NavAssist - Bussiness Plan Competition 2008

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    Business Plan 08

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    Table of Contents

    Section PageExecutive Summary 3

    Company Overview 5Mission Statement

    Goal

    Products and Services 5Cell PhoneGPS Capabilities

    Accessories

    PricingNavAssist Potential

    Market and Competitive Analysis 9Industry Overview

    Characteristics and Needs of Target MarketCompetition

    Management and Personnel 12Key Individuals

    Personnel

    Operations Plan 14Expansion

    Marketing

    Critical Risks 18

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    Internal Risks

    External Risks

    Financial Statements 21Cash Flow

    Break-Even Analysis

    Income StatementBalance Sheet

    Offering 26Funds RequiredROI Potential

    Exit Strategies

    Appendix A (Technology) 27

    Appendix B (Personnel) 30

    Appendix C (Sales Forecast) 31

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    Executive Summary

    Company Overview

    NavAssist is a company that will 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.

    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.

    Market Analysis

    The main target market of NavAssist for the first year

    of operations will consist of the visually impaired who are

    currently employed in the state of Arkansas. Arkansas has

    approximately 90,000 blind people, of which 30,000 are

    employed. Few companies have offered GPS technology to

    assist the blind; however, they have not been widely

    accepted due to high pricing and lack of training for the end

    user. By eliminating those barriers we will attract this

    untapped market.

    Management

    TheNavAssist 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

    achieve this, delivering a cost-efficient and high quality

    product at all times is the priority. NavAssist management

    team is well prepared to handle all aspects of operations to

    achieve its goal.

    Operations

    NavAssist aims to maintain operations that are

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

    manner. ECCO Design, Inc. will provide the development

    and manufacturing of our device. NavAssist will then be in

    charge of installing the GPS software package and

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

    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 under-

    served market. By empowering this market with greater

    mobility, NavAssist has a huge potential to become an

    extremely profitable company. After conservatively

    forecasting sales among the target market, we have

    constructed financial statements that reflect NavAssist

    strategy.

    Offering

    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. 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.

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    Company Overview

    By using current technology NavAssist will create an

    innovative product that will cater to and assist the visually

    impaired public. Our product will help the sight-impaired

    keep up with a very mobile and fast paced society. By

    using GPS technology alongside mobile communications,

    NavAssist will bring services that will help increase their

    functions in everyday life.

    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.

    Goals

    NavAssist will combine cutting edge GPS elements

    with an audio command system to facilitate navigation

    within one foot for the blind and visually impaired. The

    device will be user-friendly and the operating system will be

    easily handled. This device will enhance mobility among the

    visually impaired by complementing previously available

    alternatives (e.g. seeing eye-dogs) and providing a holistic

    depiction of their surroundings. The product will be

    manufactured in an economical and cost effective manner,

    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.

    The appearance of the cellular telephone will have a close

    resemblance to a basic cell phone seen in the public today.

    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

    and an enter button will be a large, easily recognizable, and

    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

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

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

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

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

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

    scrolling directly to menu of their choice. Additionally, the

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

    address book, as well as a feature with warning commands

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

    GPS Capabilities

    The GPS system will be embedded

    in the NavAssist phone, and it will

    be able to advise an effective

    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

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

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

    entered through the keyboard and will be processed by the

    software to determine turn-by-turn directions by gathering

    data that is transmitted from the satellites to the GPS

    receiver. Our GPS contains ample memory for storing

    frequently traveled routes as it traces and stores user

    movement. Accuracy is notified to users based on the

    number of aligned satellites.2

    Accessories

    Many accessories will be offered to

    maximize the usefulness of

    NavAssists guidance system and

    cell phone. Our headphone will

    help the user hear the commands

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

    2

    Please refer to Appendix B, p. 30

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    and respond to them as well. Protective casing and a

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

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

    be available to customers and can be easily uploaded onto

    our device from our website. These maps will ensure

    detailed and accurate information of the users area,

    including building information, street names, sidewalks, and

    other man-made and natural structures.

    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

    other similar products in the market, our product is over

    sixty percent cheaper than the competition.4 The initial cost

    for NavAssist device is $570 and it includes all the

    3 See also Appendix A, p. 274

    Refer to Market and Competitive Analysis Section, p. 9

    accessories specified in the package. Shipping is for free.

    There is an annual update fee for software upload for maps

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

    be acquired for an extra cost of $10.

    The initial investment per customer is as following:

    NavAssist Potential

    NavAssist is aimed to serve clients who are legally

    blind and/or severely visually impaired. With the voice

    command system, GPS technology, and mobile

    communications, it is in our plans to adopt other services

    such as the news, weather forecasts, and satellite music

    Product/Service Product/Service price

    NavAssist Device $570

    Software Maps $ 30

    Total $600

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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

    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

    advances, our product will be modified accordingly.

    Upgrades of our product will be available for our customers

    with more capabilities and options that will enhance them

    with a higher quality of life. We also acknowledge that

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

    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.

    Market and competitive

    analysis

    Industry overview

    According to the American Foundation for the Blind,

    every seven minutes someone in America will become blind

    or visually impaired.5 Approximately 10 million Americans

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

    are legally blind. The Arkansas Department of Human

    Services reported in a news release in January 2002, that

    close to 90,000 Arkansans share this disability.6

    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. 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

    data is significantly lower than the estimated 84% of

    persons within this age who were employed without any

    kind of disability. In Arkansas the unemployment rate for

    blind people is 70%.8

    Mobility is the major challenge for the visually

    impaired, and their choices to travel are limited. The

    visually impaired need some type of assistance in this

    regard; whether by a human guide, a cane, a guide-dog, or

    any other device, the blind cannot move from one place to

    another on their own.

    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.

    Characteristics & Needs of Target Market

    The main target market of NavAssist for the first

    year in phase one of operations will consist of the thirty

    percent (27,000) visually impaired who are currently

    employed in the state of Arkansas. NavAssist is currently

    exploring the possibility of obtaining insurance coverage for

    its device so it can be available to blind people that may not

    have the economic means.

    Within the past three years, few companies have

    made attempts to utilize GPS technology to assist the blind.

    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

    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

    guiding assistant, the visually impaired can obtain a broader

    sense of their surroundings that extends beyond the

    immediate awareness that their canes and seeing-eye dogs

    provide.

    Despite the obvious practical advantages, the

    drawbacks of the costs and complexity of use drive

    customers away. By integrating existing technology of GPS,

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

    blind, NavAssist will drive the price down and increase the

    products value to the user. Value will increase as clients

    begin to have multiple tools to improve their lifestyle in one

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

    potential blind customers who are employed in Arkansas

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

    population to buy the product in the first year by reducing

    economic limitations set by previous products.

    Competition

    At present, the product and services offered by

    NavAssist have limited direct competition with other

    organizations. Very few companies have either produced

    integrated GPS navigation systems, or mobile

    communications for the visually impaired. The predominant

    competitors in this field are the following:

    Sendero Group,a Company based out of California,

    has developed a GPS navigation system that gives its user

    directions by a mechanical voice (voice command system).

    Senderos main market and research is done primarily in its

    home area. Sendero has had a main competitive advantage

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

    has developed roughly seven different products catered to

    the blind. However, its BrailleNote GPS does not provide

    cell phone capabilities and in addition totes a hefty price tag

    at $1,549.

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    Trekker, designed and manufactured by Canada-

    based company, VisuAid, has developed an application

    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). Humanwares

    Pocket PC has been adapted to provide functionality to

    Trekkers application. Trekkers device has comparable

    characteristics to those of Senderos BrailleNote GPS, but it

    also lacks the advantages of cell-phone capabilities. Its

    complex design has often resulted in a non user-friendly

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

    Although NavAssist has a disadvantage entering into

    this market niche, NavAssist has the comparative advantage

    of providing a device that has been meticulously designed

    for the up most functionality of the visually impaired while

    providing navigation assistance and mobile communication

    simultaneously. NavAssist also offers an advantage in price

    over the competitors to make its device more accessible to

    those who need it.9

    Management andPersonnel

    Key IndividualsTheNavAssist management team will be operated by

    four key individuals with diverse backgrounds and work

    experience. Each team member contributes unique skill

    sets and experiences that will strengthen the daily

    operations. The management team is committed to live out

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

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

    product at all times is the priority. NavAssist management

    team is well prepared to handle all aspects of operations to

    achieve its goal.10

    9 SeeProduct and Services Section, p. 810 Please refer to Appendix D, p. 32 Resumes

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    Kyle Wood

    (CFO) Chief Financial Office

    Responsibilities: Accounting pr

    including preparation of financial statements

    keeping, financial analysis, and administrativ

    by ensuring that all of the business finances

    and remain current.

    Pablo Oropin

    (CTO) Chief Technology Offi

    Responsibilities: In charge of s

    development, programming, testing softwar

    training demos for customers, updating map

    Application Programming Interfaces, and ove

    technology development.

    r/Owner

    ocedures

    and book

    e management

    are-up-to date

    cer/Owner

    oftware

    , creating

    s and

    rseeing the

    Ivan Gomez

    (CSPO) Chief Strat

    & Chairman/Owne

    Responsibilities: Leading the strate

    strategic planning process while ca

    industry trends, competitive threats

    opportunities, internal performance,

    driven insights to help the progress

    Kris Lance

    (CMO) Chief Market

    Relations/Owner

    Responsibilities: Development and i

    marketing strategies and activities,

    the sales force, analyzing new tren

    administrative management.

    egic Planning Officer

    r

    y framework and

    turing and analyzing

    , expansion

    and delivery of data-

    of the company.

    ing Officer & Public

    mplementation of

    training and directing

    s and markets, and

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    Personnel

    NavAssists personnel requirements for the first year

    of operations (phase one) will consist of the following:

    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

    Staff 6 6 6 6 8 8 8 8 8 8 9 14

    Operations Plan

    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

    facilities located in Scott Hamilton warehouse, Little Rock,

    AR. Scott Hamilton warehouse provides NavAssist with

    flexibility of operations since additions to original demands

    can be done almost instantaneously, thus, leaving NavAssist

    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

    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

    $135,000. The software needed consist of the Application

    Programming Interface (OpenAPI), licensed by MapQuest

    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.

    which will provide the development and manufacture of our

    device. ECCO Design is a New York based consultancy,

    which is highly experienced in helping businesses to develop

    innovative products that our users desire. It is also

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    ECCO Design

    NavAssist UPS

    End User

    Follow-up

    experienced in the telephony industry, and it recently has

    developed a PDA phone that is used by major user

    providers

    such as

    AT&T and

    T-Mobile.

    Choosing

    ECCO

    Design,

    will allow

    NavAssist

    to obtain the device manufactured by Asian companies that

    presently deal with ECCO Design in a cost effective and

    timely manner. The estimated price for the development of

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

    $212.

    After the manufacturing process, the devices will be

    shipped to NavAssist warehouse where they will be

    individually inspected and then passed to the

    engineering Department. At this point, programmers will

    upload the interface and maps, and will check that the

    devices perform at their optimal level. Finally, the devices

    will be carefully packed along with their accessories and

    stored at the warehouse until shipment. Once the Sales

    Department receives an order for the product, NavAssist will

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

    responsible and liable for the product until it is delivered to

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

    end user, a NavAssists employee will contact the customer

    via telephone and ensure full customer satisfaction. If the

    customer requires assistance in how to further use the

    device, one of our programmers will proficiently guide them

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

    returned to the warehouse via UPS at the expense of

    NavAssist. NavAssists employees will also contact

    customers periodically concerning updates of maps and

    improvements in software that will be conveniently available

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    Phase 1

    Phase 2

    Phase 3

    in two forms: download at the NavAssist website, or

    delivery of CD Software upon request.

    NavAssist will provide a one-year manufacturer

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

    the device will be returned to ECCO Design for inspection

    and/or replacement.

    Expansion

    In Phase one, the first year of operations, NavAssist

    is expected to acquire eight percent of the employed blind

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

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

    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

    $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

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

    boundaries as far as Louisiana.

    We predict sales will climb in each region until we

    40% of our target market. When it appears we are

    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.

    Beyond our five year strategy, we have considered the idea

    of opening additional offices in the southeast region and

    opening up an avenue for online orders.

    Marketing

    NavAssist will have a unique marketing strategy

    through different channels of communication that will help

    the visually impaired learn about its product. Mass

    advertising through media such as television will be of little

    use to NavAssist since its target market possesses

    distinctive characteristics. Therefore, NavAssists

    marketing plan will focus on providing the most information

    about the benefits of the product and service while forming

    a bridge of a lasting relationship with the customer. This will

    be achieved through the following ways:

    Expos

    NavAssist will design expos to specifically give

    potential customers the opportunity to test out the product

    and see how they can interact with their surroundings.

    Also, NavAssist will provide substantial information about its

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

    marketing technique allows for personal interaction with the

    clients, allowing them to express their inquiries about the

    product and service, and the restrictions that may impede

    them from purchasing the product. Expos provide

    NavAssist with a first-hand-experience in identifying specific

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    customer needs and enables it to adapt its marketing

    strategies in a timely manner. Expos will be held every

    quarter during the year to increase the awareness of

    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

    blind. Through these mediums, NavAssist intends to

    educate the blind population about the benefits that they

    can receive by using its product. Contact information, as

    well as a request forms, will be endorsed to the literature

    and digital demos for potential customers that desire to

    know more about the product and service.

    Word-of-mouth

    NavAssist recognizes that blind people usually have

    strong and bonding relationships with one another. That is

    why NavAssist will focus on building long lasting

    relationships with customers. Being helpful and assertive is

    a priority for NavAssist. With this strategy NavAssist is

    confident that word-of-mouth will spread throughout its

    networks of friendships and acquaintances.

    NavAssists Web Page

    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.

    Critical Risks

    Due to the exclusivity of our market,

    NavAssist has potential risks which are seen in any startup

    business plus others specific to our situation. We have

    forecasted these concerns, and we have devised brief plans

    with which to counter act these potential threats. It is

    essential for our success to implement a corrective strategy

    before a potential threat becomes a problem with financial

    repercussions. It is our goal to turn weaknesses into

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    strengths and threats into opportunities. We distinguish

    internal risks from external risks below.

    Internal Risks

    Lack of Experience in a Small Market

    In the relatively small visually impaired market, it is

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

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

    research in their market. We have greatly reduced this

    threat by gathering information from organizations,

    institutions, and other businesses established for the

    visually impaired. They have explored what works and what

    fails: we have and will continue learning from that.

    Obviously, there is no substitute for first hand experience,

    but our constant attentiveness to current trends in the

    market should offset a huge hit.

    Staffing Risks

    Our sales will be sent to a unique set of customers.

    It will be very important to obtain the ability to showcase

    the device effectively to the visually impaired. Some of the

    most popular selling techniques will fail to develop a desire

    for the product among the visually impaired. There are also

    certain common courtesies one should be aware of amongst

    the visually impaired. When our sales force is promoting

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

    respect the customers and bring product appeal to life for

    them. To meet this need we highly encourage prior

    experience with visually impaired when hiring staff. We will

    also have periodic in house seminars to keep staff and

    managers sharp on selling strategies.

    Over Estimation of Market Demand

    We feel we have forecasted sales conservatively, but

    have considered the threat of great market resistance to the

    technology. After research, we have found expense and

    lack of training to be unrivaled deterrents in the acceptance

    of similar devices. We are prepared to adjust prices to

    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.

    Product familiarity is the key to wide distribution of our

    product.

    External Risks

    Competition Offering

    New and existing companies may be able to offer the

    product at a reduced price. As price is a major factor in the

    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.

    Costs Increase

    The cost of our product is definitely vulnerable to

    fluctuation. An increase in production costs would directly

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

    incur the extra costs without raising the price significantly if

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

    gains credibility, we expect that our market will be

    accepting of a price increase.

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    Cash Flow Statement

    2008 2009 2010 2011 2012

    Net CashFlow from Operating ActivitiesNet Income $49,855 $326,495 $1,002,040 $2,052,895 $2,398,240

    Add: Depreciation Expense 21,000 48,000 69,000 69,000 69,000

    Less: Increase Inventory (279,840) (16,960) (312,700) (291,500) (106,000)Increase Supplies (1,000) (1,000) (1,000) 0 0

    Cash Provided by/Used for Operations (209,985) 356,535 757,340 1,830,395 2,361,240

    Cash Flows from Investing Activities

    Payment for Purchase of Equipment (75,000) (75,000) (75,000) 0 0Payment for Purchase of Furniture (60,000) (60,000) (60,000) 0 0Cash Provided by/Used for Investing Activities (135,000) (135,000) (135,000) 0 0

    Cash Flows from Financing Activities

    Received from Capital Contributions 625,000 0 0 0 0

    Cash Provided by Financing Activities 625,000 0 0 0 0

    Net Increase in Cash 280,015 221,535 622,340 1,830,395 2,361,240Beginning Cash Balance 0 280,015 501,550 1,123,890 2,954,285Ending Cash Balance $280,015 $501,550 $1,123,890 $2,954,285 $5,315,525

    NavAssist, Inc.Statement of Cash Flow

    For the Years Ended December 31, 2008-2012

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    Break-Even Analysis

    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.

    0

    200,000

    400,000

    600,000

    800,000

    1,000,000

    1,200,000

    1,400,000

    1,600,000

    0

    250

    500

    750

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    1750

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    Units Sold

    R

    e

    v

    e

    n

    ue

    s

    Fixed Costs

    Variable Costs

    Total Revenues Profit

    Total Costs

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    2008 2009 2010 2011 2012

    Sales $1,320,000 $3,360,000 $6,900,000 $10,200,000 $11,400,000(Cost Of Goods Sold) (466,400) (1,187,200) (2,438,000) (3,604,000) (4,028,000)

    Gross Margin 853,600 2,172,800 4,462,000 6,596,000 7,372,000Expenses:

    Advertising 160,400 404,900 949,400 1,193,900 1,338,400Licensing fee 5,400 5,400 5,400 5,400 5,400Product development 113,000 36,000 36,000 36,000 36,000Rent 48,000 132,000 200,000 208,000 212,000Utilities 9,600 24,000 12,000 14,000 14,000Supplies 1,700 6,600 9,200 9,800 10,000Depreciation 21,000 48,000 69,000 69,000 69,000Wages 192,000 455,000 650,000 650,000 650,000Salaries 159,800 390,600 644,400 741,600 777,600Commisions 66,000 168,000 345,000 510,000 570,000

    (Total Expenses) (776,900) (1,670,500) (2,920,400) (3,437,700) (3,682,400)

    Earnings Before Interest & Taxes 76,700 502,300 1,541,600 3,158,300 3,689,600Taxes (35%) (26,845) (175,805) (539,560) (1,105,405) (1,291,360)

    Net Income $49,855 $326,495 $1,002,040 $2,052,895 $2,398,240

    For the Years Ended December 31, 2008

    NavAssist, Inc.Income Statement

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    Balance Sheet

    2008 2009 2010 2011 2012Assets:Current Assets

    Cash 280,015$ 501,550$ 1,123,890$ 2,954,285$ 5,315,525$Inventory 279,840 296,800 609,500 901,000 1,007,000Office Supplies 1,000 2,000 3,000 3,000 3,000

    Property and EquipmentFurniture 60,000 120,000 180,000 180,000 180,000Accummulated Depreciation-Furniture (6,000) (24,000) (48,000) (72,000) (96,000)Equipment 75,000 150,000 225,000 225,000 225,000Accummulated Depreciation-Equipment (15,000) (45,000) (90,000) (135,000) (180,000)

    Total Assets: $674,855 $1,001,350 $2,003,390 $4,056,285 $6,454,525

    Liabilities:Stockholder's Equity:

    Contributed Capital $625,000 $625,000 $625,000 $625,000 $625,000Retained Earnings 49,855 376,350 1,378,390 3,431,285 5,829,525

    Total Liabilities and Stockholder's Equity $674,855 $1,001,350 $2,003,390 $4,056,285 $6,454,525

    NavAssist, Inc.Balance Sheet

    December 31, 2008-2012

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    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 years 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.

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

    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.

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

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    Latitude

    Longitude

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

    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 doesnt 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

    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

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    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.

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    Appendix B (Personnel)

    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 4Staff 6 6 6 6 8 8 8 8 8 8 9 14

    TX-Dal ManagerStaff

    TX-Hou ManagerStaff

    Office Type Jan '09 Feb '09 Mar'09 Apr '09 May '09 Jun '09 Jul '09 Aug '09 Sep '09 Oct '09 Nov '09 Dec '09

    AR Manager 4 4 4 4 4 4 4 4 4 4 4 4Staff 9 9 9 9 9 9 9 9 9 9 11 16

    TX-Dal Manager 3 3 3 3 3 3 3 3 3 3 3 3Staff 8 8 8 8 8 8 8 8 8 8 10 10

    TX-Hou ManagerStaff

    Office Type 2010 2011 2012

    AR Manager 4 4 4Staff 12 12 12

    TX-Dal Manager 3 3 3

    Staff 12 12 12

    TX-Hou Manager 3 3 3Staff 10 12 12

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    Appendix C (Sales Forecast)

    2008 2009 2010 2011 2012Total Sales $1,320,000 $3,360,000 $6,900,000 $10,200,000 $11,400,000Arkansas 1,320,000 1,920,000 2,940,000 3,720,000 4,080,000Texas-Dallas 0 1,440,000 2,160,000 3,360,000 3,720,000Texas-Houston 0 0 1,800,000 3,120,000 3,600,000

    Total # customers 2,200 5,600 11,500 17,000 19,000# Customers Arkansas 2,200 3,200 4,900 6,200 6,800# Customers Texas-Dallas 0 2,400 3,600 5,600 6,200# Customers Texas-Houston 0 0 3,000 5,200 6,000

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