100% of Principal + Royalties for Life
65% of net proceeds are paid to investors pro-rata until 100% of principal investment is returned. Thereafter investors earn 20% of net proceeds until 200% is returned; then 15% until 300%; 10% until 400%; and 5% for the life of the machines. This is a custom contract, see document for details.
|1||2nd largest USA mask factory generating $7M in revenue|
|2||Former Y Combinator founder, 5 acquisitions, $10M+ raised|
|3||3.5M consumer sales, state governments (TX/IL), and hospitals (Kaiser Permanente)|
|4||FDA-Registration and ASTM Level 2 certification (~60 days from N95)|
|5||300M pre-orders from gov't agencies, hospitals, restaurants, and people|
|6||Can turn 1 ton of polypropylene ($1K) into 1M surgical or N95 masks... in < 1 day.|
We need masks. We needed them in March. We need them now. We're going to keep needing them for a long time.
We need masks that are Made in the U.S.A. COVID-19 has made it clear that critical manufacturing needs to be based here at home so that our supply chains aren't disrupted when there is a global crisis. There was no where that was made clearer than with Personal Protective Equipment (PPE) and especially masks.
It's been nothing short of incredible to watch Lloyd and his team pull this together. Researching machines, bringing them in from around the world, building a factory, then making it better and better every day. Lloyd is true testament to American ingenuity, creativity, and the entrepreneurial spirit.
I've known Lloyd for almost a decade and invested in his last Y Combinator backed company. He's one of the most driven entrepreneurs I've ever met and that says a lot because I'm one of the most active angel investors in the world. He the good kind of unreasonable – always pushing to make things better, always asking why, never taking no for an answer. I bet on him once before and it's a no-brainer to bet on him again.
We’re tired of relying on other countries for our safety. It’s time to reclaim our industrial spirit and take back our freedom. The United States was built on entrepreneurship, innovation, and grit. But over the past 20 years, we let other countries take the lead in strategic manufacturing. At Armbrust, we're changing this.
When COVID-19 hit our shores in 2020, we experienced the worst-case scenario, unable to supply our own frontline heroes with critical personal protective equipment (PPE). The market was absolutely flooded with cheap, flimsy, and downright unsafe masks made overseas.
That’s when we drew the line and decided to take matters into our own hands. We set up our very own, state-of-the-art production facility right here in Texas, which is already putting millions of medical-grade masks in the hands of Americans.
Founder Lloyd Armbrust comes from 10 years of startup experience:
A growing customer base of state government's like the State of Texas and the State of Illinois; large hospital chains like Kaiser Permanente; and over 3M in direct consumer sales.
Designed, developed, and produced at our Texas facility, each mask is rigorously tested for quality and safety.
Our FDA-registered masks are constructed with raw virgin polypropylene to block 99.2% of bacteria and particles down to 0.3 microns. Our cutting edge, beyond clean, Texas facility is working at full speed around the clock to produce sterile, damn near perfect masks.
This is just the beginning. We are scaling our capacity to produce billions of masks per year and developing more products that will set the standard for quality and safety. Let’s reclaim our industriousness, our independence, our freedom—together.
Armbrust American has financial statements ending December 31 2019. Our cash in hand is $1,687,453.88, as of September 2020. Over the three months prior, revenues averaged $1,883,457.64/month, cost of goods sold has averaged $1,006,015.46/month, and operational expenses have averaged $1,095,452.02/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We manufacture FDA-Registered Surgical and N95 Masks in our own custom-built 45,000 square foot factory--located just outside of Austin, TX.
In less than 5 months, we built an automated factory capable of producing millions of masks per day. In 5 years, we hope to be producing over 1,000 products--all that take advantage of huge macro trends happening today like Automation, Direct to Consumer, Environmentalism, low energy costs, USA Made, and a changing US Job Market that needs a manufacturing rebirth to survive.
Armbrust Inc. was incorporated in the State of Delaware in October 2018.
Since then, we have:
Historical Results of Operations
Our company was organized in October 2018 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
To-date, the company has been financed with $4,542,297 in debt.
After the conclusion of this Offering, should we hit our minimum funding target, we expect to continue to be cashflow positive.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 24 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Armbrust Inc. cash in hand is $1,687,453.88, as of September 2020. Over the last three months, revenues have averaged $1,883,457.64/month, cost of goods sold has averaged $1,006,015.46/month, and operational expenses have averaged $1,095,452.02/month, for an average burn rate of $218,009.84 per month.
We started producing masks, selling direct to consumers and to governments and institutions. This has caused us to generate $7.27mm in less than six months of operation.
We hope revenues will increase to over $3mm per month breaking $36mm annual run rate before Q1 2021. These projections cannot be guaranteed.
We primarily fund the business from sales direct from over 50,000 consumer accounts and hundreds of enterprise accounts. If existing consumer sales were to evaporate we could sustain the business on current capital and enterprise contracts for the next 24 months.
The current PPE market is in flux with an unknown future. While research shows the mask market has grown from 4.35 Billion Units in 2018 to 81.19 Billion in 2020, and is expected to reach 166.64 Billion Units by 2026, there is no way to guarantee this growth.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
Competition from China has already driven the price per mask to below pre-COVID numbers. While we continue to sell masks at 8x-10x Chinese prices there is no assurance that this will continue. We are betting on American's desire to purchase here in the United States.
Manufacturing has inherent risks such as mechanical and human error all of which can effect outputs and delivery dates.
Raw material costs are outside of our control and can change our cost of goods sold. While we have estimated these costs high, it is still something that could adversely affect the business.
We have to store large quantities of raw materials and finished product at our warehouse outside Austin, TX. While we follow all applicable laws around safety and hold the proper amounts of insurance, these materials represent a risk of temporary loss to the business due to damage, fire, or theft.
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