nanobatt biz plan

8/6/2019 Nanobatt Biz Plan

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MPS 812 Business Plan

Contents

1. Executive Summary

2. Problem & Opportunity

3. Our Products

4. Management Team

5. Route to Market

6. Business Strategy

7. Financials

8. Exit Strategy

1. Executive Summary

1.1 Introduction of Company and Type of Business


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1.2 Problem & Opportunity

1.3 Our Products

1.4 Management Team

1.5 Route to Market

1.6 Business Strategy

1.7 Financials

1.8 Exit Strategy

2. Problem and Opportunity

Battery life is a major limitation in most portable electronic devices. A typical cellphones battery

can last around 4 hours of talktime[1], while a typical laptop battery can last around 6 hours

when the laptop is running applications without power-saving mode[2]. This would be a problem

when using such mobile devices in areas where there are no easily accessible power supplies such

as rural regions. Even in urban areas, it can prove to be quite a hassle to lug a charger around

and having to search for a spot with power socket when using laptops outdoors. In light of theever-growing usage of mobile devices, there is need for batteries which can last much longer

than current ones. Nevertheless, lithium-ion battery technology is reaching a plateau in terms of

increasing battery storage capacity while mobile electronic devices are becoming increasingly

energy intensive. As such, new technologies have to be utilized to solve this problem. Also the

market size for mobile electronic products is projected to continue increasing, ensuring a steady

demand for longer-lasting batteries.


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3. Products

3.1 Technology

We are using patented nanotechnology. Years of research and development at the Massachusetts

Institute of Technology have culminated in our NanoBatt super-capacitor batteries which can lastup to 600 times longer than conventional chemical batteries, store much more energy per unit

weight and be charged almost instantaneously.

Our batteries are created using revolutionary techniques to deposit millions of carbon nanotubes

filaments, which are tiny carbon threads as thin as 1/50000 of a human hair, on the capacitor

electrodes. Since the storage ability of a capacitor depends on the size of its surface area, the use

of such nanotubes filaments vastly increases the effective surface area and increases its energy

storage density to levels exceeding that of traditional batteries.

Our NanoBatt batteries can last up to 800 times longer than conventional chemical batteries,

store much more energy per unit weight and be charged almost instantaneously. NanoBattbatteries have the potential to supplant conventional lithium-ion batteries in energy-intensive

portable electronic devices such as mobile phones and laptops. Other possible applications of our

technology include powering electric cars, autonomous robots and spacecraft equipment.

Moreover, nanotube production technology has come a long way since its infancy. Since 2000,

the production cost of high-grade single-walled nanotubes has fallen from US$1500 per gram to

US$100 per gram. Our product, however, requires only short segments of filaments which are

even cheaper still at US$50 per gram. This price tag is expected to continue falling.

3.2 Current Products

We currently have two types of products cellphones batteries and laptop batteries. We have Li-

Ion batteries for all models of major cellphones brands such as Nokia, Apple, Sony Ericsson and

Blackberry, as well as for all models of laptop batteries such as HP, Fujitsu, Acer, Apple.

3.3 Comparisons with other products

Table 1: Specifications of several popular lithium-ion batteries and Nanobatt battery for

cellphoness

Brand A B C NanoBatt

Battery life (talktime) 4 hours 5.5 hours 4.5 hours 500 hours

Weight 50g 75g 60g 60g

Time required for full

charge

3 hours 4 hours 4 hours Less than 1 sec


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Lifespan (number of

charging cycles)

900 800 700 600 000

Specific energy density

(Wh/kg)

150 220 200 23 000

Temperature

dependency

Moderate High Moderate Very Low

Production cost (US$) $4 $4.5 $5 $10

The talktime of Nanobatts are 100 longer than that of current batteries used in cellphones. With

a typical 3 days recharging once scenario, Nanobatts are able to last 300 days without recharging

with one and half hour of talktime each day. This could save a lot of hassle espcially for busy

always on the move cellphoness and laptops users because recharging batteries with Nanobatt is

as simple as connecting the cellphoness to the power source and disconnecting again.

4. Management Team

Co-founders: Goh Woon Peng, Ong Wei Guang, Chan Eng Aik, Chin Xin Yu, Lim Kuo Hou,

Ridwan Salim Sanad

At present, we do not have any CEO and CFO yet as none of the co-founders possess the

necessary experience and expertise for these positions.

Chief Executive Officer: We will find someone with the relevant expertise to steer our

company, preferably a former CEO of a Fortune 500 company. Since we are a new start-up

company, we will look for someone who is willing and has the experience to take on multiple

roles initally. He should have relevant expertises in operations management, marketing, forming

the overall strategy, financing, creation of company culture, building of senior management

team, human resources, compliance with safety regulations.

Chief Financial Officer: We will hire someone with relevant financial training to assume to role

of CFO. He should have the expertise to ensure there is strict adherence to the budget of the

company. He should also be able to devise real time auditing tools that could identify and report

the financial happenings and potential problems area of activity to the management timely andaccurately.

Chief Technology Officer: Professor Riccardo Signorelli

Prof Riccardo Signorelli from MIT has extensive research experience dealing with

nanotechnology, especially in nanotube fabrication. He is also responsible for overseeing the

development of NanoBatts technology and is our mentor.


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Technical Advisors: Joel Schindall, John Kassakian

Prof Joel and Prof John from MIT were also involved in the development of NanoBatts

technology. As such, we shall appoint them as our technical advisors.

5. Route to Market

5.1 Market Size

The market for possible applications for NanoBatt overlaps almost all devices that require a use

of a battery. However, we identified the cellphones battery market and the laptops battery market

as the best candidates with sufficient market size and demand for high performance batteries.

Cell phone sales in first quarter of 2009 was at 269.1 million units. Based on this data, we can

expect that annual sales of ~1.1 billion units. This figure should continue to increase at a rate of

7% to 9% per year in the near future. Since the volume of aftermarket battery sales is far

overshadowed by the sales to the OEM, we assume that the volumetric sales of cellphone

batteries to be closely tagged to the sales of cellphones. Given the current market price of

US$2.70 per unit for basic models of cell phone batteries, the market size for all cell phone

batteries is estimated at US$2.97 billion.

Statistics show that in 2009 cellphones sales took a 13.4% share in units sold. This value was

only 10.8% a year ago. Based on this trend, the share of cellphones sales may reach 18% in 2011

with 200 million units sold and reach 22% in 2012 at 250 million units. Typically, the unit cost

for a cellphones battery is considerably higher at US$5 which reflects that the market size for

cellphones batteries is valued at US$1-1.25 billion.

Our other focus is on the laptop battery market. In 2010, laptops sales is forecasted at 169.8

million units and the predicted to grow at about 10% each year to reach 264.0 million units by

2014. Again, we assume that the sales of laptops to be directly correlated to the sales in itsbatteries. Currently, unit costs for laptop batteries range from US$15 to US$25, indicating a

market size of US$3.4 billion now.

In all, the present total market size for cellphone batteries and laptop batteries is valued at

US$4.4 billion. This represents the the markets with the best potential for the application of


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NanoBatt. With decreasing costs as the technology matures, the potential future market may be

as large as US$8.3 billion.

5.2 Potential Customers

Our primary customers will be the Original Equipment Manufacturers (OEMs) of cellphones

(eg. Nokia, Google, Motorola, etc.) and laptops (eg. Alienware, Sony, Toshiba etc.).

5.3 Market Growth

The existing large market of high energy consumption laptops and cellphones and their rapid

market growth predicted in next two years underpins our potential to establish a considerable

market share in laptops and cellphones battery market.

We will license our products to the leading laptops and cellphones OEMs mentioned above.

Initially our batteries will be used in the launch of their new series of product for market test-

runs. Licensees that see outweighing benefits using our batteries in the initial market test-runs

will use our batteries as the new standard in all their future products. In this way, we will

successfully retain the two leading laptops and cellphones manufacturers as our long-term

customers which ensures a stable source of income in the near future. By penetrating the market

of the leading manufacturers first, we hope our batteries would become the new standard for

laptops and cellphones market quickly in three to four years time.

5.4 Marketing Approach

We will hold a booth in International Consumer Electronics Show 2011 and International CTIA

wireless trade show 2011 in Las Vegas. By paricipating in the world's largest consumer


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technology trade shows, we could publicize our products to the leading OEMs of laptops and

cellphones (eg. Nokia, Google, Motorola, etc for cellphones and eg. Alienware, Sony, Toshiba

etc for laptops.). . Brochures with comparison of performance between our products and other

rechargable batteries will be distributed to laptops and cellphones manufacturers in the

tradeshow.

Apart from that, we will also make use of the connections of our CEO, industrial connections of

NTU as well as that of MIT through our CTO to kick start our business relationship with

potential licensees quickly.

After the licensing deal is struck with our licensees, feedback of our products from our licensee

will be channeled to our R&D department for to finetune our products research according to the

changing needs of our licensees. In this way, we can ensure a continual lasting relationship withour licensee by continually inventing better products that fit the needs of the cellphones and

laptops manufacturers.

5.5 Competitors and substitutes

Listed below are companies that are potential competitiors:

Mphase

Technologies

Battery with chemicals isolated from electrode by

"nanograss" when the battery is not in useVery long shelf life

AltairnanoLithium-ion battery with the anode composed of lithium

titanate spindel nanoparticles

Higher power, quicker recharge, less

combustible than standard lithium-ion

batteries

NaoexaLithium-ion battery using nanocomposite electrodes using

technology developed at Argonne National Laboratory

Higher power, less combustible than

standard lithium-ion batteries

EcoloCapSolutions

Lead acid batteries using nanotube coatedelectrodes

Increased energy density at a lowercost that Li-ion batteries

ZpowerSilver-zinc battery using nanoparticles in the silver

cathodeHigher power density, low combustibility

NexeonStructured silicon anodes for use in lithium-ion

batteries

Higher power density, low

combustibility

NanoAmorNanotube based additive for use in lithium-ion

electrodes
http://www.mphasetech.com/nanotechnology.htmlhttp://www.mphasetech.com/nanotechnology.htmlhttp://www.altairnano.com/profiles/investor/fullpage.asp?f=1&BzID=546&to=cp&Nav=0&LangID=1&s=0&ID=10701http://www.nanoexa.com/lithium.htmlhttp://www.ecolocap.com/site/en/mbt-cnt-battery.htmlhttp://www.ecolocap.com/site/en/mbt-cnt-battery.htmlhttp://www.zmp.com/http://www.nexeon.co.uk/technologyhttp://www.nanoamor.com/inc/sdetail/23347http://www.nanoamor.com/inc/sdetail/23347http://www.nexeon.co.uk/technologyhttp://www.zmp.com/http://www.ecolocap.com/site/en/mbt-cnt-battery.htmlhttp://www.ecolocap.com/site/en/mbt-cnt-battery.htmlhttp://www.nanoexa.com/lithium.htmlhttp://www.altairnano.com/profiles/investor/fullpage.asp?f=1&BzID=546&to=cp&Nav=0&LangID=1&s=0&ID=10701http://www.mphasetech.com/nanotechnology.htmlhttp://www.mphasetech.com/nanotechnology.html


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At the moment, our concept of a capacitor-based battery unique in the market. Our most

immediate competitors offer nanotechnology-enhanced lithium-ion batteries which are

evolutionary improvements over traditional lithium ion batteries. These batteries would possibly

be able to reuse much of current technology and manufacturing processes and thus be cheaperthan our product. However, we still hold a fundamental advantage in the charging speed and

longevity of capacitors over chemical batteries. Furthermore, we designed our product to be

completely compatible with devices that operate on traditional batteries, there will be no

requirement for any redesign of their devices to optimize performance with NanoBatt. Therefore,

we expect we have the superior advantage in terms performance over our competitors. Our main

challenges will instead be our smaller financial base compared to our competitors and potential

attempts by our competitors to block our products in the market by using their financial clouts.

Technological Position

We aim to quickly obtain patents in major markets such as the United States, China, Europe,

India and South-east Asia to establish a barrier to entry to prevent copycat competitors.

Moreover, we will engage in continous research and development in the derivatives and

improvements of our technology. Details of the technical approach will only be revealed to our

outsourced manufacturers after signing a confidentiality agreement with NanoBatt.

Substitutes

In the long term, there are a few battery technologies being developed which can potentially

displace current battery technology.

Lithium-Polymer batteries have been well studied and researched on. These batteries are highly

mouldable and have high energy capacity but degrade more rapidly and are more expensive than

current lithium-ion batteries. They are yet to be widely used in the industry but this trend is

changing with the introduction of Li-Po batteries into popular devices like the MacBook and

Amazon Kindle.


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Fuel cells promises extremely high energy density. Now, they are most frequently used in large

scale applications like in vehicles where the need to store alot of energy is imperative. They can

be potentially used on laptops and cellphoness but at current prices it would be prohibitive.

However, it can occupy a niche market for users who demand >100 hr battery life.

http://www.gizmag.com/lithium-ion-battery-breakthrough-mit/11244/

Competitors:

http://www.understandingnano.com/batteries.html

Substitutes Li-Po batt, Improvement on Li-ion,Fuel Cells

6. Business Strategy

NanoBatts business model involves the designing and licensing of IP based on our proprietary

batteries rather than the manufacturing and selling of actual batteries. We aim to license IP to a

network of partner companies, and in particular we are targeting the world's leading cellphones

and laptop companies. These companies will incorporate NanoBatt batteries in their products,

paying NanoBatt royalty on every battery produced. This will constitute our main revenue

stream. Our key focus and competency lies in research and development.

original equipment manufacturers (OEMs) with the requisite nanotube fabrication facilities for

the production of NanoBatt batteries. This

First year revenue

We plan to incorporate our batteries together with new series of cellphoness and laptops. Market

size for cellphones and laptop batteries are large compared to other products such as electric cars

and autonomous robots. Thus, we will just focus on selling cellphones and laptop batteries for

the first 2 years in order to achieve positive cash flow as soon as possible. More products such as
http://www.gizmag.com/lithium-ion-battery-breakthrough-mit/11244/http://www.understandingnano.com/batteries.htmlhttp://www.understandingnano.com/batteries.htmlhttp://www.understandingnano.com/batteries.htmlhttp://www.gizmag.com/lithium-ion-battery-breakthrough-mit/11244/


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electric car batteries will be introduced into the production lines from the 3rd year onwards to

diversify our sources of income.

Cost of production

The manufacturing costs of our Nanobatt batteries will be approximately 2 times higher than that

of conventional lithium-ion batteries. We plan to decrease this to 1.5 times that of Li-ion

batteries through economies of scale.

Table 1: Manpower Allocation in the first 3 years of operation

Year 1st year 2nd year 3rd year

Senior scientist 1@$5000 1 1Scientist 1@$3000 1 2

Senior technician 1@$2500 1 1

Technician &

maintenance 0 0 1@$2000

Sales & marketing 0 1@$4000 1

Management 1@$5000 1 1

Total 4 5 7

Business strategy summary :
mailto:1@$5000mailto:1@$3000mailto:1@$2500mailto:1@$2000mailto:1@$4000mailto:1@$5000mailto:1@$5000mailto:1@$4000mailto:1@$2000mailto:1@$2500mailto:1@$3000mailto:1@$5000


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Growth Strategy

Once proof-of-concept has been shown in a high profile cellphones or laptop company, we expect

other companies in the same or in other industries to follow quickly. The incentive for the

launching customers in each sector will be to be first on its respective market, and possibly, when

additional patentable technology is developed, they can receive royalties on that specific part. This

will make our clients more competitive than others in the same market.

Nanobatt will focus first on a successful proof-of-concept in collaboration with a launching

customer from the battery industry, using a small team of top experts in the fields of

Nanotechnology in nanotubes fabrication, supplemented by experts in whey processing

from our partner. Once the proof-of-concept is demonstrated, Nanobatt will quickly

increase the critical mass of scientists to widen the scope of our applications. Business

developers with a background in the battery-industrial (phone, car, portable computer

industries.) sector will be hired to establish our market as fast as we can.

On the production side, as soon as our first prototype NB1 fits the requirements, the

prototype will be licensed to the companies who are interested in. A charge on licensing

fee per unit will be determined to companies interested in applying our prototype to their

products.

From second year onwards, our applications will be customized for different industrial

sectors, each with their own specific challenges and problems, we consider to group a


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scientific team with a focus on research and development in our prototype, in order to

maximize ability of our prototype to penetrate into their core industrial sector.

Suppliers & Strategic Partners

A small number of partners are now signed on or are subject to negotiations.

They will be paramount for the proof-of-concept phase:

Massachusetts Institute of Technology (modeling, carbon nanotubes)

TDI Wageningen (processing technology)

Future collaborations, either through (inter-)national subsidized technology development

projects or through partnership relations, include:

carbon nanotubes supplier

Massachusetts Institute of Technology (processing technology)

A substantial number of major nanotubes suppliers companies are located in the America,

concentrating a large critical mass of relevant research groups, an essential condition for

implementation of NB1 technology at industrial scale in the batteries industrial sector.

Operating Locations

During the proof-of-concept phase, we will be operating from the Massachusetts Institute of

Technology in the group of Prof. Dressehaus, with whom we already have a collaborative

project in the area of fabrication of Ultracapacitor. Nanobatt will outsource the

manufacturing of NB1.

7. Financials sure.will get it done by 26

7.1 Projected Cash Flow

Based on a royalty rate of 10% for each Nanobatt battery sold by the OEMs at an estimated price

of S$10 to cellphones companies and S$40 to laptop companies, we will earn S$1 and S$4

respectively for each battery sold. According to our predicted market share which we can capture

for each year, we have calculated our revenue and cash flow in table 3 below.


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Revenue Assumptions

Estimate our sales of our first product,

Forecast production volume X selling price - outsourcing production cost = revenue

Initiate more production lines for growth

Table 3: Projected cash flow for first 4 years

Cashflow forecast(S$'000)

Year 2011 2012 2013 2014

Income revenue 1644 5712 9916 14900

Total Expenditure 426 743.5 1428 2279

Cashflow from operation 1218 4968.5 8488 12621

Cashflow from investment 1300 5000 7200 1200

Total Cashflow calculated -82 -31.5 1288 11421

7.2 Projected Company Valuation

Table 4: Projected company valuation for first 4 years

Company Valuation in $$ 000

Free Cash Flow Now Year 1 2 3 4

-82 -31.5 1288 11421


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Discount rate 45% 35% 25% 15%

Discount Factor 0.690 0.549 0.512 0.572

Current Value -57 -17 659 6530

Entity value 7116

Debt 0Company Value 7116

Figure 2: (Bar charts of projected company valuation for first 4 years)


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8. Exit Strategy

We will put up our company for acquisition after 5 years by a larger company in the same

industry, preferably one which possesses nanotube fabrication facilities.

[1] http://www.infosyncworld.com/news/n/8069.html

[2] http://onlinelaptopbattery.com/tag/average-laptop-battery-life/

Appendix - Detailed financials


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Year 2011

Direct calculation of cash flow

Month 1 2 3 4 5 6 7 8 9 10

Income from sales

(in unit of '000)

Orders Received/Confirmed

Cell Phone battery 102 102 102 102 102 102 102 102

Laptop battery 43 43 43 43 43 43 43 43

Licensing earning (S$ '000) 274 274 274 274 274 274Payment received 274 274 274 274

Cost

(in unit of S$ '000)

Lab Rental 10 10 10 10 10 10 10 10 10 10

Salary 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5

Patent

Application Fee (US,EU,China) 0 0 12 12 12 12 12 12 12 12

Maintenance Fee (US,EU,China) 0 0 0 0 0 0 0 0 0 0Tax 0 0 0 0 0 0 0 0 0 0

Interest 0 0 0 0 0 0 0 0 0 0

Total Costs 25.5 25.5 37.5 37.5 37.5 37.5 37.5 37.5 37.5 37.5

Cash Flow from operation -25.5 -25.5 -37.5 -37.5 -37.5 -37.5 236.5 236.5 236.5 236.5

Investments


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Equipment 100 50 0 0 50 0 0 200 200 200

Liquidity

Total Cashflow calculated -125.5 -75.5 -37.5 -37.5 -87.5 -37.5 236.5 36.5 36.5 36.5

Year 2012


Month 13 14 15 16 17 18 19 20 21

Income from sales

(in unit of '000)


Cell Phone battery 205 205 205 205 205 205 205 205 205 2

Laptop battery 93 93 93 93 93 93 93 93 93

Licensing earning (S$ '000) 274 274 577 577 577 577 577 577 577 5

Payment received 274 274 274 274 577 577 577 577 577 5

Cost


Lab Rental 10 10 10 10 10 10 10 10 10

Salary 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19

Patent

Application Fee (US,EU,China) 12 12 12 12 12 12 12 12 12

Maintenance Fee (US,EU,China) 0 0 0 0 0 0 0 0 0

Tax 0 0 0 0 245.5 0 0 0 0

Interest 0 0 0 0 0 0 0 0 0 Total Costs 41.5 41.5 41.5 41.5 287 41.5 41.5 41.5 41.5 41

Cash Flow from operation 232.5 232.5 232.5 232.5 290 535.5 535.5 535.5 535.5 535

Investments

Equipment 200 200 500 500 500 500 500 500 500 5


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Liquidity

Total Cashflow calculated 32.5 32.5 -267.5 -267.5 -210 35.5 35.5 35.5 35.5 35

Year 2013


Month 25 26 27 28 29 30 31 32 33 3

Income from sales

(in unit of '000)



Laptop battery 154 154 154 154 154 154 154 154 154 15



Cost


Lab Rental 10 10 10 10 10 10 10 10 10 1

Salary 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.

Patent

Application Fee (US,EU,China) 12 12 15.9 15.9 15.9 15.9 15.9 15.9 15.9 15.

Maintenance Fee (US,EU,China) 0 0 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.

Tax 0 0 0 0 937 0 0 0 0

Interest 0 0 0 0 0 0 0 0 0

Total Costs 46.5 46.5 52 52 989 34.5 34.5 34.5 34.5 34.

Cash Flow from operation 530.5 530.5 525 525 -38 916.5 916.5 916.5 916.5 916.

Investments

Equipment 600 600 600 600 600 600 600 600 600 60


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Liquidity

Total Cashflow calculated -69.5 -69.5 -75 -75 -638 316.5 316.5 316.5 316.5 316.

Year 2014


Month 37 38 39 40 41 42 43 44 45 4

Income from sales

(in unit of '000)



Laptop battery 225 225 225 225 225 225 225 225 225 22



Cost


Lab Rental 10 10 10 10 10 10 10 10 10 1

Salary 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24

Patent

Application Fee (US,EU,China) 15.9 15.9 15.9 15.9 15.9 15.9 15.9 15.9 15.9 15

Maintenance Fee (US,EU,China) 1.6 1.856 1.856 1.856 1.856 1.856 1.856 1.856 1.856 1.85

Tax 0 0 0 0 1652 0 0 0 0

Interest 0 0 0 0 0 0 0 0 0

Total Costs 52 52.26 52.26 52.26 1704 52.26 52.26 52.26 52.26 52.2

Cash Flow from operation 899 898.7 898.7 916.5 -317 1353 1353 1353 1353 135

Investments

Equipment 100 100 100 100 100 100 100 100 100 10

Liquidity


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Total Cashflow calculated 799 798.7 798.7 816.5 -417 1253 1253 1253 1253 125

Due to rounding differences, the presented totals may deviate from the sum of the presented

figures

http://www.tomshardware.com/news/acer-dell-hp-notebook-sales,7820.html

http://www.canalys.com/pr/2010/r2010021.html

http://www.understandingnano.com/batteries.html

http://www.inventionstatistics.com/Licensing_Royalty_Rates.html

http://pesn.com/2006/02/09/9600232_MIT_Battery/

Group members:

Goh Woon Peng (086818L16)

Ong Wei Guang (087464J16)

Chan Eng Aik (086878G16)

Chin Xin Yu ()

Lim Kuo Hou (073333D16)

Ridwan Salim ()
http://www.understandingnano.com/batteries.htmlhttp://www.inventionstatistics.com/Licensing_Royalty_Rates.htmlhttp://pesn.com/2006/02/09/9600232_MIT_Battery/http://pesn.com/2006/02/09/9600232_MIT_Battery/http://www.inventionstatistics.com/Licensing_Royalty_Rates.htmlhttp://www.understandingnano.com/batteries.html

nanobatt biz plan

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