© 2005 Clancy & Company LLP • All rights reserved

Purpose of Seminar

Outline

Outline Structure

Showcase performance of previous Funds

Give status of Clancy Funding (2005) Inc.: actual and proposed

investments

The Fund - Financing Dreams

The Fund is a private Ontario company formed for the purpose of

financing various business and operational initiatives to meet strategic

business goals and dreams.

The Fund has no resources. It relies on Clancy & CompanyLLP Chartered

Accountants (“Clancy & Company”) for its administration and the

undertaking of its business procedures and initiatives.

Background - Creating Opportunity

Clancy & Company, in its role as accountant and business

advisor, is constantly reviewing business opportunities for

the purpose of assisting clients in growing their businesses.

The Fund will allow Clancy & Company to:

Assist those clients that it feels will benefit from an expeditious

access to capital

Empower clients by offering opportunities to participate in

transactions that are not in the public domain

Function

Law Firm

Clancy & Company LLPChartered Accountants

Investors

Clancy & Company Inc.

• admin.

25%

75%

Dividends

Interest

$1,000,000 investment

• accounting

• legal

expenses

Principalrevenue

capital

• interest,

• royalties, and/or

• other

• principal

PrincipalCLANCYFUNDING(2005) Inc.

Investment Opportunity

Function (1. Provide much needed resources)

The Fund will function as follows:

Prospective investees (generally, existing clients of Clancy & Company)

will request funding for a variety of purposes

Funds, generally, will be provided by way of debt instruments, at rates of

interest anticipated to be higher than those offered in traditional

financing arrangements

Function (2. Investments generate returns)

Returns to the Fund will be generated from these investments

Returns are expected over a one to six year period

Income earned and principal repayments to the Fund will not be

reinvested in new financial opportunities

Function (3. Return on investment)

Cash received by the Fund will be distributed to the unit

holder as follows:

I. Pay interest that is accrued at the Royal Bank Prime Rate less 3%

II. Repay principal

After unit holders are repaid principal and paid interest, all after tax

income will be distributed on a pro-rata basis to the common

shareholders (75% investors, 25% Clancy)

Key Issues

Investors repaid their money plus nominal interest before Clancy and

related participate

Income earned by the Fund not reinvested

Funds distributed 2x a year (July and January)

Distribution of Income

Investor Clancy Funding

(2005) Inc.Borrower

Law Firm

Clancy & Company

Clancy & Related

Investor

dividend

75%

25%

expenses

$25,000

Clancy Funding (2005) Inc.

. Interest

. Principal

. Interest, other

. Principal$25,000

Investment Advantages

Issue

The issue of up to 1,000 units at a price of $1,000/unit. Each

unit entitles the holder to a

1) $999.99 Redeemable Senior Note (Note)

2) .01 Non-Voting Common share

Issued on a pro-rata basis 75% of the Common Shares

Six years fully open to repayment

Interest at the prevailing Royal Bank Prime Rate less 3%

Interest calculated on outstanding principal only

Investment Advantages (continued)

Subscription

Minimum 25 units ($25,000)

Dividend Policy

Upon repayment of the Note and interest, a dividend policy will

commence providing for 100% of all after tax income being paid to

common shareholders on a pro-rata basis.

Investment Advantages (continued)

Security

Security provided on an investment – by – investment basis

Expenses

Legal and year end accounting fees

Monthly administrative charge the lesser of $750.00 per month or 20% of

annualized income (or less, at Clancy discretion).

Investment Advantages (continued)

Manager

Clancy & Company Inc. will be the fund manager. The principal of Clancy

& Company Inc. is David Clancy

Management Fees

nil

Income Tax Considerations

The Fund will be subject to corporate income taxes as a Canadian

Controlled Private Corporation

Unit holders will receive interest income and dividend income. This

income will be subject to tax

Income Tax Considerations (continued)

The Fund will provide each unit holder with a statement of income paid

during the year and a T5

Until a unit is disposed of, interest paid on funds borrowed for the

purchase of units will be tax deductible

Potential Conflicts of Interest

There are potential conflicts of interest for a number of reasons:

The Fund is closely associated with Clancy & Company and Clancy &

Company Inc.

Likely, Clancy & Company will be the accountants for the individual

investors in the Fund and borrowers from the Fund

Potential Risk Factors

Return on investment

Business and financial risk

Dependence on key personnel

Management of growth

Economic risk

Political risk

Overall Objectives

Preservation of Capital Good Rates of Return

Investments:

Committed and Proposed

(see handout)

Why Borrow at High Costs?

Do not “give up” equity

Expeditious access to capital

Limited number of lending sources

Deal not a traditional “bankable” deal. Can be used: To purchase a business Equity issues for business [we are asset based lender], etc.)

Additional “qualitative factors” Flexibility Use to obtain other traditional funds Credibility, etc.

Overall Objectives

Preservation of Capital Good Rates of Return