Valuation Report of

Peak Software Solutions, Inc.

Valuation Date: 19 May 2022

Created on: 19 May 2022 Prepared by:

TABLE OF CONTENTS

TABLE OF CONTENTS......................................................................................................................................2

SUMMARY OF FINDINGS................................................................................................................................3
Company Summary............................................................................................................................................................................................. 3

COMPANY VALUATION...................................................................................................................................4

COMPANY OVERVIEW....................................................................................................................................5

SCORECARD METHOD....................................................................................................................................6
Parameters of each factor:................................................................................................................................................................................ 6

RISK SUMMATION METHOD..........................................................................................................................7

Total amount per Criteria:.................................................................................................................................................................................. 7

BERKUS METHOD...........................................................................................................................................8
Total amount per Criteria:.................................................................................................................................................................................. 8

VENTURE CAPITAL (VC) METHOD..................................................................................................................9

VC METHOD FORMULA...................................................................................................................................................................................... 9

WEIGHTS OF METHODOLOGY......................................................................................................................10
Disclaimer & Notes........................................................................................................................................................................................... 10

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SUMMARY OF FINDINGS
Peak Software Solutions, Inc.

123 Main Street, San Francisco, CA 94110

2021

Company Summary

Pre-money Valuation: $1,676,119

Employees: 5
Funding: Seed Investment
Company Products: Product development stage
Expected Market Share: 25%
Years to Exit: 4
Exit Value: $10,000,000

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COMPANY VALUATION
Pre-money Valuation: $1,676,119

The pre-money valuation of the company is defined as the value of the company prior to any funding. The company
valuation is displayed as a weighted average of the different methods. The weighting for these is based of the
company stage, product development, and exit strategy and timing.

The methods used in determining the pre-money valuation of the company are: Scorecard Method, Risk Summation
Method, Berkus Method and the VC Method. The results of these are:

Total Valuation: $1,676,119

Scorecard Method: $1,513,000 (20.0%)

Risk Summation Method: $2,125,000 (20.0%)
Berkus Method: $1,100,000 (50.0%)
VC Method: $3,985,191 (10.0%)

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COMPANY OVERVIEW
In determining the metrics of the company, analysis is conducted in five major areas of any startup:

Management: Management team of the company ranks 5.5 out of 10.

This consists of Experience of founders, Previous working experience together, Permanent staff count & previous managerial experience.

Business: Business of the company ranks 5.6 out of 10.

This consists of Scalability, Stage of Development, Company Funding, Burnout Rate, Exit Potential, Exit Value, Years to Exit, Accounting &
Financial Controls and Legal Risk.

Product: The product of the company ranks 5.6 out of 10.

This consists of Uniqueness of Idea, Company Product Stage, Disruption risk of network, Disruption risk of IT and Ease of Duplication.

Market: The market of the company ranks 5.0 out of 10.

This consists of Total TAM, SAM, SOM, Expected Market Share, Market Competition, Product Competitiveness, International Expansion plans
and Political Risk.

Sales & Marketing: The sales & marketing of the company ranks 5.3 out of 10.
This consists of Strength of Brand, Customer diversity, Strength of Partnerships, Strength of Suppliers, Marketing Plan Development and
Marketing Resources.

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SCORECARD METHOD
Scorecard Method Valuation: $1,513,000

Otherwise known as the Bill Payne valuation method, this is a common valuation model for startups used by Angel
investors for pre-revenue startups. The idea is to find the average valuation of all pre-revenue startups in the
target company’s market and compare it to the pre-revenue valuation score of the target company. The scorecard
method analyses seven different factors for the company and multiples this by a score factor to the industry
average valuation for the overall valuation of the company

Industry Pre-Money Average: $2,000,000

Factor: 2,000,000

Parameters of each factor:

Strength of the Management Team: 22.5 (30%) Competitive Environment: 9.5 (10%)
Size of the Opportunity: 17 (25%) Marketing/Sales/Partners: 6 (10%)
Strength of the Product and Intellectual Need for additional rounds of funding: 4.25 (5%)
Property: 12.15 (15%) Other: 4.25 (5%)

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RISK SUMMATION METHOD
Risk Summation Valuation: $2,125,000

This valuation model for startups aims at risk assessment of the target pre-revenue, early-stage startup. The Risk
Summation method analyses twelve different risk factors for the company with a score for each, and adds this to
the average valuation within the industry and company stage. It is similar to the scorecard method and uses the
following 12 elements to evaluate its risk status:

Industrial Pre-Money Average: $2,000,000

Total amount per Criteria:

Management: $0 Competition risk: $0
Stage of business: $0 Legislation/political risk: $250,000
Funding/capital risk: $0 Litigation risk: $250,000
Manufacturing risk: $0 International risk: $0
Technology risk: $125,000 Reputation risk: $0
Sales and Marketing risk: $-250,000 Potential lucrative exit: $-250,000

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BERKUS METHOD
Berkus Method Valuation: $1,100,000

Berkus Method of Valuation is an early-stage valuation method that was explicitly created to find a starting point
without relying upon the founder’s financial forecasts. The Berkus Method studies five crucial areas of a startup and
indicates a value ranging from zero to $500,000 for each area. These areas are:

Total amount per Criteria:

Sound Idea: $200,000
Quality Management Team: $200,000
Prototype: $100,000
Strategic Relationships: $100,000
Product Rollout or Sales: $500,000

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VENTURE CAPITAL (VC) METHOD
VC Method Valuation: $3,985,191

This is one of the methods to arrive at the pre-money valuation of a pre-revenue startup. In this startup valuation
method, first the terminal value is estimated. Terminal value is the expected value of the startup during the harvest year,
the year when the investor plans to exit. From this point, the pre-money valuation is calculated using the following
formula:

VC METHOD FORMULA

Exit Value: $10,000,000

Years to Exit: 4
Discount Rate: 25.86

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WEIGHTS OF METHODOLOGY
Company Stage: Product Development Stage

The default weighting for the company valuation by the stage of development.
The calculations for each is as below:

Method Weighting
Risk
Scorecard Berkus
Stage of Company Summation VC Method
Method Method
Method
Idea Stage 12.50% 12.50% 70.00% 5.00%

Development Stage, Non-Funded 15.00% 15.00% 60.00% 10.00%

Development Stage, Funded 17.50% 17.50% 60.00% 5.00%

Product Development Stage, Non-Funded, No Exit Plans 17.50% 17.50% 55.00% 10.00%

Product Development Stage, Non-Funded, Exit Plans 15.00% 15.00% 55.00% 15.00%

Product Development Stage, Funded, No Exit Plans 20.00% 20.00% 50.00% 10.00%

Product Development Stage, Funded, Exit Plans 17.50% 17.50% 50.00% 15.00%

Startup Stage, No Exit Plans 22.50% 22.50% 40.00% 15.00%

Startup Stage, Exit Plans 20.00% 20.00% 40.00% 20.00%

Expansion Stage, No Exit Plans 25.00% 25.00% 30.00% 20.00%

Expansion Stage, Exit Plans 20.00% 20.00% 30.00% 30.00%

Disclaimer & Notes

Eqvista, Inc. expresses no opinion or any other form of assurance on this information nor represents figures, statements or other information in
this report.

Public information and industry and statistical information have been obtained from sources believed to be reliable. However, Eqvista, Inc.
makes no representation as to the accuracy or completeness of such information and have performed no procedures to corroborate the
information.
Eqvista Inc has not audited or attempted to confirm this information for accuracy or completeness.

Eqvista, Inc. does not provide assurance on the achievability of the results forecasted by or for the Company, differences between actual and
expected results may be material, and achievement of the forecasted results is dependent on actions, plans, and assumptions of management.
This report makes no guarantee or intended for use as an offer or solicitation for sale. Eqvista Inc. shall not be liable nor responsible for any
losses, claims damages, liabilities, costs and expenses in connection with or arising out of the information contained in this report.

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