Business Plan Prepared by:

Mikael Thakur

Schulich School of Business

York University
Masters 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

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mobile professionals.

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

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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.

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

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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
• 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.

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 Nanoboxx™ - Convergence comes of age

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................................................................................. .......17

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............................................................................. ................................30

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

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reality. The application of the dime sized 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.

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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 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.

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Canadian
PicoP™ projector
Dime
component

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Figure 2

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.

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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, 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

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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.

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.

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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 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.

1
http://www.abiresearch.com

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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 HANDHELD MARKET IN Q3 2007

Unit Sales
2000 Q3 2007
2003 Q3 2006
2005 Growth
2006
2008
2010
Vendor
Shipments
Share, %
Shipments
USA Market: Share, %
YTY

Palm
325,000
44.6
450,000
37.5
PDA Sales (#M) -27.8
5.98
6.09
6.21
6.31 HP
6.54 198,100
6.81 27.2
240,000
20.0
-17.5
Smartphone Sales (#M)
-
0.34
3.77 Mio
7.58 81,903
16.37 11.2
26.39 117,557
9.8
-30.3

Handheld PC Sales (#M)

-
- Fujitsu-Siemens
0.008 39,519
0.045 5.4
0.27 25,354
1.18 2.1
55.9

Handheld Computer Sales (#M)

5.98 Sharp
6.43 17,500
9.99 2.4
13.94 101,000
23.18 8.4
33.98 -82.7

Worldwide Market: 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

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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 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.

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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.

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.

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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 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;

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• 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
• 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.

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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

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

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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.

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

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$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.

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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:

Pro Forma Income Statement 2008 2009 2010 2011 2012

Revenue
Revenue from subscription $0 $800,000 $1,500,000 $700,000 $550,000
Revenue from wholesalers $0 $0 $1,750,000 $7,000,000 $30,000,000
Total $0 $800,000 $3,250,000 $7,700,000 $30,550,000
Costs
Manufacturing and Transporation Costs $0 $60,000 $420,000 $1,050,000 $5,050,000
Material Costs $263,000 $1,491,000 $3,948,000 $15,958,000
Distribution Costs $50,000 $100,000 $50,000 $50,000
Nanoboxx aspect design $3,000
Nanoboxx box prototype $3,000
Nanoboxx prototype R&D $12,000
Secure license with Microvision $30,000
Secure license with I-Tech $20,000
Secure license with VIA $10,000
Total R&D Cost $78,000 $100,000 $250,000 $1,000,000 $1,000,000
Travel Expense $7,000
Internet community promotion $3,000
General Administration $12,000
Total Marketing & Admin Costs $22,000 $700,000 $1,000,000 $2,000,000 $3,000,000
Total $100,000 $1,173,000 $3,261,000 $8,048,000 $25,058,000
Gross Margin ($100,000) ($373,000) ($11,000) ($348,000) $5,492,000

Tax & Interest $0 $0 $0 $0 $1,373,000

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

Pro Forma Balance Sheet 2008 2009 2010 2011 2012

Assets
Cash and cash equivalents $100,000 $2,250,000 $1,000,000 $3,500,000 $5,000,000
Inventory and Accounts receivable $0 $0 $0 $0 $4,119,000
Intangible Assets $1,100,000 $1,100,000 $8,200,000 $6,000,000
Total $100,000 $3,350,000 $2,100,000 $11,700,000 $15,119,000
Liabilities and Shareholders' Equity
Accounts payable $0 $0 $0 $0 $0
Long-term debt $0 $0 $0 $0 $0
Total $0 $0 $0 $0 $0
Shareholders' equity $100,000 $4,100,000 $4,100,000 $14,200,000 $14,200,000
Retained Earnings ($750,000) ($2,000,000) ($2,500,000) $919,000
Total $100,000 $3,350,000 $2,100,000 $11,700,000 $15,119,000

Please see the detail costs/benefits chart in Appendix F

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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.

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 A
Detailed Product Specifications of the Nanoboxx™

PROCESSOR & - 1.5GHz VIA C7M ULV (also available with 1.2GHz and 1.0GHz)
CHIPSET - VIA VX700 with integrated GPU
GRAPHICS - Embedded with MPEG-2, MPEG-4, WMV9 Hardware acceleration
OPERATING SYSTEM - Ubuntu Linux + OpenOffice
- Windows Vista® Ultimate, Business (optional)
- Windows® XP Tablet PC Edition 2005, Windows® XP Professional, Windows®
XP Home(optional)
STORAGE DRIVE & - HDD capacity: 1.8 inch HDD 40 - 120GB
MEMORY - 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 • Wireless LAN: Atheros tri-mode 802.11a/b/g Wi-Fi with diversity
NETWORKING • 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 B
Microvision Inc.’s PicoP™ Display Engine Specifications

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

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 Connects to cell phones, personal media players, laptops,

(NTSC/PAL) S-Video 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 10 – 30 degrees C, Ambient

Temperature

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

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Appendix C
I-Tech Inc.’s Laser Virtual Keyboard Specifications

Keyboard Light source: Red diode laser

Projection 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 D
Electronic Manufacturer Services Shortlist

POTENTIAL EMS COMPANIES

INDIC EMS ELECTRONICS PVT. LTD.
Celestica
Flextronics
Foxconn
Elcoteq
GPC Electronics
Integrated Microelectronics, Inc.
Jabil Circuit
Plexus
Quanta Computers
Sanmina-SCI
SMTC Corporation
Solectron
Swisstronics
Pantronix Corporation
Quality Assembly (Thailand),LTD.

Appendix E
Market Size and Market Estimates

Worldwide: Preliminary PDA Vendor Shipment Estimates, 1Q06

(Units)

1Q06 1Q06 Market 1Q05 1Q05 Market 1Q05- 1Q06

Company
Shipments Share (%) Shipments Share (%) Growth (%)
Research In
929,883 25.5 711,000 20.7 30.8
Motion
Palm 459,970 12.6 614,750 17.9 -25.2
Hewlett-
421,336 11.5 601,352 17.5 -29.9
Packard
Mio
216,728 5.9 119,622 3.5 81.2
Technology
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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Smartphone Market

Notebook and Portable PC Market Share

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Notebook PC Shipments, Share and
Nanoboxx™ - Convergence comes of age
Growth by Supplier

Brand
TOP 5
Q3'06
COMMERCIAL
VENDOR
Q4'06 PORTABLE PC
MARKET SHARE
Change
TOP 5 CONSUMER
Q4'06 VENDOR
PORTABLE PC
MARKET SHARE

HP

3.6M Vendor Share:

IBM 17.8%
4.7M Dell 15.3%
Acer 15.2%
29% Toshiba 15.0%
HP 13.1%
20.0% Others 23.6%
Total 100.0%

Vendor Share:
Dell HP 30.6%
Toshiba 19.7%
3.6M Dell 11.7%
Acer 10.8%
3.5M LG 7.3%
Others 19.9%
-2% Total 100.0%

15.0%

Acer

2.4M

3.1M

29%

13.3%

Toshiba

2.2M
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5%
 Nanoboxx™ - Convergence comes of age

Appendix F
Costs/Benefits

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2009 2010 2011 2011

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

Processor $30.00 $25.00 $20.00 $20.00

Motherboard $30.00 $25.00 $20.00 $20.00
Display $50.00 $40.00 $30.00 $30.00
Input $30.00 $25.00 $25.00 $25.00
Storage $30.00 $30.00 $25.00 $25.00
Memory $30.00 $25.00 $25.00 $25.00
Box $2.00 $2.00 $2.00 $2.00
Battery $10.00 $10.00 $10.00 $10.00
Power cord $0.50 $0.50 $0.50 $0.50
Package $0.50 $0.50 $0.50 $0.50
Other $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 $15,958,000.00

Box Manufacturing Costs $20.00 $20.00 $20.00 $20.00
Assembly Costs $20.00 $20.00 $18.00 $18.00
Transporation & 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 $1,000,000.00

Sales and marketing $200,000.00 $400,000.00 $1,000,000.00 $1,800,000.00
General 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 G
Agartha Inc.’s rendition of the Nanoboxx™

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