Automated Warehouse Solutions

1. Matt Lubbers: Team Lead, CEO Ryan Mejeur: Head of Research and Engineering [not present] David VanKampen: Head of Sales and Marketing David VandeBunte: Head of Technical Support, CFO Automated Warehouse Solutions Business Plan - December 16, 2008

2. Vision and Initial Motivation • Entrepreneur's Vision • Reliable and cost effective method for retrieving and storing items • Strive to incorporate: • Creative design • Good business ethics • Christian principles • Initial Motivation • Interest in robotics and engineering • Desire to create a business that can fulfill a need for the warehouse industry Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

3. Products and Services

4. Small Store Example Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

5. Products and Services Products Services • Main Product: Item Storage and Retrieval Robot (STORBOT) • Additional Add-on Features • Customer Specific Designs • Customer consulting • Support • Customer • Employee Training • Customer Relations • Technical • Problem Solving • Phone Support • On-site Support Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

6. Product Warranties and Trademarks • Warranties • Mechanical Parts Warranty • Complete System Warranty • Patent or Trademark Protection • No immediate plans for Patents and Trademarks • Trademark to be acquired after successful product • Programming code will be protected Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

7. Outsourcing vs. In-House Operations Outsourcing Operations In- House Operations • Fully Populated PCB • Electric Motors • Electronic Sensors • Heavy Material Machining • Programming • Basic Material Machining • Peripheral Circuit Boards • Product Assembly Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

8. Helpful Harmful S W Internal Origin Strengths Customer Oriented Inexpensive Prototype Development Weaknesses Inexperienced Low Funds Start-up Business O T External Origin Opportunities Niche Market Improve Efficiency Christian Witness Threats Start-up Failure Larger Companies Economy SWOT Analysis Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

9. Cost Savings Analysis • Small Stores (Hardware, Autozone, iKea, etc.) • No Employee Reduction • Efficient use of Time • Estimated 5 hours saved per week for each employee • Assume 2 employees : 5 hours * 52 weeks * 2 employees = 520 hours/year • Assume wage of $10/hour: $10/hour * 520 hours= $5200/year • Small Warehouses • Projected 25% reduction of part “gophers” • Assume 12 workers: 12 workers * .25 = 3 workers • Average worker Salary is $30,000/year • Yearly Labor Savings: $30,000 * 3 workers = $90,000 Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

10. Industry Overview And Business Strategies

11. Industrial Background • Regulatory Restrictions • OSHA , MSDS, CFR • Barriers to Entry • Lack of Reputation • Exhaustive Testing in Operational Environment • Cost effective • Ease-of-use • Future Industry Outlook • Industry pushing for Automation Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

12. Development Stages • Startup ( < 3 years) • Develop product with potential customers • Establish product locally • Continue to improve product • Growth (3 – 10 years) • Increase marketing • Expand consulting department • Look into overseas markets • Explore new product development Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

13. Development Stages (cont.) • Maturity ( > 10 years) • Develop new products for our target market • Expansion into new warehouse and storage markets • Develop daughter companies • Create new divisions • Market product replacement Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

14. Marketing Strategy

15. Target Market Small Scale Warehouses and Factories Specific Marketing Demographic • Low weight requirements • Minimize space • Low cost • Mostly male • Middle Class • “Experience” Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

16. Motivation to Buy • Decrease shelf floor space • Efficient use of human time • Quick Install Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

17. Market Size and Trends • Automation increasingly popular • Success must be proven • No one wants to experiment • Size is determined by product versatility • New uses can be found during development Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

18. Advertising and Promotion • Trade-related periodicals • Annual trade shows • Reflected in budget • On-site sales calls • Trial Periods Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

19. Competition Analysis

20. Competition • FATA Automation • ground up integration • Kiva Robots (Amazon) • shelf movers • Westfalia • palletizers Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

21. Company Managerial Structure

22. Expanded Structure Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

23. Financial Forecasts Summary of expected income, cash flows, and expenses.

24. Key Assumptions • Home business for the first eight months • Sales begin 3 months after operation begins • Sales increase to 5 units/month by the 2nd year. • Expect product market to double in size during the first few years of operation. Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

25. Income Statements • Projected income statements show profitability beginning in third year Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

26. Balance Sheet • Due to 1st year losses, owner’s equity is initially negative • In 2nd and 3rd years assets significantly greater than liabilities Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

27. Cash Flow Statement – Year 1 • Cash flow statements used as basis for income and balance statements. Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

28. Cash Flow Statement – Years 2-3 Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

29. Break Even Analysis • The break-even analysis was performed assuming the company that existed at the end of year one. • Projected number of sold units for year one is 31 units Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

30. Loan Proposal • Prototype funded from personal and donated resources. Expected to cost $1500-2000. • This prototype and trial period information presented to bank when applying for loan.

31. Amount Requested • The team would make an initial request to the bank of $150,000 at business opening and $50,000 six months into operation. • For complete details on the use of funds, see the detailed cash flow statement (Report Appendix A). • Overview: • Computers, lab equipment • Production materials • Human resources Introduction – Products – Industry/Business – Marketing – Competition – Management – Finances

32. Any Questions?