The Nanoboxx by Mikael Thakur

Business Plan Prepared by:

Mikael Thakur

Schulich School of BusinessYork UniversityMasters of Business Program

Nanoboxx™ - Convergence comes of age

AGARTHA TECHNOLOGY INC.EXECUTIVE SUMMARY

Agartha Technology Inc. (Agartha Inc.) is aiming to commercialize the world’s smallest portable

computer: the Nanoboxx™. Measuring approximately 5x2x2 inches, Nanoboxx™ has no physical

keyboard and no physical monitor, yet boasts a full-size laser projected keyboard and full-size

projected display (figure 1). By incorporating innovations in projection technology, Nanoboxx™

combines the pocket-sized convenience of a PDA with the computing power and ease of use of

a laptop. Portability, durability, and feature pack: the Nanoboxx™ will go everywhere your

business takes you.

Figure 1: Agartha Inc.’s rendition of the Nanoboxx™. The Nanoboxx™ is a portable computer measuring approximately 5x2x2 inches that projects both the display and the keyboard and is targeted to businesses and the mobile professionals.

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The miniaturization of portable computing and telecommunication devices faces an inherent challenge:

as devices get smaller, so do their keyboards and displays, which makes them uncomfortable to use.

Nanoboxx™ overcomes this challenge.

Product: What makes Nanoboxx™ unique is its innovative technology which uses low cost

holographic laser projection and diffractive mirror technology to project a full colour, high-

quality graphical user interface (GUI) on virtually any surface, eliminating the challenge of small

displays many small portable devices face. In fact, the projected GUI has a diagonal

measurement of approximately 10-12 inches, which is comparable to that of many laptops. The

embedded micro projector has no moving parts, consumes minimal power and does not need a

fan to dissipate heat.

Nanoboxx™ also projects a virtual laser keyboard to generate a full-size QWERTY keyboard that

recognizes tapped strokes through an optical recognition mechanism.

Agartha Inc.’s Nanoboxx™ is perfect for general business computing, gaming, and web browsing

and all the projection technologies (for both the keyboard and the GUI) are already fully

functional and available on the market individually from different suppliers. The initial market

niche for the Nanoboxx™ within the U.S. and Canada is estimated to be worth over $1.0 billion.

Agartha Inc. intends to enter this market swiftly by partnering with a third party and

outsourcing manufacturing. Future growth opportunities include an expansion of the current

product into new markets and the development of a line of innovative peripherals and nano

devices.

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Competition: Nanoboxx’s™ competition stems from the advancement of portable computing

devices such as laptops, PDAs and Smartphone’s. Yet the Nanoboxx™ offers several benefits

over these other portable electronic devices. Nanoboxx’s™ functionality is not limited by the

size of its screen or its keyboard. The projected keyboard and screen can be displayed on flat or

curved surfaces and allow business persons to conduct presentations on the fly. The trend

toward miniaturization and the evolution of more powerful computer and projection

technologies emphasize the demand for smaller, yet practical computing. Agartha Inc. is

uniquely positioned to capitalize on this demand.

The Management Team: Agartha Inc.’s management team consists of Cristian Blidariu, Orin

Zhao, Rudi Lof, and Mikael Thakur. In addition to the fact that each member is currently

completing an MBA, the team represents a strong blend of complementary skills and diverse

business experience: Orin and Mikael have worked intensively in the high tech industry while

Rudi and Cristian have intensive corporate law experience and are presently completing the

requirements of a law degree concurrent with their MBA’s. Therefore, a matrix management

style will be employed in order to utilize all skill sets to the furthest extent. As the company

grows, additional professional help will be hired as the need for such personnel becomes

significant and justifiable.

Financial Strategy: Agartha Inc. is seeking seed capital of $100,000 for initial company

operations to:

Secure the license for the GUI micro projector from Microvision Inc; Secure the license for the laser keyboard from I-Tech; Develop a pre-manufacturing prototype; Conduct negotiations with potential industrial partners and customers; and

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Begin alpha-testing with select corporate collaborators.

Formal operations will begin in the second half of 2009. Approximately one year later, Agartha

Inc. will raise an additional $3 million in private equity, corporate partnerships and federal

grants to:

Begin full-scale product development; Hire a seasoned CEO and management team; Research and development of new product lines; Identify outside vendors and contract the design and manufacture of the Nanoboxx™;

and Develop corporate partnership efforts.

Agartha Inc. intends to raise another $5 million in follow-on investment in the third year of

operations to scale-up its production and new product development efforts. The initial investor

will receive an equity stake in the company and preferential rights to invest in subsequent

equity rounds.

Possible exit strategies for the investor include a leveraged buyout by management, the sale of

the entire company to a major consumer, or taking the company public.

The Nanoboxx™ is an exciting and potentially very rewarding investment opportunity. Agartha

Inc.’s management team looks forward to further discussions with you regarding this Business

Plan.

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TABLE OF CONTENTS

AGARTHA TECHNOLOGY INC.EXECUTIVE SUMMARY.................................................................................................................................2

Agartha Technology Inc. (Agartha Inc.) is aiming to commercialize the world’s smallest portable computer: the Nanoboxx™. Measuring approximately 5x2x2 inches, Nanoboxx™ has no physical keyboard and no physical monitor, yet boasts a full-size laser projected keyboard and full-size projected display (figure 1). By incorporating innovations in projection technology, Nanoboxx™ combines the pocket-sized convenience of a PDA with the computing power and ease of use of a laptop. Portability, durability, and feature pack: the Nanoboxx™ will go everywhere your business takes you........................2

1.0 COMPANY OVERVIEW............................................................................................................................9

1.1 The Idea.............................................................................................................................................9

2.0 THE PRODUCT......................................................................................................................................11

2.1 Projection Technology.....................................................................................................................11

2.1.1 The Display................................................................................................................................11

.......................................................................................................................................................12

PicoP™ projector component............................................................................................................12

Canadian Dime...................................................................................................................................12

Figure 2..............................................................................................................................................13

2.1.2 How The Projector Works.........................................................................................................13

The desired image is deconstructed into electronic signals. The electronic signals drive red, green, and blue laser light sources with intensity and color formation. Spectrally pure light delivers brilliant colors using tiny red, green, and blue lasers. Red, green, blue laser light paths are combined into a single modulated light path that represents a full pallet of colors. Light output from the combiner optic is directed onto the MEMS scanning mirror which reproduces the desired image pixel by pixel. For complete specifications of the PicoP™ display engine, please refer to Appendix B.....................13

2.1.3 The Keyboard............................................................................................................................13

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The Nanoboxx™ will also embed a virtual laser keyboard by partnering with I-Tech Inc. The virtual keyboard uses state of the art infrared & laser technology to project a full-size keyboard onto any flat surface. This virtual keyboard acts exactly like any other "ordinary" keyboard and uses an optical recognition mechanism to recognize inputted keys. For the first time mobile device users can type normally and taking the pain and frustration out of existing minuscule keyboards and handwriting recognition software that current pocket PC’s have incorporated. Figure 3 shows how the I-tech keyboard is displayed........................................................................................................13

2.1.3 PC components........................................................................................................................15

2.2 Benefits............................................................................................................................................15

3.0 MARKET ANALYSIS...............................................................................................................................15

3.1 Market Segmentation......................................................................................................................16

3.2 Customer Analysis........................................................................................................................16

3.2.1 Target Market Size....................................................................................................................18

The initial market niche for the Nanoboxx™ within the U.S. and Canada is estimated to be worth over $1.0 billion. The worldwide handheld PC revenue was nearly $4.1B in 2000, which increased to over $23B in 2005. According to technology analysts ET Forecasts, worldwide handheld PC revenue will reach over $65B in 2011 for a compound annual growth rate of nearly 28% between 2000 and 2011..............18

3.3.1 Promotions...............................................................................................................................21

3.3.2 Distribution...............................................................................................................................22

3.4.1 Direct........................................................................................................................................23

There are around 20 handheld computer manufacturers around the world, such as OQO, U.S.A.; Samsung, Korea; PBJ, Japan; Han Wang, China, etc. Their products are the direct competitors of the Nanoboxx™. The competition is not intensive because the space for such a startup market to grow is huge. Therefore, the present major competitors of the Nanoboxx™ are the PDA and laptops. Regarding to the unique advantage of our products, it is not difficult for the Nanoboxx™ to win a credible market share. All these competitors have a product that do not have a full keyboard nor a full-size display...................................................................................................................................23

3.4.2 Indirect......................................................................................................................................23

4.0 OPERATIONS........................................................................................................................................23

4.2 Operating Complexity......................................................................................................................24

5.0 SUMMARY OF FINANCIALS..................................................................................................................26

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6.0 MANAGEMENT....................................................................................................................................29

APPENDICES...............................................................................................................................................31

1.0 COMPANY OVERVIEW

1.1 The Idea

What if you could embed a projector, a laser keyboard, and PC components into a box that can

fit into your pocket? That’s the idea behind Nanoboxx™ by Agartha Inc., a Toronto Ontario

base startup that is looking to commercialize the world’s smallest portable computer.

1.2 Genesis of Concept

In late 2006, a technological evolution occurred with the prospect of producing a projector the

size of a dime. In early 2007 this idea became reality. The application of the dime sized

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projector seemed limitless, and as a result the idea of the Nanoboxx™ was created.

The mission of Agartha Inc. is to commercialize new projection technology with existing

technology and transform the portable handheld computing industry with the introduction of

the Nanoboxx™. The management team of Mikael Thakur, Cristian Blidariu, Rudi Lof, and Orin

Zhao, has identified several windows of opportunity for the application of this revolutionary

technology in the portable PC industry and together constitute the nucleus of the expertise

required to take advantage of this industry.

1.3 Strategy and Objectives

Agartha Inc. has identified a significant market opportunity for innovative and scalar technology

products and developed Nanoboxx™ to capture this market as the first mover. In the short term

Agartha Inc. plans to gain funding for initial working capital, secure the license for the

projection technology and form cooperative partnerships with designers, manufacturers, and

resellers to enter the market swiftly. In the medium term the company will expand its product

range by developing other innovative portable projection products such as the windshield

projected GPS. Agartha Inc.’s long-term objectives are to continue R&D, enter new markets,

and capture 1-5% of the $1Billion portable electronic computing industry.

2.0 THE PRODUCT

Agartha Inc. is aiming to solve the keyboard and display bottleneck seen in portable computing

devices by introducing the Nanoboxx™. The Nanoboxx™ is a portable computer measuring

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OrinZ, 01/03/-1,

$65 billion


approximately 5x2x2 that will bridge the gap between a pocket PC and laptop. Finished in piano

black, this innovative product displays both the display and keyboard on virtually any surface.

For detailed product specifications please refer to Appendix A.

2.1 Projection Technology

2.1.1 The Display

Agartha Inc. will partner with U.S. based Microvision Inc. to bring to market the next generation

of portable projection technology. The Nanoboxx™ will embed Microvision Inc.’s PicoP™

display engine which contains Microvision's patented MEMS scanner. PicoP™ is an ultra

miniature projection module capable of producing full color, high-resolution images but small

enough and low power enough to be embedded directly into the Nanoboxx™ and enable a

large screen viewing experience. The ultra miniature PicoP™ display engine is comprised of 1)

electronics, 2) laser light sources,3) combiner optic, and 4) MEMS scanning mirror. These four

components of the PicoP display engine are brought to life using Microvision’s proprietary software

which Agartha Inc. will license. The desired image is reproduced in WVGA format onto any projection

surface. Figure 2 shows the relative size of the PicoP™ projector module relative to a dime.

PicoP™ projector componentCanadian Dime

Figure 2

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2.1.2 How The Projector Works

The desired image is deconstructed into electronic signals. The electronic signals drive red,

green, and blue laser light sources with intensity and color formation. Spectrally pure light

delivers brilliant colors using tiny red, green, and blue lasers. Red, green, blue laser light paths

are combined into a single modulated light path that represents a full pallet of colors. Light

output from the combiner optic is directed onto the MEMS scanning mirror which reproduces

the desired image pixel by pixel. For complete specifications of the PicoP™ display engine,

please refer to Appendix B.

2.1.3 The Keyboard

The Nanoboxx™ will also embed a virtual laser keyboard by partnering with I-Tech Inc. The

virtual keyboard uses state of the art infrared & laser technology to project a full-size keyboard

onto any flat surface. This virtual keyboard acts exactly like any other "ordinary" keyboard and

uses an optical recognition mechanism to recognize inputted keys. For the first time mobile

device users can type normally and taking the pain and frustration out of existing minuscule

keyboards and handwriting recognition software that current pocket PC’s have incorporated.

Figure 3 shows how the I-tech keyboard is displayed.

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Figure 3: Laser projected keyboard. Source: I-Tech Inc.

2.1.4 How The Keyboard Works

The virtual laser keyboard projects a template of the desired interface and the keyboard is

illuminated by a specially designed holographic optical element. Then an infra red plane of light

is generated just above and parallel to the interface surface. This light is invisible to the user.

The reflected light from the users interactions with the interface surface is passed though an

infra-red filter and an imaged on to a CMOS image sensor in the sensor module. Custom

hardware embedded in the sensor chip within the Nanoboxx™ then makes a real time

determination of the location of the reflected light. Tapped keys are recognized and processed

through an OCR mechanism. For full specifications of the virtual keyboard please review

Appendix C.

2.1.3 PC components

The PC components of the Nanoboxx™ are sourced from VIA Technology Inc. of Taiwan. VIA

Technology Inc. is a complete platform provider and is the foremost fab-less supplier of market-

leading core logic chipsets, low power x86 processors, advanced connectivity, multimedia,

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networking and storage silicon, and complete platform solutions that are driving system

innovation in the PC and embedded markets. VIA has also leads the market in miniaturization

of the platform, in order to allow the system design innovation that will drive the next

generation of personal electronics form factors. For complete technical specifications of the

platform that Agartha Inc. will use in the Nanoboxx™, please refer to Appendix D.

2.2 Benefits

Some of the benefits of the Nanoboxx™:

• Conference anywhere and have impromptu meetings on the fly;• Work on a full size screen and keyboard. No more squinting and slow data processing entry;• Give added dimension to videos and images otherwise limited by a tiny screen;

• Watch videos, share images, and truly have a mobile office in your pocket.• improve work efficiency through wireless connectivity

3.0 MARKET ANALYSIS

The Nanoboxx™ targeted niche is the high value-added handheld PC market. The traditional PCs

industry is under the threat of permanent decline from a revenue perspective. The targeted

handheld computer market was exploded 2 years ago in filling in the gap between personal

digital assistants (PDA) and laptops by the introduction of thumb computing. This niche market

grows very fast in an approximately 28% compound annual growth rate (Refer to Appendix E

for market share analysis). The entry of the Nanoboxx™ will extend this market tremendously

above its present horizon. However, the handheld computer market is relatively new and the

market of the Nanoboxx™ is even prior its infant stage, it is essential to cultivate the potential

market at the start of the product by appropriate promotions.

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3.1 Market Segmentation

The market for the Nanoboxx™ will overlay the current PDA market and overlap a portion of

traditional PC/Laptop market. The permeation of PCs, both desktops and laptops, led to the

human’s reliance of personal computers and naturally resulted in the born of handheld

computer. PDA was the pioneer product to response the needs. However, the weak

functionality and poor performance of PDA was not able to satisfy the major body of

customers. Hence, the market for PDA will finally end into 2 categories: the advanced cell

phone, Smartphone, and the powerful, practical and portable handheld computer. The

Nanoboxx™ is designed to fulfill the demands for the handheld computers.

3.2 Customer Analysis

Business users are a premium segment of the overall mobile market, not only spending more

on innovative technologies but also adopting advanced portable computing devices. The

Nanoboxx™ will initially target the mobile business person market. These users are willing and

eager to receive the benefits that converged devices offer. Choosing the right equipment for

the road is essential and it can make the difference between making the sale and losing an

account. This lucrative niche market has deep pockets, want the latest technological and

innovative devices that come to market, and usually work for large global organizations and do

extensive travelling and are involved in numerous presentations.

ABI Research1 analysis shows that the average revenue per user (ARPU) among business users is

24% higher than among personal users. For mobile devices, the gap is even wider - business

1 http://www.abiresearch.com

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users spend 80% more than personal users. Such users deliver the highest ARPU for both

business applications and hardware. Combining the two will pay dividends. Agartha Inc.

intends to capitalize on this lucrative market.

3.2.1 Target Market Size

The initial market niche for the Nanoboxx™ within the U.S. and Canada is estimated to be worth

over $1.0 billion. The worldwide handheld PC revenue was nearly $4.1B in 2000, which

increased to over $23B in 2005. According to technology analysts ET Forecasts, worldwide

handheld PC revenue will reach over $65B in 2011 for a compound annual growth rate of nearly

28% between 2000 and 2011.2

The major portion of the initial revenue will come from the North American

PDA market which is estimated to be worth around $2.0 billion. In the

medium run, the market for the Nanoboxx™ will be expanded to overlap the

traditional North American PCs market, especially the market for laptops.

The estimated market value is over $4.0 billion, a major portion from the

global $4.0 billion PDA market and a slight portion from the global $201.0

billion revenue of the PCs industry.

The Nanoboxx™ will lead the PCs industry trends in the end of the day. The

long run market value of the Nanoboxx™ is estimated to be more than $65

billion based on the compound annual growth rate of handheld computers.

The size of relative market is listed in following table:

2 http://www.etforecasts.com/products/ES_SP-PDA.htm

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HANDHELD COMPUTER SEGMENTS

Unit Sales 200020032005200620082010

USA Market:

PDA Sales (#M) 5.98 6.09 6.21 6.31 6.54 6.81

Smartphone Sales (#M) - 0.34 3.77 7.58 16.37 26.39

Handheld PC Sales (#M) - - 0.008 0.045 0.27 1.18

Handheld Computer Sales (#M) 5.98 6.43 9.99 13.94 23.18 33.98

Worldwide Market:

HANDHELD MARKET IN Q3 2007

Q3 2007Q3 2006Growth

Vendor Shipments

Share, %Shipments

Share, %YTY

Palm 325,000 44.6 450,000 37.5 -27.8

HP 198,100 27.2 240,000 20.0 -17.5

Mio 81,903 11.2 117,557 9.8 -30.3

Fujitsu-Siemens 39,519 5.4 25,354 2.1 55.9

Sharp 17,500 2.4 101,000 8.4 -82.7

Others 66,872 9.2 267,634 22.3 -75.0

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Source: IDC. Vendors shipped 728,894 handheld devices in Q3 2007, approximately 1.5% more than Q2 2007 but 39.3% less from Q3 2006.

Current market circumstances have opened opportunities for super-small devices. The

technological foundation to make robust, miniature computers finally exists; another factor at

play supporting handhelds is that consumers and corporate buyers have become acclimated to

portability. The explosive growth, until recently, of handheld devices and mobile phones

established the market for portable devices. Once the infrastructure for wireless networking is

established, ultra-portable PCs will become more popular than PDAs because they can do more

By 2011, research company IDC expects portable computers to comprise 66% of all corporate

PCs sold, up from 40% in 2006, and 71% of all consumer PCs sold, up from 44%.

3.3 Target Market Segment Strategy

The Nanoboxx™ is an innovative, completely original product, which is targeting at the market

niche for the powerful and practical handheld computers, which recently has experienced

explosive growth. The age of electronic convergence has arrived as consumers are demanding

smaller streamline full functional computing products. Therefore, it is necessary to educate the

potential consumers in the initial stage. We choose to start with the U.S. and Canada as the

testing market according to the North America’s leading position in the portable electronic

devices market. The largest group of technology enthusiasts and fans are in this area.

Soon as the result from this testing market is positive, Agartha Inc. will head to formal

manufacturing stage, which we define as the medium run. In order to keep the image of trend

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leader, Agartha Inc. will launch a series design competitions of customized Nanoboxx™

regarding to the coating, shape, peripheral, etc.

3.3.1 Promotions

In the initial stage, it is convenient and effective to bring forth the Nanoboxx™ through

professional computer journalisms and websites to technology enthusiasts, who are usually the

trend change agents of the high-tech products market. After releasing the specifications of the

Nanoboxx™ to professional computer journalisms and websites and sending samples to these

media, we will open for public subscription in short time. A number between 5,000 to 10,000

devices are expected to be sold initially by subscription such as through Stuff magazine and

online.

After the initial stage, the product will be promoted on CNBC and Bloomberg and then all major

consumer and electronic shows as well as technology and financial magazines such as Fortune

and Wired, in order to attract the major body of our potential customers, the business

professionals.

3.3.2 Distribution

Regarding to the initial promotion manner, we have determined that we will distribute the

Nanoboxx™ through direct mail in the beginning to fulfill the subscription orders.

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In the medium run, Agartha will setup representative offices in major cities in North America

and utilize the traditional PCs sales channel, such as Best Buy, Future Shop to distribute the

Nanoboxx™.

In a long run, Agartha will setup branch offices in major cities around the world to cooperate

with electronic retailers worldwide. Agartha Inc. will also entertain the opportunity of a joint

venture with industry giants such as Dell, Compaq, and Microsoft.

3.4 Competitor Analysis

The Nanoboxx™ will compete with both the PCs industry players and all other portable

electronic devices manufacturers.

3.4.1 Direct

There are around 20 handheld computer manufacturers around the world, such as OQO, U.S.A.;

Samsung, Korea; PBJ, Japan; Han Wang, China, etc. Their products are the direct competitors of

the Nanoboxx™. The competition is not intensive because the space for such a startup market

to grow is huge. Therefore, the present major competitors of the Nanoboxx™ are the PDA and

laptops. Regarding to the unique advantage of our products, it is not difficult for the

Nanoboxx™ to win a credible market share. All these competitors have a product that do not

have a full keyboard nor a full-size display.

3.4.2 Indirect

However, all portable electronic devices are the potential competitors of the Nanoboxx™. The

usage of the Nanoboxx™ is unlimited so that it is very likely for the Nanoboxx™ to invade in the

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markets for other portable electronic devices, such as portable game consoles, Smart phones,

etc.

4.0 OPERATIONS

4.1 Plans for Production

In order for Agartha Inc.’s managers to focus on its core competencies, the company will want to:

rely on contracted specialists to achieve even faster speed to market; maximize the flexibility of their capital resources by eliminating unnecessary

manufacturing equipment; increase their market responsiveness by reducing their organizational structure; maintain a laser-like focus on their markets, with no manufacturing-related distractions; lower costs while maintaining and even enhancing quality.

At every stage along the Electronics Manufacturing Services (EMS) supply chain, it makes sense

for Agartha Inc. to partner with outsourcing specialists for private label production. This

somewhat fragmented structure has created profitable opportunities for product design for

niches within the portable computing industry. Appendix D shortlist’s potential EMS candidates.

By doing this Agartha Inc. will have first mover advantage such as cost advantage, less

competition, secure important channels, and price position for customers.

4.2 Operating Complexity

The following are those areas of particular concern and importance to management:

1. Timing will play a critical role in the success of the Nanoboxx™. The key variables are

• Product readiness• Financing• Approach to marketplace

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http://www.inventronics.com/html/corporate/corporate_ems_supply_chain.htm


• Production, from delivery of components to assembly, inventory & shipping procedures.

2. Financial projections used are “best” estimates and all financial needs and operating costs

have been based on what is considered to be the most likely volume of sales achievable.

Because selling activity will begin in early 2009 reaction of the marketplace should be clear by

late spring. Decisions can still be made to cut back or to gear up for the 2009 seasons.

3. Financing would be another major consideration if sales were much in excess of

expectations, particularly because we must assume that early orders are going to require an

accompanying letter of credit if EMS is outsourced. For this the marketing plan is meant to

guard against some of these problems and is specially geared to reach upscale technology

retailers that will commit early to carry the “limited production” of the first year.

4.3 Production plan

The housing will be manufactured in Mainland China(Guangzhou). The labor costs and the cost

for raw material are competitive. Agartha Inc. will also outsource the assembly and testing of

the actual product to a reputable EMS an drop shipped to a storage facility in Canada, then

shipped to retailers.

4.4 Future Potential

The new technological innovations that have emerged during the development of the

Nanoboxx™ have significance for the future of the company as well. By benchmarking the

success of Apple’s iPod’s, Agartha Inc. will introduce enhanced feature packed versions of the

Nanoboxx™. At the end of the product lifecycle, Agartha Inc will cannibalize the product and

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introduce a more innovative version developed through intensive R&D. Concurrently the

company will release a plethora of peripherals for the Nanoboxx™ as well as cellular phones

and handheld PC’s. In addition, as product quality increased, specially designed device for the

mass market become possible at reasonable costs.

5.0 SUMMARY OF FINANCIALS

The major startup investment is the research and development costs, which include the

expenditure for securing license with major parts manufacturers, such as Microvision, I-Tech

and VIA. The other expenses include administration costs and travel expenses. The only

marketing expense in the startup period is to send out prototype models to few electronic

community websites, such as ZDNet.

In 2009, the projected sales volume is 1,000 units. All the sales are expected to be from internet

subscription. The units will be distributed by direct mail. The selling price is $800 per unit and

the distribution cost which include insurance and mail cost is $50 per unit.

The manufacturing and transportation costs are totally $60 per unit. The material costs are

$263 per unit. In this year, an R&D expenditure of $100,000 is allocated in order to perfect the

Nanoboxx™. Meanwhile, one full-time general manager and one full-time product manager will

be hired at a cost of $700,000.

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In order to maintain the operation, Agartha Inc. would introduce another $3 million

investment. The total intangible assets will be evaluated at a price of $1.1 million. The total

income at 2009 is estimated to be negative $373,000. The cumulated loss is $100,000.

In 2010, there are 2,000 units expected to be sold through internet and another 5,000 units to

be sold by retailers. The retailer price will be set at $750 per unit and the wholesaler price will

be set at $350 per unit. The material, manufacturing and transportation costs will decrease by

$60 to $263 per unit. The balance from product is estimated to be more than $1 million.

However, Agartha Inc. will invest $1.25 million in R&D, marketing and Administration in order

to look for future growth. The total loss at 2010 is expected to be $11,000.

From 2011, Agartha Inc. will use electronic devices retailers as the major distribution channel of

the Nanoboxx™. 20,000 units are expected to be sold through this channel, though 1,000 units

are still expected to be sold through the Internet. The production profit is estimated to be

above $2 million. However, Agartha Inc. will keep invest $3 million in R&D, marketing and

Administration in order to seek a high future growth. The total loss at 2011 is expected to be

$348,000.

At 2011, Agartha Inc. intends to raise another $5 million in follow-on investment to seek a

potential future growth. The total intangible assets is expecting to be valued at $8.2 million.

At 2012, we are expecting a burst in sales to reach 100,000 units. With the continuing

investment in R&D and marketing, the total EBIT will reach $5.5 million. The Pro Forma Income

Statements and Balance Sheets are provided as following:

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Pro Forma Income Statement 2008 2009 2010 2011 2012Revenue

Revenue f rom subscri pti on $0 $800, 000 $1, 500, 000 $700, 000 $550, 000Revenue f rom whol esal ers $0 $0 $1, 750, 000 $7, 000, 000 $30, 000, 000Total $0 $800, 000 $3, 250, 000 $7, 700, 000 $30, 550, 000

CostsManufacturing and Transporation Costs $0 $60, 000 $420, 000 $1, 050, 000 $5, 050, 000

Material Costs $263, 000 $1, 491, 000 $3, 948, 000 $15, 958, 000Distribution Costs $50, 000 $100, 000 $50, 000 $50, 000

Nanoboxx aspect desi gn $3, 000Nanoboxx box prototype $3, 000Nanoboxx prototype R&D $12, 000Secure l i cense wi th Mi crovi si on $30, 000Secure l i cense wi th I -Tech $20, 000Secure l i cense wi th VI A $10, 000

Total R&D Cost $78, 000 $100, 000 $250, 000 $1, 000, 000 $1, 000, 000Travel Expense $7, 000I nternet communi ty promoti on $3, 000General Admi ni strati on $12, 000

Total Marketing & Admin Costs $22, 000 $700, 000 $1, 000, 000 $2, 000, 000 $3, 000, 000Total $100, 000 $1, 173, 000 $3, 261, 000 $8, 048, 000 $25, 058, 000Gross Margi n ($100, 000) ($373, 000) ($11, 000) ($348, 000) $5, 492, 000

Tax & I nterest $0 $0 $0 $0 $1, 373, 000Total $0 $0 $0 $0 $1, 373, 000Net Income ($100, 000) ($373, 000) ($11, 000) ($348, 000) $4, 119, 000

Pro Forma Balance Sheet 2008 2009 2010 2011 2012Assets

Cash and cash equi val ents $100, 000 $2, 250, 000 $1, 000, 000 $3, 500, 000 $5, 000, 000I nventory and Accounts recei vabl e $0 $0 $0 $0 $4, 119, 000I ntangi bl e Assets $1, 100, 000 $1, 100, 000 $8, 200, 000 $6, 000, 000Total $100, 000 $3, 350, 000 $2, 100, 000 $11, 700, 000 $15, 119, 000Liabilities and Shareholders' Equity

Accounts payabl e $0 $0 $0 $0 $0Long- term debt $0 $0 $0 $0 $0Total $0 $0 $0 $0 $0Shareholders' equity $100, 000 $4, 100, 000 $4, 100, 000 $14, 200, 000 $14, 200, 000Retained Earnings ($750, 000) ($2, 000, 000) ($2, 500, 000) $919, 000Total $100, 000 $3, 350, 000 $2, 100, 000 $11, 700, 000 $15, 119, 000

Please see the detail costs/benefits chart in Appendix F

6.0 MANAGEMENT

A key objective of Agartha Inc. is to be profitable early, while being nimble enough to grow

rapidly and profitably as demand grows. Taking into account these objectives, as well as a

desire to be good stewards with the resources of the corporation, Agartha Inc has developed a

plan for a flexible management team that provides for what is needed when it is needed.

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6.1 Start-Up Team

The president of Agartha Inc. is Mikael Thakur. Mr. Thakur has more than four years of

experience in the High Technology Industry and is presently in the MBA program at the Schulich

School of Business. Mr. Thakur is a dynamic entrepreneur, results oriented professional with a

proven ability to establish rapport and build relationships’ with people from diverse

backgrounds. Creative with a flair for forecasting trends with solid academic preparation. He is

also adept at handling new challenges with a wide range of industry knowledge such as

marketing, e-business, equities, and supply chain management. Mr. Thakur is recognized by

clients and colleagues as a consummate professional with a high degree of personal integrity.

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APPENDICES

Appendix ADetailed Product Specifications of the Nanoboxx™

PROCESSOR & CHIPSET - 1.5GHz VIA C7M ULV (also available with 1.2GHz and 1.0GHz)- VIA VX700 with integrated GPU

GRAPHICS - Embedded with MPEG-2, MPEG-4, WMV9 Hardware accelerationOPERATING SYSTEM - Ubuntu Linux + OpenOffice

- Windows Vista® Ultimate, Business (optional)- Windows® XP Tablet PC Edition 2005, Windows® XP Professional, Windows® XP Home(optional)

STORAGE DRIVE & MEMORY - HDD capacity: 1.8 inch HDD 40 - 120GB- HDD protection: shock-mounted, drop detect technology- memory: DDRII 512M - 1GB

DISPLAY - Microvision PicoP™ Display Engine

- native resolution: WVGA (848 x 480)- Brightness: 10 Lumens- size: 200mm – 2000mm (Ideal) Image size (diagonal) = image-to-projector distance- external display support: VGA, HDMI, & DVI monitors up to 1920x1200 resolution

INPUT virtual laser full-size QWERTY keyboard, dedicated mouse

WIRELESS AND NETWORKING Wireless LAN: Atheros tri-mode 802.11a/b/g Wi-Fi with diversity Bluetooth 2.0 with EDR VGA/Ethernet adapter Wireless LAN: Atheros tri-mode 802.11a/b/g Wi-Fi with diversity Bluetooth 2.0 with EDR VGA/Ethernet adapter

PORTS audio jack: 3.5mm line out/line in video out: HDMI port, VGA/Ethernet adapter (included) 1 docking/power connector 1 USB 2.0 port

BATTERY type: removable lithium-ion polymer capacity: 4500mAh (standard), 9000mAh (double capacity) estimated life: up to 3 hours (standard), 6 hours (double capacity)

SECURITY embedded security: TPM v1.2 security engine: VIA Padlock™ hardware AES encryption engine

DIMENSIONS size: 5.0”(W) x 2.0”(H) x 1.8”(D) weight: 1.0 lb with standard battery (may vary based on hardware configuration)

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Appendix BMicrovision Inc.’s PicoP™ Display Engine Specifications

Display

Technology

Microvision PicoP™ Display Engine: Single Bi-axial MEMS Scanning Mirror Technology

Performance Resolution WVGA (848 x 480)

Brightness 10 Lumens

Aspect Ratio 16:9 Native

Light Sources Red, green, and blue lasers

Refresh Rate 60 Hz

Color Range 16-bit, greater than 150% of NTSC

Projection Lens None: image always in focus, no manual adjustment

Image Size 200mm – 2000mm (Ideal) Image size (diagonal) = image-

to-projector distance

Dimensions Volume ≈120 cc, including battery

Weight ≈ 220 grams, including battery

Video Inputs RGB (VGA) Composite

(NTSC/PAL) S-Video

Connects to cell phones, personal media players, laptops,

digital cameras and more

Power Internal Lithium Polymer Battery 1.5 hour battery life on a single charge

Power and charge using external Mini USB

Operating

Temperature

10 – 30 degrees C, Ambient

Availability 1st Half 2008 to qualified global OEM’s and leading mobile operators

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Appendix CI-Tech Inc.’s Laser Virtual Keyboard Specifications

Keyboard Projection Light source: Red diode laser Keyboard layout: 63 key / full sized QWERTY layout Keyboard size: 295 x 95mm projected keyboard size Keyboard position: 60mm from VKB unit Required Projection surface: Non-reflective, opaque flat surface Visibility: Good contrast up to 600 lux ambient illumination

Keystroke Sensor Ambient illumination: Works under all standard indoor illuminations up to 600 lux Detection: rate Up to 400 characters per minute Detection algorithm: Multiple keystroke support Effective keystroke: Approximately 2mm Operating surface: Any firm flat surface with no protrusions greater than 1mm

Bluetooth Bluetooth Spec: Bluetooth v1.1 class 2 Bluetooth Profile Supported: HID and SPP Range of Frequency: 2.4GHz Spectrum Transmission range: 9m Number of supported passkeys: 5

Electrical Power source: Integrated, 3.6V rechargeable lithium-ion battery Battery capacity > 120 minutes continuous typing Charge Method: Included 100-240V AC Wall Adapter

Dimensions Approximately 35 x 92 x 25mm (1.38" x 3.6" x 1")

Compatibility Support for PalmOS 5, PocketPC 2003, Windows Smartphone, Symbian OS, and Windows 2000/XP (Mac OSX will work but drivers are not provided. See the bottom of this page for details.) Look below for a list of specific compatible devices. Please note your device may still work properly if not on this list as long as it supports one of the OS listed above.

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Appendix DElectronic Manufacturer Services Shortlist

POTENTIAL EMS COMPANIESINDIC EMS ELECTRONICS PVT. LTD.CelesticaFlextronicsFoxconnElcoteqGPC ElectronicsIntegrated Microelectronics, Inc.Jabil CircuitPlexusQuanta ComputersSanmina-SCISMTC CorporationSolectronSwisstronicsPantronix CorporationQuality Assembly (Thailand),LTD.

Appendix EMarket Size and Market Estimates

Worldwide: Preliminary PDA Vendor Shipment Estimates, 1Q06 (Units)

Company 1Q06 Shipments

1Q06 Market Share (%)

1Q05 Shipments

1Q05 Market Share (%)

1Q05- 1Q06 Growth (%)

Research In Motion

929,883 25.5 711,000 20.7 30.8

Palm 459,970 12.6 614,750 17.9 -25.2

Hewlett-Packard 421,336 11.5 601,352 17.5 -29.9

Mio Technology 216,728 5.9 119,622 3.5 81.2

Dell 143,200 3.9 217,000 6.3 -34.0

Others 1,482,433 40.6 1,164,564 34.0 27.3

Total 3,653,550 100.0 3,428,288 100.0 6.6

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http://en.wikipedia.org/w/index.php?title=Pantronix_Corporation&action=edit

http://en.wikipedia.org/w/index.php?title=Swisstronics&action=edit

http://en.wikipedia.org/wiki/Solectron

http://en.wikipedia.org/wiki/SMTC_Corporation

http://en.wikipedia.org/wiki/Sanmina-SCI

http://en.wikipedia.org/wiki/Quanta_Computers

http://en.wikipedia.org/wiki/Plexus

http://en.wikipedia.org/wiki/Jabil_Circuit

http://en.wikipedia.org/wiki/Integrated_Microelectronics%2C_Inc.

http://en.wikipedia.org/w/index.php?title=GPC_Electronics&action=edit

http://en.wikipedia.org/wiki/Elcoteq

http://en.wikipedia.org/wiki/Foxconn

http://en.wikipedia.org/wiki/Flextronics

http://en.wikipedia.org/wiki/Celestica

http://en.wikipedia.org/w/index.php?title=INDIC_EMS_ELECTRONICS_PVT._LTD.&action=edit


Smartphone Market

Notebook and Portable PC Market Share

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TOP 5 COMMERCIAL VENDOR PORTABLE PC MARKET SHARE

TOP 5 CONSUMER VENDORPORTABLE PC MARKET SHARE

Vendor Share: IBM 17.8% Dell 15.3% Acer 15.2% Toshiba 15.0% HP 13.1% Others 23.6%Total 100.0%

Vendor Share:HP 30.6%Toshiba 19.7%Dell 11.7%Acer 10.8%LG 7.3%Others 19.9%Total 100.0%

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Notebook PC Shipments, Share and Growth by Supplier

Brand

Q3'06

Q4'06

Change

Q4'06

HP

3.6M

4.7M

29%

20.0%

Dell

3.6M

3.5M

-2%

15.0%

Acer

2.4M

3.1M

29%

13.3%

Toshiba

2.2M


Appendix FCosts/Benefits

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Brand

Q3'06

Q4'06

Change

Q4'06

HP

3.6M

4.7M

29%

20.0%

Dell

3.6M

3.5M

-2%

15.0%

Acer

2.4M

3.1M

29%

13.3%

Toshiba

2.2M


2009 2010 2011 2011Anticipated Retailer Sales (In units) 1,000 2,000 1,000 1,000Anticipated Wholesaler Sales (In units) 0 5,000 20,000 100,000Retailer Selling price $800.00 $750.00 $700.00 $550.00Wholeseller price $0.00 $350.00 $350.00 $300.00

Processor $30.00 $25.00 $20.00 $20.00Motherboard $30.00 $25.00 $20.00 $20.00Display $50.00 $40.00 $30.00 $30.00Input $30.00 $25.00 $25.00 $25.00Storage $30.00 $30.00 $25.00 $25.00Memory $30.00 $25.00 $25.00 $25.00Box $2.00 $2.00 $2.00 $2.00Battery $10.00 $10.00 $10.00 $10.00Power cord $0.50 $0.50 $0.50 $0.50Package $0.50 $0.50 $0.50 $0.50Other $50.00 $30.00 $30.00 $0.00

Total Material Costs per Unit $263.00 $213.00 $188.00 $158.00

Revenue $800,000.00 $3,250,000.00 $7,700,000.00 $30,550,000.00

Total Material Costs $263,000.00 $1,491,000.00 $3,948,000.00 $15,958,000.00Box Manufacturing Costs $20.00 $20.00 $20.00 $20.00Assembly Costs $20.00 $20.00 $18.00 $18.00Transporation & Insurance $20.00 $20.00 $12.00 $12.00

Overall Variable overhead $60,000.00 $420,000.00 $1,050,000.00 $5,050,000.00

Distribution Costs $50,000.00 $100,000.00 $50,000.00 $50,000.00

Cost of Goods Sold $373,000.00 $2,011,000.00 $5,048,000.00 $21,058,000.00

Research & Development $100,000.00 $250,000.00 $1,000,000.00 $1,000,000.00Sales and marketing $200,000.00 $400,000.00 $1,000,000.00 $1,800,000.00General Administration $500,000.00 $600,000.00 $1,000,000.00 $1,200,000.00

Expense $800,000.00 $1,250,000.00 $3,000,000.00 $4,000,000.00

Profit -$373,000.00 -$11,000.00 -$348,000.00 $5,492,000.00

Appendix GAgartha Inc.’s rendition of the Nanoboxx™

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Brand

Q3'06

Q4'06

Change

Q4'06

HP

3.6M

4.7M

29%

20.0%

Dell

3.6M

3.5M

-2%

15.0%

Acer

2.4M

3.1M

29%

13.3%

Toshiba

2.2M


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The Nanoboxx by Mikael Thakur

Documents