fitzpatrick timothy healthy_soles_capstone_presentation
TRANSCRIPT
WALKING – FITNESS – HEALTH – EXERCISE – RUNNING - COMFORT
Steven SpenceGarrett GoodloeTimothy Fitzpatrick
HEALTHY SOLES
™ INTRO
DUCTIO
N
INTRODUCTION
HEALTHY SOLES
™ INTRO
DUCTIO
NIntroduction
HEALTHY SOLES™ PRESENTATION
Topics to be covered include:1. PRODUCT – Tim Fitzpatrick2. COMPANY – Tim Fitzpatrick3. FINANCIALS – Steven Spence4. MARKETING – Garrett Goodloe5. LICENSING – Garrett Goodloe6. QUESTIONS – Open to All
HEALTHY SOLES
™ PRODU
CT
PRODUCT
HEALTHY SOLES
™ PRODU
CTProduct Overview
The Healthy Soles™ product family is a combination of three key elements that will provide a comfortable and interactive experience to the user.
1. An electronic shoe insole – 2. A mobile app – 3. A supporting web portal –
HEALTHY SOLES
™ PRODU
CTProduct Overview
Measure and record data about a wearer's physical activity such as the number of steps taken, distance, impact forces, calories burned, and body weight.
Provide a comfortable walking or running insole that entices the user to increase overall activity.
Promote health and fitness support through social interactions using blogging and networking.
HEALTHY SOLES
™ PRODU
CT
“The Intelligent Insole” • Is made up of a durable polyplastic liner sandwiched with flexible circuitry that has been designed for maximum comfort.• Powered by a micro battery, 12 contact point sensors measure data and send it to the cell phone app through Bluetooth technology.
How it Works
HEALTHY SOLES
™ PRODU
CT
“The Phone App” • Compatible with the latest smart phones (iPhone™, Android™, Windows™) that will instantly record data and give the user immediate feedback based upon their activity.• The app then automatically uploads the data to your pre- assigned web portal.
How it Works
“Dynamic Analysis Software”
• Specially designed software will allow you to map your progress of weight loss, cardiovascular health, and calories burned. (Reports that you can print or email directly to your doctor.)
HEALTHY SOLES
™ PRODU
CT
“Supporting Web portal” - That will provide in depth data analysis sent directly from the phone app. 1. This portal will include easy to use analysis tools in the
form of charts, tables and graphs.2. Links to related Health and fitness industries and social
blogging networks to compare or coordinate your activity with others.
How it Works
Q4 Q1 `11 Q2 Q3 Q4 Q1 `12 Q2
Plan B(if needed)
Market and sale
Product testing
Software development
Develop marketing material
Research and design
Preliminary parts list
Rough design
Develop business plan
Milestones
MilestonesHEALTHY SO
LES
™ FINAN
CIALS
The following are the key milestones for the first operations: 1.Finish hardware design by May 15, 2011.2.Start product testing on August 15, 2011.3.Finish software design by December 15, 2011.4.Finish testing of software and hardware by December 31, 2011.5.Begin sales and marketing campaign early 2012.
HEALTHY SOLES
™ FINAN
CIALS
Table 6a: Milestones…(Page 15)
Milestone Start Date End Date Budget Manager DepartmentDevelop business plan 9/20/2010 12/1/2010 $0 All AllRough design 1/7/2011 3/15/2011 $0 Spence,
FitzpatrickR&D
Preliminary parts list 1/7/2011 3/15/2011 $3,000 Spence, Fitzpatrick
R&D
Research and design 1/7/2011 7/15/2011 $0 Spence, Fitzpatrick
R&D
Develop marketing material
3/1/2011 5/1/2011 $500 Goodloe S&M
Software development 5/15/2011 12/15/2011 $3,000 Spence, Fitzpatrick
R&D
Product testing 8/15/2011 12/31/2011 $500 All AllMarket and sale 12/15/2011 7/1/2012 $0 All AllPlan B(if needed) 7/2/2012 8/1/2012 $0 All AllTotals $7,000
HEALTHY SOLES
™ COM
PANY
Company
COMPANY
HEALTHY SOLES
™ COM
PANY
About Healthy Soles™
BRIEF SUMMARY:
Healthy Soles™ - will be a private start-up venture located in Las Cruces, New Mexico. Its planned inception is in January 2011.• 3 founders are all experienced MBA professionals with engineering, electronics and small business backgrounds. • The company will seek to license its product and technology to the market leader(s) in the shoe insole industry.
Healthy Soles™ will be a private, closely held, for profit, S corporation with articles of incorporation being filed in the state of Delaware.
• Approximately $50,000 will be raised from the founders of the company for initial capital investment.• Buy and sell agreements will be in place to avoid any potential problems that may arise due to shareholders withdrawing from corporate ownership.• Insurance Policies will be taken out for the owners.
Business FormationHEALTHY SO
LES
™ COM
PANY
Because Health Soles ™ is a small company, the management will have cross-functional roles in the company.
1. Steven Spence - Research and Design, General and Administrative
2. Timothy Fitzpatrick - Research and Design, General and Administrative
3. Garrett Goodloe - Sales and Marketing, General and Administrative
Management StructureHEALTHY SO
LES
™ COM
PANY
The company will evolve through 3 growth stages:1. Research and Development – Prototype and
technology development. (Legal attorney for patent- pending will be secured)
2. Sales and Marketing – Seeking interest in licensing agreements through strategic partners. (Direct contact via face to face meetings)
3. Viral organization – Outsourcing primary business functions through professional services. (Accounting and Legal representation for contracts)
Organizational FunctionHEALTHY SO
LES
™ COM
PANY
HEALTHY SOLES
™ FINAN
CIAL’S
FINANCIALS
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Expenses Assets Investment Loans
Start-up
• $50,000 will be raised from the founders of the company. • There are no plans at this time to approach outside investors
or lenders for additional funding or partnerships
Startup HEALTHY SO
LES
™ FINAN
CIALS
Initial Startup:
HEALTHY SOLES
™ FINAN
CIALS
Table 2: Start-up Finances…………………………..Page 4Start-up ExpensesLegal $5,000 Office stationary $500 Promotional material (brochures, posters, etc.) $500 Development hardware $7,500 Development software $2,500 Website development $1,000 Computers $3,000 Utilities/Services $200 Total Start-up Expenses $20,200
Start-up AssetsCash Required $10,000 Start-up Inventory $0 Other Current Assets $0 Long-term Assets $10,500 Total Assets $20,500
Total Requirements $40,700
Start-up Requirements:
HEALTHY SOLES
™ FINAN
CIALSTable 8: Start-up Funding………………………….(Page 18)Start-up Expenses to Fund $20,200 Start-up Assets to Fund $20,500 Total Funding Required $40,700 Assets Non-cash Assets from Start-up $10,500 Cash Requirements from Start-up $10,000 Additional Cash Raised $9,300 Cash Balance on Starting Date $19,300 Total Assets $29,800 Liabilities and CapitalLiabilitiesCurrent Borrowing $0 Long-term Liabilities $0 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $0 CapitalPlanned InvestmentOwner $50,000 Investor $0 Additional Investment Requirement $0 Total Planned Investment $50,000 Loss at Start-up (Start-up Expenses) ($20,200)Total Capital $29,800 Total Capital and Liabilities $29,800 Total Funding $50,000
HEALTHY SOLES
™ FINAN
CIALSPro Forma Profit and Loss Year 1 Year 2 Year 3Sales $0 $179,400 $472,500 Direct Cost of Sales $0 $0 $0 Other Costs of Sales $0 $0 $0 Total Cost of Sales $0 $0 $0 Gross Margin $0 $179,400 $472,500 Gross Margin % 0.00% 100.00% 100.00% Expenses Payroll $0 $88,328 $148,190 Marketing/Promotion $500 $9,600 $35,000 Depreciation $1,680 $4,265 $6,075 Research and Design $6,000 $12,480 $50,000 Legal $5,000 $4,000 $6,000 Rent $0 $18,000 $20,000 Utilities $2,400 $3,300 $4,000 Insurance $0 $6,000 $12,000 Payroll Taxes $0 $13,514 $22,673 Other $500 $0 $0 Total Operating Expenses $16,080 $159,487 $303,938
Profit Before Interest and Taxes ($16,080) $19,913 $168,562 EBITDA ($14,400) $24,178 $174,637 Interest Expense $0 $0 $0 Taxes Incurred $0 $5,974 $50,569 Net Profit ($16,080) $13,939 $117,993 Net Profit/Sales 0.00% 7.77% 24.97%
Year -1 Monthly ProfitHEALTHY SO
LES
™ FINAN
CIALS($8,000)
($7,000)
($6,000)
($5,000)
($4,000)
($3,000)
($2,000)
($1,000)
$0
Month 1 Month 2
Month 3 Month 4
Month 5 Month 6
Month 7 Month 8
Month 9 Month 10
Month 11 Month 12
Profit Monthly
There will be no profit during Start-up; R&D stage
Year -2 Monthly ProfitHEALTHY SO
LES
™ FINAN
CIALS
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
($1,000)
($2,000)
($3,000)
Month 13 Month 14
Month 15 Month 16
Month 17 Month 18
Month 19 Month 20
Month 21 Month 22
Month 23 Month 24
Profit Monthly (Planned)
Profits are projected during Sales and Marketing stage
HEALTHY SOLES
™ FINAN
CIALS APPENDIX 9
Pro Forma Profit and Loss Mon-1 Mon-2 Mon-3 Mon-4 Mon-5 Mon-6 Mon-7 Mon-8 Mon-9 Mon-
10Mon-
11 Mon-12 Year-1 Year-2 Year-3Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $179,400 $472,500 Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Gross Margin $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $179,400 $472,500 Gross Margin % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $88,328 $148,190 Marketing/Promotion $500 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $500 $9,600 $35,000
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,680 $1,680 $4,265 $6,075 Research and Design $3,000 $0 $0 $0 $3,000 $0 $0 $0 $0 $0 $0 $0 $6,000 $12,480 $50,000
Legal $5,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000 $4,000 $6,000 Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $18,000 $20,000 Utilities $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $2,400 $3,300 $4,000 Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $6,000 $12,000 Payroll Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $13,514 $22,673 Other $0 $0 $0 $0 $0 $0 $0 $500 $0 $0 $0 $0 $500 $0 $0 Total Operating Expenses $8,700 $200 $200 $200 $3,200 $200 $200 $700 $200 $200 $200 $1,880 $16,080 $159,487 $303,938
Profit Before Interest and Taxes
($8,700) ($200) ($200) ($200) ($3,200) ($200) ($200) ($700) ($200) ($200) ($200) ($1,880) ($16,080) $19,913 $168,562
EBITDA ($8,700) ($200) ($200) ($200) ($3,200) ($200) ($200) ($700) ($200) ($200) ($200) ($200) ($14,400) $24,178 $174,637 Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,974 $50,569 Net Profit ($8,700) ($200) ($200) ($200) ($3,200) ($200) ($200) ($700) ($200) ($200) ($200) ($1,880) ($16,080) $13,939 $117,993 Net Profit/Sales 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 7.77% 24.97%
HEALTHY SOLES
™ FINAN
CIALS APPENDIX 10
Pro Forma Profit and Loss Mon-13 Mon-14 Mon-15 Mon-16 Mon-17 Mon-18 Mon-19 Mon-20 Mon-21 Mon-22 Mon-23 Mon-24 Year-2 Year-3
Sales $2,300 $4,600 $6,900 $9,200 $11,500 $13,800 $16,100 $18,400 $20,700 $23,000 $25,300 $27,600 $179,400
$472,500
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Gross Margin $2,300 $4,600 $6,900 $9,200 $11,500 $13,800 $16,100 $18,400 $20,700 $23,000 $25,300 $27,600 $179,400
$472,500
Gross Margin % 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Payroll $3,750 $3,750 $3,750 $3,750 $9,166 $9,166 $9,166 $9,166 $9,166 $9,166 $9,166 $9,166 $88,328 $148,190
Marketing/Promotion $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $9,600 $35,000
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $4,265 $4,265 $6,075 Research and Design $0 $0 $0 $0 $0 $0 $2,080 $2,080 $2,080 $2,080 $2,080 $2,080 $12,480 $50,000
Legal $0 $1,000 $0 $0 $1,000 $0 $0 $1,000 $0 $0 $1,000 $0 $4,000 $6,000 Rent $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $18,000 $20,000 Utilities $250 $250 $250 $250 $250 $250 $300 $300 $300 $300 $300 $300 $3,300 $4,000 Insurance $0 $0 $0 $0 $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $6,000 $12,000 Payroll Taxes $574 $574 $574 $574 $1,402 $1,402 $1,402 $1,402 $1,402 $1,402 $1,402 $1,402 $13,514 $22,673 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Operating Expenses $6,874 $7,874 $6,874 $6,874 $14,118 $13,118 $16,248 $17,248 $16,248 $16,248 $17,248 $20,513 $159,48
7 $303,93
8
Profit Before Interest and Taxes ($4,574) ($3,274) $26 $2,326 ($2,618) $682 ($148) $1,152 $4,452 $6,752 $8,052 $7,087 $19,913 $168,56
2
EBITDA ($4,574) ($3,274) $26 $2,326 ($2,618) $682 ($148) $1,152 $4,452 $6,752 $8,052 $11,352 $24,178 $174,637
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taxes Incurred ($1,372) ($982) $8 $698 ($786) $204 ($45) $345 $1,335 $2,025 $2,415 $2,126 $5,974 $50,569 Net Profit ($3,202) ($2,292) $18 $1,628 ($1,833) $477 ($104) $806 $3,116 $4,726 $5,636 $4,961 $13,939 $117,993
Net Profit/Sales -139.20% -49.82% 0.27% 17.70% -15.94% 3.46% -0.65% 4.38% 15.05% 20.55% 22.28% 17.97% 7.77% 24.97%
HEALTHY SOLES
™ FINAN
CIALSTable 8.b Pro Forma Cash Flow...(p.22) Year 1 Year 2 Year 3Cash Received $0 $0 $0Cash from Operations $0 $0 $0Cash Sales $0 $179,400 $472,500 Subtotal Cash from Operations $0 $179,400 $472,500 Sales Tax, VAT, HST/GST Received $0 $10,764 $28,350 New Current Borrowing New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $0 $190,164 $500,850 Expenditures $0 $0 $0Expenditures from Operations $0 $0 $0Cash Spending $0 $88,328 $148,190 Bill Payments $14,207 $64,160 $192,685 Subtotal Spent on Operations $14,207 $152,488 $340,875 Sales Tax, VAT, HST/GST Paid Out $0 $10,764 $28,350 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $5,000 $6,000 Dividends $0 $0 $0 Subtotal Cash Spent $14,207 $168,252 $375,225 Net Cash Flow ($14,207) $21,912 $125,625 Cash Balance $5,093 $27,005 $152,631
HEALTHY SOLES
™ FINAN
CIALS
Net Cash Flow
Cash Balance
$0
$3,000
$6,000
$9,000
$12,000
$15,000
$18,000
($3,000)
($6,000)
Month 1 Month 2
Month 3 Month 4
Month 5 Month 6
Month 7 Month 8
Month 9 Month 10
Month 11 Month 12
Cash
Cash Flow Statement
First year cash outflow for start-up and R&D expenses:
HEALTHY SOLES
™ FINAN
CIALS
Net Cash Flow
Cash Balance
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Month 13 Month 14
Month 15 Month 16
Month 17 Month 18
Month 19 Month 20
Month 21 Month 22
Month 23 Month 24
Cash 2nd Year (Planned)
Cash Flow Statement 2nd Year
Projected cash flow increase for market ready product:
HEALTHY SOLES
™ FINAN
CIALS APPENDIX 5
Pro Forma Cash Flow Mon-1 Mon-2 Mon-3 Mon-4 Mon-5 Mon-6 Mon-7 Mon-8 Mon-9 Mon-10 Mon-11 Mon-12 Year-1 Year-2 Year-3
Cash Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $179,400 $472,500
Subtotal Cash from Operations $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $179,400 $472,500
Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,764 $28,350
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $190,164 $500,850
Cash Spending $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $88,328 $148,190
Bill Payments $290 $8,417 $200 $200 $300 $3,100 $200 $217 $683 $200 $200 $200 $14,207 $64,160 $192,685
Subtotal Spent on Operations $290 $8,417 $200 $200 $300 $3,100 $200 $217 $683 $200 $200 $200 $14,207 $152,488 $340,875
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,764 $28,350
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase LT Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000 $6,000 Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $290 $8,417 $200 $200 $300 $3,100 $200 $217 $683 $200 $200 $200 $14,207 $168,252 $375,225
Net Cash Flow ($290) ($8,417) ($200) ($200) ($300) ($3,100) ($200) ($217) ($683) ($200) ($200) ($200) ($14,207) $21,912 $125,625
Cash Balance $19,010 $10,593 $10,393 $10,193 $9,893 $6,793 $6,593 $6,377 $5,693 $5,493 $5,293 $5,093 $5,093 $27,005 $152,631
HEALTHY SOLES
™ FINAN
CIALS APPENDIX 6
Pro Forma Cash Flow Mon-13 Mon-14
Mon-15
Mon-16 Mon-17 Mon-18 Mon-19 Mon-20 Mon-21 Mon-22 Mon-23 Mon-24 Year-2 Year-3
Cash Sales $2,300 $4,600 $6,900 $9,200 $11,500 $13,800 $16,100 $18,400 $20,700 $23,000 $25,300 $27,600 $179,400 $472,500
Subtotal Cash from Operations $2,300 $4,600 $6,900 $9,200 $11,500 $13,800 $16,100 $18,400 $20,700 $23,000 $25,300 $27,600 $179,400 $472,500
Sales Tax, VAT, HST/GST Received $138 $276 $414 $552 $690 $828 $966 $1,104 $1,242 $1,380 $1,518 $1,656 $10,764 $28,350
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $2,438 $4,876 $7,314 $9,752 $12,190 $14,628 $17,066 $19,504 $21,942 $24,380 $26,818 $29,256 $190,164 $500,850
Cash Spending $3,750 $3,750 $3,750 $3,750 $9,166 $9,166 $9,166 $9,166 $9,166 $9,166 $9,166 $9,166 $88,328 $148,190
Bill Payments $252 $1,798 $3,141 $3,155 $3,833 $4,167 $4,253 $7,084 $8,428 $8,441 $9,154 $10,455 $64,160 $192,685
Subtotal Spent on Operations $4,002 $5,548 $6,891 $6,905 $12,999 $13,333 $13,419 $16,250 $17,594 $17,607 $18,320 $19,621 $152,488 $340,875
Sales Tax, VAT, HST/GST Paid Out $138 $276 $414 $552 $690 $828 $966 $1,104 $1,242 $1,380 $1,518 $1,656 $10,764 $28,350
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000 $5,000 $6,000
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $4,140 $5,824 $7,305 $7,457 $13,689 $14,161 $14,385 $17,354 $18,836 $18,987 $19,838 $26,277 $168,252 $375,225
Net Cash Flow ($1,702) ($948) $9 $2,295 ($1,499) $467 $2,681 $2,150 $3,106 $5,393 $6,980 $2,979 $21,912 $125,625
Cash Balance $3,392 $2,444 $2,452 $4,748 $3,249 $3,716 $6,397 $8,547 $11,653 $17,047 $24,026 $27,005 $27,005 $152,631
HEALTHY SOLES
™ FINAN
CIALSTable 8.c Pro Forma Balance Sheet…(p24) Year 1 Year 2 Year 3Assets Current Assets Cash $5,093 $27,005 $152,631 Inventory $0 $0 $0 Other Current Assets $0 $0 $0 Total Current Assets $5,093 $27,005 $152,631 Long-term Assets Long-term Assets $10,500 $15,500 $21,500 Accumulated Depreciation $1,680 $5,945 $12,020 Total Long-term Assets $8,820 $9,555 $9,480 Total Assets $13,913 $36,560 $162,111 Liabilities and Capital Current Liabilities Accounts Payable $193 $8,901 $16,458 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $193 $8,901 $16,458 Long-term Liabilities $0 $0 $0 Total Liabilities $193 $8,901 $16,458 Paid-in Capital $50,000 $50,000 $50,000 Retained Earnings ($20,200) ($36,280) ($22,341) Earnings ($16,080) $13,939 $117,993 Total Capital $13,720 $27,659 $145,652 Total Liabilities and Capital $13,913 $36,560 $162,111 Net Worth $13,720 $27,659 $145,652
HEALTHY SOLES
™ FINAN
CIALS APPENDIX 7
Pro Forma Balance Sheet Begin Mon-1 Mon-2 Mon-3 Mon-4 Mon-5 Mon-6 Mon-7 Mon-8 Mon-9 Mon-10 Mon-11 Mon-12 Year-1 Year-2 Year-3
Cash $19,300 $19,010 $10,593 $10,393 $10,193 $9,893 $6,793 $6,593 $6,377 $5,693 $5,493 $5,293 $5,093 $5,093 $27,005 $152,631
Total Current Assets $19,300 $19,010 $10,593 $10,393 $10,193 $9,893 $6,793 $6,593 $6,377 $5,693 $5,493 $5,293 $5,093 $5,093 $27,005 $152,631
Long-term Assets $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $15,500 $21,500
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,680 $1,680 $5,945 $12,020
Total Long-term Assets $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $8,820 $8,820 $9,555 $9,480
Total Assets $29,800 $29,510 $21,093 $20,893 $20,693 $20,393 $17,293 $17,093 $16,877 $16,193 $15,993 $15,793 $13,913 $13,913 $36,560 $162,111
Accounts Payable $0 $8,410 $193 $193 $193 $3,093 $193 $193 $677 $193 $193 $193 $193 $193 $8,901 $16,458
Subtotal Current Liabilities $0 $8,410 $193 $193 $193 $3,093 $193 $193 $677 $193 $193 $193 $193 $193 $8,901 $16,458
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $8,410 $193 $193 $193 $3,093 $193 $193 $677 $193 $193 $193 $193 $193 $8,901 $16,458
Paid-in Capital $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Retained Earnings ($20,200) ($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($20,200
)($36,280
)($22,341
)
Earnings $0 ($8,700) ($8,900) ($9,100) ($9,300) ($12,500)
($12,700)
($12,900)
($13,600)
($13,800)
($14,000)
($14,200)
($16,080)
($16,080) $13,939 $117,993
Total Capital $29,800 $21,100 $20,900 $20,700 $20,500 $17,300 $17,100 $16,900 $16,200 $16,000 $15,800 $15,600 $13,720 $13,720 $27,659 $145,652
Total Liabilities and Capital $29,800 $29,510 $21,093 $20,893 $20,693 $20,393 $17,293 $17,093 $16,877 $16,193 $15,993 $15,793 $13,913 $13,913 $36,560 $162,111
Net Worth $29,800 $21,100 $20,900 $20,700 $20,500 $17,300 $17,100 $16,900 $16,200 $16,000 $15,800 $15,600 $13,720 $13,720 $27,659 $145,652
HEALTHY SOLES
™ FINAN
CIALS APPENDIX 8
Pro Forma Balance Sheet Year -2 Mon-13 Mon-14 Mon-15 Mon-16 Mon-17 Mon-18 Mon-19 Mon-20 Mon-21 Mon-22 Mon-23 Mon-24 Year-2 Year-3
Cash $3,392 $2,444 $2,452 $4,748 $3,249 $3,716 $6,397 $8,547 $11,653 $17,047 $24,026 $27,005 $27,005 $152,631 Inventory $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Current Assets $3,392 $2,444 $2,452 $4,748 $3,249 $3,716 $6,397 $8,547 $11,653 $17,047 $24,026 $27,005 $27,005 $152,631 Long-term AssetsLong-term Assets $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $15,500 $15,500 $21,500
Accumulated Depreciation $1,680 $1,680 $1,680 $1,680 $1,680 $1,680 $1,680 $1,680 $1,680 $1,680 $1,680 $5,945 $5,945 $12,020
Total Long-term Assets $8,820 $8,820 $8,820 $8,820 $8,820 $8,820 $8,820 $8,820 $8,820 $8,820 $8,820 $9,555 $9,555 $9,480
Total Assets $12,212 $11,264 $11,272 $13,568 $12,069 $12,536 $15,217 $17,367 $20,473 $25,867 $32,846 $36,560 $36,560 $162,111
Liabilities and Capital Month 13
Month 14
Month 15
Month 16
Month 17
Month 18
Month 19
Month 20
Month 21
Month 22
Month 23
Month 24 Year 2 Year 3
Accounts Payable $1,693 $3,037 $3,027 $3,694 $4,028 $4,018 $6,803 $8,147 $8,137 $8,804 $10,148 $8,901 $8,901 $16,458 Current Borrowing $0 $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 $0
Subtotal Current Liabilities $1,693 $3,037 $3,027 $3,694 $4,028 $4,018 $6,803 $8,147 $8,137 $8,804 $10,148 $8,901 $8,901 $16,458
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Liabilities $1,693 $3,037 $3,027 $3,694 $4,028 $4,018 $6,803 $8,147 $8,137 $8,804 $10,148 $8,901 $8,901 $16,458 Paid-in Capital $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 Retained Earnings ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($36,280) ($22,341)Earnings ($3,202) ($5,493) ($5,475) ($3,847) ($5,679) ($5,202) ($5,306) ($4,500) ($1,384) $3,342 $8,978 $13,939 $13,939 $117,993 Total Capital $10,518 $8,227 $8,245 $9,874 $8,041 $8,518 $8,414 $9,220 $12,336 $17,062 $22,698 $27,659 $27,659 $145,652
Total Liabilities and Capital $12,212 $11,264 $11,272 $13,568 $12,069 $12,536 $15,217 $17,367 $20,473 $25,867 $32,846 $36,560 $36,560 $162,111
Net Worth $10,518 $8,227 $8,245 $9,874 $8,041 $8,518 $8,414 $9,220 $12,336 $17,062 $22,698 $27,659 $27,659 $145,652
3-Year Projected FiguresHEALTHY SO
LES
™ FINAN
CIALS
Sales
Gross Margin
Net Profit
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
Year 1 Year 2 Year 3
Highlights
HEALTHY SOLES
™ MARKETIN
G
MARKETING
SWOT AnalysisHEALTHY SO
LES
™ MARKETIN
G
S
W
O
T
Strengths –• Experienced personnel• Patent, trademark & copyright• Low cost structure• Innovative product
Threats –• Competitive industry • Substitute products• Short product life cycle• Weak economy
Opportunities –• Rapid market growth• Dynamic changing industry• First to market product• International market
Weaknesses –• Limited sustainability• Limited financial resources• Narrow product line• Unknown technology
Market DemographicsHEALTHY SO
LES
™ MARKETIN
G
Athletic
Women
Men
Other
Market Analysis (Pie)
The U.S. Footwear industry consists of 100 manufacturers, 1,500 wholesalers, and 30,000 retail stores.The target demographic segment would include:a) Full-time employed workers with average income of
$25,000 and above.b) Median age range from 18-45.c) Health and fitness active.d) Socially interactive.e) Technology adept.f) Fashion conscious.
(According to US Census Bureau Statistics, approx 139,226,507 people)
Baby Boomers are trending toward technology based clothing and accessory products.
Boots, shoes, and accessories are still trending and make a “statement” about the individual wearer.
Consumer electronics are becoming more integrated into lifestyle choices such as health & fitness.
Sports and activity based entertainment products are continuing to outperform in sales.
Market AnalysisHEALTHY SO
LES
™ MARKETIN
G
The latest trends in technology, shoes, and apparel:
Healthy Soles™ will offer its technology to suppliers of insole markets who are:• Willing to license to expand their product line.• Are interested in working with new technology.• Looking to have a competitive edge in industry.• Seek partnerships with focused suppliers.
Market TargetHEALTHY SO
LES
™ MARKETIN
G
Shoe and insole manufacturers:
HEALTHY SOLES
™ LICENSIN
G
LICENSING
Licensing OverviewHEALTHY SO
LES
™ LICENSIN
G
Healthy Soles™ success through licensing:
• Licensing requires relatively little capital up front.• Establish Healthy Soles™ in a strategic alliance,
rather than competition with insole manufacturers. • Accelerate the process by which the technology
becomes accepted into the industry. • Would gain opportunities in open markets
worldwide through association with cooperative partnership.
Negotiating an initial agreement of a flat fee per period for assignment of the technology.
The size of the flat fee and minimum sales revenue target would be negotiated to allow a strong inducement for the licensee to integrate the technology quickly through the firm’s product line.(Sales and revenue projections have been based upon fees of $1.00 per unit of hardware and $0.50 per unit of software).
Licensing RevenuesHEALTHY SO
LES
™ LICENSIN
G
Licensing royalties will be realized through:
Analyze the economic advantage of manufacturing the insole under the Healthy Soles™ branding. This would require -1. Large amounts of venture capital through equity
partners or loans.2. Outsourcing the manufacturing of the product.3. Outsourcing selling and distributing the product.4. Entrance into a highly competitive arena with the
current insole manufacturers.
Manufacturing OptionHEALTHY SO
LES
™ LICENSIN
G
Manufacturing:If at the end of 2012 there is a failure to attract any licensees, the company will:
HEALTHY SOLES
™ LICENSIN
G APPENDIX 1
Sales Forecast Mon-1
Mon-2
Mon-3
Mon-4
Mon-5
Mon-6
Mon-7
Mon-8
Mon-9
Mon-10
Mon-11
Mon-12
Year-1 Year-2 Year-3
Unit SalesHardware license fees 0 0 0 0 0 0 0 0 0 0 0 0 0 136,500 350,000 Software license fees 0 0 0 0 0 0 0 0 0 0 0 0 0 85,800 245,000 Total Unit Sales 0 0 0 0 0 0 0 0 0 0 0 0 0 222,300 595,000 Unit PricesHardware license fees $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $0.00 $1.00 $1.00 Software license fees $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.00 $0.50 $0.50 SalesHardware license fees $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $136,500 $350,000 Software license fees $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $42,900 $122,500 Total Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $179,400 $472,500 Hardware license fees $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Software license fees $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Direct Cost of SalesHardware license fees $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Software license fees $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Projected Sales from Licensing:
HEALTHY SOLES
™ LICENSIN
G APPENDIX 2
Sales Forecast Mon-13 Mon-14 Mon-15 Mon-16 Mon-17 Mon-18 Mon-19 Mon-20 Mon-21 Mon-22 Mon-23 Mon-24 Year-2 Year-3
Hardware license fees 1,750 3,500 5,250 7,000 8,750 10,500 12,250 14,000 15,750 17,500 19,250 21,000 136,500 350,000
Software license fees 1,100 2,200 3,300 4,400 5,500 6,600 7,700 8,800 9,900 11,000 12,100 13,200 85,800 245,000
Total Unit Sales 2,850 5,700 8,550 11,400 14,250 17,100 19,950 22,800 25,650 28,500 31,350 34,200 222,300 595,000
Unit Prices Month 13
Month 14
Month 15
Month 16
Month 17
Month 18
Month 19
Month 20
Month 21
Month 22
Month 23
Month 24 Year 2 Year 3
Hardware license fees $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Software license fees $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50
Hardware license fees $1,750 $3,500 $5,250 $7,000 $8,750 $10,500 $12,250 $14,000 $15,750 $17,500 $19,250 $21,000 $136,500 $350,000
Software license fees $550 $1,100 $1,650 $2,200 $2,750 $3,300 $3,850 $4,400 $4,950 $5,500 $6,050 $6,600 $42,900 $122,500
Total Sales $2,300 $4,600 $6,900 $9,200 $11,500 $13,800 $16,100 $18,400 $20,700 $23,000 $25,300 $27,600 $179,400 $472,500
Projected Sales from Licensing:
3-Year Licensing FiguresHEALTHY SO
LES
™ LICENSIN
G
Hardware license fees
Software license fees
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
Year 1 Year 2 Year 3
Sales by Year
HEALTHY SOLES
™ QU
ESTION
’S
QUESTIONS ?
PRESENTERS:STEVEN SPENCE,
GARRETT GOODLOE, TIMOTHY FITZPATRICK
WALKING – FITNESS – HEALTH – EXERCISE – RUNNING - COMFORT