1. Evaluate the compound return on investments made at startup, Round A, Round B,

Round C, and Round D if the acquired shares eventually sell at $10 and $5. Evaluate

the compound return on all investments of each existing investor. Analyze the incentives of each investor and founder for taking the Cruttenden Roth offer to execute a

$5 IPO.

2. Using the provided financial statements as a starting point:

1. Prepare and present a discounted cash flow valuation and pro forma financials

with five years of explicit forecasts using license fees and royalties growth rates

consistent with recent history (e.g., two to three years) at Spatial.

2. Modify your analysis to consider a more successful scenario where Spatials main

revenue sources (combined) grow at 50 percent for five years and then flatten to a

more sustainable growth rate.

3. Prepare and present discounted cash flow valuations and pro forma financial

statements (five-year explicit period) that justify a $10 share price and a $5 share

price at the IPO. Make sure the ratios embedded in your projections conform to

reasonable operating ratio assumptions.

4. In all cases, be sure to explain your modeling assumptions on revenue and costs

and provide a summary comparison of the four scenarios.

3. Discuss the $5 and $10 IPO prices for Spatial within the context of comparable firms

and their multiples. (There are some glimpses of multiples in the case materials, but

you may wish to use some outside historical reference material. Please state your

sources.)