EXHIBIT 99.2
CELL BOOST
Cell Power Technologies, Inc. is the exclusive sub-distributor for
the Cellboost product line in Latin and South America. The main
distributor is Compact Power Systems ("Compact"). Compact is a
division of E & S International ("E & S"), a private electronics
distributor with over $500 million in annual sales. Compact Power
Systems licensed the Cellboost product from the original inventors
and patent holder Jumpit AS in Norway.
Recently Compact chose Energizer as its main supplier for battery
cells. The strategic alliance with Energizer affords the
manufacturers of Cellboost(TM) many other benefits. Energizer has
agreed to provide technical support for the product and for product
enhancements. Energizer's agreement allows the phrase "Powered by
Energizer" to be prominently displayed on the product packaging.
Currently the Cellboost(TM) product is carried in North America by
AT&T, and Cingular. The product can also be found in Staples, Office
Max, Office Depot, Radio Shack and 7-11 stores. The batteries will be
sold under the Cellboost(TM) name in Latin and South America.
"Powered by Energizer" with the Energizer logo will be prominently
displayed on the retail package.
Compact and ESI are also working on a new generation of Products
utilizing the Cellboost technology.
MARKET SEGMENTATION
For revenue purposes, the company has divided revenue into North
America and Latin America. North America includes The United States,
Canada, and Bermuda. Latin America includes all other countries
located in the South American Continent as well as Guatemala,
Nicaragua, Panama, Belize, Costa Rica, and Honduras.
TABLE: MARKET ANALYSIS
Market Analysis
Potential Customers Growth 2004 2005 2006 2007 2008 CAGR
- --------------------------- ------------- -------------- ------------- -------------- ------------- -------------- -------------
North America 12% 174 195 218 244 273 11.92%
Latin America 12% 127 142 159 178 199 11.88%
Other 0% 0 0 0 0 0 0.00%
- --------------------------- ------------- -------------- ------------- -------------- ------------- -------------- -------------
Total 11.90% 301 337 377 422 472 11.90%
SALES FORECAST
The Company's projections are based on typical lead times in
penetration of consumer markets. Normally the initial orders by
retail stores are test orders done on a limited basis to ascertain
sell-through. The initial roll-out is normally accompanied by ads and
coupons to introduce the product to the consumer.
North American revenue is strictly receipt of royalties.
IMPORTANT ASSUMPTIONS UNDERLYING FORECAST
The forecasts are based on important assumptions, most of which are
shown in the following table. The key underlying assumptions are:
o A slow-growth economy, without major recession.
o No unforeseen changes in technology that render Cellboost
immediately obsolete.
o Company has adequate access to equity capital and financing
sources to maintain its financial plan as shown in the tables.
TABLE: GENERAL ASSUMPTIONS
General Assumptions
2004 2005 2006
---------------------------------------- ----------------- ------------------ ------------------
Plan Month 1 2 3
Current Interest Rate 8.00% 8.00% 8.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Sales on Credit % 18.75% 25.00% 18.75%
Other 0.00% 0.00% 0.00%
---------------------------------------- ----------------- ------------------ ------------------
Calculated Totals
---------------------------------------- ----------------- ------------------ ------------------
Payroll Expense $240,000 $304,800 $387,096
Sales on Credit $662,033 $2,075,000 $2,934,375
New Accounts Payable $1,656,595 $4,973,503 $10,567,180
Inventory Purchase $1,352,975 $4,378,803 $9,442,080
BREAK-EVEN ANALYSIS
The Break-even analysis reflects the ability of Cell Power to
maintain a stabilized operating overhead, guarantee supply costs
going forward for three years minimum. The plan allows for a long
ramp up period coupled with strong distributorship networking and
most importantly, cost stability. The latter permits significant
allocation for marketing of the specified products.
TABLE: BREAK-EVEN ANALYSIS
Break-even Analysis:
------------------------------------------------ -----------------
Monthly Units Break-even 108,000
Monthly Revenue Break-even $243,000
Assumptions:
------------------------------------------------ -----------------
Average Per-Unit Revenue $2.25
Average Per-Unit Variable Cost $1.75
Estimated Monthly Fixed Cost $54,000
PROJECTED PROFIT AND LOSS
2004 2005 2006 2007
Royalty Income North America
Units Sold (note 1) 12,867,000 21,500,000 36,000,000 48,000,000
Retail Percentage 90% 85% 80% 70%
Distributor Percentage 10% 15% 20% 30%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Royalty 1,222,365 1,988,750 3,240,000 4,080,000
Sales
Units Sold (note 2) 1,116,000 6,249,600 13,374,144 34,006,278
Product Sales $3,069,000 $16,670,808 $34,605,263 $85,350,682
Less Program Discounts -$153,450 -$416,770 -$865,132 -$2,133,767
- -----------------------------------------------------------------------------------------------------------------------------------
Net Sales $2,915,550 $16,254,038 $33,740,132 $83,216,915
Cost of Goods Sold
Product Costs (note 3) $1,160,640 $6,499,584 $13,909,110 $35,366,529
Advertising Costs $368,280 $1,000,248 $2,076,316 $2,560,520
Commissions $61,380 $333,416 $692,105 $1,707,014
Royalty $111,600 $624,960 $1,337,414 $3,400,628
- -----------------------------------------------------------------------------------------------------------------------------------
Total Costs $1,701,900 $8,458,209 $18,014,945 $43,034,691
Gross Profit $2,436,015 $9,784,579 $18,965,186 $44,262,224
Expenses
ESI Profit Share $1,218,008 $4,892,290 $9,482,593 $22,131,112
Insurance $135,000 $145,125 $156,009 $167,710
Legal Fees $90,000 $97,650 $105,950 $114,956
Misc. Costs $150,000 $176,250 $207,094 $243,335
Payroll $240,000 $304,800 $387,096 $491,612
Travel $75,000 $93,750 $117,188 $146,484
- -----------------------------------------------------------------------------------------------------------------------------------
Total Expenses $1,908,008 $5,709,865 $10,455,930 $23,295,210
Operating Income $528,008 $4,074,715 $8,509,256 $20,967,014
- -----------------------------------------------------------------------------------------------------------------------------------
Interest Expense
Provisions for Income taxes $95,041 $1,548,392 $3,233,517 $7,967,465
---------------------------------------------------------------------------------------
Net Income $432,966 $2,526,323 $5,275,739 $12,999,549
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Notes
1 Projections based on North American sales projections.
2 Based on a market size of 120MM cell Phone users.
3 Product cost is approximately $1.04.
PROJECTED BALANCE SHEET
BALANCE SHEET 2004 2005 2006 2007
ASSETS
CURRENT ASSETS
CASH $ 2,320,476 $ 3,604,558 $ 6,262,980 $ 10,501,053
CASH EQUIVALENTS $ 825,000 $ 990,000 $ 1,188,000 $ 1,425,600
ACCOUNTS RECEIVABLE $ 322,129 $ 1,500,336 $ 3,052,511 $ 7,246,410
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS $ 3,467,605 $ 6,094,895 $ 10,503,491 $ 19,173,062
INTANGIBLE ASSETS, NET OF ACCUMULATED
AMORTIZATION $ 247,510 $ 217,510 $ 187,510 $ 157,510
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 3,715,115 $ 6,312,405 $ 10,691,001 $ 19,330,572
LIABILITES
NOTES PAYABLE $ 300,000 $ 300,000 $ 300,000 $ 300,000
ACCOUNTS PAYABLE $ 120,900 $ 677,040 $ 1,448,866 $ 3,684,013
DEFERRED REVENUE $ - $ - $ - $ -
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 420,900 $ 977,040 $ 1,748,866 $ 3,984,013
EQUITY
RETAINED EARNINGS $ 874,802 $ 5,278,884 $ 14,060,919 $ 35,089,145
CAPITAL $ 2,437,154 $ 2,437,154 $ 2,437,154 $ 2,437,154
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 3,732,856 $ 8,693,078 $ 18,246,938 $ 41,510,312