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stock are a minimum of the one share assessment rate. Thus the income from assessments is not the <br />total number of shares of stock times the assessment. In Table 6, we have used the base assessment <br />rate and the average number of shares of stock to provide the income due to assessments as shown in <br />Column (2). The revenues from assessments listed in the financial report for 2003 and 2004 includes <br />carryover charges for running water. Column (2) in Table 6 thus does not show the same income from <br />assessments as the financial report. Column (2) in Table 6 is the correct amount of revenue from <br />assessments and the carry over charges are included in "Estimated Other Income ", Column (3). <br />The column'labeled "Estimated Other Income" which is Column (3) was based on the 2004 financial <br />statement and was kept constant for the extent of the analysis. This number was held constant, as were <br />expenses, to provide an analysis that is does not consider inflation. The amount of other income has <br />increased approximately 4% per year since 1996, when the other income was $190,163 as shown in <br />the 1998 Feasibility Study. <br />The yearly operating expenses shown in Column (4) are based on the 2004 financial statement with <br />2005 being decreased by the amount of interest paid to the CWCB in 2004. This loan was paid in full <br />in 2004. <br />The 10% payment and the 1% loan origination fee the Company will have to make is shown in the <br />column (6) with the payment shown in 2005 and 2006 as indicated in Table 4. Column (7) labeled as <br />"CWCB LOAN PYMT" is the annual payment required to the CWCB and column (8) is the certificate <br />of deposit required by the CWCB equal to one yearly payment with the funds being deposited over a <br />ten year period of time. Columns (9) and (10) are summation of all income and all expenses, <br />respectively. Column (12) entitled "CASH BALANCE" is the sum of all revenue and expenses for <br />that year plus any carryover of cash from the previous year. <br />As can be seen from Table 6, the assessments are projected to rise to a maximum of $150.00 per share <br />which is the current assessment rate. This analysis is based on "today's dollars" with no inflation <br />included. The assessment rate was managed to provide a minimum cash balance of approximately <br />$88,000 which is 25% of their yearly operating costs. <br />COLLATERAL <br />The Highland Ditch Company, Inc. can offer the following collateral for the CWCB loan. <br />The revenue from assessments as allowed by the Company By -Laws and Articles <br />of Incorporation. <br />2. The physical structures associated with Foothills Reservoir and dam. <br />Foothills Dam- 03.076 Page 8 <br />