Investor Fact Sheet

PURPOSE

Provide a fund accounting software application, delivered on the internet and available anywhere, that provides a complete enterprise wide accounting solution to multi level church organizations.  The application will be a state of the art fund accounting system with church management functions.  It will allow church denomination leadership to have all levels of the organization manage their accounting on one system, one chart of accounts, thereby facilitating real-time reporting of receipts for the entire organization.

 

PRODUCT / SERVICE

The product ClearBlue Solutions has to offer is an application suite that is new and unique to the church contribution accounting market.  It ties together the churches with their denominational leadership offices on the same accounting system and chart of accounts so that as churches post their books periodically those posted receipts are available to the leadership offices for reporting and tracking.  The leadership office structures the chart of accounts that the entire organization will use but individual churches can customize the chart of accounts for their unique purposes.

 

START-UP PROGRAM COSTS

 

OPERATIONAL COSTS

Projected annual material, labour and overhead costs (thousands)

 FY-1           FY-2             FY-3            FY-4          FY-5

$511           $749           $1,237        $1,622    $1,955

 

SOURCES OF FUNDING

The primary funding source for start-up cost coverage will be private donors.  The funding plan is seeking $5 million for start-up funding and cash flow coverage for the first fiscal year.  Company equity will be granted at 10% for each $1 million invested.

 

MODUS OPERANDI

ClearBlue Solutions will have a staff compliment of at least 14 initially to manage the entire organization, eventually growing to about 50 employees by the fifth year.  Sales, marketing, finance, human resources, program management, product development, customer support, information technology will all be led by at least a Director level employee.  On the Board of Directors are the CEO, CIO, COO, and CFO.  ClearBlue Solutions will have one President and Vice Presidents of the major departments, finance, sales, marketing and program management.

 

FIVE YEAR PEFORMANCE

 

ANTICIPATED GROWTH

 

COMPARISON TO COMPETITION

The closest competitors compared side by side with ClearBlue’s 46 main benefits:

 

5 YEAR PROFITABILITY PROJECTION

Best – 18,000 clients:     Payback Period:             7 months

Net Present Value:         $90.5 million (5 years, 10% discount rate)

Internal Rate of Return:  246% (5 years)

Likely – 13,300 clients:   Payback Period:             1.1 years

            Net Present Value:         $59.9 million (5 years, 10% discount rate)

            Internal Rate of Return:  180% (5 years)

Worst – 8,000 clients:     Payback Period:             2.3 years

            Net Present Value:         $25.3 million (5 years, 10% discount rate)

            Internal Rate of Return:  96% (5 years)

 

Application and expected effects of funds

We are seeking a total of $5 million to fund the business to the product launch and through the first fiscal year.  The Start-Up requirement of $ 768,133 will be used primarily to establish the business; development, marketing, sales, product support, travel, office space, and minimal staff salaries.  $300,000 is earmarked for development expenses that will deliver the foundation fund accounting ClearBlue Accounting developed with customer input during the EAP period.  This is a joint effort between ClearBlue Solutions and Dobbs Enterprise Solutions of Redondo Beach, California.

 

The first fiscal year requirement of $2.9 million covers all operational and development expenses in the crucial first year of business.  However net income in that year is projected to be $5.8 million so the investment money is cash flow insurance to ensure uninterrupted operation.  The remaining $1.3 million will be held for cash reserve and operating cash flow to safeguard the first two years of operations.

 

Investor Plan and Exit Scenarios

We will offer two buyout options for investors to the end of the fifth fiscal year.  After the third FY the buyout is 150% of total invested, after five years the option is 300% of total invested.  If investors choose to stay on after the fifth fiscal year they will be given a 10% equity share of the company when it goes public.

 

	Buy Out Options					Owner Position
End of FY:	FY1	FY2	FY3	FY4	FY5	FY6 to IPO
Options:			150% buyout		300% buyout	10% Equity Share per