FM01 - Assumptions

Company NameWebsite URL

FINANCIAL MODEL

Company NameWebsite URL

ASSUMPTIONS

POP ENJOY, INC.

Assumptions

December-16

Marginal Cost per Unit

Description Value UnitsR A W P R O D U C T C O S T S

POPCORN:

Acquisition of Raw Product 0.3100$ /lb

Shipping of Product to PnJ Plant 0.0148 /lb

Acquisition Costs/Pound of Product 0.3248$ lb/

Conversion to Metric (Grams:Pound) 453.59 gr/lb

SUBTOTAL, Popcorn Costs/Gram 0.0007$ /gr

FLAVORING:

Cost of Flavor 13.00$ /gal

Weight of Flavoring (pounds per gallon) 8.33 lb/gal

Shipping of Product to PnJ Plant 0.1233 /gal

Estimated Grams/Gallon 1.0270

Ounces of Flavor Used/100 Grams of Popcorn 0.501 oz

SUBTOTAL, Cost of Flavor/Gram 0.0010$ /gr

Weight of Kernels per serving (oz) 1.50 oz

Conversion Factor - Grams:Ounce 28.35 gr/oz

Weight of Kernels per serving (gr) 42.5243 gr/serve

SUBTOTAL, Cost of Product/Serving 0.0741$ /serve

Servings Included/Unit Sold 3.00

SUBTOTAL, Product Costs/Unit Sold 0.2224$

Units/Case 12.00

TOTAL, Raw Product Costs/Case Sold 2.6689$ 0.222406328

P A C K A G E C O S T S

SERVING COSTS:

Microwaveable Bag (Delivered to Co-Packer) 0.0790$

Printing/Labeling Microwaveable Bag 0.0050$

Outer Wrap (Cello) for Serving Bag 0.0030$

SUBTOTAL, Cost of Packaging/Serving 0.0870$

UNIT COSTS:

Outer Box (Delivered to Co-Packer) 0.0890$

Printing/Labeling Outer Box 0.0050$

SUBTOTAL, Cost of Packaging/Unit 0.0940$

CASE COSTS:

Shipping Box (Delivered to Co-Packer) 0.0650$

Shiping Label 0.0050$

SUBTOTAL, Cost of Packaging/Case 0.0700$

TOTAL, Package Costs/Case Sold 4.3300$

Financial Model

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Assumptions

1

Pop Enjoy Inc.

Confidential

P R O D U C T C O S T S & P R O F I T S

TOTAL, Product & Package Costs/Case Sold 6.9989$ /unit -> 0.5832$

PopEnjoy Profit Factor 2.00

PopEnjoy Gross Profit/Case Sold 13.9978$ /unit -> 1.1665$

TOTAL, PopEnjoy Net Sale Price/Case Sold 20.9966$ /unit -> 1.7497$

P O S T P R O D U C T I O N F E E S

Co-Packer Fees:

% of PopEnjoy Net Sale Price 15.00%

SUBTOTAL, Co-Packer Fees/Case 3.1495$

Broker Fees:

% of PopEnjoy Net Sale Price & Co-Packer Fees 0.00%

SUBTOTAL, Broker Fees/Case -$

Distributor Fees:

% of PopEnjoy Net Sale Price & Co-Packer Fees 10.00%

SUBTOTAL, Distributor Fees/Case 2.4146$

Warehousing Fees:

% of PopEnjoy Net Sale Price 1.50%

SUBTOTAL, Warehousing Fees/Case 0.3149$

S H I P P I N G F E E S

Estimated Weights:

Product 3.3750 lbs

Packaging (Est. @ same weight as product) 3.3750 lbs

TOTAL, Product Weight (Case) 6.7500 lbs

From PnJ -> Co-Packer -> PnJ:

Cost/Pound (Round Trip) 0.0296$

SUBTOTAL, Shipping from Co-Packer -> Warehouse 0.1998$ /unit -> 0.0167$

From Warehouse -> Store (Assuming EastNorthCentral)

Northeast:

New England

Cost/Pound 0.06$

Middle Atlantic

Cost/Pound 0.04$

South:

South Atlantic

Cost/Pound 0.06$

East South Central

Cost/Pound 0.04$

West South Central

Cost/Pound 0.06$

Midwest:

East North Central

Cost/Pound 0.02$

West North Central

Cost/Pound 0.04$

Financial Model

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Assumptions

2

Pop Enjoy Inc.

Confidential

West:

Mountain

Cost/Pound 0.06$

Pacific

Cost/Pound 0.08$

Alaska NA

Hawaii NA

ESTIMATED, Maximum Rate/Pound 0.08$

SUBTOTAL, Shipping to Retail Outlet 0.5400$ /unit -> 0.0450$

TOTAL, Post Production Fees & Charges 6.6189$ /unit -> 0.5516$

TOTAL, Product Costs/Case Sold 2.6689$

TOTAL, Package Costs/Case Sold 4.3300$

PopEnjoy Gross Profit/Case Sold 13.9978$

TOTAL, Post Production Fees & Charges 6.6189$

TOTAL, PopEnjoy Gross Retail Sale Price 27.6155$

Pricing per Case Sold

price Costs Before Profit

Price to Wholesaler (w/o Distributor Fees) 25.2009$ 11.2031$

Distributer Price (w/o Distributor Fees) 25.2009$ 11.2031$

Retail Price 27.6155$ 13.6177$

Pricing per Unit Sold

price Costs Before Profit

Wholesale Price (w/o Broker & Distributor Fees) 2.1001$ 0.9336$

Distributer Price (w/o Distributor Fees) 2.1001$ 0.9336$

Retail Price 2.3013$ 1.1348$

Roger's Innovation Rate of # Months Over Market SaturationAdopters Curve Adoption Projection Period & Name Recognition

Innovators 2.5% 3 12Early Adopters 13.5% 5 12

Early Majority 34.0% 6 12

Late Majority 34.0% 9 18

Laggards 16.0% 11 12

S U M M A R Y O F C O S T S , F E E S , & C H A R G E S

Financial Model

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Assumptions

3

Pop Enjoy Inc.

Confidential

Echos (under 20) 45%

Xers (20-35) 49%

Boomers (35-55) 56%

Matures (over 55) 48%

Average % of Popcorn Customers: 50%

Percent that like unpopped microwave kernels 30%

% that prefer already Popped 28% [ 26 - 28 %]

% that Eat it Outside the Home 30% [ 30% ]

% that prefer popped inside the Home 20% [ 20% ]

Popped Quarts eaten /yr /person 52

Popped Quarts eaten/mo/person 4.33

Microwaveable popcorn 78%

Ready-to-Eat popcorn 15%

Unpopped popcorn 7%

US Census Household Population* 309,586,042

Micro popcorn quarts eaten/mo, US 1,046,400,822

Conversion ratio - ounces per quart 1.00

Micro popcorn ounces eaten /mo, US 1,046,400,822

Micro popcorn pounds eaten/mo, US 65,400,051

Total pounds of microwaveable popcorn 784,800,616

* Based on US Census Bureau, Population Devision, "Monthly Population Estimates for the

United States: April 1, 2010 to December 1, 2014. Figure used is for total Household

Population for March 1, 2014.

Total United States Consumption

Total pounds of popcorn sold 995,774,706

Microwaveable popcorn 78%

Total pounds of microwaveable popcorn 776,704,271

SOURCE: Popcorn Board, USA.

Demographic Assumptions

Per Capita Consumption Model

Age Demographic % Snacking on Popcorn Range

Financial Model

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Assumptions

4

Pop Enjoy Inc.

Confidential

Operating Company based in: Producer Rank in US

Nebraska 1

Initial Target Consumer Population est % of Total # of Supermarkets

Markets (top 20 states) as of 7/1/2012 US in 2010 Per State

California 38,041,430 12% 3,753

Texas 26,059,203 8% 2,145

New York 19,570,261 6% 2,202

Florida 19,317,568 6% 2,133

Illinois 12,875,255 4% 1,444

Pennsylvania 12,763,536 4% 1,428

Ohio 11,544,225 4% 1,350

Georgia 9,919,945 3% 1,151

Michigan 9,883,360 3% 1,217

North Carolina 9,752,073 3% 1,349

New Jersey 8,864,590 3% 773

Virginia 8,185,867 3% 1,007

Washington 6,897,012 2% 826

Massachusetts 6,646,144 2% 613

Arizona 6,553,255 2% 668

Indiana 6,537,334 2% 810

Tennessee 6,456,243 2% 837

Missouri 6,021,988 2% 766

Maryland 5,884,563 2% 634

Wisconsin 5,726,398 2% 685

Delivery Cost Demographics

34%

% of US Production

Financial Model

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Assumptions

5

Pop Enjoy Inc.

Confidential

Percent Discount on Gross Revenues 8.50% 5.50% 2.00%

Frequency Monthly Monthly Monthly

Shrinkage Costs 2.50% 1.75% 1.00%

Spoilage Costs 1.25% 1.00% 0.75%

Free Fill Costs 5.00% 1.00% 0.75%

Store Opening Promotional Fee 0.75% 0.75% 0.75%

Distributor's Promotional Fee 1.25% 1.25% 1.25%

Catalog Fee (Distributor) 1.25% 1.25% 1.25%

Slotting Fee 5.00% 2.50% 1.25%

Warehouse Fee 1.25% 1.25% 1.25%

Research & Development Budget 5.00% 2.50% 1.00%

First Month of Model 1/1/2015

Pre-Processor/Corn Handler 470,000$ 470,000$

Initial Service, Installation & Training 4,700$ 4,700$

Production Dryer 498,000$ 498,000$


Flavor Infuser Processor 500,000$ 500,000$


Production Finisher (Bosch) & Rinse 276,000$ 276,000$


Packing System (Talon/Massman) 800,000$ 800,000$

Packager, Palletizer, Wrapper 130,000$ 130,000$


Plant Equipment Fork Lift, Belt Drives, etc… 380,000$ 380,000$

Storage Bins 375,000$ 375,000$

Plant Equipment Maintenance (% of Cost) 0.175% 0.175%

Plant Equipment Maintenance ($) 4,295$ 4,295$

SUBTOTAL, EQUIPMENT 3,429,000$ 3,429,000$SUBTOTAL, INITIAL SERVICE 26,740$ 26,740$

SUBTOTAL, ANNUAL MAINTENANCE 51,534$ 51,534$TOTAL, EQUIPMENT & SERVICE 3,507,274$ 3,507,274$

Equipment, Service Etc. Initial Purchase Prices Subsequent Prices

Other Misc. Variables Thru Month 24 Mo 25 - 36 Month 37+

Other Variable Costs (% of sales) Thru Month 24

Thru Month 24 Mo 25 - 36 Month 37+Promotional Costs

Month 37+Mo 25 - 36

Financial Model

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Assumptions

6

Pop Enjoy Inc.

Confidential

First year 0.500% 1.250%

Second year 1.250% 2.250%

Third year 2.750% 4.000%

Fourth year 4.000% 5.500%

Fifth year & Thereafter 4.750% 6.500%

Sales Allocation Rates

Wholesalers/Internet 10%

Distributors 65%

Retailers 25%

[ 899.8 - 1700.0 ]

Customer Attrition Rate

% That doesn't repurchase 6% [ 2.9 - 7.9% ]

Bags per Minute (BPM) 150 200 300

Uptime/Hour (Minutes) 55 55 55

Bags Packed per Hour 8,250 11,000 16,500

Workhours/Day 7.5 7.5 7.5

Bags Packed per Shift 61,875 82,500 123,750

Work Days per Month 20 20 20

Bags Packed per Month 1,237,500 1,650,000 2,475,000

Units Packed per Month 412,500 550,000 825,000

Number of Shifts/Day 2 2 2

Bags Packed per Day 123,750 165,000 247,500

Bags Packed per Month 2,475,000 3,300,000 4,950,000

Units Packed per Month 825,000 1,100,000 1,650,000

Purchase Multiples Quantity

Popcorn (lbs) 44,000

Flavorings (gals) - First two years 2,000

Flavorings (gals) - Third year + 20,000

Microwave bags - First two years 500,000

Microwave bags - Third year + 25,000,000

Product boxes - First two years 175,000

Product boxes - Third year + 8,500,000

Shipping cases - First two years 14,750

Shipping cases - Third year + 710,000

Conservative

Assumptions

Moderate

Assumptions

200 BPM Machine 300 BPM Machine

Microwave Popcorn Sales $m/year 1,100.0$

Market Penetration Rates

In-House Packaging Rates 150 BPM Machine

Financial Model

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Assumptions

7

Pop Enjoy Inc.

Confidential

Initial Target Consumer Families per State Avg # Scaled up

Markets (top 20 states) w Children Children Population

California 4,117,036 1.95 8,035,222

Texas 2,723,330 1.90 5,164,472

New York 2,231,381 1.86 4,155,866

Florida 1,779,586 1.80 3,200,461

Illinois 1,514,561 1.90 2,884,036

Pennsylvania 1,430,808 1.85 2,653,125

Ohio 1,409,912 1.87 2,632,157

Georgia 1,051,302 1.81 1,899,303

Michigan 1,236,713 1.90 2,347,192

North Carolina 995,648 1.75 1,744,451

New Jersey 1,025,556 1.83 1,880,026

Virginia 881,893 1.77 1,561,010

Washington 742,481 1.87 1,385,475

Massachusetts 748,865 1.85 1,382,189

Arizona 608,218 1.97 1,197,438

Indiana 767,836 1.87 1,432,898

Tennessee 707,305 1.75 1,239,200

Missouri 699,779 1.85 1,293,406

Maryland 662,172 1.80 1,194,489

Wisconsin 665,239 1.91 1,273,539

Financial Model

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Assumptions

8

Pop Enjoy Inc.

Confidential

Pounds/Load 2,000 16,000

Hours to Infuse 2 2

Hours/Shift 8 8

Pounds Infused/Shift 8,000 64,000

Work Days per Month 20 20

Pounds Infused/Month 160,000 1,280,000

Ounces/Serving 1.50 1.50

Servings Infused/Month 1,706,667 13,653,333

Servings/Unit 3 3

Units Infused/Month 568,889 4,551,111

Add a Second Shift 2 2

Pounds Infused/Month 320,000 2,560,000

Servings Infused/Month 3,413,333 27,306,667

Units Infused/Month 1,137,778 9,102,222

$/Person/Month 1,000$ 10%

Healthcare Insurance First Year Annual Increase

Industrial InfuserIn-House Infusion Rates Initial Infuser

Financial Model

12/2/2016 2:19 PM

Assumptions

9

Pop Enjoy Inc.

Confidential

FM01 - Assumptions

Documents

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