|1||A unique modular system, offering maximum flexibility to build different vehicle variations quickly|
|2||Substantial Market Size with exponential growth, $792B by 2028|
|3||Saving multi-millions of dollars on development costs|
|4||Speeding up time-to-market, saving years on the development by using existing and proven parts|
|5||Starting in the largest key markets for last-mile logistics, US and Europe|
|6||Building strong collaborations with global partners is one of our key strategies|
|7||Setting up micro-assembly factories in global key markets|
|8||SOP ready end of 2021|
We are in the EV Commercial Industry since 2013 and are looking for great products ever since.
When I got to know about Cityfreighter, at the end of 2018, I made an initial investment to support their project to build a prototype for the ACT show in April 2019. Honestly, I never believed they will make it on time but I was convinced that their concept would be a successful business model in the future.
But then, the Easter weekend before the ACT show, a 747 cargo plane with the prototype on board landed at LAX and we virtually drove the CF1 to my facility that evening, just two and a half hours after landing!
I could not believe it! And the CF1 was the most beautiful truck of its class, I have ever seen.
Everything had been realized, almost to perfection. In specific I love the clean cockpit,
the low-floor chassis and the intelligent locking system.
I have no doubt that this innovative company, given the right support and funding, can change the industry for good and we will be there with the to a glory EV future.
The transportation and logistics industry faces many changes. By 2030, 70% of all people will live in larger cities and this growth will have an impact on urban logistics. One consequence is that the demand for sustainable, compact, pollution-free commercial vehicles is steadily growing. Furthermore, upcoming regulatory changes for inner-city traffic will lead to a rapid increase in the sales of commercial electric vehicles for urban deliveries.
We believe the problem in the industry lies beyond just swapping fossil fuel operated motors with electric ones. Electric drivetrains and batteries are quickly becoming commodities. Now we can focus on what is important: to develop customized vehicle concepts, which seamlessly integrate into the existing infrastructures and evolving business requirements of fleet operators, optimizing TCO (total cost of ownership).
CityFreighter's modular approach enables customization of key infrastructure components, serial production of commercial vehicles, which is a key differentiator compared to large OEMs and other competitors. Developing fully customized trucks for large fleet operators becomes a reality.
E-commerce has grown significantly in the past decade, as new digital business models and smarter logistics concepts enable both instant and same-day deliveries (respectively growing 36% and 17% a year). While COVID-19 has amplified and accelerated this trend, elevated e-commerce and time-definite delivery levels should remain above the pre-COVID-19 baseline in the long term
Additionally, new categories have gained momentum online, such as groceries and furniture. To illustrate, China’s food delivery leader, Meituan Dianping, experienced an increase in grocery deliveries in March and April of 400%. In the United States, research suggests e-commerce spending will grow for child products, household suppliers, groceries, and food takeout, even in the longer term-hence the change in consumer habits will be “sticky”
Source: McKinsey & Company Eric Hannon, Bernd Heid, Anja Huber, Christoph Klink
The market is currently divided into three sections:
And here is a comparison of the market standard, the typical cab design we know from several manufacturers (left), and our approach (right)
CityFreighter belongs to the last section of independent companies and there are only two other companies around which are actively moving forward, Workhorse (US) and Arrival (UK). Well, and there is Rivian, which is somehow out of competition, as they are pretty much covered the next years by a huge development and production contract (100,000 vans) they received from AMAZON.
Workhorse is a company listed on the stock market and has recently received the certification for its C650 truck. They have been struggling for some time but it seems that they are now moving on. The market is big enough and for the long term success of commercial electric vehicles, it is important that we all collaborate and support our other "market participants" -competition is a word from the past
Founded by a Russian billionaire who built up a plant in the UK. Arrival has been moving forward with their concept and recently received an investment from Hyundai of $100 million and an order of 10,000 vehicles from the logistics company UPS.
The concept of Arrival has similarities with our CityFreighter concept. They have a modular platform with a structural kit system, and they are planning to operate micro-factories as well. We will demonstrate with our next step, building the serial chassis, that our concept is faster, more flexible, and more economical
Here is an image form an internal comparison study we did, with different photoshop enhanced designs of the CF1
There is a huge demand in the US for class 3 (over 10,000 pounds) and in Europe for trucks with a GVWR of up to 4.25 tons, (they can be driven there with a basic driver's license). Existing OEMs are mostly planning to produce panel vans in the next years but there is further demand for individual vehicle solutions, for different industries. Right now, only converted vehicles are available, at a high cost and they are not really sustainable.
So we started to create a concept focusing on speeding up the-time-to-market and further trying to decrease the standard exorbitant development costs in the automotive industry significantly. We really do not have the intention to reinvent the wheel. For the brake system, the steering, the axles, and others, we are using existing and proven parts. They are standard commodities. Going this way enables us to bypass the standard stuff much faster and to concentrate on to innovate on more important needs of the industry
When talking to several investors, we mostly heard that we are too ambitious, so we wanted to make a difference by proving that our concept works. Just equipped with a plan, some virtual drawings, and our unlimited ambitions, we raised a couple of hundred thousand dollars from friends and small investors and ran a campaign on StartEngine.
Then we started to build the prototype in our European facility, a job that took endless hours on a 24/7 base for months. But by believing that nothing is impossible we did it and shipped the truck to Los Angeles. We had to ship it by air-cargo because we just finished it a couple of days before the show started.
The presentation at the ACT show has been a real blast and we were overwhelmed from the applause we got from other industry players and large OEMs
After the show, we got approached by two well-known OEMs from the commercial vehicle industry, and we were seriously discussing a possible partnership. But we recognized that we needed to fine-tune our business model and to move on to the next phase first.
The industry has a problem finding drivers, so our point to support finding potential candidates is to create a clean cockpit environment and put a bit more effort into the virtual design of the truck, to make the workspace attractive and efficient. Why hasn't it been done before?
Let’s talk about our intelligent keyless locking system which recognizes in which zone of the truck the driver currently is, and opens or closes doors, as well as the freight door, accordingly.
We are also looking into new technologies like the drive-by-wire which offers more flexibility and freedom of design. We are going to implement this.
Our truck will be designed for the urban delivery purpose, a range of 100-150 miles, a front-drive electric axle, a low-floor concept for easy access, to avoid using an electric lift to save cost, weight, and time. The battery will vary between 75 and 90 kWh. High Speed at around 60 miles/h. Charging overnight at the depot, fast charging will be offered as an option. As stated before, we believe electric motors and batteries will become commodities. Our focus lies on designing and developing driver and customer-oriented logistic solutions.
Urban delivery of the future requires to develop intelligent solutions in many areas. Our mobile hub concept has been gaining a lot of interest. A major University in California is interested in doing a pilot with us.
In between, we were invited, together with our friends from CANOO, to become part of a TV commercial for VERIZON. It has has been a very exciting experience. Unfortunately, it has not yet been aired on tv.
Covid-19 blocked our efforts to move further. Our team from different countries got separated and the German team is currently not able to return to Los Angeles.
We are now planning to do the next step in Europe and continue in California, once things get back to normal". We want to raise funds on Wefunder now, to be able to move on with our operations, to start building the serial chassis prototype.
Our strategy is to raise funds on Wefunder, to support building the beta version of our new serial chassis, together with the new driver`s cabin and the cargo area system.
Once this has been finalized, we are very much convinced to have enough leverage to be able to continue our talks with possible collaboration partners and larger investors to secure funding for phase III.
The high potential the market offers is without a doubt. Execution is the key to success. We did a pretty conservative calculation about the revenues we believe we could reach from 2022-2026, after SOP (start of production). Those numbers reflect the total volume of different chassis modules we predict we could sell in different markets within the next five years after SOP.
Disclaimer: This chart contains forward-looking projections which can not be guaranteed.
Here is our Roadmap until the end of 2021. Please be advised that to be able to realize those milestones, we would need to achieve substantial additional funding after this campaign. This chart contains forward-looking projections which can not be guaranteed.
CityFreighter has financial statements ending December 31 2019. Our cash in hand is $0, as of June 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $300/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.
Cityfreighter is developing smart, user-focused, fully electric low-floor class3 trucks from scratch, for the last mile delivery industry. The drivers' cabin and the cargo area can be customized. We are mainly using existing and proven components, not trying to reínvent the wheel. Our unique modular concept will decrease development costs and time-to-market significantly. We provide intelligent solutions to optimize the total cost of ownership and the operational efficiency
We want to become a leading brand in this niche market, providing customizable electric platforms and vehicles to large fleet operators in the commercial delivery industry. We will, either by ourselves or by strategic partners, operate micro-assembly factories in key markets. We have built a solid base for that to move further, we realized the proof of concept, and we are in serious talks with potential strategic partners and potential customers. Plus, we received a pre-order of 500 vehicles.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future if any.
Cityfreighter Inc. was incorporated in the State of Delaware in June 2018.
Since then, we have:
Historical Results of Operations
Our company was organized in June 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 $396,548 in equity.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 months before we need to raise further capital.
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 2 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
Cityfreighter Inc. cash in hand is $0, as of June 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $300/month, for an average burn rate of $300 per month. Our intent is to be profitable in 48 months.
Since the date our financials cover, we are looking for funding the next steps to build the serial chassis concept prototype. We signed a term sheet for a $300,000 investment in March, still waiting for final execution. It has been delayed because of COVID-19.
In the next 3 - 6 months we expect no change in revenues and expenses will depend on a successful campaign. We will essentially spend what we're able to raise, to build the serial chassis version. In total, we would need to raise $4-5 million till end of 2021, to start generating revenues (SOP) in 2022. Our business plan estimates (but does not guarantee) $60 million in revenues and a loss of $5.7 million for 2022.
Currently, the teams work pro-bono, smaller fees are paid out of private pockets. No other sources to rely on.
Our planning to date has been based on broader market research and our cost calculations are the result of discussions with key suppliers. We have every reason to believe that these metrics will hold across scale, however, this is not a guarantee.
The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.
Joe Storment is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
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.
Economic downturns affect the logistics industry early in their cycle and we may find our markets shrink
The COVID-19 crisis could last longer than expected, which could delay development times and other essential operations
We need to raise $4M - $5M by the end of 2021 to reach a revenue generating point. Should we be unable to secure those funds we may not be able to generate any revenues or make any return on your investment.
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