Executive Summary Business Plan
Business Overview
Gaspardo & Associates (G&A) has completed the prototype development of its Robotic Component Scanning System (ComScan) that speeds the production of a broad range of manufactured parts (from engines to medical devices) by providing high speed and high resolution 3D measurement quality inspection. Demonstrations of this prototype have created customer and dealer interest in our first product. We are seeking $2.0M in equity financing to finish development of the first product, sustain G&A until sales are self-supporting, and develop additional product variations required by the market. With an exit strategy plan to be acquired by a large production equipment company, Gaspardo & Associates anticipates a better than 12:1 payback.
Market Need
Today, many manufacturing plants are running 24/7 to keep up with demand for their completed assemblies. In order to ensure final product quality, these plants must inspect the dimensional quality of the components before they go into higher-value assemblies. This dimensional inspection occurs every time they restart a line, every time the tooling is changed, and on a sub-sampled set of full production parts. Based on 2002 Census figures there were 110K sites producing $1.5T worth of product suggesting a productivity factor of $1600/hour for a site running 24/7.
The Incumbent Solution
For the last 40 years these plants have been using a Coordinate Measurement Machine (CMM) that can be programmed to provide dozens of points/minute of 2D measurement data. In many cases companies have multiple CMMs per site to handle the measurement load. The price of a CMM ranges from $250,000 to $400,000+ depending on the size and feature set. Quality Magazines. US Quality Spending survey suggests there was $220M of programmable CMMs sold in the US in 2005 with an expected growth rate of 10%.
An Alternative Solution
Ten years ago, Area Scanner Technology using a white light interferometer became available. The scanning devices are mounted on a tripod and capable of gathering 1/2M points of measurement data on each scan. Initial acceptance was limited to early adopters because it was complex to .stitch. the scanned images together to make a complete high resolution 3D compilation of the measured data. In 2005 this was solved by Innvometric.s PolyWorks software. Innvometric.s president estimates there were approximately 300 area scanners sold in 2006. The success of area scanners in the market recently caught the attention of CMM market leader Hexagon who purchased Cognitens in March .07.
What still exists as a problem for area scanners is the need to reposition the scanner and mechanical component for each new scan. Some scanner manufacturers resell simple rotary tables that enable some automatic component repositioning. However this solution falls short of expectations because the area scanning technology can only measure what it sees. Thus shadows form, from a fixed line of sight scanning position making completely automated scanning with a rotary table impossible. The fixed radius arm of the ComScan allows the line of sight angle to change automatically thus enabling complete scanning of the component.
The ComScan Solution
The ComScan solution integrates a proprietary patent-pending semi-spherical gantry for the scanner with the appropriate X/Y/Z-axis component handling system and the PolyWorks software to provide high-speed high-resolution automated 3D measurement data collection. The ComScan works with most of the existing scanners in the market, giving Gaspardo & Associates. customers the ultimate flexibility in selecting a solution with a prices ranging from $120,000 to $250,000.
An Example of ComScan Value
A prospective customer currently spends 90 minutes collecting measurement data for an engine cylinder head using CMM and manual inspection techniques. With an area scanner on a tripod they could collect more points in approximately 45 minutes. The ComScan solution takes less than 15 minutes with the same area scanner, the ComScan also enjoys the same multi component productivity of a programmable CMM. With a 6:1 improvement over a CMM and a 3:1 improvement over an area scanner on a tripod ComScan is a cost effective solution for the manufacturing industry.
Management Team
President, Steve Gaspardo, is a degreed manufacturing engineer in robotics (computer integrated manufacturing), and 15 years experience working for ITT Hoffman and Magnetrol. He started Gaspardo & Associates, a 3D inspection service bureau, in 1996 with his wife and co-founder Cindy. In 1999, Steve started using area scanners to improve performance of the service bureau. It is this experience that provides the insight for the ComScan solution.
Brian Kinkade joined G&A in 2007 as Director Business Strategy to help raise the next round of funding and handle the sales and marketing responsibilities. He holds a BSEE and an MBA. Brian has over 18 years experience in technical sales and marketing in image processing products, motor controls, and industrial sensors.
John Verni joined G&A in 2005 as New Business Development Manager and helped raise the initial $600K funding to support the proof of concept, prototype development and marketing research activities. John is a degreed engineer and has an MBA. John has been active for the last 18 years in engineered sales for a variety of rotating equipment applications for the process industry.
Naseer Khan joined G&A in 2007 as Director of Channel Marketing and has been helping customers implement solutions in the 3D scanning arena for 14 years, with experience in both software and hardware aspects of modeling and measurement products. Working at Konica Minolta, he implemented an effective channel sales methodology, successfully engaging with industry through a strong network of established partners, delivering above quota revenues. Prior to that, Naseer excelled at various roles in sales and engineering at companies such as Geomagic, Imageware.
Commercialization Strategy
Gaspardo & Associates is in the process of firming up commitments from prospective customers for units to be delivered in 2008 and 2009. G&A plans to handle Chicago/Milwaukee regional sales directly and use CMM dealers for the rest of the United States. Recent consolidation activities in the CMM industry have left CMM dealers stranded without a product. G&A plans to sign up approximately 24 of these former CMM dealers to handles sales outside of the Chicago/Milwaukee region. Marketing activities will consist of: exhibiting/speaking at industry tradeshows, co-marketing with various Scanner manufactures, and direct marketing where appropriate. As a result, Gaspardo & Associates anticipates a market penetration of 12% of the expected area scanner sales.
Financial Forecast
| 2008 | 2009 | 2010 | 2011 | 2012 | |
| ComScan Units | 8 | 20 | 50 | 90 | 114 |
| SSG Units | 4 | 28 | 81 | 114 | |
| Total Revenue $M | 1.3 | 3.9 | 12.4 | 27.3 | 38.7 |
| Gross Margin $M | 0.5 | 1.8 | 5.9 | 13.4 | 19.2 |
| Gross Margin %/NR | 40% | 46% | 47% | 49% | 50% |
| Op. Profit $M | -0.73 | 0.44 | 3.38 | 10.36 | 15.84 |
| Op. Profit %/NR | -57% | 1% | 27% | 38% | 41% |
Funding Needs
Gaspardo and Associates seeks $2.0M equity financing to develop & launch the first product, become cash-flow positive, and develop additional product variations required by the market. Uses of funds include:
- Completion of first product design and finishing international patent protection.
- Marketing and sales promotion of first product design and establishing CMM dealer sales channel.
- Completion of follow-on product design variations.