© 2005 Clancy & Company LLP All rights reserved

Purpose of Seminar Outline  Outline Structure  Showcase performance of previous Funds  Give status of Clancy Funding (2005) Inc.: actual and proposed investments

The Fund - Financing Dreams  The Fund is a private Ontario company formed for the purpose of financing various business and operational initiatives to meet strategic business goals and dreams.  The Fund has no resources. It relies on Clancy & CompanyLLP Chartered Accountants (“Clancy & Company”) for its administration and the undertaking of its business procedures and initiatives.

Background - Creating Opportunity Clancy & Company, in its role as accountant and business advisor, is constantly reviewing business opportunities for the purpose of assisting clients in growing their businesses. The Fund will allow Clancy & Company to:  Assist those clients that it feels will benefit from an expeditious access to capital  Empower clients by offering opportunities to participate in transactions that are not in the public domain

Function Law Firm Clancy & Company LLP Chartered Accountants Investors Clancy & Company Inc. admin. 25% 75% Dividends Interest $1,000,000 investment accounting legal expenses Principal revenue capital interest, royalties, and/or other principal Principal CLANCY FUNDING (2005) Inc. Investment Opportunity

Function (1. Provide much needed resources) The Fund will function as follows:  Prospective investees (generally, existing clients of Clancy & Company) will request funding for a variety of purposes  Funds, generally, will be provided by way of debt instruments, at rates of interest anticipated to be higher than those offered in traditional financing arrangements

Function (2. Investments generate returns)  Returns to the Fund will be generated from these investments  Returns are expected over a one to six year period  Income earned and principal repayments to the Fund will not be reinvested in new financial opportunities

Function (3. Return on investment)  Cash received by the Fund will be distributed to the unit holder as follows: I. Pay interest that is accrued at the Royal Bank Prime Rate less 3% II. Repay principal  After unit holders are repaid principal and paid interest, all after tax income will be distributed on a pro-rata basis to the common shareholders (75% investors, 25% Clancy)

Key Issues  Investors repaid their money plus nominal interest before Clancy and related participate  Income earned by the Fund not reinvested  Funds distributed 2x a year (July and January)

Distribution of Income Investor Clancy Funding (2005) Inc. Borrower Law Firm Clancy & Company Clancy & Related Investor dividend 75% 25% expenses $25,000 Clancy Funding (2005) Inc.. Interest. Principal. Interest, other. Principal $25,000

Investment Advantages Issue The issue of up to 1,000 units at a price of $1,000/unit. Each unit entitles the holder to a 1)$ Redeemable Senior Note (Note) 2).01 Non-Voting Common share  Issued on a pro-rata basis 75% of the Common Shares  Six years fully open to repayment  Interest at the prevailing Royal Bank Prime Rate less 3%  Interest calculated on outstanding principal only

Investment Advantages (continued) Subscription  Minimum 25 units ($25,000) Dividend Policy  Upon repayment of the Note and interest, a dividend policy will commence providing for 100% of all after tax income being paid to common shareholders on a pro-rata basis.

Investment Advantages (continued) Security  Security provided on an investment – by – investment basis Expenses  Legal and year end accounting fees  Monthly administrative charge the lesser of $ per month or 20% of annualized income (or less, at Clancy discretion).

Investment Advantages (continued) Manager  Clancy & Company Inc. will be the fund manager. The principal of Clancy & Company Inc. is David Clancy Management Fees  nil

Income Tax Considerations  The Fund will be subject to corporate income taxes as a Canadian Controlled Private Corporation  Unit holders will receive interest income and dividend income. This income will be subject to tax

Income Tax Considerations (continued)  The Fund will provide each unit holder with a statement of income paid during the year and a T5  Until a unit is disposed of, interest paid on funds borrowed for the purchase of units will be tax deductible

Potential Conflicts of Interest There are potential conflicts of interest for a number of reasons:  The Fund is closely associated with Clancy & Company and Clancy & Company Inc.  Likely, Clancy & Company will be the accountants for the individual investors in the Fund and borrowers from the Fund

Potential Risk Factors  Return on investment  Business and financial risk  Dependence on key personnel  Management of growth  Economic risk  Political risk

Overall Objectives Preservation of Capital Good Rates of Return

Investments: Committed and Proposed (see handout)

Why Borrow at High Costs?  Do not “give up” equity  Expeditious access to capital  Limited number of lending sources  Deal not a traditional “bankable” deal. Can be used:  To purchase a business  Equity issues for business [we are asset based lender], etc.)  Additional “qualitative factors”  Flexibility  Use to obtain other traditional funds  Credibility, etc.

Overall Objectives Preservation of Capital Good Rates of Return