EFTA01090685.pdf

CORE: Proforma Balance Sheet Post Restructuring as at 12/31/15(a-d) ($000's) ASSETS Cash $335 Accounts receivable 23 Other current assets 184.3 Current Assets $542 Fixed Assets, Net 7,920 Total Assets $8,462 LIABILITIES & EQUITY Accounts payable & accrued exp. (1) $647 Bank debt - current portion 168 FM Debt (2) 3.193 Refundable Initiation Fees - Resigned members (3) 5.593 Active Members (4) 7.754 Deferred Revenue 6.406 Deferred Rent 798 Current Liabilities $24,559 Total Liabilities $24,559 Shareholder Equity ("SE") O97 -16 Total Liabilities & SE $8,462 Footnotes: (1) This liability has been reduced by approx $2.5M based on negotiations with RFR and the buyout of their interest (2) This liability represents the remaining 26 FM Notes and Accrued Interest. There are ample losses to offset the COD and are confident we will obtain most of the remaining settlement agreement signatures in the interim (3) This liability is primarily being addressed through services in kind in lieu of cash (4) Represents a contingent liability that is not due unless and until a member resigns Assumptions: a.) The figures presented are before outside accountants review b.) Assumes elimination of FM Notes c.) Assumes elimination of AES Loan and related amounts due RFR d.) Assumes all debt forgiveness flows through as income to the company in 2015 (FM) and 2016 (FM , RFR & AES) Company Confidential 2/18/2016 Page 1 EFTA01090685