A guide to understanding the benefits of Account Receivable Factoring. Chris Lehnes 203-664-1535 clehnes@VersantFunding.com

1. Introduction to Factoring By Chris Lehnes [email_address] 203-664-1535

3. Different Terminology Lending Term Factoring Equivalent Loan Factoring Facility Loan Amount Factoring Volume Lender Factor or Purchaser of Receivables Borrower Client or Seller of Receivables Note/Loan Agreement Purchase and Sale Agreement Interest Discount/Fee Borrower/Obligor Account Debtor/Customer Clients

9. 6 Steps Understanding Factoring Step 1 – Initiation a Transaction Step 2 – Application Review and Legal Documentation Step 3 – Review Process - Underwriting Step 4 – Closing and Funding Step 5 – When a Batch of Receivables is Fully Closed Step 6 – Rolling Over New Receivables

11. Step 1 Initiating a Transaction 1. Find Prospect. 2. Hand off to Versant with Intake Checklist and Accounts Receivable Aging. 3. Versant reviews aging and talks with prospect. If a deal is reached Versant issues a proposal. 4. Prospect returns signed proposal with check for application fee. Versant sends prospect application. 5. Prospect returns Application and Versant sends out contracts to be signed. When contracts are returned Versant makes initial funding.

19. Competitive Landscape

22. Frequently Asked Questions and Answers

28. Example: Impact of Factoring on Profits NOTE: The profit after factoring increased both from a dollar perspective and percentage – from $5,000 to $20,000; and 5% to 10% - respectively. By investing $10,000 in factoring (assumes invoices pay in 60 days and a 2.5% per month rate), the net profit increases by $15,000. Before Factoring After Factoring Revenues $100,000 $200,000 Cost of Goods/ Services Sold $65,000 (65%) $130,000 (65%) Gross Profit $35,000 (35%) $70,000 (35%) Variable Cost $10,000 (10%) $20,000 (10%) Fixed Costs $20,000 $20,000 Cost of Factoring N/A $10,000 Net Profit $5,000 (5%) $20,000 (10%)

29. Broker Commissions Schedule Assumes all Invoices paid in 41 Days. Commissions paid at the end of each month based upon batches of invoices closed in that month. Month 1 Month 2 Per Annum Sales $1,000,000 $1,000,000 Invoices Closed $ - $1,000,000 $12,000,000 Factoring Fees $ - $41,800 $501,600 Broker Commission Per Month Per Annum 5% $2,090 - $25,080