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Sample Investor Report

MBA subscribers conduct intelligent searches using Boolean queries. MBA subscribers receive matches between his/her criteria and opportunities on the MBA database. MBA subscribers will then identify which of those matches to review in greater detail. Below is an example of an Investor Report and the depth of information derived from raw data provided by an MBA client.

The information is presented in the form of eleven (11) major business analysis areas, i.e. an analyzed business synopsis. The 3-year financials are expertly processed and structured to facilitate ease of in-depth analysis; to include common size percentage calculations. The information is then analyzed and presented in the form of 28 of the most important financial performance ratios; to include Z Score potential for bankruptcy. The ratios are then compared against published information for that industry. In totality, a comprehensive "Business Analyst Report" prepared by your MBA.

Note: Corporate name, address, nor identity of management is revealed on the MBA database. MBA listed company identity can only be obtained through direct contact with VentureLine.

Overview
Description: Neurocomputing co-processing software that is used for highly accurate real-time speech and handwriting recognition. Listing ID: AA002235
Date Founded: October, 2006 Date Listed: June, 2007
Business Type: Computer Software SIC No: 7371
Stage of Development: Startup Number of Employees: 15
Location: San Jose, CA, USA Funding/Financing Requested: $1MM-$5MM
Annual Sales: $0 Annual Profit: $0
Relationship Desired: Funding, Partner, JV, Acquisition Public/Private: Private
For/Not For Profit: Profit Competitors: Synaptics, Neural Tech, Nestor, Revelations Research, TRW, Cisco

Product or Service
Product or Service: Neurocomputing co-processing board software, user interface subroutine library, basic netware package (5 of 14 classic network paradigms), and is Windows XP/Vista compatible.

Product Stage of Development: Three (3) software products in production.

Industry Trends: Developing new architecture for computers that will bring forth a series of new revolutionary technologies.

Valuable Characteristics: Increased functionality, ease of use by broad range of users, innovation in product development, cost effectiveness in processing element.

Technology
Technology Category: Computers/Peripherals: Neural Systems

Technology Description: Pattern recognition, machine learning, heuristic optimization by mapping well into massively parallel architecture computers.

Areas of Application: 1. Speech recognition 2. Natural language translation 3. Image and large data set analysis

Further Expansion Plans: Develop new neural net products, processes, courses to achieve and maintain level of dominance in the field.

Marketing
Target Markets: Military sonar, radar, radar analysis; industrial inspection by robot control; banking handwriting verification; consumer speech recognition; optimal switch routing in telephone and the Internet/Intranet.

Present Market Share: 0-5% Present Market Size: $10-$100 MM 3 Years: $100-$500 MM 5 Years: >$1 Billion

Distribution/Sales Strategies: VAR's, OEM's, conferences, direct sales, joint ventures, training courses as entry for products into the market.

Competitors: Synaptics, Neural Tech, Nestor, Revelations Research, TRW, Cisco

Management
Chief Executive Officer:

Education: BS and Ph.D.

Experience: Pioneer since 1978 in neurocomputing technology and the application of neural networks. A recognized leader in the field. Managed neural network applications and neurocomputer developments for past 15 years at major corporations.

Engineering Executive:

Education: BS, MS, Ph.D.

Experience: Professor of mathematics, psychology, and biomedical engineering. A world recognized authority on neural networks.

Marketing Executive:

Education: BS

Experience: Previous director of marketing and product management where he supervised the market introduction of several new AI and fuzzy logic based products to the computer industry.

Financial Executive:

Education: BS, MA

Experience: 20 years experience in high technology aerospace/defense software and electronics industry. Numerous financial management positions.

Current Income Statement

Statement Dates: October 1, 2007 through December 31, 2007

Net Sales

$247,300

Cost of Goods Sold

$341,500

Selling &                                    Administrative Expense

$58,400

Net Income/(Loss)

($152,600)

Financial Statements Available: Yes Audited By: Coopers and Lybrand

Current Balance Sheet
Assets:  
Current Assets $361,100
Fixed Assets (Net Value) $47,500
   
Total Assets $408,600
   
Liabilities and Equity:  
Current Liabilities $585,000
Long Term Debt $0
   
Equity and Retained Earnings:  
Loans from Shareholders $0
Capital Stock $0
Retained Earnings ($176,400)
   
Total Liabilities and Equity $408,600

Three Year Operating Results/Forecast ($000)
Year 2010 Common 2009 Common 2008 Common
ACTUAL? NO Size % NO Size % NO Size %
             
GROSS REVENUES $17,253 100% $8,376 100% $1,450 100%
Adjustments to Gross Revenues $0 0.0% $0 0.0% $0 0.0%
             
NET REVENUE $17,253 100% $8,376 100% $1,450 100%
Cost of Goods Sold (Direct) $8,678 50.3% $4,771 57.0% $1,504 103.7%
             
GROSS PROFIT $8,575 49.7% $3,605 43.0% ($54) -3.7%
             
OVERHEAD EXPENSE:            
Sales & Marketing Expense $3,847 22.3% $1,977 23.6% $542 37.4%
General & Administrative Expense $2,102 12.2% $859 10.3% $316 21.8%
             
TOTAL OH CASH EXPENSE $5,949 34.5% $2,836 33.9% $858 59.2%
             
OPERATING PROFIT (EBITDA) $2,626 15.2% $769 9.2% ($912) -62.9%
             
Interest Expense $0 0.0% $0 0.0% $0 0.0%
Depreciation Expense $96 0.6% $53 0.6% $13 0.9%
Amortization & Depletion Expense $60 0.3% $60 0.7% $60 4.1%
             
EARNINGS BEFORE TAX (EBT) $2,470 14.3% $656 7.8% ($985) -67.9%
Taxes Paid $988 5.7% $262 3.1% $0 0.0%
             
EARNINGS AFTER TAX (EAITDA) $1,482 8.6% $394 4.7% ($985) -67.9%
Plus: Dividend & Interest Income $0 0.0% $0 0.0% $0 0.0%
Plus: All Other Income $0 0.0% $0 0.0% $0 0.0%
             
NET INCOME (EAT + DII + OI) $1,482 8.6% $394 4.7% ($985) -67.9%
             
DISTRIBUTION OF NET INCOME            
Preferred Dividends $0 0.0% $0 0.0% $0 0.0%
Common Dividends $0 0.0% $0 0.0% $0 0.0%
Addition to Retained Earnings $1,482 8.6% $394 4.7% ($985) -67.9%

Three Year Balance Sheets ($000)
Year 2010 Common

2009

 Common 2008 Common
ACTUAL? NO Size % NO Size % NO Size %
ASSETS: CURRENT            
Cash $180 4.2% $317 18.2% $563 48.7%
Marketable Securities $200 4.7% $500 28.7% $0 0.0%
Net Accounts Receivable $1,966 45.9% $544 31.3% $231 20.0%
Notes Receivable - current portion $0 0.0% $0 0.0% $0 0.0%
Inventories $0 0.0% $0 0.0% $0 0.0%
Pre-Paid Expenses $0 0.0% $0 0.0% $0 0.0%
Other Current Assets $0 0.0% $0 0.0% $0 0.0%
             
TOTAL CURRENT ASSETS $2,346 54.7% $1,361 78.2% $794 68.7%
ASSETS: FIXED            
Buildings, Plant & Equipment @ cost $481 - $265 - $65 -
- Accumulated Depreciation B/P/E ($162) - ($66) - ($13) -
Net Buildings, Plant & Equipment $319 7.4% $199 11.4% $52 4.5%
Real Property (Land) $0 0.0% $0 0.0% $0 0.0%
Loans to Shareholders $0 0.0% $0 0.0% $0 0.0%
Intangible Assets (I.A.) $300 - $300 - $300 -
-Accumulated Amortization ($180) - ($120) - ($60) -
Net Intangible Assets $120 2.8% $180 10.3% $240 20.8%
Other Assets $1,500 35.0% $0 0.0% $70 6.1%
             
TOTAL FIXED ASSETS $1,939 45.3% $379 21.8% $362 31.3%
             
TOTAL ASSETS (CURRENT + FIXED) $4,285 100.0% $1,740 100.0% $1,156 100.0%
             
LIABILITIES:            
Accounts Payable $716 16.7% $385 22.1% $142 12.3%
Notes Payable $0 0.0% $0 0.0% $0 0.0%
Accruals (taxes/interest/wages) $1,010 23.6% $278 16.0% $299 25.9%
Current Portion - Long Term Debt $0 0.0% $0 0.0% $0 0.0%
Other Current Liabilities $0 0.0% $0 0.0% $0 0.0%
             
TOTAL CURRENT LIABILITIES (CL) $1,726 40.3% $663 38.1% $441 38.1%
             
Long Term Loans $0 0.0% $0 0.0% $0 0.0%
Long Term Bonds $0 0.0% $0 0.0% $0 0.0%
Contingent Liabilities $0 0.0% $0 0.0% $0 0.0%
Other Non-Current Liabilities $0 0.0% $0 0.0% $0 0.0%
             
TOTAL LONG TERM LIABILITIES (LTL) $0 0.0% $0 0.0% $0 0.0%
             
TOTAL LIABILITIES (CL + LTL) $1,726 40.3% $663 38.1% $441 38.1%
             
EQUITY:            
Preferred Stock $1,700 39.7% $1,700 97.7% $1,700 147.1%
Common Stock $0 0.0% $0 0.0% $0 0.0%
Additional Paid-In Capital $0 0.0% $0 0.0% $0 0.0%
Accumulated Retained Earnings $859 20.0% ($623) -35.8% ($985) -85.2%
Treasury Stock $0 0.0% $0 0.0% $0 0.0%
             
TOTAL NET WORTH $2,559 59.7% $1,077 61.9% $715 61.9%
             
TOTAL LIABILITIES + NET WORTH $4,285 100.0% $1,740 100.0% $1,156 100.0%

Ratio Analysis - Company vs. Industry = SIC 7371
Year 2010 2009 2008 2007
(Click on Ratio for definition)        Entity Company Company Company Industry
PREDICTOR RATIOS:        
Altman's Z-Score - B (2.60/1.10) 7.03 5.70 -4.80 5.4
Sustainable Growth Rate 57.91% 36.58% -137.76% 20%
         
PROFITABILITY RATIOS:        
Net Sales to Gross Sales 100.0% 100.0% 100.0% 100.0%
Gross Profit Margin on Sales 49.7% 43.0% -3.7% 39.3%
Net Profit Margin (Pre-tax) 14.3% 7.8% -67.9% 11.0%
Net Profit Margin (After-tax) 8.6% 4.7% -67.9% 4.4%
Overhead Expense to Sales 34.5% 33.9% 59.2% 28.3%
Operating Profit to Sales 15.2% 9.2% -62.9% 11.0%
Basic Earning Power 56.6% 37.7% -85.2% 23.3%
Return on Assets (After-tax) 34.6% 22.6% -85.2% 9.3%
Return on Equity 57.9% 36.6% -137.8% 19.7%
         
ASSET MANAGEMENT RATIOS:        
Collection Period (Period Average) 26.6 16.9 29.1 26.3
Collection Period (Period End) 41.6 23.7 58.1 52.6
Inventory Turns (Period Average) N/A N/A N/A N/A
Inventory Turns (Period End) N/A N/A N/A N/A
Days Inventory 0.0 0.0 0.0 0.0
Working Capital Turnover 27.8 12.0 4.1 10.3
Fixed Asset Turnover 8.9 22.1 4.0 4.8
Total Asset Turnover 4.0 4.8 1.3 2.1
         
LIQUIDITY RATIOS:        
Current Ratio 1.4 2.1 1.8 1.6
Quick Ratio 1.4 2.1 1.8 1.3
Sales/Receivables 8.8 15.4 6.3 6.9
Cash Flow/Curr. LTD N/A N/A N/A N/A
         
DEBT MANAGEMENT RATIOS:        
Times Interest Earned N/A N/A N/A N/A
Equity Multiplier 1.7 1.6 1.6 2.1
Fixed Assets (net)/Net Worth 0.76 0.35 0.51 0.93
Debt Ratio 40.3% 38.1% 38.1% 52.7%
Debt to Equity 67.4% 61.6% 61.7% 111.4%
Long-term-debt to Equity 0.0% 0.0% 0.0% 37.0%
Current-debt to Total Debt 100.0% 100.0% 100.0% 66.8%

Cash Flow Analysis - Indirect Method ($000)
YEAR: 2010 2009 2008
CASH FLOW FROM OPERATIONS:      
Net Income $1,482 $394 ($985)
Non Cash Expenses & Revenues Included in Income:      
Depreciation $96 $53 $13
Amortization & Depletion $60 $60 $60
Cash Provided (used) by Current Assets & Liabilities:      
Change in Net Accounts Receivable ($1,422) ($312) ($231)
Change in Inventories $0 $0 $0
Change in Pre-Paid Expenses $0 $0 $0
Change in Accounts Payable $331 $243 $142
Change in Accruals (t/i/w) & Contingent Liabilities $732 ($21) $299
TOTAL CASH FLOW FROM OPERATIONS: $1,279 $416 ($702)
       
CASH FLOW FROM INVESTING ACTIVITIES:      
Fixed Assets (B/P/E & Land) ($216) ($200) ($65)
Intangibles $0 $0 ($300)
Investments in Other Current Assets $0 $0 $0
Investments in Other Assets ($1,500) $70 ($70)
TOTAL CASH FLOW FROM INVESTING: ($1,716) ($130) ($435)
       
CASH FLOW FROM FINANCING:      
Change in Short-term borrowing $0 $0 $0
Change in Current Portion of L.T. Debt $0 $0 $0
Change in Loans to Shareholders $0 $0 $0
Change in Long-term borrowing $0 $0 $0
Change in Preferred Stock $0 $0 $1,700
Change in Common Stock $0 $0 $0
Change in Paid-In Capital $0 $0 $0
Change in Treasury Stock $0 $0 $0
Cash Dividends Paid - Total $0 $0 $0