing code. Application developers hence get consistency with other applications in the industry but are able to customize them to add their creativity and innovation to existing templates. The time to market for their individual developers is vastly improved at lower costs.

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Market research and analysis

Statistics on mobile advertisement spending Many companies already spend a significant amount of money on mobile and internet advertising. According to a recent report2, mobile advertising revenue will go up 18.1% this year to $1.3 billion, one of the few advertising sectors actually going up. Mobrand will appeal to the spenders of this $1.3 billion and aim to capture at least 0.5% of this market which is worth around $5 million in revenue. Our target market willingness to pay Spending on advertising, promotions and branding is a key expense for most corporations / organizations with clear expectations on the return on investment. Most companies spend 3% of sales on advertising and promotions. For a company with revenues of $1M, this translates to $30000 a year. Development of an application costs $9500 a year including initial development and continued hosting and an ongoing expense of $6000 a year. Hence Mobrand will target companies with revenues of $5M to $100M. Beyond that, we believe corporations will have the means to build their own backends and mobile applications. Competitors Traditional mobile applications development is a saturated market and Mobrand will stay out of such a market. However Mobrand will continue to face competition from the following direct and indirect competitors: 1. Current web site creation companies We expect that these firms will build skills in building web sites that provide a rich experience on mobile devices. Our key differentiator here is that we provide a richer experience that is device agnostic but still takes into account the specific interactive features offered by a device. 2. Freelance developers These individual developers or small sized firms, more and more from outside the US, offer short terms services to build well specified mobile applications. We have several points of differentiation with them: consistency in applications developed, ability to perform research on behalf of the client and hosting of the application backend that ties in seamlessly with clients business processes. Our local presence is a key value add as well. In the long term, Mobrand will woo these freelance developers to use the backend infrastructure / hosting service. This will provide them combinatorial presence in multiple products even if the product they built is for one single device platform. The ability to use a platform to deliver applications will help developers adopt the platform more.

http://www.nytimes.com/2009/08/04/business/media/04adco.html?_r=1

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3. Local mobile application development firms Companies like Sapient and Crosscomm advertise services to build iPhone applications in a custom contracted/consulting process with a client. In many ways, we share a number of points of parity with these firms. However our strengths in market research and the key strength of an architectural combination of a device agnostic backend and device specific front ends gives us a clear edge over these solution providers. The key similarities with these competitors are, a. Similar audience b. Some provide a backend c. Some provide a similar interaction experience (Flash programming, Dynamic web pages etc.) and content freshness Key differentiators are, a. Market research and requirements identification for focused mobile development b. Development/extension of community around the mobile application and brand incorporation of social networking elements into developed applications c. Backend framework that supports multiple front end device specific applications so that we can maintain and build the community effortlessly while retaining the unique interaction experience of each device Partners Mobrand has identified key partner categories where we will actively engage in providing a collaborative value proposition or simply to leverage each others client networks. 1. Advertising agencies These are our preferred partners because our models align really well. Advertising agencies often play a consulting role and lack the technical expertise to create mobile applications leave alone a backend infrastructure or hosting solution. However they are already ingrained into corporations/organizations marketing and advertising departments. Mobrand will fill in the gap advertising agencies in extending their clients advertisement campaign into the mobile world. 2. Branding consultants Similar to advertising agencies, these consultants advice our potential clients on how to establish, extend and preserve their brand. We will first influence mindshare in this segment with education on our services and why a combined architecture is preferred. We will then work with them as part of the solution they propose to clients for brand extensions and preservation. 3. Traditional web site developers Mobrand can also augment existing web site and content developers business by providing extensions of such content into the mobile world. This partnership option will be used sparingly and with much caution as many of these developers are looking to move into mobile application development which poses both an opportunity and a threat.

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Marketing Strategy
Mobrand has a well defined strategy that aligns closely with Mobrands long term strategy and strategy shifts along the way. Since Mobrand seeks to engage with different players in the market clients, application developers, potential partners at any given time a combination of tactical steps will be in play. Identification of potential marketing targets Mobrand uses two primary criteria to identify targets for marketing activities: 1. Revenue Since overall revenue affects how much potential clients spend on advertising/marketing under which we believe Mobrand expenses will be categorized, we will address only companies that have between $1M and $1B in revenue. This is a wide category and we will look for multiple application development opportunities for large clients since that will tax our development teams lesser. 2. Existence of current community Most brands have communities around them already; some explicit and direct, others more subtle and indirect. For example, a university basketball team already has a community that interacts when they meet together for a game or check a webpage for statistics. A car brand has a community often manifested in online discussion forums or interest groups within social networking groups such as Facebook. Phase 1: Beachhead penetration strategy Based on the identification pattern outlined above, Mobrand beachhead is university basketball teams and local newspapers. Both have a brand associated with them, enough budget allocations / revenues to meet our criteria and have a community around them already. We will market different ROI measurements for each category above. For university basketball teams, an advertising model will be built in that will enable purchases from the mobile application from the teams merchandise store. Note that this model extends easily to cover different sports teams. On engagement with the university and other sports related providers, we will enhance this model further based on client requirements and restrictions. For newspaper, the mobile application enables the newspaper to counter larger newspapers by providing information on the go in an interactive manner with links to the newspapers primary web site and location detection based pointers to local businesses that would push up traditional advertising revenue for the newspaper. The community aspect of these applications will also be marketed heavily. For university basketball teams, the ability to share game statistics, predictions, players photos, in game media (photos, videos) etc. will help the community better connect with itself and the team. For newspapers, the ability to record video at the site of an incident or newsworthy story and upload it to share with the community will be marketed. This beachhead also provides Mobrand with the opportunity to build two templates that can be exploited immediately. A template built around the university basketball team can be

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easily extended to cover other sports teams, other universities basketball teams and other universities other sports teams. A template built around newspapers can be easily exploited for other regional newspapers. Phase 2: Growth of applications developed This phase is critical to Mobrand because it helps us establish credibility in the industry, build out our template portfolio and backend framework and gain acceptance of our backend framework in the development community. However we would like to be in this phase the shortest since it taxes our development teams significantly and the margins will be lower than our final phase. In this phase, the following marketing strategies will be used to further our goals: 1. Engage with clients/patrons first before engaging with establishment. This helps us determine at a high level what the needs are design of the applications are and gives us immediate credibility with the client with the ability for us to explain ROI. 2. As a next step, build prototypes and get user feedback with the participation of the client so that they can see and guide firsthand the development of the application and initial feedback. 3. Once one location of the client signs up, expand to other locations of same establishment. For example, as we address regional restaurants we will build the application for one branch and market it internally within the clients organization with the help of that branchs employees to spread out across the client organization. 4. Partner actively with advertising agencies and branding consultants in each location to gain penetration into their client networks. 5. Exploit the networks built around one brands application with other applications for the same brand and for other brands that are not in the same industry but where the communities share similar demographics. Phase 3: Exploitation of backend framework and templates This is where Mobrand sees its final, most profitable business model coming into play and Mobrand will invest heavily in marketing opportunities in this phase. The primary focus will be in wooing developers to use our framework, marketing the fast turnaround in building applications built on a mature backend, licensing the backend of firms that do their own development and building a utility, pay-as-you-use model around the backend framework. While continuing many of the strategies in phase 2, the following key elements will be implemented in our marketing strategy: 1. Trademark and use of MOBI Powered tag line where MOBI stands for MObile Backend Infrastructure. 2. Viral marketing of backend framework through communities built around applications deployed on MOBI and developers of those applications 3. Participation in open standards and open source project communities to enable MOBI for use across the developer community. In general, market MOBI as a means to abstract developers from various technology advances and standards development in the mobile applications industry.

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Management Team
Mobrands management team has a strong technical background with many years in the IT industry with both technical and product management experience. The team also has strong business skills evolving from an educational background but honed through experience in the field across a wide range of technology markets. Chief Executive Officer, Balan Subramanian Balan Subramanian is currently a Product Manager at IBM where he has worked for the past 8 years in various positions that have spanned technology innovation, enablement, industry adoption and customer interactions. He has over 8 years experience in the IT industry on a number of technologies including data integration, systems management, web services standards, and open source projects. He has a long history of innovation and holds 4 US patents with15 more filed in a wide range of technologies spanning voice technologies to network access for mobile devices. He has a MS in Computer Science from George Mason University and a MBA from Kenan Flagler business school, University of North Carolina. Balan has worked in a startup environment and many intrepreneurial opportunities at IBM. He possesses a rare mix of technical skills and business acumen that position him to drive Mobrand to success. Director of Product Development and Marketing, Mallesh Murugesan Mallesh Murugesan is currently Senior Project Manager at Seaworthy Systems, a Naval Contractor engaged in building IT systems for the US Navy incorporating backend systems and applications for handheld units used by the Navy for inventory management. Mallesh has over 8 years experience in the IT industry and many years experience driving the business for his current employer. He has a MS Computer Science from George Mason and a MBA from Smith school of Business, University of Maryland. Mallesh and Balan have shared a personal and professional relationship for many years now and are well poised to take Mobrand through its strategic execution towards end goals. They will serve as the Management team and founders of the company. The following positions will be named shortly after financing is approved: Director of creativity (candidate already identified) Director of Engineering, Overseas Director of Engineering, North America Mobrand believes that the following skills are core to the success of Mobrand and hence will be developed within the company: Market research to gather and understand user needs, wants and desires Application design innovation Creation of the backend platform/engine Legal Structure The company name, Mobrand, has been reserved for incorporation. The company will be initially formed as an S corporation.

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Financial Model and projections

Funds required and their use Mobrand seeks $300,000 in capital within the next 6 months to execute on its strategy. The funds will be used for development of applications for clients, simultaneous creation of templates and backend infrastructure a key asset and for marketing purposes. Since Mobrands revenues are projected to grow exponentially from year 3 onwards, investors can expect excellent returns within 5 years. Long range financial strategy Mobrand seeks to change the mobile applications industry and become a provider of mobile development platform. However Mobrand seeks to do this without cutting corners and employing only the best talent available globally. Unlike many outsourcing providers, Mobrand wishes to build a significant employee pool in North America which we believe is key to servicing clients in the western hemisphere through creative collaboration and execution. Mobrand seeks moderate investments to start executing on the strategy and regular infusions of capital when the short term strategies change from a services model to a technology provider model. Since the investments are moderate but the projected returns are huge, initial investors will get very good returns on their investments. While Mobrand is positioned as a long term player in this industry, Mobrand will soon become a profitable acquisition opportunity for major mobile industry players including media companies, technology infrastructure providers such as the ones engaged and driving cloud computing (Amazon, Microsoft, IBM, Google etc.), mobile network providers, and mobile technology companies. We expect that Mobrand will be valued highly as it builds its repository of templates and backend infrastructure framework that represents significant intellectual property. Revenue Model Mobrand has several different revenue streams over its entire strategy: 1. Application development for client In this model the client pays for development of applications and continued hosting of the application and use of backend infrastructure. Development of an application is iterative, agile and time boxed with the option of customer to buy additional iterations at a fixed price and preset expectations. 2. Revenue share with client In cases where we identify applications for which we expect consumers to pay for them Mobrand will define a revenue sharing agreement with the brand owner/client. This agreement will include discounts or full waive offs of initial application development and sharing of end consumer revenue. 3. Licensing of templates and backend framework In this model, Mobrand will allow other development firms to license templates and backend framework to develop their own applications. Licenses will be issued on a perpetuity basis with option to use (and pay for) backend hosting on a quarterly basis.

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4. Utility model around mobile applications cloud In this model, individual developers and firms can host their applications built around our templates or their own written to our backend APIs (Application Programming Interfaces) on our backend infrastructure and pay only for the time that the applications are actually being used and based on the scale of usage. Financial Projections Our primary estimates are very conservative and based on a survey of what companies pay today for mobile application development. The survey returned a wide range of values and we picked the ones that are conservative yet allow enough accommodation for the additional value Mobrand provides. Average application cost to client Average cost per quarter Template licensing $5,000 $1,500 $15,000

Our primary cost is in the technical and creative talent required to build applications and the backend platform. Our estimates for expenses are, Headcount rates Rate for management Rate for US Rate for India Rate for China Travel costs per client per application Hosting rates Hostway

$100,000 $80,000 $14,400 $10,000

$1,200

$7,200

Mobrand achieves positive cash flows in 2010 assuming initial financing can be secured and cash drawn peaks in 4Q2013 at $1.7 million.

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APPENDIX A: HIGH LEVEL FINANCIAL PROJECTIONS 2009 Revenues Application development and hosting Number of new clients Cumulative clients Clients left (calculated as % lost each year) Average application cost to client Green revenue Transactional revenue Template revenue Cummulative number of templates Templates licensed Template licensing and reuse Total revenue 2010 2011 2012 2013

10

2 2 2 5,000 10,000 12,000

40 42 36 5,000 200,000 216,000

75 117 104 7,000 525,000 624,000

200 317 284 7,000 1,400,000 1,704,000

500 817 734 10,000 5,000,000 4,404,000

0 0 0 22,000

8 1 15,000 431,000

15 5 75,000 1,224,000

25 15 225,000 3,329,000

40 30 450,000 9,854,000

Expenses Headcount Management US India China Total cost to company Equipment Backend hosting Mobile devices Travel Total expenses Net income Cummulative net income 2 1 0 3 310,000 7,200 1,000 2,400 320,600 (298,600) (298,600) 2 3 3 2 503,200 21,600 5,000 48,000 577,800 (146,800) (445,400) 4 5 5 3 902,000 21,600 10,000 90,000 1,023,600 200,400 (245,000) 6 8 10 5 1,434,000 36,000 10,000 240,000 1,720,000 1,609,000 1,364,000 6 10 20 5 1,738,000 72,000 10,000 600,000 2,420,000 7,434,000 8,798,000

Headcount rates Rate for management Rate for US employee Rate for India employee Rate for China employee Travel costs per client Hosting rates Hostway Average application cost to client Average cost per quarter Template licensing

100,000 80,000 14,400 10,000 1,200

7,200 5,000 1,500 15,000

APPENDIX B: MONTHLY BUDGET FOR 2010

Jan Sales New applications Cummulative applications Green Revenue Transactional Revenue Template licensing Total Sales 3 5 15,000 7,500 0 22,500 1 6 5,000 0 0 5,000 3 8 15,000 0 0 15,000 2 10 10,000 15,000 0 25,000 4 14 20,000 0 0 20,000 6 19 30,000 0 0 30,000 2 21 10,000 31,500 0 41,500 2 23 10,000 0 0 10,000 Feb Mar Apr May Jun Jul Aug

Past year clients

Sep

Oct

Nov

Dec

Year 1

4 26 20,000 0 0 20,000

2 28 10,000 42,000 0 52,000

8 36 40,000 0 0 40,000

2 37 10,000 0 0 10,000

39 37 195,000 96,000 0 291,000

Cost of Goods Sold App store fees Graphics/clipart % of Total Sales Total Cost of Goods Sold 300 1,000 6% 1,300 100 0 2% 100 300 500 5% 800 200 0 1% 200 400 0 2% 400 600 500 4% 1,100 200 0 0% 200 200 0 2% 200 400 0 2% 400 200 0 0% 200 800 1,000 5% 1,800 200 0 2% 200 3,900 3,000 2% 6,900

Gross Profit Gross Margin

21,200 94%

4,900 98%

14,200 95%

24,800 99%

19,600 98%

28,900 96%

41,300 100%

9,800 98%

19,600 98%

51,800 100%

38,200 96%

9,800 98%

284,100 98%

Operating Expenses Sales, Marketing & Production Advertising & Promotion Travel Total Sales & Marketing Costs % of Total Sales 2,500 1,800 4,300 19% 0 600 600 12% 0 1,800 1,800 12% 0 1,200 1,200 5% 3,000 2,400 5,400 27% 0 3,600 3,600 12% 0 1,200 1,200 3% 0 1,200 1,200 12% 5,000 2,400 7,400 37% 1,000 1,200 2,200 4% 1,000 4,800 5,800 15% 0 1,200 1,200 12% 0 23,400 23,400 8%

Research & Development Salaries Equipment (Mobile devices) 41,933 2,000 41,933 0 41,933 0 41,933 0 41,933 0 41,933 2,000 41,933 0 41,933 0 41,933 0 41,933 0 41,933 4,000 41,933 0 503,200 8,000

Jan Total R&D Costs % of Total Sales 43,933 195%

Feb 41,933 839%

Mar 41,933 280%

Apr 41,933 168%

May 41,933 210%

Jun 43,933 146%

Jul 41,933 101%

Aug 41,933 419%

Sep 41,933 210%

Oct 41,933 81%

Nov 45,933 115%

Dec 41,933 419%

Year 1 511,200 176%

General & Administrative Backend hosting Legal & Accounting Fees Office Expenses Office Rental or Lease Telephone & Utilities Total G&A Costs % of Total Sales 1,000 0 0 0 200 1,200 5% 1,000 0 0 0 200 1,200 24% 1,000 2,500 0 0 200 3,700 25% 1,000 0 0 0 200 1,200 5% 1,000 0 0 0 200 1,200 6% 1,000 0 0 0 200 1,200 4% 1,000 0 0 0 200 1,200 3% 1,000 0 0 0 200 1,200 12% 1,000 0 0 0 200 1,200 6% 1,000 0 0 0 200 1,200 2% 1,000 0 0 0 200 1,200 3% 1,000 0 0 0 200 1,200 12% 12,000 2,500 0 0 2,400 16,900 6%

Total Operating Expenses % of Total Sales Income from Operations % of Total Sales

49,433 220% 22,500 100%

43,733 875% 5,000 100%

47,433 316% 15,000 100%

44,333 177% 25,000 100%

48,533 243% 20,000 100%

48,733 162% 30,000 100%

44,333 107% 41,500 100%

44,333 443% 10,000 100%

50,533 253% 20,000 100%

45,333 87% 52,000 100%

52,933 132% 40,000 100%

44,333 443% 10,000 100%

551,500 190% 291,000 100%

Interest Income Interest/Financing Expense Income before Taxes Taxes on Income (calculated yearly) (26,933) 0 (38,733) 0 (32,433) 0 (19,333) 0 (28,533) 0 (18,733) 0 (2,833) 0 (34,333) 0 (30,533) 0 6,667 0 (12,933) 0 (34,333) 0

0 0 (273,000) 0

Net Income After Taxes % of Total Sales

(26,933) -120%

(38,733) -775%

(32,433) -216%

(19,333) -77%

(28,533) -143%

(18,733) -62%

(2,833) -7%

(34,333) -343%

(30,533) -153%

6,667 13%

(12,933) -32%

(34,333) -343%

(273,000) -94%

APPENDIX C: MONTHLY CASH FLOW STATEMENT FOR 2010

Jan Beginning Cash Balance Cash Receipts Total Sales Interest Income Total Cash Receipts 6,000 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 277,767 238,933 205,700 186,167 157,233 137,400 134,367 99,833 68,900 75,367 60,633 26,100

22,500 0 22,500

5,000 0 5,000

15,000 0 15,000

25,000 0 25,000

20,000 0 20,000

30,000 0 30,000

41,500 0 41,500

10,000 0 10,000

20,000 0 20,000

52,000 0 52,000

40,000 0 40,000

10,000 0 10,000

291,000 0 291,000 0 503,200 12,500 6,900 23,400 0 8,000 16,900 570,900 (279,900)

Cash Disbursements Salaries & Labor 41,933 Advertising & Promotion 2,500 Cost of Goods Sold (non-labor) 1,300 Travel 1,800 Taxes on income 0 2,000 Equipment purchase G&A 1,200 Total Cash Disbursements 50,733 Net Cash from Operations (28,233)

41,933 0 100 600 0 0 1,200 43,833 (38,833)

41,933 0 800 1,800 0 0 3,700 48,233 (33,233)

41,933 0 200 1,200 0 0 1,200 44,533 (19,533)

41,933 3,000 400 2,400 0 0 1,200 48,933 (28,933)

41,933 0 1,100 3,600 0 2,000 1,200 49,833 (19,833)

41,933 0 200 1,200 0 0 1,200 44,533 (3,033)

41,933 0 200 1,200 0 0 1,200 44,533 (34,533)

41,933 5,000 400 2,400 0 0 1,200 50,933 (30,933)

41,933 1,000 200 1,200 0 0 1,200 45,533 6,467

41,933 1,000 1,800 4,800 0 4,000 1,200 54,733 (14,733)

41,933 0 200 1,200 0 0 1,200 44,533 (34,533)

Cash dividends Sale of Stock Proceeds of loan from shareholders Proceeds of Investor Loan 300,000 Net Cash Balance 277,767 238,933 205,700 186,167 157,233 137,400 134,367 99,833 68,900 75,367 60,633 26,100

300,000

APPENDIX D: QUARTERLY BUDGET 2011 TO 2013

1Q2011 Sales New applications Cummulative applications Green Revenue Transactional Revenue Template sales Total Sales 12 48 60,000 72,000 0 132,000 28 74 140,000 111,000 15,000 251,000 12 84 60,000 126,000 0 186,000 23 104 115,000 156,000 15,000 271,000 60 161 300,000 241,500 15,000 541,500 45 201 225,000 301,500 30,000 526,500 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012

Past year clients

37

3Q2012

4Q2012

1Q2013

2Q2013

3Q2013

4Q2013

60 255 300,000 382,500 0 682,500

35 283 175,000 424,500 30,000

120 395 600,000 592,500 30,000

100 485 500,000 727,500 60,000

180 652 900,000

100 735 500,000

978,000 1,102,500 15,000 45,000

599,500 1,192,500 1,227,500 1,878,000 1,602,500

Cost of Goods Sold App store fees Graphics/clipart % of Total Sales Total Cost of Goods Sold 1,200 500 1% 1,700 2,800 1,000 2% 3,800 1,200 0 1% 1,200 2,300 2,000 2% 4,300 6,000 500 1% 6,500 4,500 1,500 1% 6,000 6,000 0 1% 6,000 3,500 2,000 1% 5,500 12,000 1,000 1% 13,000 10,000 2,000 1% 12,000 18,000 500 1% 18,500 10,000 3,000 1% 13,000

Gross Profit Gross Margin

130,300 99%

247,200 98%

184,800 99%

266,700 98%

535,000 99%

520,500 99%

676,500 99%

594,000 1,179,500 1,215,500 1,859,500 1,589,500 99% 99% 99% 99% 99%

Operating Expenses Sales, Marketing & Production Advertising & Promotion Travel Total Sales & Marketing Costs % of Total Sales 0 7,200 7,200 5% 0 16,800 16,800 7% 10,000 7,200 17,200 9% 0 13,800 13,800 5% 5,000 36,000 41,000 8% 10,000 27,000 37,000 7% 5,000 36,000 41,000 6% 0 21,000 21,000 4% 15,000 72,000 87,000 7% 20,000 60,000 80,000 7% 10,000 108,000 118,000 6% 10,000 60,000 70,000 4%

Research & Development Salaries & Consulting fees Equipment (Mobile Devices) 225,500 3,000 225,500 0 225,500 1,000 225,500 1,000 358,500 0 358,500 2,000 358,500 1,000 358,500 2,000 434,500 3,000 434,500 0 434,500 4,000 434,500 0

1Q2011 Total R&D Costs % of Total Sales 228,500 173%

2Q2011 225,500 90%

3Q2011 226,500 122%

4Q2011 226,500 84%

1Q2012 358,500 66%

2Q2012 360,500 68%

3Q2012 359,500 53%

4Q2012 360,500 60%

1Q2013 437,500 37%

2Q2013 434,500 35%

3Q2013 438,500 23%

4Q2013 434,500 27%

General & Administrative Backend hosting Legal & Accounting Fees Office Expenses Office Rental or Lease Telephone & Utilities Total G&A Costs % of Total Sales 600 1,500 0 0 200 2,300 2% 600 0 0 0 200 800 0% 600 0 0 0 200 800 0% 600 0 0 0 200 800 0% 600 1,500 0 5,000 300 7,400 1% 600 0 0 5,000 300 5,900 1% 600 0 0 5,000 300 5,900 1% 600 0 0 5,000 300 5,900 1% 600 1,500 0 20,000 500 22,600 2% 600 0 0 20,000 500 21,100 2% 600 0 0 20,000 500 21,100 1% 600 0 0 20,000 500 21,100 1%

Total Operating Expenses % of Total Sales Income from Operations % of Total Sales

238,000 180% 132,000 100%

243,100 97% 251,000 100%

244,500 131% 186,000 100%

241,100 89% 271,000 100%

406,900 75% 541,500 100%

403,400 77% 526,500 100%

406,400 60% 682,500 100%

387,400 65%

547,100 46%

535,600 44%

577,600 31%

525,600 33%

599,500 1,192,500 1,227,500 1,878,000 1,602,500 100% 100% 100% 100% 100%

Interest Income Interest/Financing Expense Income before Taxes Taxes on Income (calculated yearly) (106,000) 0 7,900 0 (58,500) 0 29,900 0 134,600 0 123,100 0 276,100 0 212,100 246,147 645,400 0 691,900 1,300,400 1,076,900 0 0 1,225,818

Net Income After Taxes % of Total Sales

(106,000) -80%

7,900 3%

(58,500) -31%

29,900 11%

134,600 25%

123,100 23%

276,100 40%

(34,047) -6%

645,400 54%

691,900 1,300,400 56% 69%

(148,918) -9%

APPENDIX E: QUARTERLY CASH FLOW STATEMENTS 2011 TO 2013

Beginning Cash Balance Cash Receipts Total Sales Interest Income Total Cash Receipts 1Q2011 26,100 2Q2011 218,400 3Q2011 222,500 4Q2011 162,800 1Q2012 188,400 2Q2012 316,500 3Q2012 433,600 4Q2012 703,700 1Q2013 864,153 2Q2013 1,496,553 3Q2013 2,176,453 4Q2013 3,458,353

132,000 0 132,000

251,000 0 251,000

186,000 0 186,000

271,000 0 271,000

541,500 0 541,500

526,500 0 526,500

682,500 0 682,500

599,500 0 599,500

1,192,500 0 1,192,500

1,227,500 0 1,227,500

1,878,000 0 1,878,000

1,602,500 0 1,602,500

Cash Disbursements Salaries & Labor 225,500 Advertising & Promotion 0 Cost of Goods Sold (non-labor) 1,700 Travel 7,200 Taxes on income 0 3,000 Equipment purchase G&A 2,300 Total Cash Disbursements 239,700 Net Cash from Operations (107,700)

225,500 0 3,800 16,800 0 0 800 246,900 4,100

225,500 10,000 1,200 7,200 0 1,000 800 245,700 (59,700)

225,500 0 4,300 13,800 0 1,000 800 245,400 25,600

358,500 5,000 6,500 36,000 0 0 7,400 413,400 128,100

358,500 10,000 6,000 27,000 0 2,000 5,900 409,400 117,100

358,500 5,000 6,000 36,000 0 1,000 5,900 412,400 270,100

358,500 0 5,500 21,000 246,147 2,000 5,900 639,047 (39,547)

434,500 15,000 13,000 72,000 0 3,000 22,600 560,100 632,400

434,500 20,000 12,000 60,000 0 0 21,100 547,600 679,900

434,500 10,000 18,500 108,000 0 4,000 21,100 596,100 1,281,900

434,500 10,000 13,000 60,000 1,225,818 0 21,100 1,764,418 (161,918)

Cash dividends Sale of Stock Proceeds of loan from shareholders 300,000 Proceeds of Investor Loan Net Cash Balance 218,400 222,500 162,800 188,400 316,500 433,600 703,700

200,000 864,153 1,496,553 2,176,453 3,458,353 3,296,435

APPENDIX F: INCOME STATEMENT PROJECTIONS

2010 Sales Total App Revenue % of Total Sales Template licensing % of Total Sales Total Sales Cost of Goods Sold Total Cost of Goods Sold % of Total Sales Gross Profit Gross Margin Operating Expenses Sales & Marketing % of Total Sales Research & Development % of Total Sales G&A % of Total Sales Total Operating Expenses % of Total Sales Income from Operations % of Total Sales Interest Income Interest/Financing Expense Income before Taxes Taxes on Income (calculated yearly) Net Income After Taxes % of Total Sales 291,000 100% 0 0% 291,000 2011 840,000 97% 30,000 3% 870,000 2012 2,350,000 97% 75,000 3% 2,425,000 2013 5,900,500 98% 150,000 2% 6,050,500

6900 2% 284,100 98%

11000 1% 829,000 95%

24,000 1% 2,326,000 96%

56,500 1% 5,844,000 97%

23,400 8% 511,200 176% 16,900 6% 551,500 190% 291,000 100% 0 0 -273,000 0 -273,000 -94%

55,000 6% 907,000 104% 4,700 1% 966,700 111% 840,000 97% 0 0 -126,700 0 -126,700 -15%

140,000 6% 1,439,000 59% 25,100 1% 1,604,100 66% 2,350,000 97% 0 0 745,900 246,147 499,753 21%

355,000 6% 1,745,000 29% 85,900 1% 2,185,900 36% 5,900,500 98% 0 0 3,714,600 1,225,818 2,488,782 41%

APPENDIX G: BALANCE SHEET PROJECTIONS

Assets Current Assets Cash Investments Accounts Receivable Notes Receivable Total Current Assets Non-current assets Intellectual Property Total Non-Current Assets Total Assets Liabilities & Owner Equity Current Liabilities Short Term Debt Accounts Payable Income Taxes Payable Accrued Liabilities Total Current Liabilities Long Term Debt Total Liabilities Owner / Stockholder Equity Common Stock Preferred Stock Retained Earnings Less Cash Dividends Total Owners' Equity Total Liabilities & Equity 2009 6,000 0 0 0 6,000 2010 26,100 300,000 0 0 326,100 2011 188,400 300,000 0 0 488,400 2012 864,153 200,000 0 0 1,064,153 2013 3,296,435 0 0 0 3,296,435

0 0 6,000

10,000 10,000 336,100

84,000 84,000 572,400

150,000 150,000 1,214,153

360,000 Templates and backend platform 360,000 3,656,435

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 6,000 0 6,000 6,000

150,000 300,000 400,000 150,000 300,000 400,000 (279,900) (137,700) 475,753 0 0 0 20,100 462,300 1,275,753 20,100 462,300 1,275,753

400,000 400,000 2,432,282 0 3,232,282 3,232,282