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Monster Energy Co.

Business Plan North America

Monster Energy Co.

1 Monster Way

Corona, CA 92879-7101
Confidentiality Agreement

The undersigned reader of MONSTERs Business Plan hereby acknowledges that the information provided is
completely confidential and therefore the reader agrees not to disclose anything found in the business plan
without the express written consent of MONSTER.

It is also acknowledged by the reader that the information to be furnished in this business plan is in all aspects
confidential in nature, other than information that is in the public domain through other means and that any
disclosure or use of the same by the reader may cause serious harm and or damage to MONSTER.

Upon request this business plan document will be immediately returned to MONSTER.

This is a business plan. It does not imply an offer of any securities.

__________________________________________________

Signature

__________________________________________________

Printed Name

Monster Energy Co..| Business Plan Page 2


Overview

Research indicates that most millennial consumers drink energy beverages in order to
enhance their cognitive performance and efficiency. MONSTER is an energy drink with
natural nootropics that will increase cognitive function by containing mentally stimulating
and cognitive enhancing nutrients designed to increase efficiency in productivity at a
greater level than any other energy drinks. The positioning is to be the energy drink of
choice for any millennial looking for a cognitive, energy bosting drink that tastes great.

Monster Energy Co..| Business Plan Page 3


Table of Contents

Executive Summary ............................................................................................................... 6


Product Summary................................................................................................................................. 6
Market Summary ................................................................................................................................. 6
Three Year Objectives........................................................................................................................... 6
Keys to Success .................................................................................................................................... 7
Financing Summary .............................................................................................................................. 7

MONSTER Cognitive Enhancing Energy Drink....................................................................... 7


Industry Overview ................................................................................................................. 8
Market Trends ..................................................................................................................................... 9
Market Segmentation........................................................................................................................... 9

Strategy & Implementation Summary .................................................................................. 10


Management Team ............................................................................................................................ 11
Organizational Chart .......................................................................................................................... 12
SWOT Analysis ................................................................................................................................... 13

Competitive Comparison ..................................................................................................... 14


Marketing Plan .................................................................................................................... 15
Promotional Plan ............................................................................................................................... 15

Financial Forecasts .............................................................................................................. 16


Use of Funds ...................................................................................................................................... 16
Financial Highlights ............................................................................................................................ 17
Financial Indicators ............................................................................................................................ 18
Revenue Forecast ............................................................................................................................... 19
Projected Profit and Loss .................................................................................................................... 20
Projected Cash Flow ........................................................................................................................... 21
Wages & Payroll ................................................................................................................................. 22
Projected Balance Sheet ..................................................................................................................... 23
Sensitivity Analysis ............................................................................................................................. 24
Break-Even Analysis ........................................................................................................................... 25

Appendix............................................................................................................................. 26

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Table of Figures
Figure 1: Organizational Chart ............................................................................................................................ 12
Figure 2: Post-Financing Expenses ...................................................................................................................... 16
Figure 3: Financial Highlights .............................................................................................................................. 17
Figure 4: Financial Indicators .............................................................................................................................. 18
Figure 5: Revenue Forecast................................................................................................................................. 19
Figure 6: Profit & Loss ......................................................................................................................................... 20
Figure 7: Cash Flow ............................................................................................................................................. 21
Figure 8: Wages & Payroll ................................................................................................................................... 22
Figure 9: Balance Sheet....................................................................................................................................... 23
Figure 10: Scenario Analysis ............................................................................................................................... 24
Figure 11: Break-Even Analysis ........................................................................................................................... 25
Figure 12: 12 Month Profit & Loss ...................................................................................................................... 26
Figure 13: 12 Month Cash Flow Statement ........................................................................................................ 27

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Executive Summary

The following business plans outlines the strategy of MONSTER energy drink. The drink has been
developed in conjunction with Power Brands, a California based company that has worked with
MONSTER to derive the appropriate formulation/recipes for the drink. With the newly developed product
ready, commercialization investments will take place across marketing, branding, and advertising to
acquire a significant amount of the U.S. market within three years.

Product Summary

Most energy drinks on the market today contain ingredients that increase energy both on the short-term
with sugar and substitutes and over a period of three to five hours with ginseng, B12, and other vitamins.
In addition to eliciting a similar effect with equivalent ingredients, MONSTER contains cognitive
enhancing nutrients with a flavor base of raw ginger and capsicum, eliciting a spicy burn flavor to
generate waking-up effect. Therefore, MONSTER has additional nutrients designed to increase cognitive
performance and productivity at a greater level than all other energy drinks not containing this formula.

Market Summary

MONSTER is focused on targeting the North American market for the first three years, before expanding
internationally. As of 2017 the global energy drink market is estimated to be worth USD$55 billion and is
expected to grow by CAGR 3.7-5% by the year 2021. The markets that will be most important for energy
drink growth through 2017 are the United States, China and Brazil, according to market research firm
Euromonitor International.

Three Year Objectives

MONSTER has identified the following three year objectives:

Develop a strong brand that appeals to the mass millennial consumer market (not niche brand).
Communicate the cognitive enhancing features of the MONSTER energy drink.
Continue to perform research & development in to the branding and design.
Introduce an IoT feature to the bottle to increase brand interaction and data collection.
Have a mainstream brand across the entire United States market within three years.
Perform research into foreign markets, namely the Asian markets, for future years.

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Keys to Success

MONSTER has identified the following keys to success:

Ensure that the formulas used by MONSTER contain cognitive enhancing nutrients.
Introduce and IoT element that will be novel for the beverage industry.
Maintain a brand that targets the mass market and does not fall victim to a niche.
Rapidly expand the brand to not be surpassed by foreign rip-off brands.
Continue to invest in the supply chain and direct-to-consumer sales for higher margins.
Focus on celebrity and social influencer endorsements to build the brand image.
Target several distribution, sales, and marketing channels to reach widespread dissemination.

Financing Summary

Startup Assets Startup Liabilities


Cash on Hand 50,000 Liabilities and Capital
Office Assets 5,000 Current Borrowing -
Office Deposit 2,500 Long-Term Liabilities -
Total Startup Assets $57,500 Accounts Payable -
Other Current Liabilities -
Startup Expenses
Legal Fees 10,000 Startup Investments
Research & Development 50,000 Planned Investment
Graphic Design 2,500 Owner 150,000
Web Design 5,000 Investor -
Marketing 15,000 Total Planned Investment $150,000
Pilot Production 10,000
Total Startup Expenses $92,500
Startup Funding
Total Liabilities -
Total Requirements Total Planned Investment 150,000
Total Startup Expenses 92,500 Total Funding $150,000
Total Startup Assets 57,500
Total Requirements $150,000

MONSTER Cognitive Enhancing Energy Drink

MONSTER is an innovative energy drink that contains cognitive enhancing nutrients (nootropics) designed
to increase mental performance and all-around productivity. In addition to the beverage itself, the
company will establish a brand associated with a high performance, self-improvement lifestyle that
appeals to the entire millennial demographics from college students to young professionals looking to
better themselves in any fashion. The energy drink market is highly appealing to young students looking
for a competitive edge or the modern entrepreneur or office worker seeking to increase their productivity
in lieu of illicit substances.

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The product comes in two types, MONSTER Original and MONSTER Silk. The MONSTER Silk has the same
active ingredients as the MONSTER Original, however the capsicum has been removed to accommodate
more delicate palates. The beverage has a natural and healthy, cognitive enhancing and energy boosting
functional beverage and a unique character with a base is a mix of raw ginger and capsicum. The spicy
burn should be associated with the wake-up, gained focus and reignited ambition, eliciting a placebo
effect. The product will have an MSRP of $2.99 3.99 per bottle.

Besides our unique products, both in terms of functionality and flavor, we are using advanced IoT to track
consumer behavior as well as making sure that our costumer get the most out of their experience with
MONSTER. On every can we display a unique QR code which relates to an web-based app and a points
system. On the larger packages, such as six-packs, we incorporate NFC* labels, which is an advanced way
of enhance the user experience. The NFC solution consists of a printed electronic chip which can be read
by any NFC friendly smartphone, the chip, when read, will bring information and promotions as well as
provide us with consumer data.

The MONSTER brand has two trademarks registered in USA (MONSTER and MONSTER with the
phoenix), the Company has exclusive rights to its lab-engineered formula and it owns the IP for
it. The Company has eight web domains registered to the company and linked to its website
(drink-MONSTER.com, MONSTERoriginal.com, MONSTERsilk.com, energydrink88.com,
nootropic-drink.com, nootropic-energydrink.com, nootropicenergydrink.com, smart-
energydrink.com)

Customer value

The product contains more than 690 mg of active ingredients which combat underperformance due to
lack of focus, fatigue, and overall inefficiency due to lack of concentration and cognitive awareness.

By integrating IoT and social media, the customer can give instant feedback and engage with the brand.
Customer behavior may be monitored to build ongoing improvements to the brand that make it more
relevant and more custom to the target market.

A brand that focuses on the value of the product (I.e. productivity and cognitive enhancement) rather
than fitting a specific lifestyle niche such as a subculture or relying on a lifestyle trend.

Industry Overview

There are two main markets that LDND will benefit from. The first is the existing market for energy drink
consumers and the second is the market for nootropic consumers. There is presently no mainstream
solution for an ingestible fast-acting nootropic. Most of the solutions presently available are not approved
by the FDA and coined as research chemicals, resulting in many consumers ingesting their own ad-hoc
mixtures of these formulas with a capsule kit. With the energy drink market, worth $55.0 B globally and

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expected to increase at a CAGR of 4 5% to 2021, the growth complements the global nootropics market
estimated to reach $6.0 B by 2024 according to Credence Research.

Market Trends

Energy drinks are entering a mainstay in society, being offered at restaurants and combined with liquors
at bars. White Castle, a fast food restaurant chain, announced in October 2016 that it will begin selling
Monster energy drinks nationwide. The move came one year after it was announced that McDonalds
would start selling Monster in select establishments. Many bars and nightclubs have also started to adopt
the beverages into mainstream offerings for those that wish to pair alcohol and energy beverages.

Market Segmentation

The market is purposefully broadly defined as


millennial consumers between the ages of 21
37. The company can initially target the initial
market for energy drinks and the market for
nootropics, which should generate two
separate customer streams with different value
propositions, but equal motivations. According
to Pew Research, millennials have surpassed
Baby Boomers as the nations largest living
generation, according to population estimates
released this month by the U.S. Census Bureau.
Millennials, whom we define as those ages 18-
34 in 2015, now number 75.4 million,
surpassing the 74.9 million Baby Boomers (ages
51-69). And Generation X (ages 35-50 in 2015)
is projected to pass the Boomers in population
by 2028.

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Strategy & Implementation Summary

Research & Development

MONSTER Inc. is working with a research group and laboratory in California, which is specializing in
beverage development and research. Together with their team and their exquisite facilities we have
developed lab-engineered our products over the course of seven months. Together with professional help
we can make sure that our products are always on point, both in terms of flavor as well as functionality.

Production

The production process runs in three sections; the production of aluminum cans, which is done by Ball a
world leading brand in production of beverage containers. After the completion of the cans they get
transported to a co packer who will fill the cans with our product. Most the product will be stored at the
production sight while some of it will be transported to drop ship holding facilities. All ingredients for the
formula are being shipped to the co packer by individual distributors.

Distribution

The product will be sold via both Ecommerce and through a private distributor, each segment has its
own unique challenges and advantages. However, it is imperative that the beverage be accessible as
possible as to maximize sales and brand awareness, even if that means sacrificing margins by working
with distributors.

Channel type Products Percentage of Advantages Disadvantages


sales (%)

eCommerce MONSTER Original and 40% Easy to communicate Requires a lot of


MONSTER Silk in cases with the customers. work in terms of
of 6, 12 and 24 Nationwide reach and attracting
cost effective. customers to the
web shop.

Distributors MONSTER Original and 60% Cost effective. Risk of unreliable


MONSTER Silk. MOQ 10 High distribution distributors and
cases x24 cans. volumes. brand
Very good for building misrepresentation.
brand.

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Management Team

John Doe Chief Executive Officer

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Susan Miller Chief Operating Officer


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Kevin Jones -Chief Financial Officer


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Adrian Wilcourt Legal Compliance


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Organizational Chart

Adrian
Board/Investors
Wilcourt/Legal

John Doe/CEO

Susan Kevin
Miller/COO Jones/CFO

Marketing
Sales Director Accounting
Director

Sales Reps Collections

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SWOT Analysis

Strengths

Very high agility and flexibility to adapt to changes in the market climate.
Patent protection and enforcement internationally for the MONSTER brand.
Company will not appeal to only one specific lifestyle niche like many brands.
Unique products of high quality, far superior to standard energy drinks.
A product that may help the consumer to be more productive and efficient.
A desirable image and brand with a good customer connection.
One of the first good products on an emerging market.
Working within a market that is expected to grow with a high CAGR over a foreseeable future.
High inhouse know-how and knowledge about the market and competing products.

Weaknesses

Financially weak compared to the competition.


Production prices will be high at first with low volume.
The brand must virtually build itself from scratch.
Low visibility on the market due to age and
Company is small and will take time to saturate the market.
Small team working fulltime with the company.

Opportunities

Energy drink customers are often very loyal to brands.


Become a household name on an emerging market.
Change the norm for what a good and healthy energy drink is.
Tap into a young market which is growing.

Threats

The company must place orders in advance and may receive delayed payments from vendors.
New energy drink brands must steal market share from existing brands.
Stolen idea by larger competitors, but more likely to result in acquisition.

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Competitive Comparison

There is a myriad of energy drink beverages currently on the market and attempting to enter the market
on a regular basis. The most obvious advantage MONSTER has over its competitors is our unique and lab-
engineered products, which has gained interest within the energy drink community without even being
available on the market. MONSTERs products do not contain any artificial ingredients and have been
formulated as functional beverages that does not give the consumer a crash-and-burn effect. Competing
brands and well know energy drinks are either very unhealthy and gives the consumer an undesirable
feeling after consumption or does simply not work.

Tru Brain Established in 2014, Tru Brain establishes itself as a scientific oriented
brand with all natural ingredients. However, the product is very expensive and
unappealing to digest, packaged in 1 Oz. shots and capsules.

LifeAid Established in 2012, LifeAid markets itself as a general nutritional blend


without additives, sugar, and extra caffeine. They have a single product line for the
focus blend, which is one of seven product lines and primarily work through a multi-
level marketing structure.

Neuro Drinks Established in 2009, this brand offers seven product lines like LifeAid,
which each tout a unique blend designed to solve a specific purpose. However, no
brands approach the cognitive performance directly, the closest product line is the
Playful Energy and Sonic Refreshed

Neu, established in 2016, is a new brand of energy drinks that is most like
MONSTER. The brand has a modern and simple image that resembles the Xbox
logo and is being promoted through social media influencers. However, its
ingredients are very basic, including general D and B vitamins with some lesser
known nootropics.

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Marketing Plan

The marketing plan will begin with a product launch through social media, namely by targeting thought
leaders, influential business leaders, celebrities, and other well recognized names across Instagram,
Facebook, and YouTube. This will create a rapid brand awareness that is done through an organic word-
of-mouth approach with endorsements from trusted influencers. The overall brand will focus on the
benefits, rather than the lifestyle, as to avoid any kind of pigeon hole brand.

Promotional Plan

Social Media

Social media will be a significantly effective way to target individual orders through the initial use of
influencers for brand ambassadorships on Facebook, YouTube, and Instagram. Instagram influencers will
be compensated for taking photos of the brand, reviewing it, and providing endorsements.

Pay-Per-Click

The pay-per-click strategy of MONSTER will be used on Google Shopping/AdWords to drive traffic for
those searching for energy drinks and nootropics. Pay-per-click Facebook ads and Instagram marketing
will also take place targeting regions and demographics focused on young professionals and students.

Affiliate Marketing

The brand can sign-up with an affiliate marketing website such as Share-a-Sale or Commission Junction
which will allow individual bloggers and independent marketers to promote the product for a percentage
of the sale.

Public Relations

Mainstream media outlets, nootropic/energy drink review websites and overall performance blogs will be
targeted to introduce the brand and its benefits. MONSTER will also engage in heavy content marketing
including the creation of viral content such as infographics to promote neurogenesis and tips to stay
focused while at work or school.

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Trade Shows

Once the brand has demonstrated its potential, the products will be showcased at trade shows to secure
shelve space in retail stores and distributor agreements both mainstream supermarkets and grocery
stores, as well as college bookstores and newsstands in major cities.

Financial Forecasts

Use of Funds

Startup Assets Startup Liabilities


Cash on Hand 50,000 Liabilities and Capital
Office Assets 5,000 Current Borrowing -
Office Deposit 2,500 Long-Term Liabilities -
Total Startup Assets $57,500 Accounts Payable -
Other Current Liabilities -
Startup Expenses
Legal Fees 10,000 Startup Investments
Research & Development 50,000 Planned Investment
Graphic Design 2,500 Owner 150,000
Web Design 5,000 Investor -
Marketing 15,000 Total Planned Investment $150,000
Pilot Production 10,000
Total Startup Expenses $92,500
Startup Funding
Total Liabilities -
Total Requirements Total Planned Investment 150,000
Total Startup Expenses 92,500 Total Funding $150,000
Total Startup Assets 57,500
Total Requirements $150,000

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Financial Highlights

The financial highlights are how the company is projected to perform over the course of the next twelve
months and three to five years. The projections are based on comparable facilities based on estimated
revenue range and size, along with geographic location. We have assumed that for at least the first six-
months of post-money financing that expenses may be greater than revenues while the company invests into
growth.

Financial Highlights ($000)


Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 3 8 17 28 41 55 90 105 120 135 150 164 914 2286 5486 12618 26625
Gross Margin 2 6 12 19 29 39 63 73 84 94 105 115 640 1600 3840 8832 18637
Operating Expense 9 9 9 9 9 19 19 19 19 19 19 19 174 542 1301 2888 6003
EBITDA (7) (3) 3 11 20 8 32 42 53 63 74 84 316 773 2027 4919 10585
Net Profit (7) (3) 3 11 20 8 32 42 53 63 74 84 316 773 2027 4919 10585

Gross Margin/Revenue 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70%
EBITDA/Revenue -249% -36% 17% 38% 49% 14% 35% 40% 44% 47% 49% 51% 35% 34% 37% 39% 40%
Net Profit/Revenue -249% -36% 17% 38% 49% 14% 35% 40% 44% 47% 49% 51% 35% 34% 37% 39% 40%

Net Cash Flow (7) (3) 3 11 20 8 32 42 53 63 74 84 378 773 2027 4919 10585
Cash Balance - Ending 43 40 43 53 74 81 113 155 208 271 344 428 428 1202 3228 8148 18733

Projected Operating Highlights By Year ($000) Projected Revenues By Year ($000)


30000 30000

25000 25000
Revenue
20000 20000
Gross Margin
15000
15000
10000 EBITDA
10000
5000
Net Profit 5000
0
Year Year Year Year Year 0
1 2 3 4 5 Year 1 Year 2 Year 3 Year 4 Year 5

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
20000 12000
18000
16000 10000
14000 Net Cash Flow
12000 8000
10000
6000
8000
6000 4000
4000 Cash Balance
2000 2000
0
Year Year Year Year Year 0
1 2 3 4 5 Year 1 Year 2 Year 3 Year 4 Year 5

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Financial Indicators

The company believes that it can reach an increasng net profit margin due to economies of scale. Through
investments in capital expenditures, it may decrease its general and administrative expenses. Financial
indicators are based upon the performance of comparable companies in the same asset class, revenue
range and age both from publicly available information and our internal database of research.

Financial Indicators
Year 1 Year 2 Year 3
Profitability %'s:
Gross Margin 70% 70% 70%
Net Profit Margin 35% 34% 37%
EBITDA to Revenue 35% 34% 37%
Return on Assets 68% 62% 62%
Return on Equity 60% 59% 61%

Financial Indicators
80%

70% Gross Margin

60%

50% Net Profit Margin

40%

30% EBITDA to Revenue

20%
Return on Assets
10%

0%
Year 1 Year 2 Year 3

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Revenue Forecast

Revenue Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue Forecast
Wholesale Cases 457,920 1,144,800 2,747,520 6,319,296 13,902,451
Ecommerce Cases 456,394 1,140,984 2,738,362 6,298,232 12,722,428
Total Revenue $ 914,314 $ 2,285,784 $ 5,485,882 $ 12,617,528 $ 26,624,879

Direct Cost of Revenue


Wholesale Cases 137,376 343,440 824,256 1,895,789 4,170,735
Ecommerce Cases 136,918 342,295 821,508 1,889,470 3,816,728
Subtotal Cost of Revenue $ 274,294 $ 685,735 $ 1,645,764 $ 3,785,258 $ 7,987,464

Revenue By Year
30000

25000

20000

15000

10000

5000

0
Year 1 Year 2 Year 3 Year 4 Year 5

Year 1 Revenue Monthly


180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

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Projected Profit and Loss

The profit and loss assume that the company will have margins at a comparable level to companies within
its industry. While management might not have incurred exactly for future operating expenses, they have
been assumed to reasonable reach comparable profit margins to industry comparables. The management
will operate with minimal expenditures to focus on R&D and commercialization expenses until the
company has sufficient income to support dividend distribution.

Pro Forma Profit and Loss


Year 1 Year 2 Year 3 Year 4 Year 5

Wholesale Cases 9,540 23,850 57,240 131,652 289,634


Ecommerce Cases 6,360 15,900 38,160 87,768 177,291

Revenue 914,314 2,285,784 5,485,882 12,617,528 26,624,879


Subtotal Cost of Revenue 274,294 685,735 1,645,764 3,785,258 7,987,464
Total Cost of Revenue $ 274,294 $ 685,735 $ 1,645,764 $ 3,785,258 $ 7,987,464

Gross Margin $ 640,020 $ 1,600,049 $ 3,840,117 $ 8,832,269 $ 18,637,415


Gross Margin/Revenue 70% 70% 70% 70% 70%

Expenses
Professional Services 8,400 6,990 16,775 38,582 81,414
Utilities & Telephone 720 3,495 8,387 19,291 40,707
Office Expenses & Supplies 3,500 5,242 12,581 28,937 61,061
Repair & Maintainence 420 10,484 25,162 57,873 122,121
Advertising 95,000 320,010 768,023 1,766,454 3,727,483
Auto, Delivery, and Travel 1,750 10,484 25,162 57,873 122,121
Accounting and Legal 1,050 3,932 9,436 21,702 45,796
Rent Expense 30,000 34,287 82,288 84,757 87,300
Insurance 9,000 6,553 15,726 36,171 76,326
Social Media 10,900 22,858 54,859 126,175 266,249
Shipping 2,800 3,495 8,387 19,291 40,707
Misc. SG&A 10,500 114,289 274,294 630,876 1,331,244
Total Operating Expenses $ 174,040 $ 542,118 $ 1,301,082 $ 2,887,983 $ 6,002,529
Wages & Payroll 150,000 284,681 512,426 1,024,853 2,049,705
Depreciation, Amortization & Taxes - - - - -
Net Income $ 315,980 $ 773,250 $ 2,026,609 $ 4,919,434 $ 10,585,182
Net Income/Revenue 35% 34% 37% 39% 40%

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Projected Cash Flow

Pro Forma Cash Flow


Year 1 Year 2 Year 3 Year 4 Year 5
Beginning Cash Balance $ 50,000 $ 428,480 $ 1,201,729 $ 3,228,338 $ 8,147,771
Cash Inflows
Income from Sales $ 914,314 $ 2,285,784 $ 5,485,882 $ 12,617,528 $ -
Accounts Receivable $ - $ - $ - $ - $ -
Total Cash Inflows $ 914,314 $ 2,285,784 $ 5,485,882 $ 12,617,528 $ 26,624,879

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ - $ - $ -
Cost of Sales $ 274,294 $ 685,735 $ 1,645,764 $ 3,785,258 $ 7,987,464

Operating Activities
Salaries and Wages $ 87,500 $ 284,681 $ 512,426 $ 1,024,853 $ 2,049,705
Fixed Business Expenses $ 174,040 $ 542,118 $ 1,301,082 $ 2,887,983 $ 6,002,529
Taxes $ - $ - $ - $ - $ -

Financing Activities
Loan Payments $ - $ - $ - $ - $ -
Line of Credit Interest $ - $ - $ - $ - $ -
Line of Credit Repayments $ - $ - $ - $ - $ -
Dividends Paid $ - $ - $ - $ - $ -

Total Cash Outflows $ 535,834.08 $ 1,512,534.09 $ 3,459,273.07 $ 7,698,094.15 $ 16,039,697.38


Cash Flow $ 378,479.52 $ 773,249.91 $ 2,026,608.53 $ 4,919,433.53 $ 10,585,181.82
Operating Cash Balance $ 428,479.52 $ 1,201,729.43 $ 3,228,337.96 $ 8,147,771.49 $ 18,732,953.31
Ending Cash Balance $ 428,479.52 $ 1,201,729.43 $ 3,228,337.96 $ 8,147,771.49 $ 18,732,953.31

Year 1 Cash
500,000

450,000

400,000

350,000
Net Cash Flows
300,000

250,000

200,000

150,000
Cash Balance
100,000

50,000

-
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

(50,000)

Monster Energy Co..| Business Plan Page 21


Wages & Payroll

Most expenses will be allocated towards development and sales. The employees will be paid competitive
wages so that the company can acquire and retain top talent and compete with large competitors. As the
company grows, it may work in options and bonuses into the salaries, but will focus on a straight full-time
salary with benefits for employees.

Personnel Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Personnel Count
Sr. Developer 1 2 4 8 16
Developers 6 9 14 16 19
Sales 8 10 12 14 17
Administrative 1 1 1 2 2
Management 0 2 2 2 2

Total Personnel 16 24 32 42 56

Personnel Wage
Sr. Developer $ 100,000 $ 200,000 $ 400,000 $ 800,000 $ 1,600,000
Developers $ 450,000 $ 675,000 $ 1,012,500 $ 1,215,000 $ 1,458,000
Sales $ 280,000 $ 336,000 $ 403,200 $ 483,840 $ 580,608
Administrative $ 35,000 $ 42,000 $ 50,400 $ 60,480 $ 72,576
Management $ - $ 172,000 $ 172,000 $ 172,000 $ 172,000

Personnel Costs
Employer Expenses $ 34,600 $ 44,980 $ 89,960 $ 269,880 $ 809,640
Total Payroll $ 974,163 $ 1,591,863 $ 2,301,749 $ 3,233,467 $ 5,022,423

FIGURE 1: WAGES & PAYROLL

Monster Energy Co..| Business Plan Page 22


Projected Balance Sheet

The projected balance sheet assumes that there are no dividend draws and all cash flow is re-invested
back into the company at the end of the year. The balance sheet does not assume any line of credits or
account receivables that are outstanding at the end of the year and that the company will have paid off
all liabilities. Likewise, it assumes that all accounts will pay within thirty-days and there will be no
delinquency of payments.

Pro Forma Balance Sheet


Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash $ 492,620 $ 1,264,729 $ 3,291,338 $ 8,210,771 $ 18,795,953
Other Current Assets $ 29,500 $ 29,500 $ 29,500 $ 12,000 $ 12,000
Total Current Assets $ 522,120 $ 1,294,229 $ 3,320,838 $ 10,713,677 $ 22,388,473

Long-term Assets
Long-term Assets $ 7,500 $ 7,500 $ 7,500 $ 7,500 $ 7,500
Accumulated Depreciation $ 0 $ 0 $ 0 $ 0 $ 0
Total Long-term Assets $ 7,500 $ 7,500 $ 7,500 $ 7,500 $ 7,500
Total Assets $ 529,619 $ 1,301,729 $ 3,329,477 $ 8,248,911 $ 18,834,093

Liabilities and Capital


Current Liabilities
Accounts Payable $ - $ - $ - $ - $ -
Current Borrowing $ - $ - $ - $ - $ -
Other Current Liabilities $ - $ - $ - $ - $ -
Subtotal Current Liabilities $ - $ - $ - $ - $ -

Long-term Liabilities $ - $ - $ - $ - $ -
Total Liabilities $ - $ - $ - $ - $ -

Common Stock $ 213,640 $ 213,640 $ 213,640 $ 213,640 $ 213,640


Retained Earnings $ 315,980 $ 1,089,229 $ 3,115,838 $ 8,035,271 $ 18,620,453
Total Capital $ 529,620 $ 1,302,869 $ 3,329,478 $ 8,248,911 $ 18,834,093
Total Liabilities and Capital $ 529,619 $ 1,302,869 $ 3,329,477 $ 8,248,911 $ 18,834,093

Monster Energy Co..| Business Plan Page 23


Sensitivity Analysis

Best Case Scenario (Revenue Increase by 15% )


Year 1 Year 2 Year 3 Year 4 Year 5
Revenue $ 1,051,461 $ 2,628,652 $ 6,308,764 $ 14,510,157 $ 30,618,611
Cost of Goods Sold $ 315,438 $ 788,595 $ 1,892,629 $ 4,353,047 $ 9,185,583
Gross Margin $ 736,022 $ 1,840,056 $ 4,416,135 $ 10,157,110 $ 21,433,028
Gross Margin/Revenue 70% 70% 70% 70% 70%
Operating Expenses $ 174,040 $ 542,118 $ 1,301,082 $ 2,887,983 $ 6,002,529
Wages & Payroll $ 162,675 $ 284,681 $ 512,426 $ 1,024,853 $ 2,049,705
EBIT $ 399,307 $ 1,013,257 $ 2,602,626 $ 6,244,274 $ 13,380,794
EBIT/Revenue 38% 39% 41% 43% 44%

Worst Case Scenario (Revenue Decrease by 15% )


Year 1 Year 2 Year 3 Year 4 Year 5
Revenue $ 777,167 $ 1,942,916 $ 4,662,999 $ 10,724,899 $ 22,631,147
Cost of Goods Sold $ 233,150 $ 582,875 $ 1,398,900 $ 3,217,470 $ 6,789,344
Gross Margin $ 544,017 $ 1,360,041 $ 3,264,100 $ 7,507,429 $ 15,841,803
Gross Margin Revenue 70% 70% 70% 70% 70%
Operating Expenses $ 174,040 $ 542,118 $ 1,301,082 $ 2,887,983 $ 6,002,529
Wages & Payroll $ 162,675 $ 284,681 $ 512,426 $ 1,024,853 $ 2,049,705
EBIT $ 207,302 $ 533,243 $ 1,450,591 $ 3,594,593 $ 7,789,570
EBIT/Revenue 27% 27% 31% 34% 34%

Revenue
$35,000,000

$30,000,000
Best Case

$25,000,000

$20,000,000
Most Likely

$15,000,000

$10,000,000
Worst Case
$5,000,000

$-
Year 1 Year 2 Year 3 Year 4 Year 5

Monster Energy Co..| Business Plan Page 24


Break-Even Analysis

CASES NET REVENUE FIXED COST VARIABLE COST TOTAL COST TOTAL PROFIT
- $0 $324,040 $0 $324,040 -$324,040
2,000 $96,000 $324,040 $28,800 $352,840 -$256,840
4,000 $192,000 $324,040 $57,600 $381,640 -$189,640
6,000 $288,000 $324,040 $86,400 $410,440 -$122,440
8,000 $384,000 $324,040 $115,200 $439,240 -$55,240
10,000 $480,000 $324,040 $144,000 $468,040 $11,960
12,000 $576,000 $324,040 $172,800 $496,840 $79,160
14,000 $672,000 $324,040 $201,600 $525,640 $146,360
16,000 $768,000 $324,040 $230,400 $554,440 $213,560
18,000 $864,000 $324,040 $259,200 $583,240 $280,760
20,000 $960,000 $324,040 $288,000 $612,040 $347,960
22,000 $1,056,000 $324,040 $316,800 $640,840 $415,160
24,000 $1,152,000 $324,040 $345,600 $669,640 $482,360
26,000 $1,248,000 $324,040 $374,400 $698,440 $549,560
28,000 $1,344,000 $324,040 $403,200 $727,240 $616,760
30,000 $1,440,000 $324,040 $432,000 $756,040 $683,960
32,000 $1,536,000 $324,040 $460,800 $784,840 $751,160

Breakeven Analysis

$1,800,000

$1,600,000
COST-VOLUME-PROFIT

$1,400,000

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0
0

20000

32000
10000

12000

14000

16000

18000

22000

24000

26000

28000

30000
2000

4000

6000

8000

CASES

Monster Energy Co..| Business Plan Page 25


Appendix

Year 1 Profit & Loss


Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Wholesale Cases 29 86 173 288 432 576 936 1,092 1,248 1,404 1,560 1,716
Ecommerce Cases 19 58 115 192 288 384 624 728 832 936 1,040 1,144

Revenue 2,760 8,281 16,561 27,602 41,403 55,204 89,706 104,657 119,608 134,559 149,510 164,461
Subtotal Cost of Revenue 828 2,484 4,968 8,281 12,421 16,561 26,912 31,397 35,882 40,368 44,853 49,338
Total Cost of Revenue $ 828 $ 2,484 $ 4,968 $ 8,281 $ 12,421 $ 16,561 $ 26,912 $ 31,397 $ 35,882 $ 40,368 $ 44,853 $ 49,338

Gross Margin $ 1,932 $ 5,796 $ 11,593 $ 19,321 $ 28,982 $ 38,643 $ 62,794 $ 73,260 $ 83,726 $ 94,192 $ 104,657 $ 115,123
Gross Margin/Revenue 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70%

Expenses
Professional Services - - - - - 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Utilities & Telephone 60 60 60 60 60 60 60 60 60 60 60 60
Office Expenses & Supplies - - - - - 500 500 500 500 500 500 500
Repair & Maintainence - - - - - 60 60 60 60 60 60 60
Advertising 5,000 5,000 5,000 5,000 5,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Auto, Delivery, and Travel - - - - - 250 250 250 250 250 250 250
Accounting and Legal - - - - - 150 150 150 150 150 150 150
Rent Expense 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Insurance 750 750 750 750 750 750 750 750 750 750 750 750
Social Media 500 500 500 500 500 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Shipping - - - - - 400 400 400 400 400 400 400
Misc. SG&A - - - - - 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Total Operating Expenses $ 8,810 $ 8,810 $ 8,810 $ 8,810 $ 8,810 $ 18,570 $ 18,570 $ 18,570 $ 18,570 $ 18,570 $ 18,570 $ 18,570

EBIT $ (6,878) $ (3,014) $ 2,783 $ 10,511 $ 20,172 $ 20,073 $ 44,224 $ 54,690 $ 65,156 $ 75,622 $ 86,087 $ 96,553
EBIT/Revenue -249% -36% 17% 38% 49% 36% 49% 52% 54% 56% 58% 59%

Monster Energy Co..| Business Plan Page 26


Year 1 Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Received

Revenue
$ 2,760.2 $ 8,280.6 $ 16,561.2 $ 27,601.9 $ 41,402.9 $ 55,203.8 $ 89,706.2 $ 104,657.3 $ 119,608.3 $ 134,559.4 $ 149,510.4 $ 164,461.4
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Sale of Other Current Assets


$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 2,760.2 $ 8,280.6 $ 16,561.2 $ 27,601.9 $ 41,402.9 $ 55,203.8 $ 89,706.2 $ 104,657.3 $ 119,608.3 $ 134,559.4 $ 149,510.4 $ 164,461.4

Expenditures

Expenditures from Operations


$ 9,638.1 $ 11,294.2 $ 13,778.3 $ 17,090.6 $ 21,230.9 $ 47,631.2 $ 57,981.9 $ 62,467.2 $ 66,952.5 $ 71,437.8 $ 75,923.1 $ 80,408.4
Subtotal Spent on Operations
$ 9,638.1 $ 11,294.2 $ 13,778.3 $ 17,090.6 $ 21,230.9 $ 47,631.2 $ 57,981.9 $ 62,467.2 $ 66,952.5 $ 71,437.8 $ 75,923.1 $ 80,408.4

Additional Cash Spent

Current Borrowing Repay


$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 9,638.1 $ 11,294.2 $ 13,778.3 $ 17,090.6 $ 21,230.9 $ 47,631.2 $ 57,981.9 $ 62,467.2 $ 66,952.5 $ 71,437.8 $ 75,923.1 $ 80,408.4

Net Cash Flow


$ (6,877.9) $ (3,013.6) $ 2,782.8 $ 10,511.3 $ 20,172.0 $ 7,572.7 $ 31,724.4 $ 42,190.1 $ 52,655.8 $ 63,121.6 $ 73,587.3 $ 84,053.0
Cash Balance
$ 106,122.1 $ 103,108.5 $ 105,891.3 $ 116,402.7 $ 136,574.7 $ 144,147.4 $ 175,871.8 $ 218,061.9 $ 270,717.7 $ 333,839.2 $ 407,426.5 $ 491,479.5

Monster Energy Co..| Business Plan Page 27