kiro’o games usiness plan summary...page 2 sur 41 introduction this document is intended to...

KIRO’O GAMES SARL 8824 Yaoundé ● Téléphone : (237) 675 46 39 91/ (237)694 43 06 38

RC/YAO/2015/B/528; CRT: M061512333206G www.kiroogames.com

KIRO’O GAMES BUSINESS PLAN SUMMARY

FIRST PROFESSIONAL VIDEO GAME STUDIO IN CENTRAL AFRICA

_____________________________

Expansion Plan 2016 – 2026

Financial & Technical summary

- Main promoter : MADIBA Guillaume Olivier S/C Groupe MADIA

- Contact main promoter

o Mail : [email protected]

o Phone(1): +237 699 64 37 54

o Phone (2) : +237 670 73 13 14

- Activity sector: Information Technology, Entertainment, Mobile, Advertising, Culture.

- Website: www.kiroogames.com

- Project location :

o Realization : Cameroun

o Target Area: Europe, USA, Africa.

This document is an English translation of the original French document.

mailto:[email protected]

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INTRODUCTION

This document is intended to provide a summary of the financial & technical business

plan for the expansion of Kiro'o Games. It shows the vision and the expansion strategy,

particularly in the area of mobile gaming well as positioning as a game publisher in Africa.

It follows the logic of gradual responses in the following concerns:

- Present Kiro'o Games studio: missions, team, working environment and references in the

industry.

- Potential market and gaming market key figures: Description of the video game industry

value chain, distribution targets and coveted market share.

- Product management, games catalog and Business Model: Kiro’o games catalog

organization, Kiro'o Tales creative methodology, game creation strategy, target platform

(PC, Console and Mobile) and suitable Business Model.

- Communication and Marketing Strategy: positioning strategy as a strong brand for the

target.

- Planning and activities between 2016 and 2026: forward planning of the main phases of

flexible evolution depending on the sector movements.

- List & evolution of needs, technical expansion: projections on the variable needs of

Human and material resources based on success indicators.

- Simulations synthesis: quantified representations of the expansion needs, probable

returns on 10 years of exploitation.

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EXPANSION: KEY FIGURES

Input & Output in 10 accounting years

101 240 000 USD of sales

27 100 000 USD of operating expenses

42 million USD of net income after tax

10,6 million of dividends distributed

Investment: 7 284 000 USD needed before self-financing

Self-financing: Kiro'o Games finances itself after 03 accounting years.

Investment financing (by equity + loan)

Sales of 25% Kiro’o Games shares at 450 000 USD

6 834 000 USD of loan by new capital subscribers

Investment returns

Buy 25% of Capital at 450 000 USD and receive accumulated over 10 years 2 513 000

USD in dividends, more than 550% of your initial bet.

Lend us $ 6 834 000 and you are paid back $ 14 350 000 over 07 years, more than

210% of your initial loan.

Overall, invest 7 284 000 USD to get returns of $ 16 864 000 over 10 years of

operating. More than 230% returns on your investment. It’s about 130% profit.

Payback period: 06 years

You begin to receive your first returns at the end of the 3rd year but you will recover your

investment completely after 06 years. After this year, you're in the profit phase.

All the simulations were done pessimistically

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Summary

A- PRESENTATION OF KIRO’O GAMES ........................................................................................................ 5

1- The main promoter : MADIBA Guillaume Olivier .............................................................................. 5

2- The Kiro’o team .................................................................................................................................. 6

3- Current working environment ........................................................................................................... 7

4- General Fund raising strategy ............................................................................................................ 8

5- Kiro’o in the world .............................................................................................................................. 8

6- Previous fund raising & current distribution of capital .................................................................. 10

B- VIDEO GAMING POTENTIAL MARKET .................................................................................................. 11

1. The video game industry value chain .............................................................................................. 12

2. Video Games in Africa ...................................................................................................................... 12

3. Targeted markets ............................................................................................................................. 13

C- Our games : Catalog & Business Model ............................................................................................... 14

D- KIRO’O CENTER & KIRO’O ADS (K-CENTER & K-ADS) .......................................................................... 16

E- EXPANSION ACTIVITIES PLANNING (2016-2026) ................................................................................. 17

F- BUILDING & HUMAN RESSOURCES NEEDS .......................................................................................... 20

G- EXPANSION : FINANCIAL OVERVIEW ................................................................................................... 24

1. Simulation parameters ..................................................................................................................... 24

a. Fund raising (Equity + Loans) ....................................................................................................... 24

b. Dividends & Loans repayment ..................................................................................................... 25

c. Other parameters ......................................................................................................................... 26

2. Simulations by expansion phases .................................................................................................... 27

a. Global Financial summary per phase ........................................................................................... 27

b. Take-Off Phase: financial summary ............................................................................................. 29

c. Development Phase: Financial summary .................................................................................... 31

d. Growth Phase: Financial summary .............................................................................................. 33

e. Diversification Phase: Financial summary ................................................................................... 35

3. Global simulation per year ............................................................................................................... 37

a. Exploitation analysis ..................................................................................................................... 37

b. Fundraising calendar .................................................................................................................... 39

H- CONCLUSION ........................................................................................................................................ 40

1- Advantages and disadvantages........................................................................................................ 40

2- Why are we sustainable ? ................................................................................................................ 41

KIRO’O GAMES SARL 8824 Yaoundé ● Téléphone : (237) 675 46 39 91/ (237)694 43 06 38

RC/YAO/2015/B/528; CRT: M061512333206G www.kiroogames.com

A- PRESENTATION OF KIRO’O GAMES

About us

Kiro'o Games is a video game development studio with:

- A competent and cohesive team.

- An ambitious and innovative vision

- A well progressing brand among its target

- A constantly expanding Networking in harmony with objectives.

Our vision

- Make games that stimulate and encourage the “souls” of the players by approaching

existential, philosophical and geopolitical topics.

- Make interactive games inspired by African fantasy, which provide great moments of

relaxation and fun.

Our objective

- Become the biggest video game publisher in Africa

- Position ourselves as leader of the African gaming industry

1- The main promoter : MADIBA Guillaume Olivier

Programmer, designer, manager and writer, Olivier MADIBA is a multi-

task man. Aged of 30, is the General manager of Madia SARL (his first

company) and also Founder, CEO and Lead Project of Kiro'o Games. He

works every day his leadership to incarnate the best ideals of the

pursuit of excellence with his team. Today, Kiro'o Games represents one

of the socio-economic models for the young generation of African

entrepreneurs in full awakening.

His life’s philosophy:

« Being realistic is to find rational means to achieve wonderful goals»

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2- The Kiro’o team

The main raw material of the digital sector company is its human resource.

Since December 2013, Kiro'o Games is comprised of a solid core of 19 people combining artistic,

IT, logistics, managerial and communicational skills

Current organization of Kiro'o Games

The managerial is focus on leadership and social cohesion to promote a strong sense of

"professional family". The team consists of:

- 1 CEO/Lead Project

- 1 Co-Lead Project, Sound designer

- 1 Lead Design, marketing manager

- 1 Lead Programmer

- 1 Lead Artist

- 1 business Developer

- 1 Community manager

- 2 programmers

- 3 backgrounds designer

- 2 Chara designer

- 1 Character animator & AI

- 1 SFX designer

- 1 PNJ & item designer

- 1 webmaster & hud designer

- 1 Taxation and Logistics Manager

- 1 responsible for maintenance

- 1 responsible cooking

- 02 consultants Programmation &

Gamedesign (France & Belgium)

KIRO’O GAMES Shareholders

Lead Project Co- Lead Project & Sound designer

Lead Programmer

Lead Artist Game Designer

Background/ Artworks Team

Visual SFX/ Interface Team

Administrative & Financial Service

Business Developer

CharaDesign Team

Programmation

Team

Community Manager

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3- Current working environment

Kiro'o Games works professionally since December 2, 2013 in a residence in the area of Biyemassi –

Yaounde (Cameroon).

It is a residential home converted into a game studio. For more discretion, the external

appearance remained unattractive. The street is secure; there are no serious infrastructural problems

like water outages or electrics failures except in cases of national shortages (which are not frequent).

The team is organized by center of expertise in an open-space to facilitate inter-employee

communication. The garage was turned into a dining room; it serves as a relaxation room.

Brainstorming and dreamstorming are constantly organized there to share and develop the common

vision.

However, for future growth, the team should:

- Get more space to facilitate the expansion of the studio team

- Integrate some infrastructure to ensure energy independence of the studio in case of national

shortage (Generator, solar panels, etc.)

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4- General Fund raising strategy

The studio will use two fund raising strategies necessary at the key moments of its expansion

(Private Equity + Loans):

- Private Equity: The studio shares sales are based on the assessment of potential products to

create. A clause defined in the founding shareholders common charter allows the shares sales

according to needs.

- Loans: a large part of necessary funds for the expansion will be raised by this method. The new

shareholder loans us money based on business needs. This loan will be repaid at equivalent or

higher rates than the average rate of interest granted by banks.

- Increase in capital: based on visions and objectives, a capital increase is possible if the financial

returns of the games do not provide self-investment for expansion.

- Investment by spot or sectoral shareholding: People can invest in division or in a particular

product and get time gains as a percentage of the generated profits.

5- Kiro’o in the world

Besides being a simple studio, Kiro'o Games was erected as one of the most promising startups in

Africa. This is due to several factors including:

- Identification of Young African to Kiro’o promoters: The creators of the studio are pure local

products with a common path to the majority of young people in the continent.

- Innovative Business Model: Few African startups are trying to create local products with an

ambition success in Western markets. In this, Kiro'o Games innovates by showing that Africa

can be more than a raw material reservoir. The long-term ambition will position us as a global

economic operator (flow of African games in the world and sell world games in Africa).

- A high potential Product with recognition by critics: The first game of the studio, "Aurion

Legacy of the Kori-Odan", is the most anticipated game from the African gaming market. The

success of the Greenlight (Steam) and the Kickstarter campaign illustrate that international

players are receptive to our formula.

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They spoke about us

All this media campaign was performed with a communication budget of less than € 10,000.

The innovative aspect and product quality, as well as the history of the studio were clearly

sufficient to create buzz.

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6- Previous fund raising & current distribution of capital

To develop Aurion, Kiro'o Games was inspired by the African tontine system and managed to

raise funds via Equity Crowdfunding adapted to the local context. Therefore Kiro'o Games counts

among its shareholders, companies and individuals with a strong background in different spheres of

international business.

Distribution of Capital Type of shareholders (distribution) Description

08 founders shareholders (670 so 67% of the share capital)

Ideological founders, principal promoters of the project since 2003 & Madia LTD

(Our incubator between 2012 and 2013).

88 shareholders Origins (330 so 33% of the share capital)

Investors who participated in the startup studio.

However, Kiro'o Games via Aurion has managed to establish itself in player’s minds by

successfully raising funds on Kickstarter (a fund US raising platform funds via preorders). An indicator

that clearly shows the game is awaited. Below is previous fund raising summary:

System/fund raising platform Amount raised contributors Period

Equity Crowdfunding ≈ 215 000 USD 96 April 2013 – August 2015

Kickstarter ≈ 55 000 USD 1310 15 Sept – 20 October 2015

Most of our shareholders are highly concentrated outside Cameroon. The graph representing the

source of funds shows the country of residence and nationality of the different shareholders. This is an

indicator of our ability to manage a distant and diversified shareholding.

7%

0%

0%

27%

11%

0%

44%

1% 2% 4%

4%

Allemagne

Bénin

Burkina Faso

Cameroun

Canada

Côte d'Ivoire

France

Grande Bretagne

Italie

Norvège

Suisse

UAE

USA

1% 0,33%

74%

2%

20%

3%

Allemande

Béninoise

Camerounaise

Congolaise

Française

Togolaise

By Country of Residence By Nationality

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B- VIDEO GAMING POTENTIAL MARKET

Some key figures in the sector

75,5 billion

- 2014: Video gaming revenues in the world (dollars) o 31,9 billion in Asie-Pacific o 24 billion in USA o 18,2 billion in Europe o 0,5 billion in Africa

1,2 billion 0,69 billion 0,8 billion

- Mobile Gamers in the world - TV & console Gamers in the world - PC Gamers in the world

20,9 millions 32 millions

- Mobile Gamers in Africa - Potential Gamers in Africa (all categories)

137 million &

2 billion

- 137 million, production budget (dollars), excluding advertising campaign

of the blockbuster GTA V of Rocktar North. It totaled $ 265 million advertising included.

- 2 billion is the revenue generated by GTA V between 2013 and 2015

22 million

Number of copies sold (all platforms) between 2011 and 2015 of 'The Elder Scroll Skyrim' thereby becoming the best-selling A-RPG of all time.

o 10,8 million in North America o 9,2 million in Europe o 0,5 million in japan o 1,5 million in the rest of the world

An indicator of the potential market size of "Aurion inheritance Kori-Odan", which is the same type. 3,5 million copies sold on the PC version.

6 million

Number of copies sold (all platforms) between 2014 and 2015 of the Action-RPG: THE WITCHER 3

1,5 billion The revenue generated by the mobile game Candy Crush over 03 years (in dollars)

Top 50

- 80% of casual gamers choose only applications / games from the top 50

download sites. - It is very difficult to get a market share in the mobile, view of the forest

similar offers.

40% 35% 25%

- 40% of global consoles sold in Europe - 35% of global consoles sold in the US - 25% of global consoles sold in Japan

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1. The video game industry value chain

The value chain shows the path of a product from its creation to its consumer. In general, the

entertainment industry (music, books, film, video games) follows a well-defined chain. But the video

game industry has its own key steps as illustrated in the following figure:

2. Video Games in Africa

Africa has long been ignored by the game industry map. A trend which is gradually changing due

to several factors of consumption and production. Analysts and experts predict strong growth in the

sector by 2020. Specialized Gaming international organizations are already interested in the African

market. They have some representations in Africa like Senegal IGDA, IGN Africa.

On more than 55 million Smartphones sold in Africa in 2014, about 38% of users play Mobile, a

theoretical African market of 20,9 million players.

Console & PC potential market is estimated at more than 32 million players.

Research Links:

- http://www.ericsson.com/res/docs/2014/consumerlab/ericsson-consumerlab-10-hot-consumer-

trends-2015.pdf

- http://www2.deloitte.com/tn/fr/pages/technologies-medias-et-telecommunications/articles/tmt-

predictions-afrique-2015.html

- http://www.internetworldstats.com/stats.htm

For more information, please read the Technical expansion Business plan in the appendix of this

document.

Developer

Studio Publisher Distrisbutor Retailer Gamer

Studio Publisher Distributor Gamer

Kiro'o Games Plug In Digital Steam

Partner X Gamer

Industry standard value Chain

Kiro’o Games current value chain

http://www.ericsson.com/res/docs/2014/consumerlab/ericsson-consumerlab-10-hot-consumer-trends-2015.pdf

http://www.ericsson.com/res/docs/2014/consumerlab/ericsson-consumerlab-10-hot-consumer-trends-2015.pdf

http://www2.deloitte.com/tn/fr/pages/technologies-medias-et-telecommunications/articles/tmt-predictions-afrique-2015.html

http://www2.deloitte.com/tn/fr/pages/technologies-medias-et-telecommunications/articles/tmt-predictions-afrique-2015.html

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3. Targeted markets

Our games will be available in the world via official stores of giants such as Google & Apple. But

we mainly target:

For our Casual games catalog :

o Africa: mass mobile games users; informal market so unsaturated; low financial returns,

hence the need for education, familiarization and integration of gaming behavior in the

long term.

o The African Diaspora: Low mobile game users, saturated but structured market, strong

demand from the need of African cultural content, banked population, Casuals games

financial returns more or less immediate.

For our Core games catalog (PC & Console): Kiro’o Games aims the World gaming market via e-

selling platform like Steam, GOG, etc.

Some video game development studio in Africa

They are more than two dozen in Africa, but only ten of them are referenced on the

GameDevMap as development studios, one of the conditions is to have at least one a game on the

market.

http://www.gamedevmap.com/

Some active video game development studios in Africa : LUMA ARCADE (RSA); FREE LIVE GAMES

(RSA) ; MALIYO (Nigeria); KULUYA (Nigeria); Leti arts (Ghana), GAMSOLE (Nigeria) ; CELESTIAL GAMES

(RSA) ; THOOPID (RSA) ; DIGITAL MANIA (Tunisia) ; SCRIN ARTS Studios (Kenya) ; BLACK DIVISION

GAMES (Kenya) ; etc.

Below is a comparative analysis with the 05 most popular African studios with at least one game

on the market:

Caractéristiques & offres MALIYO KULUYA LUMA FREE LIVES LETI KIRO’O GameDev PC X X X 2D Graphics X X X X X 2D HD Graphics X 3D Graphics X X X Android/IOS Platform X X X X Game to African context X X X X Good playability X X X X X X Massive Communication X X X X International recognition, specialized press coverage

X X

In orange – our expansion goals

http://lumaarcade.com/

http://www.freelives.net/

https://www.maliyo.com/games/

http://kuluya.com/

http://letiarts.com/

http://gamsole.com/our-games/

http://celestial-games.com/games.html

http://www.thoopid.com/

http://digitalmaniastudio.com/

http://www.scrinarts.com/work

http://www.blackdivisiongames.com/

http://www.blackdivisiongames.com/

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C- Our games : Catalog & Business Model

The creation of our games is mainly based on the type of player, Kiro’o Tales and the industry key

figures.

What is "Kiro'o Tales"?

Kiro'o is an expression derived from "Kiroho Maono" in Swahili meaning "Spiritual Vision". Kiro'o

Tales can be defined as "Tales of spiritual vision".

The Kiro'o type does not pretend to reinvent the system, but it offers a redesign of known

ingredients with considerable added value.

A highlight of Kiro'o is that beyond entertainment, the player must have

clear and distinct feeling of having grown in wisdom in his real life.

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Our games are primarily classified in 02 categories:

- Core Games (PC, Console): medium and large-scale games that we will achieve mainly for

external markets in priority (USA, Europe, Asia). Games for building the international

reputation of Kiro’o technically (example: the saga Aurion 1.0 to 4.0). Each of these games is

thought to be Multiplatform (PC, PS4, Xbox One, etc.)

- Casual Games (Mobile, Tablet & Smartphone): small and medium sized games that are

essentially made for the African market. The technical challenge is less complex than a Core

Games, but the challenge is the establishment of a communications ecosystem / advertising

(Example: Candy Crush, Clash of clans, etc.). These games will be typed in 04 categories:

Bronze (very small games, industrial production as Tetris, solitaire)

Silver (midsize games, adapted to Kiro'o Tales, game like doodle jump)

Gold (Big Games, headlights licenses as Angry bird)

Serious games (educative)

The mobile game will be available worldwide but communication efforts will be primarily focused

on the African market with the key objective to:

Become a strong integrated brand into local behavior and values

As well as Coca-Cola wants its place on every family's dinner table in the US,

Kiro'o will be in each African Smartphone.

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D- KIRO’O CENTER & KIRO’O ADS (K-CENTER & K-ADS)

Order to facilitate development and profitability of our games catalog by advertising, It is

necessary to develop the K-Center and K- Ads:

- Kiro’o Center (K-Center): Mobile application installed with tour games, allowing centralized

management of player's account. It provides to player the latest information on our available

games on official giants’ stores (Play Store, AppStore, etc.)

- Kiro’o Ads (K-Ads): Web application for local management of relevant advertisements for

African SMEs. K-Ads is designed to serve as digital Ad center targeting African customers. At

best, the team will be grafted to existing native systems (Google Ads, etc.) to avoid "reinventing

the system".

Functioning of K-center & K-Ads: Case of micro-transactions efficiency model

Players must install K-Center. Games

have blocked functionality in the absence

of Kiro'o Center.

Kiro'o Center manages different

games functionality on phones

By buying some packages on the

K-Center, players unlock some

features in our games

Players download several Casual

games Kiro'o

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E- EXPANSION ACTIVITIES PLANNING (2016-2026)

GLOSSARY OF PHASES

TAKE-OFF 2015 - 2016 1 year

DEVELOPMENT 2017 - 2019 3 years

GROWTH 2020 - 2021 2 years

DIVERSIFICATION 2022 - 2025 4 years

The expansion of Kiro'o Games is performed on 3 main areas from a strategic point of view:

Physical and administrative Evolution: This is the spinal cord of the evolution of the studio via

a change of local (new building’s construction) and diversification of activities.

Evolution of our Core Games division: Our initial plan for the creation of the Aurion saga on PC

and consoles

Production and evolution of our Casual Games division: More than create games, this is to set

up and monitor the operating system (games, Ads, etc.) on Smartphones & tablets.

Kiro’o Games strategic expansion plan

Casuals games

production (Mobiles,

tablets, etc.)

Physical expansion

& Admin

Core Games

production(Aurion)

Creation of our first

Casuals game and the

exploitation network

Take-off

Development

Growth of Kiro’o

Casual Game users

Growth of Kiro’o

Casual Game users.

Advertising operations

Growing work and

adaptation if

necessary

The new local &

Recruitment

for the expansion

Growth

Recruitment for the

diversification phase

Diversification &

external investment

Aurion 1.0 Sales.

R&D for Aurion 2.0 &

3.0

Aurion 2.0 production

Aurion 2.0 Sales

Production of Aurion

3.0

R&D Aurion 4.0 et 1.5

Aurion 3.0 Sales

Production of Aurion 1.5 (remake 1.0)

Production of Aurion 4.0

Diversification

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However, from a financial point of view, the plan may be reduced to two main flows to guide

our investment needs. We can fuse the flux Casual, Physics and Admin. It is in fact noted that each

Core Games requires an own investment, while the Casual division, admin and physical expansion can

be supported on paired investments.

Financial plan summary technically adapted

Our following simulations and financial presentations will be adapted to this dual flow to facilitate our

budget "modularity":

- Keep up with the technology cycle timing of the video game industry: Being competitive on

the current generation (PS4, Xbox One) and prepare ourselves for the next.

- Adapt ourselves to the fastest self-financing opportunities: This financial arrangement

facilitates our expansion planning, priorities based on the attractiveness of investors.

Expansion Casual,

administrative and physical

(Financially related)

Core Games

Production (Aurion)

(Financially)

New building. recruitment for the expansion.

Production of first Casuals games and

exploitation Network

Take-off

Development

Growth of Kiro’o Casual Games

users

Recruitment for the diversification phase.

Growth of Kiro’o Casual Games users and

advertising operations

Diversification & external investment.

Growing work and adaptation if necessary

Growth

Diversification

Aurion 1.0 Sales

R&D Aurion 2.0 & 3.0

Production of Aurion

2.0

Aurion 2.0 Sales


R&D Aurion 4.0 et 1.5

Aurion 3.0 Sales

Production of Aurion 1.5 (remake 1.0)


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Perspectives after 2026

Kiro'o Games aims to build an African cultural entertainment empire. Although offering a

high potential profitability, our video games must be supported by additional series of activities

to ensure our company’s significant impact.

Therefore, it is essential that Kiro'o extend earlier in the following areas depending on the

evolution of the African market (financial, networking, etc.). The challenge will always be to

adapt these concepts to local and international movements:

Activities Details

Cartoons & animated movies

If our games and the effective emergence of a large african middle class show an impact of Advertising on African target, we want to develop cartoons that will be profitable based on their audience through advertising in Africa and the rest of world. If we are also witnessing the return of cinema on the continent or the extension of WebTV, this development will be considered.

African toy market

Through our highly marketables licenses (Aurion, etc.) we have the potential to create a craze among all African descent children on the continent or elsewhere. So we want to expand our presence in the entertainment world and children’s education (by generating positive models). If we well approach this element, we ensure a generational branding in 20 or 30 years (like Star Wars that is seen by three generations of Americans).

AR (Augmented reality)

Depending on the AR market expansion to the general public, we will develop a suited playground or products.

Amusement Park

One of our key visions. Provide attractive destinations with our products theme in major African cities.

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F- BUILDING & HUMAN RESSOURCES NEEDS

The following images show the final appearance desired studio on 2 floors as well as

planned staff capabilities.

The studio will be an arrangement of open spaces promoting optimal communication

between the teams. Maximum capacity of 160 people

- In black: the solid walls (brick, cinder block, etc.)

- In blue : the partitioned spaces (floor to ceiling) with glass and doors

- In brown dash: Partition spaces halfway up defining the general open spaces.

- Blue spaces: Offices (Leads and administrative) which is closed because of sensitive

information.

View of the studio Ground floor with the effective work area

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View of the 1st floor studio dedicated to rest and amusement of the staff

Order to facilitate periods of probable Crunch or blocked internship, we expect a 1st

floor that will operate at half our studio, while the other half will be rented out to other

companies (ideally compatible to our sector). We can recover it if we need space for future

expansions.

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The following table summarizes the role of the new studio room and spaces:

Room / Space names Details

Ground floor

Entrance & front yard The entrance with gates, a sentry and security personnel. It is crucial that the studio is surrounded by a fairly high fence. The court will allow the organization of events and coordination exercise

Studio back yard A space with garden behind the studio.

Entrance hall The lobby with reception and security service that will monitor the security cameras. The lobby also serves as a waiting room for visitors.

Hall toilets Toilet dedicated to visitors in the Hall

Lobby & staff lockers The staff will not be allowed to enter with some personal tools (bags, etc.) it will be necessary that they be stored in dedicated racks.

CEO’s office Office with panoramic window and blinds. The central position allows the CEO to have a general view on the team and also to facilitate the communication system

Admin & finance Administrative management (project management, accounting, finance, business development, logistics, etc.)

Marketing et Communication Marketing, press relations, community management, customer service, etc.

Concept Art & 2D animation Artists and 2D animator. It could evolve and be used for Animated Drawing teams at the appropriate time

Programmation Programmer space

Writing Dialogues, scripts, and texts. Everything will be as games and produced in the studio.

Gameplay et UI Area reserved for teams Game Designer, Level designers and user interface designers.

3D Animation 3D animators space

Server Room Kiro'o servers for our work tools exploiting client-server architectures and our proxy to administer the LAN.

QA testing Room dedicated testers (one-off). And also to journalists from the specialized press that will test our games.

Background & characters modeling

Space dedicated to the 3D characters modeling and designs.

Conference room

A room dedicated to our internal projections or statements to the press or to special visitors. The teams will also be screenings of video training. The idea is to have between 50 and 100 seats.

Meetings room

A room dedicated to staff family visit and other smaller internal meeting

M & W Toilets

Separate toilets for men and women of the studio.

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1st floor

Team dorm room The team dorm room that can contain between 20-50 bunk beds ideally to allow the team to live in the studio if necessary

Team Lockers Showers, dressing, lockers for the team

Managers dorm room The dorm room for the management team (CEO, directors)

Video & motion capture room

Room dedicated to motion capture and video editing made (blue or green background)

Managers lockers The bathroom of the studio executives

Kitchen A kitchen with direct access from a staircase

Canteen with picture window on terrace

The cafeteria of the studio overlooking a terrace

Relaxation room A space to allow some members of the team a breather and relax playing other games.

Utility room Storage space hardware reserves

Main front terrace A terrace overlooking the cafeteria and recreation room.

Safety is maximized in the studio including surveillance cameras and a digital door access.

Summary of the evolution of human resources needs

Services 2016 2017 - 2019 2020 - 2026

Max Aurion 1.0 Aurion 2.0 Aurion 3.0 Aurion 4.0

Direction (CEO & Assistant) 1 2 2 2 2

Administrative & Finance 3 4 7 9 15

Marketing & Com 4 9 12 15 18

Concept Art & Animation 2D 6 15 16 16 30

Writing 0 2 2 3 6

Programmation 5 6 8 11 18

Gameplay/UI 4 8 9 9 15

Animateur 3D 0 10 12 12 21

Modeling characters 0 10 12 12 15

Modeling Decors 0 10 12 12 15

Sounds & music 1 2 2 2 6

Total 24 78 94 103 160

sur 41

G- EXPANSION : FINANCIAL OVERVIEW

1. Simulation parameters

This is the set of factors that influenced the calculation in the simulations in this

document.

GLOSSARY OF PHASES

TAKE-OFF 2015 - 2016 1 year 52 weeks

DEVELOPMENT 2017 - 2019 3 years 156 weeks

GROWTH 2020 - 2021 2 years 104 weeks

DIVERSIFICATION 2022 - 2025 4 years 208 weeks

Exchange Rates Dollars // FCFA 600

Exchange Rates Euro // FCFA 655

a. Fund raising (Equity + Loans)

To start its expansion which is spread over 10 years, Kiro'o Games needs a funding of

up to $ 7,3 million before its self financing. Depending on the funds collected Kiro'o will

adjust the expansion strategy.

Kiro'o Games put on sale 25% of its capital (250/1000 shares):

10% : 100 shares at $1500 each at the take off stage

15% : 150 shares $2000 each at the development stage

N.B. the new shareholder who joined us at the take-off phase has preferential subscription

rights to $ 1,500 per share from the development phase.

The remaining funds are financed through loans by the new shareholder. Equity

conditioned by a more substantial loan. The cost of entry will differ depending on the input

period in the capital:

Take-off: 01 share at $ 21 800 ($ 1500 of capital & $ 20 300 of loans)

Development: 01 share at$ 34 000 ($ 2000 of capital & $ 32 000 of loans)

The hypothesis of expansion “Casual only” is simulated in case of low fund raising. It is

not highly beneficial in the long term. The specialization in mobile gaming offers low margin

of progression for a company based in Africa which does not have a large budget marketing

studios like KING (Candy Crush) or Rovio (Angry bird) for an aggressive communication on the

target. It is the medium-term second plan (B plan) of Kiro'o Games.

sur 41

b. Dividends & Loans repayment

The video game industry business cycle is different from the classic commercial ones,

especially for emerging studios. During the creation phases of apps & games, expenses are

incurred but the returns are not immediate. It’s usually at the end of the development

period, after injecting large sums in marketing and communication that the game is sold.

Therefore the income is distributed at the end of phase.

However these can be distributed each year based on the business rhythm in the case

where previously developed games are still selling throughout the exercise period and

subsequent periods.

Dividends: they are distributed based on profits and business objectives with the aim to

maintain financial autonomy to the next phase. They are calculated on the proportion of

the input amount in the Capital. These will be distributed to current (or end) of the

period "development" as indicated by the simulation table.

Dividends for a share bought depending on the period

Loans repayment: they come at the end of the "development" period. The fraction of

reimbursement and the interest rate depends on Kiro'o Games strategic choices based

on the volume of invested funds.

for a share, lend us $ 20 300 at the takeoff stage and globally receive $ 37 400 at the growth phase;

lend us $ 32 000 at the development phase and receive $ 72 430 at the diversification phase.

In summary if you lend us in total $ 52 300 you will receive globally $ 109 830 in 10 years.

When ? How many ? How much ? Development Growth Diversification Dividends Returns Percentage

02 parts 5 025 5 025 10 051

2% 168% 168% 335%

01 part 2 513 2 513 5 025

1% 168% 168% 335%

01 part 2 513 2 513 5 025

1% 126% 126% 251%

Take-off & development

(01 share/phase)

Take-off

I receive as dividends to Phase GLOBALLY OVER 10 YEARS

01 Share: DIVIDENDS BASED ON THE ENTRY IN THE CAPITAL EXPANSION CASUAL + CORE (DOLLARS)

IF I buy

Development

20 101 670%

503%10 051

670%10 051

3000

1500

2000

Take-Off Development Growth Diversification Total

Take-Off (A) 20 300 - - - 20 300

Development(B) - 32 000 - - 32 000

on loans (A) - 17 433 2 867 - 20 300

on loans (B) - - 14 567 17 433 32 000

0% 80% 110% 140%

on loans (A) - 13 947 3 153 - 17 100

on loans (B) - - 16 023 24 407 40 430

on loans (A) - 31 380 6 020 - 37 400 on loans (B) - - 30 590 41 840 72 430

Take-Off (A) 8 100 - - - 8 100

Take-Off (B) - 5 900 - - 5 900

on loans (A) - 7 000 1 100 - 8 100

on loans (B) - 5 900 - 5 900

0% 50% 50% 0%

on loans (A) - 3 500 550 - 4 050

on loans (B) - - 2 950 - 2 950

on loans (A) - 10 500 1 650 - 12 150

on loans (B) - - 8 850 - 8 850

LOANS

GROSS RETURNS

Interest rate

INTERESTS

NET RETURNS

LOANS

GROSS RETURNS

Interest rate

INTERESTS

NET RETURNS

LOAN per share bought

CASUAL+CORE

CASUAL ONLY

sur 41

Comparison with a compound interest investment

Lend us 20 300 USD and we'll refund 37 400 USD. To have the same acquired value,

you should invest the same amount (loans) in compound interest for 05 years at 13,00%.

c. Other parameters

The other parameters considered in the simulations are listed below:

Kiro'o games began the construction of local "corporate headquarters" (with a max

capacity of 160 peoples) in the first year and settled at the end of the realization of the

Ground floor. Hence the weight of the expenses generated at the take-off phase. This is

to remove rental expenses and removals from the studio because of the space

requirement generated by the increase in staff in 10 years.

A part of funds necessary for communication of games developed in the first phase but

sold in the second was budgeted at the take-off phase to anticipate any delay in the

second fund raising and to ensure the first mobiles games marketing.

For greater transparency, the income tax was calculated on a regular basis at the taxes

rate on Cameroonian companies (33,33%). Amount that result is relatively high because

companies that operate in IT spend less to generate big profits. However, tax

optimization can be performed. A decrease of 20% to 75% of taxes would result in the

increase of the balance before distribution, which will have the effect of increasing the

volume of dividends as well as the net balance at the end of the phase.

Amount

DECOLLAGE 20 300 5 13,00% 37 400

DEVELLOPEMMENT 32 000 7 12,38% 72 430

DECOLLAGE 8 100 5 8,45% 12 150

DEVELLOPEMMENT 5 900 7 5,96% 8 850 CASUAL i = [ᶰ√(VA/VN)]-1

i: interest rateFormula

VA = VN (1+i)ᶰ

N: yearsVA: Acquired value

EQUITY LOAN TO INVESTMENT IN COMPOUND INTEREST

LOAN VN: nominal value

CASUAL+CORE

sur 41

2. Simulations by expansion phases

These simulations show the synthesis of the expansion documents (technical and financial).

a. Global Financial summary per phase

Flows (Dollars)

N.B. The most pertinent information is summarized in the table on the part of the expansion Casual + Core (in green).

You will notice the financial volume weight of tax amount (calculated on the basis of revenues net of charges during the phase). Without tax

optimization, financial health appears low but the company self-financing its expenses over 70% in the second phase. With the reduction of

the tax amount, the gross balance and cash flow will increase.

Take-Off Development Growth Diversification Take-Off Development Growth Diversification

Equity for the period 150 000 300 000 - - 150 000 300 000 - -

Loans 2 033 333 1 472 684 - - 2 033 333 4 800 265 - -

Total external investment (A) 2 183 333 1 772 684 - - 2 183 333 5 100 265 - -

Global Sales (B) 2 005 938 19 500 000 15 773 333 38 445 333 2 005 938 19 500 000 26 280 625 53 455 750

Initial self financing ( C) - 1 327 358 8 874 549 9 133 556 - 1 327 358 6 762 206 8 839 788

Total Inputs (D=A+B+C) 4 189 271 22 600 042 24 647 883 47 578 889 4 189 271 25 927 623 33 042 831 62 295 538

Expenses 1 971 881 2 800 042 3 095 910 8 457 267 1 971 881 6 127 623 7 205 073 11 772 347

Income taxes 331 479 6 355 429 7 848 396 14 422 864 331 479 6 425 003 9 701 819 19 505 267

Total Output ( E ) 2 303 360 9 155 471 10 944 306 22 880 130 2 303 360 12 552 626 16 906 892 31 277 613

1 885 911 13 444 571 13 703 577 24 698 758 1 885 911 13 374 997 16 135 939 31 017 925

Gross returns - 1 753 009 1 753 009 - - 2 277 866 2 277 866 2 277 866

Interest/loans - 876 504 876 504 - - 1 822 293 2 505 653 3 189 012

Net Returns (G) - 2 629 513 2 629 513 - - 4 100 159 4 783 519 5 466 878 1 885 911 10 815 058 11 074 064 24 698 758 1 885 911 9 274 838 11 352 420 25 551 046

founder shareholders - 815 014 815 014 1 630 027 - 1 055 306 1 055 306 2 110 611

Origins Shareholders 558 553 640 368 640 368 1 280 736 558 553 829 169 829 169 1 658 337

New sharholders - 485 127 485 127 970 254 - 628 158 628 158 1 256 316

Total Distribution (i) 558 553 1 940 509 1 940 509 3 881 017 558 553 2 512 632 2 512 632 5 025 265

1 327 358 8 874 549 9 133 556 20 817 741 1 327 358 6 762 206 8 839 788 20 525 782

47% 287% 108% 100% 22% 94% 75% 100%

FINANCIAL OVERVIEW CASUAL ONLY (DOLLARS) CASUAL+CORE (DOLLARS)

Net balance before distribution ( H = F - G )

Kiro'o Games: net balance after distribution "final self financing" ( H - i )

LOAN REPAYMENT

DIVIDENDS

INPUTS

Cash flow rate for the next phase

OUTPUT

Kiro'o Games Gross balance ( F = D - E )

sur 41

Financial returns management for the subscriber shareholder of 25% of Capital (Dollars)

In summary, invest $ 7 283 598 on us today and you will get $ 16 863 188 in total returns over 10 years.

Almost 232% of your original bet. However, you continue to get your dividends after this period of expansion.

N.B. This table summarizes the financial returns for new shareholder investor who subscribes 25% of Kiro'o Games shares. It summarizes the

status of dividends, loans and the overall status of the invested funds. It also presents profitability rate:

Average rate of return on dividends: Dividends received / subscribed capital (Equity)

Average cumulative rate of return on dividends: sum of dividends received during expansion / Subscribed capital

Repayment rate of loans: Net repayment of phase / Total loan

Cumulative repayment rate of loans: Total net repayment / Total loan

Rate by phase return (global): Investment Returns of phase / investment balance at the period

Global returns rate: cumulative investments returns / Total investment (in red)

Take-Off Development Growth Diversification Take-Off Development Growth Diversification

Equity for the period (A) 150 000 300 000 - - 150 000 300 000 - -

Total Cumulative net investment 150 000 450 000 450 000 450 000 150 000 450 000 450 000 450 000

Dividends (B) - 485 127 485 127 970 254 - 628 158 628 158 1 256 316

Average rate of return 0% 108% 108% 216% 0% 140% 140% 279%Average cumulative rate of return 0% 108% 216% 431% 0% 140% 279% 558%

Loans (C ) 2 033 333 1 472 684 - - 2 033 333 4 800 265 - -

Loans: Balance at period 2 033 333 3 506 017 1 753 009 - 2 033 333 6 833 598 4 555 732 2 277 866

Gross loan repayment (D) - 1 753 009 1 753 009 - - 2 277 866 2 277 866 2 277 866

Interest on loans - 876 504 876 504 - - 1 822 293 2 505 653 3 189 012

Net repayments of loans - 2 629 513 2 629 513 - - 4 100 159 4 783 519 5 466 878

Repayment rate 0% 75% 75% 0% 0% 60% 70% 80%

Cumulative repayment rate 0% 75% 150% 0% 0% 60% 130% 210%

Investment (A+C) 2 183 333 1 772 684 - - 2 183 333 5 100 265 - -

investment: Balance at period 2 183 333 3 956 017 2 203 009 450 000 2 183 333 7 283 598 5 005 732 2 727 866

investment returns (B+D) - 3 114 640 3 114 640 970 254 - 4 728 317 5 411 677 6 723 194 Cumulative investment returns - 3 114 640 6 229 280 7 199 534 - 4 728 317 10 139 993 16 863 188

rate by phase 0% 79% 141% 216% 0% 65% 108% 246%

Global returns rate 0% 79% 157% 182% 0% 65% 139% 232%

GLOBAL

CASUAL ONLY (DOLLARS) CASUAL+CORE (DOLLARS)

DIVIDENDS

LOANS

NEW SHAREHOLDERS GLOBAL RETURNS OVERVIEW

sur 41

b. Take-Off Phase: financial summary

Take-off: Sales

Take-Off: summary of expenses

FCFA EUROS DOLLARS

9 825 15 16

49% 49% 49%

4 814 7,35 8,02

1 203 562 500 1 837 500 2 005 938

FCFA EUROS DOLLARS

1 203 562 500 1 837 500 2 005 938

1 203 562 500 1 837 500 2 005 938

SALES if CASUAL ONLY

SALES if CASUAL+CORE

Global margin (sales target)

250 000

AURION 1.0 PROFITABILITY PARAMETERS (2016)

Target of copies soldMinimum sale price

Gross margin rate Kiro'o Games

Gross margin per copies sold

TAKE-OFF GLOBAL SALES

FCFA Euros Dollars

76 800 000 117 252 128 000

40 902 000 62 446 68 170

323 800 000 494 351 539 667

26 138 000 39 905 43 563

35 000 000 53 435 58 333

32 148 750 49 082 53 581

8 340 000 12 733 13 900

640 000 000 977 099 1 066 667

1 183 128 750 1 806 303 1 971 881

600 873 750 880 553 961 270

TAKE-OFF GLOBAL EXPENSES

>>Total purchase software

>>Total External services

>>Total Social & Networking Expenses

>> Total Marketing/Com Expenses

>> Total Recycling Equipment

>> TOTAL OPERATING EXPENSES 2015-2016

>> Total cost of Human Ressources

>> Total Cost structure

>> Total Building Construction

>> TOTAL EXPENSES/INVESTMENT

sur 41

Take-off: Financial summary

FCFA 100 million was invested in advertising at this phase to boost Aurion 1.0 Sales

The net balance at the end of this stage partly finances the next phase expenses. In case where any subscription is made in the second

phase, the expansion will be managed by priority on cash according to sales curve.

Revenues of this phase are done by the sales of the first game Aurion the legacy of Kori-Odan. An agreement has been signed with the

shareholders Origins of the project for the dividends distribution. They should receive their dividends in priority in this phase.

FCFA Euros Dollars FCFA Euros Dollars

Equity for the period 90 000 000 137 405 150 000 90 000 000 137 405 150 000

Loans 1 220 000 000 1 862 595 2 033 333 1 220 000 000 1 862 595 2 033 333

Total external investment (A) 1 310 000 000 2 000 000 2 183 333 1 310 000 000 2 000 000 2 183 333

Global Sales (B) 1 203 562 500 1 837 500 2 005 938 1 203 562 500 1 837 500 2 005 938

Initial self financing ( C) - - - - - -

Total Inputs (D=A+B+C) 2 513 562 500 3 837 500 4 189 271 2 513 562 500 3 837 500 4 189 271

Expenses 1 183 128 750 1 806 303 1 971 881 1 183 128 750 1 806 303 1 971 881

Income taxes 198 887 288 303 645 331 479 198 887 288 303 645 331 479

Total Output ( E ) 1 382 016 038 2 109 948 2 303 360 1 382 016 038 2 109 948 2 303 360

Kiro'o Games Gross balance ( F = D - E ) 1 131 546 463 1 727 552 1 885 911 1 131 546 463 1 727 552 1 885 911

Loans nets returns (G) - - - - - -

Origins Shareholders Dividends on Aurion (H) 335 131 720 511 651 558 553 335 131 720 511 651 558 553 Dividends distribution to associates & investors (I) - - - - - -

net balance "final self financing" (F-G-H-I) 796 414 743 1 215 900 1 327 358 796 414 743 1 215 900 1 327 358

Cash flow rate for the next phase 47% 47% 47% 22% 22% 22%

TAKE-OFFCASUAL Only CASUAL + CORE

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c. Development Phase: Financial summary

Development: Sales

Development: summary of expenses

% By week Phase: development

Europe 1 000 000 4% 40 000 1 000 40 000 000 50% 20 000 000 3 120 000 000

USA 1 000 000 5% 50 000 1 000 50 000 000 50% 25 000 000 3 900 000 000

Africa 30 000 000 2% 600 000 250 150 000 000 20% 30 000 000 4 680 000 000

Total 32 000 000 240 000 000 75 000 000 11 700 000 000

Target

population

paying

users ratio

Target of paying

users/weeks

Transaction

price (Fcfa)

Global sales by

transactions/week

MOBILE CASUAL GLOBAL SALES (FCFA)Area

FCFA EUROS DOLLARS

11 700 000 000 17 862 595 19 500 000

11 700 000 000 17 862 595 19 500 000 SALES if CASUAL+CORE


DEVELOPPEMENT GLOBAL SALES


404 280 000 617 221 673 800 1 211 265 000 1 849 260 2 018 775

258 357 000 394 438 430 595 854 073 000 1 303 928 1 423 455

515 600 000 787 176 859 333 555 600 000 848 244 926 000

198 500 000 303 053 330 833 258 000 000 393 893 430 000

75 000 000 114 504 125 000 115 000 000 175 573 191 667

67 965 000 103 763 113 275 79 318 000 121 096 132 197

130 323 000 198 966 217 205 538 317 500 821 859 897 196

30 000 000 45 802 50 000 65 000 000 99 237 108 333

1 680 025 000 2 564 924 2 800 042 3 676 573 500 5 613 089 6 127 623

1 824 699 250 2 785 800 3 041 165 3 694 749 125 5 640 838 6 157 915

>> Total purchase equipment

CASUAL ONLY

>> Total building final installation






CASUAL + COREDEVELOPMENT GLOBAL EXPENSES




sur 41

Development: Financial summary

N.B Dividends’ distribution and repayment of new shareholder loans start at this phase, 04 years after the fundraising. But this distribution

depends on our products’ reception by the market. Since the charges spread throughout this phase are covered largely by external investment

(loans), the profits generated each year will be redistributed and partially repay loans at the end of the 2nd year.


Equity for the period 180 000 000 274 809 300 000 180 000 000 274 809 300 000

Loans 883 610 258 1 349 023 1 472 684 2 880 158 758 4 397 189 4 800 265

Total external investment 1 063 610 258 1 623 832 1 772 684 3 060 158 758 4 671 998 5 100 265

Global Sales 11 700 000 000 17 862 595 19 500 000 11 700 000 000 17 862 595 19 500 000 Initial self financing 796 414 743 1 215 900 1 327 358 796 414 743 1 215 900 1 327 358

Total Inputs (A) 13 560 025 000 20 702 328 22 600 042 15 556 573 500 23 750 494 25 927 623

Expenses 1 680 025 000 2 564 924 2 800 042 3 676 573 500 5 613 089 6 127 623

Income taxes 3 813 257 498 5 821 767 6 355 429 3 855 002 044 5 885 499 6 425 003

Total Output (B) 5 493 282 498 8 386 691 9 155 471 7 531 575 544 11 498 589 12 552 626

Kiro'o Games Gross balance ( C=A-B) 8 066 742 503 12 315 637 13 444 571 8 024 997 956 12 251 905 13 374 997

Loans nets returns (D) 1 577 707 693 2 408 714 2 629 513 2 460 095 255 3 755 871 4 100 159

Dividends (C ) 1 164 305 129 1 777 565 1 940 509 1 507 579 379 2 301 648 2 512 632

net balance "final self financing" (E ) 5 324 729 681 8 129 358 8 874 549 4 057 323 323 6 194 387 6 762 206


DEVELOPMENTCASUAL Only CASUAL + CORE

sur 41

d. Growth Phase: Financial summary

Growth: Sales

Mobile games sales

Aurion 2.0 Sales

% By week Phase: Growth

Europe 1 100 000 4% 44 000 1 000 44 000 000 50% 22 000 000 2 288 000 000

USA 1 200 000 5% 60 000 1 000 60 000 000 50% 30 000 000 3 120 000 000

Africa 39 000 000 2% 780 000 250 195 000 000 20% 39 000 000 4 056 000 000

Total 41 300 000 299 000 000 91 000 000 9 464 000 000

Global sales by

transactions/week


Transaction

price (Fcfa)

Target

population

paying

users ratio

Target of paying

users/weeks

FCFA EUROS DOLLARS

16 375 25 27,29

55% 55% 55%

9 006 13,75 15,01

6 304 375 000 9 625 000 10 507 292

FCFA EUROS DOLLARS

9 464 000 000 14 448 855 15 773 333

15 768 375 000 24 073 855 26 280 625

SALES: CASUAL ONLY

SALES: CASUAL+CORE

Target of copies sold

Minimum sale price





700 000

GROWTH GLOBAL SALES

sur 41

Growth: Summary of expenses

Growth: Summary of expenses


582 840 000 889 832 971 400 1 438 320 000 2 195 908 2 397 200

283 776 000 433 246 472 960 1 000 896 000 1 528 085 1 668 160

597 700 000 912 519 996 167 1 272 700 000 1 943 053 2 121 167

211 500 000 322 901 352 500 338 000 000 516 031 563 333

85 000 000 129 771 141 667 115 000 000 175 573 191 667

51 730 000 78 977 86 217 53 128 000 81 111 88 547

0 0 0 50 000 000 76 336 83 333

45 000 000 68 702 75 000 55 000 000 83 969 91 667

1 857 546 000 2 835 948 3 095 910 4 323 044 000 6 600 067 7 205 073

1 916 626 750 2 926 148 3 194 378 4 503 598 375 6 875 723 7 505 997


CASUAL ONLY CASUAL + COREGROWTH GLOBAL EXPENSES



>> Total Purchase Equipment








Loans - - - - - -

Global Sales 9 464 000 000 14 448 855 15 773 333 15 768 375 000 24 073 855 26 280 625

Initial self financing 5 324 729 681 8 129 358 8 874 549 4 057 323 323 6 194 387 6 762 206

Total Inputs (A) 14 788 729 681 22 578 213 24 647 883 19 825 698 323 30 268 242 33 042 831

Expenses 1 857 546 000 2 835 948 3 095 910 4 323 044 000 6 600 067 7 205 073

Income taxes 4 709 037 506 7 189 370 7 848 396 5 821 091 167 8 887 162 9 701 819

Total Output (B) 6 566 583 506 10 025 318 10 944 306 10 144 135 167 15 487 229 16 906 892


Loans nets returns (D) 1 577 707 693 2 408 714 2 629 513 2 870 111 130 4 381 849 4 783 519

Dividends (C ) 1 164 305 129 1 777 565 1 940 509 1 507 579 379 2 301 648 2 512 632



GROWTHCASUAL Only CASUAL + CORE

sur 41

e. Diversification Phase: Financial summary

Diversification: Sales

Mobile games Sales

Aurion 3.0 Sales

% By week Phase: diversification

Europe 1 210 000 4% 48 400 1 000 48 400 000 50% 24 200 000 5 033 600 000

USA 1 440 000 5% 72 000 1 000 72 000 000 50% 36 000 000 7 488 000 000

Africa 50 700 000 2% 1 014 000 250 253 500 000 20% 50 700 000 10 545 600 000

Total 53 350 000 373 900 000 110 900 000 23 067 200 000

Target

population

paying

users ratio

Target of paying

users/weeks

Transaction

price (Fcfa)

Global sales by

transactions/week


FCFA EUROS DOLLARS

16 375 25 27

55% 55% 55%

9 006 13,75 15,01

9 006 250 000 13 750 000 15 010 417

FCFA EUROS DOLLARS

23 067 200 000 35 217 099 38 445 333

32 073 450 000 48 967 099 53 455 750 SALES if CASUAL+CORE

Target of copies sold

Minimum sale price





1 000 000


DIVERSIFICATION GLOBAL SALES

sur 41

Diversification: Summary of expenses

Diversification: Financial summary


2 144 160 000 3 273 527 3 573 600 3 153 120 000 4 813 924 5 255 200

1 580 880 000 2 413 557 2 634 800 2 045 088 000 3 122 272 3 408 480

735 700 000 1 123 206 1 226 167 1 450 700 000 2 214 809 2 417 833

373 000 000 569 466 621 667 414 500 000 632 824 690 833

115 000 000 175 573 191 667 115 000 000 175 573 191 667

125 620 000 191 786 209 367 130 420 000 199 115 217 367

- - - - - -

- - - - - -

5 074 360 000 7 747 115 8 457 267 7 063 408 000 10 783 829 11 772 347

5 299 360 000 8 090 626 8 832 267 7 555 328 000 203 241 722 204 272 213

CASUAL ONLY CASUAL + COREDIVERSIFICATION GLOBAL EXPENSES




>> Total Purchase Equipment








Loans - - - - - -

Global Sales 23 067 200 000 35 217 099 38 445 333 32 073 450 000 48 967 099 53 455 750

Initial self financing 5 480 133 353 8 366 616 9 133 556 5 303 872 647 8 097 515 8 839 788

Total Inputs (A) 28 547 333 353 43 583 715 47 578 889 37 377 322 647 57 064 615 62 295 538

Expenses 5 074 360 000 7 747 115 8 457 267 7 063 408 000 10 783 829 11 772 347

Income taxes 8 653 718 284 13 211 784 14 422 864 11 703 159 941 17 867 420 19 505 267

Total Output (B) 13 728 078 284 20 958 898 22 880 130 18 766 567 941 28 651 249 31 277 613


Loans nets returns (D) - - - 3 280 127 006 5 007 827 5 466 878

Dividends (C ) 2 328 610 258 3 555 130 3 881 017 3 015 158 758 4 603 296 5 025 265



DIVERSIFICATIONCASUAL Only CASUAL + CORE

sur 41

3. Global simulation per year (CASU+CORE)

The analysis of the exploitation aims to provide a more accurate view of the financial situation of the company. Tables that follow, we will

identify the annual results of our operations, cash flows and possible investment returns.

P.S. In this part, all simulations are performed in Dollars

a. Exploitation analysis

Structure of sales per operating year (Dollars)

Structure of investment returns per year (Dollars)

TAKE-OFF

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Sales per phases -

Coefficient of realization per year 0% 5% 35% 60% 50% 50% 25% 25% 25% 25%

Sales per year - 975 000 6 825 000 11 700 000 7 886 667 7 886 667 9 611 333 9 611 333 9 611 333 9 611 333

Aurion Revenues Sales per year 2 005 938 - - - 10 507 292 - - 15 010 417 - -

2 005 938 975 000 6 825 000 11 700 000 18 393 958 7 886 667 9 611 333 24 621 750 9 611 333 9 611 333

STRUCTURE OF SALESDEVELOPMENT GROWTH DIVERSIFICATION

Mobile Gaming Revenues

19 500 000 15 773 333 38 445 333

Global revenues per year

TAKE-OFF

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Dividends per phase 558 553

Coefficient of distribution 100% 0% 40% 60% 70% 30% 15% 55% 15% 15%

Annual dividends 558 553 - 1 004 961 1 507 441 1 758 681 753 721 753 721 2 763 642 753 721 753 721

Reimboursement per phase -

Coefficient of reimbursement 0% 0% 50% 50% 50% 50% 50% 50% 0% 0%

Reimbursement per year - - 1 138 856 1 138 856 1 138 856 1 138 856 1 138 856 1 138 856 - -

Interest on loans per phase -

Interest on loans per year - - 911 085 911 085 1 252 742 1 252 742 1 594 399 1 594 399 - - Interest on loans

1 822 170 2 505 484 3 188 798

INVESTMENT RETURNSDEVELOPMENT GROWTH DIVERSIFICATION

Dividends

2 512 402 2 512 402 5 024 804

Gross loans

reimbursement

2 277 713 2 277 713 2 277 713

sur 41

Operating table & net cash flows (Dollars)

The following table summarizes the annually operating as universal accounting logic. It details the course of revenues to income as well

as the movements of the actual liability

Note: With this calculation logic, the visibility of the evolution of revenues and expenses is clearer; the amount of taxes is closer to reality. The

determination of the annual operating result is more detailed (you will notice that we are in the red for 02 years), the annual distribution of

dividends is clearly noticeable. Given the self-financing capacity rate after the take-off phase, the balance achieved at the end of each phase is

sufficient to fund the next phase.

TAKE-OFF

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GROSS SALES per YEAR (A) 2 005 938 975 000 6 825 000 11 700 000 18 393 958 7 886 667 9 611 333 24 621 750 9 611 333 9 611 333

Fixed assets & equipment acquisitions 1 133 792 1 137 726 - - 263 547 - 217 367 - - -

Human resources 128 000 672 925 672 925 672 925 1 198 600 1 198 600 1 313 800 1 313 800 1 313 800 1 313 800

Operating costs 67 870 474 485 474 485 474 485 834 080 834 080 852 120 852 120 852 120 852 120

Marketing & communication 539 667 308 667 308 667 308 667 1 606 417 514 750 331 542 1 423 208 331 542 331 542

External services 43 563 143 333 143 333 143 333 281 667 281 667 172 708 172 708 172 708 172 708

Social & networking 58 333 63 889 63 889 63 889 95 833 95 833 47 917 47 917 47 917 47 917

Depreciation of fixed assets (I) 56 690 170 462 170 462 170 462 223 172 223 172 266 645 266 645 266 645 213 936

Total operating charges (B) 2 027 915 2 971 487 1 833 761 1 833 761 4 503 315 3 148 102 3 202 098 4 076 398 2 984 732 2 932 022

Operating income (C=A-B) 21 977 - 1 996 487 - 4 991 239 9 866 239 13 890 644 4 738 565 6 409 235 20 545 352 6 626 602 6 679 311

Financial expenses "interest of loans" (D) - - 911 085 911 085 1 252 742 1 252 742 1 594 399 1 594 399 - -

Net income before tax (E=C-D) 21 977 - 1 996 487 - 4 080 154 8 955 154 12 637 902 3 485 823 4 814 836 18 950 953 6 626 602 6 679 311

Income tax (33,33%) 7 325 - 665 429 - 1 359 915 2 984 753 4 212 213 1 161 825 1 604 785 6 316 353 2 208 646 2 226 214

Tax credit 7 325 665 429 672 754 - - - - - - -

Net income after tax 21 977 - 1 996 487 - 2 047 485 5 970 401 8 425 689 2 323 998 3 210 051 12 634 600 4 417 955 4 453 097

Dividends distributed 558 553 - 1 004 961 1 507 441 1 758 681 753 721 753 721 2 763 642 753 721 753 721

Gross balance Kiro'o Games 580 530 - 1 996 487 - 1 042 524 4 462 960 6 667 007 1 570 278 2 456 331 9 870 958 3 664 235 3 699 376

(+) Depreciation of fixed assets (I) 56 690 170 462 170 462 170 462 223 172 223 172 266 645 266 645 266 645 213 936

Net balance of Kiro'o Games (Cash flow) 523 840 - 1 826 025 - 1 212 986 4 633 422 6 890 179 1 793 449 2 722 976 10 137 603 3 930 880 3 913 312

Initial self financing (A) - 1 659 493 2 383 370 5 007 402 8 501 968 14 253 291 14 907 884 16 492 003 25 490 750 29 421 629

External investment "Equity+Loans" (B) 2 183 333 2 549 902 2 549 902 - - - - - - -

Total initial cash (C=A+B) 2 183 333 4 209 395 4 933 273 5 007 402 8 501 968 14 253 291 14 907 884 16 492 003 25 490 750 29 421 629

Annual cash flows (D) 523 840 - 1 826 025 - 1 212 986 4 633 422 6 890 179 1 793 449 2 722 976 10 137 603 3 930 880 3 913 312

Gross loans reimbursement (E ) - - 1 138 856 1 138 856 1 138 856 1 138 856 1 138 856 1 138 856 - -

Final cash - Net self financing (C+D-E) 1 659 493 2 383 370 5 007 402 8 501 968 14 253 291 14 907 884 16 492 003 25 490 750 29 421 629 33 334 941

Cash flow rate for the next year 56% 130% 273% 189% 453% 466% 405% 854% 1003% 100%

Cash flow rate for the next phase 25%

ACTIVITIES OF EXPANSION "2016 - 2026"DEVELOPMENT GROWTH DIVERSIFICATION

EXPLOITATION OF

KIRO'O GAMES

NET CASH FLOWS

KIRO'O GAMES

111% 113% 100%

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b. Fundraising calendar

To minimize the risks associated with this expansion, fundraising should be made gradually over 03 years according to the following

parameters:

10 capital calls on 03 years divided into 25/250 shares per call, about 10% of the investment per call

The gap between calls is about 03 or 04 months. Ideally at the end of each quarter (2016-2017) but also early in the quarter (2018).

The subscribed capital is conditional upon the granting of a loan to Kiro'o Games

The net amount raised per phase is quite close to the amount of external financing requirement presented in the operating table.

NB. This calendar is adapted to minimize risk. However, the investor can buy all the shares on sale, with the equivalent loan if desired.

MARCH JUNE SEPTEMBER DECEMBER MARCH JUNE SEPTEMBER JANUARY APRIL JULY

No. of shares sold 25 25 25 25 25 25 25 25 25 25

Total No. of shares sold during the period (cumulative) 25 50 75 100 125 150 175 200 225 250

Percentage of the fundraising progression 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Shares price at the period

Loans per Shares

Total cost of shares

Equity at the period 37 500 37 500 37 500 37 500 50 000 50 000 50 000 50 000 50 000 50 000

Loans at the period 507 500 507 500 507 500 507 500 800 000 800 000 800 000 800 000 800 000 800 000

Fund raised at the period 545 000 545 000 545 000 545 000 850 000 850 000 850 000 850 000 850 000 850 000

Total fund raised at the period (cumulative) 545 000 1 090 000 1 635 000 2 180 000 3 030 000 3 880 000 4 730 000 5 580 000 6 430 000 7 280 000

Net fundraising per phase

FUND RAISED

2 180 000 2 550 000 2 550 000

SCHEDULE OF FUNDRAISING2016 2017 2018

SHARES

COSTS1 500 2 000 2 000

20 300 32 000 32 000

21 800 34 000 34 000

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H- CONCLUSION

Kiro'o Games aims to position itself as the Gaming Entertainment company leader in Africa. For that we need an investment that could

fund the launch of this expansion which is spread over 10 years but self-financing after 03 accounting years.

Therefore, based on funds obtained, Kiro'o Games will define its expansion strategy: Casual only or Casual + Core. As our simulations

above, in both cases of expansion, returns are positive but each of these cases has advantages and disadvantages

1- Advantages and disadvantages

CASUAL ONLY CASUAL+CORE

ADVANTAGES

Low investment

Popularity and fast public reception

Short period of game development (03 - 12 months)

Good annual profitability (conditioned by the in-app payment acceptance by the African target)

Notoriety gain

Maintenance of high technical level

Competitiveness & world recognition

Well-defined market segment via core games

Huge returns generated by core licenses

Market diversification in core gaming and mobile gaming

DISADVANTAGES

Unstructured African Market

Saturated market offers in Europe & USA

Low growth margin & notoriety gain

Limited technical development level

Probability of success between 30% and 40%

Investment heaviness

Long development periods of Core games (01 - 03 years)

Full loans refund over 07 years

Probability of success between 40% and 60%.

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2- Why are we sustainable ?

All the simulations were done pessimistically with a very pragmatic view of the success of this expansion. Forecasts are quite close or

even below the reality.

Even in 10 years, our simulations seem realistic compared to other major studios in the world today.

However, regarding sales, we expect to do much more.

Kiro’o Games

GAMER SPIRIT DESIGN

COMPARATIVE THEM TODAY KIRO'O IN 10 YEARS

>> Broforce, PC game sales at $ 14.99 released in 2013 (South African Studio - free live games)) 413 771 Copies

>> HOTLINE MIAMI, independant PC game released in 2012 (Dennanton games - USA) 1 725 000 copies

>> Average salary of a production manager in a big game studio (Ubisoft, bethesda) $ 90 000 /year

>> Average salary of a production manager in a medium game studio (Platinium games, Tri Ace) $ 50 000 /an

>> Average budget for a big independent video games $ 6 000 000 $ 5 000 000

$ 30 000 /year

1 000 000 copies

kiro’o games usiness plan summary...page 2 sur 41 introduction this document is intended to...

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