presented by Cloud Registry.
TLD Applicant ‐‐ Financial Projections : Sample In local currency (unless noted otherwise)
Sec.
I) Projected Cash Inflows and Outflows A) Forecasted registration volume Reference / Formula Start‐up Costs ‐ Year 1
Live / Operational
Year 2 Year 3
Comments / Notes Provide name of local currency used.
62,000 80,600 104,780
Registration was forecasted based on recent market surveys which we have attached and discussed below. We do not anticipate significant increases in Registration Fees subsequent to year 3. Other cash inflows represent advertising monies expected from display ads on our website.
B) Registration fee C) Registration cash inflows D) Other cash inflows E) Total Cash Inflows A * B
$ ‐ ‐ ‐ ‐
$ 5.00 $ 5.50 $ 6.05 310,000 443,300 633,919 35,000 48,000 62,000 345,000 491,300 695,919
Projected Operating Cash Outflows F) Labor: i) Marketing Labor
25,000 66,000 72,000 81,000 68,000 45,000 44,000 10,000 112,000 29,000 71,000 47,000 26,400 12,000 122,500 29,800 74,000 49,000 31,680 14,400 136,000 30,760
Costs are further detailed and explained in response to question 47.
ii) Customer Support Labor 5,000 iii) Technical Labor 32,000 G) Marketing 40,000 H) Facilities 7,000 I) General & Administrative 14,000 J) Interest and Taxes 27,500 K) Outsourcing Operating Costs, if any (list the type of activities being outsourced): i) Hot site maintenance ii) Critical Registry Functions
5,000 7,500 7,500 7,500 32,000 37,500 41,000 43,000
iii) {list type of activities being outsourced} iv) {list type of activities being outsourced} v) {list type of activities being outsourced} vi) {list type of activities being outsourced} L) Other Operating Costs M) Total Operating Cash Outflows N) Projected Net Operating Cash flow E ‐ M
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Provide a list and associated cost for each outsourced function. Outsourcing hot site to ABC Company, cost based on number of servers hosted and customer support Outsourced critical registry and other functions to ABC registry. Costs are based on expected domains and queries Provide a description of the outsourced activities and how costs were determined Provide a description of the outsourced activities and how costs were determined Provide a description of the outsourced activities and how costs were determined Provide a description of the outsourced activities and how costs were determined
12,200 18,000 21,600 25,920 199,700 437,000 450,800 493,260 (199,700) (92,000) 40,500 202,659
IIa) Break out of Fixed and Variable Operating Cash Outflows
A) Total Variable Operating Costs 72,067 163,417 154,464 200,683 Variable Costs: ‐Start Up equals all labor plus 75% of marketing. ‐Years 1 through 3 equal 75% of all labor plus 50% of Marketing, and 30% of G&A and Other costs Fixed Costs: equals Total Costs less Variable Costs
B) Total Fixed Operating Costs C) Total Operating Cash Outflows = Sec. I) M CHECK
127,633 273,583 296,336 292,577 199,700 437,000 450,800 493,260 ‐ ‐ ‐ ‐
Check that II) C equals I) N. Note: ICANN is working on cost model that will be provided at a later date Commensurate with Question 24 Commensurate with Question 26 Commensurate with Question 35 Commensurate with Question 38 Commensurate with Question 43
IIb) Break out of Critical Registry Function Operating Cash Outflows
A) Operation of SRS B) Provision of Whois C) DNS Resolution for Registered Domain Names D) Registry Data Escrow E) Maintenance of Zone in accordance with DNSSEC G) Total Critical Function Cash Outflows H) 3‐year Total 5,000 6,000 7,000 8,000 9,000 ‐ 115,850 98,000 21,000 16,000 58,000 32,000 18,000 24,000 11,000 43,000 22,000 14,000 16,000 35,000 5,500 6,600 7,700 8,800 9,900 38,500 6,050 7,260 8,470 9,680 10,890 42,350
III) Projected Capital Expenditures
A) Hardware B) Software C) Furniture & Other Equipment ‐Hardware & Software have a useful life of 3 years ‐Furniture & other equipment have a useful life of 5 years
D) Outsourcing Capital Expenditures, if any (list the type of capital expenditures) i) ‐ ii) iii) iv) v) vi) ED) Other Capital Expenditures F) Total Capital Expenditures ‐ ‐ ‐ ‐ ‐
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List and describe each identifiable type of outsourcing. List and describe each identifiable type of outsourcing. List and describe each identifiable type of outsourcing. List and describe each identifiable type of outsourcing. List and describe each identifiable type of outsourcing. List and describe each identifiable type of outsourcing.
173,000 61,000 54,000 85,000
IV) Projected Assets & Liabilities
A) Cash B) Accounts receivable C) Other current assets D) Total Current Assets E) Accounts payable F) Short‐term Debt G) Other Current Liabilities H) Total Current Liabilities I) Total Property, Plant & Equipment (PP&E) 556,300 70,000 40,000 ,300 666,300 300 578,600 784,600 106,000 160,000 60,000 80,000 744,600 1,024,600
41,000 110,000 113,000 125,300
41,000 110,000 113,000 125,300 = Sec III) F: cumulative 173,000 234,000 288,000 373,000 Prior Years + Cur Yr = IIb) H) 115,850 115,850 115,850 115,850 288,850 349,850 403,850 488,850 1,000,000 1,000,000 1,000,000 1,000,000 Principal payments on the line of credit with XYZ Bank will not be incurred until Year 5. Interest will be paid as incurred and is reflected in Sec I) J.
J) 3‐year Reserve K) Other Long‐term Assets L) Total Long‐term Assets M) Total Long‐term Debt
V) Projected Cash flow (excl. 3‐year Reserve)
A) Net operating cash flows B) Capital expenditures C) Change in Non Cash Current Assets D) Change in Total Current Liabilities = Sec. I) N = Sec. III) FE = Sec. IV) (B+C): Prior Yr ‐ Cur Yr = Sec. IV) H: Cur Yr ‐ Prior Yr (199,700) (92,000) 40,500 202,659 (173,000) (61,000) (54,000) (85,000) n/a (110,000) (56,000) (74,000) 41,000 69,000 3,000 12,300 The $41k in Start Up Costs represents an offset of the Accounts Payable reflected in the Projected balance sheet. Subsequent years are based on changes in Current Liabilities where Prior Year is subtracted from the Current year
E) Debt Adjustments F) Other Adjustments G) Projected Net Cash flow
= Sec IV) F and M: Cur Yr ‐ Prior Yr
n/a
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(66,500) 55,959 (331,700) (194,000)
VI) Sources of funds
A) Debt: i) On‐hand at time of application 1,000,000 See below for comments on funding. Revenues are further detailed and explained in response to question 48.
ii) Contingent and/or committed but not yet on‐ hand B) Equity: i) On‐hand at time of application ii) Contingent and/or committed but not yet on‐ hand C) Total Sources of funds
‐ 1,000,000
General Comments (Notes Regarding Assumptions Used, Significant Variances Between Years, etc.): We expect the number of registrations to grow at approximately 30% per year with an increase in the registration fee of $1 per year for the first three years. These volume assumptions are based on the attached (i) market data and (ii) published benchmark registry growth. Fee assumptions are aligned with the growth plan and anticipated demand based on the registration curve. We anticipate our costs will increase at a controlled pace over the first three years except for marketing costs which will be higher in the start‐up and first year as we establish our brand name and work to increase registrations. Operating costs are supported by the attached (i) benchmark report for a basket of similar registries and (ii) a build‐up of costs based on our current operations. Our capital expenditures will be greatest in the start‐up phase and then our need to invest in computer hardware and software will level off after the start‐up period. Capital expenses are based on contract drafts and discussions held with vendors. We have included and referenced the hardware costs to support the estimates. Our investment in Furniture and Equipment will be greatest in the start‐up period as we build our infrastructure and then decrease in the following periods. Start‐up: Our start‐up phase is anticipated to comprise [X] months in line with benchmark growth curves indicated by prior start‐ups and published market data. Our assumptions were derived from the attached support Comments regarding how the Applicant plans to Fund operations: We have recently negotiated a line of credit with XYZ Bank (a copy of the fully executed line of credit agreement has been included with our application) and this funding will allow us to purchase necessary equipment and pay for employees and other Operating Costs during our start‐up period and the first few years of operations. We expect that our business operation will be self funded (i.e., revenue from operations will cover all anticipated costs and capital expenditures) by the second half of our second year in operation; we also expect to become profitable with positive cash flow in year three. General Comments regarding contingencies: Although we expect to be cash flow positive by the end of year 2, the recently negotiated line of credit will cover our operating costs for the first 4 years of operation if necessary. We have also entered into an agreement with XYZ Co. to assume our registrants should our business model not have the ability to sustain itself in future years. Agreement with XYZ Co. has been included with our application. A full description of risks and a range of potential outcomes and impacts are included in our responses to Question 49. These responses have quantified the impacts of certain probabilities and our negotiated funding and action plans as shown, are adequate to fund our Worst Case Scenario.