|1||TEAM. We are a global team of aviation entrepreneurs led by Jonathan Evans, an exited tech CEO.|
|2||TIMING. Post-COVID airlines pull routes but demand for direct, uncrowded air travel is increasing.|
|3||ON-DEMAND. Our 'right-sized' aircraft avoid hubs and access 10x more airfields through a simple App.|
|4||SOFTWARE. We scale with AI-driven routing, demand-generation, and booking.|
|5||CLEANER. We explore the most exciting hybrid & electric aircraft for clean air travel.|
|6||JOYFUL. Join us in re-imagining a better way to fly and own a share in the future of aviation.|
It is 2020 and despite all the available advances in mobility, people still have no real control over where, when and how they fly. As the airline industry once again resuscitates a failing hub and spoke operation, we see that the huge demand for regional and local air connectivity is unmet. That's why we want to reimagine air travel at KinectAir -
To MOVE people to where they NEED to be.
Our platform meets consumer demand for direct air travel on your own schedule - meaning no more hunting through the airlines' schedules that serve major airport hubs and force people to fly unsustainably. Our app creates a booking to your actual need.
As a software-defined global air mobility company, we build powerful AI software to operate our own flexible, on-demand network of 'right-sized' aircraft with world-class pilots, so that we can fly our customers safely to where they need to be, when they want to be there. We believe that this will allow us to dramatically change the way people fly and expand the market for on-demand air mobility.
Sometimes, you just need to be there in person. We are on a mission to empower people to connect with each other, places, and communities by air. We plan two complementary products. The go anywhere point to point charter or group flights for 8 people, and turboprops with up to 80 seats offering flexible routing. The combination of the software, the most versatile machines available and the airfield access we can give customers will create a game changing network for regional flying.
KinectAir Anywhere - Connecting, on-demand
Our on demand flight network helps our customers avoid busy commercial airports, with their endless crowds and lines, to finally deliver a service that meets customer needs in a dynamic and intelligent way.
The customer just needs to use their smartphone to tell us where and when they need to go and KinectAir Anywhere will dispatch a safe, economical and highly versatile Pilatus PC-12 aircraft to reach any airfield within 1,000 miles.
Other airlines only operate out of 50 of the 2000+ available airports in the US, and are simply not 'on-demand' travel experiences. We can change that.
Pilatus PC-12 pictured
KinectAir Together - Connecting Regions
Together we will support regional communities to connect and thrive. We plan to service regular volumes of inter-regional air travel as we scale in the USA and Europe. We will build a flexible schedule to meet the demand for communities and businesses in regions poorly connected by road and rail. KinectAir Together will use efficient turboprop aircraft with up to 80 seats. These inter-regional routes will also flex with demand or even offer exclusive flights for seasonal events through the dynamic KinectAir App. Put simply, we know there is twice as much demand closer to the business, places and communities people want in their lives and we intend to fulfil it.
Dash-8 Turboprop pictured
To maximize efficiency - affordability for customers and our profitability - we plan to code AI software to continuously optimize, at scale and in real time, the true supply and demand across our own network of aircraft, pilots, and other passengers. The software instantly learns, recalculates, and offers the best options. It also suggests targeted remarketing online and uses our network to act on the data to fill flights.
The outcome is compelling and intuitive travel options for clients, driven by algorithms that make life easier. To fly with KinectAir, we simply invite you to begin your journey by using your mobile to tell us where you need to be.
KinectAir aspires to be efficient by design. We aim to do more to cut waste and reduce avoidable CO2 aviation emissions than any air company has before. First, the right-sized aircraft we use today are significantly more efficient than equivalent jet aircraft. By optimizing operations using these efficient aircraft, we can dramatically reduce the typical carbon footprint for passengers.
Second, achieving significant reductions in operator CO2 emissions can only be attained by open innovation and cooperation between new partners. Electric and hybrid manufacturers of conventional take off and landing (eCTOL) aircraft are streets ahead in terms of reaching and exceeding regulatory standards for safe operations. KinectAir is already looking to bring in hybrid and electric aircraft into the fleet in the near term (1-2 years). With such aircraft, the traveler will be part of the leap forward in aviation. Allowing more people to positively evaluate their need to travel against their carbon footprint. Fossil fuels represent 40% of a typical airline's cost base today. As with so many sustainable policies, we believe that doing the right thing is profitable for the customer, the planet and operations.
KinectAir was conceived and started by Jonathan Evans; an Army veteran, professional pilot, and successfully-exited entrepreneur. After selling his drone software company, Skyward, to Verizon in February 2017, Jonathan hand-picked a unique team from the aerospace and software industries to go after his dream of a flexible on-demand flight network.
The global launch team that joins him in founding KinectAir is composed of professional aviators, data science and software engineers, legal counsel, and seasoned entrepreneurs. The team has developed a shared vision to build a trusted air service from the ground-up around a company that has software in its soul.
Jonathan raised over $8M of venture capital during the five years from Skyward's inception to its acquisition by Verizon in 2017. As has been well documented, the VC-backed startup journey can be magnificent in what it makes possible, as well as in some of the challenges it can present.
In starting KinectAir, Jonathan wants to change the investment paradigm, and after a period of self-funding to bring the concept into form, we're now seeking to build an investor base of support from the very people we fly. We want our earliest customers to be so enthused about the service that they want to own a piece of the company providing it.
The Wefunder platform, and the recent JOBS Act that allows for this more democratized investment structure in a startup, is perfectly aligned with this ambition. We welcome you to join this KinectAir journey here, with us.
KinectAir has financial statements ending December 31 2019. Our cash in hand is $6,554.79, as of April 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $3,025/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.
KinectAir provides joyful and accessible air travel experiences around the world by employing safe and efficient, state-of-the-art and right-sized aircraft flown by senior captains; harmonized by intelligent, robust, and elegant software.
KinectAir hopes to be a global experience company connecting people around the world to the times and spaces that compose their lives. Aviation's regulations, aircraft, and pilots already provide a trusted and recursive global scaffold to this ambition. KinectAir will scale by using software to open bottlenecks in existing infrastructure, unlock private air mobility for the masses, and lead the industry as the software-defined operator of a rising tide of electric, digital, and automated aircraft.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
KinectAir Inc. was incorporated in the State of Delaware in April 2019. The company has been self-funded and incubated for over a year as a 'moonlit' project between the co-founders. Our CEO left Verizon in October 2019 to lead the company full-time, and as of March 2020, six of the eight co-founders have transitioned to full-time. We established a closed beta group of 65 travelers in the Pacific Northwest to test the market and sell flights (brokering existing operators' infrastructure at this stage), targeting a 10-15% margin on every flight. We're working with customers on a minimum tech-debt software product, and coding in the right direction.
Historical Results of Operations
Our company was organized in April 2019 and has limited operations upon which prospective investors may base an evaluation of its performance. The company has a UK subsidiary that was formed on April 22, 2020. It is wholly owned by KinectAir Inc. The UK subsidiary was created in order to pursue operations in the UK, where it will be beneficial to have a UK entity for purposes of finance structuring and compliance with regulations. At present, it has no material assets and no liabilities.
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
To date, the company has been funded with $63,000 in SAFEs and $67,202 in debt.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 10 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
KinectAir Inc. cash in hand is $6,554.79, as of April 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $3,025/month, for an average burn rate of $3,025 per month.
Since 12/31/2019, we have begun limited product offerings in select markets for purposes of market research. We have also moved forward with our application for our own Part 135 charter certificate. We have incurred additional expenses related to both of these items. However, we do not have significant additional recurring expenses.
Our intent is to operate profitably at the unit economic level or per each brokered flight and to be profitable in 36 months. We anticipate revenue will begin in the next 6-12 months, initially from our highest tier of travelers/members who will have partial ownership interests in aircraft. We anticipate it will take approximately $10M in funds raised (total) in order for us to break even.
Our operations and profitability are dependent upon our ability to acquire sufficient customers to support our planned scale.
Our business model is dependent in part on obtaining certain required regulatory certifications and approvals from regulators, including the Department of Transportation and Federal Aviation Administration, as well as counterpart European regulators for foreign operations. If it takes longer than anticipated to obtain certain approvals or if we are unable to obtain them, it will negatively impact our business.
As an innovator in the highly regulated aviation space, it is possible that some of our proposed platform functions may be found not to meet the current regulatory framework by the Department of Transportation, the Federal Aviation Administration, or other applicable regulatory authorities.
We expect our operating expenses to increase in the future as we expand our operations. If our revenue does not grow at a greater rate than our expenses, we will not be able to achieve and maintain profitability.
We may encounter unforeseen expenses, operating delays, or other unknown factors that may result in losses in future periods. If our expenses exceed our revenue, our business may be seriously harmed and we may never achieve or maintain profitability.
Any aviation accidents or incidents on flights we broker or operate could give rise to significant potential liability and could damage our brand.
Our company will face competition from other air operators, brokers and tech startups. Our success will depend on our ability to create a more compelling brand and service, and to innovate ahead of the competition.
The commercial air travel is currently experiencing an unprecedented drop in demand. However, we believe that the many of the reasons that people are choosing to avoid commercial airports do not apply to on-demand travel with smaller aircraft and private terminals.
Our business plan includes -- but is not limited to -- the Company ownership and operation of aircraft. If we do not reach sufficient demand to offset the fixed costs of these aircraft assets they will be a drain on our operating funds.
Covid-19 has severely negatively impacted the commercial air travel market. It is uncertain at this time what the medium and long term impacts on air travel will be. While this presents some risks to on-demand air travel, it may present opportunities, for example the opportunity to further distinguish our service from competitors and gain market share.
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.
Our business plan includes the development of artificial intelligence (“AI”) algorithms to assist with aircraft routing, demand-generation, and booking, all in order to generate efficiencies. At present, our AI platform is in concept form only. Unforeseen challenges may arise in developing this platform, and it is possible that the platform may not generate anticipated efficiencies.
Our business plan models decreasing costs of aircraft operation based on network effects of a larger fleet of available aircraft and use of AI algorithms to assist with aircraft routing, demand-generation, and booking. It is possible that planned efficiencies will not be achieved.
At present we anticipate requiring significant additional funds to reach profitability beyond the maximum offering amount in this fundraise. The source of these funds has not yet been identified, and it is possible the Company will face challenges in securing additional funding.
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