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Page 1
Table of Contents
Page 2
RQM Technologies
Market
Our primary target markets include, but are not limited to, the family consumer, channel sales
to original equipment manufacturers (OEMs), businesses tracking shipments or vehicles, the
military, and the political arena. Because of our unique proprietary programming capabilities for
each individual unit, we have already received indications of interest from several of these
target markets, including one branch of the U.S. Military.
We predict our systems will also appeal strongly to families concerned about the safety of their
loved ones. Sadly, child abduction is on the rise globally. More than 2,100 children are
reported missing each day in the U.S. alone (FBI National Crime Information Center). At the
other end of the age spectrum, there are 4.5 million Alzheimer patients in the U.S., 60% of
whom (2.7 million adults) wander away from their homes at some point, unaware of their
surroundings. We believe our devices will greatly reduce these figures in both cases, while
potentially saving lives.
The combined number of "potential" customers for our products is well over 500,000,000; we
will focus on a more realistic and attainable three-year sales goal of roughly 99,000 users
worldwide, which will generate many millions of dollars in sales revenues.
Management
The founders of RQM Technologies, Steven M. Bloome and Andrew F. Siska, have been
associates for over 20 years; they create the perfect synergy to ensure the success of our
company. Steven M. Bloome is a Sales and Marketing Management veteran with more than 25
years of successfully penetrating previously unseen markets niches, partnering with other
companies in win-win scenarios, and creating national presence for companies. He is also,
accomplished in launching new products. Andrew F. Siska is a Chief Electronic Engineer with 20
years experience, and is considered an expert in his field, having previously designed devices
for military applications, medical imaging systems, computers and more.
By focusing on our strengths, our key customers, and our customers' needs, RQM Technologies
will increase sales to several millions of dollars within two years, while also improving the gross
margin on sales, cash management and working capital.
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RQM Technologies
Chart: Highlights
Highlights
$6,000,000
$5,000,000
$4,000,000 Sales
Gross Margin
$3,000,000
Net Profit
$2,000,000
$1,000,000
$0
Year 1 Year 2 Year 3
1.1 Mission
RQM Technologies' mission is to become the leading vendor of Personal Locator Devices
worldwide. Through a combination of evolving technologies, miniaturization, affordability for the
end-user, programming capabilities and ease of use, RQM Technologies will be known as the
premier developer/supplier of potentially life-saving Personal Locator Devices.
To maintain these key factors, RQM Technologies' needs include start-up funding, partnering
with value-added investor/partners, aggressive marketing, quality sales professionals,
accomplished C-Level management, product branding, increasing reach into target markets,
affiliating with the right channel partners, competitive intelligence and appropriate use of
evolving technologies.
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RQM Technologies
1.3 Objectives
RQM Technologies has identified three types of objectives that will serve as challenging but
attainable goals for the organization. They are:
Business Objectives
1. To become the premier vendor in the new and evolving Personal Locator Device industry.
2. To reach profitability within one year of the company's launch.
3. To develop additional profit centers such as programming, training, seminars, ancillary
equipment, etc. within the first two years.
Financial Objectives
1. Increase product sales to several million dollars annually by the end of the second year.
2. Bring gross margin up and maintain that high level by the third year.
3. Improve inventory turnover on an ongoing basis, until "just-in-time" inventory is standard
by the third year.
Marketing Objectives
RQM Technologies is a privately owned start-up company, located in Bolingbrook, IL, a western
suburb of Chicago.
missing children
the active elderly (including Alzheimer's patients)
soldiers in the field and at sea, mariners lost at sea
and even pets
while also serving the business arena, as a way to better manage the logistics of:
outside personnel
fleet vehicles
valuable parcels
and deliveries
The company's management philosophy is based on responsibility and mutual respect, while
encouraging ownership of responsibilities to help foster personal and professional growth. RQM
Technologies focuses on productivity for growth and profitability, and respect for its customers
and employees to increase repeat and referral business while minimizing employee turnover.
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RQM Technologies
Our plan begins with a two month start-up period during which we will focus primarily on
setting up our offices and developing our system designs, but also including significant initial
marketing work. Our start-up expenses for these first months will be used for further product
development, legal costs, payroll, marketing and typical expenses associated with opening our
first office. The founders will provide the first round financing to launch the company, initiate a
small production run of our Personal Locator Device(s), and initiate further product
development, while marketing and pre-selling our devices.
In addition, we will need another investor/partner to provide funds to cover the cash necessary
to see us through our first year in business, as we begin to make and sell our products. We plan
to fund future growth from sales revenues.
Initially, we will be leasing a relatively small office space for administrative functions and an
electronics bench lab in order to keep our first year expenses to a minimum, as we continue
product development while marketing and pre-selling our Personal Locator Device(s) prior to
production. We will consider a larger office space only when we have outgrown our current
facility, dependent on sales, budgets and personnel needs.
We have identified the following equipment needed for opening our first office:
Details of our start-up requirements can be found in the Start-up tables, below.
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RQM Technologies
Start-up Funding
Start-up Expenses to Fund $100,700
Start-up Assets to Fund $349,300
Total Funding Required $450,000
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $349,300
Additional Cash Raised $0
Cash Balance on Starting Date $349,300
Total Assets $349,300
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Founders $250,000
Investor $200,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $450,000
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RQM Technologies
Chart: Start-up
Start-up
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Expenses Assets Investment Loans
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $30,000
Stationery etc. $1,500
Consultants $5,000
Insurance $1,000
Utilities $2,400
Rent $3,800
Research and Development $3,500
Expensed Equipment $10,000
Industrial Design $10,700
Personnel $30,000
Company Vehicles & Associated Expenses $2,800
Other $0
Total Start-up Expenses $100,700
Start-up Assets
Cash Required $349,300
Start-up Inventory $0
Other Current Assets $0
Long-term Assets $0
Total Assets $349,300
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RQM Technologies
RQM Technologies is owned and operated by its founders, Steven M. Bloome and Andrew F.
Siska. We are currently in search of an investor/partner(s) who will bring more to RQM
Technologies than just financing. The ideal Investor/Partner(s) we are seeking should bring
expertise in the areas of legal, financial, and international regulatory issues, as a portion of our
target market(s) will be international in scope in the near future. The Investor/Partner(s) will
receive an equity position in the company and sit on the Board of Directors.
More details on the company's founding partners may be found below, in the Management
Summary.
Products
RQM Technologies develops, markets and sells miniaturized, low-cost, electronic, remote
Personal Locator Devices using unassisted GPS/GSM technology, which is not reliant on cellular
towers to relay data. The remote Personal Locator Device system includes a small
programmable external device (approximately 2" x 2" x 3/8") fitted with GPS/GPM transceivers,
which can be activated from a remote location anywhere in the world to instantaneously
pinpoint the wearer's location, speed and direction of travel, accurate to within 3 meters in real-
time. This will prove an invaluable tool in helping families and law enforcement agencies locate
missing persons within seconds, with the distinct potential of saving lives by finding missing
persons much faster than any other current technology available to an end-user.
Our remote Personal Locator Device(s) immediately locate and help rescue lost or missing
children, teens, the active elderly (including Alzheimer's patients) pets, military personnel in the
field or at sea, with a simple cellular phone call or computer key stroke. These same Locator
Devices can be used in the business arena in order to better manage the logistics of outside
personnel, sales people, deliveries, fleet operations, valuable packages or equipment in transit,
helping to increase their business efficiency and thus improve profits.
Phase 2 PTD will utilize military technology not reliant on cellular towers, but rather linking
directly to the GPS satellite network in orbit. These will be effective anywhere in the world,
for applications where cellular towers are not present, such as mountains, lakes and oceans,
deserts, and small or remote cities where cellular towers are not present. Although slightly
more expensive to the end-user, we feel this product will address the problems associated
in areas without cellular coverage, not currently available outside the military. The Phase 2
PTD is a unit designed for the military, sportsman, hikers, campers, boaters, and other
adventurers.
Both units are being developed simultaneously, and will be available for pre-sale orders in the
Fall of 2004.
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RQM Technologies
Services
As RQM Technologies grows, we will be defining and developing additional profit centers for our
company and investors by offering value-added services such as training classes, seminars, on-
site programming, private labeling for our channel market resellers, and other ancillary revenue
streams based on individual client needs.
The Personal Locator Device (or Personal Locator Service) industry is fairly new in the consumer
market, but as most analysts agree, this is the beginning of a brand new industry with the
potential for explosive growth due to the rapidly decreasing technology costs, which will allow
consumers to afford and utilize a technology which was originally developed by, and for, the
military in the 1970's.
Ovum Research states that "Location Services" revenues will grow to $18 billion by 2006. ABI,
a NY based technology research firm states that the global personal GPS market will be
propelled to more than $22 billion by 2008. While there is a market potential for more than a
billion users worldwide, we are estimating a more realistic long-term market for Personal
GPS/GSM technology, initially marketed within the United States.
Family Consumers
Original Equipment Manufacturers (OEMs)
Businesses
The Military
Political and other Government Consumers
Our market segmentation focuses on five key areas of potential customers. Our targeted
market segments have so far failed to meet their own needs for low-cost, programmable
tracking devices by developing such systems internally. While it is difficult to make an exact
classification of the market needs for such a new electronics product, our research suggests the
following (full market analysis details can be found below in the Detailed Market Breakdown
topic):
Family Consumers: With over 875,000 children reported missing in the United States in just
the last year, this low-cost device will help families concerned about the whereabouts of their
children, teens, elderly parents (including Alzheimer's patients), and pets, by enabling them to
keep tabs on their loved ones' locations at any given time. One of the many programming
capabilities of this device will allow the family to set distance parameter guidelines, such that
once the wearer of the device (for example, a young child) travels beyond a set distance from
the "base" unit, the remote unit is automatically activated to alert the "home base" unit (a cell
phone, pda or computer) of the child's location, direction and speed of travel. This will be a
great asset in assisting law enforcement agencies in recovering missing persons within minutes.
Statistics from the FBI indicate that missing children who are murdered are usually killed within
three hours of abduction. The RQM Technologies Personal Tracking Device (PTD) will save lives,
by immediately alerting the "base" unit, aiding in timely tracking and rescue by law
enforcement agencies. Another programming capability is the ability to download all medical
information, contact information, emergency numbers, etc., in the event an individual is found
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RQM Technologies
incapacitated, allowing emergency teams to treat a patient effectively, while alerting the
guardian of her child's, parent's, or pet's whereabouts.
Businesses: Our product enables a business location to keep real-time tracking of company
vehicles, valuable packages, outside employees, deliveries, etc. We believe our device will be
viewed by businesses as an economical way to increase productivity, giving them real-time
data on the locations of their field employees and vehicles at all times, and helping to better
manage fleet and deliveries logistics. One of our key strengths in this market segment is the
low one-time cost, rather than a recurring fee for usage, adding to the business's ROI for our
products.
The Military: According to recent Department of Defense press releases, the military appears
to be searching for a device such as ours. The United States Coast Guard, for instance, is called
upon for Search and Rescue missions more than 40,000 per year, on average. The problem
with the currently used "beacon system": Since 121.5 MHz beacons transmit anonymously, the
only way to ascertain the location is to dispatch expensive resources to investigate. Current
beacon systems can take up to an hour to translate information, while only providing vague
location data, forcing time intensive and expensive Search and Rescue (SAR) missions. In the
field, the RQM Technologies' remote unit will save lives, finding those missing in action, and
locating sailors lost at sea. Their use will also taxpayer dollars, making Search and Rescue
missions shorter and less expensive. A consultant to the U.S. Navy has indicated solid interest
in two of our devices for use in the military.
The Political Market: According to statistics from specialized insurers like Hiscox (UK),
political kidnappings are prevalent in restive countries such as Colombia, Mexico, and the
Philippines; they are also on the rise in smaller countries such as Turkey and Trinidad. The
governments of these countries are spending millions of dollars in ransom each year in order to
minimize publicity and embarrassment. By fitting political figures, captains of industry and high
profile businessmen with our device, we believe this trend will decrease in the countries which
use our product, proving its efficacy in the field and sparking interest from other countries.
Our research shows that all current competitors with similar products require the user to log on
to the competitors website (or phone into call-centers) to actually locate the missing person,
while incurring monthly fees ranging from $20.00 - $40.00 per month. In essence, their
systems dictate that the users must be located at their internet-accessible computer in order to
use the competitors' systems. Imagine that you are a mother, visiting a park with your child.
Suddenly, you turn around and cannot see him - he has disappeared! With our competitors'
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RQM Technologies
systems, you would have to run home to log on to your computer, losing valuable time and
probably increasing the distance between yourself and your child. With our system, however,
you simply turn on your PDA or cell phone while still at the park, and view your child's location,
direction and speed of travel while you are still in close proximity. The RQM Technologies
systems will allow a user to locate the missing person(s) from potentially any cell phone,
wireless Palm Pilot, or PDA, freeing them from the need to be in front of a fixed computer, while
increasing real-time efficiencies. This important difference of a few minutes will literally
translate into saving lives.
Maritime Market: Personal Flotation Device (PFDs) and Life Boat companies are typically
manufacturers of textiles, and do not generally have the expertise to develop high-end global
positioning satellite electronic tracking systems. We are planning on lobbying the Senate,
through our consultant to the U.S. Navy (and Coast Guard), to enact laws mandating that these
life-saving devices be fitted in all Personal Flotation Devices. This would save lives, and save
taxpayers hundreds of millions of dollars in costs associated with traditional U.S. Coast Guard
Search and Recovery methods. The Coast Guard admits that radio beacons are outdated
technology, and they are currently implementing a program called Rescue 21, searching for
better ways to locate missing persons at sea in a more timely and efficient manner.
Pet Supply Chain Stores: RQM Technologies Personal Locator Device is small enough to
fit onto a pet collar. We are planning to partner with large pet-supply chains such as PetCo,
PetSmart, etc., as well as pet collar manufacturers, to make this technology more accessible to
consumers worried about their pets wandering off.
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Family Consumers 10% 280,500,000 308,550,000 339,405,000 373,345,500 410,680,050 10.00%
OEMs 10% 109,000,000 114,450,000 120,172,500 126,181,120 132,490,170 5.00%
Businesses 5% 12,753,076 13,390,729 14,060,265 14,763,278 15,501,441 5.00%
Military 5% 753,000 790,650 830,183 871,692 915,276 5.00%
Political and Gov't 5% 50,000 52,500 55,125 57,882 60,775 5.00%
Misc Sales 0% 0 0 0 0 0 0.00%
Total 8.55% 403,056,076 437,233,879 474,523,073 515,219,472 559,647,712 8.55%
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RQM Technologies
Family Consumers
OEMs
Businesses
Military
Misc Sales
These figures indicate the strong market need for a method of quickly and reliably locating
missing children. This so-far untapped market is quite large, even just within the U.S.
According to the 2002 U.S. Census Bureau reports, there are 60,492, 447 are under 14 years of
age in the U.S., including:
But the family market also has to worry about its elderly loved ones. According to the same
census report, there are 40,144,000 adults over 62 years of age in the U.S., 4.5 million of
whom have Alzheimer's disease. With a median income in the U.S. of $51,742 per family, our
family consumer market in the U.S. has the potential for selling our affordable devices for over
60,492,447 children under the age of 14, in addition to over 4,500,000 active senior citizens
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RQM Technologies
afflicted with Alzheimer', based on the above figures, for a combined target market of over
64,992,447 consumers.
Business Segment
It is more difficult to determine exact numbers for the business segment, as specific data is not
as readily available. However, as of 2001 (latest census data available) there were 12,753,076
businesses operating in the U.S. which fit our target market, meaning they have a strong or
immediate need for our products; this number excludes others, such as retail sales, wholesale
traders, information management, education, public administration, or other services not
defined.
The price points for similar Personal Locator Device systems using GPS/GSM technologies in the
business segment are currently in the $200 - $2000 range, and in most cases, do not offer the
remote abilities or programming capabilities for specific businesses needs in managing logistics
and tracking. We believe our low prices, combined with these features and the autonomous
internal tracking ability (not reliant on a vendor's website with monthly fees) will be very
attractive to the business segment.
This same system used at sea would immediately alert the deck's computers if a serviceman at
sea fell overboard, once the remote unit is programmed to be water activated. We have a
preliminary interest from the U.S. Navy, thanks in part to our ability to program individual
remote units with medical histories and other pertinent information for each serviceman's
remote unit. By using our system, coupled with encrypted signals for the military, our
programmable PTDs also work in deserts, jungles, mountains, etc., showing longitude, latitude,
altitude, speed and direction of travel, representing "eyes in the skies" for the military to know
exactly where their field personnel are located at any given moment.
We have also developed a lower-cost unit for the U.S. Navy which relies on "line of sight"
technology, which is affordable enough to equip every seaman in the U.S. Naval fleet. We have
already received an indication of interest from the U.S. Navy, through our consultant, due to
the extremely low cost and efficacy of the product.
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RQM Technologies
Our choice of target markets is strategic, and reflects our strengths and weaknesses.
The Family Consumer Market is key for RQM Technologies for several reasons. First, as a
system that works anywhere in the world, (versus all of our competitors' cellular tower reliant
systems), our potential market is 8 billion people worldwide. Capturing a market share of only
1/10 of 1% of this potential, we would realize the sale of 8 million units. As we enter this
market segment, we will be aggressively seeking partner companies such as cellular phone
providers and computer OEMs (included in channel sales to further penetrate the consumer
market) and associations such as The National Center for Missing and Exploited Children, The
National Alzheimer's Association, Amber Alert Network, etc. An alliance with any of these type
of organizations will add significant credibility, branding and positioning, thus generating sales
for RQM Technologies.
The Channel Sales to OEMs segment will be strong for several reasons. By positioning our
product for cellular providers, cell phone manufacturers, and computer manufacturers as an
ancillary item to help them market their own products, we will effectively increase our sales
force substantially, without the expenses of payroll, benefits, etc., because their sales force(s)
will sell our products for their respective companies. This would also positively impact branding,
making our name more commonplace in all the markets discussed herein. By securing alliances
in this market, we also position ourselves as the leader in this new technology and
its associated applications. This will foster confidence in the RQM Technologies' product,
increase sales dramatically and help our company break into the global market.
We will also be seeking entry into the automotive market to compete with LoJack. Our system
is more effective than the current LoJack system, and with a lower price point, we feel we will
be able to partner with the automotive manufacturers. The RQM system will allow them to offer
a more efficient product to their customers, while increasing their profit margins for this type of
technology.
The Business Market is more difficult to estimate. RQM Technologies' products will benefit
any business that depends on knowledge of the whereabouts of their products, services,
vehicles, valuable parcels or outside personnel are on a real-time basis. The keys to success in
this segment are threefold:
An affordable, one-time cost per unit for the business, instead of our competitors' higher-
priced units with recurring monthly charges.
The ease and ability to self-manage this program internally without the necessity to use call
centers or websites for a monthly fee.
The programming capabilities of our units, which allows businesses to easily customize each
individual unit based on their unique needs for each individual application.
The Military Market: We have a strong contact with a consultant to the U.S. Navy, who
feels, based on recent DOD press releases, coupled with previous projects on which he has
successfully consulted, that we are developing a product the military would greatly desire
because of its purpose, abilities and low price point. One of the benefits to the programming
capabilities of our PTD is the ability to program each soldier's medical information and history
into their remote units, so that any medic attending to them in the field would immediately
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RQM Technologies
have this valuable information. The U.S. Navy will be very interested in two of our locator
systems.
The Political Market may be more difficult to penetrate because of the complexity of
foreign governments, and international laws, and wide variations in cultural approaches to
safety and government oversight of individuals. However, we feel we will still be able to enter
into agreements with several smaller countries that are in the throws of political turmoil. We
project that the benefits our products provide will quickly foster confidence in their
potential, and will not be seen as a "Big Brother" device. Once our products have proven their
efficacy by saving individuals from kidnappings, especially high profile officials, we believe
markets in other countries will quickly open up to RQM Technologies.
We are part of the life-saving electronic devices industry, specifically Personal Locator
Device(s), an industry projected to grow to over $22 billion dollars within the next five
years. Market leaders in this small but growing personal locator industry are iTrack, Wherify
and uLocate, and LoJack for the automotive industry. RQM Technologies' Personal Locator
Devices (PLDs) are smaller and more easily concealed, less expensive, uniquely programmable
for individual needs, and more user-friendly than our competitors' products.
RQM Technologies will continue to conduct industry analysis to stay current on the nature and
dynamics of this new and evolving technology (and emerging target markets) which, while in its
infancy, is poised to experience explosive growth. This focus will help management develop
insight and devise sustainable business and marketing strategies to assure future success and
avoid making decisions based on blind assumptions, while continuing to develop next
generation technologies to remain the leader in this industry.
In the Personal Locator Industry, consumers are searching for the most effective product at the
lowest possible price; different market segments will put different emphases on ease of use
versus reliability or cost, depending on their needs and budgets. Although we will emphasize
some aspects of our products differently for the distinct market segments described above, our
products beat the competition on all grounds.
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markets. As a start-up company, we believe the consumer market and channel sales will give
us the quickest launch and penetration while immediately generating revenues to sustain our
company's growth and expansion into other markets. The business market will likely be the
next key, as we promote our products as tools for businesses to manage outside personnel and
fleet costs and logistics.
Our competitive edge lies with our innovative products, as well as the successful planning and
implementation of our marketing plans.
RQM Technologies' unique application of a remote miniaturized unit that incorporates an end-
user programmable transmitter/receiver inside a unit only 2" x 2" x 3/8" that has GPS/GSM
technology is relatively new to the marketplace. It is this new technology which will make our
Personal Locator Device(s) attractive to resellers such as our channel market segment. While
not widely known, most of the major cellular phone manufacturers will be incorporating GPS
technology into their newly manufactured cell phones over the next three years. We believe this
is a key advantage for us, as our remote unit has been designed to work with these next-
generation cell phones. We are a couple of years ahead of our competition in the sense that our
remote unit will immediately work with these "new technology" cell phones.
Another competitive edge is our positioning as a strategic ally with original equipment
manufacturers of PDAs and cellphones, who are clients more than customers. By building a
business based on long-standing relationships, we build defenses against competition through
the demonstrated efficacy of our products, and our partners' loyalties. For our channel sales
partners, our products translate into new customers and additional recurring revenues. The
longer the relationship stands, the more our clients will understand what we offer them and
why they need it, further solidifying our intended relationships with major cell phone carriers
and computer manufacturers.
Competitors' Disadvantages
While RQM Technologies competes against other companies and technologies meant to provide
similar products and services, they cannot match ours. Our competitors have several
disadvantages:
Effectiveness:
Most competitors do not offer remote miniaturized concealable units which users can wear;
their devices would be especially bulky, awkward, and obvious on children.
Their products do not allow for a locating "home-base" which is a cell phone, Palm Pilot or
wireless mobile computer or desktop anywhere in the world, which can report on the unit's
location instantly, even while both units (remote and base units) are in transit.
Our competitors' devices cannot be programmed for individual remote unit
applications, such as water activation, parameter limit alert, medical history of the
wearer, etc.
The units cannot be armed from a remote location.
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RQM Technologies
Price:
Greater initial cost to the end user ($200-$2000), with fewer features and capabilities.
Recurring monthly fees to the end user with most systems.
The most significant difference between our system and our competitors' is our use of
"unassisted" GPS/GSM technology. Unlike our competitors', our system is not reliant on being in
an area where cellular towers exist. Our competitors' products do not work in areas where there
is no cellular coverage, or less than the three three cellular towers needed for triangulation. Our
system uses military inspired radio frequencies which transmit directly to the GPS satellite
network. Our system will work anywhere in the world, including deserts, mountains, oceans and
all other remote locations.
RQM Technologies also eliminates the need for the "tracker" to -hone into a call center, or to sit
in front of a computer to download from a our website (both for a monthly fee ranging from
$20-$40/month) in order to find someone who is missing, losing valuable minutes which
can mean the difference between life and death. Our Personal Locator Device(s) allow the chase
unit (wireless Palm Pilot, laptop, and most cell phones) to follow the remote unit, even as both
units (remote and "base unit") are in transit.
Our most important marketing goal as a start-up is to build product and brand awareness. The
way we go about this task will vary from one market segment to another.
Family Consumers
While it is widely know that child abductions are on the rise every year, and that Alzheimer's
disease afflicts more seniors annually, it is not well known that products such as the RQM
Technologies' Personal Locator Device(s) are available at such an affordable cost. We are
anticipating the end-user's cost at less than 33 cents per day for one year, based on a price
point of only $120.00 per unit to the end user.
To raise awareness of our products among Family Consumers, our main marketing strategy
hinges upon a high-publicity, one-time "stunt," to take place in late October or early November
of 2004.
With the knowledge, assistance and approval of a respected police department, (and media
outlets) we plan on staging a demonstration child abduction and rescue to show the system's
immediate response and efficacy. In order to comply fully with the law, we will ask a police
officer to perform the character of the abductor, in portraying the "abduction" of his/her own
child; this will minimize any potential risk, keeping the child firmly under the protector of his or
her own parent throughout the demonstration. After a 10 minute head-start, another officer,
with no foreknowledge of the "abductor's" intended destination, will then track down the
"abductee," in order to demonstrate how quick and easy it is to locate the abducted child in a
timely manner that could ultimately save the child's life.
For this demonstration, we will invite a respected television news crew or popular talk show to
follow the staged abduction in order to document our success, while broadcasting this life-
saving demonstration nationwide. As an incredibly worthy cause, we believe that many media
outlets will want to run this human-interest story in an effort to help aid against child
abductions and wandering Alzheimer's patients by helping to make our technology public
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RQM Technologies
knowledge. We expect this nationwide publicity to break down most existing barriers of entry
into our other targeted markets.
We will aggressively target publicity of our staged abduction through TV shows such as Oprah,
The Maury Povich Show, Regis and Kelly, 60 Minutes, and all others that can sway national
opinion that cater to family and safety issues. We believe that this and further demonstrations
will be very well received, while gaining invaluable exposure as we begin branding our name
while positioning our company.
We will then market heavily in publications geared towards parenting and Alzheimer's
associations for the consumer market, while aggressively seeking free publicity through print,
radio and television, specifically once our Personal Location Device has demonstrated its
efficacy during the staged abduction.
We will focus our efforts to partner with Original Equipment Manufacturers on nationwide
cellular providers and computer manufacturers. We will emphasize our products' potential as an
additional source of revenue for them, both at the front end for product sales, and in the case
of cellular providers, with recurring monthly revenues; this should make our product very
desirable as part of their product lines. By solidifying these partnership agreements, we will also
enable cross-marketing back into the consumer market through their sales forces' efforts and
their advertising, increasing our sales efforts nationwide without the expense of additional
personnel to cover the entire U.S. We believe that once partnered with these companies, our
channel market partners (resellers) will advertise the RQM Technologies Personal Locator
Device(s) as new features in their traditional outlets, primarily print advertising and in-house
POS material, in order to increase mutual sales and brand awareness, benefiting both
organizations, while fitting a nation of families with our potentially life-saving device.
Business Market
Our military and political markets will necessitate a slightly different and more personal
approach through specific relationships we have developed with individuals inside these market
segments. We feel these markets are worth pursuing aggressively. We are currently in
discussion with a consultant to the U.S. Navy, who feels the military is looking for a device such
as the RQM Technologies' Personal Locator Device(s), in order to better protect their
servicemen.
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RQM Technologies
We have to sell our service and support. The RQM Technologies' Personal Locator Device(s)
remote unit, while very easy to program and facilitate, will be better received if we offer (fee
based) training services for our larger clients, such as our channel sales partners and large
corporate accounts. Simplifying the understanding and implementation of our system will help
encourage the daily use and sales efforts of our product, while generating additional revenues
for RQM Technologies, our channel market resellers while increasing the ROI for our
investor/partner(s).
The Yearly Total Sales chart summarizes our ambitious sales forecast. We expect sales to
increase dramatically as the RQM Technologies' Personal Locator Device(s) demonstrate its
efficacy, and is well received in our target markets. Once our system saves a life, we will
aggressively pursue widespread press and publicity, at which point, we believe all barriers into
the consumer markets will be eliminated, while opening markets we may not have targeted as
primary markets.
The important elements of the sales forecast are shown in the table below. We are using
aggressive forecasts that will achieve momentum, revenues, positive cash flow and profitability.
We feel these are attainable goals, as we plan to offer our Personal Locator Device(s) in
minimums of 1000 unit orders to our channel, military and political markets. Units will be sold
to our individual and family consumer market either through our channel markets, or directly
for a slightly higher fee through our website.
Sales Forecast
Year 1 Year 2 Year 3
Sales
Family Consumers $540,000 $800,000 $1,250,000
Channel Sales to OEMs $605,000 $1,500,000 $2,225,000
Businesses $206,500 $300,000 $750,000
Military $150,000 $1,000,000 $1,125,000
Political $450,000 $472,500 $496,125
Total Sales $1,951,500 $4,072,500 $5,846,125
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5 M
4 Month
RQM Technologies
1 Month
Month
Month 3 Month
2 Month
Chart: Sales Monthly
Sales Monthly
$240,000
$30,000
$0
Sales by Year
$6,000,000
$4,000,000
Channel Sales to OEMs
Businesses
$3,000,000
Military
$2,000,000 Political
$1,000,000
$0
Year 1 Year 2 Year 3
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RQM Technologies
The RQM Technologies' website will be the virtual business card and portfolio for the company,
as well as its online "corporate home" for business-to-business marketing and investor
relations. It will showcase our products and services, as well as hosting a portfolio of all past
and current real-life testimonials. The website needs to be simple to navigate, yet well designed
and flexible, to accommodate changes in our online needs.
RQM Technologies is dedicated to helping find those who are lost, and will entertain adding links
to recognized agencies that have the same goals, as long as it adds value to the company. To
show our concerns and good will, while reminding visitors of our products' potential, we will add
banner links to agencies such as The National Center for Missing and Exploited Children
(NCMEC), AMBER Alert, Child Search and other national missing children's programs. We will
also have a link to the National Alzheimer's Association.
The key to the website strategy will be combining a very well-designed front end, with a back
end capable of recording leads, processing online orders and information requests, offering
online manuals and running RQM Technologies' own online marketing program for OEM
affiliates.
The RQM Technologies' initial website will be developed with few technical resources; a simple
hosting provider will host the site and provide the technical back end.
The design, updates and maintenance of the site will be done by contracted web designers, for
a more professional image of our company, freeing up senior management to focus on
company growth and product development. As the website rolls out future developments such
as new products, product add-ons and software updates, ancillary products, newsletters and
downloadable market research reports. We may need to contract further technical resources to
build the trackable download information with the capabilities of transmitting and organizing
extensive information.
5.6 Milestones
The following table lists important program milestones, with dates and managers in charge, and
budgets for each. The milestone schedule indicates our emphasis on planning for
implementation.
What the table doesn't show is the commitment behind it. Our business plan includes complete
provisions for plan-vs.-actual analysis, and we will be holding follow-up meetings every month
to discuss the variance and course corrections.
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Table: Milestones
Milestones
Chart: Milestones
Milestones
Prototype Completion
Patent Applications
Funding
Begin Sales
Marketing Materials
RQM Technologies' management will be slow to hire new people, and very loyal to those who
are hired. We believe our employees will be our greatest asset, and therefore, as we increase
personnel, we will be looking only for individuals whose experience, skills, contacts and
expertise will help foster the development and growth of our company. While there is a
temptation to hire inexpensive personnel in order to further control costs, our philosophy is that
there is a better rate of return in hiring more experienced personnel with expertise in areas we
need, so they can immediately contribute to helping attain or exceed the company's goals and
objectives.
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RQM Technologies
Initially, RQM Technologies' day-to-day operations will be managed by its founders, who prefer
a close, hands-on approach to all aspects of their business. As the company grows, we will be
adding accomplished Executive Management at the C-Level in order to manage our growth with
expertise in the areas most needed. RQM Technologies is a small company with a minimum
command hierarchy and a maximum of community spirit and cooperation. Once profitable, we
intend on donating a small percentage of proceeds to charitable causes that are within our
target market(s), both as a measure of good will and as an added marketing leg. Despite the
small size of this company, our business practices are centered on implementing our goals,
never losing sight of profitability objectives and ROI for our investor/partner(s).
In order to minimize our start-up costs, we will continue to outsource the manufacturing,
industrial design and packaging of our devices until the product demand warrants a more
profitable method of producing the quantities needed to fulfill sales orders. Only at that point
will we consider manufacturing the products ourselves.
Immediate personnel plans call for a minimum of three, to a maximum of five employees for
the first year, unless unforseen sales growth dictates the absolute need for additional
personnel. After the first year, we anticipate the need for additional personnel in the areas of
office management and human resources, experienced technical sales professionals, and
financial and technical operations. We may hire these addition personnel on a part-time basis,
and move into full time positions as warranted by the company's growth.
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Table: Personnel
Personnel Plan
Year 1 Year 2 Year 3
Steven M. Bloome (Pres/CEO) $97,000 $130,000 $175,000
Andrew J. Siska (CTO) $95,500 $120,000 $150,000
CEO $0 $125,000 $150,000
CFO $0 $120,000 $120,000
Reception/Secretarial $22,500 $75,000 $160,000
Total People 3 6 6
As a start-up company in an emerging and changing industry, we have intentionally designed a
conservative plan, looking to ensure the achievement of our corporate goals along with a solid
ROI to our investor/partner(s). We will of course revise our financial plan throughout the first
year based on actual figures in sales, manufacturing costs, technological advances, personnel,
office space, marketing costs, and so on.
Securing the patents (applied for) for our advanced devices and systems in a new and
emerging industry will add immediate value to RQM.
Securing seed money with investor(s)/partner who will bring added value to RQM.
The acceptance of our device(s)/systems by the public, the business sector and the military.
The ability to attract strong C-Level management to our team as needed.
Managing growth and production costs so as to maintain projected margins and cash flow.
Staying ahead of technological advances in this field, and reacting to these changes in a
timely and efficient manner.
Managing the start-up of RQM with minimal personnel until steady growth necessitates
hiring additional department management and support staff.
Partnering with strong OEMs quickly in order to penetrate and dominate market share.
Partnering with industry leaders (such as UPS, the U.S. Navy, etc.,) to assist in
demonstrating the efficacy of our systems.
Success in marketing our products for brand awareness and positioning.
Adjusting and adapting to the market trends within this new and emerging industry.
be needed to go into a larger scale production run, if RQM cannot self-fund our own growth.
However, we believe that we will be in a position to fund ourselves, limiting the risks while
increasing the ROI on our investor/partner(s).
Of particular interest to investors is the Dividends row in the Cash Flow table. We project
increasing dividends, which will be distributed first to outside investors; the founders will defer
dividends until the third year.
Share Ownership Year 2004 Year 2005 Year 2006 Year 2007
Founders' Shares 50,000 50,000 50,000 50,000
Stock Split Multiple 0 0 0
Stock Options Issued 0 0 0 0
Investor Shares Issued 21,429 0 0
Price per share $9.33 $0.00 $0.00 $63.00
Options Holders' Shares 0 0 0 0
Year 2004 Investors' Shares 21,429 21,429 21,429 21,429
Year 2005 Investors' Shares 0 0 0
Year 2006 Investors' Shares 0 0
Total Shares Outstanding 71,429 71,429 71,429 71,429
Equity Ownership Percentage Year 2004 Year 2005 Year 2006 Year 2007
Founders' Equity 70.00% 70.00% 70.00% 70.00%
Option Holders' Equity 0.00% 0.00% 0.00% 0.00%
Year 2004 Investors' Equity 30.00% 30.00% 30.00% 30.00%
Year 2005 Investors' Equity 0.00% 0.00% 0.00%
Year 2006 Investors' Equity 0.00% 0.00%
Total Equity 100.00% 100.00% 100.00% 100.00%
Investors' Equity 30.00% 30.00% 30.00% 30.00%
Founders' & Employees' Equity 70.00% 70.00% 70.00% 70.00%
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The chart shows what we need to sell per month according to these assumptions in order to
break even. This is about 80% of our planned average 2004 - 2005 monthly sales goals, even
with four months of no revenue before sales begin; therefore we believe we can realistically
achieve these goals and maintain these levels.
Break-even Analysis
Assumptions:
Average Percent Variable Cost 50%
Estimated Monthly Fixed Cost $78,165
Break-even Analysis
$100,000
$80,000
$60,000
$40,000
$20,000
$0
($20,000)
($40,000)
($60,000)
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RQM Technologies
The financial plan depends on important assumptions, most of which are shown in the following
table. The key underlying assumptions are:
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 6.00% 6.00% 6.00%
Long-term Interest Rate 8.50% 8.50% 8.50%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
The Profit and Loss table, below, shows our projected sales, cost of sales, and operating
expenses for the first three years. of particular note are the high Sales and Marketing
expenses; our research indicates these approximate spending levels will be necessary for
launching such a new and unique product successfully. We are currently taking bids from four
prominent advertising agencies to manage this aspect of our product launches.
All costs associated with manufacturing and distributing the physical products can be found
under cost of sales in the Sales Forecast table, above.
We anticipate that sales will begin to generate a stable profit for RQM in February of 2005,
about halfway through our first year.
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RQM Technologies
Profit Yearly
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
Year 1 Year 2 Year 3
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12
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RQM Technologies
$2,800,000
$2,400,000
$2,000,000
$1,600,000
$1,200,000
$800,000
$400,000
$0
Year 1 Year 2 Year 3
Expenses
Payroll $215,000 $570,000 $755,000
Sales and Marketing and Other Expenses $216,000 $200,000 $250,000
Depreciation $0 $0 $0
Advertising & Marketing Collateral $295,000 $350,000 $425,000
Industrial Design $64,284 $75,000 $80,000
Rent $22,800 $26,000 $30,000
Telephone $7,500 $10,000 $15,000
Utilities $14,400 $18,000 $20,000
Insurance $6,000 $7,500 $7,500
Payroll Taxes $50,200 $85,500 $113,250
Company Vehicles and related expenses $16,800 $18,000 $19,000
Trade Shows & Events $30,000 $0 $0
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RQM Technologies
Profit Monthly
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
($30,000)
($40,000)
The Cash Flow table below shows that while initial cash flow will be out of the business,
sufficient start-up funding, combined with projected sales revenues, should allow us to maintain
a high positive cash balance throughout our first year, as we launch our products.
Of particular interest to investors is the Dividends row, below. We project increasing dividends,
which will be distributed first to outside investors; the founders will defer dividends until the
third year.
Page 29
MonthM3
RQM Technologies
MonthMonth
1 2
Chart: Cash
Cash
$300,000
$250,000
$200,000
$0
($50,000)
($100,000)
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RQM Technologies
The Balance Sheet shows an increasingly stable cash position and net worth over the first three
years, as our products become more established in the market. We do not plan to borrow
money to fund growth, so our liabilities in all years represent simple Accounts
Payable stemming from ongoing operating expenses.
Current Assets
Cash $157,041 $164,809 $796,484
Accounts Receivable $230,167 $480,325 $689,512
Inventory $130,900 $374,100 $346,806
Other Current Assets $0 $0 $0
Total Current Assets $518,108 $1,019,234 $1,832,801
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $518,108 $1,019,234 $1,832,801
Current Liabilities
Accounts Payable $192,371 $266,615 $336,595
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $192,371 $266,615 $336,595
Long-term Liabilities $0 $0 $0
Total Liabilities $192,371 $266,615 $336,595
Our main business ratios can be found in the following table, along with standard ratios for our
industry, Radio and Television Broadcasting and Wireless Communications Equipment
Manufacturing (e.g. GPS), NAICS code 334220. We do intend to improve gross margin,
collection days, and inventory turnover.
Our high gross margin reflects the nature of our particular kind of electronic equipment; a much
higher percentage of our products' value lies in the innovative design and (patents applied for)
customizable interface, than in skilled assembly (the typical distinguishing feature in this
industry). Our ratios will, therefore, differ from others in this industry.
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RQM Technologies
Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 108.69% 43.55% 5.37%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 51.00% 53.00% 28.38%
Selling, General & Administrative Expenses 48.65% 38.68% 36.43% 16.09%
Advertising Expenses 26.18% 13.51% 11.55% 0.71%
Profit Before Interest and Taxes 1.94% 17.61% 23.67% 1.84%
Main Ratios
Current 2.69 3.82 5.45 1.77
Quick 2.01 2.42 4.41 0.87
Total Debt to Total Assets 37.13% 26.16% 18.37% 64.99%
Pre-tax Return on Net Worth 11.59% 95.26% 92.48% 2.57%
Pre-tax Return on Assets 7.29% 70.34% 75.50% 7.35%
Activity Ratios
Accounts Receivable Turnover 4.24 4.24 4.24 n.a
Collection Days 56 64 73 n.a
Inventory Turnover 10.91 7.90 7.62 n.a
Accounts Payable Turnover 9.57 12.17 12.17 n.a
Payment Days 27 26 27 n.a
Total Asset Turnover 3.77 4.00 3.19 n.a
Debt Ratios
Debt to Net Worth 0.59 0.35 0.22 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $325,736 $752,619 $1,496,206 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.27 0.25 0.31 n.a
Current Debt/Total Assets 37% 26% 18% n.a
Acid Test 0.82 0.62 2.37 n.a
Sales/Net Worth 5.99 5.41 3.91 n.a
Dividend Payout 1.89 0.15 0.23 n.a
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Appendix
Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Family Consumers 0% $0 $0 $0 $35,000 $45,000 $50,000 $60,000 $60,000 $65,000 $70,000 $75,000 $80,000
Channel Sales to OEMs 0% $0 $0 $0 $60,000 $70,000 $70,000 $70,000 $75,000 $75,000 $85,000 $50,000 $50,000
Businesses 0% $0 $0 $0 $14,000 $16,000 $18,000 $20,000 $23,000 $25,000 $27,500 $30,000 $33,000
Military 0% $0 $0 $0 $0 $0 $0 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Political 0% $0 $0 $0 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Total Sales $0 $0 $0 $159,000 $181,000 $188,000 $225,000 $233,000 $240,000 $257,500 $230,000 $238,000
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Chipset $0 $0 $0 $55,650 $63,350 $65,800 $78,750 $81,550 $84,000 $90,125 $80,500 $83,300
Programming $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Packaging $0 $0 $0 $23,850 $27,150 $28,200 $33,750 $34,950 $36,000 $38,625 $34,500 $35,700
Subtotal Direct Cost of Sales $0 $0 $0 $79,500 $90,500 $94,000 $112,500 $116,500 $120,000 $128,750 $115,000 $119,000
Page 1
Appendix
Table: Personnel
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Steven M. Bloome (Pres/CEO) 0% $7,500 $7,500 $7,500 $7,500 $7,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500
Andrew J. Siska (CTO) 0% $7,500 $7,500 $7,500 $7,500 $7,500 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $10,000
CEO 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CFO 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Reception/Secretarial 0% $0 $0 $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Total People 2 2 2 3 3 3 3 3 3 3 3 3
Total Payroll $15,000 $15,000 $15,000 $17,500 $17,500 $19,000 $19,000 $19,000 $19,000 $19,000 $19,000 $21,000
Page 2
Appendix
General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Long-term Interest Rate 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
Page 3
Appendix
Gross Margin $0 $0 $0 $79,500 $90,500 $94,000 $112,500 $116,500 $120,000 $128,750 $115,000 $119,000
Gross Margin % 0.00% 0.00% 0.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
Expenses
Payroll $15,000 $15,000 $15,000 $17,500 $17,500 $19,000 $19,000 $19,000 $19,000 $19,000 $19,000 $21,000
Sales and Marketing and Other $0 $0 $12,500 $16,000 $17,500 $20,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Expenses
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Advertising & Marketing Collateral $20,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Industrial Design $5,357 $5,357 $5,357 $5,357 $5,357 $5,357 $5,357 $5,357 $5,357 $5,357 $5,357 $5,357
Rent $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900
Telephone $500 $500 $600 $600 $750 $750 $750 $50 $750 $750 $750 $750
Utilities $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Insurance $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Payroll Taxes $3,200 $3,200 $3,200 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,900 $4,900
Company Vehicles and related 15% $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400
expenses
Trade Shows & Events $0 $0 $0 $0 $15,000 $15,000 $0 $0 $0 $0 $0 $0
Total Operating Expenses $49,057 $54,057 $66,657 $73,857 $90,507 $94,507 $84,507 $83,807 $84,507 $84,507 $85,007 $87,007
Profit Before Interest and Taxes ($49,057) ($54,057) ($66,657) $5,643 ($7) ($507) $27,993 $32,693 $35,493 $44,243 $29,993 $31,993
EBITDA ($49,057) ($54,057) ($66,657) $5,643 ($7) ($507) $27,993 $32,693 $35,493 $44,243 $29,993 $31,993
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred ($14,717) ($16,217) ($19,997) $1,693 ($2) ($152) $8,398 $9,808 $10,648 $13,273 $8,998 $9,598
Net Profit ($34,340) ($37,840) ($46,660) $3,950 ($5) ($355) $19,595 $22,885 $24,845 $30,970 $20,995 $22,395
Net Profit/Sales 0.00% 0.00% 0.00% 2.48% 0.00% -0.19% 8.71% 9.82% 10.35% 12.03% 9.13% 9.41%
Page 4
Appendix
Page 5
Appendix
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Net Cash Flow ($15,645) ($34,457) ($38,134) $23,895 ($147,703) ($20,658) $9,793 ($14,264) $17,969 $25,790 $546 $608
Page 6
Appendix
Cash Balance $333,655 $299,199 $261,065 $284,960 $137,257 $116,599 $126,392 $112,129 $130,097 $155,887 $156,433 $157,041
Current Assets
Cash $349,300 $333,655 $299,199 $261,065 $284,960 $137,257 $116,599 $126,392 $112,129 $130,097 $155,887 $156,433 $157,041
Accounts Receivable $0 $0 $0 $0 $79,500 $167,350 $181,483 $203,367 $225,250 $232,617 $244,750 $239,458 $230,167
Inventory $0 $0 $0 $0 $87,450 $99,550 $103,400 $123,750 $128,150 $132,000 $141,625 $126,500 $130,900
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $349,300 $333,655 $299,199 $261,065 $451,910 $404,157 $401,482 $453,509 $465,529 $494,714 $542,262 $522,392 $518,108
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $349,300 $333,655 $299,199 $261,065 $451,910 $404,157 $401,482 $453,509 $465,529 $494,714 $542,262 $522,392 $518,108
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $18,695 $22,079 $30,605 $217,500 $169,751 $167,431 $199,863 $188,998 $193,338 $209,916 $169,051 $192,371
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $18,695 $22,079 $30,605 $217,500 $169,751 $167,431 $199,863 $188,998 $193,338 $209,916 $169,051 $192,371
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $18,695 $22,079 $30,605 $217,500 $169,751 $167,431 $199,863 $188,998 $193,338 $209,916 $169,051 $192,371
Paid-in Capital $450,000 $450,000 $450,000 $450,000 $450,000 $450,000 $450,000 $450,000 $450,000 $450,000 $450,000 $450,000 $450,000
Retained Earnings ($100,700) ($100,700) ($100,700) ($100,700) ($100,700) ($100,700) ($100,700) ($100,700) ($100,700) ($100,700) ($100,700) ($100,700) ($150,700)
Earnings $0 ($34,340) ($72,180) ($118,840) ($114,890) ($114,895) ($115,249) ($95,654) ($72,769) ($47,924) ($16,954) $4,041 $26,436
Total Capital $349,300 $314,960 $277,120 $230,460 $234,410 $234,406 $234,051 $253,646 $276,531 $301,376 $332,346 $353,341 $325,736
Total Liabilities and Capital $349,300 $333,655 $299,199 $261,065 $451,910 $404,157 $401,482 $453,509 $465,529 $494,714 $542,262 $522,392 $518,108
Net Worth $349,300 $314,960 $277,120 $230,460 $234,410 $234,405 $234,051 $253,646 $276,531 $301,376 $332,346 $353,341 $325,736
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