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A An n o or rg ga an ni ic c f fa ar rm m c co om mm mu un ni it ty y

Strategic Business Plan



Contact




The content of this report is confidential and is the sole property of Mitchell Farms, LLC Its use is strictly limited to those
readers authorized by the Company. Any reproduction or divulgence of the content of this report without the written consent of
the company is strictly prohibited.
M Mi it tc ch he el ll l F Fa ar rm ms s B Bu us si in ne es ss s P Pl la an n

Table of Contents

EXECUTIVE SUMMARY
Company Description
Highlights of the Enterprise
The Market Opportunity
Market Segmentation
Financial Projections
Investment Opportunity & Return Strategy

COMPANY ANALYSIS
Company Profile
Mission Statement
Stage of Development
Legal Structure & Ownership
Headquarters & Locations
Core Corporate Objectives
Critical Success Factors

PRODUCTION & PROCESSING
Farming Practices
Facilities & Processing
Product Description

MARKET ANALYSIS SUMMARY
Industry Analysis
Health Influences
Consumption Trends
Target Market Segments
Competitive Environment
Key Competitors
Risk Factors

IMPLEMENTATION SUMMARY
Competitive Edge
Economic Advantages & Funding Support
Marketing Plan Summary
MANAGEMENT SUMMARY
Management Profile
Personnel Plan

FINANCIAL PLAN
Important Assumptions
Revenue Forecast
Consolidated Pro Forma Financials
Projected Profit and Loss
Projected Cash Flow
Projected Balance Sheet
Sources & Uses of Funds

APPENDIX
Financials (Monthly for Year 1)


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Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Mitchell Farms, LLC in
this business plan is unique to this enterprise and is confidential; therefore, the reader agrees not
to disclose any information contained herein or in verbal discussions without the express written
permission of Mitchell Farms, LLC or its principals.

It is acknowledged by the reader that the information to be furnished in this business plan is in all
respects confidential in nature, other than the information that is in the public domain, and that
any disclosure or use by the reader may cause serious harm or damage to Mitchell Farms, LLC
or its entities. Reader acknowledges this information as sensitive and agrees to handle all
information contained in this document in a strictly confidential manner.

This Business Plan is not an offer, which can only be made by an approved Private Placement
Memorandum. Participatory interest will only be to Accredited Investors.

This Document includes forward-looking statements. All statements, other than statements of
historical fact within this Business Plan, including statements regarding Mitchell Farms, LLC for its
subsidiaries strategies, plans, objectives and expectations, are all forward-looking statements.
Although Mitchell Farms, LLC believes that the expectations reflected in such forward-looking
statements are reasonable at this time, it can give no assurance that such expectations will prove
to have been correct. Certain important factors that could cause actual results to differ materially
from expectations are set forth herein. Any subsequent written and oral forward-looking
statements attributable to Mitchell Farms, LLC or persons acting on its behalf are expressly
qualified in this regard.

Upon request, this document is to be immediately returned to Mitchell Farms, LLC.

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Confidential 1
Executive Summary

Company Description

Mitchell Farms, LLC (the Company or Mitchell Farms) is seeking a total of US$15.7 million, at $8.2
million from the founder and private equity sources, and $7.5 million in debt and government-
supported financing, to acquire the proposed assets and operations to fully launch a vertically-
integrated, sustainable organic farm and processing enterprise serving the domestic United States
and robust foreign export markets. The Company will acquire more than 1,400 acres of land in
Adello, Washington; execute required improvements to create the greenhouse production facilities;
and develop on-site support facilities.

The principal of the Mitchell Farms, Mr. David A. Mitchell intends to maximize existing alliances and
partnerships with local government and in the agricultural community to launch full-scale operations
of the proposed sustainable organic tomato agribusiness within the next 12 months.

Highlights of the Enterprise

Mitchell Farms is poised to utilize sustainable organic production methodologies, combined with
advanced and processing technologies, to reap significant profit, presented by the current trade
conditions driving the United States leading position in exports of tomatoes, and domestic and
sustained global demand for tomato products.

Highlights of Mitchell Farms

Experienced Entrepreneurial Team. Each of the principals has solid business and farm
management experience and commands a wealth of knowledge, as well as passion, for
transforming the existing farm operations into a key producer of high quality organic products
for domestic and foreign consumption, as well as an international participant in the tomato
industry.
Diversified Revenue Streams. Mitchell Farms will service the high demand in the identified
domestic and international markets for high quality value-added organic tomato products and
contract processing services. The Company targets multiple vertical markets, from domestic
and foreign retail chains to further processors and manufacturers of tomato-based products
seeking organic content.
Domestic and International Market Demand. On a global scale, the annual production of
fresh tomatoes accounts for approximately 100 million tonnes. More than a quarter of that
amount is grown specifically for the processing industry, making tomatoes the worlds leading
vegetable for processing. More than 27 million tonnes of tomatoes are processed every year
in factories belonging to the greatest labels of the global food industry. Globally, the organic
food market continues to grow, from current projected value of $36.7 billion to an estimated
$67.1 billion in 2011.
Ideal Location. Washington, and other regions in the northwestern United States, is ideal for
organic agribusiness operations. The farm attributes meeting the requirements of the
business and the proximity to other organic producers, as well as easily accessible transit
operations, combine to make the chosen site ideally suited to the scale of operations
proposed. The company also owns a railroad spur close by.


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Confidential 2
The Market Opportunity

The global organic food market grew by 13.6% in 2006 to reach a value of $36.7 billion. In 2011, the
market is forecast to have a value of $67.1 billion, an increase of 83% since 2006.Fruit and vegetable
sales form the most lucrative segment of the market, accounting for 39.5% of the market's value. The
largest organic food market is the Americas, which accounts for 49.7% of the global market's value.

Additionally, the United States is one of the world's leading producers of tomatoes, second only to
China. Annual per capita use of fresh-market tomatoes increased 18 percent to nearly 20 pounds per
person, while use in processed products declined 6 percent to about 70 pounds, on a fresh-weight
basis. Mexico and Canada are important suppliers of fresh-market tomatoes to the United States, and
Canada is the leading U.S. export market for fresh and processed tomatoes. The U.S. fresh and
processed tomato markets, combined, accounted for about $2 billion in cash receipts during the mid-
2000s.

Market Segmentation

As a vertically integrated operation, Mitchell Farms manages the entire supply chain to offer
sustainable organic tomato products that satisfy the nutritional and taste preference needs of multiple
markets. Mitchell Farms has segmented its markets according to the type of buyer. Domestically,
the sales strategy combines direct-to-consumer sales at regional farmers markets with wholesale to
retailers, both through direct channels and distributors. The Company is also targeting export
markets, directly via government assignments and contracts, and brokered through export specialists
in the commodity and with specific international guidelines.

The marketing strategy will be based on developing awareness about the company, the scale of its
production capacity, and the major advantages the company brings as an enterprise operating in a
disadvantaged business zone.

Financial Projections

Utilizing resources from private investment, governmental support, and the personal contributions of
the principals, Mitchell Farms will have adequate funding to acquire the proposed assets and
operations, complete development of the enterprise, and establish full-scale operations within one
year. With waiting buyers, Mitchell Farms will achieve its revenue goals rapidly while carefully
containing overhead costs using greenhouse technology systems. Profits remain strong and capable
of sustaining operations beyond the first five years of projections. Additional opportunities to Mitchell
Farms allow for additional future expansion of farm management and product lines.


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Confidential 3
Financial Highlights

$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue Profit



Investment Opportunity & Return Strategy

Ultimately, the appeal of the venture lies in the undeniable need for domestic production of a nutrient-
rich, certified organic, quality product.

City, county, and state governments in Washington are strongly encouraging the introduction of the
project in their communities as economic stimulus and employment opportunity creation in the area
and disadvantaged business climates. Significant financial incentives may become available to
Mitchell Farms to offset the level of investment in private equity required and to stimulate a more
rapid return.

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Confidential 4
Company Summary

Mitchell Farms, LLC is limited liability company, founded by David A. Mitchell, operating the Farmer
Dougs brand.

Company Profile

Mission Statement

The founding principals have clearly articulated the overriding strategic mission of the
organization: It is the goal of Mitchell Farms, LLC to produce healthy, affordable sustainable
organic produce year-round using modern, sustainable organic agricultural practices,
including earthworm engineering, green engineering, responsible water usage, and high-tech
economies of scale. Mitchell Farms will become a dominant organic production and
processing operation within the organic produce marketplace by providing high quality fresh-
market and value-added products responsive to consumer tastes, preferences, and
nutritional needs.

Stage of Development

Mitchell Farms is in the advanced phases of start-up. While next generation product and
service variations and strategic partner contracts continue to be developed, the fundamental
product lines and operating units have been defined and initial marketing planning efforts
have been engaged to identify the target domestic and international markets, establish
marketing strategies, and recruit board and staff members to execute the tactics toward
achieving the overarching corporate goals of the enterprise.

Legal Structure & Ownership

David A. Mitchell will maintain majority ownership in Mitchell Farms and any future subsidiary
companies. Convertible preferred stock positions will be distributed to investment partners
according to the terms of specific private placement memoranda.

Mitchell Farms, LLC is a holding company and the main marketing division for the Farmer
Dougs brand of products, engaged in vertically integrated sustainable organic tomato
production and processing.

Headquarters & Locations

Mitchell Farms, LLC will maintain its administrative headquarters in the State of Washington.
The proposed venture will develop and acquire farm production and processing facilities in
Adello, Washington. Adello is a small community of 957 residents, located in Lincoln County,
along with 47
th
latitudinal parallel. The community is less than 100 miles from Moses Lake,
Spokane, and the Kennewick/Tri-Cities areas. The location spans 1,422 acres with two
established wells and an irrigation system. The property also has a small permanent pond.

The land will facilitate the organic farming operation and the installation of greenhouses
covering 600 acres.

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Confidential 5
Core Corporate Objectives

The Company has identified the following objectives as essential to its success:

Business Objectives

1. Become the preeminent, sustainable organic tomato producer and value-added product
supplier in the Pacific Northwest; the one to which all others are compared.
2. Achieve full capacity of organic hothouse operations, creating substantial employment
opportunities within the states and communities in which Mitchell Farms operates.
3. Grow the operation within three to five years to expand into significant global export
opportunities, leveraging the nutritional value and benefit of the product.
4. Maintain a clean, safe, and environmentally responsible operation for all employees, resident
staff, public, and the environment throughout all aspects of the facility.

Marketing Objectives

1. Develop Mitchell Farms as the key sales interface to target domestic distributors and retailers
as well as federal government contract and international export opportunities.
2. Coordinate public and educational tours of the production farm and processing facilities.
3. Create private label branding opportunities for distributors and retailers.
4. Develop and foster a strong brand and reputation for quality, value-added organic tomato
products at consumer points of contact.
Financial Objectives

1. Secure funding to effectively fulfill the purpose and mission of Mitchell Farms.
2. Minimize overhead costs through fair employment policies and internal rewards within the
processing facilities.
3. Effectively utilize human and intellectual capital and network resources to gain advantage
and build a significant presence within its spheres of operation through domestic government
contracts and global export programs.
4. Continually reinvest profits for growth, development, and investment return.


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Confidential 6
Critical Success Factors

Both the short-term and long-term success of Mitchell Farms rest upon the ability of the company and
the management team to continually satisfy market demands in terms of quality and availability, while
executing careful cost containment measures and fostering mutually beneficial relationships with the
local and federal governments and regulatory bodies; distribution and retail clients; and international
buyers.

1. Building support for the Mitchell Farms processing protocols and fostering a strong presence
among the markets its serves, surrounding regions, and the country.
2. Leveraging demand for domestic and international production of a wide variety of organic
produce with high nutritional content to gain significant price and tax benefits through
government and export programs.
3. Increase market and industry knowledge of Mitchell Farms and its vertically integrated
processing systems as the superior organic greenhouse operation in the nation and create a
model on which future organic produce-farming facilities can be replicated.


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Confidential 7
Production & Processing Summary

Mitchell Farms will be the producer as well as primary sales and marketing channel of the Farmer
Doug brand of fresh-market and value-added processed organic tomato products for consumption
domestically and abroad. Leveraging their experience and expertise, combined with that of industry
gurus mentoring the development of the multi-faceted project, the principals have outlined a broad
selection of fresh-market packages and processed products with proven appeal consumer appeal in
all markets. Utilizing the advancements in organic growth, harvesting, and processing technology
that maximizes the quantity of tomatoes produced, Mitchell Farms will be able to maximize its
capacity potential and satisfy the market demand.

Farming Practices

Mitchell Farms will plant, grow, and cultivate its organic tomatoes on site at its Adello, Washington
farm, using the practices and methodologies of US Department of Agriculture certified organic
regulations.

Through its proposed land acquisition and facility construction strategies, Mitchell Farms will, by the
third year of operations, establish 40 greenhouses of approximately 40,000 square feet each. The
greenhouses will be semi-permanent structures constructed of glass in order to effectively maximize
year-round light for an extensive growing season and provide the ideal ambient temperatures for
plant growth. Passive thermal energy resources through black piping, as well as geo-thermal
resources, will be employed to maintain necessary temperatures year-round. Low heat light bulb
fixtures will be used to augment natural lighting resources.

The Company will maintain its own vermiculture and organic manure processing systems to ensure
the plants and resulting fruit remain free of pesticides and other agricultural chemicals. Earthworm
engineering will produce one pound of organic soil per worm every three days utilizing organic range-
fed cow manure. The greenhouse environments additionally ensure that the organic tomatoes are
not subjected to external contaminants from rainwater, area agricultural spraying, or chemical-laden
groundwater systems.

GPS monitoring systems and automatic sensors will be deployed in each greenhouse to monitor and
make adjustments for ventilation, pH levels, humidity, watering levels, and aeration.


Facilities & Processing

The farm will also maintain support services buildings away from the greenhouse operations to
prevent against all forms of contamination. In addition to the vermiculture building, the Company
intends to house a laboratory and seed maintenance building to maintain genetic integrity while
developing more robust varietals of tomatoes can be produced and tested.

The facilities will also house a metal shop for greenhouse maintenance, an equipment repair shop to
ensure all auxiliary operating equipment remains in working condition, an automotive shop to
maintain the vehicles, and central, energy-efficient and green administrative building.
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Confidential 8
Product Description

Mitchell Farms plans to offer the full range of available fresh market and
processed tomato products to make optimal use of the entire crop yield,
minimizing waste and delivering quality, value-added organic produce
and ingredients. The following list itemizes the wide array of products
that will be made available in each of the two main product categories:
fresh-market and processed.

Fresh-Market Tomatoes

The Farmer Dougs Organic Tomatoes
packaging will provide fresh-market options for
consumers, with four to six tomatoes per
package of varying sizes.

Cherry and Plum
Heirloom
Beefsteak
Tomatoes-On-the-Vine (TOV)


Processed Tomato Products

Farmer Dougs will also develop a proprietary organic tomato juice product from culls of the yield.
Additionally, Mitchell Farms will be positioned as a supplier to other manufacturers in the food and
beverage industry for its organic, non-market ready culls will be utilized as raw materials in a wide
range of other tomato-based products, including:
Barbecue Sauce
Salsa
Barbecued Chips
Sliced Tomatoes
Diced Tomatoes
Tomato Paste
Bloody Mary Mix
Sloppy Joe Mix
Chili
Soups
Cocktail Sauce
Spaghetti Sauce
Crushed Tomatoes
Steak Sauce
Ketchup
Diced Tomatoes
Stewed Tomatoes
Sun-Dried Tomatoes
Hot Sauce
Marinades
Pizza Sauce
Tomato Juice
Whole Peeled
Tomatoes

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Confidential 10



Market Analysis Summary

Industry Overview
In the United States, only potatoes are eaten more
often than tomatoes. The tomato is one of the
most commonly grown fresh market vegetables.
Tomatoes are both high yielding and labor
intensive. Production and marketing costs for intensively cultured tomatoes, including those grown
organically, can be over $4,000 per acre with an expected gross return of $4,000 to $8,000 per acre.
Gross returns of $18,000 are not uncommon. These numbers are for field grown tomatoes and not
greenhouse production.
Efficient harvesting, handling, and marketing techniques are extremely important in the production of
this highly perishable crop. Harvesting tomatoes is very labor intensive. For storage and shipping,
fruit can first be picked at the "breaker" stage of maturity, when the blossom end turns pink. Post-
harvest temperature management is critical to maintain quality. Tomatoes may become damaged
when stored below 55F. The optimum temperature range for longest shelf life is between 55F and
70F.
In general, the tomato market fluctuates with the growing season, starting high and dropping as the
summer season progresses, which has spurred usage of plasticulture and hoop house production
techniques that extend the season.
The North American greenhouse tomato industry has grown rapidly since the early 1990s and is now
a significant factor in the fresh tomato industry. Total North American greenhouse tomato production
for 2003 was estimated at 528,078 metric tons, from negligible amounts in the early 1990s. Canada is
the largest producer with an estimated 42 percent of production, followed by the United States with 30
percent, and Mexico with 28 percent.
Between the early 1990s and 2003, North American greenhouse tomato area is estimated to have
grown by almost 600 percent to 1,726 hectares. Production has also grown; from 1998 to 2003,
North American greenhouse production grew 103 percent. Growth continues but is stabilizing in
Canada and the United States, while continuing strong in Mexico. In 2003, in the United States and
Mexico, the greenhouse shares of total fresh tomato production were 9 and 8 percent, respectively,
but are likely higher now. In Canada, greenhouse tomatoes dominate fresh tomato production, with
an 89-percent share.

Demand for organic produce in the United States has increased steadily since the early 1990s. In
2000, for the first time, conventional supermarkets sold more organic food than any other venue.
According to the Organic Trade Association (OTA), organic food sales in the United States totaled
$13.8 billion in 2005, making up 2.5% of the retail food market. This is an increase from 1.9% in 2003
and from 0.8% in 1997. This increase coincides with the implementation of national organic standards
by the USDA in October of 2002, which provided uniform labeling for consumer recognition. Demand
trends are expected to continue as more conventional retailers take up a larger portion of the organic
market. Sales of organic foods are estimated to rise to $23.8 billion by 2010.

In 2007, approximately 129,000 acres of
tomatoes are expected to be harvested
for a total cop value of $1.3 billion.
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Confidential 17
Health Influences

According to the Journal of Agriculture and Food Chemistry, organically grown tomatoes have higher
levels of flavonoids, which may protect against cardiovascular disease. Researchers concluded that
the level of one flavonoid in the organic tomatoes was almost twice as high as that in conventionally
grown tomatoes. Scientific evidence has identified flavonoids as having health benefits in the fight
against age-related diseases.

In general, organically grown foods have higher concentrations of cancer-fighting compounds than
conventionally grown foods. Fruits and veggies grown organically show significantly higher levels of
cancer-fighting antioxidants than conventionally grown foods. The research suggests that pesticides
and herbicides actually thwart the production of phenolics chemicals that act as a plant's natural
defense and also happen to be good for human health. Fertilizers, however, seem to boost the levels
of anti-cancer compounds.

Consumption Trends

U.S. fresh tomato consumption is evenly distributed between the retail and foodservice markets.
Greenhouse tomatoes have made major inroads in U.S. retail channels, with less success in food
service. An estimated 37 percent of fresh tomatoes sold in U.S. retail channels are greenhouse
tomatoes. The retail quantity sold of all types of field tomatoesround (mature green and vine ripe),
roma, cherry and grapeincreased until 2001, but has declined slightly since then. Mature green
tomatoes, the backbone of the U.S. field tomato industry, have been impacted the most by
greenhouse gains. The mature green tomato share of the retail quantity of fresh tomatoes sold
plummeted from 1998 to 2003.

As consumers seek a deeper values experience, their relationships with brands and retailers have
become integral to success. According to the industry watch group, Organic Consumers, individuals
want to know what brands and retailers are doing to protect the environment and their health, and
they are seeking more information than ever before. The group classifies the most integrated and
loyal organic consumers as devoteds and temperates, consistently using organic products in all
facets of daily life, from food and beverage to skin care and household cleansers. Other
classifications are dabblers and reluctants, with only 36% and 21% of them, respectively, having
used any organic product in the past year. T

The consumer base of organic food has become more diverse and cannot be easily pigeonholed as
the market is growing with increased availability and popularity. A study by the Hartman Group in
2002 found that half of the respondents who purchased organic food frequently have an annual
income below $50,000, and that African Americans, Asian Americans, and Hispanics purchase more
organic products than Caucasians.

The overall household penetration of organic products is 57%. Increased selection and availability
have driven increased frequency of usage and 20%+ sales increases over the past year. Analysts
project expansion of emerging organic categories such as clothing, linens, lawn and garden as well
as continued growth of new personal care and food and beverage products options.

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Confidential 18
Target Market Segments

With increasing production and supply of organic produce and meats, organic food, once considered
a niche product, has become more available and affordable for consumers in mainstream grocery
stores. It is estimated that the mass-market channel, which includes supermarkets, grocery stores,
mass merchandisers, and club stores, now handles 46% of total organic food sales.

The market segments currently targeted by Mitchell Farms are retailers, specialty grocers, direct
consumers, foodservice clients, and further processors. With progressive expansion into these
markets, the targeted purchase decision makers are segment buyers, distributors, brokers, and
procurement officials.

Retailers, retail distributors and wholesalers are ideal customers for organic tomato products primarily
in the form of fresh-market varieties. Targeted customers in this segment include:

Safeway, Inc.
Publix
The Kroger Co.
Whole Foods/Wild Oats Marketplace
Trader Joes
Lunds & Byerlys
Brown & Cole
Wal-Mart Superstores/Sams Club
Target Supercenters
Costco
A&P
Royal Ahold
Haggen Food & Pharmacy
Rosauers Supermarkets
Yokes Fresh Market

Foodservice distributors, serving finished food manufacturers, restaurants, and institutional catering
providers, are a key market for fresh-market organics and basic packaged pastes, juices, and
processed items. Such customers include:

SYSCO Foods
US Foodservice
Basic American Foods
Performance Food Group

Further processors are targeted customers of culls for processing into other tomato-based products.
Prospective targets include:

H.J. Heinz Company
Small Planet Foods
Amys Organics

Mitchell Farms has developed a full-fledged marketing plan to guide its initial entry into the organic
retail market through the development of strong alliances with brokers and key industry participants in
the distribution of organic produce.


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Confidential 19
Competitive Environment
As the industry leader, Canada drives the greenhouse tomato market during its March to December
season, with its high yields and consistent product quality. The main weakness of the Canadian
greenhouse industry is that it does not produce tomatoes in the winter. In the United States, the large
greenhouse operations are located in the Southwest and West, where climate conditions enable them
to produce tomatoes profitably in the winter, when prices are higher. The strength of the U.S. industry
is bolstered by high yields, product consistency, and year-round supply. To meet domestic demand,
the United States imports over half of its supply of greenhouse tomatoes from Canada and Mexico.
Today the Canadian manufacture of tomatoes is facing dollar issues for export therefore reducing the
amount of tomatoes purchased from Canada.
Beyond indirect competition in the general fresh-market and tomato processing industry, Mitchell
Farms also competes with other regional organic tomato producers. The number of certified organic
producers grew to 554 last years from 529 in 2005 and the amount of organic farm sales grew to
$101.5 million from $77.4 million.
Key Competitors

Dominion Organics is located in Ferndale, Washington and produces organic basil, bok
choy, Swiss chard, cucumbers, greenhouse tomatoes, melons, onions, peppers, and summer
squash. The small farm markets primarily direct-to-consumer through regional farmers
markets and serves the large tomato processing industry in California as an approved
certified vendor.


Risk Factors

International Competition. The U.S. industry is vulnerable to increasing competition from
Mexico during the winter months, which could erode profits that carry it through the summer when
prices are lower.

Tomato price decline. As the North American greenhouse tomato industry has expanded from
market niche to mainstream status, tomato prices have declined. There have been two periods of
very low prices. In summer 1999, beefsteak tomato prices fell to a new low, causing financial
problems for a number of greenhouse growers. In 2000, the industry began to produce tomatoes-
on-the-vine (TOV), which have been popular with consumers. The shift to TOVs took the
downward price pressure off beefsteak tomatoes. TOVs have enjoyed a substantial premium over
beefsteaks, but as more and more growers turned to TOVs, prices also began to decline, with a
particularly rapid drop in summer 2004.

Product liability claims or product recalls could result in significant legal claims. The
packaging, marketing, and distribution of organic food products involve an intrinsic risk of product
liability and product recall, combined with ensuing adverse publicity.

The price or availability of water, energy and freight costs could amplify expenses,
decrease profitability, and hinder operations. The prices of water, electricity and natural gas
vary significantly over time, due to supply and other factors, and impact the proposed cost
structure. Increased costs of production may not be able to be passed on to customers.

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Confidential 20
Implementation Summary

Mitchell Farms will leverage its competitive advantage to establish a niche within the industry, realize
the profit potential, and fulfill its overarching mission. The Company will execute its strategies to
achieve high volume sustainable organic tomato production and high quality product, while pursuing
opportunities to grow the business in the future through new domestic and foreign markets and
mutually beneficial strategic alliances and partnerships.

Competitive Edge

The core competency of Mitchell Farms lies in its vertical integration of the key aspects of cultivation
and production of organic tomatoes. The ability to integrate the production of uncontaminated
organic soil, not only substantially contributes to one of the states key growth agricultural segments,
but also enables the Company to ensure consistency in the quality of product in the greenhouse
environment. Key advantages of Mitchell Farms that distinguish it from existing competitors and
create barriers to entry for new participants are highlighted below.

Vertically Integrated, Efficient Operations.

Vertical integration affords exacting control over the process, from the chemical properties of the
organic soil produced on site to the final fresh-market and culled product ultimately produced and
shipped. Mitchell Farms produces high-quality organic tomatoes efficiently by combining cost-
effective, high-volume greenhouse production with on-site support farming practices that ensure
control over the growth environment and applied products.

Strong Market Position with Strategically Located, Efficient Operations, Creating Jobs.

The proposed large-scale integrated operations, primary geographic location, and business
ownership imbue a strong market position in the competitive landscape while maintaining economies
of scale in production and marketing. The strategic location not only allows Mitchell Farms to supply
cost-effective delivery of fresh-market tomatoes to many of the most populous regions in the United
States, but also opens significant sales opportunities for the Company through regional distribution
hubs for major retailers.

Outstanding Product Offerings that are Responsive to Customer Needs.

The proprietary end-product recipes and state-of-the-art methods and technologies position the
wholesale, retail, and export products to become recognized as the best tasting, highest quality
organic food and culinary products available.

Experienced Management Team.

The senior management has an extensive background in the farming industry in operating fully-
integrated systems, with in-depth knowledge of business and organization development, organic
production, processing, food safety, and sales. The experience and indisputable motivation of the
principals guarantees success in developing the Company as one of the leading producer and
processors of high-quality organic products.

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Confidential 21
Economic Advantages & Funding Support

Domestically, Mitchell Farms expects to receive substantial support from the local and regional
governments and agencies as enticement for the business and employment opportunities the venture
represents in Washington. The Company has received confirmation from the local government that it
is in talks to develop the large-scale organic farm operation in the town of Adello. Operating as a
certified organic producer, Mitchell Farms will likely receive supplementary regulatory and taxation
benefits.

Marketing Strategy

The marketing strategy is designed to increase margins and returns on invested capital. Key
elements of the strategy, resting heavily upon the business development savvy of the principals and
successful personal and institutional selling activities, include:

Effective Brand Development and Equity
Public Relations & Editorial Coverage
Advertisements with Trade Media of Targeted B2B Customers
Media Kits & Video News Releases
Word-of-Mouth
Direct Personal Selling
Trade Network Marketing & Trade Event Participation
Marketing Collateral
Cooperative Retail Promotional Opportunities
Effective Cross-Cultural Marketing Approach
Internet Marketing

Press releases and news stories

National media will be introduced to the Farmer Dougs brand with pre-written articles (with
photos) to alert produce buyers of the coming product and create enthusiasm. These articles
will be provided to hard copy publications as well as web-based entities (i.e. Fruitnet.com,
etc.). Articles and Press Releases will average about $1,000 each with a significant
concentration of releases produced in the first year, with fewer releases (between four and
five) produced in subsequent years.

Web Site

At the same time, press releases and articles are delivered; a web site will be developed
telling the complete story of the Farmer Dougs brand and the Mitchell Farms organic
philosophy. This will be continually updated to show progress as well as be maintained as a
site that can help create a strong mailing list for buyers, both commercial and retail. Funds
have been earmarked for start-up and on-going website development services.

Packaging

Each commodity will have to have a similar yet different package. The material used for these
packages is just as important as the product itself. Recycled materials, homespun design will
be the hallmark of Farmer Dougs Organic Tomatoes packaging.

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Display Advertising

Media buys will be placed in key produce buyers business publications, including but not
limited to, the following:

o o The Packer - 12,000+ produce buyers - 54 issues a year
o o Supermarket News - 34,000+ circulation - 52 issues a year

General Public Advertising - Brand Support

Support will be necessary to secure the brands position not only on the shelves but in the
end users mind. At this point, National Radio Sponsorships of key shows within the key
demographic, ultimately leading to National Television Sponsorships of key shows on PBS or
Food Network, CNN or others.

Management intends to commit to a proportionate and appropriate marketing budget that will
maximize return for the reasonable expenditure to effectively launch the business and drive
distribution channel sales. The marketing budget will likely be established at four to five percent of
sales to support advertising efforts, direct mail, trade advertising, radio, television, outdoor
advertising, and other on-going programs. As opportunities develop, Mitchell Farms will participate
in cooperative promotional campaigns with the agencies and trade entities to increase awareness
among the population about the benefits and availability of quality organic products, domestically and
abroad.
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Management Summary

Mitchell Farms is owned and operated by its founder and key management personnel. Immediate
personnel plans outline staffing and labor needs to initiate and sustain operations of the farm and its
planned activities. The management team has identified external resources to augment their business
and entrepreneurial acumen with strong industry knowledge and expertise as well as farm
management skills that can be imparted to the staff of Mitchell Farms.

Management Team

The highly committed management team brings together a diverse background that compliments the
business needs for strategic organization, sales, creativity, and technical farming expertise to ensure
processing and production prove effective and sales and marketing activities deliver results. Each
member has a strong degree of drive and passion to ensure the success of Mitchell Farms, including
an extensive, combined background and entrepreneurial experience in developing profitable and
responsible agricultural operations in the United States.

David A. Mitchell, Founder & Interim Chief Executive Officer. Mr. Mitchell has extensive
experience in business startups. His expertise spans a variety of applicable industries, from
a profitable syndicated dairy farm to multiple building and land development firms.

Joe Jones, B.Sc., M.Sc., M.I.o.H., A.Ag., Chief Operations Officer. Mr. Jones has
extensive technical management and planning experience in alternative crop science,
harvest methodologies, and sustainable horticultural production.

Alan Smith, Facilities Manager. Mr. Smith is a seasoned production manager for all
aspects of construction and facility development.

Thomas Jensen, Farm Administrator. Mr. Jensen brings a wealth of experience in
landscape architecture, land planning, utility administration, and project management.

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Personnel Plan

The personnel plan calls for sufficient staff at the farm and greenhouse facility to fulfill the overarching
mission of the organization and provide the level of quality product to customers. Mitchell Farms will
be able to benefit from economic incentives in the communities in which it operates as the enterprise
introduces new employment opportunities. Annual wage and salary increases aligned with national
inflationary rates are also planned for all employees. Activities at the farm assume pre-opening labor
needs.

PROJECTED EXPENSES
Year 1 Year 2 Year 3 Year 4 Year 5
Employee Costs
Chief Executive Officer $120,000 $124,800 $129,792 $134,984 $140,383
Chief Operations Officer $100,000 $104,000 $108,160 $112,486 $116,986
Chief Financial Officer $100,000 $104,000 $108,160 $112,486 $116,986
Sales & Marketing Director $100,000 $104,000 $108,160 $112,486 $116,986
Facilities Manager $55,000 $57,200 $59,488 $61,867 $64,342
Landscape Manager $60,000 $62,400 $64,896 $67,492 $70,192
Master Greenhouse Grower $75,000 $78,000 $81,120 $84,365 $87,739
Benefits 22% $134,200 $139,568 $145,151 $150,957 $156,995
Subtotal $744,200 $773,968 $804,927 $837,124 $870,609

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Financial Plan

The financial plan for Mitchell Farms fulfills the goals to establish and grow the Company, to execute
the strategies and tactics prescribed in the business plan, and to realize the revenues and projected
profits. Within the limitations of unforeseen factors and time frames, the projections and forecasts
represent expected income and expenses based on the described operations and marketing
activities. Consolidated financial projections are presented in this section, with monthly projections
depicted in the Appendix.

Important Assumptions

The values in the financial plan are depicted in US dollars. The foundation of many projections is
based upon a combination of evaluation of financials of comparable existing organic greenhouse
operations, current commodity pricing, forecasts for production activities, and historical data for
tomato production and consumption within the United States.

Key assumptions include:

Cost of living increases for salaries are assumed at 4% annually.
In addition to federal payroll taxes, State of Washington contributions are assumed at
1.43%.
The inflation rate, impacting costs and expenses, is assumed at 3.9% annually.

GENERAL ASSUMPTIONS

Tax Rate 39.00%
Payroll Tax/ Personnel Burden 22.00%
Merchant Account Costs (Credit Cards) 2.79%
Long-Term Loan Interest Rate 8.75%

ACCOUNTS PAYABLE
% of Vendors Paid Within
Immediately 25%
30 days 75%
60 days 0%

ACCOUNTS RECEIVABLE
% of Customers Paying Within
Immediately 25%
30 days 45%
60 days 30%
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Revenue Strategy

The core of the sales strategy is cultivating direct sales with major constituents, developing a
distribution network and nurturing beneficial strategic alliances with industry partners. Highly
interested buyers, the result of the proactive approach of the management team and project
promoters, is a strong indicator of the inevitable success of Mitchell Farms and the probable accuracy
of the sales projections.

Forecast

The following sales forecast shows consolidated sales increasing to $25 million within one
year, and reaching nearly $89.6 million in the fifth year of the forecast. It assumed the facility
would be at full-scale production of the first 12 greenhouses within three months. Monthly
details for the first year are included in the appendices.

FIVE-YEAR REVENUE PROJECTION
Year 1 Year 2 Year 3 Year 4 Year 5
Fresh-Market 11420842 25818750 38250000 38250000 38250000
Wholesale price / unit $1.85 $1.86 $1.87 $1.88 $1.89
Fresh-Market $21,128,557 $48,022,875 $71,527,500 $71,910,000 $72,292,500

Processed 2284168 5163750 7650000 7650000 7650000
Sale price / unit $1.55 $1.56 $1.57 $1.58 $1.59
Processed $3,540,461 $8,055,450 $12,010,500 $12,087,000 $12,163,500

Branded Juice 222374 478104 1027924 1182112 1359429
Sale price / unit $2.79 $3.80 $3.81 $3.83 $3.85
Branded Juice $620,423 $1,816,796 $3,916,390 $4,527,491 $5,233,803

Projected Totals $25,289,441 $57,895,121 $87,454,390 $88,524,491 $89,689,803


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Anticipated Annual Sales Projections

$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
Farmer Doug's Tomato Sales
Fresh-Market Processed Branded Juice







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Projected Profit and Loss

The projected, consolidated profit and loss statement represents the expected performance of
Mitchell Farms during its first five years of operations. Monthly profit and loss figures for the first full
year of operations are included in the appendices.

REVENUE
Year 1 Year 2 Year 3 Year 4 Year 5
Total Revenue $25,289,441 $57,895,121 $87,454,390 $88,524,491 $89,689,803
Cost of Sales
Direct Materials $4,552,099 $10,421,122 $15,741,790 $15,934,408 $16,144,164
Direct Labor $5,057,888 $11,579,024 $17,490,878 $17,704,898 $17,937,961
Broker Commissions $1,011,578 $2,315,805 $3,498,176 $3,540,980 $3,587,592
Total Cost of Sales $10,621,565 $24,315,951 $36,730,844 $37,180,286 $37,669,717
Gross Profit $14,667,876 $33,579,170 $50,723,546 $51,344,205 $52,020,086

EXPENSES
Salaries & Wages $610,000 $634,400 $659,776 $686,167 $713,614
Personnel Burden $134,200 $139,568 $145,151 $150,957 $156,995
Supplies (office and operating) $6,000 $6,240 $6,490 $6,749 $7,019
PR/Marketing Consultants $60,000 $62,400 $64,896 $67,492 $70,192
Marketing & Advertising $240,000 $289,476 $437,272 $442,622 $448,449
P/D Consultants $18,000 $18,720 $19,469 $20,248 $21,057
Accounting and Legal Services $18,000 $18,720 $19,469 $20,248 $21,057
Sales & Distribution Consultant $18,000 $18,720 $19,469 $20,248 $21,057
Facility Improvements $0 $50,275 $52,286 $54,377 $56,553
Misc. Maintenance $0 $2,514 $2,614 $2,719 $2,828
Computer/IT $3,000 $3,120 $3,245 $3,375 $3,510
Utilities $0 $10,055 $10,457 $10,875 $11,311
Cold Storage Warehousing $120,000 $124,800 $129,792 $134,984 $140,383
Product Liability Insurance $96,000 $99,840 $103,834 $107,987 $112,306
Business Insurance $9,000 $9,360 $9,734 $10,124 $10,529
Depreciation $486,207 $486,207 $486,207 $486,207 $486,207
Postage & Delivery $600 $624 $649 $675 $702
Miscellaneous Expense $2,400 $2,496 $2,596 $2,700 $2,808
Total Expenses $1,821,407 $1,977,534 $2,173,404 $2,228,752 $2,286,575

EBIT $12,846,469 $31,601,636 $48,550,142 $49,115,453 $49,733,510
Taxes $5,010,123 $12,324,638 $18,934,555 $19,155,026 $19,396,069
Interest $0 $0 $0 $0 $0
NET PROFIT $7,725,528 $19,276,998 $29,615,586 $29,960,426 $30,337,441

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Projected Annual Profit

$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
Year 1 Year 2 Year 3 Year 4 Year 5




Projected Annual Gross Margin

$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
Year 1 Year 2 Year 3 Year 4 Year 5




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Projected Cash Flow

The consolidated Pro Forma Cash Flow forecast illustrates the cash requirements of the Company. A
five-year forecast is depicted here, and the detailed monthly figures for the first full year of operations
are included in the appendices.

Year 1 Year 2 Year 3 Year 4 Year 5
CASH ON HAND (beginning of period)
$1,083,500 $3,863,554 $13,351,405 $16,075,487 $15,975,088
CASH INFLOWS FROM OPERATING
ACTIVITIES

Cash Sales $6,322,360 $14,473,780 $21,863,597 $22,131,123 $22,422,451
Accounts Receivable $15,117,586 $17,734,221 $21,035,546 $43,591,829 $61,435,739
NET CASH INFLOWS $21,439,946 $32,208,001 $42,899,143 $65,722,952 $83,858,189

CASH OUTFLOWS FROM ACTIVITIES
Inventory Purchase $11,280,389 $15,914,397 $20,885,103 $37,366,484 $37,872,481
Accounts Payable $5,561,178 $4,188,113 $16,062,875 $21,810,541 $23,765,466
Cash Spending $610,000 $634,400 $659,776 $686,167 $713,614
Loan principal payment $753,245 $840,409 $937,660 $1,046,165 $1,167,227
Additional Borrowing Principal Repayment $0 $0 $0 $0 $0
Dividends $455,080 $1,142,830 $1,379,647 $4,626,494 $6,516,061
Owners' Withdrawal $0 $0 $250,000 $287,500 $330,625
NET CASH OUTFLOWS $18,659,892 $22,720,149 $40,175,062 $65,823,351 $70,365,474
Net cash flow $2,780,054 $9,487,851 $2,724,081 ($100,399) $13,492,715
Cash Position (end of period) $3,863,554 $13,351,405 $16,075,487 $15,975,088 $29,467,803


The final dividend structure will be determined between management of Mitchell Farms and
prospective investors.
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Annual Cash Flow Projections

$(5,000,000)
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
Cash Balance Net Cash Flow






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Projected Balance Sheet

The balance sheet in the following table is for the initial five years of operations. The monthly
estimates for Year One are included in the appendices.

ASSETS
Starting
Balances
Year 1 Year 2 Year 3 Year 4 Year 5
Current assets
Cash and cash equivalents $1,083,500 $3,863,554 $13,351,405 $16,075,487 $15,975,088 $29,467,803
Accounts receivable $0 $3,849,495 $8,931,851 $31,317,645 $53,316,608 $58,274,238
Inventories $100,000 $4,580,476 $10,073,751 $15,217,064 $15,403,261 $15,606,026
Total current assets $1,183,500 $12,293,525 $32,357,007 $62,610,196 $84,694,958 $103,348,067

Fixed assets
Property, plant and equipment $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000
Less accumulated depreciation $0 $486,207 $972,414 $1,458,621 $1,944,828 $2,431,034
Total fixed assets $14,100,000 $13,613,793 $13,127,586 $12,641,379 $12,155,172 $11,668,966

Other assets
Long-term cash investments $0 $0 $0 $0 $0 $0
Equity investments $0 $0 $0 $0 $0 $0
Other assets $0 $0 $0 $0 $0 $0
Total other assets $0 $0 $0 $0 $0 $0
Total assets $15,283,500 $25,907,318 $45,484,593 $75,251,575 $96,850,130 $115,017,032

LIABILITIES & OWNERS' EQUITY
Current liabilities
Loans payable $0
Accounts payable $0 $1,211,407 $1,343,134 $1,513,629 $1,542,585 $1,572,962
Income taxes payable $0 $5,120,941 $12,324,638 $18,934,555 $19,155,026 $19,396,069
Total current liabilities $0 $6,332,348 $13,667,772 $20,448,184 $20,697,612 $20,969,031

Other liabilities
Long-term debt $7,500,000 $6,746,755 $5,906,346 $4,968,685 $3,922,520 $2,755,293
Total other liabilities $0 $6,746,755 $5,906,346 $4,968,685 $3,922,520 $2,755,293

Total liabilities $0 $13,079,103 $19,574,118 $25,416,869 $24,620,132 $23,724,324
Total owners' equity $15,283,500 $12,828,214 $25,910,475 $49,834,706 $72,229,999 $91,292,708
Total liabilities + owners'
equity
$15,283,500 $25,907,318 $45,484,593 $75,251,575 $96,850,130 $115,017,032
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Sources and Uses of Funds

In order to effectively launch all aspects and phases to the planned operations of Mitchell Farms and
its subsidiary companies, the principals are seeking a total of $15.7 million, through investment
source supported by economic incentives. The principals have engaged with state, county, and local
agencies within its respective operating areas to identify and apply for all grants and incentives for
which Mitchell Farms may qualify to offset the total level of investment capital required. However, as
such programs have lengthy review and disbursement processes, the management team has clearly
defined the immediate needs of the organization.

The following table outlines the additional funding requirements and the uses of capital to launch all
phases for Mitchell Farms and achieve full-scale operations of all facilities.

SOURCES OF CAPITAL
Owners' Investment
Owner Investment $ 250,000
New Investment $ 7,950,000
Total Investment $ 8,200,000

Bank Loans
Primary Lender $ 7,500,000
Total Bank Loans $ 7,500,000

STARTUP EXPENSES

Long-Term Assets
Land $ 1,250,000
Buildings $ 11,850,000
Machinery $ 750,000
Other Equipment $ 250,000
Total Long-Term Assets $ 14,100,000

Location and Admin Expenses
Legal and accounting fees $ 11,000
Prepaid insurance $ 15,000
Broker Fees $ 25,000
Consultants $ 8,000
Supplies $ 4,000
Other Administrative Expenses $ 5,500
Total Location and Admin Expenses $ 68,500

Opening Inventory
Starting Inventory $ 100,000
Total Inventory $ 100,000
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Advertising and Promotional Expenses
Product Launch Marketing $ 223,000
Merchandising $ 25,000
Packaging Production $ 25,000
Corporate Identity Material $ 10,000
Web Site Design & Development $ 8,000
Packaging Design $ 2,000
Artwork Creation $ 15,000
Total Advertising/Promotional Expenses $ 308,000

Other Expenses
Travel $ 20,000
Financing Recruitment Expenses $ 20,000
Total Other Expenses $ 40,000

Working Capital $ 1,083,500

Total Source of Funds $ 15,700,000
Total Startup Expenses $ 15,700,000


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Investment Analysis

Based on sales forecasts and projections of business value, it is anticipated that invested equity and
capital will yield dividends to investors beginning in the fourth quarter. These funds would be
distributed between ownership according to vested percentages of the principals and stockholders.
The following analysis of the investment details how management predicts valuation to proceed over
time, based on the current assumptions, planned expenses, and financing projections.

Investment Analysis
Start Year 1 Year 2 Year 3 Year 4 Year 5

Initial Investment
Equity Investment $7,950,000 $0 $0 $0 $0 $0
Dividends $0 $455,080 $1,142,830 $1,379,647 $4,626,494 $6,516,061
Ending Valuation $0 $0 $0 $0 $0 $121,350,000
Combination as Income Stream ($7,950,000) $455,080 $1,142,830 $1,379,647 $4,626,494 $127,866,061
Percent Equity Acquired 20%
Net Present Value (NPV) $69,999,516
Internal Rate of Return (IRR) 80%

Assumptions
Discount Rate 10.00%
Valuation Earnings Multiple 20 20 20 20 20
Valuation Sales Multiple 2.23 2.23 2.23 2.23 2.23

Total New Investment $7,950,000 $0 $0 $0 $0 $0
Dividends $455,080 $1,142,830 $1,379,647 $4,626,494 $6,516,061
Calculated Earnings-based Valuation $154,510,000 $385,540,000 $592,310,000 $599,210,000 $606,750,000
Calculated Sales-based Valuation $56,400,000 $129,110,000 $195,020,000 $197,410,000 $200,010,000
Calculated Average Valuation $105,455,000 $257,325,000 $393,665,000 $398,310,000 $403,380,000

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APPENDIX I: Payroll Projections

Year One

PROJECTED EXPENSES
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Employee Costs
Chief Executive Officer $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Chief Operations Officer $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333
Chief Financial Officer $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333
Sales & Marketing Director $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333
Facilities Manager $4,583 $4,583 $4,583 $4,583 $4,583 $4,583 $4,583 $4,583 $4,583 $4,583 $4,583 $4,583
Landscape Manager $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Master Greenhouse Grower $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250
Benefits 22% $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183
Subtotal $62,017 $62,017 $62,017 $62,017 $62,017 $62,017 $62,017 $62,017 $62,017 $62,017 $62,017 $62,017




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APPENDIX II: Revenue Forecast

Year One

12-MONTH REVENUE PROJECTION
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1
Annual
Totals
Fresh-Market 0 0 562500 646875 743906 855492 983816 1131388 1301097 1496261 1720700 1978805 11420842
Wholesale price / unit $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85
Fresh-Market $0 $0 $1,040,625 $1,196,719 $1,376,227 $1,582,661 $1,820,060 $2,093,069 $2,407,029 $2,768,083 $3,183,296 $3,660,790 $21,128,557

Processed 0 0 112500 129375 148781 171098 196763 226278 260219 299252 344140 395761 2284168
Sale price / unit $1.55 $1.55 $1.55 $1.55 $1.55 $1.55 $1.55 $1.55 $1.55 $1.55 $1.55 $1.55 $1.55
Processed $0 $0 $174,375 $200,531 $230,611 $265,203 $304,983 $350,730 $403,340 $463,841 $533,417 $613,430 $3,540,461

Branded Juice 0 12000 13200 14520 15972 17569 19326 21259 23385 25723 28295 31125 222374
Sale price / unit $2.79 $2.79 $2.79 $2.79 $2.79 $2.79 $2.79 $2.79 $2.79 $2.79 $2.79 $2.79 $2.79
Branded Juice $0 $33,480 $36,828 $40,511 $44,562 $49,018 $53,920 $59,312 $65,243 $71,767 $78,944 $86,838 $620,423

Projected Totals $0 $33,480 $1,251,828 $1,437,761 $1,651,399 $1,896,881 $2,178,962 $2,503,111 $2,875,612 $3,303,692 $3,795,657 $4,361,058 $25,289,441



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APPENDIX III: Pro Forma Financials

Profit and Loss Statement Year One

REVENUE
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Total Revenue $0 $33,480 $1,251,828 $1,437,761 $1,651,399 $1,896,881 $2,178,962 $2,503,111 $2,875,612 $3,303,692 $3,795,657 $4,361,058

Cost of Sales
Direct Materials $0 $6,026 $225,329 $258,797 $297,252 $341,439 $392,213 $450,560 $517,610 $594,664 $683,218 $784,990
Direct Labor $0 $6,696 $250,366 $287,552 $330,280 $379,376 $435,792 $500,622 $575,122 $660,738 $759,131 $872,212
Broker Commissions $0 $1,339 $50,073 $57,510 $66,056 $75,875 $87,158 $100,124 $115,024 $132,148 $151,826 $174,442
Total Cost of Sales $0 $14,062 $525,768 $603,860 $693,588 $796,690 $915,164 $1,051,307 $1,207,757 $1,387,550 $1,594,176 $1,831,644

Gross Profit $0 $19,418 $726,060 $833,901 $957,812 $1,100,191 $1,263,798 $1,451,804 $1,667,855 $1,916,141 $2,201,481 $2,529,414

EXPENSES

Salaries & Wages $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833
Personnel Burden $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183 $11,183
Supplies (office and operating) $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
PR/Marketing Consultants $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Marketing & Advertising $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
P/D Consultants $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Accounting and Legal Services $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Sales & Distribution Consultant $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Facility Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Misc. Maintenance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CC Processing Fees $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Computer/IT $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cold Storage Warehousing $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Product Liability Insurance $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000
Business Insurance $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Depreciation $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517
Postage & Delivery $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Miscellaneous Expense $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Total Expenses $151,784 $151,784 $151,784 $151,784 $151,784 $151,784 $151,784 $151,784 $151,784 $151,784 $151,784 $151,784

EBIT ($151,784) ($132,365) $574,276 $682,117 $806,028 $948,407 $1,112,014 $1,300,020 $1,516,071 $1,764,357 $2,049,697 $2,377,630
Taxes $0 $0 $223,968 $266,026 $314,351 $369,879 $433,686 $507,008 $591,268 $688,099 $799,382 $927,276
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
NET PROFIT ($151,784) ($132,365) $350,309 $416,092 $491,677 $578,528 $678,329 $793,012 $924,803 $1,076,258 $1,250,315 $1,450,354

Confidential 39

APPENDIX III: Consolidated Pro Forma Financials

Cash Flow Statement Year One

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
CASH ON HAND (beginning of period)
$1,083,500 $947,761 $747,521 $281,124 $453,432 $673,604 $948,849 $1,211,699 $1,547,392 $1,966,874 $2,482,726 $3,109,411
CASH INFLOWS FROM OPERATING
ACTIVITIES

Cash Sales $0 $8,370 $312,957 $359,440 $412,850 $474,220 $544,741 $625,778 $718,903 $825,923 $948,914 $1,090,265
Accounts Receivable $0 $3,390 $146,836 $896,670 $1,029,861 $1,182,899 $1,358,749 $1,560,817 $1,793,022 $2,059,866 $2,366,525 $2,718,951
NET CASH INFLOWS $0 $11,760 $459,793 $1,256,110 $1,442,711 $1,657,119 $1,903,489 $2,186,595 $2,511,925 $2,885,789 $3,315,439 $3,809,216

CASH OUTFLOWS FROM ACTIVITIES
Inventory Purchase $0 $0 $657,647 $636,212 $730,761 $839,404 $964,246 $1,107,708 $1,272,572 $1,462,036 $1,679,778 $1,930,024
Accounts Payable $25,238 $100,951 $156,943 $335,433 $379,058 $429,183 $486,781 $552,967 $629,023 $716,426 $816,871 $932,306
Cash Spending $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833 $50,833
Loan principal payment $59,668 $60,215 $60,767 $61,324 $61,886 $62,454 $63,026 $63,604 $64,187 $64,775 $65,369 $65,968
Additional Borrowing Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $75,752 $75,790 $75,828 $75,866 $75,903 $75,941
Owners' Withdrawal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH OUTFLOWS $135,739 $211,999 $926,190 $1,083,802 $1,222,538 $1,381,874 $1,640,639 $1,850,902 $2,092,444 $2,369,937 $2,688,754 $3,055,073
Net cash flow ($135,739) ($200,239) ($466,398) $172,308 $220,172 $275,245 $262,850 $335,693 $419,482 $515,852 $626,685 $754,143
Cash Position (end of period) $947,761 $747,521 $281,124 $453,432 $673,604 $948,849 $1,211,699 $1,547,392 $1,966,874 $2,482,726 $3,109,411 $3,863,554



Confidential 40

APPENDIX III: Consolidated Pro Forma Financials

Balance Sheet Year One


ASSETS
Starting
Balances
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current assets
Cash and cash equivalents $1,083,500 $947,761 $747,521 $281,124 $453,432 $673,604 $948,849 $1,211,699 $1,547,392 $1,966,874 $2,482,726 $3,109,411 $3,863,554
Accounts receivable $0 $0 $21,720 $813,756 $995,406 $1,204,095 $1,443,857 $1,719,330 $2,035,846 $2,399,533 $2,817,435 $3,297,653 $3,849,495
Inventories $100,000 $100,000 $85,938 $217,818 $250,170 $287,343 $330,057 $379,139 $435,541 $500,356 $574,842 $660,444 $758,824
Total current assets $1,183,500 $1,047,761 $855,180 $1,312,697 $1,699,008 $2,165,042 $2,722,763 $3,310,169 $4,018,780 $4,866,763 $5,875,004 $7,067,508 $8,471,873

Fixed assets
Property, plant and equipment $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000 $14,100,000
Less accumulated depreciation $0 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517 $40,517
Total fixed assets $14,100,000 $14,059,483 $14,059,483 $14,059,483 $14,059,483 $14,059,483 $14,059,483 $14,059,483 $14,059,483 $14,059,483 $14,059,483 $14,059,483 $14,059,483

Other assets
Long-term cash investments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Equity investments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total other assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total assets $15,283,500 $15,107,244 $14,914,663 $15,372,180 $15,758,491 $16,224,525 $16,782,246 $17,369,652 $18,078,262 $18,926,246 $19,934,487 $21,126,991 $22,531,356

LIABILITIES & OWNERS' EQUITY

Current liabilities
Loans payable $0
Accounts payable $0 $100,951 $100,951 $100,951 $100,951 $100,951 $100,951 $100,951 $100,951 $100,951 $100,951 $100,951 $100,951
Income taxes payable $0 $0 $0 $223,968 $266,026 $314,351 $369,879 $433,686 $507,008 $591,268 $688,099 $799,382 $927,276
Total current liabilities $0 $100,951 $100,951 $324,918 $366,976 $415,301 $470,829 $534,636 $607,959 $692,218 $789,050 $900,332 $1,028,226

Other liabilities
Long-term debt $7,500,000 $7,440,332 $7,380,116 $7,319,349 $7,258,025 $7,196,139 $7,133,685 $7,070,659 $7,007,055 $6,942,868 $6,878,093 $6,812,724 $6,746,755
Total other liabilities $0 $7,440,332 $7,380,116 $7,319,349 $7,258,025 $7,196,139 $7,133,685 $7,070,659 $7,007,055 $6,942,868 $6,878,093 $6,812,724 $6,746,755

Total liabilities $0 $7,541,282 $7,481,067 $7,644,268 $7,625,001 $7,611,440 $7,604,514 $7,605,295 $7,615,013 $7,635,086 $7,667,143 $7,713,056 $7,774,982
Total owners' equity $15,283,500 $7,565,961 $7,433,596 $7,727,912 $8,133,489 $8,613,085 $9,177,732 $9,764,357 $10,463,249 $11,291,160 $12,267,344 $13,413,935 $14,756,374
Total liabilities + owners'
equity
$15,283,500 $15,107,244 $14,914,663 $15,372,180 $15,758,491 $16,224,525 $16,782,246 $17,369,652 $18,078,262 $18,926,246 $19,934,487 $21,126,991 $22,531,356