Chainsaw  investors survey
on a manufacturing investment opportunity

Quasiturbine Tronçonneuses Inc.
"Zero vibration - Low noise - Low pollution" 
Quasiturbine Chainsaw manufacturing company

(Note: This is not a stock market approved investment prospectus)


This project is a great opportunity for forestry regions, looking for local economic development and diversification.

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Preliminary prototypes - Not the definitive manufactured product

Superiority of the Quasiturbine chainsaw
The product has several superior characteristics: 
 "Safety-Therapeutic Quasiturbine Chainsaw" with zero vibration (reduces risk of Raynaud's Syndrome),
Better health by less pollution (less poisoning by exhaust gas and less side effects), 
Better security by 20 times (?) less noise (lessening to environment and ears protection - No more ear plugs!), 
Rapid stopping ability improves safety (superior torque allows lower operating RPM and lower inertia). 
Possibility (?) of pneumatic start (air starter) using less that a liter canister reservoir pressurized by the combustion chamber!

Technology readiness
A Quasiturbine pneumatic chainsaw prototype has been built and operational since 1997.
This Quasiturbine chainsaw prototype is exhibited in a showcase near the IMAX entrance 
at the "Old Port of Montréal Sciences Center"
From the past years research, an elaborated functional engineering CAD design has been developed 
for the Quasiturbine gasoline engine, and is ready to be built and tested. Minor improvements will eventually be added.
A detailed professional design chainsaw analysis based on the Quasiturbine engine size and other considerations has been completed.
Generic components have been assessed and suppliers identified.
Standard certification procedure tests have been reviewed and considered.
Positive reactions to this technology have been obtained from local chainsaw retailers.

Market and objectives 
It is estimated that approximately 2 to 4 million chainsaws are manufactured annually world-wide, 
of which over 1 million are used by professional
(subject to further verification).
The present market distribution network is very fragmented 
and not owned by any major chainsaw manufacturers (often small independent local shops). 

The company objective is to capture 10% of the professional chainsaw market within five years, 
which will required to make about 100,000 units a year (300 per day) world-wide on the the fifth year. 
A more modest objective of 20,000 units per year (60 per day) appears to be the minimum viable level. 
This objective is achievable because there will be no similar product marketed by competitors during the 5-years exclusivity period. 

Due to the therapeutic, safety, health and environmental benefits of the product, support by 
unions, governments, health experts, insurance companies and employers can be expected.
We anticipate that
professional buyers will be willing to pay a premium to obtain these benefits !
Non-professional equipment sales also offer a great complementary market with considerable potential. 
In order to prevent radical action by conventional chainsaw manufacturers, some market share must be allocated to them. 
By the fifth year, market penetration achieved with this superior product 
should enable the company to compete well with other manufacturers starting to implement the Quasiturbine technology.

Intended company financial needs
In 2005, it is the promoter's intention to create a new company, 
duly licensed to manufacture and market a chainsaw using a Quasiturbine type of engine. 
This company will initially be private, and financed only through private foreign investments.
(Local laws prohibit internet private investment opportunity offers to Canadian residents)
1/1000 of initial offered shares = $ 20,000 US
(Sales will be progressive as investment will be needed - The first round targets 100 shares in year 2005)
This investment carries the usual risks associated with new technologies, and is intended for well-informed professional investors.
Some financing may also come from loans.

Start-up loan alternative or complement
The promoter would consider to pay up to 20% interest per year on a substantial initial loan,
(Collateral guarantee would be some company shares, or rights on the Chainsaw license Agreement).

Company book keeping
Company legal and accounting department will be under the supervision of a major international firm located in Montréal Canada.

Manufacturing plant location
Manufacturing plant will not require highly skilled personnel, and would be suitable for a rural location.
Depending on early investors' preferences, the plant could be located outside Canada. 
This project is a great opportunity for forestry regions, looking for local economic development and diversification.

The license agreement
The company will manufacture all chainsaw components except the Quasiturbine engine "rotors" 
which will be provided by Quasiturbine Agence Inc through a variety of authorized manufacturers.  
The intended company has already signed a "rotor" priority supply principle agreement with Quasiturbine Agence Inc. 
by which all "rotors" supplied will come with a license to make a handheld 
gasoline Quasiturbine wood chainsaw with an aluminum-steel engine in the maximum 2 to 6 HP range. 
Exclusivity is guaranteed for at least 5 years after the sales start 
and with special permission, manufacturing for existing trade names during the exclusivity period could be considered. 
To avoid restraining initial growth activities, payment for the supply-license priority entry agreement will be in company shares 
and later royalties from sales revenues. 
The company will initially market the chainsaw in North America, 
and success in technical and sale targets will progressively open the territory to South America and eventually to the world,
with a priority to server the authorized plant location vicinity area and countries.
It is not the purpose and the right of the company to do R&D on the Quasiturbine engine itself, 
nor to get, possess, manage or trade intellectual properties on the engine, its accessories or uses. 
If the company is later restructured, amalgamated or sold, all agreements will be honored by Quasiturbine Agence Inc. 
to the activity level 6 months before initiation of the actual action, additional level being matter of negotiations.

Company budget estimate (In US $)

Government grants: Many government programs are available to assist with establishing of new corporations and development of new products. 
All available assistance will be considered for the company start-up.

Sales, operational cost and profit projections: Projections are based on the following assumptions: 
production cost of $375/unit (once grant and fiscal advantages taken into account).
An average wholesale sale price of $500 per unit including technology premium for those professional units (Retail between $600 to $1000).
The first 2 years of operation should be highly supported by grants from governments.
This should lead to a comfortable 25 % profit, or about 125 $ per unit. On an annual basis, this would mean:
       Year                                   Quantity                      Sales                      Operation cost                    Profit
3rd year (80 units per day)          25 000 units              $12 millions                       $9 millions                    $3 millions
4th year                                     50 000 units              $25 millions                       $19 millions                   $6 millions
5th year (300 units per day)       100 000 units              $50 millions                       $38 millions                   $12 millions
The Quasiturbine technology is believed to offer a long term potential to further lower the production cost below conventional piston chainsaws.

Fifth year production cost distribution: Fifth year operation will require a total weight of over one million pounds of raw material, 
and will produce an added value of about $20/pound. 

The fifth year production cost estimate of $38 millions to produce and sell 100,000 units should be distributed as follow:
$3 million for raw material
$3 million for generic chainsaw components
$9 million to purchase engine rotors (Variable - $ 90 per units ?)
$3 million for diverse sub-contract
$4 million for the plant and equipment location 
$6 million for plant salaries ($ 60 per unit = 3 employee working hours)
    (200 workers = 1 man-year for 500 units, or the equivalent of 2.5 units per shop worker-day)
$2 million quality services, certifications and guaranties
$1 million in R&D for better integration of chainsaw components 
$2 millions for external sales, publicity and promotion. 
$1 million for various consulting and administrative services 
$4 million in royalties on technologies (Variable - $ 40 per unit + technology premium ?)
This distribution is somewhat speculative, and will have to be readjusted to account for operation reality.

In the initial phase, top quality project engineers will be required. 
Montréal is a high-tech city with a high core of engineering consultants and aeronautics industries, 
well able to provide
at very competitive prices all specialized skills and shops required.
In the fifth year, the operation will require about 200 workers in the main plant, 
plus about 200 workers in direct outsourcing facilities, generic components not being included.
Distribution, sales and marketing will require an additional 100 employees (or service contracts) world wide.
Manufacturing plant will require few skilled personnel, and will be suitable for a rural environment.
Most of the plant work will be accomplished by low to medium paid jobs, with on-site training.
A total of 500 employees ($10-15 millions wages) will produce, sell and distribute 300 units daily, 
an overall ratio of 1.5 worker-days per unit.

Company status on the fifth year
By the fifth year, the company should have captured a 10% share of the professional chainsaw market, 
should have the most advanced chainsaw product technology based on Quasiturbine engine, 
and should have world-wide reputation. 
The Safety-Therapeutic Quasiturbine Chainsaw could be regarded as a must for all professionals. 
The company should be profitable and without debt, 
and facing a large new potential market for professional and non professional chainsaws.
Total company value could be in the hundreds of millions U.S. dollars (initial shares plus increase in value of 20-fold or more).
Further expansion could be financed by loans, without further share offerings.

Investors cross evaluation
Investment decision will be presumed to be based on evaluations 
of technology, market, financial and other factors by independent investor's experts, 
and investors agree not to oppose any statement by Quasiturbine Agence Inc., the company, the inventors or any other related sources 
in regard to their investment decisions and follow-up.

Investor profit expectation
The company operation will likely not be profitable before the 3rd or the 4th year,
however, operation profit projection could be quite high base on this new innovative technology.
Investors are generally not looking at operation profits, 
but at the premium other investors will be willing to pay to take their place in this venture.
In this respect, investor profit expectation could be substantial as early as in the first year.
For a single investor over a 8 years period, this project could mean investment during year 1,2,3,
zero investment in year 4 and 5 (external loans if required), a complete pay back in year 6,7,8 
and substantial ownership thereafter of a company valued at several hundreds millions $
(the promoter takes an option to buy back the investor shares in year 9 and 10 at a predetermine price).

Canadians residents not eligible
Local laws prohibit internet private investment opportunity offers to Canadian residents.
To comply with Canadian law, Canadian citizens and/or corporations will be permitted to invest only later, 
if and when the company becomes publicly listed according to stock market rules. 

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Quasiturbine Tronçonneuses Inc.  Zero vibration - Low noise - Low pollution Safety-Therapeutic Quasiturbine Chainsaws
Casier 2804, 3535 Ave Papineau, Montréal Québec H2K 4J9 CANADA (514) 527-8484 Fax (514) 527-9530
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