presently considered to be a minimum of $957,000. If expected discounted revenue, free cash flow and net earnings 34 are objectively applied to different valuation formats, the present pre funding value of ATs should be considerably higher and increase significantly in the immediate future and thereafter.
Expected funding from travel industry sources was delayed when they curtailed operations due to Covid-19, causing a loss of their sales revenue and related investment capital. Based on evolving considerations, alternative funding plans are being acquired.
Since early 2020 when Covid-19 caused a suspension of recently implemented Journey sales and startup operations, loans from present ATs principals have supported a minimized cash burn rate.
Current funding requirements range from a minimum amount that adequately provides for favorable earnings to a maximum amount that permits accelerated expansion. Alternatives are presently being considered.
Minimum but adequate funding of $250,000 plus renewal or replacement of equipment (Car) financing of $450,000, a total of $700,000, provides for positive cash flow in month 7 after funding occurs.
Maximum eventual funding of up to $5,000,000 allows earlier introduction of domestic and foreign Journey services, products and opportunities with positive cash flow in month 15 after funding occurs.
ATs’ forecast earnings and profit margin varies based on the rate of growth which depends on the amount of funding 36. Favorable performance occurs with minimal funding and improves if more capital is available to expedite the acquisition and improvement of rail Cars with more bedrooms, increasing Journey inventory, sales and subsequent revenue.
Revenue and expected subsequent earnings were stopped in early 2020 when Covid-19 caused a curtailment of sales and imminent Journey services. ATs subsequently reduced business activities and expenses to a minimum and has been coasting until recently; operations are now being re-implemented.
Forecasts assume that two primary products, individual Journeys and Train’Shares, are sold. In the event that evolving circumstances cause a separation of these two products or purposeful significant emphasis of one or the other, desirable earnings still occur. If only individual Journeys were sold, EBITDA in early years would be lower but Journey sales would continue in future years. If only Train’Shares were sold, EBITDA in early years would be higher but would be reduced to receipt of management fees and service charges in future years. Forecasts in this Plan are for mixed use and the sale of both primary products. Forecasts for individual products are available.
Projected earnings are relatively high and include forward looking predictions considered to be reasonable based on repeated scrutinization, see enviable reasons for enhanced earnings37, Exhibit A.
Although minimum funding 36 is adequate to produce favorable earnings, up to a maximum funding 36 accelerates introduction of Cars providing more bedrooms (Journey inventory) for sale with related increased revenue and earnings. Total annual profits with minimum funding runs up to 18 months behind total profits with maximum funding.
Other sources of revenue and income not included in present forecasts, and related operations, include the following.
Instead of and in addition to traveling as part of normal Amtrak trains on fixed routes at Amtrak’s scheduled times, ATs will use independent Amtrak engines to exclusively pull multiple ATs Cars having a total of about 14 or more bedrooms on ‘free-roaming’ itineraries over 21,000 miles of tracks in the U.S. and into Canada. Positive discussions also provide
