Dloc sdlom example report

Detailed Report Of
ANYCO, INC.
555 ANYSTREET DR
ANYTOWN, FLORIDA, 33555
Prepared by
7819 N. Dale Mabry Highway
Suite 200
Tampa, FL 33614
1-800-311-0703

VALUATOR’S LETTER
October 30, 2015
Joe Smith
5555 Anystreet Dr
Anytown, FL 33555
Dear Joe Smith,
I have performed a valuation engagement, which results in a conclusion of value that is expressed as
an opinion of value (single value vs. a range of values), as that term are defined by the Institute of
Business Appraisers (IBA) Professional Standards, of ANYCO, INC..
The opinion of value is the result of professional judgment, experience and opinion. This is acknowledged
by appraisal societies, the courts and government agencies such as the United States’ Internal Revenue
Service through its historical revenue rulings (RR), including- ARM 34, RR 59-60, 65-192, RR 65-193,
RR 68-609, RR 77-287, RR 80-213, RR 83-120, RR 93-12. See Appendix D for more details.
The interest being valued is five percent 5.0% interest of the Equity in, or ten (10) shares of, ANYCO,
INC., a New York Corporation (filing as an "S" Corporation), herein known as the Subject Company,
Company or ANYCO, at the valuation date:
December 31, 2014
This valuation was performed solely to assist in the matter of the settlement of a Gift Tax; the resulting
opinion of value should not be used for any other purpose or by any other party for any purpose.
Based on my analysis, as described in this valuation report, the opinion of value for the interest of
ANYCO, INC. as of December 31, 2014 was:
60,000 (rounded)
This conclusion is subject to the Statement of Assumptions and Limiting Condition found in Appendix C
and to the Valuation Analyst’s Representation found in Appendix A. I have no obligation to update this
report or my opinion of value for information that comes to my attention after the date of this report.
Any prior sales of the interest, Subsidiaries or Affiliates, discounts, restrictions or limitations,
hypothetical conditions, references to specialist used, disclosure of subsequent events, applications of
jurisdictional exception, or any other information the valuation analyst deemed useful to enable user(s)
of the report to appreciate the work performed shall be detailed in this report.
I have no present or contemplated financial interest in the Company. My fees for this conclusion of
value are in no way contingent upon the results of my findings.
Salvatore B. Urso
President
Ameri-Street Advisory, Inc.

TABLE OF CONTENTS
1 REPORT SUMMARY ...................................................................................7
2 INTRODUCTION........................................................................................8
2.1 Report Layout ..............................................................................................8
2.2 Description of the Assignment........................................................................8
2.3 Scope Limitation...........................................................................................8
2.3.1 Restrictions and Limitations Bestowed upon the Analyst.................................8
2.3.2 Restrictions and Limitations Bestowed upon the Shareholder(s) ......................8
2.3.3 Limiting Conditions....................................................................................8
2.4 Sources of Information..................................................................................8
2.4.1 Source of Information Disclaimer ................................................................8
2.4.2 Company Non-Financial Information............................................................9
2.4.3 Company Financial Information...................................................................9
2.4.4 References to Specialist used .....................................................................9
2.4.5 Information on the Economy ......................................................................9
2.4.6 Industry Information .................................................................................9
2.4.7 Information on Guideline Companies ...........................................................9
2.5 Premium for Voting Privileges ...................................................................... 10
2.6 Standard of Value....................................................................................... 10
2.6.1 DEFINITION OF FAIR MARKET VALUE ........................................................ 10
2.7 Premise of Value ........................................................................................ 10
2.8 Hypothetical Conditions and Key Assumptions................................................ 11
2.9 Significant Historical Events ......................................................................... 11
2.10 Subsequent Events ..................................................................................... 11
2.11 Environmental Issues.................................................................................. 11
2.12 Jurisdictional Expectations ........................................................................... 11
2.13 Prior Sale of Interest in ANYCO .................................................................... 12
2.14 Control and Marketability Characteristics ....................................................... 13
2.14.1 The Effect of Illiquidity............................................................................. 13
2.15 The Effect of Illiquidity Discounts on Levels of Value ....................................... 14
2.15.1 Enterprise-Level Discount for Lack of Marketability (EDLOM) ........................ 14
2.15.2 Discount for Lack of Control (DLOC) .......................................................... 14
2.15.3 Shareholder-Level Discounts for Lack of Marketability (SDLOM) .................... 15
2.15.4 Diagram of Illiquidity Discounts vs. Levels of Value ..................................... 15
2.16 Discounts Applied to the Subject .................................................................. 16
3 OVERVIEW OF THE COMPANY.................................................................16
3.1 Business Activity Overview and History ......................................................... 16

3.2 Corporate Structure.................................................................................... 17
3.3 Management & Employees........................................................................... 17
3.3.1 Shareholders/Managers ........................................................................... 17
3.3.2 Employees ............................................................................................. 17
3.4 Capital Structure ........................................................................................ 17
3.4.1 Total Invested Capital.............................................................................. 17
3.5 Non-operating and Investment Assets........................................................... 18
3.6 Ownership Interest ..................................................................................... 18
3.7 Location and Facilities ................................................................................. 18
3.8 Subsidiaries or Affiliates .............................................................................. 18
3.9 Economic Dependence ................................................................................ 18
3.10 Growth Limiters ......................................................................................... 18
3.11 Other Material Matters Influencing Value ....................................................... 18
3.12 Goodwill Allocation ..................................................................................... 18
4 FINANCIAL STATEMENTS ECONOMIC ADJUSTMENTS .............................19
4.1 Company Balance Sheets ............................................................................ 19
4.1.1 Historical Balance Sheets ......................................................................... 19
4.1.2 Common-Sized Historical Balance Sheets ................................................... 20
4.1.3 Liquidation Value .................................................................................... 21
4.1.4 Adjusted Book Value (Going Concern) ....................................................... 21
4.1.5 Adjustments to the Balance Sheets ........................................................... 21
4.1.6 Balance Sheets Detailed Adjustments ........................................................ 22
4.1.7 Adjusted Historical Balance Sheets............................................................ 23
4.1.8 Common-Sized Adjusted Historical Balance Sheets...................................... 24
4.2 Company Statements of Operations.............................................................. 25
4.2.1 Historical Statements of Operations........................................................... 25
4.2.2 Common-Sized Historical Statements of Operations .................................... 26
4.2.3 Adjustments to the Statement of Operations .............................................. 26
4.2.4 Statements of Operations Detailed Adjustments.......................................... 27
4.2.5 Adjusted Historical Statements of Operations ............................................. 28
4.2.6 Common-Sized Adjusted Historical Statements of Operations ....................... 29
4.2.7 Net Income to Adjusted Net Income Reconciliation...................................... 30
5 COMPANY FINANCIAL POSITION VS. PEERS ..........................................31
5.1 Analytical Process....................................................................................... 31
5.2 Industry Group Analysis .............................................................................. 31
6 COMPANY FINANCIAL TRENDS ANALYSIS ..............................................31
6.1 Overview................................................................................................... 31

6.2 Financial Statements Parameters Considered ................................................. 31
6.3 Balance Sheet Trends ................................................................................. 32
6.3.1 Liquidity Ratio Trends .............................................................................. 32
6.3.2 Coverage Ratio Trends............................................................................. 33
6.4 Statement of Operations Trends................................................................... 34
6.4.1 Multi-Growth Adjusted Statements of Operations ........................................ 34
6.5 Company Historic Summary Cash Flow Statements Trends .............................. 37
7 VALUATION METHODOLOGY AND APPROACHES.....................................38
8 METHODOLOGIES CONSIDERED BUT REJECTED .....................................40
8.1 Dividend Paying Capacity ............................................................................ 40
8.2 Liquidation Value Method............................................................................. 40
8.3 Company Transactions Method..................................................................... 40
8.4 Capitalization of Cash Flow Method ............................................................... 41
8.4.1 Estimate of Ongoing Benefit Stream .......................................................... 41
8.5 Discounted Multi-Growth Method .................................................................. 41
8.6 Discounted Future Cash Flow Method ............................................................ 41
8.7 Industry Data Method – Mergerstat .............................................................. 41
9 METHODOLOGY CONSIDERED AND USED ...............................................42
9.1 Adjusted Book Value Method – Going Concern ............................................... 42
9.1.1 Indicated Value Calculation ...................................................................... 42
9.1.2 Application of Built In Gains Adjustment .................................................... 42
9.1.3 Application of Shareholder Discounts ......................................................... 42
10 METHODOLOGIES USED AS SANITY CHECKS ..........................................43
10.1 Market Data Method – Mid-Market Comps...................................................... 43
10.1.1 Mid-Market Guideline Company Regression Analysis .................................... 44
10.1.2 Estimate of Net Earnings.......................................................................... 44
10.1.3 Estimate of Revenue................................................................................ 44
10.1.4 Estimate of Assets................................................................................... 45
10.1.5 Estimate of Book Value ............................................................................ 45
10.1.6 Indicated Value Calculation ...................................................................... 46
11 CONCLUSION OF VALUE .........................................................................46
11.1 Summary of Methods Considered, Used & Rejected ........................................ 46
11.2 Value of Interest Appraised.......................................................................... 48
11.2.1 Application of Shareholder Discounts ......................................................... 48
11.2.2 Final Calculation of Interest Appraised ....................................................... 48
11.3 Opinion of Fair Market Value ........................................................................ 49
12 EXHIBIT 1: BALANCE SHEETS ADJUSTMENTS DETAILS ..........................50

13 EXHIBIT 2: INCOME STATEMENTS ADJUSTMENTS DETAILS....................55
14 EXHIBIT 3: SDLOM & DLOC CALCULATIONS ...........................................60
14.1 Establishing a DLOM Base using Published Research and Studies...................... 60
14.1.1 Implied Base Marketability Discount: Published Research ............................. 60
14.1.2 Pluris DLOM Studies ................................................................................ 60
14.1.3 Summary of Studies used for the SDLOM Bases.......................................... 63
14.1.4 PLURIS DATA ......................................................................................... 64
14.2 Calculation of the Discount for Lack of Control (DLOC) .................................... 65
14.3 DLOC Sanity Check: Mergerstat® /BVR Control Premium Study ....................... 67
14.4 Adjustment of the SDLOM Base.................................................................... 68
14.4.1 Quantifying Measurement of the SDLOM Factors ......................................... 68
15 EXHIBIT 4- GUIDELINE TRANSACTION COMPANY DATA ........................70
15.1 Done Deals Data (Private) ........................................................................... 70
16 APPENDIX A: VALUATION ANALYST’S REPRESENTATION.......................71
17 APPENDIX B: APPRAISER’S CURRICULUM VITAE ...................................72
18 APPENDIX C: LIMITING CONDITIONS ....................................................76
19 APPENDIX D: IRS REVENUE RULINGS ....................................................80
20 APPENDIX E: MARKETABILITY DISCOUNT..............................................87
21 APPENDIX F: GLOSSARY.........................................................................99
22 APPENDIX G: CLIENT PROVIDED FINANCIAL DOCUMENTS...................108
23 APPENDIX H: OUTSIDE SPECIALIST USED ...........................................109
23.1 Property Appraisal from Jones & Jones Appraisers, Inc.................................. 109

1 REPORT SUMMARY
Type of Report Detailed Report
Name of the Subject ANYCO, INC.
Report Standards Accordance with The Institute of Business Appraisers Professional Standards
Governing Standard IRS Revenue Ruling 59-60
Type of Entity/Filing Status Corporationwhich files as an "S" Corporation
Doing Business As (d/b/a) N/A
Description of Business Other Activities Related to Real Estate
Industry Code (NAICS) 531390
Prepared for Joe Smith
Purpose the settlement of a Gift Tax
Gift Recipient The Albert Smith Family Trust
Restrictions and Limitations None
Significant Historical Events None
Standard of Value Fair Market Value
Premise of Value value as a Going Concern
Appraiser’s Name Salvatore B. Urso
Appraiser’s Firm Ameri-Street Advisory, Inc.
Valuation Date December 31, 2014
Report Delivery Date October 30, 2015
Business Interest Valued 5.0% of the Common Stock
Level of Value As Privately-Held, Non-Marketable, Non-Controlling
Conclusion of Value $60,000

INTRODUCTION Page 8
2 INTRODUCTION
2.1 Report Layout
To improve the reader’s experience and for simplification purposes, some supporting charts,
data, and calculations are relegated to the exhibit and appendix sections at the end of this
report. In certain sections I refer to specific exhibits that expound on a calculation or subject
pertaining to the topic of that particular section. Likewise, appendices are referenced to support
specific statements under discussion or as reference material.
Heading numbers are utilized to organize each section. For instance, section 2.3.1 is subsection
of 2.3 (Scope Limitation), which is a subsection 2.0 (Introduction).
What’s more, note that the bottom footer of each page has section information that allows the
reader to establish a point of reference regardless of which page is displayed.
2.2 Description of the Assignment
I have performed a valuation engagement, as that term are defined by the Institute of Business
Appraisers (IBA) Professional Standards, of ANYCO, INC. This engagement results in a Detailed
Report that will provide sufficient information to permit the intended users to understand the
data, reasoning, and analyses underlying the valuation analyst’s conclusion of value.
I was retained by Joe Smith to provide an opinion of the Fair Market Value of five percent (5.0%)
interest in ANYCO, INC., a New York Corporation located at 555 ANYSTREET DR ANYTOWN,
FLORIDA, 33555 Furthermore, the interest is being valued as of December 31, 2014.
The report will be used by Joe Smith for the sole purpose of the settlement of a Gift Tax. The
distribution of this report is restricted to Joe Smith, legal and tax professionals advising Joe
Smith and any regulatory agencies whereby reporting is required. Any other use of this report
is unauthorized and the information included in the report should not be relied upon.
2.3 Scope Limitation
2.3.1 Restrictions and Limitations Bestowed upon the Analyst
The scope of this valuation engagement report was not limited.
2.3.2 Restrictions and Limitations Bestowed upon the Shareholder(s)
As of the valuation date, there were no operating agreements or shareholder restrictions in
place.
2.3.3 Limiting Conditions
This valuation report has been prepared in accordance with The Institute of Business Appraisers
Professional Standards. In accordance with these standards, Assumptions and Limiting
Conditions are provided in the sections called APPENDIX C: LIMITING CONDITIONS.
2.4 Sources of Information
2.4.1 Source of Information Disclaimer
Information in this report was obtained from management, public records and other sources
considered to be informed and reliable. Therefore, I have relied upon the referenced information
without independent verification.

INTRODUCTION Page 9
2.4.2 Company Non-Financial Information
The source of the non-financial information was gathered
1. Telephone interview held on 10/08/2015.
2. Via email.
3. The analyst did not tour the facility due to timing constraints and schedule conflicts.
4. Company attendees of initial interview held on 10/08/2015:
a. Joe Smith, majority shareholder, Chief Executive Officer.
2.4.3 Company Financial Information
2.4.3.1 Company Fiscal Periods Analyzed
The financial review of the Company includes the review and analysis of the Company’s tax
returns balance sheets, and statements of operations for the fiscal years ending December 31,
2010 through December 31, 2014, the valuation date. Historical Gift Tax Returns from 2006
through 2013 were also reviewed.
2.4.3.2 Company Financial Statements
Annual compiled financial statements for ANYCO, INC. prepared by management, for the periods
ending December 31, 2014.
2.4.3.3 Company Tax Returns
U.S. Corporation income tax returns for ANYCO, INC. were prepared by Satty, Levine & Ciacco,
CPAs, P.C. firm for the years ended December 31, 2010-2014. Gift tax returns were prepared
by DePinto Nornes & Associates, LLP for years ending 2006 though 2013.
2.4.3.4 Company Forecasts and Projections
None provided.
2.4.4 References to Specialist used
See attached land appraisal in Appendix H dated September 11, 2015 performed by Jones &
Jones Appraiser, Inc. NOTE: the appraisal is dated after the valuation date, i.e., September 11,
2015. Management received confirmation from the appraisal company stating that the value as
of December 31, 2014, the valuation date, would not change from the value presented in the
appraisal dated September 11, 2015. I included the email from the appraiser in Appendix H.
2.4.5 Information on the Economy
Information on the national economy in included on pages 20 and 30 of the property appraisal.
2.4.6 Industry Information
Industry information was not applicable in this situation since the tenant could be from practically
any industry.
2.4.7 Information on Guideline Companies
1. Done Deals- Mid-Market, Private and Public Company Transactions
2. Pluris DLOM DatabaseTM- Restricted Stock Private Placement Data for Illiquidity
Discounts Baseline

INTRODUCTION Page 10
3. Pubic Market Empirical Data Mergerstat® /BVR Control Premium Study Definitions
See definitions found in APPENDIX F: GLOSSARY.
2.5 Premium for Voting Privileges
This discount was not applied since I am valuing 5% non-controlling interest.
2.6 Standard of Value
2.6.1 DEFINITION OF FAIR MARKET VALUE
Fair market value is the logical framework through which an effort is made to determine the
price at which the Company’s common shares would trade under the presumption that a market
exists.
In the United States of America, the most widely recognized and accepted standard of value is
termed fair market value (FMV). It is the standard used in all Federal tax matters, whether it is
gift taxes, estate taxes, income taxes or inheritance taxes. The IRS has defined FMV in Revenue
Ruling 59–60 (section 2.02) as follows:
“The price at which the property would change hands between a willing buyer and a willing
seller, when the former is not under any compulsion to buy and the latter is not under any
compulsion to sell, both parties having reasonable knowledge of relevant facts.”
It is important to remember the “willing buyer and willing seller” mentioned above are
considered hypothetical as opposed to specific. Thus a representative price would not be
considered a FMV if it were affected by a buyer’s or seller’s unique motivations. This would be
an example of investment value, defined by real estate terminology as “value to a particular
investor based on individual investment requirements.”
A sound valuation will be based upon the relevant facts, but the elements of common sense,
informed judgment and reasonableness must enter the process of weighing those facts and
determining their aggregate significance.
My valuation is in accordance with the above statements.
2.7 Premise of Value
This report is prepared using the premise that the subject company is value as a Going Concern.
This means that it is presumed that in the future the assemblage of assets, resources and
income producing items will continue in use to produce income and cash flow. The subject
company is a going concern business enterprise.

2.8 Hypothetical Conditions and Key Assumptions
In preparing this opinion of value, the only hypothetical condition was that according to the land
appraiser’s statement (see Appendix H) the value of the land and building as of September 11,
2015 used in its report has not material changed since the valuation date December 31, 2014.
2.9 Significant Historical Events
I am not aware of any significant historical events that would have a material impact on the
valuation of the Subject.
2.10 Subsequent Events
In preparing this opinion of value, certain events could have occurred after the valuation date
that were not known or knowable at the valuation date. If there were such events, these events
were not considered in preparing the opinion of value. There were no such subsequent events
known or knowable as of the valuation date.
2.11 Environmental Issues
A determination of any liabilities of the business related to environmental issues, other than
those reflected in the financial statements, is outside the scope of this engagement. Inquiries
were not made with management regarding the Company’s compliance with various
environmental and hazardous waste laws.
2.12 Jurisdictional Expectations
None to my knowledge as of the report date in accordance to New York or Florida law

2.13 Prior Sale of Interest in ANYCO
As of the valuation date, the following 9 transactions have taken place:
Details of the transactions
1. Transaction #1: 12/25/03; from Albert Smith, Sr. to Joe Smith
2. Transaction #2: 12/31/06; from Joe Smith to The Albert Smith Family Trust; 12 shares for $47,750
6. Transaction #6: 12/31/10; from Joe Smith to The Albert Smith Family Trust; 5.7 shares for $51,300
Data from the 2003 transaction was not made available.
ANYCO Transactions and Indicated Value
Transaction Number # 1 # 2 # 3 # 4 # 5 # 6 # 7 # 8 # 9
Date of Transaction 12/25/2003 12/31/2006 1/3/2007 1/3/2008 1/2/2009 12/31/2010 1/3/2011 12/31/2012 1/2/2013
Transaction Price Per Share 0.00 3,979.17 4,041.67 4,166.67 4,611.64 9,000.00 9,000.00 4,240.00 8,220.00
Total Shares Outstanding 200 200 200 200 200 200 200 200 200
Implied Value 795,833 808,333 833,333 922,327 1,800,000 1,800,000 848,000 1,644,000
Weight Applied 0 1 1 1 1 1 1 1 1
Weighted Average 1,181,478
Adjustment
Subtotal 1,181,478
Indicated Equity Value 1,181,478
SELECTED EQUITY VALUE 1,181,000

INTRODUCTION: Control and Marketability Characteristics Page 13
2.14 Control and Marketability Characteristics
2.14.1 The Effect of Illiquidity
The theory behind fair market value is to take into consideration the lack of liquidity which
translates to the lack of marketability. Liquidity is also referred to as that asset which could be
turned into cash within three (3) business days. In Valuing a Business, The Analysis and
Appraisal of Closely Held Companies, Third Edition, by Shannon P. Pratt, Robert F. Reilly and
Robert P. Schweihs, the authors state on page 333 that, “The market for securities in the United
States is the most liquid market for any kind of property anywhere in the world. This is one of
the major reasons companies are able to raise investment capital from both institutional and
individual investors: the ability to liquidate the investment immediately, at little cost, and with
virtually certainty as to realization of the widely publicized market price. Empirical evidence
demonstrates that investors are willing to pay a high premium for this level of liquidity, or,
conversely, extract a high discount relative to actively traded securities for stocks or other
investment interests that lack this high degree of liquidity.”
A major factor in considering a discount for a lack of marketability is whether a company is
publicly traded. In fact, a key difference between the Subject and its publicly traded
counterparts is the lack of marketability. All other things being equal, an investment is worth
more if it is marketable than if it is not, since investors prefer liquidity over illiquidity (lack of
liquidity). Interests in closely held businesses are illiquid relative to most other investments.
The market places a far greater value differential on the liquidity factor alone in its pricing of
common stocks than in its pricing of any other class of investment assets, for sound reasons.
For common stocks as a group, investors expect to realize the majority of their return in the
form of capital gains at the time of the stock's sale and only a small part of their total return in
the form of dividends while they hold the stock. This situation is taken to the extreme, of course,
in the case of common stock that has not paid dividends in the past. Thus, the ability to sell a
stock is crucial to the realization of the investor's expected return for buying and holding it.
Another reason that liquidity takes on a high degree of importance for common stocks is that
the stocks' prices tend to be much more volatile than prices of real estate or other securities
such as preferred stocks or bonds. Consequently, the investor's choice as to the timing of the
sale of the stock is much more important in determining the amount of return to be earned on
the investment than is the case with other security investments. Numerous studies concerning
the size of marketability discounts have been published. See APPENDIX E: MARKETABILITY
DISCOUNT.
“Privately-held” means the company is not a public company with access to a public market
stock exchange. What’s more, “Privately-held, Marketable, Control” implies there is a market
for 100% control interested in a private company, albeit not a stock exchange where the stock
could be sold quickly; as such a significant difference is the time it takes to sell 100% controlling
interest in a private company. Unlike stock in a public company which could be sold typically
within three days, interest in a private company takes much longer to sell. Therefore, an
enterprise-level discount for lack for marketability, which I shall refer to as the EDLOM in this
report, is applied to account for the significant difference in time that it takes to sell 100%
controlling interest in a private company vs. a minority interest in a publicly-traded company.
“Enterprise-Level” means the discount is applicable to the entire enterprise, regardless of
shareholder characteristics.
Furthermore, to my knowledge, there is no such market available in which to sell less than
100% controlling interest in a privately-held company. Therefore, an additional discount for
illiquidity is necessary to account for the lack of market in which to sell a non-controlling interest
in a privately-held company. I shall refer to this illiquidity discount as the share-holder discount
for lack of marketability, or SDLOM. Unlike the EDLOM, this discount shall be influenced by
specific shareholder characteristics. See section 14.2 for more details.

INTRODUCTION: The Effect of Illiquidity Discounts on Levels of Value Page 14
There are some cases in which both EDLOM and SDLOM are used. For instance, both would be
considered when utilizing the Income Approach to derive value of non-controlling interest in a
privately-held company.
2.15 The Effect of Illiquidity Discounts on Levels of Value
2.15.1 Enterprise-Level Discount for Lack of Marketability (EDLOM)
Some categories of marketability discounts apply to the entire entity or to all the shareholders,
regardless of the shareholder characteristics. In the context of this report, I shall refer to these
discounts as Enterprise-Level Discounts for Marketability, or EDLOM. These discounts are
generally applied to account for the illiquidity of going from a publicly-traded, marketable
interest level-of-value to a privately-held, marketable, controlling interest level-of-value. In
other words, this is the discount that accounts for the fact that the current shareholders cannot
liquidate this private company in three days or so.
If applicable, for instance in the Income Approaches, the first discount applied is the EDLOM.
This discount is only applied when the starting point level of value is “As Freely Traded Public
Marketable.” This is the case when public guideline companies are used to generate the Subject’s
discount and capitalization rates. The EDLOM is the discount that accounts for the illiquidity of
the Privately-Held Subject vis-à-vis a company traded in a public stock exchange. In other
words, it accounts for the fact that the guideline companies have access to a public market
where the Subject does not. Therefore, the EDLOM relegates the level of value from “As Freely
Traded Public Marketable” to the “As Privately-Held Marketable Control” level of value. Note,
however, that if the starting point level of value were “As Privately-Held Marketable Control,”
then the EDLOM would not be necessary. In fact, as an example, this is the case when the
Market Approach’s Guideline Transaction Method is utilized since the guideline companies are
actual privately-held company transactions from the private market place. It is generally
acceptable to assume the transactions were for controlling interest.
Finally, note that if an EDLOM is used, it is applied prior to any shareholder discounts for lack of
control or shareholder lack of marketability discounts, which are discussed below. See Figure 1
below. All discounts are applied multiplicatively, not additively.
For this report, the EDLOM was not used since the Income Approach was rejected.
2.15.2 Discount for Lack of Control (DLOC)
A control owner enjoys valuable prerogatives of ownership that a non-control owner does not,
including the ability to appoint management, determine management compensation &
prerequisites, set policy and change the course of the business, acquire and liquidate assets,
award contracts, make acquisitions, liquidate, dissolve, sell or recapitalize the company, etc. As
such, the non-controlling interest in a business is subject to what is known as a Discount for
Lack of Control, DLOC. Note that “Minority Interest” is a subset of non-control.
Furthermore, if I were performing a valuation for a non-control interest in a privately-held
company where the standard of value were Fair Market Value and the starting level of value was
“As Privately-Held Marketable Control,” then I should consider applying a discount for lack of
control (DLOC) and an associated shareholder discount for lack of marketability (SDLOM), which
shall be described in the following section. Note, however, that if Fair Value is the standard of
value, it is highly likely that neither a DLOC nor an SDLOM would be used due to “Dissenter’s
Rights” statues in most states; in such case the value of the non-controlling interest would be a
pro-rata value of the 100% controlling interest value.
Since this valuation is for 5.0% non-controlling interest, and the standard of value is Fair Market
Value, DLOC should be considered in this case.
For a detailed explanation and calculation of the DLOC, see section Calculation of the Discount
for Lack of Control (DLOC) on page 65.

INTRODUCTION: The Effect of Illiquidity Discounts on Levels of Value Page 15
2.15.3 Shareholder-Level Discounts for Lack of Marketability (SDLOM)
The non-controlling interest in a privately-held entity is not as marketable as a controlling
interest in the same entity. In fact, there is no known market, public or private, for non-
controlling interest in privately-held companies. As such, an additional discount for lack of
marketability for non-controlling interest should be considered. In the contexts of this report I
shall refer to this discount as a Shareholder-Level Discount of Lack of Marketability or SDLOM.
Some categories of marketability discounts reflect the characteristics of ownership and apply
only to specific blocks of stock or interest in the Company. These discounts are generally applied
to a non-control level of value after any discounts for lack of control.
Since this valuation is for 5.0% non-controlling interest, SDLOM should be considered in this
case.
For a detailed explanation and calculation of the SDLOM, see sections 14.1 on page 60 and 14.2
on page 65.
2.15.4 Diagram of Illiquidity Discounts vs. Levels of Value
The following illustration provides a summary of where the various Illiquidity discounts apply to
the various levels of value. Note that discounts are applied in a multiplicative manner, not
additive. Also, note that in this calculation the EDLOM is not used at all. Our starting point is “As
Privately-Held Marketable Control.”
x (1- EDLOM)
Equity Value Indication
(As Freely Traded, Public, Marketable)
(As Privately-Held, Marketable, Control)
x (1-DLOC) x (1-SDLOM)
(As Privately-Held, Non-Marketable, Non-Control)
Figure 1

OVERVIEW OF THE COMPANY: Discounts Applied to the Subject Page 16
2.16 Discounts Applied to the Subject
The Subject’s business interest ownership and marketability characteristics are 5.0% As
Privately-Held, Non-Marketable, Non-Controlling. This means that the interest being valued is
for five percent (5.0%), which is non-controlling, and is not marketable since there is no such
market, neither public nor private, for non-controlling interest in a privately-held going concern.
This is the reason both DLOC and SDLOM are considered, i.e., for lack of control and for lack of
marketability for a non-controlling interest.
Relative to ANYCO, INC.:
 Enterprise-Level Discount for Lack of Marketability (EDLOM) was not applied. This
discount was not applied since the guideline companies used in my report had privately-
held, marketable ownership characteristics.
 Discount for Lack of Control (DLOC) was applied since the interest being valued is non-
controlling interest.
For a detailed explanation and calculation of the DLOC, see section Calculation of the
Discount for Lack of Control (DLOC) on page 65.
 Shareholder-Level Discount for Lack of Marketability (SDLOM) was applied since I am
valuing 5.0% non-controlling interest. Note that a holder of non-controlling common
stock could conceivably own the shares for his or her entire life and never realize a gain on
the sale of those shares of stock of in the Company. Therefore, the likelihood that an
independent outside third party would be interested in purchasing any of the minority
shares of stock that pays no dividends is extremely remote.
For a detailed explanation and calculation of the SDLOM, see sections 14.1 on page 60 and
14.2 on page 65.
3 OVERVIEW OF THE COMPANY
3.1 Business Activity Overview and History
ANYCO, INC. operates as a real estate holding company under the NAICS code of 531390, Other
Activities Related to Real Estate.
As of the valuation date, aside from working capital, there was only one main asset, namely-
Lease Option to purchase the land and building (“Property”) located at 1234 Dunwood Avenue,
Hillsborough County, Florida.
On July 15, 1992, ANYCO entered into a lease agreement with the current Property owner, ABC
Development. The current expiration date on the lease is October 31, 2024.
ANYCO has an option to purchase the Property at any time. The purchase price as of the
valuation date was $98,246. Since the optional purchase price decreases each year by
$9,824.61, the buyout price when the lease expires shall be $1.
ANYCO subleases the property to a single tenant, NY Tent LLC as per a Sub Lease agreement
signed on August 11, 2014. See page 13 of Appraisal in Appendix H.

OVERVIEW OF THE COMPANY: Corporate Structure Page 17
3.2 Corporate Structure
ANYCO, INC. was formed on October 17, 1999 in the state of New York. It does not operate as
the dba. The Company prepares its financial statements on the accrual basis of accounting,
which recognizes income as it is earned rather than collected and expenses are recognized as
they are incurred rather than when paid.
The Company has elected to be taxed as an "S" Corporation under the Internal Revenue Code.
As an “S” Corporation, the Company does not pay federal corporate income taxes on its taxable
income. The taxable income of the Company is proportionately passed to the shareholders of
the Company. Similar provisions apply for state income tax purposes.
3.3 Management & Employees
3.3.1 Shareholders/Managers
The Company’s management team is comprised of the following individuals:
1. Joe Smith is a 65.85% shareholder, President and CEO
2. The David Smith Family Trust is a 34.15% shareholder
3. Albert Smith is a 0.00% shareholder, Vice President
3.3.2 Employees
The Company has no other employees.
3.4 Capital Structure
3.4.1 Total Invested Capital
The Company’s adjusted book value of current assets is $76,547, which are mainly comprised
of $45,700 in cash and $31,000 in other current assets.
The Company’s operating tangible property and equipment is mainly comprised of leasehold
improvements to the building for which it has the option to purchase. The adjusted book value
of the tangible property was $137,053. According to management, all equipment is in Fair
condition and well maintained.
3.4.1.1 Debt Capital
The Company’s $213,943 adjusted current liabilities are mainly comprised of $144,000
estimated property taxes if lease option is exercised and $59,990 security deposits from its sub-
tenant, NY Tent LLC. Family short-term notes were recast to equity since none appeared to be
bona fide loans.
Building Lease Payable of $95,790 to the current building owner makes up the majority of the
long-term liabilities, which are $97,258.
3.4.1.2 Equity Capital
The common stock makes up $200, additional paid in capital is $384,851, while Retained
Earnings makes up the balance of $3,033,578.

OVERVIEW OF THE COMPANY: Non-operating and Investment Assets Page 18
3.5 Non-operating and Investment Assets
Excess or Non-operating assets represent the value of resources the company has control of but
are not required to operate the business. Examples are excess cash on hand, real estate or
other securities. In my judgment, there are no excess and non-operating assets that need to be
added back.
3.6 Ownership Interest
3.7 Location and Facilities
The Company’s headquarters is located at 555 ANYSTREET DR, ANYTOWN, FLORIDA, 33555.
The building and land (“Property”) are located 1234 Dunwood Avenue, Hillsborough County,
Florida
3.8 Subsidiaries or Affiliates
None.
3.9 Economic Dependence
As of the valuation date, there was an economic dependence on one (1) sub-tenant. In fact, the
Company had to settle for an under-market lease in order to curtail its losses.
3.10 Growth Limiters
Since the Company’s only asset is a single tenant building, the Company’s growth is limited.
3.11 Other Material Matters Influencing Value
None to my knowledge as of the valuation date.
3.12 Goodwill Allocation
In some cases, depending on the purpose and premise of the valuation, as well as local state
laws, it becomes necessary to bifurcate the Goodwill into Personal Goodwill and Enterprise
Goodwill. I refer to the separation and exclusion of the Personal (aka Professional) Goodwill as
the “PGW carve-out.” In this case, the PGW was not carved out since the purpose of the valuation
did not dictate I do so.
Common Common
Shares Percentage
Name Owned Owned
Joe Smith 131.70 65.85%
The David Smith Family Trust 68.30 34.15%
Albert Smith 0.00 0.00%
Totals 200 100.00%

FINANCIAL STATEMENTS ECONOMIC ADJUSTMENTS: Company Balance Sheets Page 19
4 FINANCIAL STATEMENTS ECONOMIC ADJUSTMENTS
4.1 Company Balance Sheets
4.1.1 Historical Balance Sheets
Year
Ended
Year
Ended
Year
Ended
Year
Ended
Year
Ended
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Assets:
Current Assets
Cash 114,711 42,072 22,604 11,734 45,700
Accounts Receivable
Inventory
Raw Material
Work in Progress
Finished Goods
Total Inventory 0 0 0 0 0
Other Current Assets
Loans & Exchanges 20,000
NY Job Dev. Authority Security Deposits 30,006 30,006 30,006 30,006 30,846
Total Other Current Assets 50,006 30,006 30,006 30,006 30,846
Total Current Assets 164,718 72,078 52,611 41,741 76,547
Fixed Assets - Net
Fixed Assets - Cost
HVAC 15,018 15,018 14,017
Building 78,597
Land 19,649
Leasehold Improvements 168,060 168,060 168,060 168,060 157,374
Total Fixed Assets - Cost 168,060 168,060 183,078 183,078 269,637
Accumulated Depreciation
HVAC -1,503 -1,503
Building -420
Vehicles
Leasehold Improvements -98,605 -109,290 -120,476 -130,661 -130,661
Total Accumulated Depreciation -98,605 -109,290 -120,476 -132,164 -132,584
Total Fixed Assets - Net 69,455 58,770 62,602 50,914 137,053
Intangible Assets - Net
Lease Option Value 0
Lease Buyout Cost 0
Total Intangible Assets - Net 0 0 0 0 0
Other Non-Current Assets
Loan Receivable 20,000 9,000 12,000
Officer Loan 2,475 2,475 2,475 2,475 2,475
Total Other Non-Current Assets 22,475 2,475 2,475 11,475 14,475
Total Assets 256,648 133,323 117,688 104,130 228,075
Liabilities and Equity:
Liabilities
Current Liabilities
Property Tax Payable
Short Term Loan Payable- Jesus Delgado 12,000 72,000 72,000 100,000
Short Term Loan Payable- Barbara Norberto 200,000 200,000 200,000 200,000
Short Term Loan Payable- E. Romy Norberto 5,000 43,000 43,000 103,000
FLASN LLC Loan 4,000 4,000 4,000
Short Term Lease loan 3,466 3,792 4,148
Accrued Expenses 1,575 1,400 1,425 1,090 1,805
Security Deposits- Sub-Tenant Jasco Indust. 62,389 62,389 59,990
Total Current Liabilities 1,575 218,400 386,280 386,271 472,943

FINANCIAL STATEMENTS ECONOMIC ADJUSTMENTS: Company Balance Sheets Page 20
4.1.2 Common-Sized Historical Balance Sheets
Year
Ended
Year
Ended
Year
Ended
Year
Ended
Year
Ended
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Assets:
Current Assets
Cash 44.70% 31.56% 19.21% 11.27% 20.04%
Accounts Receivable
Inventory
Raw Material
Work in Progress
Finished Goods
Total Inventory 0.00% 0.00% 0.00% 0.00% 0.00%
Loans & Exchanges 7.79%
NY Job Dev. Authority Security Deposits 11.69% 22.51% 25.50% 28.82% 13.52%
Total Other Current Assets 19.48% 22.51% 25.50% 28.82% 13.52%
Total Current Assets 64.18% 54.06% 44.70% 40.09% 33.56%
Fixed Assets - Net
Fixed Assets - Cost
HVAC 12.76% 14.42% 6.15%
Building 34.46%
Land 8.62%
Leasehold Improvements 65.48% 126.05% 142.80% 161.39% 69.00%
Total Fixed Assets - Cost 65.48% 126.05% 155.56% 175.82% 118.22%
HVAC -1.44% -0.66%
Building -0.18%
Vehicles
Leasehold Improvements -38.42% -81.97% -102.37% -125.48% -57.29%
Total Accumulated Depreciation -38.42% -81.97% -102.37% -126.92% -58.13%
Total Fixed Assets - Net 27.06% 44.08% 53.19% 48.90% 60.09%
Lease Option Value 0.00%
Lease Buyout Cost 0.00%
Total Intangible Assets - Net 0.00% 0.00% 0.00% 0.00% 0.00%
Loan Receivable 7.79% 8.64% 5.26%
Officer Loan 0.96% 1.86% 2.10% 2.38% 1.09%
Total Other Non-Current Assets 8.76% 1.86% 2.10% 11.02% 6.35%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00%
Liabilities
Current Liabilities
Property Tax Payable
Short Term Loan Payable- Jesus Delgado 9.00% 61.18% 69.14% 43.85%
Short Term Loan Payable- Barbara Norberto 150.01% 169.94% 192.07% 87.69%
Short Term Loan Payable- E. Romy Norberto 3.75% 36.54% 41.29% 45.16%
FLASN LLC Loan 3.40% 3.84% 1.75%
Short Term Lease loan 2.95% 3.64% 1.82%
Accrued Expenses 0.61% 1.05% 1.21% 1.05% 0.79%
Security Deposits- Sub-Tenant Jasco Indust. 53.01% 59.91% 26.30%
Total Current Liabilities 0.61% 163.81% 328.22% 370.95% 207.36%

FINANCIAL STATEMENTS ECONOMIC ADJUSTMENTS Page 21
4.1.3 Liquidation Value
The Company’s reported liquidation value at the date of the valuation was $2,440,000. Listed
below, I have identified adjustments that are required to restate shareholders’ equity and reflect
the liquidation asset value of the Company.
The assumption was that all fixed and intangible assets are marked down to 25% of adjusted
book value.
4.1.4 Adjusted Book Value (Going Concern)
The Company’s reported book value at the date of valuation was $-342,000. Listed below, in
“Adjustments to the Balance Sheet” section, I have identified adjustments that are required to
restate shareholders’ equity and reflect the adjusted net book value of the Company as
$3,418,629.
4.1.5 Adjustments to the Balance Sheets
Normalization adjustments are required to adjust the historical balance sheets, so that they are
representative of a normal condition as of the valuation date.
Often adjustments must be made to a company’s balance sheets to arrive at a more accurate
picture of fair market value which is essential to properly depict a consistent set of operating
data for analysis, including ratio analysis (comparison and trend). Typical adjustments include
those that eliminate unusual entries, inflated or deflated items, extraordinary items, non-
operating assets or liabilities, incorrectly categorized items, and other assets or liabilities that
may understate or overstate the reported results of normal operations.
In the context of this report, I shall refer to three categories of adjustments, namely- Category
1, Category 2, or Category 3 (CAT1, CAT2 and CAT3, respectively); more specifically,
CAT1 typical adjustments include those that adjust assets or liabilities to fair market value
(FMV). Examples could include removal of uncollectable accounts receivables, adjusting
equipment values to FMV, or converting inventory1
from LIFO to FIFO to estimate FMV. These
particular adjustments proportionately change the Company’s equity value. Example: When
adjusting up the value of a particular piece of equipment to fair market value (FMV), the equity
value of the Company would increase proportionately.
CAT2 are those adjustments that are of a controlling or discretionary in nature; these
particular adjustments shall have no effect on the Company’s equity value, but are separated
and noted as “excess or non-operating assets or liabilities.” Example: The Company owns a
building from which it leases space; that building could be a non-operating asset if owning the
building is not necessary, i.e., versus leasing out a similar space from a third party property
owner. Another example is if the Company has excess cash according to discussions with
management and comparison with RMA peer data.
CAT3 are re-categorized items that are moved from one asset or liability category to another
asset, liability or equity category within the balance sheet. Only when these particular
adjustments include re-categorizing from an asset or liability to equity, there is a
proportionately equal, or equal and opposite, change the equity value of the Company;
example: re-categorizing a non-bona fide2
shareholder loan to the Company from a liability
category to retained earnings shall reduce liabilities, but increase equity.
1
If the company is using the FIFO (first in, first out) method of inventory, then one may utilize the book
value as a proxy for the fair value. If the company is using the LIFO (last in, first out) method of inventory,
then one must add the LIFO reserve to conclude at a rough approximation of the FIFO value.
2
Bona fide would indicate that terms were negotiated at arm’s length, reasonable interest rate charged,
payments are being made to repay, ability to pay back possible, etc. There must be evidence that the
note is a bona fide note, not an owner’s capital contribution.

4.1.6 Balance Sheets Detailed Adjustments
The following adjustments were made to the balance sheets:
See EXHIBIT 1: BALANCE SHEETS on page 50 for details of each year’s Balance Sheet
adjustments.
4.1.6.1 Category 1 Adjustments
I made the following CAT1 adjustments:
1. Adjusted the Intangible Lease Option Value to $3.6M, less Lease Buyout Cost of
$98,246.
2. Contingent liabilities were added due to the existence of property taxes due if the lease
option is exercised.
I made no CAT2 Adjustments:
I made the following CAT3 Adjustments:
1. Notes to/from shareholder were recategorized to stakeholders’ equity since they were
not considered “bona fide.” This increased equity.

4.1.7 Adjusted Historical Balance Sheets
Adjusted Year
Ended
Adjusted Year
Ended
Adjusted Year
Ended
Adjusted Year
Ended
Adjusted Year
Ended
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Assets:
Current Assets
Cash 114,711 42,072 22,604 11,734 45,700
Accounts Receivable
Inventory
Raw Material
Work in Progress
Finished Goods
Total Inventory 0 0 0 0 0
Loans & Exchanges 20,000
NY Job Dev. Authority Security Deposits 30,006 30,006 30,006 30,006 30,846
Total Other Current Assets 50,006 30,006 30,006 30,006 30,846
Total Current Assets 164,718 72,078 52,611 41,741 76,547
Fixed Assets - Net
Fixed Assets - Cost
HVAC 15,018 15,018 14,017
Building 78,597
Land 19,649
Leasehold Improvements 168,060 168,060 168,060 168,060 157,374
Total Fixed Assets - Cost 168,060 168,060 183,078 183,078 269,637
HVAC -1,503 -1,503
Building -420
Vehicles
Leasehold Improvements -98,605 -109,290 -120,476 -130,661 -130,661
Total Accumulated Depreciation -98,605 -109,290 -120,476 -132,164 -132,584
Total Fixed Assets - Net 69,455 58,770 62,602 50,914 137,053
Lease Option Value 3,600,000
Lease Buyout Cost -98,246
Total Intangible Assets - Net 0 0 0 0 3,501,754
Loan Receivable 20,000 9,000 12,000
Officer Loan 2,475 2,475 2,475 2,475 2,475
Total Other Non-Current Assets 22,475 2,475 2,475 11,475 14,475
Total Assets 256,648 133,323 117,688 104,130 3,729,829
Liabilities
Current Liabilities
Property Tax Payable 144,000
Short Term Loan Payable- Jesus Delgado 12,000 72,000 72,000 0
Short Term Loan Payable- Barbara Norberto 200,000 200,000 200,000 0
Short Term Loan Payable- E. Romy Norberto 5,000 43,000 43,000 0
FLASN LLC Loan 4,000 4,000 4,000
Short Term Lease loan 3,466 3,792 4,148
Accrued Expenses 1,575 1,400 1,425 1,090 1,805
Security Deposits- Sub-Tenant Jasco Indust. 62,389 62,389 59,990
Total Current Liabilities 1,575 218,400 386,280 386,271 213,943
Long-Term Debt
Lease Loan Payable 9,408 5,616 1,468
Building Lease Payable 95,790
Total Long-Term Debt 0 0 9,408 5,616 97,258
Other Non-Current Liabilities
Other Non-Current Liabilites

4.1.8 Common-Sized Adjusted Historical Balance Sheets
Year
Ended
Year
Ended
Year
Ended
Year
Ended
Year
Ended
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Min Max Mean Median
Assets:
Current Assets
Cash 44.70% 31.56% 19.21% 11.27% 1.23% 1.23% 44.70% 21.59% 19.21%
Accounts Receivable
Inventory
Raw Material
Work in Progress
Finished Goods
Total Inventory 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Loans & Exchanges 7.79% 7.79% 7.79% 7.79% 7.79%
NY Job Dev. Authority Security Deposits 11.69% 22.51% 25.50% 28.82% 0.83% 0.83% 28.82% 17.87% 22.51%
Total Other Current Assets 19.48% 22.51% 25.50% 28.82% 0.83% 0.83% 28.82% 19.43% 22.51%
Total Current Assets 64.18% 54.06% 44.70% 40.09% 2.05% 2.05% 64.18% 41.02% 44.70%
Fixed Assets - Net
Fixed Assets - Cost
HVAC 12.76% 14.42% 0.38% 0.38% 14.42% 9.19% 12.76%
Building 2.11% 2.11% 2.11% 2.11% 2.11%
Land 0.53% 0.53% 0.53% 0.53% 0.53%
Leasehold Improvements 65.48% 126.05% 142.80% 161.39% 4.22% 4.22% 161.39% 99.99% 126.05%
Total Fixed Assets - Cost 65.48% 126.05% 155.56% 175.82% 7.23% 7.23% 175.82% 106.03% 126.05%
HVAC -1.44% -0.04% -1.44% -0.04% -0.74% -0.74%
Building -0.01% -0.01% -0.01% -0.01% -0.01%
Vehicles
Leasehold Improvements -38.42% -81.97% -102.37% -125.48% -3.50% -125.48% -3.50% -70.35% -81.97%
Total Accumulated Depreciation -38.42% -81.97% -102.37% -126.92% -3.55% -126.92% -3.55% -70.65% -81.97%
Total Fixed Assets - Net 27.06% 44.08% 53.19% 48.90% 3.67% 3.67% 53.19% 35.38% 44.08%
Lease Option Value 96.52% 96.52% 96.52% 96.52% 96.52%
Lease Buyout Cost -2.63% -2.63% -2.63% -2.63% -2.63%
Total Intangible Assets - Net 0.00% 0.00% 0.00% 0.00% 93.89% 0.00% 93.89% 18.78% 0.00%
Loan Receivable 7.79% 8.64% 0.32% 0.32% 8.64% 5.59% 7.79%
Officer Loan 0.96% 1.86% 2.10% 2.38% 0.07% 0.07% 2.38% 1.47% 1.86%
Total Other Non-Current Assets 8.76% 1.86% 2.10% 11.02% 0.39% 0.39% 11.02% 4.82% 2.10%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Liabilities
Current Liabilities
Property Tax Payable 3.86% 3.86% 3.86% 3.86% 3.86%
Short Term Loan Payable- Jesus Delgado 9.00% 61.18% 69.14% 0.00% 0.00% 69.14% 34.83% 35.09%
Short Term Loan Payable- Barbara Norberto 150.01% 169.94% 192.07% 0.00% 0.00% 192.07% 128.00% 159.98%
Short Term Loan Payable- E. Romy Norberto 3.75% 36.54% 41.29% 0.00% 0.00% 41.29% 20.40% 20.14%
FLASN LLC Loan 3.40% 3.84% 0.11% 0.11% 3.84% 2.45% 3.40%
Short Term Lease loan 2.95% 3.64% 0.11% 0.11% 3.64% 2.23% 2.95%
Accrued Expenses 0.61% 1.05% 1.21% 1.05% 0.05% 0.05% 1.21% 0.79% 1.05%
Security Deposits- Sub-Tenant Jasco Indust. 53.01% 59.91% 1.61% 1.61% 59.91% 38.18% 53.01%
Total Current Liabilities 0.61% 163.81% 328.22% 370.95% 5.74% 0.61% 370.95% 173.87% 163.81%
Long-Term Debt
Lease Loan Payable 7.99% 5.39% 0.04% 0.04% 7.99% 4.48% 5.39%
Building Lease Payable 2.57% 2.57% 2.57% 2.57% 2.57%
Total Long-Term Debt 0.00% 0.00% 7.99% 5.39% 2.61% 0.00% 7.99% 3.20% 2.61%
Other Non-Current Liabilities
Other Non-Current Liabilites

4.2 Company Statements of Operations
4.2.1 Historical Statements of Operations
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Revenues
Gross Rent 304,856 0 167,167 379,950 207,563
Total Revenues 304,856 0 167,167 379,950 207,563
Cost of Goods Sold
Rents Paid- Real Property 0 0 0 0 0
Total Cost of Goods Sold 0 0 0 0 0
Gross Profit 304,856 0 167,167 379,950 207,563
Operating Expenses
Filing Fees 0 0 19 9 0
Repairs & Maintenance 46,800 53,255 32,936 0 10,966
Commissions 15,372 0 34,938 77,840 0
Taxes & Licenses 175 0 50 175 50
Depreciation 10,683 10,682 11,186 11,688 12,107
Misc. 1,349 636 166 150 0
Alarm & Security 0 1,428 179 0 179
Bank Charges 0 0 150 0 15
Consulting Expenses 0 4,650 400 0 2,000
Postage & Delivery 31 1 0 0 12
Rents- Real Property 247,873 227,217 247,622 268,529 185,905
Telephone 0 15 179 179 179
Advertising 0 550 1,043 0 0
Insurance 0 11,294 1,737 300 300
Auto and Travel 35 4,032 113 0 0
Legal & Professional 3,337 12,975 1,868 7,730 6,764
Management Fees 4,000 0 3,000 0 0
Office Expense 0 329 29 0 0
Professional Fees - Other 0 860 11,450 0 0
Error in 2010 0 -550 0 0 0
Utilities 0 16,072 2,521 0 221
Total Operating Expenses 329,655 343,446 349,586 366,600 218,698
Operating Profit -24,799 -343,446 -182,419 13,350 -11,135
Other Income/(Expense)
Interest Expense (-) -175 0 -10,505 -23,106 -43,235
Total Other Income/(Expense) -175 0 -10,505 -23,106 -43,235
Income Before Taxes -24,974 -343,446 -192,924 -9,756 -54,370
Income Taxes 0 0 0 0 0
Net Income/(Loss) -24,974 -343,446 -192,924 -9,756 -54,370

4.2.2 Common-Sized Historical Statements of Operations
4.2.3 Adjustments to the Statement of Operations
Normalizing adjustments to ANYCO‘s statement of operations were not necessary. Typically,
adjustments are made to the company’s income statements to arrive at a more accurate picture
of fair market value and long-term normal earnings capacity, which are essential to properly
depicting a consistent set of operating data for analysis, including ratio analysis (comparison
and trend).
Secondly, ANYCO‘s benefit stream should be matched as closely as possible to that of the
guideline companies used to derive its value. For instance, if public guideline companies were
used as the basis of the cost of equity calculation in the Income Approach utilized to derive
ANYCO‘s value, it would be inappropriate to use a benefit stream that is not becoming of a public
company. In other words, public company management does not have the flexibility or “control”
that a closely-held, private company majority stakeholder may enjoy. For instance, actual
compensation in a closely-held entity tends to be based on affordability, family dynamics, and
other discretionary choices rather than the economic value of the services that are provided to
the company; a controlling stakeholder in ANYCO may choose to increase his/her salary as high
as possible, or he/she may choose to purchase life insurance for his/her entire family. However,
if ANYCO were a public company, these perks would not be possible. Moreover, along similar
lines, if private guideline companies were used as the basis of Discretionary Earnings calculations
in the Market Approach utilized to derive ANYCO‘s value, then the benefit stream should be
adjusted in a manner to include all “discretionary” or “control” adjustments.
In the context of this report, I shall refer to three categories adjustments, namely- Category 1,
Category 2, or Category 3 (CAT1, CAT2 and CAT3, respectively); more specifically,
Year
Ending
Year
Ending
Year
Ending
Year
Ending
Year
Ending
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Revenues
Gross Rent 100.00% 0.00% 100.00% 100.00% 100.00%
Total Revenues 100.00% 0.00% 100.00% 100.00% 100.00%
Cost of Goods Sold
Rents Paid- Real Property 0.00% 0.00% 0.00% 0.00% 0.00%
Total Cost of Goods Sold 0.00% 0.00% 0.00% 0.00% 0.00%
Gross Profit 100.00% 0.00% 100.00% 100.00% 100.00%
Operating Expenses
Filing Fees 0.00% 0.00% 0.01% 0.00% 0.00%
Repairs & Maintenance 15.35% 5325500.00% 19.70% 0.00% 5.28%
Commissions 5.04% 0.00% 20.90% 20.49% 0.00%
Taxes & Licenses 0.06% 0.00% 0.03% 0.05% 0.02%
Depreciation 3.50% 1068200.00% 6.69% 3.08% 5.83%
Misc. 0.44% 63600.00% 0.10% 0.04% 0.00%
Alarm & Security 0.00% 142800.00% 0.11% 0.00% 0.09%
Bank Charges 0.00% 0.00% 0.09% 0.00% 0.01%
Consulting Expenses 0.00% 465000.00% 0.24% 0.00% 0.96%
Postage & Delivery 0.01% 100.00% 0.00% 0.00% 0.01%
Rents- Real Property 81.31% 22721700.00% 148.13% 70.67% 89.57%
Telephone 0.00% 1500.00% 0.11% 0.05% 0.09%
Advertising 0.00% 55000.00% 0.62% 0.00% 0.00%
Insurance 0.00% 1129400.00% 1.04% 0.08% 0.14%
Auto and Travel 0.01% 403200.00% 0.07% 0.00% 0.00%
Legal & Professional 1.09% 1297500.00% 1.12% 2.03% 3.26%
Management Fees 1.31% 0.00% 1.79% 0.00% 0.00%
Office Expense 0.00% 32900.00% 0.02% 0.00% 0.00%
Professional Fees - Other 0.00% 86000.00% 6.85% 0.00% 0.00%
Error in 2010 0.00% -55000.00% 0.00% 0.00% 0.00%
Utilities 0.00% 1607200.00% 1.51% 0.00% 0.11%
Total Operating Expenses 108.13% 34344600.00% 209.12% 96.49% 105.36%
Operating Profit -8.13% -34344600.00% -109.12% 3.51% -5.36%
Interest Expense (-) -0.06% 0.00% -6.28% -6.08% -20.83%
Total Other Income/(Expense) -0.06% 0.00% -6.28% -6.08% -20.83%
Income Before Taxes -8.19% -34344600.00% -115.41% -2.57% -26.19%
Income Taxes 0.00% 0.00% 0.00% 0.00% 0.00%
Net Income/(Loss) -8.19% -34344600.00% -115.41% -2.57% -26.19%

CAT1 typical adjustments include those that eliminate non-recurring gains or losses, unusual
entries, inflated or deflated items, extraordinary items, expenses or income generated from
non-operating assets, and other income or expenses that may understate or overstate the
reported results of normal operations; these particular adjustments proportionately change
the Net Income. Example: When a one-time sale of an item generated from an unusual
circumstance is removed from sales, the net income would decrease proportionately.
CAT2 are those adjustments that are of a controlling or discretionary in nature; these
particular adjustments are merely a proportional re-categorization to/from the Net Income.
Example: Officer in a corporation pays herself a salary that is low for that particular industry
in which the company operates. In this case, for instance per RR 59-60, section 4.02 (d), I
may increase her salary to match industry peer values assimilated from the department of
labor or RMA data; this increase to Officer Compensation would proportionally decrease the
Net Income.
CAT3 are re-categorized items that are moved from one expense category to another expense
category within the statement of operations; these particular adjustments have no effect on
the Net Income. Example: Officer’s Compensation (OC) that is stated as Salaries & Wages
(SW). Re-categorizing it from SW to OC would be an equal and opposite adjustment that
would have no effect on Net Income.
4.2.4 Statements of Operations Detailed Adjustments
The following adjustments were made to the statements of operations:
See EXHIBIT 2: INCOME STATEMENTS on page 55 for details of each year’s adjustments.
I made no CAT1 adjustments:
I made no CAT2 Adjustments:
I made the following CAT3 Adjustments:
1. Recategorized “Rents- Real Property” expense to COGS since this expense is the rent
paid to the current building owner. This adjustment had no effect on Net Income.

4.2.5 Adjusted Historical Statements of Operations
Year
Ending
Year
Ending
Year
Ending
Year
Ending
Year
Ending
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Revenues
Gross Rent 304,856 0 167,167 379,950 207,563
Total Revenues 304,856 0 167,167 379,950 207,563
Cost of Goods Sold
Rents Paid- Real Property 247,873 227,217 247,622 268,529 185,905
Total Cost of Goods Sold 247,873 227,217 247,622 268,529 185,905
Gross Profit 56,983 -227,217 -80,455 111,421 21,658
Operating Expenses
Filing Fees 0 0 19 9 0
Repairs & Maintenance 46,800 53,255 32,936 0 10,966
Commissions 15,372 0 34,938 77,840 0
Taxes & Licenses 175 0 50 175 50
Depreciation 10,683 10,682 11,186 11,688 12,107
Misc. 1,349 636 166 150 0
Alarm & Security 0 1,428 179 0 179
Bank Charges 0 0 150 0 15
Consulting Expenses 0 4,650 400 0 2,000
Postage & Delivery 31 1 0 0 12
Rents- Real Property 0 0 0 0 0
Telephone 0 15 179 179 179
Advertising 0 550 1,043 0 0
Insurance 0 11,294 1,737 300 300
Auto and Travel 35 4,032 113 0 0
Legal & Professional 3,337 12,975 1,868 7,730 6,764
Management Fees 4,000 0 3,000 0 0
Office Expense 0 329 29 0 0
Professional Fees - Other 0 860 11,450 0 0
Error in 2010 0 -550 0 0 0
Utilities 0 16,072 2,521 0 221
Total Operating Expenses 81,782 116,229 101,964 98,071 32,793
Operating Profit -24,799 -343,446 -182,419 13,350 -11,135
Interest Expense (-) -175 0 -10,505 -23,106 -43,235
Total Other Income/(Expense) -175 0 -10,505 -23,106 -43,235
Income Before Taxes -24,974 -343,446 -192,924 -9,756 -54,370
Income Taxes 0 0 0 0 0
Net Income/(Loss) -24,974 -343,446 -192,924 -9,756 -54,370

4.2.6 Common-Sized Adjusted Historical Statements of Operations
Year
Ending
Year
Ending
Year
Ending
Year
Ending
Year
Ending
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Revenues
Gross Rent 100.00% 0.00% 100.00% 100.00% 100.00%
Total Revenues 100.00% 0.00% 100.00% 100.00% 100.00%
Cost of Goods Sold
Rents Paid- Real Property 81.31% 22721700.00% 148.13% 70.67% 89.57%
Total Cost of Goods Sold 81.31% 22721700.00% 148.13% 70.67% 89.57%
Gross Profit 18.69% -22721700.00% -48.13% 29.33% 10.43%
Operating Expenses
Filing Fees 0.00% 0.00% 0.01% 0.00% 0.00%
Repairs & Maintenance 15.35% 5325500.00% 19.70% 0.00% 5.28%
Commissions 5.04% 0.00% 20.90% 20.49% 0.00%
Taxes & Licenses 0.06% 0.00% 0.03% 0.05% 0.02%
Depreciation 3.50% 1068200.00% 6.69% 3.08% 5.83%
Misc. 0.44% 63600.00% 0.10% 0.04% 0.00%
Alarm & Security 0.00% 142800.00% 0.11% 0.00% 0.09%
Bank Charges 0.00% 0.00% 0.09% 0.00% 0.01%
Consulting Expenses 0.00% 465000.00% 0.24% 0.00% 0.96%
Postage & Delivery 0.01% 100.00% 0.00% 0.00% 0.01%
Rents- Real Property 0.00% 0.00% 0.00% 0.00% 0.00%
Telephone 0.00% 1500.00% 0.11% 0.05% 0.09%
Advertising 0.00% 55000.00% 0.62% 0.00% 0.00%
Insurance 0.00% 1129400.00% 1.04% 0.08% 0.14%
Auto and Travel 0.01% 403200.00% 0.07% 0.00% 0.00%
Legal & Professional 1.09% 1297500.00% 1.12% 2.03% 3.26%
Management Fees 1.31% 0.00% 1.79% 0.00% 0.00%
Office Expense 0.00% 32900.00% 0.02% 0.00% 0.00%
Professional Fees - Other 0.00% 86000.00% 6.85% 0.00% 0.00%
Error in 2010 0.00% -55000.00% 0.00% 0.00% 0.00%
Utilities 0.00% 1607200.00% 1.51% 0.00% 0.11%
Total Operating Expenses 26.83% 11622900.00% 61.00% 25.81% 15.80%
Operating Profit -8.13% -34344600.00% -109.12% 3.51% -5.36%
Interest Expense (-) -0.06% 0.00% -6.28% -6.08% -20.83%
Total Other Income/(Expense) -0.06% 0.00% -6.28% -6.08% -20.83%
Income Before Taxes -8.19% -34344600.00% -115.41% -2.57% -26.19%
Income Taxes 0.00% 0.00% 0.00% 0.00% 0.00%
Net Income/(Loss) -8.19% -34344600.00% -115.41% -2.57% -26.19%

4.2.7 Net Income to Adjusted Net Income Reconciliation
Year
Ending
Year
Ending
Year
Ending
Year
Ending
Year
Ending
December 31,
2010
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
Historic Net Income (Loss) -24,974 -343,446 -192,924 -9,756 -54,370
Rents Paid- Real Property 2,2,2,2,2 -247,873 -227,217 -247,622 -268,529 -185,905
Rents- Real Property 1,1,1,1,1 247,873 227,217 247,622 268,529 185,905
Income Taxes Tax,Tax,Tax,Tax,Tax 0 0 0 0 0
Adjusted Net Income -24,974 -343,446 -192,924 -9,756 -54,370
Year Ending December 31, 2010
(2) - CAT3: Recat from Operating Expenses
(1) - CAT3: Recat to COGS
(Tax) - As per tax table

COMPANY FINANCIAL POSITION VS. PEERS Page 31
5 COMPANY FINANCIAL POSITION VS. PEERS
5.1 Analytical Process
As part of my review process, I have reviewed the financial position and performance of the
Company over the relevant period of analysis. This review entailed an analysis of the Company’s
current financial statements in comparison with prior years and in comparison with industry
norm statistics. My analysis was supplemented by detailed discussions with management that
enhanced my understanding of the business reasons for changes in the financial statements.
Results of this analysis, which have valuation implications are discussed at the appropriate point
in the valuation section of this report.
5.2 Industry Group Analysis
Typically, the analysis of the financial position and performance of a company consists of a
review of the trends of that company and a comparison with peer companies. However, because
ANYCO is a holding company it is my opinion that it will be very difficult to perform a proper
industry comparison. In fact, the Company is classified under the North American Industry
Classification System (NAICS) # 531390 (Other Activities Related to Real Estate), which is very
broad and most likely does not consist of similar operating companies as ANYCO. For this reason,
a comparative analysis was not performed. For this reason, a comparative analysis was not
performed.
6 COMPANY FINANCIAL TRENDS ANALYSIS
6.1 Overview
The financial review of the Company also includes the trends analysis of the Company’s tax
returns balance sheets, and statements of operations for the fiscal years ending December 31,
2010 through December 31, 2014, the valuation date.
In my opinion, based on the Company’s business cycle, the four (4) years period covered in this
analysis is adequate to identify any existing financial and operational trends that may affect my
estimate of value. Included in this report are various summaries of financial data (as adjusted)
that were generated in the analysis. The following comments are what I consider representative
of the financial position and results of operations of as of the date of valuation for the period
analyzed.
6.2 Financial Statements Parameters Considered
The following are trends analysis highlights of the Subject Company’s balance sheets and
statements of operations at the date of valuation. Typically, to provide guidance in assessing the
Company specific risk premium (CSRP) in the Income Approach and the derived multiple in the
Market Approach, I rely on a quantitative “grading system” of from minus one-tenth percent (-
0.1%) for all the increases in risk or plus one-tenth (+0.1%) for decreases in risk; this system
recognizes positive and negative aspects of the business. In some situations, certain ratios are
not relevant or unreliable; in such cases a zero percent (0%) was applied.
The balance sheet parameters considered were liquidity, coverage and operating ratios. The
statements of operations parameters considered were revenue, gross margins, operating
expenses, net income, and discretionary earnings. Finally, historical trends in the Company’s
cash flow statements were considered.
In this case, while I did not ultimately use the Income or Market Approach to accord value, I still
reviewed the trends analysis as a confirmation to ultimately choose the Asset Approach as the
best indicator of value.

COMPANY FINANCIAL TRENDS ANALYSIS Page 32
6.3 Balance Sheet Trends
6.3.1 Liquidity Ratio Trends
As of December 31, 2014, the valuation date, ANYCO, INC.’s balance sheets liquidity ratios
appear to be trending unfavorably downward:
1. The Company’s Current and Quick Ratios are flat.
2. The Company’s Days Receivables are not important in this sort of business.
3. The Company’s Inventory Days is not important in this sort of business.
4. The Company’s Days Payable trends are unfavorably upward.
5. The Company’s Working Capital Turnover is trending unfavorably downward.
104.58
0.33 0.14 0.11 0.36
0
20
40
60
80
100
120
2010 2011 2012 2013 2014
Current Ratio
72.83
0.19 0.06 0.03 0.21
0
10
20
30
40
50
60
70
80
2010 2011 2012 2013 2014
Quick Ratio
0 0 0 0 0
0
0.2
0.4
0.6
0.8
1
2010 2011 2012 2013 2014
Days' Receivable
0 0 0 0 0
0
0.2
0.4
0.6
0.8
1
2010 2011 2012 2013 2014
Days' Inventory
0 0 0 0
283
0
50
100
150
200
250
300
2010 2011 2012 2013 2014
Days' Payable
1.87
0.00
-0.50
-1.10
-1.51-2
-1
0
1
2
3
2010 2011 2012 2013 2014
Revenue to Working Capital

6.3.2 Coverage Ratio Trends
As of December 31, 2014, the valuation date, ANYCO, INC.’s balance sheets coverage ratios
appear flat to inconclusive.
The Company’s Debt-to-Equity upward trend is misleading since the 2014 balance sheet was
the only one adjusted to fair market value in the event that Anyco exercised its right to purchase
on December 31, 2014.
0.00 0.00 0.00
0.58
0.00
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2010 2011 2012 2013 2014
Times Interest Earned
0.27
0.00 0.00 0.00 0.00
0
0.05
0.1
0.15
0.2
0.25
0.3
2010 2011 2012 2013 2014
Fixed Assets to Tangible Worth
0.01
0.00 0.00 0.00 0.00
0
0.001
0.002
0.003
0.004
0.005
0.006
0.007
2010 2011 2012 2013 2014
Debt to Tangible Net Worth
0.01
0.00 0.00 0.00
0.09
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.1
2010 2011 2012 2013 2014
Debt to Equity

6.4 Statement of Operations Trends
6.4.1 Multi-Growth Adjusted Statements of Operations
As of December 31, 2014, the valuation date, ANYCO, INC.’s statements of operations ratios
are trending upward:
1. The Company’s Revenue trend is upward, but the values are very low.
2. The Company’s Gross Profit Margin is trending unfavorably downward.
3. The Company’s Operating Expenses are flat.
4. The Company’s Net Income is trending upward.
5. The Company’s Discretionary Earnings are trending upward.
1 Year 2 Years 3 Years 4 Years
Compound Annual 2010-2011 2010-2012 2010-2013 2010-2014
Revenue N/A -25.95% 7.62% -9.16%
Cost of Goods -8.33% -0.05% 2.70% -6.94%
Gross Profit N/A N/A 25.05% -21.48%
Operating Expenses 42.12% 11.66% 6.24% -20.42%
Operating Profit 1284.92% 171.22% N/A -18.14%
Other Income/Expense N/A 674.78% 409.21% 296.46%
Pretax Income 1275.21% 177.94% -26.90% 21.47%
Taxes N/A N/A N/A N/A
Net Income 1275.21% 177.94% -26.90% 21.47%
EBIT 1275.21% 170.27% N/A -18.29%
EBITDA 1232.44% 161.85% N/A N/A
Annual 2010-2011 2011-2012 2012-2013 2013-2014
Revenue N/A N/A 127.29% -45.37%
Cost of Goods -8.33% 8.98% 8.44% -30.77%
Gross Profit N/A -64.59% N/A -80.56%
Operating Expenses 42.12% -12.27% -3.82% -66.56%
Operating Profit 1284.92% -46.89% N/A N/A
Other Income/Expense N/A N/A 119.95% 87.12%
Pretax Income 1275.21% -43.83% -94.94% 457.30%
Taxes N/A N/A N/A N/A
Net Income 1275.21% -43.83% -94.94% 457.30%
EBIT 1284.92% -46.89% N/A N/A
EBITDA 2257.35% -48.54% N/A -96.12%
Growth Ratios Based On Adjusted Income Statements

6.4.1.1 Adjusted Benefit Streams Graph
-14,116
-332,764
-171,233
25,038
972
-400,000
-350,000
-300,000
-250,000
-200,000
-150,000
-100,000
-50,000
0
50,000
December 31, 2010 December 31, 2011 December 31, 2012 December 31, 2013 December 31, 2014
Adjusted Benefit Stream
Pretax Income After Tax Income EBIT EBITDA Linear (EBITDA)
-24,799
0
-14,116
-343,446
0
-332,764
-182,419
0
-171,233
13,350
0
25,038
-11,135
0 972
-400,000
-350,000
-300,000
-250,000
-200,000
-150,000
-100,000
-50,000
0
50,000
Debt Free Pretax Income Officer's Compensation (Adjusted to 1FTE) Seller's Discretionary Earnings
Income
Year
Ending December 31, 2010
Year
Year
Year
Year

6.4.1.2 Multi-Year Growth Adjusted Statement of Operations Graph
𝐶𝐴𝐺𝑅 (𝐼𝑅𝑅) = (
𝐸𝑛𝑑𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒 (𝐹𝑉)
𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒 (𝑃𝑉)
)
1
#𝑌𝑒𝑎𝑟𝑠
− 1
% 𝐶ℎ𝑎𝑛𝑔𝑒 = (
𝐸𝑛𝑑𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒−𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒
𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑉𝑎𝑙𝑢𝑒
) 𝑥 100
0.0%
-8.33%
0.00% 42.12%
1275.21% 1284.92%
2257.35%
0.00% 8.98%
-64.59% -12.27% -43.83% -46.89% -48.54%
127.3%
8.4% 0.0%
-3.8% -94.9%
0.0% 0.0%
-45.4% -30.8% -80.6% -66.6%
457.3%
0.0%
-96.1%
-5
0
5
10
15
20
25
Revenue Cost of Goods Gross Profit Operating Expenses Net Income EBIT EBITDA
ANNUAL GROWTH (% Change)
2010-2011 2011-2012 2012-2013 2013-2014
Revenue Cost of Goods Gross Profit Operating Expenses Operating Profit Other Income/Expense Pretax Income
2010-2011 0.00% -8.33% 0.00% 42.12% 1284.92% 0.00% 1275.21%
2010-2012 -25.95% -0.05% 0.00% 11.66% 171.22% 674.78% 177.94%
2010-2013 7.62% 2.70% 25.05% 6.24% 0.00% 409.21% -26.90%
2010-2014 -9.16% -6.94% -21.48% -20.42% -18.14% 296.46% 21.47%
-200.00%
0.00%
200.00%
400.00%
600.00%
800.00%
1000.00%
1200.00%
1400.00%
COMPOUND ANNUAL GROWTH (CAGR)
2010-2011 2010-2012 2010-2013 2010-2014

6.5 Company Historic Summary Cash Flow Statements Trends
As of December 31, 2014, the valuation date, ANYCO, INC.’s historic cash flows are mainly
trending unfavorably:
1. The Company’s total cash used for Operations is trending unfavorably downward.
2. The Company’s total cash used for Investing Activates is trending favorably downward.
3. The Company’s total cash provided by Financing Activates is trending unfavorably
upward.
Year
Ended
Year
Ended
Year
Ended
Year
Ended FY2014
December 31,
2011
December 31,
2012
December 31,
2013
December 31,
2014
(12 months annualized)
Cash Provided by (used for) Operations
Net Income (Loss) -343,446 -192,924 -9,756 -54,370 -54,370
Plus Depreciation & Amortization 10,682 11,186 11,688 12,107 12,107
Plus Non Cash Expenses 0 0 0 0 0
(Increase)/Decrease in Accounts Receivable 0 0 0 0 0
(Increase)/Decrease in Inventory 0 0 0 0 0
(Increase)/Decrease in Other Current Assets 20,000 0 0 -840 -840
(Increase)/Decrease in Other Non-Current Assets 20,000 0 -9,000 -3,000 -3,000
Increase/(Decrease) in Accounts Payable 0 0 0 0 0
Increase/(Decrease) in Other Current Liabilities -175 62,414 -335 -1,685 -1,685
Increase/(Decrease) in Other Non-Current Liabilities 0 0 0 0 0
Total Cash Provided by (used for) Operations -292,939 -119,324 -7,403 -47,788 -47,788
Cash Provided by (used for) Investing Activities
(Increase)/Decrease in Net Fixed Assets 3 -15,018 0 -98,246 -98,246
(Increase)/Decrease in Net Intangible 0 0 0 0 0
Total Cash Provided by (used for) Investing Activities 3 -15,018 0 -98,246 -98,246
Cash Provided by (used for) Financing Activities
Net Additions to/(reductions in) Notes Payable 217,000 114,874 -3,466 179,998 179,998
Net Investment in/(distribution of) Equity 3,296 0 -1 2 2
Total Cash Provided by (used for) Financing Activities 220,296 114,874 -3,467 180,000 180,000
Total Increase/(Decrease) in Cash -72,640 -19,468 -10,870 33,966 33,966
Beginning Cash Balance 114,711 42,072 22,604 11,734 11,734
Ending Cash Balance 42,072 22,604 11,734 45,700 45,700

VALUATION METHODOLOGY AND APPROACHES Page 38
7 VALUATION METHODOLOGY AND APPROACHES
The value of ANYCO, INC.‘s common stock must be determined with a view toward the intrinsic value of the
assets, the value of its income flow and the fair market value of the equity in the marketplace. As set forth
in Revenue Ruling 59-60, different methods of valuation consider the different elements of value in arriving
at an overall conclusion. An asset or cost approach looks to the present, utilizing estimates of the current
cost to reproduce or replace the property and the property’s current state of depreciation. A market approach
looks to the past, arriving at a conclusion through an analysis of past company’s sales similar to the entity
being valued. An income approach looks to the future, quantifying the potential financial benefits of owning
the company. In the analysis of ANYCO, INC., I have considered the appropriateness of each of these
methods in the valuation.
The approaches discussed above (asset, income and market) are recognized methodologies for estimating
business enterprise value. The business enterprise value represents the total price at which the Company
might be expected to exchange between a willing buyer and a willing seller in an arm’s length transaction.
Furthermore, the three (3) approaches and several methods of valuing closely held businesses are in
accordance with generally accepted valuation principles. The Institute of Business Appraisers (IBA)
Professional Standards defines the asset, market, and income approaches as follows:
1. Asset Approach - a general way of determining a value indication of a business, business ownership
interest, or security using one or more methods based directly on the value of the assets net of
liabilities.
2. Market Approach - a general way of determining a value indication of a business, business
ownership interest, security, or intangible asset by using one or more methods that compare the
subject to similar businesses ownership interests, securities, or intangible assets that have been
sold.
3. Income Approach - a general way of determining a value indication of a business, business
ownership interest, security, or intangible asset using one or more methods that convert anticipated
economic benefits into a present single amount.
ASSET BASED APPROACH
Determination of asset value begins with the company’s reported financial statements. Adjustments are
made, as necessary or appropriate, to reflect the market values of the corporation’s assets and liabilities, as
opposed to their book values. The objective is to arrive at a net asset value, which is defined as the difference
between the adjusted valuation of all assets and liabilities. Net asset value should reflect the valuation of
assets and liabilities in the context of a going concern. Therefore, net asset value is not the company’s
liquidation value because liquidation value assumes that the business is not a going concern.
Net asset value is generally considered to be a good indicator of value for holding companies when the
earnings and cash flows generated are reflected in the value determinations of the underlying assets. It is
not generally considered a significant indicator of an operating company’s value, since, the earnings and cash
flows are not reflected in the value of the underlying recorded assets but in the intangible asset value of the
company.
The liquidation value of the company’s assets is another method that is generally not considered appropriate
for valuing operating entities. If the company is being valued as a going concern, it will not be able to
liquidate its assets and continue operations. However, if the company is being liquidated or the ownership
interest being valued has the ability to liquidate the company and would receive a higher return on investment
form the liquidation, the liquidation value may be the company’s best indication of value.
MARKET APPROACH
This approach to valuing a company or ownership interests requires the valuer to research practically
available sources of information to find similar investments that can be used for comparison purposes. The

VALUATION METHODOLOGY AND APPROACHES Page 39
primary reason, that this approach is not used in every valuation, is the difficulty in obtaining sufficient or
reliable data concerning the transfers of business ownership interests that occur in the private marketplace.
Valuers generally research three types of entity transactions to find transactions of similar investments that
can be used for comparative purposes. They look for transactions involving stock, securities, or other owner
interests of the Subject Company or guideline companies. Guideline companies can either be publicly traded
or closely-held.
TRANSACTIONS INVOLVING COMPANY STOCK
One of the best market approaches to value is the examination of recent transactions in the Company’s own
stock. There is generally no active market for closely-held common stock, but if some transactions have
occurred, a market value can sometimes be derived and used as an element in the determination of fair
market value. Even if limited transactions have occurred at arm’s length, inferences may sometimes be
drawn about fair market value based on the limited transaction volume.
CONCEPTUAL FRAMEWORK OF THE GUIDELINE COMPANY METHOD
The American Society of Appraisers (ASA) Business Valuation Standards provide the following “Conceptual
Framework” for the Guideline Company Method:
1. Market transactions in business, business ownership interests or securities can provide objective,
empirical data for developing value measures to apply to business valuation.
2. The development of value measures from guideline companies should be considered for use in the
valuation of businesses, business ownership or securities to the extent that adequate information is
available.
3. Guideline companies are companies that provide a reasonable basis for comparison to the relative
investment characteristics of the company being valued. Ideal guideline companies are in the
same industry as the company being valued; but, if there is insufficient transaction evidence
available in the same industry, it may be necessary to consider companies with an underlying
similarity of relative investment characteristics such as markets, products, growth, cyclical
variability and other salient factors.
Also, the ASA Business Valuation Standards state the “Empirical data from guideline companies can be found
in transactions involving either publicly traded or closely-held companies.”
GUIDELINE COMPANY VALUE MULTIPLES OR RATIOS
A value multiple or ratio relates a stock’s market price to the reported accounting data such as sales, earnings
and book value. These ratios provide an objective basis for measuring the market’s perception of a stock’s
fair market value. Value ratios generally reflect the trends in growth, performance and stability of the
financial results of operations. In this way, the business and financial risks exhibited by an industry or group
of companies can be viewed in relation to market values. Value ratios also reflect the market’s outlook for
the economy as a whole.
The value multiples or ratios can be arrived at from either publicly traded companies or closely-held
companies. To determine the multiples or ratios, the valuer needs access to reliable information from the
guideline company’s financial statements and about the transfer of ownership transaction(s).

METHODOLOGIES CONSIDERED BUT REJECTED Page 40
INCOME APPROACH
The operational nature and capital structure of each business determines the appropriate methods best suited
to value that firm.
Once the benefit or benefits are selected, the valuer then calculates an appropriate discount or capitalization
rate to be applied to each benefit. These rates are calculated using generally accepted financial models such
as the Capital Asset Pricing Model (CAPM), the Build-Up Method, and the Gordon Growth Model.
If the valuer selects a current period benefit as representative of the future, valuation theory refers to this
as “capitalizing” the benefit. If the valuer selects a future benefit stream as representative of the future,
valuation theory refers to this as “discounting” the future benefits.
8 METHODOLOGIES CONSIDERED BUT REJECTED
While there are many methods that can be used to determine the fair market value of a company, the fact
pattern in the specific case of ANYCO, INC. dictates that certain methodologies are inappropriate. The
following lists those methods and the reasons why they were not used.
8.1 Dividend Paying Capacity
Revenue Ruling 59-60 (section 4.02) states:
(e) Primary consideration should be given to the dividend-paying capacity of the company rather than to
dividends actually paid in the past. Recognition must be given to the necessity of retaining a reasonable
portion of profits in a company to meet competition. Dividend-paying capacity is a factor that must be
considered in an appraisal, but dividends actually paid in the past may not have any relation to dividend-
paying capacity. Specifically, the dividends paid by a closely held family company may be measured by
the income needs of the stockholders or by their desire to avoid taxes on dividend receipts, instead of by
the ability of the company to pay dividends. Where an actual or effective controlling interest in a
corporation is to be valued, the dividend factor is not a material element, since the payment of such
dividends is discretionary with the controlling stockholders. The individual or group in control can
substitute salaries and bonuses for dividends, thus reducing net income and understating the dividend-
paying capacity of the company. It follows, therefore, that dividends are less reliable criteria of fair
market value than other applicable factors.
This method was considered, but rejected because the Company has never paid dividends. However, since
the Company has had, and appears to have, the future capacity to pay dividends, other methods are more
appropriate to consider, i.e., market and income approaches.
8.2 Liquidation Value Method
The liquidation value method develops a value by adjusting the reported book values of a subject company’s
individual assets to their actual or estimated fair market values as if they were to be sold in an orderly,
piecemeal manner and subtracting the associated liabilities adjusted to their actual or estimated fair market
value. This method was rejected in the valuation of ANYCO, INC. because my review indicates that the
enterprise is an ongoing enterprise and it is more appropriately valued using another method. Furthermore,
the interest holders have no plans or expectations that the Company will be liquidated.
8.3 Company Transactions Method
The company transaction approach uses recent transactions involving the Company’s stock. The principle of
substitution is used to determine the value. This simply means that if one arm’s length fair market value
transaction occurred at a given price then if nothing has substantially changed, another arm’s length fair
market value transaction would occur at the same price. This method was rejected because all transactions
were among family members and in my opinion did not represent fair market value.

METHODOLOGIES CONSIDERED BUT REJECTED Page 41
8.4 Capitalization of Cash Flow Method
Capitalization of cash flow requires an estimate of an ongoing benefit stream and a capitalization rate. The
capitalization rate represents the required rate of return minus the sustainable growth rate. Capitalization of
cash flow effectively determines the present value of the Company’s ongoing economic benefit stream
growing perpetually at a fixed rate and discounted at the required rate of return. The present value is
representative of the amount a willing buyer and a willing seller would exchange for the business.
In this case, this method produced a value of $0 due to the negative benefit stream. See next section below.
8.4.1 Estimate of Ongoing Benefit Stream
The analysis presented below represents the calculation of the ongoing economic benefit stream. It depicts
the calculation of the after tax cash flow benefit stream.
8.5 Discounted Multi-Growth Method
The discounted future cash flow method was considered, but rejected. This income method is not the most
appropriate method to use for this particular valuation. The method focuses on the present value of the
forecasted future benefits which could accrue to a hypothetical owner of the company. The benefits vary
greatly in the short run and are still estimable in the long run. This method requires an explicit forecast of
the future benefit streams over a reasonably foreseeable short term and an estimate of a long term benefit
stream that is stable and sustainable, i.e. not varying from period to period. In addition, the benefit stream
is determined to continue into the future without compromise. An appropriate discount rate and an estimate
of long term growth beyond the forecast period allow discrete present values to be calculated and summed
for all the benefit streams and determine the entity value.
In this case, since the future benefit stream is expected to exhibit constant growth, if at all, and since
management does not have a clear forecast of the future benefit streams, this method shall not be
appropriate.
8.6 Discounted Future Cash Flow Method
This income method is not an appropriate method to use because the method focuses on the present value
of the forecasted future benefits that would accrue to the hypothetical owner of the company. The benefit
streams would vary greatly in the short run, but are still estimable in the long run. This method requires an
explicit forecast of the future benefit streams, yearly capital expenditures, and new debt to sustain growth
over a reasonably foreseeable short term and an estimate of a long term benefit stream that is stable and
sustainable (i.e. not varying from period to period and determined to continue into the future without
compromise). An appropriate discount rate and an estimate of long term growth beyond the forecast period
allow discrete present values to be calculated and summed for all of the benefit streams to determine the
entity’s value.
In this case, since the future benefit stream is expected to exhibit constant growth, if at all, and since
management does not have a clear forecast of the future benefit streams, this method shall not be
appropriate.
8.7 Industry Data Method – Mergerstat
Using multiples derived from compilations of industry pricing statistics a market approach may be used to
estimate the Fair Market Value of a company when the company can be shown to be representative of the
Year
Ending
Year
Ending
Year
Ending
Year
Ending
Year
Ending
December
31, 2010
December
31, 2011
December
31, 2012
December
31, 2013
December
31, 2014
Earning Power Based on Net of Debt After Tax Cash Flow
Adjusted Pretax Income -24,974 -343,446 -192,924 -9,756 -54,370
Add Depreciation/Amortization and Other Non-Cash Expenses 10,683 10,682 11,186 11,688 12,107
Total -14,291 -332,764 -181,738 1,932 -42,263

METHODOLOGY CONSIDERED AND USED Page 42
market. By convention, analysts express the relationship between the market price of a stock and its historical
earnings in the form of a ratio of the market price of earnings for the most recent twelve months, i.e.,
price/earnings (P/E) ratio. Using the industry pricing statistic against the company’s earnings the Fair Market
Value can be estimated.
The Company is not representative of the industry.
9 METHODOLOGY CONSIDERED AND USED
9.1 Adjusted Book Value Method – Going Concern
The adjusted value of ANYCO, INC. as of December 31, 2014 was $3,419,000. The adjusted book value -
going concern method develops a valuation indication by adjusting the reported book values of a subject
company’s assets to their actual or estimated Fair Market Values and subtracting its liabilities (adjusted to
Fair Market Value, if appropriate). The specific adjustments were described in the analysis of the balance
sheet. The indicated value should not be interpreted as an estimate of liquidation value. Neither an orderly
nor a forced liquidation is contemplated.
9.1.1 Indicated Value Calculation
As determined below, the Fair Market Value indicated by using the Adjusted Book Value as a Going Concern
method was $3,418,629 and was rounded to $3,419,000. This value is prior to any discounts, i.e., Discount
for Lack of Control (DLOC) or Shareholder Discount for Lack of Marketability (SDLOM).
9.1.2 Application of Built In Gains Adjustment
A built in gain or trapped in gain tax adjustment was not made since management has no plans to sell the
Company in the near future.
9.1.3 Application of Shareholder Discounts
A discount for lack for lack of control (DLOC) is a reduction in the initial indicated value due to a lack of
control prerogatives such as declaring dividends, liquidating the company, going public, issuing or buying
stock, directing management, setting management’s salaries, etc. In my opinion, a DLOC of 30% is
appropriate because the interest being valued is five percent (5%) non-controlling.
In addition to and in conjunction with the DLOC, a discount for lack of marketability (SDLOM) of 49% is
applied. This discount reflects an expectation for illiquidity to account for the fact that there is no market
(public or private) for non-controlling interest in a Privately-held business.
Note that it is common practice to apply the DLOC and DLOM multiplicatively, not additively. The DLOC is
applied first.
See EXHIBIT 3: SDLOM & DLOC CALCULATION for a detailed explanation of the calculation.

Dloc sdlom example report

Recommended

Recommended

More Related Content

What's hot

What's hot (14)

Similar to Dloc sdlom example report

Similar to Dloc sdlom example report (20)

Recently uploaded

Recently uploaded (20)

Dloc sdlom example report