Domino Comptech Holdings

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Financial Holding Company Business Plan

Company Summary

Domino Comptech Holdings, (DCH) was formed under the laws of the State of Gulfstate, as a diversified financial holding company. The purpose of Domino Comptech Holdings is to facilitate the acquisition of existing companies and provide additional capital to increase the volume and the profitability of the acquired companies.

2.1 Company History

Domino Comptech Holdings, a financial holding company, was incorporated as a Gulfstate corporation in 2002. DCH has purchased existing companies that are revenue producing and have a history of strong revenue production, existing buildings, equipment, vehicles, employees and a minimum of 10 years of profitable business. 

Kettle-Moraine Computers, Inc.

Last year, DCH purchased Kettle-Moraine Computers, Inc., (KMCI) a Gulfstate corporation that was started in 1990 by Lynx Caracal. Under his direction, the company has developed into a full-service provider of computer hardware and services. Aside from assembling and selling a trademarked brand of PCs, servers and laptops, KMCI is an authorized reseller or service provider for numerous leaders in the IT industry, such as Compaq, Dell, Gateway, Okidata, Enterasys, World Wide Technology, Structure Wise, Lexmark, Hewlett-Packard, Novell, Panasonic, Cisco, IBM and Nortel Networks.

In order to provide a full range of quality services, KMCI employs skilled and certified professionals that hold certifications including A+, Microsoft Certified Professional (MCP), ASE, Microsoft Certified System Engineer (MCSE), Novell CNA and CNE, ACT Compaq, Cisco, CCNA, IBM, Lexmark, Hewlett-Packard, Network + and Networking Essentials. These professionals have successfully fulfilled statewide hardware and maintenance contracts. As a part of those contracts they currently provide on-site service for computers in every county in the state of Gulfstate. In addition, they have contracts in parts of other states, such as Plainsstate and Hillystate.

ZumoNet

Also in Q4 last year, Domino Comptech purchased ZumoNet, an Internet Service Provider (ISP). ZumoNet was wholly owned by Lynx Caracal, and was merged via a stock swap. DCH received 100% of the shares, both issued and unissued, of the ISP, in exchange for 1,500,000 shares of DCH common stock. In addition to the customer base of the ISP, DCH receives an annual revenue stream of $20,000 annually. The total expenses of the ISP is only $3,600 showing a total annual profit of $16,400. ZumoNet service fees are small in comparison to AOL, Sprint, and Bell; however, ZumoNet only offers a 56K dial-up connection for a monthly fee of twenty dollars for unlimited access. The price for the service is on a sliding scale based on the type of billing; for example, Bi-Annual unlimited access is one hundred dollars, and if the customer pays annually the fee drops to a total of one hundred dollars. In addition, there is a one time sign-up fee of five dollars. DCH is currently investigating the most cost effective way to increase the ISP's service to include DSL, T-1, and T-4; however, with the announcement of Sprint shutting down its ISP service, we are carefully looking at the ISP business model to make sure that the new services we offer are competitive and profitable. For this reason, we do not expect to increase our service offering within the next year.

Past Performance

Our past performance indicates the overall decline that effected the technology sector over the past three years. In the beginning of Year 1, we have seen a significant up-turn in the number of orders placed through our sales department. The management believes that this increase is directly related to:

  1. Companies and other entities, especially the state of Gulfstate, which previously had their budgets frozen, are now purchasing new hardware and software.
  2. The Governor of the state of Gulfstate has signed an executive order to enforce a Gulfstate state law making it mandatory that all state offices purchase equipment and services from companies which are based in Gulfstate. DCH maintains its corporate headquarters and plant facilities in Central City, the capital of Gulfstate.
  3. The implementation of the S.E.A.T.* Management program for all business, and educational institutions.
  4. The expansion of the S.E.A.T. Management program into the surrounding states.

*S.E.A.T. (Shrinking Expenses Advancing Technology) Management is a combined product/service offering whereby institutions can contract with us to outsource their full IT needs (hardware, software, service, tech support, and product replacement) on a three year renewable contract. This is discussed fully under Products and Services, below.

Past Performance
FY 2001 FY 2002 FY 2003
Sales $10,392,811 $8,090,275 $2,557,055
Gross Margin $4,019,873 $2,814,145 $977,387
Gross Margin % 38.68% 34.78% 38.22%
Operating Expenses $3,975,828 $3,622,506 $1,288,385
Collection Period (days) 33 41 102
Inventory Turnover 8.76 8.19 3.01
Balance Sheet
FY 2001 FY 2002 FY 2003
Current Assets
Cash $24,045 $13,239 $7,709
Accounts Receivable $940,059 $857,610 $572,109
Inventory $727,207 $561,143 $487,587
Other Current Assets $385,915 $190,731 $193,429
Total Current Assets $2,077,226 $1,622,723 $1,260,834
Long-term Assets
Long-term Assets $1,396,982 $1,464,032 $1,479,498
Accumulated Depreciation $952,728 $1,087,047 $166,002
Total Long-term Assets $444,254 $376,985 $1,313,496
Total Assets $2,521,480 $1,999,708 $2,574,330
Current Liabilities
Accounts Payable $663,740 $509,665 $166,002
Current Borrowing $0 $0 $370,126
Other Current Liabilities (interest free) $246,210 $637,873 $335,462
Total Current Liabilities $909,950 $1,147,538 $871,590
Long-term Liabilities $2,221,869 $2,091,938 $1,973,421
Total Liabilities $3,131,819 $3,239,476 $2,845,011
Paid-in Capital $676,193 $676,193 $676,193
Retained Earnings ($1,286,532) ($1,915,961) ($946,874)
Earnings $0 $0 $0
Total Capital ($610,339) ($1,239,768) ($270,681)
Total Capital and Liabilities $2,521,480 $1,999,708 $2,574,330
Other Inputs
Payment Days 38 35 38
Sales on Credit $10,392,811 $8,090,275 $2,557,055
Receivables Turnover 11.06 9.43 4.47

2.2 Company Ownership

The company is a privately-held C corporation owned in majority by its founders, officers, and directors. There are thirteen shareholders with a total of 33,258,080 common shares. There are four major shareholders:

Lynx Caracal19,733,040 shares
Kit Puma 9,000,000 shares
Neve Palenque1,500,000 shares
Minerva Astarte1,204,800 shares

2.3 Company Locations and Facilities

DCH is currently located in Central City, Gulfstate, and housed within the corporate administrative offices of Kettle-Moraine Computers. While we are in the same location as KMCI, we do maintain totally separate offices, with our own entrance and individual offices for Kit Puma and Tulum Margay, and we share a conference room with KMCI.

KMCI currently leases approximately 1,338 square feet of office space, divided into three separate locations within the same property. The KMCI retail space is located at street level, with good signage, directly across from the Capital Mall (a shopping mall with anchor tenants of JC Penny, Sears, and Dillards). In addition, immediately across the street are a large bank and a supermarket. From these three locations, the Kettle-Moraine Computers retail center is clearly visible. The KMCI retail center isn't completely dependent on foot traffic for their sales, since KMCI does have a sales force.

The balance of the KMCI leased space is in two second-story office spaces. The administrative office, sales office, conference room, and the two offices used by Domino Comptech Holdings are located upstairs in suites on the third floor. KMCI also rents a third floor suite, which is Lynx Caracal's private office.

KMCI also owns a 100,000 square foot building that houses the computer production facility with plenty of additional land for future explanation.