Business Strategy and Business Plan (11081)

Prof. Dr. Roland Kirstein

PD Dr. Annette Kirstein

Michael Karas, M. Sc.

Dipl.-Kfm. Matthias Peiß

Business Plan III

Team number 24

DentaClean GmbH

Disselnmeyer, Lars – 209044 - IBE

Guhl, Tamara – 208659 - IBE

Ikuesan, Colin – 209588 – IBE

Mazur, Nicolae – 209941 - IBE

Onwunta, Ezinne Ikodiya – 205952 – European Studies

Schupp, Pia – 207845 – European Studies

Staab, Taline – 209086 – IBE

Magdeburg, 03.02.2015

I

Table of Contents

Vision Statement.............................................................................................................................................. III

Mission Statement ........................................................................................................................................... III

Executive Summary ........................................................................................................................................ IV

1. The Market ............................................................................................................................................... 1

1.1. Business Description ........................................................................................................................ 1

1.1.1. Product ...................................................................................................................................... 1

1.1.2. Price .......................................................................................................................................... 1

1.1.3. Place .......................................................................................................................................... 1

1.1.4. Promotion .................................................................................................................................. 2

1.2. Market Analysis ............................................................................................................................... 2

1.2.1. Industry Description .................................................................................................................. 2

1.2.2. Customer Description ............................................................................................................... 3

1.2.3. Competitor Description ............................................................................................................. 3

1.3. Market Research .............................................................................................................................. 4

2. Legal Form……………………………………………………………………………………………4

3. Personnel……………………………………………………………………………………………...5

4. Financials……………………………………………………………………………………………..6

Closing….………………………………………...………………………………………………………….....8

References………………………………………...…………………………………………………………….9

List of Appendices

Appendix 1: Different Packages ................................................................................................................ 11

Appendix 2: Willingness to pay ................................................................................................................. 11

Appendix 3: Value model ........................................................................................................................... 12

Appendix 4: Sales Forecast ........................................................................................................................ 12

II

Appendix 5: SWOT Chart ......................................................................................................................... 13

Appendix 6: Organizational Chart ............................................................................................................ 13

Appendix 7: Personnel Requirements ....................................................................................................... 14

Appendix 8: Personnel Chart .................................................................................................................... 14

Appendix 9: Personnel Growth ................................................................................................................. 15

Appendix 10: Financial Statements and Ratios........................................................................................ 16

III

Vision Statement

Every single person should experience the benefits DentaClean brings to your teeth.

Mission Statement

DentaClean aims to provide the best dental products on the market which are easy to use,

time-saving and offer the best dental hygiene creating competitive products that will bring

health for every persons’ teeth.

IV

Executive Summary

DentaClean, which operates as a GmbH, provides its new innovative product Dentabrace,

a mouthpiece that automatically brushes your teeth. It offers a better clean than any normal

toothbrush. DentaClean focuses on selling the product to an age group between 12 and 65

years, precisely in Germany. Therefore it leads to an enormous market potential of 92.34

million units per year. The production will be outsourced to China. DentaClean will receive

its revenue indirectly through the customers, who buy Dentabrace in order to achieve

preventive healthcare. The company is composed of a team which consists out of

experienced employees in our field. DentaClean faces no direct competitors, however they

are still a few established companies such as Dr.Best who benefit from already existing

loyalty of customers and this is also the goal DentaClean wants to achieve in the long-term.

DentaClean’s initial capital is approximately 16,000,000 € which is separated into 40% of

contributed capital and 60% will be founded from the bank. Our company expects a high

and growing sales volume leading to 280,000 mouthpieces and 594,000 brushes in the third

year. In the same year our profit is estimated to be 1,751,108.90€ and a great part will be

spent on advertisement and research & development to ensure our long-term existence in

the market.

1

1. The Market

1.1. Business Description

Dentabrace is the new product of DentaClean. The product is a mouthpiece that

automatically dispenses toothpaste and brushes your teeth. It consists of 96 circular brushes

in a brace of adjustable material that perfectly cleans each tooth.

1.1.1. Product

Dentabrace is easy to use and offers a better clean than traditional toothbrushes. One can

brush his teeth without using his hands, therefore it is time-saving while being able to do

something else. Our product cleans your teeth automatically through its 96 brushes which

are included in the brace. Dentbrace comes with a station that cleans the brace and refills it

with toothpaste.

1.1.2. Price

DentaClean. offers its product Dentabrace in different starter packages: basic, gold and

family (see Appendix 1). The price of the packages will be the same for the same market

and for all distribution channels. We will increase the profits by creating loyalty towards

the brand and decreasing costs by economies of scale. A part of the profit will be reinvested

in further improvements to keep the highest quality. The optimal price is 60 € (see

Appendix 2).

1.1.3. Place

DentaClean. will have its headquarter and assembly factory in Hamburg, Germany. The

production of all the details under quality control will be in Shenzhen, China. Dentabrace

will be sold in supermarkets, pharmacies and on the internet. The product will be available

in Germany for the first period and worldwide only in an online store.

2

1.1.4. Promotion

Our pre-launch strategy consists of PR, viral marketing, involving opinion leaders and

medical specialists. Therefore we will try to prepare the market for a new product. The

launch strategy will make use of website advertisements, TV, billboards, social media and

apparition in articles. The post-launch strategy will involve independent reviews from

specialists (especially dentists) and advertisements in stores, social media and websites.

Our Unique Selling Proposition is: The best way to keep your teeth clean with the least

effort.

DentaClean creates value through the quality of the product that satisfies and creates loyal

customers which afterwards will bring a powerful word-to-mouth advertisement.

Furthermore we will diminish costs by increasing quantity, and keep the quality of the

product by innovation and further development.

1.2. Market analysis

1.2.1. Industry description

Our product will be placed in the growing industry of hygiene products, more precisely the

toothbrush-industry. According to estimations the global market will record 6% yearly

growth between 2011 and 2016.1

The industry is one of the sectors whose market involves almost everyone worldwide: both

young and old people with different cultural and financial backgrounds. With increasing

level of technology people raised and are still raising their awareness of the importance of

oral health care and that is the reason for the ongoing enlargement of the industry especially

in the sector of electric toothbrushes. Barriers to entry are rather high because a few

established firms are taking advantage of economies of scale and their customers’ loyalty.

1 http://www.reportlinker.com/ci02140/Oral-Care-Products.html

3

1.2.2. Customer description

Our potential customers are the part of the German population between the age of 12 and

65 who regularly brush their teeth. In total, the population is estimated to be around 80 Mio

people. Adding up the relevant age groups leads to a number of 51.3132 million people in

Germany who are potential customers of Dentabrace.2 Although we sell our product

worldwide, our main market is Germany. We more precisely target the innovators and early

adopters that consist of 16% of the population. Afterwards we are also looking forward to

create loyalty in the early and late majority that is 68%.3

1.2.3. Competitor description

The market leading brand in Germany in selling ordinary toothbrushes is Dr. Best which is

part of the British pharmaceutical company GlaxoSmithKline. According to a survey 22 %

of the sold toothbrushes in 2013 were Dr.Best. With a total percentage of 32 %

toothbrushes from other brands, mainly from drugstore or supermarket chains, take the

highest percentage.4 The market leading brand in selling electric toothbrushes is Oral-B

which is owned by Procter&Gamble.5 Since Dentabrace is an entirely new product on the

market, we do not face any direct competitors but still the loyalty to the established

producers of the toothbrushes is considered to be a strong competitive factor in penetrating

the market.

2 http://www.bpb.de/nachschlagen/zahlen-und-fakten/soziale-situation-in-deutschland/61538/altersgruppen

(02.12.14) 3 http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action (03.12.14) 4 http://de.statista.com/statistik/daten/studie/171576/umfrage/verwendete-zahnbuerstenmarken/ (02.12.14) 5 http://www.businesswire.com/news/home/20131111005753/de/ (02.12.14)

4

1.3. Market Research

DentaClean will make its profits by selling one starter package that costs 60+ € (depending

on package) per customer and additional brushes for 20 € per set.

The number of 51.3 million potential buyers in Germany leads to a market potential of

92.34 million units per year.6 This leads us to a sales potential of 7.2 million units per year,

bought partly by established electrical toothbrush users and customers that are open-minded

to new innovations. In that respect our predicted sales volume for the first three years is

equal to 0.815 million units per year, giving us a market share of 0.88 %. For following

financial years, DentaClean tends to increase its profit by enlarging quantity and reducing

costs.7

2. Legal Form

DentaClean will operate as a limited liability company (GmbH) and has therefore a

minimum capital requirement of 25,000€. The capital will be raised equally through the

sum of shareholders capital contribution (by our 7 founders), with the opportunity of

additional shareholders if investment is sufficient. With DentaClean being a limited

liability company, it benefits from the limitation of liability. Only the company itself is

liable with the company assets according to §13 II GmbH-Act. DentaClean‘s board of

directors is consisted by a joint of the shareholders. The shareholders are entitled to

dividends at the end of the year in proportion to the shares (§29 GmbH-Act), as well as to

take part in decision-making, given the right to vote in a frequently held shareholders

meeting. Shareholders also have the right of information and inspection of the accounts and

records (§51a GmbH-Act). The majority principle is being applied when decisions

regarding the company are made. The amount of a shareholders capital shares determines

the power of ones' vote and amount of profit share. No associate will be included in loss

6 http://de.globometer.com/Koerperpflege.php 7 https://www.surveymonkey.com/analyze/Q0htN8Snb92TIcqrQGBahGBN46kUHSKZP0wApmkT80M_3D

(03.12.2014)

5

sharing. In addition to the trade tax of 3.5%8, the turnover tax depending on the business

activities has to be paid. Furthermore DentaClean has to pay 19% tax on each product of

Dentabrace and the corporation tax amounts to 15.825% of the profit.9

3. Personnel

Management team:

The management team consists of one General Manager, one Assistant Manager and four

Vice Managers. The General Manager is the head of the company and is responsible for

analyzing situations in order to make efficient decisions, leading and directing employees

and to oversee all administrative functions in order to ensure administrative efficiency,

proper procedure, implementation of policies and employee morale. The net wage of the

GM is 6,400€ and it will cost us 8,320€ including indirect costs (see Appendix 7).

The Assistant Manager is the right hand of the GM, being able to make decisions and

coordinate with VMs. Vice Managers are responsible for coordinating and strategically

planning their departments and supervising the workforce.

The AM will receive a gross wage of 5,280€ that will cost us 6,864€ and Vice Managers

will receive 4,800€ which will cost us 6,240€ (see Appendix 7).

Service team:

The service team consists of 105 people. Regardless the position, each employee will work

8h/day with one hour break, 24 days per month. All personnel will work five days per

week, from Monday to Friday, with days off on the weekend. The payment of the workers

varies according to their position and experience. The average gross wage for employees is

3,512.90€. The Human Resources department will ensure that every worker can complete

their tasks and offer training when needed. Moreover they will ensure the maximum

efficiency throughout the activity of the firm. The gross wages will sum up to 389,200€ and

our total expenses on wages will be 505,960€ per month and 6,071,520€ per year

respectively. As DentaClean is an innovative company aiming to revolutionize the oral care

8 http://www.hamburg.de/jobs/1718982/gewerbesteuer/ 9 http://www.steuerberaten.de/tag/koerperschaftsteuer/

6

market, the company’s number of personnel working in Research & Development and

Marketing will increase, as well as IT and Customer Service Departments (see Appendix

9). Therefore, the personnel costs will rise of 56,992€ per year. The personnel will receive a

holiday bonus and remuneration bonuses according to their experience and if the company

exceeds its financial plan.

4. Financials

In order to assure the proper functionality and to reduce risks, DentaClean needs an initial

capital of 16,000,000 €. 40% of which (6,400,000 €) consists of contributed capital and

60% (9.600.000 €) will be funded from the bank with an interest rate of 3%10 for 10 years.

Therefore DentaClean will have to pay 1,112,379.79 € each year. The headquarter of the

company will be in Hamburg, where 29%11 corporate income tax is applied, and a trade tax

of 470. According to our future expectations, DentaClean will sell 282,000

mouthpieces in the first year, 315,000 mouthpieces and 324,300 brushes in the second year

and 280,000 mouthpieces and 594,200 brushes for year three.

According to our expectations, the company becomes profitable in the second year

therefore being able to pay dividends for the shareholders. DentaClean will pay 10% of the

net income as dividends in year two and three. The entire production of Dentabrace will be

outsourced to Shenzhen, China in order to decrease costs. The production cost for a

mouthpiece is 34.85 € per piece and for the brushes 14 € per piece. The transportation costs

of delivering the product from our warehouse to the retailers amount to 116,800 € per year.

Due to the increase of the amount of sold products the other selling and administrative

expenses will rise in the following years. The total cost of goods is 9,827,500 €; 15,587,680

€ and 15,985,770 € for the first three years respectively. DentaClean will have expenses on

wages equal to 6,071,520 € per year. Our company will have high expenses on

10

https://www.bundesbank.de/Redaktion/EN/Downloads/Statistics/Money_Capital_Markets/Interest_Rates_Yields/S11B

ATGVE.pdf?__blob=publicationFile 11 http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-

table.aspx

7

advertisement because Dentabrace is a new product on the market. The DentaClean

Headquarter and the warehouse will be rented for an amount of 19,937.50 € per month

including utilities. After the second year we intend to acquire our own warehouse in order

to decrease our rental costs. Since one of DentaClean’s values is innovation, we will invest

annually in research and patents to increase our long-term revenues. We also require an

initial investment in office equipment of 150,000 € and 35,000 € in other assets. After the

first three years of activity, we expect a slightly decrease in the number of sales of the

mouthpiece, but an increase in the selling of brushes. Furthermore the prices may be

adjusted to inflation rates and EUR/USD exchange rate and new products will be

developed. DentaClean will branch into new markets and rise the market shares in existing

ones.

In the worst case scenario DentaClean will have losses in the first three years:

4,417,636.67€; 4,698,135.07€; 869,837.81€ respectively. These losses appear due to an

insufficient amount of sales in the first year. Since Dentabrace is a new product on the

market, it may risk a misunderstanding from costumers. In order to keep the company

running, DentaClean will have to invest more into advertisement, reduce personnel and

decrease the output. To cover the expenses of the company it will be required to take extra

bank loans in the second and third year. Furthermore the company will not pay any

dividends in the first three years. Nevertheless DentaClean expects a positive outcome in

the fourth year.

In the best case scenario the company will increase its sales by 20%, therefore

allowing additional investment into advertisement and other assets. DentaClean will profit

from an unpayable grant of 1.5 Million euro from the Federal Ministry of Education and

Research. Through the increase of the sales, DentaClean will require more workers. A rise

in income will allow the company to pay a higher amount of dividends for its shareholders.

To understand the current state of our business and to predict how it is likely to do in the

future DentaClean provides the five ratios, including Debt-To-Assets, Return-On-Equity,

Inventory-Turnover, Profit-Over-Productive-Assets and Quick-Ratio (See appendix 10).

According to the result of our Debt-To-Asset-Ratio which is rather low and decreases after

the first year, DentaClean’s financial risk declines. Furthermore the company is using its

8

stockholder’s equity, which amounts to about 6.0 Mio € in the first year, in an advantageous

way to be able to provide a decent return for equity investors. The increase of the Return-

On-Equity-Ratio within the first three years indicates that DentaClean is efficiently using

its capital.

Our Quick-Ratio lays between 1,6 and 2,2 during the first three years which means that for

every Euro of DentaClean’s current liabilities, the firm has about 2€ of very liquid assets to

cover those immediate obligations. Therefore DentaClean not only provides long-term

reliability, but also short-term liquidity.

Closing

Due to the fact that Dentabrace is an innovative product which does not face any direct

competition, DentaClean is going to bring a great transformation of a new and

advantageous way of brushing teeth in the Oral Care Industry. The product is time saving,

truly easy to use, medical preventive and comfortable through its adjustable material.

Hence using Dentabrace is the best way to keep your teeth clean with the least effort.

As the one-time purchase of Dentabrace requires the additional buying of brushes, high

customer loyalty towards DentaClean will be created.

Our business policies, implemented by competent and experienced personnel, is geared

towards proper management of our fund, for example high investments in advertisement,

research and development. Therefore DentaClean will be profitable in the long-run and will

be placed in the forefront of the Oral Care Industry in the coming years.

Creditors who trust in DentaClean’s long-run reliable and dynamic appearance, will benefit

from a profitable outcome. DentaClean won’t abuse the investor’s trust to believe in our

product which will revolutionize the Oral Care Market.

9

References

Business Wire (1211.2013): Happy Birthday Oral-B: Die elektrische Zahnbürste wird 50.

http://www.businesswire.com/news/home/20131111005753/de/ (last access 02.12.14)

Deutsche Bundesbank: Interest Rate Statistic.

https://www.bundesbank.de/Redaktion/EN/Downloads/Statistics/Money_Capital_Markets/I

nterest_Rates_Yields/S11BATGVE.pdf?__blob=publicationFile (last access 02.01.14)

GloboMeter: Verbraucherzahlen weltweit: Koerperpflege und Schoenheitsprodukte.

http://de.globometer.com/Koerperpflege.php (last access: 14.01.2014)

Group 24 survey (01.12.2014): Dentabrace – An innovative way to brush your teeth.

https://www.surveymonkey.com/analyze/Q0htN8Snb92TIcqrQGBahGBN46kUHSKZP0w

ApmkT80M_3D (last access 03.12.2014)

Hamburg.de: Die Gewerbesteuer.

http://www.hamburg.de/jobs/1718982/gewerbesteuer/ (last access 03.01.15)

KPMG: Corporate tax rates table.

http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-

rates-table.aspx

ReportLinker: Oral Care Products Industry Market Research & Statistics

10

http://www.reportlinker.com/ci02140/Oral-Care-Products.html

Simon Sinek (September 2009): How great leaders inspire action.

http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action (last access

03.12.14)

Statista: Beliebteste Zahnbürstenmarken in Deutschland in den Jahren 2012 und 2013.

http://de.statista.com/statistik/daten/studie/171576/umfrage/verwendete-

zahnbuerstenmarken/ (last access 02.12.2014)

Statistisches Bundesamt (31.05.2012): Bevölkerung nach Altersgruppen und Geschlecht.

http://www.bpb.de/nachschlagen/zahlen-und-fakten/soziale-situation-in-

deutschland/61538/altersgruppen (last access 02.12.2014)

Steuerberaten.de: Körperschaftssteuer.

http://www.steuerberaten.de/tag/koerperschaftsteuer/ (last access: 02.01.2014)

11

Appendices

Appendix 1: Different Packages

Basic

• 1 Station

• 2 pkgs. of brushes

• 1 year warranty

Gold

• 1 Station

• 6 pkgs. of brushes

• 2 year warranty

• 15% voucher on next

purchase

Family

• 2 Stations

• 8 pkgs. of brushes

• 1 year warranty

Appendix 2: Willingness to pay

12

Appendix 3: Value model

Appendix 4: Sales forecast

0,00

5000000,00

10000000,00

15000000,00

20000000,00

25000000,00

30000000,00

year 1 year 2 year 3

Sales forecast

TR TC

13

Appendix 5: SWOT

Strengths

• Comfortable

• Saves time

• Easy to use

• Fewer visits at the dentist

• Self- cleaning device

• No waste of toothpaste

Weaknesses

• Costly

• High initial cost

• Has to be adjusted since there are

different types of jaws

Opportunities

• Motivation to really brush your

teeth

• Easily creating brand loyalty

• A lot of new markets to discover

• No direct competitors

Threats

• Customer is afraid to use product

And doesn’t believe that product

will work

• Dependance on type of distributor

• Big companies (P&G) have a big

market share already

Appendix 6: Organizational Chart

14

Appendix 7: Personnel Requirements

The GM will be required:

• 5 years Operations Manager

experience

• Knowledge of Chinese language

• Msc in Business Administration

• Excellent Managerial background

The AM and VM will be required:

• 3 years managerial experience

• Msc in Business Administration

• Strong knowledge in their

assigned field

Appendix 8: Personnel Chart

15

Appendix 9: Personnel Growth

Research Department: 10 ⇒ 15 Increase by 50%

Marketing Department: 15 ⇒ 19 Increase by 22%

IT Department: 3 ⇒ 5 Increase by 40%

Customer Service

Department :

3 ⇒ 4 Increase by 25%

16

Appendix 10: Financial Statements

17

DentaClean GmbH DentaClean GmbH

Projected Balance Sheet Projected Income StatementAt December 31st (Euros) At December 31st (Euros)

O p. Day Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

ASSETS REVENUES

Current Assets Sales revenues 21.024.000,00 30.463.200,00 32.251.320,00

Cash 15.185.000,00 14.510.025,04 12.470.489,90 11.505.573,88 Cost of goods 11.862.700,00 18.840.020,00 19.176.080,00

Inventory 0,00 348.500,00 1.022.520,00 988.300,00 GRO SS PRO FIT 9.161.300,00 11.623.180,00 13.075.240,00

Total Current Assets 15.185.000,00 14.858.525,04 13.493.009,90 12.493.873,88 Wages expense 2.763.271,68 3.315.925,92 3.348.753,12

Property, Plant, Equipment Contributions to social insurance 2.993.544,32 3.592.253,08 3.627.815,88

Office Equipment 750.000,00 758.000,00 764.000,00 769.500,00 Rent expense 239.250,00 239.250,00 239.250,00

Equipment 30.000,00 51.000,00 67.000,00 99.000,00 Depreciation expense 257.766,67 261.366,67 266.400,00

Real Estate 0,00 0,00 0,00 0,00 Advertising expense 1.200.000,00 1.500.000,00 1.200.000,00

Total Property, Plant, Equipment 780.000,00 809.000,00 831.000,00 868.500,00 Administrat ion expense 314.704,00 314.704,00 314.704,00

(Accumulated Depreciation) 0,00 -257.766,67 -519.133,33 -785.533,33 Other selling and administrative expenses 116.800,00 181.800,00 243.000,00

Net Property,Plant,Equipment 780.000,00 551.233,33 311.866,67 82.966,67 Total Se lling and Administrative Expenses 7.885.336,67 9.405.299,67 9.239.923,00

Other (Intangible) Assets 35.000,00 35.000,00 1.335.000,00 3.035.000,00 EBIT 1.275.963,33 2.217.880,33 3.835.317,00

TOTAL ASSETS 16.000.000,00 15.444.758,37 15.139.876,56 15.611.840,55 Interest Expense 254.628,61 221.257,22 187.885,83

LONG-TERM LIABILITIES EBT 1.021.334,72 1.996.623,12 3.647.431,17

Notes Payable 9.600.000,00 8.487.620,28 7.375.240,56 6.262.860,84 Trade Tax 168.009,56 328.444,50 600.002,43

TOTAL LONG-TERM LIAB. 9.600.000,00 8.487.620,28 7.375.240,56 6.262.860,84 Corporate Income Tax 296.187,07 579.020,70 1.057.755,04

STOCKHO LDER'S EQ UITY NET INCO ME 557.138,09 1.089.157,91 1.989.673,71Contributed Capital 6.400.000,00 6.400.000,00 6.400.000,00 6.400.000,00 Other Revenue 0,00 149.900,00 245.000,00

Retained Earnings 0,00 557.138,09 1.214.736,00 2.554.079,71

Other Revenues 0,00 0,00 149.900,00 394.900,00 DentaClean GmbH

TOTAL STOCKHOLDER'S EQ UITY 6.400.000,00 6.957.138,09 7.764.636,00 9.348.979,71 Projected Cash Flow StatementTOTAL LIABILITIES&ST. EQ UITY 16.000.000,00 15.444.758,37 15.139.876,56 15.611.840,55 At December 31st (Euros)

Year 1 Year 2 Year 3

CASH FLOWS FROM O PERATING ACTIVITIES

Cash collected from customers (incl.VAT) 25.018.560,00 36.251.208,00 38.379.070,80

DentaClean GmbH Cash paid to suppliers (incl. VAT) -14.531.328,00 -23.221.707,60 -22.778.813,40

Projected Statement of Retained Earnings Cash outflow for VAT payable (collected-paid) -1.386.638,24 -1.735.546,64 -2.203.003,64At December 31st (Euros) Cash paid for wages -2.763.271,68 -3.315.925,92 -3.348.753,12

Year 1 Year 2 Year 3 Cash paid for insurance -2.993.544,32 -3.592.253,08 -3.627.815,88

Retained Earning at the beginning of 0,00 557.138,09 1.214.736,00 Cash paid for other operat ing activities -2.877.373,00 -3.709.270,18 -4.130.391,05

Net Income for the year 557.138,09 1.089.157,91 1.989.673,71 Net Cash Flow from O perating Activities 466.404,76 676.504,58 2.290.293,71

Dividends declared for 0,00 431.560,00 650.330,00 CASH FLOW FROM INVESTING ACTIVITIESRetained Earning at the end of 557.138,09 1.214.736,00 2.554.079,71 Cash paid to purchase equipment and other assets -29.000,00 -1.322.000,00 -1.737.500,00

Net Cash Flow from Investing Activities -29.000,00 -1.322.000,00 -1.737.500,00

CASH FLOW FROM FINANCING ACTIVITIES

Cash received on notes payable and other financing 0,00 149.900,00 245.000,00

Cash paid on notes payable and other financing -1.112.379,72 -1.112.379,72 -1.112.379,72

Cash paid for dividends 0,00 -431.560,00 -650.330,00

Net Cash Flow from Financing Activities -1.112.379,72 -1.394.039,72 -1.517.709,72

NET CHANGE IN CASH DURING THE YEAR -674.974,96 -2.039.535,14 -964.916,01

CASH AT BEGINNING O F YEAR 15.185.000,00 14.510.025,04 12.470.489,90CASH AT END O F YEAR 14.510.025,04 12.470.489,90 11.505.573,88

BEST CASE SCENARIO

18

DentaClean GmbH DentaClean GmbH

Projected Balance Sheet Projected Income StatementAt December 31st (Euros) At December 31st (Euros)

Op. Day Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

ASSETS REVENUES

Current Assets Sales revenues 13.583.200,00 19.370.800,00 23.876.100,00

Cash 15.185.000,00 9.685.421,67 3.322.497,95 5.162.167,80 Cost of goods 9.827.500,00 15.587.680,00 15.985.770,00

Inventory 0,00 348.500,00 1.022.520,00 988.300,00 GRO SS PROFIT 3.755.700,00 3.783.120,00 7.890.330,00

Total Current Assets 15.185.000,00 10.033.921,67 4.345.017,95 6.150.467,80 Wages expense 2.763.271,68 2.486.944,51 2.661.030,63

Property, Plant, Equipment Contributions to social insurance 2.993.544,32 2.694.189,89 2.882.783,18

Office Equipment 750.000,00 758.000,00 764.000,00 769.500,00 Rent expense 239.250,00 239.250,00 239.250,00

Equipment 30.000,00 51.000,00 67.000,00 99.000,00 Depreciation expense 257.766,67 261.366,67 266.400,00

Real Estate 0,00 0,00 0,00 0,00 Advertising expense 1.200.000,00 2.000.000,00 1.700.000,00

Total Property, Plant, Equipment 780.000,00 809.000,00 831.000,00 868.500,00 Administration expense 314.704,00 314.704,00 314.704,00

(Accumulated Depreciation) 0,00 -257.766,67 -519.133,33 -785.533,33 Other selling and administrative expenses 0,00 0,00 0,00

Net Property,Plant,Equipment 780.000,00 551.233,33 311.866,67 82.966,67 Total Se ll ing and Administrative Expenses 7.768.536,67 7.996.455,07 8.064.167,81

Other (Intangible) Assets 35.000,00 35.000,00 935.000,00 2.235.000,00 EBIT -4.012.836,67 -4.213.335,07 -173.837,81

TOTAL ASSETS 16.000.000,00 10.620.155,00 5.591.884,62 8.468.434,46 Interest Expense 254.628,61 234.519,12 332.031,70

LO NG-TERM LIABILITIES EBT -4.267.465,28 -4.447.854,19 -505.869,51

Notes Payable 9.600.000,00 8.487.620,28 7.817.304,08 11.067.723,44 Trade Tax 0,00 0,00 0,00

TOTAL LO NG-TERM LIAB. 9.600.000,00 8.487.620,28 7.817.304,08 11.067.723,44 Corporate Income Tax 0,00 0,00 0,00

STO CKHO LDER'S EQUITY NET INCOME -4.267.465,28 -4.447.854,19 -505.869,51Contributed Capital 6.400.000,00 6.400.000,00 6.400.000,00 6.400.000,00 Other Revenue 0,00 89.900,00 132.000,00

Retained Earnings 0,00 -4.267.465,28 -8.715.319,46 -9.221.188,98

Other Revenues 0,00 0,00 89.900,00 221.900,00 DentaClean GmbH

TOTAL STOCKHOLDER'S EQUITY 6.400.000,00 2.132.534,72 -2.225.419,46 -2.599.288,98 Projected Cash Flow StatementTOTAL LIABILITIES&ST. EQ UITY 16.000.000,00 10.620.155,00 5.591.884,62 8.468.434,46 At December 31st (Euros)

Year 1 Year 2 Year 3

CASH FLOWS FROM OPERATING ACTIVITIES

Cash collected from customers (incl.VAT) 16.164.008,00 23.051.252,00 28.412.559,00

DentaClean GmbH Cash paid to suppliers (incl. VAT) -12.109.440,00 -19.351.423,00 -18.982.344,50

Projected Statement of Retained Earnings Cash outflow for VAT payable (collected-paid) -359.574,24 -150.935,24 -1.122.870,74

At December 31st (Euros) Cash paid for wages -2.763.271,68 -2.486.944,51 -2.661.030,63

Year 1 Year 2 Year 3 Cash paid for insurance -2.993.544,32 -2.694.189,89 -2.882.783,18

Retained Earning at the beginning of 0,00 -4.267.465,28 -8.715.319,46 Cash paid for other operating activit ies -2.296.376,37 -3.228.266,88 -2.968.779,46

Net Income for the year -4.267.465,28 -4.447.854,19 -505.869,51 Net Cash Flow from O perating Activities -4.358.198,61 -4.860.507,52 -205.249,51

Dividends declared for 0,00 0,00 0,00 CASH FLOW FRO M INVESTING ACTIVITIESRetained Earning at the end of -4.267.465,28 -8.715.319,46 -9.221.188,98 Cash paid to purchase equipment and other assets -29.000,00 -922.000,00 -1.337.500,00

Net Cash Flow from Investing Activities -29.000,00 -922.000,00 -1.337.500,00

CASH FLOW FRO M FINANCING ACTIVITIES

Cash received on notes payable and other financin 0,00 589.900,00 5.132.000,00

Cash paid on notes payable and other financing -1.112.379,72 -1.170.316,20 -1.749.580,64

Cash paid for dividends 0,00 0,00 0,00

Net Cash Flow from Financing Activities -1.112.379,72 -580.416,20 3.382.419,36

NET CHANGE IN CASH DURING THE YEAR -5.499.578,33 -6.362.923,72 1.839.669,85

CASH AT BEGINNING OF YEAR 15.185.000,00 9.685.421,67 3.322.497,95CASH AT END OF YEAR 9.685.421,67 3.322.497,95 5.162.167,80

WORST CASE SCENARIO

19

Year 1 Year 2 Year 3

Most Likely Case 0,586 0,516 0,429

Best Case 0,550 0,487 0,401

Worst Case 0,799 1,398 1,307

Year 1 Year 2 Year 3

Most Likely Case -0,069 0,258 0,338

Best Case 0,147 0,257 0,390

Worst Case -2,001 1,999 0,195

Year 1 Year 2 Year 3

Most Likely Case 25,466 15,280 16,175

Best Case 34,039 18,425 19,403

Worst Case 28,199 15,244 16,175

Year 1 Year 2 Year 3

Most Likely Case -8,068 26,674 28,538

Best Case 20,026 29,800 36,843

Worst Case -83,676 -66,386 -5,110

Year 1 Year 2 Year 3

Most Likely Case 1,660 1,800 2,175

Best Case 1,779 1,914 2,335

Worst Case 1,210 0,585 0,676

RATIOS

Quick Ratio

Debt-to-Assets Ratio

Return-on-Equity Ratio

Inventory Turnover

Profit-over-Productive Assets