Miscellaneous Supplements – Sports

Structured Lipids- Increased Protein SynthesisAdvances in the technology behind lipid synthesis led to the development of structured lipids (SLs). A structured lipid (SL) is a triglyceride that includes both medium (8-12 carbons) and long-chain fatty acids (14-22 carbons) within the same triglyceride. Emulsions including SL have demonstrated increased protein synthesis and increased nitrogen balance (NB) in burned animals The SL has also been superior to medium-chain triglyceride (MCT) and long-chain triglyceride (LCT) emulsions in stimulating muscle protein synthesis in animal studies.The use of SLs has been primarily limited to clinical and experimental settings whereby it has become necessary to develop medical nutrition therapies that minimize the adverse effects of high lipid feedings and maximize the positive outcomes. Such positive outcomes include increased protein synthesis, enhanced immune function, decreased risk for cardiovascular disease, and improved glucose homeostasis. The ability to increase protein synthesis, maintain the health of the immune system, and stabilize blood glucose are factors that can also play a role in improving athletic performance. Research on the application of this clinical technology to athletic performance is not available at this time.Peptides- To Provide Glutamine to TPN PatientsIn an effort to provide glutamine to TPN patients in a form that can remain stable in liquid, the amino acid has been bonded with other amino acids, such as the dipeptide alanyl-glutamine. This combination can preserve muscle glutamine levels and muscle protein synthesis after surgery and improve whole-body nitrogen balance. This finding is supported by research on rats with peritonitis Alanylglutamine increased protein synthesis in the liver and skeletal muscle, protected the morphology of the intestinal mucosa, and improved survival in protracted bacterial peritonitis. The researchers concluded that alanylglutamine supplementation may be useful in septic patients.Role of Glutamine as Glucose RegulationThe role of glutamine regarding glucose regulation may be important in exercise-trained individuals. Its function in gluconeogenesis (formation of glucose) and glycogen repletion may serve as a useful function during and after exercise. Gluconeogenesis from glutamine can occur without changes in plasma insulin and glucagon levels, providing evidence that glutamine itself can regulate gluconeogenesis.Nurjhan et al. compared the contribution of alanine and glutamine to glucose formation in postabsorptive (fasted) normal human volunteers and found that the amount of glucose carbon that came from protein­derived glutamine was 100% greater than from alanine. Varnier et al. studied the effects of glutamine, alanine plus glycine, and saline infusion on glycogen accumulation in subjects who cycled for 90 minutes. Two hours postexercise, glutamine infusion resulted in a twofold greater concentration of muscle glycogen than either saline or alanine plus glycine infusion. In postabsorptive humans, glutamine could be more important than alanine for glucose formation derived from proteolysis. Further, glutamine carbon can be directed to glycogen accumulation in skeletal muscle that had been previously glycogen depleted.In mice that were genetically predisposed to being overweight and hyperglycemic, the administration of glutamine in conjunction with a high-fat diet resulted in a reduction of body weight and a drop in hyperglycemia and hyperinsulinemia. The mechanism for a glutamine­induced weight reduction is not known, though it may be related to the ability of glutamine to lessen the insulin resistance induced by a high-fat diet. Further, the administration of glutamine to lipid-based TPN can prevent glucose intolerance and insulin resistance.

Why Businesses Do Not Sell

It would be nice to live in a world where every business-for-sale was sold at top dollar. While there is no such thing as a perfect business free from all defects, there are a number of problems that can hinder a sale that could be remedied, if given enough time. This article lists ten of the reasons which are often cited as contributing factors in an unsuccessful sale or a completed deal for less than potential value.Business intermediaries need to be up-front with their seller clients, educating them on the challenges faced, and the likely impact that one or more of these issues will have on completing a successful transaction.1. UNREALISTIC EXPECTATIONSa. Valuation/Listing Price:Arguably, the price a business is listed at is one of the critical elements to a successful sale. An owner’s emotional attachment to their business, coupled with an inexperienced business intermediary’s desire to obtain the listing and please the seller, can be a recipe for disaster. Overpricing a business will deter knowledgeable buyers from establishing communications. Additionally, it will be extremely difficult to defend the valuation when a business has been priced unrealistically. The typical outcome is that the listing will languish in the marketplace and recovery becomes more difficult. Once on the market for months on end at the wrong price, the process in re-pricing and re-listing creates a whole new set of challenges, the least of which is maintaining credibility.b. Unrealistic Terms and/or StructureDeal structure, asset allocation and tax management must be addressed proactively and early in the process. Often the Buyer and Seller place all of the focus on the sale price at the expense of the ‘net after-tax results’ of a business transaction. In most cases, a seller could achieve a deal that provides a greater economic benefit when an experienced Tax Attorney/CPA assists with structuring the transaction. In addition to structure there are a number of other issues that could be problematic, including:

Seller insists on all cash at closing and is inflexible in negotiating other terms.

The buyer’s unwillingness to sign a personal guarantee

The lack of consensus on the Asset Allocation

Seller insisting on only selling stock (typically with a C-Corp)

Inability to negotiate equitable seller financing, an earn-out, or terms for the non-compete

2. PROFESSIONAL ADVISORSFor a successful sale to occur, a business owner must have the right team of advisors in place. An experienced mergers & acquisitions intermediary will play the most critical role – from the business valuation to negotiating the terms, conditions, and price of the sale as well as everything in between (confidential marketing, buyer qualification, etc). Aside from the M&A advisor, a business attorney who specializes in business transactions is critical. Once again, “who specializes in business transactions”. Any professional who has been in the industry for more than a year will be able to point to a transaction that has failed because the lawyer that was chosen did not have the specialized expertise in handling business transactions. Additionally, a competent CPA who is knowledgeable about structuring business transactions will be the third key role. While a business owner’s current legal and tax advisors may have the best of intentions in assisting their client with the business sale, if they are not experienced with mergers and acquisitions it would be highly recommended to evaluate alternatives. In some cases, there is one shot when an offer has been received and it is therefore imperative not to attempt to make a deal that is out of reach and impossible to complete.3. DECREASING REVENUES/PROFITSThe majority of buyers are seeking profitable businesses with year-over-year increasing revenue and profits. When a business has a less stellar track record with varied results or possibly declining revenue and/or profits, complications with the business sale are likely to occur. Not only will decreasing profits and revenue impact the availability of third party funding but it will have a material impact on the business valuation. While buyers traditionally purchase businesses based on anticipated future performance, they will value the business on its historical earnings with the major focus on the prior 12-36 months. For those businesses which have deteriorating financials, the seller should be able to articulate accurate reasons for the decline. Both the lender and the buyer will need to obtain a realistic understanding of the underperformance to assess the impact it is likely to have on future results. In cases where the seller is confident that the decline was an anomaly and is not likely to repeat itself, structuring a component of the purchase price in the form of an earn-out would probably be necessary. In other circumstances, when there are two or more years of declines, the buyer and lender will question “where is the bottom?” and what is the new normal. In this situation, a decrease in valuation will be inevitable. Cash flow is the driver behind business valuations and business acquisitions. The consistency and quality of revenue and income will be one of the key focal points when assessing an acquisition. It all relates to risk. Those businesses with dependable recurring revenue generated from contractual arrangements will generally be in greater demand than businesses who produce income based on a project based model.4. INACCURATE OR INCOMPLETE BOOKSOne of the most critical components to a successful business sale is for the business to maintain accurate, detailed, and clean financial statements that match the filed tax returns. Not only will these financial statements be the basis for the business valuation but they will also be the criteria for whether the business will qualify for bank transaction funding. Too often the business is managed as purely a lifestyle business that is focused only on short term owner compensation, without regard to building long term value. In these cases, the owner has taken very liberal personal expenses that may not be able to be added back when deriving the adjusted earnings. Given the importance these documents represent, a business owner should ensure that the books are professionally managed and up to date. Records that are messy, incomplete, out-of-date or containing too many personal expenses will only give prospective buyers and lenders reasons to question the accuracy of the books. Last but not least, businesses that have a ‘cash component’ will need to report 100% of this income for it to be incorporated in the valuation.5. CUSTOMER CONCENTRATIONBusinesses that have a handful of customers that produce a large percentage of the company’s revenues, will probably have customer concentration issues, especially if one client represents greater than 10% of sales. It is important for a business owner to recognize that a business which lacks a broad and diverse base of customers possesses a higher degree of risk for a buyer as the loss of any one of these large clients could have a material impact on the future earnings. As a result, customer concentration will have an effect on the valuation, deal structure, and salability of the business. Vendor and industry concentration can also pose complications when selling a business. Specialization can be a competitive advantage for a business and assist in winning contracts. However, this same narrow industry focus could be a detriment if it is perceived that the business does possess a broad supply chain and ample options to source products and materials.6. THE OWNER IS THE BUSINESSIt is not uncommon for the owner to play a significant role in the operation and management of the business. This is particularly true with smaller enterprises. Where this situation can present a problem is when the owner is not only the face of the business but also deeply involved with all facets of the company – sales, marketing, operations, management, marketing, and financial. If there are no key employees and there are few written processes and procedures, the business lacks a dependable and repeatable work flow. When it becomes evident that the business cannot operate effectively without the owner’s hands on involvement and personal know-how, it becomes problematic. Of equal concern is the relationship the owner may have with the customers of the business. If the customer does business with the firm largely in part of the relationship with the owner, this situation will create customer retention concerns and possible transition problems when the business is being sold. In summary, buyers want a business that can operate independently from the current business owner.7. THE OWNER(S) IS AGING AND HAS SLOWED-DOWNIt is not uncommon for a business owner to become complacent after running the company for an extended period of time. Becoming tired and lacking the previous ‘fire in the belly’ has a way of spilling over into the business fundamentals. The number of trade shows that the business participates in decreases, the travel and new customer sales calls that routinely took place on a daily basis in the early years, have been paired down. The investment spending on equipment upgrades, vehicle replacement or marketing programs have been cut back. Innovation has come to a grinding halt and the business is on auto pilot. The financials have luckily held steady but for how long? An owner who has become burnt out almost unavoidably transmits their lack of zeal and drive to their staff and clients in a number of subtle ways. The net result is the company’s performance slowly begins to deteriorate. Unfortunately, this situation can become even more pronounced when the owner finally makes the decision to sell the business and mentally checks out at the worst possible time. Transferring ownership can be viewed by some as a highly emotional process, and the decision to sell at the right time is often ignored until the issue is forced upon the owner (failing health, divorce, disability, etc.) and usually at a fraction of the former valuation.8. INDUSTRY IS DIMINISHING OR THREATENED Over the last two centuries there have been a number of industries that have developed and grown significantly. In this same time frame, many new industries have been created while others have become extinct. The future outlook for a given industry will have a direct impact on the valuation and marketability of the business during a sale. Businesses facing obsolescence or mired in a shrinking industry will face an uphill battle when it comes time to transitioning or selling the company. Maintaining a diverse offering of products and services that are relevant to the market, not just today, but also with an eye to the future, will enable a business owner to avoid this situation. Not only will this assist in mitigating the impact from declining sales but also demonstrate to a prospective buyer that the business has a clear path to grow in the future.9. CHOOSING THE WRONG LENDERFrom loan application approval to transaction funding is a process in business transactions that can take six weeks or more, that is with an ‘experienced’ business acquisition financier. Many deals have fallen apart during this time frame because the buyer became aligned with the wrong financial institution. There is nothing worse, for all parties involved, to find out four weeks into the process that either the loan terms previously promised were not correct or worse, that the bank underwriter declined the loan.In the field of business acquisitions, not all banks/lenders are the same. There are conventional loans, SBA backed loans, and there are lenders that provide cash-flow based financing and others that only provide asset based funding. One bank may turn down a borrower for an SBA 7a loan while another institution will readily accept it. Every lender has its own unique and frequently modified lending criteria. Therefore, buyers need to ensure they are working with the right lender from day one, or valuable time is wasted causing the deal to be compromised, or lost to another, better prepared candidate. Buyers should consult with the business intermediary representing the sale to determine which lenders have reviewed and/or pre-approved the transaction for funding. Obviously, buyers who are prequalified from the start and verify that the bank’s lending criteria conforms to the type of businesses they are evaluating, will be the best positioned for a successful acquisition.10. COMMERCIAL PROPERTY ISSUESFor some businesses the saying “location, location, location” cannot be more important to the value of the company. Typically, this will pertain to retail businesses. If the physical location is of major importance, the business buyer will seek assurances that they can either purchase the real estate or be able to sign a long term lease. On the flip side, the business could be located in a part of town that has fallen on hard times or could be located on the owner’s personal property, both situations necessitating that the business be relocated. Also, some businesses are not easily relocatable without affecting the current customer base. All of these circumstances add another layer of complexity to the transaction.Additionally, the type and size of facility can also have a material impact on the sale. If the facility is not large enough to provide the enterprise a sustained growth path, a buyer could become disinterested. Another situation could be the value of the property. If the current owner purchased the land/building a decade or two earlier and the financials or recast do not reflect a current FMV rent/lease payment, valuation problems will occur.Business transactions involving the sale of commercial real estate can be hampered by the Environmental Site Assessments (ESA’s) – Phase 1 and Phase 2. Property that is contaminated can be very costly to clean up and will have an impact on the closing. When this situation arises, it will be important for the buyer and seller to have a clear understanding of the costs to resolve the issue, which party is responsible, and whether a price offset will be warranted.Other complicating factors involving commercial real estate include zoning changes that require a property to be brought up to new codes, and clear definition of who bears responsibility and the cost of this process. Last but not least, the agreement by the landlord with either a lease assignment or offering a new lease at comparable rates.SUMMARYMost small business owners have spent the majority of their life building their business. It is not uncommon for a business seller to become so emotionally attached to the company that they look past some rather glaring problems that a business intermediary, a lender, or prospective buyer will immediately recognize. It is natural for a seller to want to obtain the highest price possible for their business. There is so much bad information on the web related to multiples and business valuations that this should not come as a surprise. M&A Advisors need to be honest and direct in educating a business seller on the challenges faced in a potential sale, the range for a realistic transaction price, as well as creative terms and structuring options that might be utilized. Being a people pleaser and ignoring any potential problems will only provide the seller with unrealistic expectations. In the arena of business negotiations there are few if any “pleasant surprises”. Dealing with issues up front rather than late in the sales cycle process should be the golden rule.

Software Maintenance Implications on Cost and Schedule

Abstract The dictionary defines maintenance as, “The work of keeping something in proper order.” However, this definition does not necessarily fit for software. Software maintenance is different from hardware maintenance because software doesn’t physically wear out, but often gets less useful with age. Software is typically delivered with undiscovered flaws. Therefore, software maintenance is: “The process of modifying existing operational software while leaving its primary functions intact.” Maintenance typically exceeds fifty percent of the systems’ life cycle cost . While software maintenance can be treated as a level of effort activity, there are consequences on quality, functionality, reliability, cost and schedule that can be mitigated through the use of parametric estimation techniques.1. INTRODUCTION One of the greatest challenges facing software engineers is the management of change control. It has been estimated that the cost of change control can be between 40% and 70% of the life cycle costs . Software engineers have hoped that new languages and new process would greatly reduce these numbers; however this has not been the case. Fundamentally this is because software is still delivered with a significant number of defects. Capers Jones estimates that there are about 5 bugs per Function Point created during Development . Watts Humphrey found “… even experienced software engineers normally inject 100 or more defects per KSLOC . Capers Jones says, “A series of studies the defect density of software ranges from 49.5 to 94.5 errors per thousand lines of code .” The purpose of this article is to first review the fundamentals of software maintenance and to present alternative approaches to estimating software maintenance. A key element to note is that development and management decisions made during the development process can significantly affect the developmental cost and the resulting maintenance costs.2. SOFTWARE MAINTENANCE Maintenance activities include all work carried out post-delivery and should be distinguished from block modifications which represent significant design and development effort and supersede a previously released software package. These maintenance activities can be quite diverse, and it helps to identify exactly what post-delivery activities are to be included in an estimate of maintenance effort. Maintenance activities, once defined, may be evaluated in a quite different light than when called simply “maintenance”. Software maintenance is different from hardware maintenance because software doesn’t physically wear out, but software often gets less useful with age and it may be delivered with undiscovered flaws. In addition to the undiscovered flaws, it is common that some number of known defects pass from the development organization to the maintenance group. Accurate estimation of the effort required to maintain delivered software is aided by the decomposition of the overall effort into the various activities that make up the whole process.3. APPROACHING THE MAINTENANCE ISSUE Maintenance is a complicated and structured process. In his textbook, Estimating Software Intensive Systems, Richard Stuzke outlines the typical software maintenance process. It is apparent that the process is more than just writing new code.The following checklist can be used to explore the realism and accuracy of maintenance requirements.o Which pieces of software will be maintained?o How long will the system need to be maintained?o Are you estimating the entire maintenance problem, or just incremental maintenance?o What level of maintenance is required?o Is that which is being called maintenance in fact a new development project?o Who will do the maintenance? Will it be done organically by the original developer? Will there be a separate team? Will there be a separate organization?o Will maintainers be using the same tools used during development? Are any proprietary tools required for maintenance?o How much Commercial-Off-The-Shelf (COTS) is there? How tightly coupled are the interfaces?o Some follow-on development may be disguised as maintenance. This will either inflate maintenance figures, or else cause shortfalls if basic maintenance gets pushed aside. These questions will help you ask whether maintenance is being honestly represented.o Is the activity really an incremental improvement?o Are healthy chunks of the original code being rewritten or changed?o Will additional staff be brought in to perform the upgrade?o Is the maintenance effort schedule regular and fairly flat, or does it contain staffing humps that look like new development?4. SANITY CHECKS Although sanity checks should be sought on a year-by-year basis, they should not be attempted for overall development. The reason for this is that maintenance activities can be carried on indefinitely, rendering any life-cycle rules useless. As an example, consider Grady (p. 17):We spend about 2 to 3 times as much effort maintaining and enhancing software as we spend creating new software.This and similar observations apply at an organizational level and higher, but not for a specific project. Any development group with a history will be embroiled in the long tail ends of their many delivered projects, still needing indefinite attention. Here are a few quick sanity checks:o One maintainer can handle about 10,000 lines per year.o Overall life-cycle effort is typically 40% development and 60% maintenance.o Maintenance costs on average are one-sixth of yearly development costs.o Successful systems are usually maintained for 10 to 20 years.Finally, as in development, the amount of code that is new versus modified makes a difference. The effective size, that is, the equivalent effort if all the work were new code, is still the key input for both development and maintenance cost estimation.5. FIVE ALTERNATIVE APPROACHES All software estimation techniques must be able to model the theory and the likely real world result. The real world scenario is that over time, the overlay of changes upon changes makes software increasingly difficult to maintain and thus less useful. Maintenance effort estimation techniques range from the simplistic level of effort method, through more thoughtful analysis and development practice modifications, to the use of parametric models in order to use historical data to project future needs.5.1 Level of Effort As is sometimes the case in the development environment, software maintenance can be modeled as a level of effort activity. Given the repair category activities and the great variance that they show, this approach clearly has deficiencies. In this approach, a level of effort to maintain software is based on size and type.5.2 Level of Effort Plus Stuzke proposed that software maintenance starts with basic level of effort (minimum people needed to have a core competency and then that that basic core staff must be modified by assessing three additional factors; configuration management, quality assurance, and project management. His process addressed some of the additional factors affecting software maintenance.5.3 Maintenance Change Factor Software Cost Estimation with COCOMO II (Boehm 2000) proposes a deceivingly simple, but also quite useful methodology for determining annual maintenance. Maintenance is one of the menu selections in the menu bar. In COCOMO II Maintenance encompasses the process of modifying existing operational software while leaving its primary functions intact. This process excludes:o Major re-design and re-development (more than 50% new code) of a new software product performing substantially the same functions.o Design and development of a sizeable (more than 20% of the source instructions comprising the existing product) interfacing software package which requires relatively little redesigning of the existing product.o Data processing system operations, data entry, and modification of values in the database.The maintenance calculations are heavily based upon the Maintenance Change Factor (MCF) and the Maintenance Adjustment Factor (MAF). The MCF is similar to the Annual change Traffic in COCOMO81, except that maintenance periods other than a year can be used. The resulting maintenance effort estimation formula is the same as the COCOMO II Post Architecture development model.As stated previously, three cost drivers for maintenance differ from development. Those cost drivers are software reliability, modern programming practices, and schedule. COCOMO II assumes that increased investment in software reliability and use of modern programming practices during software development has a strong positive effect upon the maintenance stage.Annual Maintenance Effort = (Annual Change Traffic) * (Original Software Development Effort)The quantity Original Software Development Effort refers to the total effort (person-months or other unit of measure) expended throughout development, even if a multi-year project.The multiplier Annual Change Traffic is the proportion of the overall software to be modified during the year. This is relatively easy to obtain from engineering estimates. Developers often maintain change lists, or have a sense of proportional change to be required even before development is complete.5.4 Managing Software Maintenance Costs by Developmental Techniques and Management Decisions During DevelopmentWhen it comes to maintenance, “a penny spent is a pound saved.” Better development practices (even if more expensive) can significantly reduce maintenance effort, and reduce overall life cycle cost. The more effort put into development, the less required in maintenance. As an example, the software development cost and schedule can be significantly impacted (reduced) by letting the number of defects delivered grow. This cost and schedule reduction is more than offset by the increase in maintenance cost. The following discussion is an example of how management decision can significantly affect/reduce software maintenance costs.Lloyd Huff and George Novak of Lockheed Martin Aeronautics in their paper “Lockheed Martin Aeronautics Performance Based Software Sustainment for the F-35 Lightning II” propose a series of development and management decision designed to impact and reduce software maintenance costs. They propose an eight step process to estimate and control software maintenance . Their proposed steps are:1. Strive for Commonality2. Apply Industrial Engineering Practices to Software3. Engage4. Adopt a Holistic Approach to Sustainment5. Develop Highly Maintainable Systems and Software6. Manage the Off-the-Shelf Software7. Plan for the Unexpected8. Analyze and Refine the Software Sustainment Business Case (use Parametric software sustainment cost estimates)5.5 A Parametric Assessment of Software MaintenanceParametric models like SEER for Software allow maintenance to be modeled in either of two ways:Estimating maintenance as a part of the total lifecycle cost. Choosing the appropriate Maintenance category parameters will include an estimate of maintenance effort with the development estimate for the individual software program. Several reports and charts show breakdowns of development vs. maintenance effort. This method is best used to evaluate life cycle costs for each individual software program.Estimating maintenance as a separate activity. Using the appropriate maintenance parameters for the software to be maintained you can model the maintenance effort as a separate activity. This method will allow you to fine tune your maintenance estimate by adjusting parameters. Maintenance size should be the same as development size, but should be entered as all pre-existing code. This method can also be useful in breaking out total project maintenance costs from project development costs.A good parametric estimate for maintenance includes a wide range of information. Critical information for completing a software maintenance estimate is the size or amount of software that will be maintained, the quality of that software, the quality and availability of the documentation, and the type or amount of maintenance that will be done. Many organizations don’t actually estimate maintenance costs; they simply have a budget for software maintenance. In this case, a parametric model should be used to compute how much maintenance can actually be performed with the given budget.Estimating and planning for maintenance are critical activities if the software is required to function properly throughout its expected life. Even with a limited budget, a plan can be made to use the resources available in the most efficient, productive manner. Looking at the diagram above, you can see that not only are the multiple inputs that impact the maintenance, but there are several key outputs that provide the information necessary to plan a successful maintenance effort.6. Conclusion The conclusions of this article are:o Software maintenance can be modeled using a simplistic method like Level of Effort Staffing, but this technique has significant drawbacks.o Software maintenance costs can be significantly affected by management decisions during the developmental process.o Software maintenance can be accurately estimated using parametric processes.o Software maintenance is best modeled when development and management decisions are coupled with parametric cost estimation techniques.REFERENCES [1] Software Maintenance Concepts and Practices (second Edition) by Penny Grubb and Armstrong Takang, World Scientific, 2005.[2] Estimating Software Intensive Systems; Richard Stuzke, 2005, Addison-Wesley.[3] Lloyd Huff, George Novak; Lockheed Martin Aeronautics; Lockheed Martin Aeronautics Performance Based Software Sustainment for the F-35 Lightning II.[4] G. Edward Bryan, “CP-6: Quality and Productivity Measures in the 15-Year Life Cycle of an Operating System,” Software Quality Journal 2, 129-144, June 1993.[5] Software Sizing, Estimation, and Risk Management; Daniel D. Galorath, Michael W. Evans, 2006, Auerbach Publications.