# Financial Overview

# Financials Framework

**Version:** 1.0
**Last Updated:** 2026-01-28
**Owner:** Alem Basic
**Prepared by:** John (Director)

---

## Executive Summary

Financial structure, budget allocation, revenue streams, cost centers, 50% charity commitment, and investment strategy. Clear money flow, transparent accounting, and sustainable growth.

**Key Principle:** Profitable, sustainable, generous. Build a business that makes money AND gives back.

---

## 1. Revenue Streams

### 1.1 LumisCare (SaaS — Primary Revenue)

**Model:** Monthly recurring subscriptions

**Pricing Tiers:**

| Tier | Price | Includes | Target Customer |
|------|-------|----------|----------------|
| **Starter** | $49/month | Up to 50 patients, basic scheduling, documentation | Solo operators, new agencies |
| **Professional** | $99/month | Up to 200 patients, Vapi voice, analytics, compliance | Small agencies (5-20 caregivers) |
| **Enterprise** | $199/month | Unlimited patients, custom integrations, priority support, dedicated onboarding | Growing agencies (20+ caregivers) |

**Discounts:**
- Annual billing: 20% off (2 months free)
- Non-profit agencies: 10% off
- Beta users (first 20): 50% off for 6 months

**Revenue Projections:**

| Timeframe | Customers | Avg Price | MRR | ARR |
|-----------|-----------|-----------|-----|-----|
| **Month 6** | 10 | $99 | $990 | $11,880 |
| **Month 12** | 50 | $99 | $4,950 | $59,400 |
| **Month 18** | 100 | $99 | $9,900 | $118,800 |
| **Month 24** | 200 | $120 (mix) | $24,000 | $288,000 |

**Assumptions:**
- 30% trial-to-paid conversion
- 5% monthly churn
- 70% Starter, 25% Professional, 5% Enterprise
- Average customer lifetime: 20 months

**Key Metrics:**
- **Customer Acquisition Cost (CAC):** Target < $500
- **Lifetime Value (LTV):** Target > $2,000
- **LTV/CAC Ratio:** Target > 3:1
- **Payback Period:** Target < 6 months

### 1.2 Bosnian Payment App (Future Revenue)

**Model:** Transaction fees + premium features

**Revenue Sources:**

| Source | Rate | Notes |
|--------|------|-------|
| **Merchant transaction fee** | 0.5-1.5% | Lower than card networks (2-3%) |
| **P2P instant transfer** | 0.20 KM | Free standard, paid instant |
| **Bill payment fee** | 0.50-1.00 KM | Utility bills, telecom top-ups |
| **Bank integration license** | Annual fee (TBD) | Per-bank API access |
| **Data insights** | TBD | Anonymized transaction data (Phase 2+) |

**Revenue Projections (Year 2+):**

| Users | Avg Transaction/User/Month | Volume/Month | Revenue (1% fee) | MRR |
|-------|----------------------------|--------------|------------------|-----|
| 10,000 | 5 | 50,000 txns × 20 KM = 1M KM | 10,000 KM | ~€5,000 |
| 50,000 | 5 | 250,000 txns × 20 KM = 5M KM | 50,000 KM | ~€25,000 |
| 100,000 | 10 | 1,000,000 txns × 20 KM = 20M KM | 200,000 KM | ~€100,000 |

**Timeline:** GA launch Month 12+, meaningful revenue Month 18+

### 1.3 Crypto Trading (Secondary Income)

**Model:** Active trading for capital appreciation

**Capital:** $10,000 (approved by Alem 2026-01-28)

**Strategy:**
- 30% USDC reserve
- 20% ETH, 15% BTC, 10% SOL, 10% BNB
- 5% alt coins, 5% meme coins, 5% swing trading
- -5% stop-loss, +8-10% take-profit

**Target ROI:** 5%+ monthly (conservative), 60%+ annually

**Revenue Contribution:** Minor (not primary business), used to fund operations or reinvest.

---

## 2. Cost Structure

### 2.1 Cost Centers

#### Infrastructure & Hosting

| Category | Monthly | Notes |
|----------|---------|-------|
| **AWS (LumisCare)** | $500-2,000 | Scales with users (ECS, RDS, S3, CloudFront) |
| **Vapi voice AI** | $100-500 | Per usage (voice-to-assessment) |
| **Monitoring (Datadog, PagerDuty)** | $100-300 | Infrastructure monitoring, on-call |
| **CDN & DNS** | $50-100 | CloudFront, Route53 |
| **Total Infrastructure** | **$750-2,900/month** | |

#### SaaS Tools & Software

| Tool | Monthly | Purpose |
|------|---------|---------|
| **Stripe** | 2.9% + $0.30/txn | Payment processing |
| **Intercom / Crisp** | $50-200 | Customer support chat |
| **Jira / Linear** | $50-100 | Project management |
| **Apollo.io** | $100 | Sales outreach |
| **LinkedIn Sales Navigator** | $80 | Sales prospecting |
| **Notion** | $10-50 | Documentation |
| **Auth0 / Clerk** | $50-200 | Authentication |
| **GitHub** | Free-$50 | Code repository |
| **Total SaaS** | **$390-780/month** | |

#### Development Services (SnowIT ↔ Fast Constructions)

**Model:** Fast Constructions pays SnowIT for development services.

**Options:**

**Option A: Revenue Share**
- SnowIT receives 50% of Fast Constructions revenue
- Example: $1,000 MRR → $500 to SnowIT, $500 to Fast Constructions
- **Pros:** Aligned incentives, SnowIT shares upside
- **Cons:** Variable income for SnowIT, complex accounting

**Option B: Fixed Monthly Retainer**
- SnowIT receives $3,000-$10,000/month (market rate for BiH dev team)
- **Pros:** Predictable, simple, easier for tax/transfer pricing
- **Cons:** Not aligned with revenue growth

**Option C: Hybrid**
- Base retainer ($2,000/month) + 25% revenue share
- **Pros:** Balanced, some predictability + upside
- **Cons:** Still complex accounting

**Recommendation:** Start with **Option B (Fixed Retainer)** — $5,000/month to SnowIT. Simpler for early stage.

**Documented in Development Services Agreement (see LEGAL-STRUCTURE.md).**

#### Marketing & Sales

| Category | Monthly | Notes |
|----------|---------|-------|
| **Cold outreach tools** | $200 | Apollo, LinkedIn |
| **Advertising (Google, Facebook)** | $500-2,000 | Scale with revenue |
| **Content creation** | $200-500 | Blog, videos (mostly internal) |
| **Conferences / events** | $0-1,000 | Occasional |
| **Total Marketing** | **$900-3,700/month** | |

#### Professional Services

| Service | Frequency | Cost | Notes |
|---------|-----------|------|-------|
| **Accountant (US)** | Monthly or quarterly | $200-500/month | Tax filing, bookkeeping |
| **Accountant (BiH)** | Quarterly | $100-300/quarter | SnowIT accounting |
| **Lawyer** | As needed | $200-400/hour | Contracts, IP, compliance |
| **Patent attorney** | One-time + ongoing | $3K-6K (provisional), $50K-110K (full) | File within 60 days |
| **Total Professional Services** | **$300-1,000/month** | (average) |

#### Insurance

| Type | Annual | Monthly |
|------|--------|---------|
| **Cyber liability** | $2,000-5,000 | $170-420 |
| **Professional liability (E&O)** | $1,500-3,000 | $125-250 |
| **General liability** | $500-1,000 | $40-85 |
| **Total Insurance** | **$4,000-9,000/year** | **$335-755/month** |

#### Team Compensation (SnowIT)

**Current:** All agents are virtual (no direct cost to Alem yet).

**Future (if hiring real humans):**

| Role | Salary (BiH market) | Annual Cost |
|------|---------------------|-------------|
| **Senior Developer (BiH)** | €2,000-3,000/month | €24K-36K |
| **Junior Developer (BiH)** | €1,000-1,500/month | €12K-18K |
| **QA Engineer (BiH)** | €1,500-2,500/month | €18K-30K |
| **DevOps (BiH)** | €2,500-4,000/month | €30K-48K |
| **US Sales Rep (part-time)** | $3,000-5,000/month | $36K-60K |

**Note:** Currently deferred. Agents (virtual) have no direct cost. Asmir (SnowIT partner) may hire real humans when revenue supports it.

### 2.2 Total Burn Rate (Early Stage)

**Before meaningful revenue:**

| Category | Monthly Low | Monthly High |
|----------|-------------|--------------|
| Infrastructure | $750 | $2,900 |
| SaaS tools | $390 | $780 |
| Development (SnowIT payment) | $5,000 | $5,000 |
| Marketing | $900 | $3,700 |
| Professional services | $300 | $1,000 |
| Insurance | $335 | $755 |
| **Total Burn** | **$7,675/month** | **$14,135/month** |

**Average:** ~$10,000/month burn in early stage (pre-revenue)

**Runway:** Depends on capital available.
- If $60K available → 6 months runway (at $10K/month burn)
- If $100K available → 10 months runway

**Break-even target:** 100 customers × $99/month = $9,900 MRR (covers $10K/month burn)

---

## 3. Capital Allocation

### 3.1 Current Capital

**Trading Capital:** $10,000 (allocated to Nick for crypto trading)

**Operating Capital:** TBD (Alem to clarify)

**Questions for Alem:**
- [ ] How much operating capital is available for LumisCare?
- [ ] Should we raise external funding (angel, seed) or bootstrap?
- [ ] What is acceptable burn rate before break-even?

### 3.2 Funding Strategy

**Option A: Bootstrap**
- No external investors
- Grow slowly with revenue
- **Pros:** Full control, no dilution
- **Cons:** Slower growth, limited capital

**Option B: Angel / Seed Round**
- Raise $100K-500K from angels or small VCs
- **Pros:** Faster growth, capital for marketing and team
- **Cons:** Dilution (10-20%), investor expectations

**Option C: Grants & Credits**
- Apply for Google for Startups ($100K-$350K GCP credits)
- Apply for AWS Activate ($5K-$100K credits)
- Healthcare innovation grants
- **Pros:** No dilution, free resources
- **Cons:** Application process, limited to credits (not cash)

**Recommendation:** Start with **Option C (Grants)** + **Option A (Bootstrap)**, raise **Option B** only if growth justifies it.

**Action Items:**
- [ ] Apply to Google for Startups (John prepares, Alem approves)
- [ ] Apply to AWS Activate
- [ ] Research healthcare innovation grants (Selma)

### 3.3 Investment Strategy (Trading)

**Capital:** $10,000 (approved)

**Allocation (Target):**
- 30% USDC (reserve): $3,000
- 20% ETH: $2,000
- 15% BTC: $1,500
- 10% SOL: $1,000
- 10% BNB: $1,000
- 5% alt coins: $500
- 5% meme coins: $500
- 5% swing trading: $500

**Risk Management:**
- -5% stop-loss on all positions (auto-sell if loss exceeds 5%)
- +8-10% take-profit targets
- Max 30% in any single asset
- Monthly rebalancing

**Expected Returns:**
- Conservative: 3-5% monthly ($300-500/month on $10K)
- Moderate: 5-8% monthly ($500-800/month)
- Aggressive: 10%+ monthly ($1,000+/month) — higher risk

**Use of Profits:**
- 50% reinvested (compound growth)
- 50% to operating expenses or charity

**Responsible:** Nick (execution), John (oversight), Alem (strategy approval)

---

## 4. Charitable Giving (50% Commitment)

### 4.1 Policy

**Commitment:** 50% of all net profits donated to charity.

**Which Entity?**
- **Fast Constructions (USA)** — recommended (tax-deductible in US)
- OR Alem Basic (individual) — if taking distributions

**Net Profit Definition:**
- Revenue - COGS - Operating Expenses - Taxes = Net Profit
- 50% of Net Profit → Charity
- 50% of Net Profit → Retained earnings or distributions

**Frequency:** Annually (easier accounting, better for tax deduction)

**Example (Year 1):**
- Revenue: $100,000
- Expenses: $60,000
- Net Profit: $40,000
- Charity: $20,000 (50%)
- Retained: $20,000 (50%)

### 4.2 Charity Selection

**Focus Areas:**
- Healthcare access (aligned with LumisCare mission)
- Underserved communities (US and Bosnia)
- Education (STEM, healthcare training)
- Disaster relief (if needed)

**Criteria:**
- US-registered 501(c)(3) or equivalent
- Verified via GuideStar, Charity Navigator, or BBB Wise Giving Alliance
- Transparent financials (>80% of funds to programs, not overhead)
- Proven impact

**Potential Charities:**
- Direct Relief (healthcare access)
- Partners in Health (underserved communities)
- Doctors Without Borders (global health)
- Local BiH charities (if Payment App succeeds)

**Decision:** Alem selects charities (or delegates to John with approval).

### 4.3 Transparency & Marketing

**Public Commitment:**
- Publish on lumiscare.com/impact (transparency page)
- "50% of profits → charity. We care about your patients AND your community."
- Use as marketing differentiator ("Healthcare software that gives back")

**Annual Report:**
- "In 2026, we donated $X to [charities]."
- List charities, amounts, impact
- Share on LinkedIn, blog, email to customers

**Tax Benefits:**
- US: Corporate charitable donations deductible up to 10% of taxable income (C-corp)
- Bosnia: Limited deductibility (consult accountant)
- Norway (Alem personal): ~12,000 NOK/year deductible

---

## 5. Budget Planning

### 5.1 Monthly Budget (Early Stage)

| Category | Budgeted | Actual (Month X) | Variance |
|----------|----------|------------------|----------|
| **Revenue** | $990 | $X | +/- Y% |
| **Expenses** | | | |
| ├─ Infrastructure | $1,500 | $X | +/- Y% |
| ├─ SaaS tools | $500 | $X | +/- Y% |
| ├─ Development (SnowIT) | $5,000 | $X | +/- Y% |
| ├─ Marketing | $1,000 | $X | +/- Y% |
| ├─ Professional services | $500 | $X | +/- Y% |
| ├─ Insurance | $500 | $X | +/- Y% |
| **Total Expenses** | **$9,000** | **$X** | **+/- Y%** |
| **Net Profit/(Loss)** | **($8,010)** | **$X** | |

**Budget Owner:** John (prepares), Alem (approves)

**Review Cadence:** Monthly (Monthly Business Review)

**Adjustments:** John can adjust <10% variance, Alem approves >10% variance.

### 5.2 Annual Budget (Year 1)

**Revenue Target:** $59,400 ARR (50 customers × $99/month)

**Expense Budget:**

| Category | Annual | Notes |
|----------|--------|-------|
| Infrastructure | $18,000 | Scales with users |
| SaaS tools | $6,000 | |
| Development (SnowIT) | $60,000 | $5K/month |
| Marketing | $24,000 | Heavy in early months |
| Professional services | $12,000 | Includes patent filing |
| Insurance | $6,000 | |
| **Total Expenses** | **$126,000** | |

**Net Loss (Year 1):** ~$66,600 (need capital to cover)

**Path to Profitability:**
- Break-even: ~100 customers (Month 12-15)
- Profitable: >100 customers + growing

**Funding Needed (Year 1):**
- Operating capital: $70,000 (covers net loss + buffer)
- Trading capital: $10,000 (already allocated)
- **Total:** $80,000

**Sources:**
- Alem personal capital
- Angel investors
- Grants (Google, AWS)
- Trading profits (if Nick successful)

---

## 6. Financial Reporting

### 6.1 Monthly Reporting (John → Alem)

**By 5th of each month:**

**P&L (Profit & Loss):**

| Line Item | Current Month | Last Month | YTD |
|-----------|---------------|------------|-----|
| **Revenue** | $X | $Y | $Z |
| **COGS** | $X | $Y | $Z |
| **Gross Profit** | $X | $Y | $Z |
| **Operating Expenses** | | | |
| ├─ Infrastructure | $X | $Y | $Z |
| ├─ SaaS tools | $X | $Y | $Z |
| ├─ Development | $X | $Y | $Z |
| ├─ Marketing | $X | $Y | $Z |
| ├─ Professional services | $X | $Y | $Z |
| ├─ Insurance | $X | $Y | $Z |
| **Total OpEx** | $X | $Y | $Z |
| **Net Profit/(Loss)** | $X | $Y | $Z |

**Cash Flow:**

| Category | Current Month | Last Month |
|----------|---------------|------------|
| **Cash In** (revenue) | $X | $Y |
| **Cash Out** (expenses) | $X | $Y |
| **Net Cash Flow** | $X | $Y |
| **Cash Balance (end of month)** | $X | $Y |

**Runway:** X months (at current burn rate)

**Charitable Giving Accrual:** $X (50% of net profit YTD, paid annually)

### 6.2 Quarterly Reporting

**Includes:**
- Full P&L, cash flow, balance sheet (if applicable)
- Customer metrics (MRR, churn, LTV, CAC)
- Trading performance (ROI, Sharpe ratio)
- Variance analysis (budget vs actual)
- Forecast update (next quarter)

**Reviewed at Quarterly Planning Meeting.**

### 6.3 Annual Reporting

**Includes:**
- Annual financial statements (P&L, balance sheet, cash flow)
- Tax filings (prepared by accountant)
- Charitable giving summary (donations made)
- Performance vs budget
- Next year budget

**Published:** Transparency report on lumiscare.com/impact (charity only, not full financials)

---

## 7. Tax Strategy

### 7.1 Tax Jurisdictions

| Entity | Jurisdiction | Tax Type | Rate | Filing |
|--------|--------------|----------|------|--------|
| **Fast Constructions (USA)** | US Federal + State | Corporate income tax | 21% federal + 0-9% state | Quarterly estimated, annual return |
| **SnowIT (Bosnia)** | Bosnia & Herzegovina | Corporate income tax | 10% | Quarterly or annual |
| **Alem Basic (individual)** | Norway | Personal income tax | Progressive (up to ~50%) | Annual |

### 7.2 Tax Optimization (Legal)

**Strategies:**
- **Charitable deductions:** 50% of profit → charity (US tax deductible)
- **R&D credits:** Apply for R&D tax credits (US, BiH) — software development qualifies
- **Transfer pricing:** Document SnowIT → Fast Constructions payment at market rate (avoid tax authority challenges)
- **Depreciation:** Depreciate software development costs over time (GAAP/tax rules)
- **Loss carryforward:** Year 1 losses offset future profits (US allows carryforward)

**Accountants:**
- **US:** Hire US accountant for Fast Constructions (Q1)
- **BiH:** Engage BiH accountant for SnowIT (Q1)
- **Norway:** Alem's personal accountant (for distributions)

### 7.3 Transfer Pricing Documentation

**Required:** If Fast Constructions pays SnowIT >€10K/year, document that payment is at "arm's length" (market rate).

**Method:**
- Benchmark BiH software developer rates: $50-100/hour or $3K-10K/month retainer
- Document hours worked by SnowIT team
- Invoice monthly with breakdown
- Keep records for tax authorities

**Owner:** Dženan (compliance) + accountants

---

## 8. Document Control

| Version | Date | Changes | Author |
|---------|------|---------|--------|
| 1.0 | 2026-01-28 | Initial document | John |

**Next Review:** 2026-04-01 (quarterly)

**Owner:** Alem Basic
**Maintained By:** John (Director)

---

**End of Financials Document**

Clear revenue model. Clear cost structure. Clear charity commitment. Build profitably, scale sustainably, give generously.