Very Successful Scenario
Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 [1]
Year Number 0 1 2 3 4 5 6 7 8 9 10
Revenue
Avg. Enrollments / Course [2] 5000 5000 5000 5000 5000 5000 5000 8750 15313 26797 46895
Number of Courses 8 16 24 32 40 48 50 50 50 50 50
Avg. Revenue per Enrollment $10 $10 $10 $10 $10 $10 $10 $10 $10 $10 $10
Annual Revenues $400,000 $800,000 $1,200,000 $1,600,000 $2,000,000 $2,400,000 $2,500,000 $4,375,000 $7,656,250 $13,398,438 $23,447,266
- Production Costs $15,583 $15,583 $15,583 $15,583 $15,583 $15,583 $3,000 $3,000 $3,000 $3,000 $3,000
- Student Service Costs $210,000 $420,000 $630,000 $840,000 $1,050,000 $1,260,000 $1,312,500 $2,296,875 $4,019,531 $7,034,180 $12,309,814
- Marketing and Advertising $80,000 $160,000 $240,000 $320,000 $400,000 $480,000 $500,000 $875,000 $1,531,250 $2,679,688 $4,689,453
- Administrative Costs $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
- Creator Royalties $17,424 $34,847 $52,271 $69,695 $87,118 $104,542 $108,898 $190,571 $333,500 $583,624 $1,021,343
Operating Expenses $324,007 $631,431 $938,854 $1,246,278 $1,553,702 $1,861,125 $1,925,398 $3,366,446 $5,888,281 $10,301,491 $18,024,610
- Reg CF Revenue Shares $1,486 $2,973 $4,459 $5,945 $7,432 $8,918 $9,290 $16,257 $28,450 $49,787 $87,127
Gross Profits $74,507 $165,597 $256,687 $347,777 $438,867 $529,957 $565,312 $992,297 $1,739,519 $3,047,159 $5,335,528
- Taxes $16,391 $36,431 $56,471 $76,511 $96,551 $116,590 $124,369 $218,305 $382,694 $670,375 $1,173,816
Free Cash Flow $58,115 $129,165 $200,216 $271,266 $342,316 $413,366 $440,944 $773,992 $1,356,825 $2,376,784 $23,120,622
Discounted Cash Flow $58,115 $109,462 $143,792 $165,101 $176,563 $180,686 $163,339 $242,975 $360,967 $535,860 $4,417,529
Revenue Share Forecasts
Yearly Revenue Share Program $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $125,000 $218,750 $382,813 $669,922 $1,172,363
Annual Reg CF Distribution $1,486 $2,973 $4,459 $5,945 $7,432 $8,918 $9,290 $16,257 $28,450 $49,787 $87,127
Total Revenue with Investors $1,486 $4,459 $8,918 $14,864 $22,295 $31,213 $40,503 $56,760 $85,210 $134,997 $222,124
Net Present Value (NPV) [3] $6,554,391
Assumptions:
Avg. Revenue per Enrollment [4] $10 Production Budget / Amount Raised $135,000 Student Svc. Costs / Enrollment $5.25
Mktg. / Adv. Reinvestment % 20%
Annual Enrollment Growth Rate 75%
Effective Tax Rate 22%
Revenue Share Rate [5] 5%
Discount Rate [6] 18%
Notes
[1] Year 10 is treated as a perpetuity (an asset that generates a constant stream of identical cash flows) but is still subject to the discount rate in the model.
[2] Enrollment estimates are based on comparisons to Eazl's internal data from previous online courses.
[3] The net present value (NPV) is a method of estimating the value of a project that accounts for risk and inflation.
[4]Revenue per enrollment has two parts: (1) the price paid for lifetime access to course materials (2) micro-payments for additional student support.
[5] The Revenue Sharing rate is determined by the Project and require a super-majority vote at the annual meeting to modify.
[6] The discount rate reduces the present value of cash flows to reflect the riskiness of the business. A low discount rate would be 8% and a high one 30%.
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Moderately Successful Scenario
Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 [1]
Year Number 0 1 2 3 4 5 6 7 8 9 10
Revenue
Avg. Enrollments / Course [2] 2000 2000 2000 2000 2000 2000 2000 3000 4500 6750 10125
Number of Courses 8 16 24 32 40 48 50 50 50 50 50
Avg. Revenue per Enrollment $10 $10 $10 $10 $10 $10 $10 $10 $10 $10 $10
Annual Revenues $160,000 $320,000 $480,000 $640,000 $800,000 $960,000 $1,000,000 $1,500,000 $2,250,000 $3,375,000 $5,062,500
- Production Costs $15,583 $15,583 $15,583 $15,583 $15,583 $15,583 $3,000 $3,000 $3,000 $3,000 $3,000
- Student Service Costs $84,000 $168,000 $252,000 $336,000 $420,000 $504,000 $525,000 $787,500 $1,181,250 $1,771,875 $2,657,813
- Marketing and Advertising $32,000 $64,000 $96,000 $128,000 $160,000 $192,000 $200,000 $300,000 $450,000 $675,000 $1,012,500
- Administrative Costs $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
- Creator Royalties $6,969 $13,939 $20,908 $27,878 $34,847 $41,817 $43,559 $65,339 $98,008 $147,012 $220,518
Operating Expenses $139,553 $262,522 $385,492 $508,461 $631,431 $754,400 $772,559 $1,156,839 $1,733,258 $2,597,887 $3,894,831
- Reg CF Revenue Shares $595 $1,189 $1,784 $2,378 $2,973 $3,567 $3,716 $5,574 $8,361 $12,541 $18,812
Gross Profits $19,853 $56,289 $92,725 $129,161 $165,597 $202,033 $223,725 $337,587 $508,381 $764,572 $1,148,858
- Taxes $4,368 $12,384 $20,399 $28,415 $36,431 $44,447 $49,219 $74,269 $111,844 $168,206 $252,749
Free Cash Flow $15,485 $43,905 $72,325 $100,745 $129,165 $157,585 $174,505 $263,318 $396,537 $596,366 $4,978,383
Discounted Cash Flow $15,485 $37,208 $51,943 $61,317 $66,622 $68,882 $64,642 $82,662 $105,494 $134,454 $951,192
Revenue Share Forecasts
Yearly Revenue Share Program $8,000 $16,000 $24,000 $32,000 $40,000 $48,000 $50,000 $75,000 $112,500 $168,750 $253,125
Annual Reg CF Distribution $595 $1,189 $1,784 $2,378 $2,973 $3,567 $3,716 $5,574 $8,361 $12,541 $18,812
Total Revenue with Investors $595 $1,784 $3,567 $5,945 $8,918 $12,485 $16,201 $21,775 $30,136 $42,677 $61,489
Net Present Value (NPV) [3] $1,639,902
Assumptions:
Avg. Revenue per Enrollment [4] $10 Production Budget / Amount Raised $135,000 Student Svc. Costs / Enrollment $5.25
Mktg. / Adv. Reinvestment % 20%
Annual Enrollment Growth Rate 50%
Effective Tax Rate 22%
Revenue Share Rate [5] 5%
Discount Rate [6] 18%
Notes
[1] Year 10 is treated as a perpetuity (an asset that generates a constant stream of identical cash flows) but is still subject to the discount rate in the model.
[2] Enrollment estimates are based on comparisons to Eazl's internal data from previous online courses.
[3] The net present value (NPV) is a method of estimating the value of a project that accounts for risk and inflation.
[4]Revenue per enrollment has two parts: (1) the price paid for lifetime access to course materials (2) micro-payments for additional student support.
[5] The Revenue Sharing rate is determined by the Project and require a super-majority vote at the annual meeting to modify.
[6] The discount rate reduces the present value of cash flows to reflect the riskiness of the business. A low discount rate would be 8% and a high one 30%.
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Low Success Scenario
Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 [1]
Year Number 0 1 2 3 4 5 6 7 8 9 10
Revenue
Avg. Enrollments / Course [2] 500 500 500 500 500 500 500 625 781 977 1221
Number of Courses 8 16 24 32 40 48 50 50 50 50 50
Avg. Revenue per Enrollment $10 $10 $10 $10 $10 $10 $10 $10 $10 $10 $10
Annual Revenues $40,000 $80,000 $120,000 $160,000 $200,000 $240,000 $250,000 $312,500 $390,625 $488,281 $610,352
- Production Costs $15,583.33 $15,583.33 $15,583.33 $15,583.33 $15,583.33 $15,583.33 $3,000 $3,000 $3,000 $3,000 $3,000
- Student Service Costs $21,000 $42,000 $63,000 $84,000 $105,000 $126,000 $131,250 $164,063 $205,078 $256,348 $320,435
- Marketing and Advertising $8,000 $16,000 $24,000 $32,000 $40,000 $48,000 $50,000 $62,500 $78,125 $97,656 $122,070
- Administrative Costs $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
- Creator Royalties $1,742 $3,485 $5,227 $6,969 $8,712 $10,454 $10,890 $13,612 $17,015 $21,269 $26,586
Operating Expenses $47,326 $78,068 $108,810 $139,553 $170,295 $201,038 $196,140 $244,175 $304,218 $379,273 $473,091
- Reg CF Revenue Shares $149 $297 $446 $595 $743 $892 $929 $1,161 $1,452 $1,814 $2,268
Gross Profits -$7,474 $1,635 $10,744 $19,853 $28,962 $38,071 $52,931 $67,164 $84,955 $107,194 $134,992
- Taxes $0 $360 $2,364 $4,368 $6,372 $8,376 $11,645 $14,776 $18,690 $23,583 $29,698
Free Cash Flow -$7,474 $1,275 $8,380 $15,485 $22,590 $29,695 $41,286 $52,388 $66,265 $83,611 $584,967
Discounted Cash Flow -$7,474 $1,081 $6,018 $9,425 $11,652 $12,980 $15,294 $16,446 $17,629 $18,851 $111,766
Revenue Share Forecasts
Yearly Revenue Share Program $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $12,500 $15,625 $19,531 $24,414 $30,518
Annual Reg CF Distribution $149 $297 $446 $595 $743 $892 $929 $1,161 $1,452 $1,814 $2,268
Total Revenue with Investors $149 $446 $892 $1,486 $2,230 $3,121 $4,050 $5,212 $6,663 $8,477 $10,745
Net Present Value (NPV) [3] $213,667
Assumptions:
Avg. Revenue per Enrollment [4] $10 Production Budget / Amount Raised $135,000 Student Svc. Costs / Enrollment $5.25
Mktg. / Adv. Reinvestment % 20%
Annual Enrollment Growth Rate 25%
Effective Tax Rate 22%
Revenue Share Rate [5] 5%
Discount Rate [6] 18%
Notes
[1] Year 10 is treated as a perpetuity (an asset that generates a constant stream of identical cash flows) but is still subject to the discount rate in the model.
[2] Enrollment estimates are based on comparisons to Eazl's internal data from previous online courses.
[3] The net present value (NPV) is a method of estimating the value of a project that accounts for risk and inflation.
[4]Revenue per enrollment has two parts: (1) the price paid for lifetime access to course materials (2) micro-payments for additional student support.
[5] The Revenue Sharing rate is determined by the Project and require a super-majority vote at the annual meeting to modify.
[6] The discount rate reduces the present value of cash flows to reflect the riskiness of the business. A low discount rate would be 8% and a high one 30%.
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Scenario Net Present Value Outcome Probability Very Successful Scenario $6,554,391 25%
Moderately Successful Scenario $1,639,902 50%
Low Success Scenario $213,667 25%
Scenario-weighted Valuation $2,511,965
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Capitalization Table Prior to the Offering Total Shares Authorized 96,000
Holder Shares of Common Stock Held % Vote
Meg Media Inc. ("Eazl") 48,001 75.83% Capitalization Table with Bonus Shares for Campaign
Picture Show LLC 13,500 21.33% Bonus Share Schedule
James M. Falvey 1,800 2.84% Funding Phase Share Bonus Funding Threshold Share Threshold Max. # of Bonus Shares
Total Shares Outstanding 63,301 Bonus Phase 1 (Momentum) 100% $20,000 800 800
Bonus Phase 2 (Foundation) 60% $110,000 4,400 2,640
Capitalization Table on Closing at the Minimum ($10,000) Bonus Phase 3 (Inspire) 20% $235,000 9,400 1,880
Holder Shares of Common Stock Held % Vote Bonus Phase 4 (Impact) 10% $450,000 18,000 1,800
Meg Media Inc. ("Eazl") 48,001 66.06% Bonus Phase 5 (Legacy) 5% $530,000 21,200 1,060
Picture Show LLC 13,500 18.58% Total Possible Bonus Shares 8,180
James M. Falvey 1,800 2.48%
Reg. CF Shareholders
Base Shares Amount 400 0.55%
Max Bonus Shares 400 0.55%
Total Reg CF 800 1.10%
Total Shares Outstanding 64,101
Treasury Reserve 31,899 33.23%
Capitalization Table on Closing at $135,000
Holder Shares of Common Stock Held % Vote
Meg Media Inc. ("Eazl") 48,001 66.06%
Picture Show LLC 13,500 18.58%
James M. Falvey 1,800 2.48%
Reg. CF Shareholders
Base Shares Amount 5,400 7.43%
Max Bonus Shares 3960 5.45%
Total Reg CF 9,360 12.88%
Total Shares Outstanding 72,661
Treasury Reserve 23,339 24.31%
Capitalization Table on Closing at $530,000
Holder Shares of Common Stock Held % Vote
Meg Media Inc. ("Eazl") 48,001 66.06%
Picture Show LLC 13,500 18.58%
James M. Falvey 1,800 2.48%
Reg. CF Shareholders
Base Shares Amount 21,200 29.18%
Max Bonus Shares 8180 11.26%
Total Reg CF 29,380 40.43%
Total Shares Outstanding 92,681
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Treasury Reserve 3,319 3.46%
