Chemalit Chemicals

Less: Amortization expense (1041. 67)123,958. 33 Total assets $491,197. 91 Liabilities 0 Stockholders Equity Contributed Capital 500,000. 00 Retained Earnings (8,802. 09) Total Stockholders equity 491,197. 91 Total Liabilities and Stockholders equity $491,197. 91 CHEMALITE, INC Cash Flow Statement For the period ended June 30, 2003 Cash flows for operating activities Cash paid to suppliers $ (75,000. 00) Cash paid for legal fees, charter printing costs (7,500. 00) Net cash flow from operating activities (82,500. 00) Cash flows for investing activities Cash paid to purchase machinery (62,500. 00) Cash flows from financial activities Cash received from shareholders 375,000. 00 Cash at end of year $230,000. 00 4. Financial Statements for stockholder’s for year 2003 CHEMALITE, INC Balance Sheet At December 31, 2003 Assets Cash $ 113,000. 00 Accounts Receivable 69,500. 00 Inventory 55,000. 00 Property, Plant and Equipment$ 212,500. 00 Less: Accumulated Depreciation10,885. 42 201,614. 58 Patent 125,000. 00 Less: Amortisation 25,000. 00 100,000. 00 Total Assets $ 539,114. 58 Liabilities 0 Stockholders Equity Contributed Capital 500,000. 00 Retained Earnings 39,114. 58 Total Stockholders equity 539,114. 58 Total Liabilities and Stockholders equity $ 539,114. 58 Income Statement For the period ended December 31, 2003 Revenue $ 754,500. 00 Expenses Cost of Goods Sold $ 545,000. 00 General and administrative expense 87,500. 00 Research and development expense 23,750. 00 Advertisement expense 22,500. 00 Interest expense 750. 00 Amortisation expense 25,000. 00 Depreciation expense 10,885. 42 Cash Flow Statement For the period ended December 31, 2003 Cash flows for operating activities Cash received from customers $ 685,000. 00 Cash paid to suppliers and employees(600,000. 00) Cash paid for administrative expenses(87,500. 00) Cash paid for research and development(23,750. 00) Cash paid for Advertising(22,500. 00) Net cash flow from operating activities $ (48,750. 00) Cash flows for investing activities Cash paid to purchase machinery(212,500. 00) Net cash flow from investing activities (212,500. 0) Cash flows from financing activities Cash received from shareholders 375,000. 00 Cash paid for interest on loan (750. 00) Net cash from financing activities 374,250. 00 Cash at end of year $ 113,000. 00 5. Report to Shareholders:- To Our Shareholders The year 2003 has been a very significant year for Chemalite, Inc with a successful commercial launch of its product and revenue earnings of over $700,000. The initial profits made in the first year are moderate due to the high ini tial expenses made on setting up the business and advertising. The financial health of the company is healthy with zero liabilities and a positive cash balance throughout the year despite the huge cash outflow from initial investment behind machinery and installation. The new invention of Chemalite has been patented by the company and is showing good value for business use. In addition to our current revenue sources we are expecting a great deal in the coming year which will be prestigious for the company as well as profitable. The committee for the Olympic Games, Athens 2004 has placed a firm order with us for 60,000 Chemalites which will generate $90,000 in revenue. The Olympics committee wants to give a Chemalite to each person in the opening ceremony. The athletes and fans will light their Chemalites which will be symbolic of the Olympic flame. This will bring us publicity and will improve our future marketable value. Going forward, we will have guaranteed sales from any demands for fireless ignition as Chemalite does not expect any competitors to come up with a similar product before five years. Lastly, we thank the shareholders for their continuous support and belief in the company.