Executive Summary

 

Waveblades are bodysurfing hand blades that enhance surfers’ experience through increased speed and control.  Waveblades are two handplanes that each hand slides into so that they can glide smoothly across the water. Waveblades, Inc. (WB) will initially target current handboarders, bodysurfers, and bodyboarders, with great potential to expand to the larger surf community and even beyond to the mass water sports market.

 

Every other handboard/handplane out there is:

 

  1. Sold as a single board

  2. Secured only by a Velcro strap across the back of the hand – have to make a conscious effort to conform the hand to the board, not the other way around

  3. Made of resin coated Styrofoam or wood – clumsy and a potential skull cracker in the surf

  4. Priced at $125-200+ for a single board

 

Waveblades give significant advantages over the competition by providing:

 

  1. A blade for each hand – great balance, no impediment to swimming, can go either direction on the wave

  2. Form fitting design that completely covers the hand and gives each finger control over the movement of the plane – lightweight, streamlined, easy to wear, and really cool looking – check out the prototypes at http://www.waveblades.com/index1.html

  3. Reinforced but soft skinned material – able to hold an edge on the wave but not crease your head in a tumble

  4. Price projected at $95

 

The form fitting and soft-skinned design gives Waveblades the potential to capture the public imagination just like the Morey Boogie Board did. The Morey Boogie took body boarding beyond the limited appeal of clumsy inflatable rubber surf mats and unforgiving wooden body boards, and became the go to wave riding toy for all levels of experience.

 

Manufacturing is straightforward and can be done domestically for quality control. The product has been designed and refined, a provisional patent obtained, and a potential manufacturer identified. Marketing will concentrate on the Waveblades website, partner websites, and brick and mortar surf shops, and will be supported by surf event presence and social media. Additional products that would pair well with Waveblades include apparel, back packs, and camera mounts.

 

The principals are seeking a total commitment of $250,000 to cover Year 1 costs for design finalization, patent costs, injection mold development, initial production costs, marketing expenses and minimal salaries to the principals. After Year 1, revenues should cover costs.

 

Pro Forma Financials (with a 1/1/16 funding date)

2016 2017 2018 2019

Gross Revenue 186,000 925,000 1,500,000 2,100,000

Annual Profit/(Loss) (210,000) 255,000 440,000 650,000

ITD Profit/(Loss) (210,000) 45,000 485,000 1,135,000

 

Max projected investor outlay: $230,000

Date max outlay reached: July 2016

Date ITD breakeven reached: Oct 2017

Pro forma summary Excel file attached; main pro forma assumptions:

 

  1. Principals - $2K/month each until Year 2, then, $4K/$6K/$8K per month in Yrs 2, 3 and 4; no pay until production start; did not include profit sharing/equity in pro forma yet

  2. Development - Patent $30K; Design $4K; prototypes for 3 sizes $3K each; mold fabrication for 3 sizes $22K each; patent maintenance $12/15/18K in Yrs 2, 3 and 4

  3. Consulting – Website creation $15K in first year, then $6K/year maintenance; up to $10K pegged to 1st 2 yrs production deferred comp for business plan & pro forma work

  4. Production – S/M/L sizes $15.50/16.50/17.50 per unit (see Foam Creations quote attached), with no volume discount negotiated yet

  5. Production estimates - $1/unit for packaging; $2/unit for manuf shipping; $6.95 S&H revenue to Waveblades, $2.95 S&H expense to Waveblades

  6. Gross Rev by product – 40% Large Waveblades, 30% Medium, 20% Small, 10% Apparel

  7. Revenue by distribution channel – 40% WB website, 20% partner sites, 20% surf shops, 15% sporting goods stores, 5% events

  8. Percent commission by distribution channel – 0% on WB website; 25% to partner sites; 50% to surf shops & sporting goods stores (i.e., wholesale pricing); 15% at events

 

 

WAVEBLADES- Estimate

Attn: Robert Davis, Tim Cunningham

July 8th 2015

Below please find a budgetary updated estimate for a of WAVE BLADES

 

UPDATED ESTIMATE June 24th 2015 (not Final Quote)

 

DESCRIPTION CAD Proto Min. Order Parts Tooling & Cooling Fixtures

Pair Med. Blades ? 1L=$1,350 500 pair $16.50 pair 2 sets = $21,500 ($10,750 each)

Pair Large Blades ? 1L=$1,350 500 pair $17.50 pair 2 sets = $21,500 ($10,750 each)

Pair Small Blades ? 1L=$1,350 500 pair $15.50 pair 2 sets = $21,500 ($10,750 each)

 

  • 100% Advance Deposit (wire transfer) for 1st tooling ($10,750) required.

  • Written P.O. for tooling needs to be sent with final approved CAD file by email.

  • 100% Advance Deposit ($10,750) required for second production tool required on First Article Approval of first tool, before production starts

  • Those annual shipments in excess of 10,000 units may earn a discount thereafter of 5%, once 10,000 units have been shipped in that calendar year. Additional tooling to the first 2 molds, will be required as annual production reaches toward 10,000 units.

 

Notes:

 

  • Prototype Estimate is a single left or a single right. not a pair. 1L = One Left

  • Two completed 2-cavity tools required for production

  • Limited production of 50 sets only (total) is allowed from first tool set, but then 2nd tool is then required for normal production run. Second tool set must be same size to equalize production rate

  • Estimate includes both tooling cost and cooling fixture palms but NOT finger cooling gigs

  • Estimate does NOT include webbing strap or strap assembly at this time/ pending strap specs

  • Estimate does NOT include packaging at this time

  • Yellow color only is quoted at this time

  • CAD with P.O. for tooling by email by Wave Blade Engineering prior to tooling start.

  • Please allow 4-6 weeks to tool completion un-textured.

  • Un-textured pilot production option may commence once first articles are approved for pilot run.

  • Tool can then be sent to Mold Tech for texturing option, with 2 week lead time added

  • Testing for physical properties resistance to environmental and chemical exposures, including mechanical stress, attachment, and any additional testing is to be specified, standardized, and monitored by the customer.

  • Final quote will be provided once the final CAD is approved by both parties. Estimate is subject to change.

 

Payment terms

  • All purchases are cash in advance until formal credit approval by Foam Creations is established

  • All prices in U.S. dollars

  • All part prices are FOB Quebec City Canada

 

Thank you for this opportunity to submit an estimate for work.

Kevin McCarthy,

VP Operations

Foam Creations

 

Table of Contents


 

Business Concept 5

Water Sports Industry Analysis 6

Target Market/Customer Analysis 7

Marketing 8

Financial Analysis 10

Management Team 10

Product Details/Manufacturing Analysis 10

Industry Challenges and Opportunities 11

Appendix 1 – Photos (TBD) 12

Appendix 3 – Competitive Matrix & Survey (Excel spreadsheets from Brent Wong) 13

Appendix 4 - Patents 13

Appendix 5 – Encyclopedia of Surfing – Bodysurfing 13

 

 

Business Concept

 

Waveblades are a bodysurfing product designed to enhance the surfer’s experience through increased speed, balance, and mobility.  Waveblades are two hand-planes that each hand slides into so that they can glide smoothly across the water like mini-surfboards for the hands. The Waveblades are innovatively crafted and patented devices that amplify the bodysurfing experience.

 

Bodysurfing has existed for decades and possibly even centuries while using all sorts of devices to ride waves from driftwood to inflatable rafts to Boogie Boards, anything that can increase the surface area of the swimmer while bodysurfing.

 

While many bodysurfers have not typically used any type of board, those who have tried Waveblades immediately love the product, saying that they catch twice as many waves and ride each wave more than twice as long.  Waveblades are a revolutionary product that increase acceleration and buoyancy above all other hand-boarding products.  

 

A bodysurfer will use essentially the same technique of catching the wave while hand-boarding. As the wave rolls towards the hand-boarder, they kick hard with their fins and use their arms in a freestyle swim stoke for that extra push. The forward momentum of the wave will pick them up and carry them with it as they streamline their body. This is when they extend the Waveblades with arms outstretched out in front of them, gliding along the slope of the wave and really gaining the advantage of the surface area of the dual Waveblades over the single hand boards on the market today.

 

Waveblades come as a pair for both hands as compared to every other hand-board in the market that are only sold for single handed use.  One handboard may be acceptable for experts who have been bodysurfing or handboarding many years, but it can be dangerous for the less experienced as well as less enjoyable. Using two Waveblades will still cost less than the majority of single hand boards on the market.

 

Additionally, Waveblades are the only hand-board that is shaped to the hand with a glove that makes it very easy to swim without ever coming off and provides the best support and control for maneuvering on the wave.  The mold and glove aspect gives each finger control over the movement of the board and really allows the bodysurfer to feel like it is an extension of their arm.  Waveblades are lightweight, streamlined, easy to wear, and adds speed and to the pure pleasure of bodysurfing. And in phosphorescent colors they look cool as well. 

 

Waveblades will also appeal to recreational and competitive swimmers by enhancing their upper body workout. In addition, the foam blades keep your hands as warm as wearing neoprene wetsuit gloves.

 

Product Advantages

 

 One of the biggest differentiating factors is that Waveblades come with two handboards (for both hands) compared to the others in the market.  Competitors sell their handboard as a single board used by just one hand.  Offering two Waveblades provides a much better user experience.  Experienced users gravitate towards using two handboards because it provides more control, flexibility and agility when riding a wave.  Not only do more experienced users enjoy the two-handboard experience better, but those who are new to the sport will also benefit.  Having a second board gives the user more support when in the water and trying to catch a wave.  This offers an additional safety component for new users that is not seen with the competition.  Waveblades have a foam component injected around the corners offering more control in the ocean and additional safety, particularly for less experienced surfers.

 

Waveblades are designed to become a part of your hand, offering a superior fit than strapped wooden or glass handboards.  Competitors that offer sizes that may be too big or too small and pose a hazard and safety issue, especially for the less experienced.  Waveblades are built in multiple sizes and offer a customized fit in order to have the best glove like feeling and provide the best user experience.  Other competitors utilize straps or handles for the user to hold on to while trying to ride a wave.  However this makes it hard to ride a wave under water and can easily be lost in the water if not held correctly.  Waveblades offer better support with the glove-like fit and the natural palm grip made into the foam base of the product.  Waveblades offer a comfortable fit that works better in the water and feel like extensions of the user’s body. They are lightweight, using durable and safe materials, with a design honed over years of development.

 

 

Water Sports Industry Analysis

 

Waveblades are categorized as sporting goods equipment.  While the most pertinent sub-sector is bodysurfing, there are no demographic or equipment sales data on that specific sector to analyze.  However, the principals believe that Waveblades has the ability to expand beyond the body surfing demo and approach the ubiquity of the Boogie Board, which transcended even the surf community to appeal to all levels of water sports participants.

 

According to statista.com, as of mid 2014 the US sporting goods market was projected at more than $63 billion for 2014, of which approximately $35 billion was spent on footwear and apparel, and $28 billion for sporting goods equipment. Around one quarter or $7 billion of these sales are sold by sporting goods stores like Dick’s Sporting Goods, Big 5 Sports, or The Sports Authority. About 14 percent or $4 billion of sporting goods equipment was sold through online channels and is the distribution channel with the highest growth in market share. And as an aside, Walmart, while not considered a sporting goods store, had $9 billion in revenue from sporting goods in 2014.

 

A more focused 2012 retail survey was commissioned by the Surf Industry Manufacturing Association (SIMA), conducted by Leisure Trends Group and published in the San Diego Union-Tribune in June 2013. $6.1 billion was spent on surf and skate retail (apparel, footwear and equipment). $4.6 billion of this revenue went to chain stores, department stores etc; and $1.5 billion went to surf and skate retailers, of which $760 million went to surf retailers. Of that $760 million, $147 million was generated by surf equipment – split approximately 60% surfboards and 20% each for standup paddleboards and hybrids (e.g. fish).

 

According to a June 2013 article in Forbes.com, over the last decade the number people in the U.S. who surf at least once a year has increased by nearly 50 percent to 2.6 million, of whom 1 million surf at least eight times a year.

 

There is great potential for international traction. Not only are handboards significantly more common in Australia and Hawaii, surfing in general is rising in Europe and Asia; and there is increasing female participation (per a 2013 Fortune article, 36% of surfers are women); industry analysts predict that the global surf industry will generate more than $13 billion by 2017.

 

The current single handboard industry may be small, at least in the US, but is growing as water sports enthusiasts continue to look for exciting ways to ride waves, and we believe Waveblades can occupy a huge space as a surf toy, because it’s fun, it’s safe, and it’s cool looking.

 

Public information regarding handboard sales and competitors is limited, but we have compiled separate surveys of the brands available in 2015, and of the brands popular with individual bodysurfers. [Please see attached exhibits]

 

 

Target Market/Customer Analysis

 

We expect the audience for frequent Wavebladers to be similar in size and makeup to that of frequent board surfers.  According to the USC Marshall School of Business, of 1 million frequent surfers, almost 50 percent are aged 12 to 24 years old, and 30 percent are ages 25 to 44. Due to the ease of use of Waveblades, we expect a proportionately larger percentage coming from ages 10 to 16.  While the majority of water sports enthusiasts are male, female participation is significant at over one third and growing. The initial target market will be advanced bodysurfers, handboarders and contest competitors to create a solid brand following of opinion leaders.

 

Promotion and advertisement will initially be targeted on the Southern California coastal communities such as San Diego, Huntington Beach, and Manhattan Beach.

 

Beyond pure recreation there are several additional potential uses including core training; physical therapy & rehabilitation; water aerobics; open water swim training in lakes and oceans; and in constructed surf parks/artificial waves.

 

 

Marketing

 

The initial launch of the higher-end product will be sold within west coast, east coast, and Hawaiian specialty surf shops.  Local southern California shops will be targeted and display Waveblades for sale. According to the Surf Industry Manufacturers Association, there are approximately 1,100 specialty surf shops in the United States not including any chain retailers.  It can be a safe and modest assumption that Waveblades could sell just two pairs to half of these specialty shops as they would be curious about such an advanced product.  In this manner Waveblades expects to sell at least 1,000 pairs in the first year of production.

 

Regional shops will purchase through the Waveblades website and distributed via UPS.  Waveblades will distribute through the website via UPS as well as Amazon.com and other ecommerce channels.  As we gain traction and recognition, Waveblades will target large retail shops like Big 5, Sports Authority, Sports Chalet, and Dick’s Sporting Goods for distribution. These large retail shops make up the bulk of overall sporting good sales and offer a great opportunity reach a much wider audience, at a price competitive with other water sports equipment options.

 

Waveblades are a highly differentiated product with clear benefits.  Every part of the marketing effort will be geared to show the audience how Waveblades can appeal to all and are better than the others in the marketplace.  For example, the packaging will include a small two-sided product details insert that will outline to the customer how Waveblades sets itself apart from the rest; and, in our video marketing campaign each clip will include different qualities of the product that are not found elsewhere.

 

When Waveblades first launched in 1996, it was the first of its kind. Now there are over 20 products marketed as handboards. The influx of competitors is actually good for Waveblades because it boosted awareness for this specific market with no additional costs.  With the re-launch of Waveblades and having a superior product in the industry with clear advantages over the competition we feel that through new strategic marketing channels there is extremely high potential to lead and expand the market.

 

In 2016 we will re-establish the online presence of Waveblades.  Waveblades will extensively utilize social media and viral marketing. The website will be enhanced to provide quality photos, descriptions, and the ability to purchase products.  Here you can not only order products but also customize your own Waveblades, read more about the industry, hear the Waveblades story and watch videos of people in action.

 

Waveblades videos will be created for marketing collateral utilizing a go-pro camera mounted to one hand with professional handboarders as well as local amateurs.  Expanding off this idea we will launch a video campaign via social media to further engender conversation and interest in the product.  These videos will be incorporated within all on-site promotional booths (e.g. at surfing & bodysurfing events and specialty surf shops) and will be a key marketing tool.  

 

At the launch of Waveblades the major promotions will initially cater to the experienced users and will be sold through specialty surf shops on the west coast and Hawaii.  These regions have shown the most traction because of the consistency of waves and temperate climates, and are a great opportunity to capture the more experienced market.  This will begin in mid 2016 and lead into the big wave winter months.  Once the product is known among the big wave riders, marketing of smaller sized Waveblades will target a younger and less experienced audience through print advertising, direct mail, web optimization, and social media.  Eventually, sporting goods retailer shelf space will provide the vast marketing abilities and is a 2 year goal for Waveblades.

 

There are at least half a dozen major events at which we plan to have a Waveblades booth with demo videos and samples to show and sell to competitors and spectators.  We anticipate giving about 50 pairs of Waveblades for free to pro surfers and handboarders, and possibly as prizes at these events.  The only cost to the surfers for these Waveblades would be their agreement to share their stories and videos of them using Waveblades.  This should help encourage these and other athletes to use Waveblades and spread the word organically.

 

During the winter months of 2016, our plan is to start selling Waveblades to more experienced users, as the winter months are typically the best time to ride big waves.  This is when the beaches with the best waves are typically the most crowded with experienced wave riders.  During the National Redwings Memorial handboarding competition in Point Panic and Flies-Mamala at Kakaako Park on Oahu Island (typically held in early August), we will demo Waveblades to the professionals and the public in order to gain interest and start generating hype around the product.

 

Prior to the summer months of 2017 we will have distribution set up in many of the surf retailers as well as some of the larger retailers. Further, we will continue with our grass roots approach.  This would include setting up a tent/booth on the beach to allow free demos of the product layering in a social media component to help create awareness among the top beach communities in the west coast and online. Sponsorship of certain events might also be beneficial.

 

Initially Waveblades will create video content featuring more experienced handboarders to capture the attention of the broader audiences. Many professional surfers and bodyboarders have already used Waveblades all over the world for years; the Waveblades website already provides numerous pictures and testimonials from athletes such as Nick Menas and David Beights.

 

Financial Analysis

 

The financial models for Waveblades have been generated and have been estimated to leave some variance for unexpected costs.  In order to have a successful launch of Waveblades and grow the product during the first years the company is seeking to raise $250,000.  By the end of 2017 Waveblades is projecting to pay back the initial investment and have a gross ITD profit of approximately $90,000.  By the end of 2019, the ITD profit (before profit sharing to the principals) is expected to be approximately $1.25 million.

 

The initial investment of $250,000 will be utilized for the start-up costs, manufacturing and marketing expenses of Waveblades for the first year (2016).  After this time the revenue from sales of Waveblades will be used for all costs and make back the initial investment by the end of 2017.  Summary Excel exhibits are attached.

 

 

Management Team

 

Bob Davis – Founder and President, will be responsible for product design, testing and development, and marketing and distribution. Mr. Davis has owned a number of successful businesses including graphic design, retail sales, and environmental education. Armed with his experience in running businesses in multiple disciplines, Mr. Davis’ mission is to ensure the long term health and stability of Waveblades and maximize the return on investment to stakeholders.

 

Tim Cunningham - Chief Executive Officer, will be responsible for strategic planning, production oversight, and stakeholder relations. Mr. Cunningham earned a BA in Communications and an MA in Environmental Policy and Management.  He has over 25 years experience in marketing, sales, and management consulting.  Through his self-employment in a variety of industries, Mr. Cunningham understands the challenges in launching a niche product.

 

Mentorship program with

Beaver Theodosakis Founder Prana, Lifes a Beach, Bad Boys Club, Spy Eyewear.

Was born an entrepreneur. He’s spent his career in start-ups and being a founder across action sports, powersports, yoga and the active outdoor lifestyle markets. Beaver has always lead his entrepreneurial endeavors with the intention of doing the right thing for his people and for the planet. He and his wife Pam founded prAna 23 years ago. They literally were garage founders, completely dedicated to their vision of providing the best, most versatile and performance-driven (while still street-savvy) apparel to like-minded customers. They were yogis and climbers, raising a family in Southern California. They couldn’t find the product that aligned with their passions and values, so they created it! Beaver and Pam were very hands-on when in startup mode, they designed, cut and sewed, and sold and shipped prAna goods from their home. They made their own hangtags from recycled newspapers. They hand built a team of dedicated and complimentary team members that lived the company values.  Not many founders can claim that they’ve founded a category – in the case of Beav and Pam, they expanded the notion of performance / lifestyle apparel and accessories to the point of spearheading a new space within outdoor industry. Add to that their contribution to the movement of responsible sourcing and manufacturing and the intricate and intentional incorporation of inspirational athletes and ambassadors, and you can experience the business innovation that prAna brought to our markets. What was the secret? Well, it wasn’t a silver bullet – it was a way of living. Learn about the journey of prAna on the Intrepid Entrepreneur podcast as I interivew Beaver Theodosakis, founder of prAna.

Product Details/Manufacturing Analysis

 

(Pending patent approval as of December 2015)

 

Waveblades are hydro dynamically designed for maximum speed and control with a customized fit and made from two different materials.  The base of the Waveblade is conformed to the curvature of the hand with grooves for each finger, made from injected foam at varying thicknesses. The foam will have a shape that contours to the hand will provide a solid grip onto the Waveblades.  The top portion of the Waveblade will be made out of neoprene and will be glued onto the foam base of the product.  The top portion will cover the hand and give the user a ‘glove’ or more customized feel.  With a sturdy and smooth surface area on the bottom, this allows the Waveblade to maneuver smoothly through the water.  Additionally, foam is injected on the sides and top to crease a contoured foam palm support to have the feeling of a five-fingered comfort glove.  Depending on size this model will cost $15-19 per pair to manufacture (not including initial start up costs) and will sell for $95.

 

Another model can be designed for beginners and everyone else.  It will be made out of one material (foam) and will have different densities of the foam throughout the product.  The base will be the exact same as the original Waveblades; however, the top portion will be made out of foam as well with a thinner, lower density.  This will also enclose the hand and give the user a natural way to wear the Waveblade.  This model will cost less to manufacture (not including initial start up costs) and will sell for proportionally less.

 

Similar products in this space such as bodyboards utilize a Polyethylene core (Dow), Polypropylene and Arcel.  The hard bottom of the bodyboard, Slicks, is made of Surlyn and High Density Polyethylene (HDPE).  

 

After review of the overall industry and penetration of the American market in particular, it would be most beneficial to work with a domestic partner or manufacturer. Foreign manufacture would take a lot of time (different materials per country), include importation costs and require management of the production chain.  In discussion with different manufacturers and analysis of product rollout in America, Waveblades will work with a domestic partner initially until the production quantities of Waveblades are more consistent and in greater economies of scale.

 

In researching the different materials and labor costs, there are two ways to manufacture Waveblades.  One way would include using two different materials that would be glued together.   Utilizing two materials would likely have to be done in a two-step process.  Step one would require manufacturing the bottom of the Waveblade, or the foam component.  The second step would include working with a different manufacturer to attach the top portion, or the neoprene-type component, to the top of the foam base.  Using two materials would almost double the cost of production (approx. $8/pair).  The other option would be to produce a Waveblade only utilizing one material with different densities for the top and bottom components.  This could be similar to how a Croc shoe is made and would only require one manufacturer.  With this option the cost to manufacturer would be roughly $4 for a pair of Waveblades.  For either option these prices are based off of an initial production of 1000 units.

 

Exact manufacturing costs are highly dependent on whether one or two molds are needed, which will be determined from the necessary thicknesses and densities.  There is a fine line for weight, strength, and stiffness, which will be determined from the prototype.  For example, a reduction in size will create a denser product which is also heavier and stiffer.

 

 

Industry Challenges and Opportunities

 

Due to shifting consumer interests and desire for increased innovation, sporting goods tend to have short product life cycles, often less than two years according to Hoovers.com. Waveblades has drastically improved the products design since it was first created.  Improvements included tweaks for amplified hydrodynamics as well as increased safety and reliability.  Waveblades will continuously test product designs, leading to new Waveblades products year after year.  Waveblades also have the ability to continuously provide creative and fun designs and colors in different models.  Additionally, designs can be incorporated into matching backpacks, fins and wetsuits.  

 

Large manufacturers of sporting goods may rely on a short list of large retail chains such as Kmart, Target, and Wal-Mart for a significant portion of sales. Since most contracts are not long term or have a binding agreement, the loss of a key large customer or reduced orders can have significant financial impacts. In addition, the loss of a big customer can also cause problems with inventory and affect the supply chain.  To maintain important customer relationships, Waveblades will have a specialized sales and customer relations representative who routinely communicates with key customers.  Additionally, Waveblades has already built solid relationships with many specialty surf shops in San Diego and Los Angeles area counties.

 

Sporting goods sales are typically seasonal; however, the largest market for surfing products is the US west coast, Hawaii and Australia, which have relatively consistent year round sales. In fact, highest sales in Southern California are seen during the winter when the rest of the U.S. sees a decline in surfing product sales. US sales will be augmented with global sales to tropical countries for even further consistency.  

 

Global sales will be a key component of growth in the future. As more people in developing nations such as China and India enter the middle class, demand for sporting goods are likely to increase; some sporting goods manufacturers already export as much as half of their production to meet international demand. In 2009 the Organization for Economic Co-operation and Development (OECD) estimates that the global middle class will expand from about 1.8 billion in 2009 to almost 5 billion by 2030.  Significant overseas activities will require transactions in different currencies, with exposure to exchange rate fluctuations. Further, operating in foreign countries would require Waveblades to comply with local customs and labor laws. Changes to labor rules in foreign countries can adversely affect business.

 

Waveblades may face competition from imported sporting goods, whether from Japan, China, Thailand, and Vietnam or other regions which can offer low wage costs.  In finding savings on manufacturing costs through outsourcing production to low-cost labor regions, Waveblades can provide overseas contract manufacturers with raw materials, molds, tooling, and other manufacturing equipment to keep original quality and still utilize low wages.

 

Appendix 1 – Photos (TBD)

 

Appendix 2 – Financial Projections (Excel spreadsheets from Sam Teeple)

 

Appendix 3 – Competitive Matrix & Survey (Excel spreadsheets from Brent Wong)

 

Appendix 4 - Patents

 

Obtaining a patent can take between 24 to 36 months. The utility patent application filing fee for a micro-entity in the United States is $70. However, it is typically advised that creating a patent requires the assistance of an attorney.  Attorney fees can range from $5,000 to $15,000 or more, depending on the complexity of the invention.

 

However, Waveblades applied to and was accepted by UCLA School of Law Pro Bono Patent Program in mid-2015 and anticipates submission of patent application near end of 2015. Waveblades is only incurring the filing fee of $70 and the illustrator’s fee of $250.

 

After the patent has been issued, the USPTO requires that maintenance fees be paid after 3.5, 7.5 and 11.5 years. The fees increase over the 20 year life of the patent, ranging from $400 to $2,000 for a micro-entity classification.  In addition, if one wants to protect an invention outside of the United States, they can expect to expend an additional $10,000 per each foreign country in which protection is sought.

 

Appendix 5 – Encyclopedia of Surfing – Bodysurfing

 

By Bruce Brown, Greg MacGivillray, Jim Freeman, John Severson

 

Bodysurfing is riding a wave using only the body as a planing surface; the original and purest form of surfing. Prior to the invention of the surf leash in the early 1970s, all surfers were adept bodysurfers, as nearly every wipeout was followed by a bodysurfing ride to the beach to pick up the lost board. In the 1990s, bodysurfing was being described as "the lost art" but in the new century, following along with the sport's neo-retro movement, it had a significant uptick in popularity. "It's just so complementary to what the wave is doing," bodysurfing ace Mike Stewart said in 2009. "To me it's the best interaction between man and nature that exists."

 

Nothing factual is known about the origins of bodysurfing, but it's possible that humans were inspired to emulate wave-riding sea animals such as dolphins and seals. Bodysurfing certainly predates board-surfing, which itself, University of Hawaii anthropologist Ben Finney suggests, may date as far back as 2000 B.C. Recorded bodysurfing history, however, begins after that of board-surfing. In 1899, Australian Fred Williams was taught to bodysurf by Tommy Tanna, a Polynesian islander brought to Sydney to work as a gardener; Williams in turn taught local "surf-bathers" how to ride waves.

 

Bodysurfing was first popularized in the United States during the mid-'20s by Olympic swimmer Wally O'Conner of Los Angeles, who would visit local beaches and draw an audience by diving underwater while facing an incoming wave, do a push-turn off the sand, then burst out of the shore-bound white water. (USC football player Marion Morrison, an early California bodysurfer, tore ligaments in his shoulder while riding the surf near Balboa Pier in 1926; finished with organized sports, Morrison made his way to Hollywood and was renamed John Wayne.)

 

In 1931, Los Angeles bodysurfer Ron Drummond published The Art of Wave-Riding, a 26-page primer on bodysurfing basics, and the first book of any kind on surfing. California surfer Owen Churchill visited Hawaii the following year and noticed that locals were able to increase the power of their kick stroke—and therefore catch waves easier—after fixing palm fronds to their feet with tar. Churchill kept the idea in the back of his mind, and in 1940 introduced what would become a bodysurfing equipment standard: the Churchill "Duck Feet" swim fin. In another breakthrough, around the same time, Santa Monica lifeguard Cal Porter taught himself how to ride at an angle across the wave face rather than straight to the beach.

 

Tens of thousands of coast-dwelling Americans had by that time taken to waves. A bodysurfing article published in 1940 by Life magazine, "Surf-Riding is a Favorite Summertime Sport," noted that "almost every boy and girl [in California] is an expert surf-rider." Board-surfing, mat-riding, and bodyboarding would all become popular in the years and decades to come—and gain far more attention—but bodysurfing, practiced mostly by tourists and day visitors during the warmer months, has always, quietly, remained the most popular form of wave-riding.

 

Beginning bodysurfers ride near the shore, in water shallow enough to allow them to catch an incoming wave—sometimes already broken—with a jumping push-start, followed by a straight-for-the-beach ride either with their arms tight against their sides or extended out before them. Intermediate and advanced bodysurfers catch unbroken waves and angle in one direction or another across the wave face, usually extending the wave-side arm and using the palm of the hand as an added planing surface. (A variety of handheld planing aids, called "handplanes," ranging from a simple plywood rectangle to plastic-molded devices with straps and tiny fins, have been used and discarded over the decades; the 2000s saw a sharp increase in their use.) Swim fins remain an essential piece of bodysurfing equipment, as they allow the bodysurfer to catch waves in deeper water, and can also provide a burst of speed while riding.

 

While bodysurfing for the most part involves trimming along the wave face and riding inside the tube whenever possible, maneuvers such as spinners and barrel rolls are fairly common among advanced riders. Some of the best waves for bodysurfing are steep, fast, tubing beach break waves that are often unsuitable for boardsurfing; two of the best known are Sandy Beach and Makapuu on the east shore of Oahu in Hawaii. The Wedge, in Newport Beach, California, a ferocious sand-pounding peak wave aptly described by Sports Illustrated in 1971 as "a great big screaming shore break," has for decades been bodysurfing's most fearsome and famous break. Each year the Wedge is responsible for dozens of neck and back injuries; some permanent.

 

Bodysurfing has always been the least-publicized form of surfing, partly because it offers little to marketers and also because the act doesn't have the same visceral impact as boardriding. Several bodysurfers have nonetheless distinguished themselves through the years, including Buffalo Keaulana and Barry Holt of Hawaii; Californians Bud Browne, Candy Calhoun, Larry Lunbeck, and Mickey Muñoz; Wedge riders Fred Simpson, Terry Wade, and Mark McDonald; and Australians Don McCredie, Tony Hubbard, Max Watt, and Michael Fay. Hawaiian lifeguard Mark Cunningham, a sublimely smooth master at the board-dominated Pipeline, was unanimously regarded as the world's premier bodysurfer from the mid-1970s to the early '90s; nine-time bodyboarding world champion Mike Stewart then become the sport's dominant presence, and was the first to do a barrel roll at Pipeline.

 

The 2000s brought a renaissance for bodysurfing, thanks mostly to a renewed interest among young surfers in riding alternative surf craft. (It didn't hurt that presidential candidate Barack Obama, during a break in his 2008 campaign, bodysurfed with great style at Sandy Beach.) By 2010, beautifully designed artisanal wooden handplanes were being sold online and in surf shops around the world. California pro surfers Chris, Keith, and Dan Malloy developed a serious interest in bodysurfing, and in 2011 Keith Malloy released Come Hell or High Water, a beautifully-shot film devoted to bodysurfing; The Plight of the Torpedo People, a hardcover book documenting the making of Malloy's film, written by Dave Parmenter and Bruce Jenkins, was released in 2013.

 

Bodysurfing has no organized contest circuits or leagues, or a definitive world championship. A limited number of individual contests, however, have long been attended by a small international cadre of full-time bodysurfers. Two of the biggest events, both founded in 1977, are the Oceanside World Bodysurfing Championship, held in midsummer, and the Pipeline Bodysurfing Classic, usually held in January. The Pipeline Classic, long regarded as the sport's most prestigious contest, became the first professional bodysurfing contest in 1980, but soon returned to amateur status after organizers were unable to find sponsors.

 

Included among the small number of bodysurfing video titles are Primal Surf (2000), Pure Blue (2001), and Come Hell or High Water (2011). Bodysurfing has also been featured in more than a dozen surf movies and videos, including Barefoot Adventure (1960), Gun Ho! (1963), The Endless Summer (1966), Going Surfin' (1973), and We Got Surf (1981). The Art of Bodysurfing, a paperback book offering both history and instruction, was published in 1972.

 

Appendix 6 – Encyclopedia of Surfing – Bodyboarding

 

By Ira Opper, Scott Dittrich, Steve Soderberg, Jeff Devine

 

Type of surfing done on a soft, square-nosed, semiflexible board, usually in a prone position; invented in the early 1970s by Southern California surfboard designer Tom Morey. Bodyboarding is often described as the most popular form of surfing, as bodyboards outsell surfboards by a huge margin.

 

Although bellyboarding is the original form of boardsurfing, dating back hundreds if not thousands of years, it was all but dead by the late '60s; stand-up surfing was the runaway most popular way to ride, with kneeboarding a distant second. Morey gave new life to prone surfing in 1973 by marketing his two-year-old invention called the Morey Boogie, a 4' 6" by 23" bellyboard made mostly of closed-cell polyethylene packing foam. Easier, cheaper, and safer to ride than a surfboard, Boogie boards soon became popular, especially with kids and tourists: 80,000 units were shipped in 1977, just before Morey sold the Boogie to American toy giant Kransco. Sales figures more than quadrupled by the end of the decade, and bodyboards were soon available in thousands of coastal American drugstores and sporting goods stores, as well as surf shops. By the early '80s bodyboarding had its own identity, separate from stand-up surfing, with fast-evolving performance standards and homegrown heroes—most notably Jack Lindholm of Hawaii, inventor of the drop-knee stance and the first bodyboarder to ride Pipeline.

 

The first professional bodyboarding contest was the 1979 Morey/Gap Pro, held in Huntington Beach, California; six years later a bodyboarding division was added to the United States Surfing Championships, and in 1990 it became part of the World Amateur Surfing Championships. The Morey Boogie International Bodyboarding Championship, held at Pipeline and long considered the sport's unofficial world title, was founded in 1982, with Hawaiian sensation Mike Stewart winning the event 10 out of its first 15 years. (Stewart's reputation was so golden that his 1991  Surfer magazine profile was titled, "Is Mike Stewart the Best Surfer in the World?" The Pipeline contest itself was later renamed the Mike Stewart International Pipeline Pro.) Bodyboarding Magazine, a spin-off of Surfing Magazine, began publishing in 1985; more than 15 bodyboarding publications were founded worldwide in the next two decades. The Hawaii-based Global Organization of Bodyboarders was launched in 1995 to oversee and unify international professional competitions. In 2004, the organization was renamed the International Bodyboard Association. As of 2014, the IBA Global Slam Series was the elite-level pro tour and the official world championship-granting circuit.

 

Although millions of low-end bodyboards are still made from single-foam molds (using polystyrene, polyethylene, or EVA foam), today's high-performance bodyboards are laminates, usually made of EVA foam on the rails and deck, a polypropylene core, an internal carbon-fiber nose-to-tail stringer for added strength, and a slick hard-plastic bottom. Bodyboards are virtually indestructible. A high-quality bodyboard is generally about four feet long, two feet wide, two inches thick, and costs about $300. Dozens of companies worldwide manufacture performance-geared bodyboards; more than 100 others produce inexpensive single-foam models. About 750,000 bodyboards were sold annually in the United States in the mid-2000s, compared to an estimated 200,000 surfboards. Intermediate and advanced bodyboarders use swim fins to aid in catching waves; riders of all levels generally use a leash attached to the either the wrist, ankle or bicep.

 

The key to bodyboarding's popularity is that it's easy and immediately enjoyable for the beginner, but also an open-ended performance challenge to the expert. Small numbers of bodyboards are seen at most surf spots around the world; at a few dozen breaks generally regarded as too dangerous (or too shapeless) for board-surfing—Sandy Beach in Hawaii, the Wedge in California, Shark Island in Australia—bodyboards are the preferred wave-riding craft. Top bodyboarders can ride as deeply inside the tube as surfers; popular bodyboard maneuvers include 360-degree spinners, barrel rolls, and a wide variety of looping aerial moves. Some bodyboarders still use the drop-knee stance, placing one foot on the forward-area deck of the board; a smaller number rise all the way to their feet.

 

Stand-up surfers have traditionally viewed bodyboarding with ambivalence, or outright malice; the learning curve is too fast, the number of bodyboarders was, for a time, too large, and their sense of cool is less developed. "They're just incredibly easy to hate," Australian surf journalist Nick Carroll wrote of bodyboarders in 1997. "Clinging on to their brightly-colored mass-produced plastic things like life-rafts in a storm, then riding the wave prone like a turtle, or half-raised on one knee like some brave competitor in the Special Olympics." ("Sponger," "booger," "lid-rider," and "speed-bump" are a few of the nicknames for bodyboarders.) A 1990 Tracks magazine article titled "Will the Next Generation of Surfers Please Stand Up" suggested that bodyboarding was compromising Australia's ability to produce world-class surfers.

 

But bodyboarding has in fact been a stepping stone for many of the world's top surfers—eleven-time world champion Kelly Slater was a bodyboarder before he was a stand-up surfer—as well as providing a simple means for just about anyone to experience the power and thrill of riding a wave. Many of surfing’s best photographers also come from the bodyboarding ranks: Chris Burkard, Todd Glaser, and Scott Aichner, to name a few. Many of the world’s most fearsome surf breaks have been pioneered by bodyboarders—Shipsterns Bluff in Tasmania, Cyclops in West Australia, and Tahiti’s Teahupoo, for example. "To tell you the truth, boogie boarders found 'em all," Australian charger Justin Allpont told ESPN about bodyboarding’s influence in finding powerful, dangerous waves. “After hunting down all these spots, most of the time we'd find out that boogie boarders had already been there for awhile."

 

Bodyboarding’s popularity in the United States took a downward plunge in the late ‘80s and early ‘90s. At least partially responsible was the surf industry’s exposure to the global recession; many surf companies stopped funneling money to bodyboarding, focusing instead on traditional standup surfing. In the early '90s, bodyboard sales plummeted by one-third. By the 2000s, an explosion of surf schools across the country directed newcomers to easy-to-ride soft-top surfboards, and away from bodyboards, further eroding bodyboarding’s market share. By the time Bodyboarding magazine folded in 2002, bodyboarding was practically invisible to the American surf media.

 

In some areas, however, the sport's popularity remains strong: Australia and Latin America in particular, as well as the Canary Islands, Tahiti, parts of Europe, and Hawaii. Riptide, the oldest and longest-running bodyboard magazine, is published six times a year, out of Burleigh Heads, Australia.

 

Influential bodyboarders in the post-Stewart era include six-time world champion Guiherme Tamega (Brazil), drop-knee ace Paul Roach (California), three-time world champion Jeff Hubbard (Hawaii), slab-charger Steve MacKenzie (Australia), three-time world champion Ben Player (Australia), and back-flip innovator Mike Eppelstun (Australia). Phyllis Dameron of Hawaii was the first internationally-known female bodyboarder, lauded for her fearless attack at Waimea Bay in the late '70s. Stephanie Petterson of Brazil became the first women's world champion, in 1990.

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