Introduction to QAI's Vision Quasar Aerospace Industries, Inc. (QAI) is an integrated aviation/aerospace corporation which has been created to pursue an innovative and highly synergistic business strategy. This strategy will be achieved through a process by which several businesses in the aviation/aerospace industry will be combined into an integrated and self-supporting network which will have the ability to operate in a more complex strategic environment and to achieve greater success than would have been possible if they were operating purely alone. Within this context QAI will not acquire and operate these business units according to some master corporate plan. Rather, the goal will be for these entities to retain their operational independence and unique corporate cultures. In this fashion, the resources, talents, insight, experience, and market potential of each will be supported and enhanced in a cooperative process which will lead to increased productivity, efficiency, and scalable economies resulting in increased profitability and market relevance. The integration of the business units of QAI will be a phased process which will require that each unit be operationally vital and cash positive from inception. The only exception to this principal will be a unit tasked to develop follow-on products. This will be explained in detail below. The units integrated in the first phase of QAI’s operations will either be wholly owned subsidiaries, or QAI will hold a minimum 80% equity. These components are: - Atlantic Aviation, Inc. (AAI) – AAI is a wholly-owned subsidiary of QAI which operates a flight school at Herlong Airport in Jacksonville, Florida, and will develop and operate flight schools nationwide.
- A soon-to-be named company is a successful aircraft component manufacturer.
- Aviation Import/Export, Inc. (AIE) - AIE was formed to import aircraft and/or aircraft components for sale, lease and use by QAI affiliates and for sale and/or lease to other companies.
- Quasar Aircraft Corporation (QAC) - This company will develop the new products and over see the development of the VLJ program
- Quasar Financial Corporation (QFC) - This entity will support the aircraft sales process by arranging financing and insurance for customers and the aircraft that will be required for AAI’s flight school operations
A second major phase of the corporation’s development will be to identify and acquire small to medium sized business which will be complimentary to QAI’s strategic vision and conglomerate. Atlantic Aviation, Inc. (AAI) The corporation is developing a highly innovative business plan for the operation of franchise-based flight schools throughout the United States. AAI has been formed to respond to a critical shortage of flight school capacity in the Florida market. There is a particular demand for training of international students. Once the initial school is operational the goal is to market this “School Concept” as a turn-key franchise opportunity to aviation professionals around the country. With the context of the larger QAI strategic vision, AAI will serve the following purposes: - Provide a ready-made market for a significant number of Quasar aircraft.
- Enhance QAI’s credibility with the early development of a significant and profitable subsidiary.
- Increase QAI’s visibility in the marketplace.
Quasar Aircraft Corporation (QAC) QAC is a Nevada corporation owned QAI. QAC will be responsible for the development program for a Very Light Jet (VLJ) and a new advanced trainer aircraft. The new advanced training aircraft will have an immediate market on certification by selling aircraft to it’s sister corporation Atlantic Aviation, Inc. Jim Ray will lead this development team, and after extensive research feels confident that he will have a technically advanced, economically operating four seat aircraft certified within 18 months of the beginning of development. The aircraft will use a certified Continental power plant that only burns 5.5 gallons per hour. Due to its exceptional performance efficiency the aircraft should appeal to a wide segment of the general aviation market. Additionally, QAC will be charged with the development of new models in the Quasar line of aircraft. This corporation is tasked with the development of the Quasar line of aircraft. A highly talented team with a great breadth of managerial and engineering experience is in place to direct QAC’s operations. James Ray with the able assistance of our blue ribbon advisory board will direct the engineering required to complete Proof of Concept (POC) aircraft. James Ray will serve as project manager. QAC is developing a four place aircraft, and flight tests are anticipated to begin in the 1st quarter of 2010. An eight/ten place aircraft which would double as a small freighter aircraft would be the next development project. Both of these aircraft will outperform any other comparable aircraft currently on the market with an approximate 40% fuel consumption advantage. The capstone of QAC’s program will be the development of a Very Light Jet (VLJ). The first phase of QAI’s expansion and development plan is, of course, the development of the Quasar four seat training aircraft. The manufacture of light propeller powered aircraft has lagged significantly in the U.S. market for some years, with the exception of “Kit Built” planes. There is a particular void in the market place for an affordable trainer aircraft. Cessna no longer produces the 152, and the 172 is priced in excess of $200,000. Cessna has announced the development of an LSA, to be built in China, which they plan to begin delivering in late 2009. However, with the recent crash of the prototype could delay that program. Over 1,000 orders have been placed for this aircraft. The Quasar trainer will be designed to fill this void, and to provide a superior plane that is safe, dependable, extremely cost efficient, and supported by a nationwide maintenance and repair capability. Once the Quasar trainer is established in the marketplace, the company will proceed to the development of an eight to ten place aircraft. The four place aircraft will begin flight tests in early 2010. This aircraft will need to be certified by the FAA. Our designers will work closely with the company’s Advisory Board (described below) in a coordinated process to further the goal of a fully certified aircraft. Since the U.S. is the largest market in the world it is paramount to obtain FAA certification at the earliest possible date. Owing to our phased approach, however, the company, unlike many others, will be cash positive with substantial revenues from inception. Our research indicates that market for this category of aircraft is large, and that the market appears to be far greater than the productive capacity of the manufacturers currently in the business. Other than the projected Cessna entry, there are a few European built planes that our aircraft should be able to compete against effectively. To achieve this phase of our plan we must overcome two barriers. First, adequate financing must be secured. Second, the expert team we have developed must be able to manufacture, deliver, and support an exceptional aircraft that will attract significant numbers of buyers in this market niche. We are confident that we have the management team, designers, advisors, a well-trained manufacturing cadre, and a marketing network to make a major impact on the market. Once the Quasar line is established our goal is to (1) Continue to carve a substantial niche in the affordable light plane market, (2) Become a major player in the manufacture of aircraft/aerospace components for the aircraft industry, and (3) Design, certify and build the best Very Light Jet aircraft available in the marketplace over the next five years. The market for VLJ’s also appears to be far greater than current productive capacity. As an example, Eclipse alleges that they have over 2,200 orders for their plane, but bad management has forced them into bankruptcy and they have ceased production. Once the development phase is completed our sales forecast for the VLJ is 20 aircraft in 2010 and 60 aircraft in 2011. Synergies, Strategies, and Planning The synergies implicit in QAI’s strategic vision have been alluded to several times in this document. Here they are summarized: - The acquisition of the manufacturer immediately establishes QAI as a significant component manufacturer in the U.S. aviation marketplace. The manufacturer's healthy profit margin strengthens the company’s financial statement immediately. Control of a major component supplier to the Quasar line of aircraft enables the company to achieve significant economies. Control of the manufacturer increases QAI’s visibility in the aviation community.
- Quasar Financial Corporation (QFC) will provide significant assistance to the company’s sales force by enabling them to offer “One Stop Shopping” for the customers’ acquisition, financing, and insurance needs. It should also provide a small but steady positive cash flow.
- Atlantic Aviation, Inc. (AAI) particularly in its franchise phase, offers a significant internal market for Quasar aircraft. This will enable QAC to achieve profitability much sooner than would have been possible otherwise. Even in its initial Jacksonville phase AA will provide early support for the corporate bottom line. As with the manufacturer, QAI’s visibility as a significant player in the aviation industry is enhanced.
The Bottom Line about QAI This is an opportunity for a financial investment that has only reasonable risks, adequate security, and substantial potential rewards. The current cash flow from the operations of the combined companies can carry QAI to profitability from day one. It is estimated that the combined company will have revenues in 2009 of approximately $43 million and a consolidated EBITDA of $9 million even if we do not acquire other subsidiaries. |