USE OF PROCEEDS
The following Use of Proceeds is based on estimates made by management. The Company planned the Use of Proceeds after deducting estimated offering expenses estimated to be $25,000. Management prepared the milestones based on three levels of offering raise success: 25% of the Maximum Offering proceeds raised ($125,000), 50% of the Maximum Offering proceeds raised ($250,000), 75% of the Maximum Offering proceeds raised ($375,000), and the Maximum Offering proceeds raised of $500,000 through the offering. The costs associated with operating as a public company are included in all our budgeted scenarios and management is responsible for the preparation of the required documents to keep the costs to a minimum.
Although we have no minimum offering, we have calculated used of proceeds such that if we raise 25% of the offering is budgeted to sustain operations for a twelve-month period. 25% of the Maximum Offering is sufficient to keep the Company current with its public listing status costs with prudently budgeted funds remaining which will be sufficient to complete the development of our marketing package. If the Company were to raise 50% of the Maximum Offering, then we would be able to expand our marketing outside the US. Raising the Maximum Offering will enable the Company to implement our full business. If we begin to generate profits, we plan to increase our marketing and sales activity accordingly.
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Table of Contents
Spirit intends to use the proceeds from this offering as follows:
Application of
25% of
Proceeds
50% of Maximum
75% of
Maximum
Maximum
Proceeds
$
% of Total
$
% of total
$
% of total
$
% of total
Total Offering Proceeds
125,000
100 %
250,000
100.00
375,000
100.00
500,000
100.00
Offering Expenses
Legal & Professional Fees
5,000
4.0 %
5,000
2.0 %
5,000
1.3 %
5,000
1.0 %
Accounting Fees
3,500
2.8 %
3,500
1.4 %
3,500
0.9 %
3,500
0.7 %
Admin Fees
1,500
1.2 %
1,500
0.6 %
1,500
0.4 %
1,500
0.3 %
Total Offering Expenses
10,000
8.0 %
10,000
4.0 %
10,000
2.7 %
10,000
2.0 %
0.0 %
0.0 %
0.0 %
Net Proceeds from Offering
115,000
92.0 %
240,000
96.0 %
365,000
97.3 %
490,000
98.0 %
Use of Net Proceeds
Research and Development
25,000
20.0 %
55,000
22.0 %
75,000
20.0 %
100,000
20.0 %
Legal and Professional Fees
10,000
8.0 %
20,000
8.0 %
30,000
8.0 %
45,000
9.0 %
Marketing and Sales
45,000
36.0 %
85,000
34.0 %
140,000
37.3 %
200,000
40.0 %
Working Capital
35,000
28.0 %
80,000
32.0 %
120,000
32.0 %
145,000
29.0 %
Total Use of Net Proceeds
115,000
92.0 %
240,000
96.0 %
365,000
97.3 %
490,000
98.0 %
Notes:
The foregoing represents our best estimate of the allocation of the proceeds of this offering based on planned use of funds for our operations and current objectives.
Under Net Proceeds, Legal and accounting are Legal and auditor/accounting fees not related to this offering. Assuming we raise the Maximum Offering, we believe there will be additional costs associated with implementing our business plan that will require greater attention from our professional advisors, including the possibility of filing a registration statement on Form 10 or Form S-1 which would greatly increase costs associated with keeping compliant with reporting requirements.
Under Net Proceeds, we have based our calculation and division of funds on the current needs of the Company. However, our market place is constantly changing. Management may, depending on circumstances, be required to divert funds from one heading to another as the business demands. For example, successful expanded marketing in the US may require us to use more resources in IT to keep up with demand. Likewise, if our marketing efforts are less fruitful than anticipated, we may divert funds to improving the underlying product.
We currently consider the foregoing project our priority and intend to use the proceeds from this offering for such projects.
Clarified as to term use and disclosure added that fees increase with the offering size as it is anticipated that a greater size of raise will increase the corporation’s activities which will result in a greater number of transactions thus resulting in the need for additional disclosure and accounting.
AI
