1. October 6, 2006

3. Mr. Mike and Shirley Jones

4. Peachtree Plumbing, Inc.

5. 5929 Red Bluff Boulevard

6. Atlanta, Georgia 30329

8. Description of Engagement

9. Plough-Back Financial has been engaged by you to estimate the fair market value of a 36.4% interest, equivalent to 20,000 shares, in Peachtree Plumbing, Inc. (“Peachtree”, “Company”, or “Co.”) as of June 30, The conclusion of value will be used as a basis for negotiation of the aforementioned interest. The premise of value selected is consistent with that of a going concern—that is an enterprise with assets that will continue operating into the future. Plough-Back completed the valuation report on October 6, 2006.

10. Pursuant to Revenue Ruling (RR) 59-60, the IRS defines Fair Market Value as follows:

11. “The price at which the property would change hands between a willing buyer and a willing seller, when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts.”

12. Company Overview

13. Peachtree is a privately-held plumbing contracting company headquartered in Atlanta, Georgia. The Company was founded in 1989 by Reginald Jones. Upon Mr. Jones passing away, his family inherited the company; namely, his son and daughter-in-law, Mike and Shirley Jones and their two children Mark and Jill Jones. Of the 55,000 shares outstanding, Mark and Shirley own 30,000 and 20,000 shares, equivalent to a 54.5% and 36.4% ownership interest, respectively. Their children, Mark and Jill Jones own 3,000 and 2,000 shares, equivalent to a 5.5% and 3.6% ownership interest, respectively. Peachtree serves both residential and commercial markets in northern Florida and Georgia. The Company is primarily engaged in servicing, installing, and combined selling and installing plumbing related to new jobs, additions, and maintenance of past jobs.

14. Valuation Methods and Conclusion of Value

15. The valuation process included several plausible valuation approaches
The valuation process included several plausible valuation approaches. To that end, we considered the Income, Asset, Market, Income/Asset, and Rule of Thumb approaches. First, the Income approaches considered include the capitalization and discounted cash flow (DCF) methods. Given Peachtree’s 15.6% compounded annual growth rate (CAGR) between 2002 and 2006, coupled with management’s optimistic growth forecast, the DCF method was chosen as a more effective valuation approach than the capitalization method. Additionally, we performed a single regression analysis to determine whether or not the passage of time is a strong indicator of Company earnings. The regression analysis results produced an R² value of 0.93; thus, validating the positive correlation between time and earnings. The regression analysis is discussed further in the body of the report. Second, the Asset approach was considered; however, this approach pursuant to RR is suited towards non-operating enterprises, asset-intensive operations (i.e., Real Estate Holding Companies), buy-sell agreements, or companies with poor financial performance. None of these conditions are relevant to Peachtree and, therefore, using the Asset approach was deemed imprudent.

16. Third, we identified reasonably comparable guidelines companies using Pratt’s Stats completed transaction database, resulting in our decision to use the Market approach as a viable valuation alternative. Fourth, the Excess Earnings/Reasonable Rate Method is considered a viable valuation approach because Peachtree is outperforming its competitors, in terms of year-over-year growth and profitability, which implies that the Company is benefiting from the effective use of intangible assets. It should be noted that the Excess Earnings/Reasonable Rate Method is a variation of the Excess Earnings/Treasury Method. Pursuant to RR , the Treasury Method should only be used when there isn’t a more effective approach to valuing intangible assets. Fifth and last, the Rule of Thumb approach was considered as a sanity check of the DCF, Guideline Completed Transaction (GCT), and Excess Earnings/Reasonable Rate methods. The Rule of Thumb method was deemed non-viable following our due diligence efforts because we failed to identify reliable industry data that could be applied to the subject Company.

17. Based on the information and analysis presented in the detailed valuation report, Plough-Back Financial opines that a 36.4% interest in Peachtree Plumbing, Inc. is valued at $1,767,000, or $88.34 per share.

18. The conclusion of value is subject to the assumptions and limiting conditions in Appendix A.

19. Timothy Carter, MBA, PMP, AVA

20. Timothy Carter, MBA, PMP, AVA

21. Plough-Back Financial, Inc.

27. Table of Contents

29. Company Profile and Operations Analysis
Background
Operations
Competitive Landscape
Organization Structure and Management
Employee Relations
Facilities and Equipment
Financing
Stock Ownership
Growth Expectations
Strengths and Weaknesses

30. Economic and Industry Analysis
Economic Analysis
Industry Analysis

31. Financial Analysis of the Subject Company
Balance Sheet Analysis
Common- Size Balance Sheet
Economic/Normalized Balance Sheet

32. Cash and equivalents have been reduced $1,094,000 and $1,676,000, respectively. Cash and equivalents before making normalization adjustments were 55% of total assets (Exhibit 2). Cash and equivalents have been adjusted downward 43% to the industry average of 12%.

33. Inventory under the FIFO method of accounting has been increased $4,650 from $49,000 to $53,650.

34. Plant, Property & Equipment has increased $458,250 from $900,000 to $1,358,250. This adjustment is based on an appraisal performed by a third party appraiser.

35. Exhibit : Historical Balance Sheet

40. Exhibit : Common-Size Balance Sheet

44. Exhibit : Economic/Normalized Balance Sheet
Income Statement Analysis
Common- Size Income Statement
Economic/Normalized Income Statement

45. Exhibit : Historical Income Statements

51. Exhibit : Common-Size Income Statement

52. Exhibit : Economic/Normalized Income Statement
Ratio Analysis
Comparative Analysis

53. Exhibit : Key Ratio Analysis

55. Valuation of the Subject Company
Income Approach (Discounted Cash Flow)

57. Weighted Average Cost of Capital
Growth Rate
Capitalization Rate

58. Exhibit : Weighted Average Cost of Capital

59. Exhibit : Projected Common-Size Income Statement

60. Exhibit : Projected Common-Size Balance Sheet

61. Exhibit : Discounted Cash Flow Analysis
Market Approach

67. Exhibit : Guideline Completed Transaction Analysis
Income/Asset Approach

68. Exhibit : Excess Return/Reasonable Rate Method
Asset Approach
Rule of Thumb
Valuation Adjustments
Non-Operating Assets

69. Exhibit : Indicated Values Adjusted for Non-Operating Assets
Adjustment for Control
Adjustment for Lack of Marketability
Restricted Stock Studies
Pre-IPO Studies

70. Exhibit : Implied Minority Discount

72. Exhibit : Discount for Lack of Marketability
Reconciliation of Indicated Vales

73. Exhibit : Adjusted Indicated Values including Control and Marketability Adjustments
Conclusion of Value

74. Appendix : Assumptions and Limiting Conditions

76. Appendix : Marketability Discount: Restricted Stock Studies

81. Appendix : Marketability Discount: Pre-IPO Studies

93. Appendix : Sources Used in Valuation Report

94. Center for Economic & Industry Research. (2006)
Center for Economic & Industry Research. (2006). Plumbing Industry Report.

95. Construction Contractor. (2006). Retrieved from http://www

96. Damodaran, A. (2006). Relative Valuation: First Principles
Damodaran, A. (2006). Relative Valuation: First Principles. New Jersery: John Wiley & Sons, Inc.

97. Federal Government's Economic Assumptions. (2009)
Federal Government's Economic Assumptions. (2009). Retrieved from Goverment Printing Office (GPO):

98. Federal Open Market Committee. (2006)
Federal Open Market Committee. (2006). Retrieved from Federal Reserve Board:

99. Federal Reserve Beige Book - Atlanta. (2006)
Federal Reserve Beige Book - Atlanta. (2006). Retrieved from Federal Reserve Board:

100. Ibbotson Associates. (2006)
Ibbotson Associates. (2006). Stocks, Bonds, Bills, and Inflation (SBBI) Valuation Edition Yearbook.

101. Mergerstat. (2005). The Mergerstat Industry Analysis.

102. National Association of Certified Valuation Analysts. (2009)
National Association of Certified Valuation Analysts. (2009). Business Valuations: Fudamentals, Techniques and Theory. Salt Lake City.

103. Peachtree Plumbing, Inc. (2006). Income Statement. Atlanta.

104. Peachtree Plumbing, Inc. (2006). Balance Sheet. Atlanta.

105. Pratt, S. P. (2005). The Market Approach to Valuing Businesses
Pratt, S. P. (2005). The Market Approach to Valuing Businesses. New Jersey: John Wiley & Sons, Inc.

106. Pratt's Stats. (2008). Pratt's Stats Transaction Report.

107. Pratt's Stats. (2008). Pratt's Stats Transaction Report.

108. Pratt's Stats. (2008). Pratt's Stats Transaction Report.

109. Risk Management Association (RMA). (2006)
Risk Management Association (RMA). (2006). Comparative Historical Data Report .

110. Appendix : Valuator Qualifications