Fifty 1 Labs Inc (FITY)

[Maddog]

Tench E-mail Re: GPS Personal Locator

I wrote: How much is the tracking subscription in year 2 (following the free initial year)? I know you can't usually talk about margins but I'll ask anyway...what kind of margin do we pull in on the hardware and on the software subscriptions?

His response (in part): There no hidden or overage fees. First year, $29.99 Unlimited GPS tracking. Year 2 and 3 etc, same price. What we have is different from the other similar products in the marketplace. For example, they will require a $7.50 month fee, $5.00 overage and many other fees. They do this because they don’t have a backend network to support the device. We do. They also will NEVER be able to fill orders in the 5 and 10 thousand plus range. They’re selling it via the internet but won’t be able to solidify large nationwide distributors or retailers. We are working with several organizations that are looking at scales of 5,10 and 15 thousand per month orders. The retail price of $489 is not what we realistically expect to get on a volume basis in the marketplace. That price would be equivalent to a single person walking into a Best buy and ordering one device. Our price to large retailers and organizations will be closer to $289 or even lower depending on volume. We get $20 of that $29.99 annual fee.


Looks good on my end...thoughts?