The Supply Chain Finance Solution EarlyPaytm The Supply Chain Finance Solution

Agenda What is Supply Chain Finance (SCF)? How Does It Work? What Is Important in an SCF Program? Does SCF Deliverable a Measurable Return? Why Use SCF? Why Not?!

What is Supply Chain Finance? Less Expensive Extra Capital New or Distressed Business Capital Family & Friends Angels Venture Capital Funds Factoring Invoices P.O. Financing Hedge Funds Cash = Retained earnings Suppliers Control Payment Timing Receivables the bank cannot fund Tooling (WIP & Piece Price) VMI (scan or consumption) Financing Cost Consistent Business Capital Banks Financial Institutions t

Validated and Posted in A/P Queue Customer Payment Issued How Does Supply Chain Finance Work? Day 1: Ship and Invoice Day 50: Payment Received Supplier Activity Ship to Pay Timeline Buyer Activity Day 5: Validated and Posted in A/P Queue Day 50: Customer Payment Issued

InStream Receives Full Payment How Does Supply Chain Finance Work? Day 1: Ship and Invoice Day <=50: Payment Received Day 50: InStream Receives Full Payment InStream EarlyPaytm Window InStream pays supplier 100% of invoice amount less Accelerated Payment Discount assessed for 10 days InStream pays supplier 100% of invoice amount less Accelerated Payment Discount assessed for 40 days Ship to Pay Timeline Day 5: Validated and Posted in A/P Queue Day 50: Customer Payment Issued

*What is Important in an SCF Program? Interacts Easily with Buyer, Supplier and Supplier Bank 69% Minimal or No IT Work Required 58% Provides Supplier Maximum Flexibility for Usage 29% Can Address Supplier Needs Beyond Receivables 20% *Source: Aberdeen Consulting Benchmark

Does SCF Provide a Measurable Value? 11 days shorter DSO* 2.9% lower average cost of short term capital* More visible and flexible cash flow Meet sub-supplier terms Lower cost of goods sold Suppliers Benefit Buyers Benefit 13.6 days longer DPO* Fewer supply problems tied to cash flow or capital issues Maintain extended terms Lower cost of goods sold Fewer supplier calls Supplier Banks Benefit Flexible capital for clients when the bank cannot meet demands Lower exposure without impacting clients Help clients improve cash flow Help clients improve profitability Our research shows that Best in Class buyers enjoy 13.6 days greater DPOs – or days payables outstanding -- than their peers and obtain trade financing at an annualized rate 2.86 percentage points lower. Most important, Supply Chain Finance leaders are creating a lower cost and more financially stable end-to-end supply chain, resulting in a strategic advantage. Best in Class suppliers also enjoy better metrics, such as 11 days shorter Days Sales Outstanding or DSOs. Because they have better cash flow visibility and predictability and improved access to credit and lower-cost financing, this helps to reduce the financial costs buried in their products. This cost savings can help drive better gross margins for both suppliers and their buyers. *Source: Aberdeen Consulting Benchmark

Why Participate as a Buyer? Why Not?! No Downside: No Contract Little or No IT Work Very Little Resource Expenditure Significant Upside: Improves DPO & Supply Chain Maintain or Extend Payment Terms Can Provide Significant Benefit to Strategic Suppliers

Why Participate as a Supplier? Why Not?! No Downside: No IT Work Easy to Get Started You & Your Bank Control Usage & No Unused Facility Fees Significant Upside: Improves Financial Position Lower Cost of Financing Extra Capital When You Need It More Predictable Cash Flow Management Cash to Improve Credit Position with Key Suppliers Lower Credit Exposure to Customers as Needed Improve Balance Sheet Ratios

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