Financial Performance Analysis of Sample Technologies Inc. January 2020 - May 2021

Sample Technologies Inc.* Analysis of the Financial Results January 2020 May 2021 *This is a presentation for a fictional company, not a real-life client. It was designed to show an example of the analysis that AG Capital provides to its clients.

Section Name Slide No. Table of Contents Analysis of the Financial Results January 2020 May 2021 1. Overall Profitability 2. Sales to Related Customers 3. Sales to External Customers 4. Balance Sheet 5. Summary of the Key Findings 3 5 6 12 13 22 23 29 30 34 2

1. Overall Profitability January 2020 May 2021 3

NetSales and Net Income January 2020 May 2021 600 Thousands 500 400 300 200 91 80 78 63 100 61 56 54 -38 -9 -13 -2 -41 -19 -1 6 -1 0 Jan'16 Feb'16 Mar'16 Apr'16May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17May'17 -100 -200 -237 -300 Net Sales Net Income Total net sales in Year 2020 reached the point of $2.764M (on average ~ $230.3K per month), net income for Year 2021 was $92.836K or 3% from total net sales. Total net sales in January - May 2021 equaled to $832.359K (on average ~ $166.5K per month; -28% compared to monthly net sales in Year 2020), net income was $35.4K or 4% from total net sales. 4

Profitability Ratios January 2020 May 2021 25% 20% 20% 19% 18% 18% 18% 20% 17% 17% 16% 14% 14% 14% 15% 12% 13% 10% 8% 6% 11% 5% 10% 10% 10% 9% 8% 5% 7% 7% 7% 6% 4% 3% 0% 0% Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 -2% -5% -7% -10% -10% -15% Gross Profit Margin EBITDA Margin Net Profit Margin Overall gross profit margin in January 2020 May 2021 on average was 13% from total net sales, but total net profit margin was on average 3-4% from net sales. 5

2. Customers and Vendors January 2020 May 2021 6

Net Sales and Net Income January 2020 May 2021 600 Thousands 500 400 300 238 184 200 105 77 100 55 24 20 4 -73 2 1 0 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 -100 Net Sales Net Income Net sales in January 2020 May 2021 contributed ~54% from total net sales(e.g. $1.953M out of $3.596M). Gross profit from sales to related parties reached the point of $622.4K. The company shows positive overall profitability ratios only thanks to profitable deals with related parties. 7

Sales Structure (1) January 2020 May 2021 600 Thousands 500 400 295 300 396 397 200 269 209 100 35 21 16 21 47 38 36 35 28 0 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 -100 Equipment Installation Sales-Parts Sales-Accessories Shipping and Delivery Income Sales-Equipment Sales Discounts Average monthly sales to related parties in January 2020 May 2021 were ~ $114.9K. The volatility in sales throughout the period is mostly attributable to completion of large installation orders, which are booked only by the end of each installation. 8

Sales Structure (2) January 2020 May 2021 Sales Discounts; -119,461; -5% Sales-Accessories; 211,664; 10% 6% 0% Equipment Installation Sales-Accessories Sales-Equipment Sales-Parts Shipping and Delivery Income Sales Discounts 21% Sales- Equipment; 1275,691; 58% Net sales to related parties in January 2020 May 2021 reached the point of $1.953M and consisted mainly of equipment and part sales. Sales discounts to related parties contributed 5% from total net sales to related parties. Sales discounts are not identifiable by sales positions. 9

Regular Sales Structure (1) January 2020 May 2021 80000 70000 60000 34990 50000 21287 15803 40000 30000 21419 46904 20000 38248 36161 34771 28030 10000 15299 2782 8535 7251 7094 5495 5001 1739 725 4172 695 2776 3287 0 265 Jul'16 0 19 0 0 0 0 0 0 0 0 0 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 -10000 -20000 Equipment Installation Sales-Accessories Shipping and Delivery Income Sales Discounts Regular monthly sales to related parties in January 2020 May 2021 were ~ $13.5K. The volatility in regular sales throughout the period is also mostly attributable to completion of large installation orders they are associated with; these orders are booked only by the end of each installation. 10

Net Sales and Margin January 2020 May 2021 1400,000 150.00% 83.34% 100.00% 1200,000 32.08% 50.00% -2.74% 1000,000 0.00% 800,000 -50.00% -100.00% 600,000 -150.00% 400,000 -200.00% -255.63% 200,000 -250.00% 131,085 211,664 1275,691 448,384 5,414 ,0 -300.00% Equipment Installation Sales-Accessories Sales-Equipment Sales-Parts Shipping and Delivery Income Net Sales w/o Discounts Margin, % from Net Sales w/o Discounts Average margin from sales of accessories to related parties in January 2020 May 2021 was -3%, which means that accessories were sold to related parties at a loss (the higher margin, the better). 11

Mark-up January 2020 May 2021 1400,000 600% 500% 500% 1200,000 400% 1000,000 300% 800,000 200% 600,000 47% 100% -3% 400,000 -72% 0% 200,000 -100% 131,085 211,664 1275,691 448,384 5,414 ,0 -200% Equipment Installation Sales-Accessories Sales-Equipment Sales-Parts Shipping and Delivery Income Net Sales w/o Discounts Mark-up Average gross mark-up from sales of accessories to related parties of in January 2020 May 2021 was -3%, which means that accessories were sold to related parties at a loss (the higher mark-up, the better). In January May 2021, the weighted average mark-up for accessories sold was +3%. 12

3. Sales to External Customers January 2020 MAY 2021 13

Net Sales and Net Income January 2020 May 2021 500000 400000 300000 200000 100000 0 Jan'16 Feb'16 Mar'16 Apr'16May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17May'17 -100000 -200000 -300000 -400000 Net Sales Net Income Net sales to external parties in January 2020 May 2021 contributed ~46% from total net sales(e.g. $1.644M out of $3.597M). Gross losses from sales to external parties were -$148.7K (gross profit from all sales deals was +$475.4K). The company sold goods and services to external parties with negative average mark-up. 14

Sales Structure (1) January 2020 May 2021 500000 400000 300000 200000 100000 0 Jan'16 Feb'16 Mar'16 Apr'16May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17May'17 -100000 Equipment Installation Sales-Parts Sales Discounts Sales-Accessories Commission Income Sales-Equipment Shipping and Delivery Income Regular monthly sales to external parties in January 2020 May 2021 (excluding large equipment sales deals in March 2020)were ~$75K. 15

Sales Structure (2) January 2020 May 2021 Commission Income; ,646; 0% 1% Equipment Installation Sales-Accessories Sales-Equipment Sales-Parts Commission Income Shipping and Delivery Income Sales Discounts Sales Discounts; -408,121; -17% Sales-Parts; 919,594; 37% 3% Sales-Accessories; 191,033; 8% Sales-Equipment; 837,288; 34% Net sales to external parties in January 2020 May 2021 reached the point of $1.644M and consisted mainly of equipment and part sales. Sales discounts to external parties contribute 17% from total net sales (or ~35%, excluding large deals with the sales of equipment). Sales discounts are not identifiable by sales positions. 16

Margin January 2020 May 2021 1000,000 60% 51% 900,000 50% 800,000 40% 700,000 30% 600,000 20% 500,000 10% -4% 400,000 0% -16% 300,000 -10% 200,000 -20% -34% 100,000 -30% 69,871 191,033 837,288 919,594 ,646 33,580 ,0 -40% Equipment Installation Sales-Accessories Sales-Equipment Margin, % from Net Sales w/o Discounts Sales-Parts Commission Income Shipping and Delivery Income Net Sales w/o Discounts Average margin from sales of accessories and equipment to external parties in January 2020 May 2021 was accordingly -16% and -4%, which means that accessories and equipment were sold to external parties at a loss. Worth mentioning that in January - May 2021 average margin for accessories and equipment sold was +25%. Average margin before a discount for goods sold to external parties is lower. Discount rate for goods sold to external parties is higher. 17

Mark-up January 2020 May 2021 106% 900,000 110% 800,000 90% 700,000 70% 600,000 50% 500,000 30% 400,000 -4% 10% 300,000 -14% -26% -10% 200,000 -30% 100,000 69,871 191,033 837,288 919,594 ,646 33,580 ,0 -50% Equipment Installation Sales-Accessories Sales-Equipment Sales-Parts Commission Income Shipping and Delivery Income Net Sales w/o Discounts Mark-up Average mark-up from sales of accessories and equipment to external parties in January 2020 May 2021 was accordingly -14% and -4%, which means that accessories and equipment were sold to external parties at a loss. Worth mentioning that in January - May 2021 average mark-up for accessories and equipment sold was +38%. Average mark-up before a discount for goods sold to external parties is lower. Discount rate for goods sold to external parties is higher. 18

Cost Structure (1) January 2020 May 2021 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 Advertising Expenses Merchant Account Fees Office Expense Facilities & Equipment Other Admin. Expenses Depreciation Expense Auto/Truck Expenses Salaries, Wages & Benefits Interest Expenses Average monthly indirect costs in January 2020 May 2021 (all costs, excluding cost of goods sold), were $21.8K(including non-cash depreciation expenses of ~$0.834K per month). Operating costs (payroll expenses, etc.) are not identifiable between related / external parties. 19

Cost Structure (2) January 2020 May 2021 Average Monthly Expenses 8% 7% Advertising Expenses Merchant Account Fees Auto/Truck Expenses Office Expense Facilities & Equipment Salaries, Wages & Benefits Other Admin. Expenses Depreciation Expense Interest Expenses Income Taxes 26% 1% 2% 10% 5% 8% 19% Office Expense; 3,078 Average monthly indirect costs in January 2020 May 2021 (all costs, excluding cost of goods sold), were $21.8K. 20

Facilities and equipment rent (~ $3K per month out of total facility expenses of ~ $3.4K per month), electricity, gas, alarms, cleaning. Comments on Cost Structure Office expense office suppliers, computer / internet / website / telephone, etc. office expenses. Other Admin. Expenses legal and accounting fees, general liability insurance, licenses and permits, dues and subscriptions, postage, bank fees/charges, meals and entertainment, miscellaneous expenses. Salaries, Wages & Benefits salaries, payroll tax, health insurance, worker compensation. Income taxes State Income tax, Business tax, Sales tax paid. 21

4. Balance Sheet January 2020 May 2021 22

Assets January 2020 May 2021 1000 Thousands 900 800 464 700 600 500 400 496 289 263 160 449 177 388 300 398 463 449 154 394 147 360 200 125 150 262 149 231 226 226 100 85 177 33 132 122 120 67 65 63 61 51 42 41 35 25 0 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 -100 Checking/Savings Accounts Receivable Inventory Other Current Assets Assets consist mainly of fixed assets (~20% from total assets) as well as inventory (~60%) and cash resources (10%). There is a substantial increase in inventory in Year 2021. In separate months accounts receivable were booked with negative values . 23

Equity & Liabilities January 2020 May 2021 1100 Thousands 900 700 618 73 66 64 100 63 500 329 284 42 102 269 218 177 170 80 97 26 82 121 173 10 20 26 27 68 16 300 19 134 148 73 47 393 16 13 370 363 360 354 345 342 332 325 324 65 306 292 281 100 174 174 172 116 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 -100 Equity Sales Tax Payable Due to credit institutions Accounts Payable Equity and Liabilities of consist of mainly shareholder s equity (~50%) and due to credit institutions (40%). The company has high liquidity (accounts receivables+inventory+cash exceed accounts payable+short- term lease payments by ~2 times). Debt/EBITDA ratio is below 1,0 (the lower, the better), meaning that the company has good capacity to borrow money. 24

Inventory and Inventory Turnover January 2020 May 2021 65 600000 70 60 60 500000 48 50 400000 36 40 34 31 300000 27 26 26 24 24 30 23 23 22 22 21 19 200000 20 150429 148941 153867 464160 496247 159631 177158 263437 288614 125162 146601 360066 393610 463184 448633 449297 397786 100000 10 0 0 Jan'16 Feb'16 Mar'16 Apr'16May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17May'17 Inventory Inventory Turnover in Days The value of inventory and average inventory turnover ratioincreased by 2.5 times in Year 2021. Taking into account current average monthly sales volume to both related and external parties, current inventory could be sold within next 65 days. It is of essence to control inventory to get rid of low liquidity risk. 25

Accounts Receivable and Debtor Days January 2020 May 2021 500000 8 6 6 400000 6 4 4 3 3 300000 4 3 3 3 2 1 200000 2 1 1 1 1 1 1 387599 -71316 -26488 -8436 13953 13585 27523 84874 33418 -3484 -2273 -4167 -5110 100000 0 -4391 2855 7880 4816 0 -2 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 -100000 -4 Accounts Receivable Debtor Days In separate months accounts receivable were booked with negative values. According to balance sheet data, it takes to customers on average up to one week to pay for the goods / services purchased good payment discipline. 26

Accounts Payable and Creditor Days January 2020 May 2021 23 700000 25 600000 18 18 20 17 17 16 16 500000 15 15 15 14 15 400000 11 10 10 300000 8 10 6 200000 618065 329053 102339 134230 120723 5 73050 46839 68480 79683 82139 97092 42045 63216 99885 72997 63861 66090 3 100000 0 0 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 Accounts Payable Creditor Days According to balance sheet data, it takes up to two weeks to pay for bills / invoices received from vendors. Increasing creditor days ratio will improve liquidity. The higher creditor days ratio, the better. 27

Length of Cash Cycle in Days January 2020 May 2021 ,70 ,55 ,60 ,51 ,50 ,40 ,40 ,31 ,30 ,19 ,17 ,20 ,14 ,13 ,13 ,12 ,12 ,11 ,11 ,11 ,11 ,10 ,10 ,10 ,0 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 Inventory Turnover in Days Debtor Days Creditor Days Length of Cash Cycle, Days The length of cash cycle (average number of days starting from the day money is paid to vendors for acquired inventory and ending with the day money is received from customers for goods sold)on average is ~55 days. In other words, the company has to finance its commercial operations during 2 months. Liquidity of the company depends mainly of inventory turnover it is of great importance not to hold excessive inventory in order to avoid lack of cash resources. 28

5. Summary of the Key Findings January 2020 May 2021 29

1. The company shows positive overall profitability ratios (gross margin of 13% and net profit margin of 4%) only thanks to highly profitable sales of equipment and parts to related parties. 2. Net sales to related parties in January 2020 May 2021 contributed ~54% from total net sales (e.g. $1.953M out of $3.597M). 3. Accessories were sold to related parties with negative average margin (-3%). In Year 2021 average margin was +5%. 4. Accessories and equipment were sold to external parties with negative average margin (accordingly, -16% and -4%). In Year 2021 average margin for the goods sold was +25%. 5. Average margin before a discount for goods sold to external parties is lower(compared to the average margin for goods sold to related parties; - 9% vs. +32%). 6. Discount rate for goods sold to external parties are higher (compared to the average discount rate for goods sold to related parties; -17% vs. -5%). Summary of the Key Findings (1) Analysis of the Financial Results January 2020 May 2021 30

7. Average monthly costs in January 2020 May 2021 (all costs, excluding cost of goods sold), were $21.8K. taking into account average overall gross margin of 13%, the company has to generate monthly net sales of at least $168K to generate zero net profit margin. Summary of the Key Findings (2) Analysis of the Financial Results January 2020 May 2021 8. The value of inventory and average inventory turnover ratio increased substantially in Year 2021. Taking into account current average monthly sales, it will take ~2 months to sell current inventory. It is of great importance not to hold excessive inventory in order to avoid lack of cash resources. 9. The company has a strong balance sheet (thanks to deals with related parties): 9.1. Current assets exceed current liabilities by more than 2 times; 9.2. Debt / EBITDA ratio is below 1 (the lower, the better). The company has good capacity to borrow money. 31

10. Our recommendations: - Split indirect operating expenses (e.g. payroll expenses) between related and external parties so as to be able to determine the profitability of the deals with related and external parties precisely. - Split sales discounts by sales positions so as to be able to determine average margin by sales positions precisely. - Check accounts receivable (negative values in various months in order). Summary of the Key Findings (3) Analysis of the Financial Results January 2020 May 2021 32

Thank you for the attention! Questions / Comments? 33