Assumptions

1) $1M investment infusion assumed to be completed by Feb 09.

2) Cost of Revenue includes affiliate commissions, chargeback's and royalty. This is assumed to be high
between Feb 09 - Sept 09 since funds raised will be utilized for new affiliate deals, SEO deals and other
player acquisition strategies.
3) Operational costs include those associated with running Israel and US operations. It is anticipated
that a significant amount of resources will be spent on Marketing and New Recruitments to support
growth in players. This is assumed to be high between Feb 09 - Sept 09 since funds raised will be
utilized to roll out Marketing campaigns.
4) It is assumed that real conversion of the above marketing and player acquisition strategies will
create impact beginning Oct 09 i.e. we anticipate a 6 months roll out of new capital infusion to fully
adopt and execute growth strategies.
5) Corporate tax rate is 12% based on average rate of listed companies.

$1M INVESTMENT

YR1

LOW
YR2

YR3

NET REVENUES

$6,999,070

$13,759,154

$20,632,409

COST OF REVENUE

$2,050,071

$5,014,659

$6,221,343

GROSS PROFIT

$4,948,999

$8,744,495

$14,411,066

OPERATING EXPENSES

$1,943,970

$4,096,783

$5,158,102

EARNINGS FROM OPERATIONS

Operating Margin %

$3,005,029
43%

$4,647,712
34%

$9,252,964
45%

$0

$0

$0

$3,005,029

$4,647,712

$9,252,964

INTEREST INCOME / (EXPENSE)

-$170,973

-$235,893

-$235,893

NET EARNINGS BEFORE TAXES

$2,834,056

$4,411,819

$9,017,070

$340,087

$529,418

$1,082,048

$2,493,969
36%

$3,882,401
28%

$7,935,022
38%

EXTRAORDINARY INCOME / (EXPENSE)

EARNINGS BEFORE INTEREST & TAXES

TAXES
NET EARNINGS
Net Profit Margin %

Operating Profit Multiple M

Particulars
Op. Profit (1)
Weight Assigned (2)
Weighted Profit (1*2)
Total weighted Profit
Total weight
Weighted average profit
Multiple
Value of business

YR 1
$3,005,029
5
$15,025,145
$61,374,885
12
$5,114,574
6
$30,687,442

LOW
YR 2
$4,647,712
4
$18,590,849

YR3
$9,252,964
3
$27,758,891

Assumptions

1) On a conservative basis, weights are assigned as 5 & 4 for year 1 & 2 respectively to arrive at the weighted average profit.
2) For high Growth business generally a multiple in the range of 8 to 12 is assigned. We have taken a conservative view and applied a multi

Sales Multiple metho

Particulars

YR 1

LOW
YR 2

YR3

$6,999,070
5
$34,995,350
$151,929,195
12
$12,660,766
3
$37,982,299

Revenue (1)
Weight Assigned (2)
Weighted Revenue (1*2)
Total weighted revenue
Total weight
Weighted average revenue
Multiple
Value of business

$13,759,154
4
$55,036,618

$20,632,409
3
$61,897,227

Assumptions

1) On a conservative basis, weights are assigned as 5 & 4 for year 1 & 2 respectively to arrive at the weighted average profit.
2) For high Growth business generally a multiple in the range of 3 to 5 is assigned. We have taken a conservative view and applied a multip

PE Multiple Method
Valuation at YR 1 (Financial Injection)
New Investment
Percentage share of the business
Post-money valuation of the business
Implied pre-money valuation
Valuation at Exit Point
Exit at end of year
Earnings (Profit) After Tax, taken from Financial Forecasts for YR:

Valuation at Exit Point

P / E Ratio

Investor Return on Investment

Assumes Low P/E Ratio

Value of investment

Investment
Year
Year
Year

High
Med
Low

3
3
3

$1,000,000
$3,174,009
$4,881,209
$6,321,592

Assumptions
1) Multiples are assigned as 24, 16 & 8 based on data of publicly listed iGaming companies in EU & GB.
2) Industry multiple in the range of 8 to 24. We have taken a conservative view and applied a multiple 8.

Total % ROI

317%
488%
632%

MID
YR2

YR1

YR3

HIGH
YR2

YR1

$7,121,434

$18,508,531

$29,632,409

$7,314,152

$25,929,329

$2,101,653

$6,627,416

$10,371,343

$2,183,069

$9,157,283

$5,019,781

$11,881,115

$19,261,066

$5,131,083

$16,772,046

$1,985,057

$5,424,000

$5,158,102

$2,049,854

$7,505,430

$3,034,724
43%

$6,457,115
35%

$14,102,964
48%

$3,081,229
42%

$9,266,616
36%

$0

$0

$0

$0

$0

$3,034,724

$6,457,115

$14,102,964

$3,081,229

$9,266,616

-$170,973

-$235,893

-$235,893

-$170,973

-$235,893

$2,863,751

$6,221,222

$13,867,070

$2,910,255

$9,030,723

$343,650

$746,547

$1,664,048

$349,231

$1,083,687

$2,520,101
35%

$5,474,675
30%

$12,203,022
41%

$2,561,025
35%

$7,947,036
31%

rating Profit Multiple Method

YR1
$3,034,724
5
$15,173,621

MID
YR2
$6,457,115
4
$25,828,460

YR3
$14,102,964
3
$42,308,891

$83,310,972
12
$6,942,581
6
$41,655,486

YR1
$3,081,229
5
$15,406,143

HIGH
YR2
$9,266,616
4
$37,066,465

$107,057,496
12
$8,921,458
6
$53,528,748

e view and applied a multiple 6.

Sales Multiple method

YR1

MID
YR2

YR3

YR1

HIGH
YR2

$7,121,434
5
$35,607,171

$18,508,531
4
$74,034,124

$29,632,409
3
$88,897,227

$198,538,522
12
$16,544,877
3
$49,634,630

$7,314,152
5
$36,570,758

$25,929,329
4
$103,717,317

$261,587,825
12
$21,798,985
3
$65,396,956

view and applied a multiple 3.

tiple Method
LOW

es Low P/E Ratio

CAGR (compounded
annual growth rate) of
initial investment
46.96%
69.63%
84.90%

LOW
MID
HIGH

MID

HIGH

$1,000,000
5.0%
$20,000,000
$19,000,000

$1,000,000
5.0%
$20,000,000
$19,000,000

$1,000,000
5.0%
$20,000,000
$19,000,000

$7,935,022

$12,203,022

$15,803,981

24
16
8

$190,440,529
$126,960,352
$63,480,176

$292,872,529
$195,248,352
$97,624,176

$379,295,545
$252,863,697
$126,431,848

HIGH
YR3
$40,433,250
$14,151,638
$26,281,613
$8,086,650
$18,194,963
45%
$0
$18,194,963
-$235,893
$17,959,069
$2,155,088
$15,803,981
39%

HIGH
YR3
$18,194,963
3
$54,584,888

HIGH
YR3

$40,433,250
3
$121,299,750

GB & EU iGAMING
TICKER
PE
TTR.L
8
888.L
20
GVC.L
1.69
LNG.L
54
MDC.L
1.25
PRTY.L
42.2
PTEC.L
17.09
SPO.L
4.49
WMH.L
4.82
BWIN.VI
8.81
GF8.F
11.87
SNA.MI
26.8
TIM.DE
7.84
AVG PE
16.07
LOW

8.03

AVG

16.07

HIGH

24.10

NO NEW INVESTMENT

LOW
YR2

YR1

YR3

NET REVENUES

$6,881,434

$10,361,926

$19,653,428

COST OF REVENUE

$1,942,047

$4,144,770

GROSS PROFIT

$4,939,387

$6,217,156

$6,878,700
35%
$12,774,728

OPERATING EXPENSES

$1,904,516

$3,626,674

$4,913,357

EARNINGS FROM OPERATIONS

Operating Margin %

$3,034,871
44%

$2,590,482
25%

$7,861,371
40%

$0

$0

$0

$3,034,871

$2,590,482

$7,861,371

INTEREST INCOME / (EXPENSE)

-$170,973

-$235,893

-$235,893.12

NET EARNINGS BEFORE TAXES

$2,863,898

$2,354,588

$7,625,478

$343,668

$282,551

$915,057

$2,520,230
37%

$2,072,038
20%

$6,710,421
34%

EXTRAORDINARY INCOME / (EXPENSE)

EARNINGS BEFORE INTEREST & TAXES

TAXES
NET EARNINGS
Net Profit Margin %

Operating Profit Multiple Method

Particulars
Op. Profit (1)
Weight Assigned (2)
Weighted Profit (1*2)
Total weighted Profit
Total weight
Weighted average profit
Multiple
Value of business

YR 1
$3,034,871
5
$15,174,356
$49,120,396
12
$4,093,366
6
$24,560,198

LOW
YR 2
$2,590,482
4
$10,361,926

YR3
$7,861,371
3
$23,584,114

Assumptions

1) On a conservative basis, weights are assigned as 5 & 4 for year 1 & 2 respectively to arrive at the weighted average profit.
2) For high Growth business generally a multiple in the range of 8 to 12 is assigned. We have taken a conservative view and applied a multi

Sales Multiple method

Particulars

YR 1

LOW
YR 2

YR3

$6,881,434
5
$34,407,169
$134,815,157
12
$11,234,596
3
$33,703,789

Revenue (1)
Weight Assigned (2)
Weighted Revenue (1*2)
Total weighted revenue
Total weight
Weighted average revenue
Multiple
Value of business

$10,361,926
4
$41,447,705

$19,653,428
3
$58,960,284

Assumptions

1) On a conservative basis, weights are assigned as 5 & 4 for year 1 & 2 respectively to arrive at the weighted average profit.
2) For high Growth business generally a multiple in the range of 3 to 5 is assigned. We have taken a conservative view and applied a multip

PE Multiple Method
Valuation at YR 1 (Financial Injection)
New Investment
Percentage share of the business
Post-money valuation of the business
Implied pre-money valuation
Valuation at Exit Point
Exit at end of year
Earnings (Profit) After Tax, taken from Financial Forecasts for YR:
Valuation at Exit Point

P / E Ratio

Investor Return on Investment

Assumes Low P/E Ratio

Value of investment

Investment
Year
Year
Year

High
Med
Low

3
3
3

$1,000,000
$2,684,168
$3,697,413
$4,824,915

Total % ROI

268%
370%
482%

Assumptions
1) Multiples are assigned as 24, 16 & 8 based on data of publicly listed iGaming companies in EU & GB.
2) Industry multiple in the range of 8 to 24. We have taken a conservative view and applied a multiple 8.

MID
YR2

YR1

YR3

HIGH
YR2

YR1

$6,999,070

$12,563,538

$24,976,527

$7,314,152

$16,662,977

$1,987,383

$5,025,415

$7,992,489

$2,109,021

$6,665,191

$5,011,687

$7,538,123

$16,984,038

$5,205,130

$9,997,786

$1,943,970

$4,397,238

$6,244,132

$2,049,854

$5,832,042

$3,067,717
44%

$3,140,884
25%

$10,739,907
43%

$3,155,276
43%

$4,165,744
25%

$0

$0

$0

$0

$0

$3,067,717

$3,140,884

$10,739,907

$3,155,276

$4,165,744

-$170,973

-$235,893

-$235,893.12

-$170,973

-$235,893

$2,896,743

$2,904,991

$10,504,013

$2,984,303

$3,929,851

$347,609

$348,599

$1,260,482

$358,116

$471,582

$2,549,134
36%

$2,556,392
20%

$9,243,532
37%

$2,626,186
36%

$3,458,269
21%

Operating Profit Multiple Method

YR1
$3,067,717
5
$15,338,584
$60,121,841
12
$5,010,153
6
$30,060,921

MID
YR2

YR3

YR1

$3,140,884
4
$12,563,538

$10,739,907
3
$32,219,720

$3,155,276
5
$15,776,380
$74,268,475
12
$6,189,040
6
$37,134,238

HIGH
YR2
$4,165,744
4
$16,662,977

he weighted average profit.

en a conservative view and applied a multiple 6.

Sales Multiple method

YR1

MID
YR2

YR3

YR1

HIGH
YR2

$6,999,070
5
$34,995,350
$160,179,083
12
$13,348,257
3
$40,044,771

$12,563,538
4
$50,254,152

$24,976,527
3
$74,929,581

$7,314,152
5
$36,570,758
$196,176,262
12
$16,348,022
3
$49,044,066

$16,662,977
4
$66,651,908

he weighted average profit.

n a conservative view and applied a multiple 3.

PE Multiple Method
LOW

mes Low P/E Ratio

CAGR (compounded
annual growth rate) of
initial investment

38.97%
54.63%
68.98%

LOW
MID
HIGH

MID

HIGH

$1,000,000
5.0%
$20,000,000
$19,000,000

$1,000,000
5.0%
$20,000,000
$19,000,000

$1,000,000
5.0%
$20,000,000
$19,000,000

$6,710,421

$9,243,532

$12,062,289

24
16
8

$161,050,097
$107,366,731
$53,683,366

$221,844,765
$147,896,510
$73,948,255

$289,494,929
$192,996,620
$96,498,310

HIGH
YR3
$30,984,532
$9,295,360
$21,689,172
$7,746,133
$13,943,039
45%
$0
$13,943,039
-$235,893.12
$13,707,146
$1,644,858
$12,062,289
39%

HIGH
YR3
$13,943,039
3
$41,829,118

HIGH
YR3

$30,984,532
3
$92,953,596

GB & EU iGAMING
TICKER
PE
TTR.L
8
888.L
20
GVC.L
1.69
LNG.L
54
MDC.L
1.25
PRTY.L
42.2
PTEC.L
17.09
SPO.L
4.49
WMH.L
4.82
BWIN.VI
8.81
GF8.F
11.87
SNA.MI
26.8
TIM.DE
7.84
AVG PE
16.07
LOW

8.03

AVG

16.07

HIGH

24.10