Experiences that convinced me to learn more about the financials. Areas that may be of concern; 1.Tax Preparer asked questions regarding; 1.Bad Debt 2.Depreciations 3.Inventory obsolescence 4.Accruals 2.When Income Statement is different from Balance Sheet 1.Earnings vs Income 2.What GL Accounts are being pass through to Balance Sheet How will I know what Gross Margins % would yield the desired PROFITS

Expanding knowledge of financial concepts 1.Didn’t understand why net income was not always translated into available cash 2.When accruals were beneficial 1.If setup properly, can provide a more accurate picture. 3.Making sure expenditures were posted in the proper journal 1.This can cause unnecessary actions / adjustments / reporting errors 4.Areas that may be of concern 1.Inbound Freight Charges 2.System – Inventory Adjustments 3.Gross Margins

Key financial concepts to watch for on a regular basis 1.Custom / Standard Reports; 1.Daily Review 1.Daily Sales Transaction 2.Exception Reports 2.Weekly 1.Inventory Valuation 2.Exception Report 3.Monthly Review 1.Accounts Receivables 2.Accounts Payables

What are the benefits that lead me to seek a better understanding of the financial reports? 1.Examples: 1.Increase in overall Gross Margins on Sales 2.Have better A/P terms and more aggressive A/R collections 3.Avoiding repetitive Return Goods 4.Continue to better understand ways to utilize the information in the reports. 2.EBITDA = Earnings Before the deduction of Interest Expenses, Taxes, Depreciation, and Amortization.

Advice and Helpful Hints when starting a Business. 1.Systems 1.Industry Specific Business Systems (if possible). 2.Be involved in Setting up Journal Accounts. 3.Forecasting Models & Update Routinely. 4.Seek help / assistance early. 5.Plan as much as possible. 2.Procedures 1.Have reports that you understand. 2.Accrue for Bad Debt, Obsolescence & Bonuses, etc. 3.Don’t delay when the enviable is presented. 3.Patience ~ during a period of stability. Don’t panic & stick to the plan.

Summary Financial Statements Month =8 Annual Results & Forecast YTD Results Income Statement: 2015(f) YTD 8-15YTD 8-14 Net Sales $ 10,355,000 $ 13,108,761 $ 9,464,395 $ 11,181,031 $ 9,632,558 $ 8,337,551 $ 7,212,292 $ 7,628,091 Cost of Good Sold 9,734,000 12,229,464 8,766,901 10,505,053 9,026,393 7,753,460 6,840,170 7,048,058 Gross Margin $ 621,000 $ 879,297 $ 697,494 $ 675,978 $ 606,165 $ 584,091 $ 372,123 $ 580,033 Sales Expense $ 172,000 $ 190,792 $ 150,785 $ 109,764 $ 128,334 $ 106,850 $ 114,539 $ 123,056 Office & Admin Expense 435, , , , , , , ,332 Shipping & Handling 8,000 8,935 5,169 15,357 11,698 3, ,289 Total Operating Expense $ 615,000 $ 578,397 $ 531,744 $ 463,714 $ 543,262 $ 570,397 $ 383,462 $ 362,678 Operating Profit $ 6,000 $ 300,900 $ 165,750 $ 212,265 $ 62,903 $ 13,694 $ (11,339) $ 217,355 Interest Expense $ - $ 1,179 $ 5,253 $ 7,899 $ 9,230 $ 6,907 $ 11 $ 272 Other Expense - (35) (3,263) (4,582) (675) (8,221) $ (53) (6) Total Other Expense/(Income) $ - $ 1,144 $ 1,990 $ 3,318 $ 8,555 $ (1,314) $ (42) $ 266 Net Profit/(Loss) Before Taxes 6, , , ,947 54,347 15,008 (11,297) 217,090 Interest Expense - 1,179 5,253 7,899 9,230 6, Depreciation 2, ,778 3,603 7,718 9,794 1, EBITDA $ 8,000 $ 301,353 $ 175,791 $ 220,450 $ 71,295 $ 31,709 $ (10,202) $ 217,639

Balance Sheet: 2015(f) YTD 8-15YTD 8-14 Cash $ 54,000 $ 1,494,422 $ 158,685 $ 0 $ 6,578 $ 27,955 $ 415,233 $ 277,879 Accounts Receivable - Total 1,498,000 2,015,594 1,532,328 1,463,124 1,575,679 1,293,405 1,521, ,626 Inventory 113, , , , , , , ,307 Other Current Assets 12,000 7,733 6,243 5, ,737 7,733 Total Current Assets $ 1,677,000 $ 3,642,500 $ 1,869,461 $ 1,637,261 $ 1,767,349 $ 1,500,155 $ 2,069,971 $ 1,164,545 Net Fixed Assets 10, ,044 7,369 3,192 10,910 10, Other LT Assets Total Assets $ 1,687,000 $ 3,643,126 $ 1,870,504 $ 1,644,630 $ 1,770,541 $ 1,511,065 $ 2,080,680 $ 1,165,310 Note Payable - BB&T $ - $ 338,457 $ - $ 89,296 $ 377,336 $ - Accounts Payable - Trade 1,076,000 2,609,859 1,400,014 1,141,089 1,106,184 1,283,765 1,483, ,958 Accrued Liabilities 106,000 49,426 35,540 37,707 62,846 46, ,585 22,451 Total Current Liabilities $ 1,182,000 $ 2,997,743 $ 1,435,553 $ 1,268,093 $ 1,546,365 $ 1,330,380 $ 1,596,403 $ 602,409 Member Equity $ 505,000 $ 645,383 $ 434,951 $ 376,537 $ 224,176 $ 180,685 $ 487,504 $ 562,901 Total Liabilities & Equity $ 1,687,000 $ 3,643,126 $ 1,870,504 $ 1,644,630 $ 1,770,541 $ 1,511,065 $ 2,083,907 $ 1,165,310