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OK. I understand the desire for additional due diligence. Remember that the example below would be one of several that would be possible if the full $10 Million could be raised. I'll add a few more hypothetical facts. Some have been changed slightly to maintain confidentiality. Remember this is hypothetical only and no offer or other investment opportunity exists. This is merely for discussion purposes. The people described are real some details of their background have been slightly modified to protect their privacy. Proposed Management Team: 1. President - Background -Locomotive Engineer/Conductor - Class 1, 6 years; Attorney 15 years (significant time spent representing several RRs in different deals and litigation); Past short line management experience 5 years, also experienced with deal structures and financing; DSLE. B.A. J.D. Total of 15 years RR experience. 2. Vice President - Operations/Engineering - Background- Former Chief Engineer - Class 1 RR, progressed thru engineering ranks on another Class 1. Also Locomotive Engineer/Conductor and FRA qual. track inspector. Has operated his own short lines in the past (3). Total of 28 years RR experience. 3. Board Member - Background - Managing Director - Major Investment Bank - B.S. MBA Some RR deal background. 4. Controller - 15 years experience in RR finance. Class 1 and Class 3 B.S./M.S. Accounting 5. Manager Mechanical - 5 years Class 2 Mechanical Dept., Lic. Servicing Engineer, certified carman, machinist. 2 years MOW Experience. 6. General Manager - To be determined upon acquisition. Property: (First of several) Location; Southeast U.S. 32 miles. 115# and 112# with some 100# in sidings. Jointed. 2 miles of 115# CWR. timber ties. 6 bridges all steel. Ruling grade 0.7%. Max curvature 10 degrees. Runs along river. Interchange: NS and CSX. Paper barriers possible. Traffic: 2,400 carloads coal; 1,000 carloads cardboard; 2,000 carloads wood chips. Total 5,400 current annual carloads. Revenue projection: $1.42Million Year 1. By year 5 assuming 4,000 additional coal loads revenue grows to $2.62Million+ Cost projection: $1.24MIllion Year 1. By year 5 costs increase to $1.88Million. EBITDA projection $180,000 year 1 growing to $740,000 or more by year 5. Potential customers. Recently two mining companies have reopened local mines. Coal is being trucked to a power station 60 miles distant. Power station has rail access which is not currently used. Coal is barged in from other sources. Power company dislikes barge reliability and seeks alternative supplies. Potential additional 4,000 to 6,000 annual carloads from both mines (not all would go to this power station). Some coal is metallurgical grade and other is only fit for steam coal. Employees: 4 T&E; 3 MOW. To be adjusted as required by growth. Equipment: Locomotives: 2 4 axle units(2000hp) and 4 six axle units (3,000+hp) MOW: Hirail inspection truck, Hirail Boom truck, backhoe, tamper, regulator others as deemed necessary. Acquisition cost from owner $1.2Million Financial structure to be determined depending upon need. Hope this is enough to give you some idea. Questions? LC
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