NavAssist - Bussiness Plan Competition 2008

Business Plan ‘08

Table of Contents Section Executive Summary

Page 3

Company Overview

5

Mission Statement Goal

Products and Services

5

Cell Phone GPS Capabilities Accessories Pricing NavAssist Potential

Market and Competitive Analysis

9

Industry Overview Characteristics and Needs of Target Market Competition

Management and Personnel

12

Key Individuals Personnel

Operations Plan

14

Expansion Marketing

Critical Risks

18

Internal Risks External Risks

Financial Statements

21

Cash Flow Break-Even Analysis Income Statement Balance Sheet

Offering

26

Funds Required ROI Potential Exit Strategies

Appendix A (Technology)

27

Appendix B (Personnel)

30

Appendix C (Sales Forecast)

31

Executive Summary

Market Analysis The main target market of NavAssist for the first year

Company Overview

of operations will consist of the visually impaired who are currently employed in the state of Arkansas. Arkansas has

NavAssist is a company that will provide visually approximately 90,000 blind people, of which 30,000 are impaired individuals with a device that will help improve employed. Few companies have offered GPS technology to their quality of life. We are dedicated to enabling our assist the blind; however, they have not been widely customers to overcome the mobility barrier by offering accepted due to high pricing and lack of training for the end them an affordable and high quality product. user. By eliminating those barriers we will attract this

Product and Services Our product enhances the ability of the blind to fulfill two of their most important needs: navigation and communication. NavAssist will combine cutting edge GPS elements with an audio command system to facilitate navigation for the blind and visually impaired.

untapped market.

Management The NavAssist management team will be operated by four key individuals with diverse backgrounds and work experience. Those four key individuals include: Ivan Gomez as Chairman, Kyle Wood as Chief Financial Officer, Kris Lance as Chief Marketing Officer, and Pablo Oropin as Chief Technology Officer. Each team member contributes unique skill sets and experiences that will strengthen the daily operations. The management team is committed to live out

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its vision of helping the blind improve their quality of life. To

extremely profitable company. After conservatively

achieve this, delivering a cost-efficient and high quality

forecasting sales among the target market, we have

product at all times is the priority. NavAssist management

constructed financial statements that reflect NavAssist

team is well prepared to handle all aspects of operations to

strategy.

achieve its goal.

Offering

Operations

NavAssist seeks an initial first year investment of

NavAssist aims to maintain operations that are

$625,000 in equity financing. NavAssist requires this

simplistic, cost efficient, and that can be handled in a timely

capital to cover its start-up costs until cash flows are

manner. ECCO Design, Inc. will provide the development

available.

and manufacturing of our device. NavAssist will then be in

in the NavAssist, Inc. We calculate an average per year

charge of installing the GPS software package and

rate of return on investment of 35% over the first five years

applications. At that point the device will be ready for the

of operations.

In return for your risk we offer 30% ownership

customer to order. Upon receiving an order, we will ship product to its destination by way of the UPS carrier.

Financial Statements NavAssist has an opportunity to explore an underserved market. By empowering this market with greater mobility, NavAssist has a huge potential to become an

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Goals

Company Overview

NavAssist will combine cutting edge GPS elements with an audio command system to facilitate navigation

By using current technology NavAssist will create an within one foot for the blind and visually impaired. The innovative product that will cater to and assist the visually device will be user-friendly and the operating system will be impaired public. Our product will help the sight-impaired easily handled. This device will enhance mobility among the keep up with a very mobile and fast paced society. By visually impaired by complementing previously available using GPS technology alongside mobile communications, alternatives (e.g. seeing –eye-dogs) and providing a holistic NavAssist will bring services that will help increase their depiction of their surroundings. The product will be functions in everyday life. manufactured in an economical and cost effective manner,

Mission Statement The mission of NavAssist is to provide visually impaired individuals with a device that will help improve their quality of life. We are dedicated to enabling our customers to overcome the mobility barrier by offering them an affordable and high quality product.

making it affordable to the end user. Our intent is to enable the product to be included in the coverage of health insurance plans.

Product and Services The product and service combination of NavAssist merges the technology in the cell phone and global

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positioning system (GPS) industries in a manner which is practical for improving the lifestyle of the blind. Our product enhances the ability of the blind to fulfill two of their most important needs: navigation and communication. We offer a device similar to a standard cell phone with GPS capabilities. However, our product is based mostly on the reliance of a voice command system that makes the instructions within the menu and the courses of action taken by the user audible. NavAssist also incorporates the latest and most precise GPS systems, helping the blind visualize their route down to a foot of distance.

Cell Phone NavAssist cell phone system will use the GSM 900 and GSM 1800 frequencies so that it will work using any SIM card that cell phone companies may provide.

It will include keypad buttons, a microphone, charger input, and a battery. The keypad buttons are the most important in the external design of the product. Up and down arrows

The appearance of the cellular telephone will have a close and an enter button will be a large, easily recognizable, and resemblance to a basic cell phone seen in the public today. centralized on the device. The phone will also have the nine

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digit keys below that. Upon pressing the enter button, an

sidewalk.1 The information about the destination(s) will be

automated list of menu options will be voiced. The user can

entered through the keyboard and will be processed by the

then select the option by: (1) verbal affirmation of the

software to determine turn-by-turn directions by gathering

menu option title, (2) pressing enter as the option is being

data that is transmitted from the satellites to the GPS

said, or (3) pressing the respective number of the desired

receiver. Our GPS contains ample memory for storing

command. With the joystick, the user has the option of

frequently traveled routes as it traces and stores user

scrolling directly to menu of their choice. Additionally, the

movement. Accuracy is notified to users based on the

phone will have voice dial-up for all the contacts in the

number of aligned satellites.2

address book, as well as a feature with warning commands

Accessories

for the status of the system (e.g. low battery, weak signal).

Many accessories will be offered to

GPS Capabilities

maximize the usefulness of The GPS system will be embedded

NavAssist’s guidance system and

in the NavAssist phone, and it will

cell phone. Our headphone will

be able to advise an effective

help the user hear the commands

route when given a location. Accuracy is the defining quality of our GPS system, pinpointing the route within a foot of distance. The NavAssist utilizes the latest civil and military technology to 1

For more information, please refer to Appendix A, p. 27

2

Please refer to Appendix B, p. 30

guide users even while riding in a cab or walking down the

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accessories specified in the package. Shipping is for free. and respond to them as well. Protective casing and a

There is an annual update fee for software upload for maps

remote-locater (similar to key locaters) will be offered for

and points of interest of $30. Special locations layouts may

the device.3 Maps unique to specific cities and regions will

be acquired for an extra cost of $10.

be available to customers and can be easily uploaded onto

The initial investment per customer is as following:

our device from our website. These maps will ensure detailed and accurate information of the user’s area, including building information, street names, sidewalks, and other man-made and natural structures.

Product/Service

Product/Service price

NavAssist Device

$570

Software – Maps

$ 30

Total

$600

Pricing NavAssist has created an affordable product to make it widely available to any visually impaired person who has the desire to improve his/her quality of life. Compared to

NavAssist Potential NavAssist is aimed to serve clients who are legally

other similar products in the market, our product is over

blind and/or severely visually impaired. With the voice

sixty percent cheaper than the competition.4 The initial cost

command system, GPS technology, and mobile

for NavAssist device is $570 and it includes all the

communications, it is in our plans to adopt other services such as the news, weather forecasts, and satellite music

3 4

See also Appendix A, p. 27 Refer to Market and Competitive Analysis Section, p. 9

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stations for the comfort and enjoyment of the blind. Since our device is user-friendly and the technology can be easily

Market and competitive analysis

adaptable, this enables us to tap into other markets; for example, clients with less severe visual impairment problems - especially the elderly. As GPS technology and mobile communications

Industry overview According to the American Foundation for the Blind, every seven minutes someone in America will become blind

advances, our product will be modified accordingly.

or visually impaired.5 Approximately 10 million Americans

Upgrades of our product will be available for our customers

suffer from this kind of disability, and 1.3 million of them

with more capabilities and options that will enhance them

are legally blind. The Arkansas Department of Human

with a higher quality of life. We also acknowledge that

Services reported in a news release in January 2002, that

software will require attention in this regard as well. Maps of

close to 90,000 Arkansans share this disability.6

regions, city layouts, and points of interest change constantly. Our clients will be able to upload the most recent database of maps and have the most accurate information available at their fingertips at all times.

5

Taken from the American Foundation for the Blind.

6 Quinn, Joe, Director of Communications “DHS Division Helps Blind Arkansans Move into Workplace.” Arkansas Department of Human Services. 18 Jan. 2002. < http://www.arkansas.gov/dhhs/oc/nrelease/blindvr.htm> accessed on 6 Feb. 2007.

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Nationally, among persons aged 21 to 64 that suffer from visual impairment, only 41.5% are employed.7 This

Characteristics & Needs of Target Market

data is significantly lower than the estimated 84% of The main target market of NavAssist for the first persons within this age who were employed without any year in phase one of operations will consist of the thirty kind of disability. In Arkansas the unemployment rate for percent (27,000) visually impaired who are currently blind people is 70%.8 employed in the state of Arkansas. NavAssist is currently Mobility is the major challenge for the visually exploring the possibility of obtaining insurance coverage for impaired, and their choices to travel are limited. The its device so it can be available to blind people that may not visually impaired need some type of assistance in this have the economic means. regard; whether by a human guide, a cane, a guide-dog, or Within the past three years, few companies have any other device, the blind cannot move from one place to made attempts to utilize GPS technology to assist the blind. another on their own. However, up until now, it has not been widely available. After interviewing a member of the administration at Arkansas School for the Blind and the Deaf, we were told that there is an extremely small percentage of blind people in Arkansas using a GPS guiding assistant of any form. After research, it is noticeable that the main deterrents of

7

Leonard, Robin. “Statistics on Vision Impairment: A Resource Manual 2002 .” < Research Institute at Lighthouse International. 5th Edition, April 2002. accessed on 6 Feb. 2007. 8

Quinn.

the technology are the high price of the products already available and the complexity of using the product. Many

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among the blind believe that a GPS guiding assistant product would be a valuable tool in their life. With this GPS

Competition At present, the product and services offered by

guiding assistant, the visually impaired can obtain a broader

NavAssist have limited direct competition with other

sense of their surroundings that extends beyond the

organizations. Very few companies have either produced

immediate awareness that their canes and seeing-eye dogs

integrated GPS navigation systems, or mobile

provide.

communications for the visually impaired. The predominant

Despite the obvious practical advantages, the drawbacks of the costs and complexity of use drive

competitors in this field are the following: Sendero Group, a Company based out of California,

customers away. By integrating existing technology of GPS,

has developed a GPS navigation system that gives its user

cell phone, and PDA models, and catering the device to the

directions by a mechanical voice (voice command system).

blind, NavAssist will drive the price down and increase the

Sendero’s main market and research is done primarily in its

product’s value to the user. Value will increase as clients

home area. Sendero has had a main competitive advantage

begin to have multiple tools to improve their lifestyle in one

on adapting technology to the blind since the year 2000. It

reasonably-sized device. NavAssist will focus on the 27,000

has developed roughly seven different products catered to

potential blind customers who are employed in Arkansas

the blind. However, its BrailleNote GPS does not provide

and draw up to eight percent (2,700 customers) of that

cell phone capabilities and in addition totes a hefty price tag

population to buy the product in the first year by reducing

at $1,549.

economic limitations set by previous products.

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Trekker, designed and manufactured by Canadabased company, VisuAid, has developed an application

over the competitors to make its device more accessible to those who need it.9

adapted for the blind and visually impaired. The application provides talking menus, talking maps and GPS information that run in a personal digital assistant (PDA). Humanware’s

Management and Personnel

Pocket PC has been adapted to provide functionality to Trekker’s application. Trekker’s device has comparable

Key Individuals The NavAssist management team will be operated by

characteristics to those of Sendero’s BrailleNote GPS, but it

four key individuals with diverse backgrounds and work

also lacks the advantages of cell-phone capabilities. Its

experience. Each team member contributes unique skill

complex design has often resulted in a non user-friendly

sets and experiences that will strengthen the daily

interface with the visually impaired. Its price is $1,695.

operations. The management team is committed to live out

Although NavAssist has a disadvantage entering into

its vision of helping the blind improve their quality of life.

this market niche, NavAssist has the comparative advantage

To achieve this, delivering a cost-efficient and high quality

of providing a device that has been meticulously designed

product at all times is the priority. NavAssist management

for the up most functionality of the visually impaired while

team is well prepared to handle all aspects of operations to

providing navigation assistance and mobile communication

achieve its goal.10

simultaneously. NavAssist also offers an advantage in price

9

See Product and Services Section, p. 8 Please refer to Appendix D, p. 32 Resumes

10

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Kyle Wood

Ivan Gomez

(CFO) Chief Financial inancial Officer/Owner

(CSPO) Chief Strategic Planning Of Officer

Responsibilities: Accounting procedures

& Chairman/Owner

including preparation of financial statements and book

Responsibilities: Leading the strategy framework and

keeping, financial analysis, and administrative management

strategic planning process while capturing and analyzing

by ensuring uring that all of the business finances are-up-to are date

industry trends, competitive threats, ts, expansion

and remain current.

opportunities, internal performance, and deliver delivery of datadriven insights to help the progress of the company.

Pablo Oropin

Kris Lance

(CTO) Chief Technology Officer/Owner

(CMO) Chief Marketing O Officer & Public

Responsibilities: In charge of software

Relations/Owner

development, programming, testing software, creating

Responsibilities: Development and implementation of

training demos for customers, updating maps and

marketing strategies and activities, training and directing

Application Programming Interfaces, and overseeing the t

the sales force, analyzing new trends and markets, and

technology development.

administrative management.

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Personnel NavAssist’s personnel requirements for the first year of operations (phase one) will consist of the following:

room for expansion upon request. The estimated space necessary for operations is 5,000 square feet with a total cost of $4,000 per month. Scott Hamilton warehouse is a heated and air-conditioned facility. The remodeling needed

Office Type Jan '08 Feb '08 Mar'08 Apr '08 May '08 Jun '08 Jul '08 Aug '08 Sep '08 Oct '08 Nov '08 Dec '08 AR Manager 4 4 4 4 4 4 4 4 4 4 4 4 Staf 6 6 6 6 8 8 8 8 8 8 9 14

is minimal and the offices can be easily equipped inside of the warehouse. The equipment requirements consist of basic office equipment and specific software that will enable us to carry the day-to-day operations. The estimated cost for the computers, desks, and accessories the first year is roughly

Operations Plan

$135,000. The software needed consist of the Application Programming Interface (OpenAPI), licensed by MapQuest

NavAssist aims to maintain operations that are simplistic, cost efficient, and that can be handled in a timely manner. The operations will be directed out of the main

with an annual cost of $5,000, and Visual Studio for general programming with a cost of $500. NavAssist operations begin at ECCO Design Inc.

facilities located in Scott Hamilton warehouse, Little Rock,

which will provide the development and manufacture of our

AR. Scott Hamilton warehouse provides NavAssist with

device. ECCO Design is a New York based consultancy,

flexibility of operations since additions to original demands

which is highly experienced in helping businesses to develop

can be done almost instantaneously, thus, leaving NavAssist

innovative products that our users desire. It is also

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experienced in the telephony industry, and it recently has developed a PDA phone that is used by major user ECCO Design

End User

Follow-up

NavAssist

UPS

individually inspected and then passed to the engineering Department. At this point, programmers will

providers

upload the interface and maps, and will check that the

such as

devices perform at their optimal level. Finally, the devices

AT&T and

will be carefully packed along with their accessories and

T-Mobile.

stored at the warehouse until shipment. Once the Sales

Choosing

Department receives an order for the product, NavAssist will

ECCO

send an invoice to UPS for package pick-up. UPS will be

Design,

responsible and liable for the product until it is delivered to

will allow

the end user. Once the product is received and used by the

NavAssist

end user, a NavAssist’s employee will contact the customer

to obtain the device manufactured by Asian companies that

via telephone and ensure full customer satisfaction. If the

presently deal with ECCO Design in a cost effective and

customer requires assistance in how to further use the

timely manner. The estimated price for the development of

device, one of our programmers will proficiently guide them

the device is $80,000, plus a manufactured cost per unit of

in trouble-shooting. In case of a defective product, it will be

$212.

returned to the warehouse via UPS at the expense of After the manufacturing process, the devices will be

shipped to NavAssist warehouse where they will be

NavAssist. NavAssist’s employees will also contact customers periodically concerning updates of maps and improvements in software that will be conveniently available

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in two forms: download at the NavAssist website, or delivery of CD Software upon request. NavAssist will provide a one-year manufacturer

Expansion In Phase one, the first year of operations, NavAssist is expected to acquire eight percent of the employed blind

warranty for its device. In the case of a manufacture flaw,

people in the state of Arkansas. After spending a year in

the device will be returned to ECCO Design for inspection

our home office in Little Rock, AR, we will expand by

and/or replacement.

opening an office in Dallas, Texas. This is represented as phase 2 on the graphic. We will have trained managers and staff in December of the previous year in the Little Rock office to open the Dallas office. Our plan is to aggressively advertise the NavAssist name in Dallas and the surrounding area. Due to the large population in the small area, we foresee sales in the first year at Dallas to be $1,440,000, selling to 2,400 customers. In phase 3, starting in 2010, we will open an office in Houston, Texas. Again, the densely populated area will allow us to advertise aggressively and yield high sales. We plan to see

Phase 1 Phase 2

Phase 3

$1,800,000 in revenues from the first year of operation at the Houston office. In the following years we hope to expand the area of coverage in both Texas offices. In

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Dallas, we look to sale to the entire central region of the

distinctive characteristics.

state, and in Houston, we hope to reach extend its

marketing plan will focus on providing the most information

boundaries as far as Louisiana.

about the benefits of the product and service while forming

We predict sales will climb in each region until we 40% of our target market. When it appears we are

Therefore, NavAssist’s

a bridge of a lasting relationship with the customer. This will be achieved through the following ways:

approaching that mark in Arkansas we will begin selling a newly improved model of our product. We will then be able return to the early adopters of our device, as they will be looking for an upgrade. We predict that it will necessary to release the new GPS cell phone within year 2010 or 2011.

Expos NavAssist will design expos to specifically give

Beyond our five year strategy, we have considered the idea

potential customers the opportunity to test out the product

of opening additional offices in the southeast region and

and see how they can interact with their surroundings.

opening up an avenue for online orders.

Also, NavAssist will provide substantial information about its

Marketing

product and how the blind person can benefit from it. This

NavAssist will have a unique marketing strategy

marketing technique allows for personal interaction with the

through different channels of communication that will help

clients, allowing them to express their inquiries about the

the visually impaired learn about its product. Mass

product and service, and the restrictions that may impede

advertising through media such as television will be of little

them from purchasing the product. Expos provide

use to NavAssist since its target market possesses

NavAssist with a first-hand-experience in identifying specific

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customer needs and enables it to adapt its marketing

confident that word-of-mouth will spread throughout its

strategies in a timely manner. Expos will be held every

networks of friendships and acquaintances.

quarter during the year to increase the awareness of

NavAssist’s Web Page

NavAssist product and to attract new customers. Literature ad Digital Demos Literature and digital demos will be distributed in schools, institutions, and government associations for the

NavAssist Web Page will be the permanent medium of communication that provides broad information about the company, the products and services that it sells, and reviews of customers that are already using the product.

blind. Through these mediums, NavAssist intends to educate the blind population about the benefits that they

Critical Risks

can receive by using its product. Contact information, as well as a request forms, will be endorsed to the literature

Due to the exclusivity of our market,

and digital demos for potential customers that desire to

NavAssist has potential risks which are seen in any startup

know more about the product and service.

business plus others specific to our situation. We have

Word-of-mouth

forecasted these concerns, and we have devised brief plans

NavAssist recognizes that blind people usually have

with which to counter act these potential threats. It is

strong and bonding relationships with one another. That is

essential for our success to implement a corrective strategy

why NavAssist will focus on building long lasting

before a potential threat becomes a problem with financial

relationships with customers. Being helpful and assertive is

repercussions. It is our goal to turn weaknesses into

a priority for NavAssist. With this strategy NavAssist is

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strengths and threats into opportunities. We distinguish

the device effectively to the visually impaired. Some of the

internal risks from external risks below.

most popular selling techniques will fail to develop a desire for the product among the visually impaired. There are also

Internal Risks

certain common courtesies one should be aware of amongst

Lack of Experience in a Small Market

the visually impaired. When our sales force is promoting

In the relatively small visually impaired market, it is

the product we must insure the fact that they know how to

crucial to know their needs, wants, likes, and dislikes. As a

respect the customers and bring product appeal to life for

new business in the field, it will require some catch up on

them. To meet this need we highly encourage prior

research in their market. We have greatly reduced this

experience with visually impaired when hiring staff. We will

threat by gathering information from organizations,

also have periodic in house seminars to keep staff and

institutions, and other businesses established for the

managers sharp on selling strategies.

visually impaired. They have explored what works and what

Over Estimation of Market Demand

fails: we have and will continue learning from that.

We feel we have forecasted sales conservatively, but

Obviously, there is no substitute for first hand experience,

have considered the threat of great market resistance to the

but our constant attentiveness to current trends in the

technology. After research, we have found expense and

market should offset a huge hit.

lack of training to be unrivaled deterrents in the acceptance

Staffing Risks

of similar devices. We are prepared to adjust prices to

Our sales will be sent to a unique set of customers. It will be very important to obtain the ability to showcase

meet desired sales, but we would prefer to increase an expense to offer more training sessions (refer to Advertising

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Expense in Financial Statements). Our goal is to make use of the device common knowledge among the target market.

Costs Increase The cost of our product is definitely vulnerable to

Product familiarity is the key to wide distribution of our

fluctuation. An increase in production costs would directly

product.

affect the price we offer to our customers. We are willing to

External Risks

incur the extra costs without raising the price significantly if

Competition Offering

this occurs early in the business life, but after our name

New and existing companies may be able to offer the product at a reduced price. As price is a major factor in the

gains credibility, we expect that our market will be accepting of a price increase.

industry, they would instantly be a threat. Our first projected line of defense is to have already established a reliable and respected brand name among the blind that they will prefer despite a higher price. If we have not gained that brand recognition, we are prepared to increase training for the product or decrease the price, resembling the solution mentioned to neutralize an over estimation of market demand.

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Cash Flow Statement NavAssist, Inc. Statement of Cash Flow For the Years Ended December 31, 2008-2012

Net CashFlow from Operating Activities Net Income Add: Depreciation Expense Less:

Increase Inventory Increase Supplies Cash Provided by/Used for Operations Cash Flows from Investing Activities Payment for Purchase of Equipment Payment for Purchase of Furniture Cash Provided by/Used for Investing Activities Cash Flows from Financing Activities Received from Capital Contributions Cash Provided by Financing Activities

Net Increase in Cash Beginning Cash Balance Ending Cash Balance

2008

2009

2010

2011

2012

$49,855 21,000

$326,495 48,000

$1,002,040 69,000

$2,052,895 69,000

$2,398,240 69,000

(279,840) (1,000) (209,985)

(16,960) (1,000) 356,535

(312,700) (1,000) 757,340

(75,000) (60,000) (135,000)

(75,000) (60,000) (135,000)

(75,000) (60,000) (135,000)

(291,500) 0 1,830,395

(106,000) 0 2,361,240

0 0 0

0 0 0

625,000 625,000

0 0

0 0

0 0

0 0

280,015 0 $280,015

221,535 280,015 $501,550

622,340 501,550 $1,123,890

1,830,395 1,123,890 $2,954,285

2,361,240 2,954,285 $5,315,525

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Break-Even Analysis

1,600,000

R e v e n u e s

Total Revenues

1,400,000

Profit

1,200,000

Total Costs Variable Costs

1,000,000 800,000 600,000 400,000

Fixed Costs

200,000 2500

2250

2000

1750

1500

1250

1000

750

500

250

0

0

Units Sold

As expressed in the chart above, NavAssist will become profitable in the first year of operations after attaining 2002 units sold, which represents revenues of roughly 1.2 million.

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INCOME STATEMENT NavAssist, Inc. Income Statement For the Year Ended December 31, 2008 January Sales (Cost Of Goods Sold)

February

March

April

May

June

July

August

September

October

November

December

Year End

$6,000 (2,120)

$9,000 (3,180)

$30,000 (10,600)

$39,000 (13,780)

$60,000 (21,200)

$93,000 (32,860)

$108,000 (38,160)

$141,000 (49,820)

$174,000 (61,480)

$192,000 (67,840)

$228,000 (80,560)

$240,000 (84,800)

$1,320,000 (466,400)

Gross Margin Expenses: Advertising Licensing fee Product development Rent Utilities Supplies Depreciation Wages Salaries Commisions (Total Expenses)

3,880

5,820

19,400

25,220

38,800

60,140

69,840

91,180

112,520

124,160

147,440

155,200

853,600

34,500 450 80,000 4,000 800 100 0 16,000 10,200 300 (146,350)

5,700 450 3,000 4,000 800 100 0 16,000 10,200 450 (40,700)

15,300 450 3,000 4,000 800 100 0 16,000 10,200 1,500 (51,350)

5,400 450 3,000 4,000 800 100 0 16,000 10,200 1,950 (41,900)

8,400 450 3,000 4,000 800 150 0 16,000 13,600 3,000 (49,400)

16,800 450 3,000 4,000 800 150 0 16,000 13,600 4,650 (59,450)

7,400 450 3,000 4,000 800 150 0 16,000 13,600 5,400 (50,800)

10,300 450 3,000 4,000 800 150 0 16,000 13,600 7,050 (55,350)

14,600 450 3,000 4,000 800 150 0 16,000 13,600 8,700 (61,300)

7,000 450 3,000 4,000 800 150 0 16,000 13,600 9,600 (54,600)

15,000 450 3,000 4,000 800 200 0 16,000 15,300 11,400 (66,150)

20,000 450 3,000 4,000 800 200 21,000 16,000 22,100 12,000 (99,550)

160,400 5,400 113,000 48,000 9,600 1,700 21,000 192,000 159,800 66,000 (776,900)

Earnings Before Interest & Taxes Taxes (35%)

(142,470) 49,865

(34,880) 12,208

(31,950) 11,183

(16,680) 5,838

(10,600) 3,710

690 (242)

19,040 (6,664)

35,830 (12,541)

51,220 (17,927)

69,560 (24,346)

81,290 (28,452)

55,650 (19,478)

76,700 (26,845)

Net Income

($92,606)

($22,672)

($20,768)

($10,842)

($6,890)

$449

$12,376

$23,290

$33,293

$45,214

$52,839

$36,173

$49,855

November

December

NavAssist, Inc. Income Statement For the Year Ended December 31, 2009 March

April

May

$90,000 (31,800)

$111,000 (39,220)

$159,000 (56,180)

$180,000 (63,600)

$216,000 (76,320)

$264,000 (93,280)

$279,000 (98,580)

$309,000 (109,180)

$384,000 (135,680)

$402,000 (142,040)

$441,000 (155,820)

$525,000 (185,500)

$3,360,000 (1,187,200)

58,200

71,780

102,820

116,400

139,680

170,720

180,420

199,820

248,320

259,960

285,180

339,500

2,172,800

42,938 450 3,000 11,000 2,000 500 0 37,917 30,600 4,500 (132,904)

16,388 450 3,000 11,000 2,000 500 0 37,917 30,600 5,550 (107,404)

43,988 450 3,000 11,000 2,000 500 0 37,917 30,600 7,950 (137,404)

15,525 450 3,000 11,000 2,000 500 0 37,917 30,600 9,000 (109,992)

24,150 450 3,000 11,000 2,000 550 0 37,917 30,600 10,800 (120,467)

48,300 450 3,000 11,000 2,000 550 0 37,917 30,600 13,200 (147,017)

21,275 450 3,000 11,000 2,000 550 0 37,917 30,600 13,950 (120,742)

29,613 450 3,000 11,000 2,000 550 0 37,917 30,600 15,450 (130,579)

41,975 450 3,000 11,000 2,000 550 0 37,917 30,600 19,200 (146,692)

20,125 450 3,000 11,000 2,000 550 0 37,917 30,600 20,100 (125,742)

43,125 450 3,000 11,000 2,000 650 0 37,917 37,800 22,050 (157,992)

57,500 450 3,000 11,000 2,000 650 48,000 37,917 46,800 26,250 (233,567)

404,900 5,400 36,000 132,000 24,000 6,600 48,000 455,000 390,600 168,000 (1,670,500)

(74,704) 26,146

(35,624) 12,468

(34,584) 12,104

6,408 (2,243)

19,213 (6,725)

23,703 (8,296)

59,678 (20,887)

69,241 (24,234)

101,628 (35,570)

134,218 (46,976)

127,188 (44,516)

105,933 (37,077)

502,300 (175,805)

($48,558)

($23,156)

($22,480)

$4,165

$12,489

$15,407

$38,791

$45,007

$66,058

$87,242

$82,672

$68,857

$326,495

January Sales (Cost Of Goods Sold) Gross Margin Expenses: Advertising Licensing fee Product development Rent Utilities Supplies Depreciation Wages Salaries Commisions (Total Expenses) Earnings Before Interest & Taxes Taxes (35%) Net Income

February

June

July

August

September

October

Navassist

Year End

23

NavAssist, Inc. Income Statement For the Years Ended December 31, 2008 2008 Sales (Cost Of Goods Sold) Gross Margin Expenses: Advertising Licensing fee Product development Rent Utilities Supplies Depreciation Wages Salaries Commisions (Total Expenses)

2009

2010

2011

2012

$1,320,000 $3,360,000 $6,900,000 $10,200,000 $11,400,000 (466,400) (1,187,200) (2,438,000) (3,604,000) (4,028,000) 853,600

2,172,800

4,462,000

160,400 404,900 949,400 5,400 5,400 5,400 113,000 36,000 36,000 48,000 132,000 200,000 9,600 24,000 12,000 1,700 6,600 9,200 21,000 48,000 69,000 192,000 455,000 650,000 159,800 390,600 644,400 66,000 168,000 345,000 (776,900) (1,670,500) (2,920,400)

Earnings Before Interest & Taxes Taxes (35%)

76,700 (26,845)

502,300 (175,805)

1,541,600 (539,560)

Net Income

$49,855

$326,495 $1,002,040

6,596,000

7,372,000

1,193,900 5,400 36,000 208,000 14,000 9,800 69,000 650,000 741,600 510,000 (3,437,700)

1,338,400 5,400 36,000 212,000 14,000 10,000 69,000 650,000 777,600 570,000 (3,682,400)

3,158,300 (1,105,405)

3,689,600 (1,291,360)

$2,052,895

$2,398,240

Navassist

24

Balance Sheet NavAssist, Inc. Balance Sheet December 31, 2008-2012 2008 Assets: Current Assets Cash Inventory Office Supplies Property and Equipment Furniture Accummulated Depreciation-Furniture Equipment Accummulated Depreciation-Equipment

$ 280,015 279,840 1,000 60,000 (6,000) 75,000 (15,000)

2009

$

501,550 296,800 2,000 120,000 (24,000) 150,000 (45,000)

2010

$

1,123,890 609,500 3,000 180,000 (48,000) 225,000 (90,000)

2011

$

2,954,285 901,000 3,000 180,000 (72,000) 225,000 (135,000)

2012

$

5,315,525 1,007,000 3,000 180,000 (96,000) 225,000 (180,000)

Total Assets:

$674,855

$1,001,350

$2,003,390

$4,056,285

$6,454,525

Liabilities: Stockholder's Equity: Contributed Capital Retained Earnings

$625,000 49,855

$625,000 376,350

$625,000 1,378,390

$625,000 3,431,285

$625,000 5,829,525

Total Liabilities and Stockholder's Equity

$674,855

$1,001,350

$2,003,390

$4,056,285

$6,454,525

Navassist

25

Offering Funds Required NavAssist seeks an initial first year investment of $625,000 in equity financing. NavAssist requires this capital to cover its start-up costs until cash flows are available. Our start-up costs will include, among other things, expenses for renting a facility out of which to operate, equipment and furniture, initial product development, stocking an inventory, and advertising.

Return on Investment In return for your risk we offer 30% ownership in the NavAssist, Inc. We calculate an average per year rate of return on investment of 35% over the first five years of operations.

Exit Strategy There are basically two different exit strategies offered to NavAssist investors. At the fifth year’s end of operations, the investors have the opportunity to sell their shares back at 35% per year rate of return. At this time, NavAssist plans to become a public traded company, and investors have the choice to either sell their shares at their convenience, or retain ownership in NavAssist.

Navassist

26

Appendix A (Technology) NavAssist Components


A lithium battery that operates between 15 and 20 hours




A battery charger




Input/Output USB port for uploading and downloading software and maps




512 kbs of memory storage




Magellan Serial GPS receiver




10 alphanumeric keys with Braille keyboard, 1 key for send, 1 key for receive, and a mini joystick




A crystal microphone (optimum for cell phone usage).11




NavAssist Software, which will merge MapQuest API, and GPS receiver software




Circuit Board and Microprocessor designed by ECCO Design Company

GPS information The government of the United States of America is the only institution that operates the Global Positioning System's accuracy and maintenance. The Earth has 24 United States military satellites for the GPS, 12 in each hemisphere. Those 24 satellites rotate around the earth 2 times a day.

http://www.geosoft-gps.de/images/Gps_config.jpg 11

This microphone has an attached a diagram to the crystal. The crystal will create a signal when sound waves hit the diagram.

Navassist

27

A normal GPS receiver picks up around 12 satellites, but the accuracy of your actual position is not very reliable; it ranges around ± 20 feet. For instance, if the GPS receiver tells you that you are 1 foot away from Wal-Mart, it may be that you are actually are 20 feet away from Wal-Mart.

For blind people this represents a huge dilemma because their current

location given by the GPS receiver has to be as accurate as possible to the genuine one. Thus, NavAssist uses a GPS receiver that will be able to register around 16 satellites at a time. 15 of these satellites are United States military satellites and 1 of them will be a geostationary one (it is statitc: it doesn’t not rotate around the earth) called Wide Area Augmentation System (WAAS). NavAssist GPS receiver will then be able to have an accuracy of around ± 1 foot which is as close as possible to the real position; that can make the difference between a sidewalk and a highway. How does NavAssist GPS system work? NavAssist contains a GPS receiver whose

Longitude

purpose is to track at least 16 satellites. This GPS receiver indicates the altitude and latitude of the current location of the device. This information is used to compare it with the database

inside

the

device

by

using

our

NavAssist software so that the device will be

Latitude http://www.enchantedlearning.com/usa/activity/latlong/mapanswers.GIF

Navassist

28

able to determine nearby places, streets, avenues, etc.

NavAssist GPS receiver is a Magellan Serial receiver which uses the NMEA 0183 protocol (this protocol is used by most GPS receivers, and its purpose is to define how data is transmitted between a satellite and GPS receiver). This GPS receiver will be able to pick up the WAAS satellite necessary for the accuracy of our system.

NavAssist Software Given the altitude and longitude by our GPS receiver, our software will be able to generate detailed information about the speed and the direction at which our blind costumer is traveling at.

This software will calculate those parameters by

measuring altitude and longitude samples every half-second from the GPS receiver. Furthermore, this software will be able to calculate the distance and direction from a street or intersection to where our blind customer wants to go by requesting the altitude and longitude coordinates from the place of destination and applying mathematical algorithms. NavAssist software will also complete a text to speech conversion so that our device can interact with our blind costumers. This capability will be made possible by using SAPI 4.0a SDK Suite within our software which is a free open-source application programming interface that converts text to speech.

Navassist

29

Appendix B (Personnel) Office AR

Type Manager Staff

Jan '08

Feb '08

TX-Dal

Manager Staff

TX-Hou

Manager Staff

Office AR

Type Manager Staff

TX-Dal

Manager Staff

TX-Hou

Manager Staff

Office AR

Type Manager Staff

2010 4 12

2011 4 12

2012 4 12

TX-Dal

Manager Staff

3 12

3 12

3 12

TX-Hou

Manager Staff

3 10

3 12

3 12

4 6

Jan '09

Mar'08 4 6

Feb '09

Apr '08 4 6

Mar'09

May '08 4 6

Apr '09

Jun '08 4 8

May '09

Jul '08 4 8

Jun '09

Aug '08 4 8

Jul '09

Sep '08 4 8

Aug '09

Oct '08 4 8

Sep '09

Nov '08 4 8

Oct '09

Dec '08 4 9

Nov '09

4 14

Dec '09

4 9

4 9

4 9

4 9

4 9

4 9

4 9

4 9

4 9

4 9

4 11

4 16

3 8

3 8

3 8

3 8

3 8

3 8

3 8

3 8

3 8

3 8

3 10

3 10

Navassist

30

Appendix C (Sales Forecast)

Total Sales Arkansas Texas-Dallas Texas-Houston Total # customers # Customers Arkansas # Customers Texas-Dallas # Customers Texas-Houston

2008 $1,320,000 1,320,000 0 0 2,200 2,200 0 0

2009 $3,360,000 1,920,000 1,440,000 0 5,600 3,200 2,400 0

2010 $6,900,000 2,940,000 2,160,000 1,800,000 11,500 4,900 3,600 3,000

2011 $10,200,000 3,720,000 3,360,000 3,120,000 17,000 6,200 5,600 5,200

Navassist

2012 $11,400,000 4,080,000 3,720,000 3,600,000 19,000 6,800 6,200 6,000

31