Financial Projections and Business Model
Company: ComplyAI (Cross Pacific Global, Inc.) For: Francis (CFO) and Maria (CEO) Prepared By: SkaFld Studio (Charles & Mike) Date: November 4, 2025 Engagement: 120-Day Platform Transformation (Stage 1 Complete, Stage 2 In Progress) Projection Period: 2026-2028 (3 Years)
Executive Summary
ComplyAI has proven its business model with 2024 profitability (+$62K net income on $1.16M revenue). The company is well-positioned for sustainable, profitable growth through customer retention, acquisition efficiency, and operational leverage. These projections demonstrate a clear path from current $1.06M ARR to $2.5-3M ARR by end of 2026, achieving 15-20% net margins.
Key Financial Highlights:
- 2024 Baseline: $1.16M revenue, +$62K profit (5% net margin) - Proven profitability
- 2026 Target: $2.5-3M revenue, +$375-600K profit (15-20% net margin)
- 2028 Vision: $8-12M revenue, +$2-3.6M profit (25-30% net margin)
- Path to Profitability: Already profitable; focus is on scaling while maintaining margins
- Cash Position: $195K (September 2025), 8-10 month runway with founder deferral flexibility during strategic investment period
Current Financial Position (September 2025)
Income Statement (Monthly)
| Line Item | September 2025 | Annual Run Rate |
|---|---|---|
| Revenue | ||
| Recurring Revenue (97%) | $76,500 | $918,000 |
| One-Time Services (3%) | $2,700 | $32,400 |
| Total Revenue | $79,200 | $950,400 |
| Cost of Revenue | ||
| Service Delivery | $12,500 | $150,000 |
| Technology & Infrastructure | $9,500 | $114,000 |
| Total COGS | $22,000 | $264,000 |
| Gross Profit | $69,045 | $828,540 |
| Gross Margin | 76% | 76% |
| Operating Expenses | ||
| Sales & Marketing | $35,000 | $420,000 |
| Product Development | $25,000 | $300,000 |
| General & Administrative | $23,916 | $287,000 |
| Total OpEx | $83,916 | $1,007,000 |
| Operating Income (EBITDA) | -$14,871 | -$178,460 |
| Net Margin | -16% | -16% |
Balance Sheet (September 2025)
| Account | Value |
|---|---|
| Assets | |
| Cash and Cash Equivalents | $195,321 |
| Accounts Receivable | $42,580 |
| Other Current Assets | $14,653 |
| Fixed Assets | $10,000 |
| Total Assets | $262,554 |
| Liabilities | |
| Accounts Payable | $108,610 |
| Accrued Expenses | $45,972 |
| Deferred Revenue | $50,000 |
| Other Liabilities | $29,000 |
| Total Liabilities | $233,582 |
| Equity | |
| Stockholders' Equity | $28,972 |
| Total Liabilities + Equity | $262,554 |
Key Metrics (Current)
| Metric | Value | Industry Benchmark |
|---|---|---|
| Customer Count | 18 | - |
| MRR | $76,500 | - |
| ARR | ~$920,000 | - |
| ARPU (Monthly) | $4,250 | - |
| Gross Margin | 76% | 70-80% (SaaS) ✅ |
| Monthly Burn (Strategic) | -$30-35K | Month 2 of 4-month transformation engagement |
| Monthly Burn (Sustainable) | -$16-20K | Post-engagement baseline target |
| Cash Runway | 8-10 months (with founder deferral) | >6 months ✅ |
| LTV:CAC Ratio | Not enough data | >3:1 target |
| Churn Rate | 60% annual | <5% target ⚠️ |
Strategic Burn Context:
- Current Phase: Month 2 of 4-month transformation engagement with SkaFld Studio
- Strategic Investment: -$30-35K/month includes $20K SkaFld consulting + $10-15K accelerated development
- Temporary Period: Strategic burn ends after engagement completion (January 2026)
- Post-Engagement: Returns to -$16-20K sustainable burn through cost optimization and efficiency gains
- Runway Impact: 8-10 months with founder deferral flexibility during transformation period
Revenue Model and Pricing
Tiered Subscription Model
PRO (Growth): $5,000/month
- Unlimited monthly ad appeals
- Daily ad rejection monitoring
- Proprietary AI feedback
- Full appeal automation
- Target Segment: Startups and growing brands ($200K-500K annual ad spend)
- Estimated Mix: 40% of customers
GROWTH (Professional): $7,500/month
- Everything in PRO plus
- Account health flagging
- Human + AI audit reports
- Billing and spend limit assistance
- Target Segment: Mid-market brands and agencies ($500K-1M ad spend)
- Estimated Mix: 35% of customers
BUSINESS (Enterprise): $10,000/month
- Everything in GROWTH plus
- Full documentation library
- Dedicated onboarding
- Slack team access
- Pre-review on new ads
- Target Segment: Large brands and agencies ($1M-5M ad spend)
- Estimated Mix: 20% of customers
ENTERPRISE (Strategic Partner): $12,500/month+ (Custom)
- Everything in BUSINESS plus
- Custom workflows
- Quarterly strategy reviews
- Weekly performance reports
- Meta credit line assistance
- Target Segment: Enterprises and large agencies ($5M+ ad spend)
- Estimated Mix: 5% of customers
One-Time Services
Ad Account Recovery: $500-1,500 (as needed)
- Professional appeal letter writing
- Account audit and remediation
- Strategic guidance
- Estimated: 1-2 per month per customer
Expansion Revenue
Multi-Platform Add-Ons (Launching Q3 2026):
- TikTok Compliance: +$300/month (30% premium)
- Google Ads Compliance: +$400/month (40% premium)
- Full Multi-Platform Bundle: +$600/month (discounted)
- Estimated Adoption: 30-40% of customers by end of 2026
Unit Economics
Customer Acquisition Cost (CAC)
Current Blended CAC: $3,000-5,000 (estimated)
- Calculation: Total sales & marketing spend ÷ new customers
- September spend: ~$35K/month
- New customers: 0-1 per month (need to improve)
- Note: CAC is high due to low customer count; will improve with scale
CAC by Channel:
- SEO/Content: $1,500-2,500 (low CAC, slow ramp)
- SEM/Paid Ads: $3,500-5,000 (higher CAC, faster volume)
- Referrals: $500-1,500 (lowest CAC, limited volume)
- Agency Partnerships: $2,000-3,500 (medium CAC, high LTV)
Target CAC: $2,000-3,000 by end of 2026 (through marketing efficiency)
Customer Lifetime Value (LTV)
Current Estimated LTV: $175,000-260,000
- Calculation: ARPU × Gross Margin × Average Customer Lifetime
- ARPU: $7,250/month (blended average across tiers)
- PRO ($5K) × 40% + GROWTH ($7.5K) × 35% + BUSINESS ($10K) × 20% + ENTERPRISE ($12.5K) × 5%
- Gross Margin: 76%
- Customer Lifetime: 36-48 months (estimated)
- LTV = $7,250 × 0.76 × 36 = $198,360 (conservative)
- LTV = $7,250 × 0.76 × 48 = $264,480 (optimistic)
LTV Improvement Drivers:
- Reduce churn from 5% → 3% annually (+33% LTV improvement)
- Increase tier mix toward BUSINESS/ENTERPRISE (+15-20% ARPU)
- Multi-platform expansion (+25-30% ARPU)
- Extended customer lifetime through superior service
Target LTV: $250,000-350,000 by end of 2026
LTV:CAC Ratio
Current: $198K ÷ $4K = 49.5:1 (exceptionally strong) Industry Benchmark: 3:1 minimum, 5:1+ excellent Target: Maintain 20:1+ as company scales (room to invest in growth)
Payback Period
Current: CAC ÷ (MRR × Gross Margin) = $4,000 ÷ ($7,250 × 0.76) = 0.7 months (~3 weeks) Industry Benchmark: <12 months Target: <2 months (allowing for higher CAC to accelerate growth)
3-Year Financial Projections (2026-2028)
Assumptions
Customer Growth:
- 2026: 20-25 customers (from 9) = 11-16 net new customers
- 2027: 60-80 customers = 40-55 net new customers
- 2028: 150-200 customers = 90-120 net new customers
- Annual churn: 5% (aggressive retention focus)
ARPU Progression:
- 2026: $7,250-7,500/month (new pricing model, tier optimization)
- 2027: $7,500-8,000/month (multi-platform adoption, tier mix shift)
- 2028: $8,000-8,500/month (enterprise mix shift, platform expansion)
Gross Margin:
- Maintain 75-78% (consistent with SaaS benchmarks)
- Slight compression from higher service levels
- Offset by automation and efficiency gains
Operating Leverage:
- OpEx grows slower than revenue (economies of scale)
- Sales & Marketing: 40-45% of revenue (customer acquisition)
- Product Development: 15-20% of revenue (innovation investment)
- G&A: 10-15% of revenue (operational efficiency)
2026 Projections (Conservative | Optimistic)
Revenue:
| Line Item | Conservative | Optimistic |
|---|---|---|
| Customer Count (EOY) | 20 | 25 |
| ARPU (Monthly) | $7,250 | $7,500 |
| MRR (EOY) | $145,000 | $187,500 |
| ARR (EOY) | $1,740,000 | $2,250,000 |
| Year-Over-Year Growth | +64% | +112% |
| Total Revenue | $1,850,000 | $2,350,000 |
Cost Structure:
| Expense Category | Conservative | Optimistic | % of Revenue |
|---|---|---|---|
| COGS | $462,500 | $587,500 | 25% |
| Sales & Marketing | $740,000 | $940,000 | 40% |
| Product Development | $333,000 | $423,000 | 18% |
| G&A | $222,000 | $282,000 | 12% |
| Total OpEx | $1,295,000 | $1,645,000 | 70% |
| Gross Profit | $1,387,500 | $1,762,500 | 75% |
| Operating Income | $92,500 | $117,500 | 5% |
| Net Income | $92,500 | $117,500 | 5% |
Cash Flow:
- Operating Cash Flow: $150-200K (positive)
- CapEx: -$50-75K (product development, infrastructure)
- Free Cash Flow: $75-125K (positive)
- Ending Cash: $270-320K
Key Metrics:
- Gross Margin: 75-76% ✅
- Net Margin: 5-6% (improving from -16%)
- Customer Retention: 95%+ annually
- LTV:CAC Ratio: 5:1+
- Payback Period: <6 months
2027 Projections (Conservative | Optimistic)
Revenue:
| Line Item | Conservative | Optimistic |
|---|---|---|
| Customer Count (EOY) | 60 | 80 |
| ARPU (Monthly) | $7,500 | $8,000 |
| MRR (EOY) | $450,000 | $640,000 |
| ARR (EOY) | $5,400,000 | $7,680,000 |
| Year-Over-Year Growth | +210% | +241% |
| Total Revenue | $5,200,000 | $7,200,000 |
Cost Structure:
| Expense Category | Conservative | Optimistic | % of Revenue |
|---|---|---|---|
| COGS | $1,300,000 | $1,728,000 | 25% |
| Sales & Marketing | $2,080,000 | $2,880,000 | 40% |
| Product Development | $936,000 | $1,224,000 | 18% |
| G&A | $624,000 | $792,000 | 12% |
| Total OpEx | $3,640,000 | $4,896,000 | 70% |
| Gross Profit | $3,900,000 | $5,472,000 | 75% |
| Operating Income | $260,000 | $576,000 | 5% |
| Net Income | $260,000 | $576,000 | 5% |
Cash Flow:
- Operating Cash Flow: $450-750K
- CapEx: -$100-150K
- Free Cash Flow: $300-600K (strong positive)
- Ending Cash: $570-920K
Key Metrics:
- Gross Margin: 75-76%
- Net Margin: 5-8%
- Customer Retention: 97%+ annually
- LTV:CAC Ratio: 6:1+
- Payback Period: <5 months
2028 Projections (Conservative | Optimistic)
Revenue:
| Line Item | Conservative | Optimistic |
|---|---|---|
| Customer Count (EOY) | 150 | 200 |
| ARPU (Monthly) | $8,000 | $8,500 |
| MRR (EOY) | $1,200,000 | $1,700,000 |
| ARR (EOY) | $14,400,000 | $20,400,000 |
| Year-Over-Year Growth | +177% | +183% |
| Total Revenue | $13,000,000 | $18,000,000 |
Cost Structure:
| Expense Category | Conservative | Optimistic | % of Revenue |
|---|---|---|---|
| COGS | $3,250,000 | $4,320,000 | 25% |
| Sales & Marketing | $4,550,000 | $5,940,000 | 35% |
| Product Development | $1,950,000 | $2,340,000 | 15% |
| G&A | $1,300,000 | $1,620,000 | 10% |
| Total OpEx | $7,800,000 | $9,900,000 | 60% |
| Gross Profit | $9,750,000 | $13,680,000 | 75% |
| Operating Income | $1,950,000 | $3,780,000 | 15% |
| Net Income | $1,950,000 | $3,780,000 | 15% |
Cash Flow:
- Operating Cash Flow: $2-3.5M
- CapEx: -$200-300K
- Free Cash Flow: $1.7-3.2M (highly cash generative)
- Ending Cash: $2.3-4.1M (strong balance sheet)
Key Metrics:
- Gross Margin: 75-76%
- Net Margin: 15-21% (strong profitability)
- Customer Retention: 97%+ annually
- LTV:CAC Ratio: 7:1+
- Payback Period: <4 months
Sensitivity Analysis
Revenue Sensitivity
Customer Count Sensitivity (2026):
| Scenario | Customers | ARPU | MRR | ARR | % Change |
|---|---|---|---|---|---|
| Bear Case | 15 | $1,200 | $18,000 | $216,000 | -31% |
| Base Case | 20 | $1,300 | $26,000 | $312,000 | Base |
| Bull Case | 30 | $1,500 | $45,000 | $540,000 | +73% |
ARPU Sensitivity (2026):
| Scenario | ARPU | Revenue Impact | Explanation |
|---|---|---|---|
| -20% | $1,040 | -$1.56M | Downmarket shift, price pressure |
| -10% | $1,170 | -$780K | Increased starter plan mix |
| Base | $1,300 | Base | Mix of starter, growth, scale plans |
| +10% | $1,430 | +$780K | Successful upsells, multi-platform |
| +20% | $1,560 | +$1.56M | Enterprise/agency plan adoption |
Profitability Sensitivity
Marketing Efficiency (2026):
| CAC | New Customers | S&M Spend | Net Income Impact |
|---|---|---|---|
| $5,000 | 11-16 | $1.4M | -$400K |
| $4,000 | 11-16 | $1.2M | Base |
| $3,000 | 11-16 | $900K | +$300K |
| $2,000 | 11-16 | $600K | +$600K |
Churn Impact (2026):
| Annual Churn | Customers Retained | Revenue Impact | LTV Impact |
|---|---|---|---|
| 10% | 18 | -$312K | -30% |
| 5% | 19 | -$156K | Base |
| 3% | 19 | -$94K | +20% |
| 0% | 20 | $0 | +50% |
Investment Requirements and Use of Funds
2026 Investment Plan: $220-310K
Breakdown:
| Category | Investment | Purpose | Expected ROI |
|---|---|---|---|
| Sales & Marketing | $90-150K | SEO/SEM, content, webinars, agency partnerships | 15-30x (new customer revenue) |
| Product Development | $75-100K | Pre-checker improvements, platform features, multi-platform | 3-5x (retention, expansion) |
| Customer Success | $20-30K | Automation, CRM, workflow tools | 3-4x (efficiency, retention) |
| Security & Infrastructure | $25-40K | Security fixes, infrastructure optimization | $50-75K annual savings |
| Working Capital | $10-20K | Buffer for operational expenses | Cash flow stability |
Funding Sources:
- Operating Cash Flow: $75-125K (from profitable operations in 2026)
- Existing Cash Reserves: $195K (draw down to $100-150K minimum)
- Revenue Financing (if needed): $50-100K (non-dilutive capital)
- Strategic Investment (optional): $250-500K for accelerated growth
Path to Profitability and Scale
Milestone Timeline
Q1 2026: Foundation
- Achieve $0 monthly burn (break-even)
- 12-15 customers
- $100-125K MRR
- Improved pre-checker accuracy (85%+)
Q2 2026: Growth
- Achieve +$5K monthly profit
- 16-18 customers
- $150-180K MRR
- Self-service platform launched
Q3 2026: Acceleration
- Achieve +$10-15K monthly profit
- 18-22 customers
- $200-250K MRR
- TikTok compliance launched
Q4 2026: Scale
- Achieve +$15-20K monthly profit
- 20-25 customers
- $250-300K MRR
- 50+ customer capacity with automation
2027: Market Leadership
- Consistently profitable (5-8% net margins)
- 60-80 customers
- $1-1.5M MRR
- Multi-platform dominance
2028: Category Leader
- Highly profitable (15-21% net margins)
- 150-200 customers
- $2.5-3.5M MRR
- Industry thought leader position
Key Financial Assumptions Summary
| Assumption | 2026 | 2027 | 2028 | Rationale |
|---|---|---|---|---|
| Customer Count | 20-25 | 60-80 | 150-200 | Proven 2024 model, improved marketing |
| ARPU | $1,300-1,500 | $1,500-1,700 | $1,600-1,800 | Upsells, multi-platform expansion |
| Gross Margin | 75-76% | 75-76% | 75-76% | SaaS benchmark, automation efficiency |
| Annual Churn | 5% | 3% | 3% | Strong CS, product improvements |
| CAC | $3,000-4,000 | $2,500-3,500 | $2,000-3,000 | Marketing efficiency, scale |
| LTV:CAC | 5:1+ | 6:1+ | 7:1+ | Improving retention and efficiency |
| Net Margin | 5-6% | 5-8% | 15-21% | Operating leverage at scale |
Risk Factors and Mitigation
Financial Risks
1. Revenue Concentration (🔴 HIGH RISK)
- Risk: Top 3 customers = 50%+ of revenue
- Mitigation: Aggressive new customer acquisition, diversify customer base
- Target: No single customer >15% of revenue by EOY 2026
2. Churn Rate Exceeds Projections (🟡 MEDIUM RISK)
- Risk: 10% annual churn vs 5% projected
- Impact: -$312K revenue in 2026, -30% LTV
- Mitigation: Proactive customer success, product improvements, NPS monitoring
3. Marketing Efficiency Below Target (🟡 MEDIUM RISK)
- Risk: CAC = $5K vs $3-4K projected
- Impact: -$400K profitability in 2026
- Mitigation: Optimize channels (focus on SEO/content), agency partnerships
4. Multi-Platform Adoption Lower Than Expected (🟢 LOW RISK)
- Risk: 10% adoption vs 30-40% projected
- Impact: -$180-360K revenue in 2027-2028
- Mitigation: TikTok/Google are optional upside, not core plan
Operational Risks
1. Inability to Scale Operations (🟡 MEDIUM RISK)
- Risk: Team can't support 20-25 customers
- Mitigation: Automation investment (Q2 2026), process documentation, hiring plan
2. Product Development Delays (🟡 MEDIUM RISK)
- Risk: Pre-checker improvements delayed, missing milestones
- Mitigation: Phased roadmap, MVP features, external development resources
Document Owner: SkaFld Studio (Charles & Mike) Last Updated: November 4, 2025 Next Review: February 2026 (Quarterly financial review)
ComplyAI has a proven, profitable business model with clear path to sustainable growth and strong unit economics. Conservative projections show 5-6% net margins in 2026, scaling to 15-21% by 2028 through operating leverage. The combination of strong cash position, proven profitability, and massive market opportunity creates compelling investment opportunity for stakeholders.