1. Federally Funded Research & Development Tax Credits These Underutilized Wage Based Tax Credits for Businesses through out the United States & Canada Create an Increase in Cash Flow This document and/or electronic file contains information that (a) is or may be LEGALLY PRIVILEGED, CONFIDENTIAL, PROPRIETARY IN NATURE, OR OTHERWISE PROTECTED BY LAW FROM DISCLOSURE, and (b) is intended only for the use of Best Bottom Lines, LLC. You must have written authorization from Best Bottom Line, LLC to use, copy, or distribute any part of this document as it is strictly prohibited.

2. R&D Tax Credit – IRC §41 In December 2001, new tax regulations enabled small to mid-size companies to be eligible to take the R&D (wage-based) Tax Credits. Documentation and Discovery requirements were relaxed. The goal was to keep innovation and creativity in the U.S. and encourage economic growth. Clients can now receive cash back and/or tax credit benefits for conducting technical activities and meeting the tax regulation requirements.

3. About Best Bottom Lines, LLC Represents a National Tax Recovery Consulting Firm based out of Troy, MI Specializing in Engineering-Based Tax Studies such as: R&D, Cost Segregation and Energy Efficiency Studies Unique staff made up of legal, tax and engineers made up of : mechanical, chemical, electrical & structural needed to fully maximize tax benefits. All of our work will withstand IRS scrutiny and is backed by an unlimited audit defense guarantee

4. New or Improved Business Component A business component can be a product or a process, and can include the following : Performing environmental testing Developing, implementing, or upgrading systems and/or software Automating and/or streamlining internal processes Expending resources on outside consultants/contractors to do any of the above-stated activities Attempting the use of new materials and compounds

5. Technological in Nature The taxpayer is seeking information that is technological in nature: N ature component is based on the process of experimentation used in the research relying on the principles of hard sciences, such as physical or biological sciences, engineering, or computer science.

6. Elimination of Uncertainty  The research and development activities must eliminate uncertainty either about the capability or method of developing the product.  In addition, the elimination of certainty of the improvement of the product or its appropriate design is also sufficient to meet this requirement.

7. Process of Experimentation The Process of Experimentation involves the evaluation of one or more alternatives where there exists uncertainty at the outset as to the appropriate design of the business component. The Taxpayer may conduct a process of evaluating the alternatives through systematic trial and error, developing one or more hypotheses, designing and conducting experiments to test the hypotheses, among other things.

8. Eligible Costs Wages - Form W-2, Partnership Earnings subject to Self Employment Tax, Schedule C, bonuses paid to employee excludes 401(k) & fringe benefits Supplies - Cost to fabricate prototypes / items consumed in R&D process Any tangible property used in the conduct of qualified research other than land or improvements to land, and property subject to depreciation 65% of Contract Research - Fees paid to non-employees, outside consultants / engineers / software developers

9. The Process Data Collection Project Identification Preliminary Analysis Interviews Credit Calculations Reporting Financials Projects & Activities Qualified Projects Employee R&D Allocations

10. Qualifying Clients Manufacturing Fabrication Engineering Chemical Tool and Die Machine Shops Software Development Electronics Biotechnology Pharmaceutical

11. Ex: Manufacturing Co. #1 Automotive Prototyping Sampling of activities: – Plastic part manufacturing, – Rapid prototype modeling, – Design – AutoCAD, – Aluminum prototype tooling, – Silicone tooling, – Injection, Blow, Compression molding, – Vacuum forming Annual Payroll 2003 – $2MM 2004 – $3MM 2005 – $4MM 2006 – $5MM Net Credit Benefit for 2003 thru 2006 tax years: $200,000

12. Sampling of activities: – Grinding – CAD Drawings – Electro Mechanics – Vibratory Deburring – Hardware Insertion – Laser Technology – Machining Annual Payroll – 2003 – $6MM – 2004 – $7MM – 2005 – $8MM – 2006 – $9MM Net Credit Benefit for 2003 thru 2006tax years: $500,000 Ex: #2 Manufacturing Co. Metal Product Fabrication

13. Ex: Software Co Sampling of activities: Designing software Coding Programming Improving application features Functionality improvements Alpha, beta testing Improving Modules Annual Payroll 2003 – $5MM 2004 – $6MM 2005 – $7MM 2006 – $8MM Net Credit Benefit for 2003 thru 2006 tax years: $500,000

14. Ex: Engineering Co. Sampling of activities: – Pipe and Filtration Systems – Prototyping – Solvent and Adhesive bonding – Quality Assurance – Thermoforming Process – Designing systems and products – Developing layouts and schematics – Testing and Failure analysis – Annual Payroll – 2003 – $10MM – 2004 – $11MM – 2005 – $12MM – 2006 – $13MM Net Credit Benefit for 2003 thru 2006 tax years: $700,000

15. The Final Product The R&D Study / Technical Report The R&D Study / Technical Report is where all the arguments, documentation of qualification and quantification must coalesce into a coherent statement of who, why, when, where and how much. The Study will convey the credit being taken and the basis for such amount. For a credit with varying qualitative issues, the report is critical ABC, Inc. 1234 Research Lane Houston, TX 77000 R&D Tax Credit Study 2002 – 2005 Tax Years

16. Form 6765

17. State R&D Tax Credits Arizona Arkansas California Colorado Connecticut Delaware Georgia Hawaii Idaho Illinois Indiana Iowa Michigan (Office) Minnesota Montana New Jersey New Mexico North Carolina North Dakota Ohio Pennsylvania Rhode Island South Carolina Texas (Office) Utah Vermont West Virginia Wisconsin Washington Kansas Louisiana Maine Maryland Massachusetts

18. Benefits to Clients Significant credits/cash back from previous 3 open years $1 for $1 reduction on current year’s taxable liability Additional tax savings in the future Unutilized credits are carried back 1 year and then carried forward up to 20 years Increase company assets and value

19. What’s Next? I. Conference Call / Visit with Clients / CPA Firm II. Setup office visit with the CPA Firm (Tax Partners/Managers) and/or with the Prospective Client (CEO/CFO/President) III. Feasibility Analysis IV. Initiate the Study

20. Frequently Asked Questions What type of background and expertise is necessary to successfully provide the service? The R&D Tax Credit team must have the technical (engineering) and legal expertise to quantify or qualify the credit. Numerous CPA’s across the country outsource this highly specialized service to our team. Our Clients have never documented employees activities/time. Is that a concern? No. Through our interview process, we collect and document the necessary information required by the code/IRS. What if the shareholders are in AMT situation? The un-utilized credits are carried back 1 year and then carried forward up to 20 years. How does our team get paid? For previous 3 open years, our fees are contingency based. If we can’t help you realize any benefits, we don’t get paid. For current and future years, due to IRS Circular 230, we charge a fixed fee. How long does it take for the Client to realize the benefits? For previous 3 open years, it takes 3 – 4 months after amending returns to receive cash back from the IRS for taxes paid. For current year, the benefit is realized upon filing, which is $1 for $1 reduction on taxable liability. Will this project disrupt the employee’s or the CPA’s daily activities? – Our process is strategically designed so that it takes a total of 5 to 10 hours of client time – technical interview. This includes a few hours with the company’s chief engineer(s), and a hour or two with the controller/CFO and the CPA.

21. Contact Information Best Bottom Lines, LLC Bruce Etterling, CEO Tel: (888) 598-9667 FAX: (888) 817-0921 BEtterling@bestbottomlines.com