|1||20 pilots including brand/location partners Disney, McDonalds, and a Warren Buffett company proved people love our automated retail stores.|
|2||CEO/Founder sold a company to market leader ZoomSystems, operator of BestBuy Express. (Team: MIT Sloan, Harvard Business, & Dartmouth).|
|3||Proven Scalable Model: Boston pilots pay for themselves every 6 months. A small critical mass can trigger self-funded growth.|
|4||Exit Strategy: Within 2 years the company hopes (but not guarantees) to be acquired by a company like Amazon, Google, Apple, or BestBuy.|
|5||Strong IP including patent for compact dispensing and container swap replenishment systems.|
|6||(We made the world's smallest and most-efficient product-dispensing kiosk)!|
|7||Raising an investment round to scale to 350 locations in the top 20 cities in the U.S. (Based on successful pilot results).|
Traditional retailers can’t serve vital growing needs in crowded places.
When was the last time your phone was dying and you had no way to charge it as you rushed to board? It’s impossible to have a full-blown store in some places, yet needs like this are growing 6 times faster than the rest of retail. Just the power bank market is growing at staggering 18.7%/yr (Grand View Research).
Existing solutions are too big.
Large automated stores designed in the past are not suitable for crowded places and are destined to be away from the real point of need.
With over 20 pilots from Disney, MacDonald’s, and a Warren Buffet Jewelry Company, we proved people want MagNet micro stores.
To find the most promising value proposition, we deployed our pilots in different types of locations using a previous generation kiosk. We tested airports, bus, subway and train stations, convention centers, amusement parks, travel plazas, and shopping malls. We learned what works and does not work and we also established valuable partnerships with brands and property managers including Disney, MacDonald’s, and a Warren Buffet jewelry company.
MagNet next gen micro store is the world's smallest* and most-efficient product-dispensing kiosk reaching customers where no one else can. (*Based on capabilities)
Based on the pilots we developed our next gen micro store with a beautiful non-invasive design, a tiny footprint, and a container swap replenishment system that takes only seconds. Our patented technology makes operation 85% more cost-efficient (based on time to replenish in the field).
We created a delightful customer experience
MagNet micro store UI is large, responsive, visually clean and simple. It provides precise information that includes text, reviews, pictures, and videos that empower customers to make a quick decision with confidence and delight. Surveys show that 99.9% of our customers walk away extremely happy with their experience.
Founders created and sold a company to the market leader ZoomSystems, operator of BestBuy Express. With solid industry experience we executed pilots and developed state-of-the-art technology. Our team also has a strong education background from MIT Sloan, Harvard, Brown, and Dartmouth.
Smart Back-End Control System
We also developed a robust back-end system that monitors and controls the network on real time and triggers efficient container swaps to replenish the micro stores based on predictive analytics.
Micro Store P&L/Month
Our final pilot with the next gen micro store achieved all we were expecting, most notably customer delight and high profitability (Micro stores pay for themselves every 6 months).
2 Year Milestones (Unit Deployment Schedule)
Start point is at investment round completion and may vary. SEC Disclaimer: Includes forward-looking projections that cannot be guaranteed.
Today we are ready to scale, we have a proven team, value proposition, business model, patented technology, and the necessary partnerships in place. Long term we plan to deploy 10,000 micro stores with additional product categories and territories.
Help us create the future of retail. Join the revolution!
MagNet Analytics has financial statements ending December 31 2018. Our cash in hand is $10,000, as of January 2020. Over the three months prior, revenues averaged $3,500/month, cost of goods sold has averaged $1,750/month, and operational expenses have averaged $18,000/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.
MagNet is a chain of automated retail kiosks selling products needed on the spot in high-traffic locations not available for traditional retail. MagNet kiosks provide a unique combination of precise information (typically only offered by online shopping) with immediate gratification exactly at the point of need. MagNet has the smallest footprint and highest efficiency in the market, reaching consumers where no one else can.
In 5 years MagNet will have more than 1000 locations in the US and the company will be an acquisition target of companies like Amazon, Google, Apple, and BestBuy that are trying to bridge the gap between online and location retail.
MagNet Analytics, Inc. was incorporated in the State of Delaware in May 2018.
Since then, we have:
Historical Results of Operations
MagNet Kiosks, Inc. was incorporated as a Massachusetts S-corp May 2014. In May 2018, MagNet Analytics was incorporated as a c-corporation, in order to pursue capital from investors. All assets and liabilities were transferred from MagNet Kiosks, Inc. to MagNet Analytics, Inc. MagNet Kiosks, Inc. will dissolve around the time of the conclusion of this Offering.
Our company was organized in May 2018 and has limited operations upon which prospective investors may base an evaluation of its performance.
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 financed with $3,295,204 in equity.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 18 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 3 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
MagNet Analytics, Inc. cash in hand is $10,000, as of January 2020. Over the last three months, revenues have averaged $3,500/month, cost of goods sold has averaged $1,750/month, and operational expenses have averaged $18,000/month, for an average burn rate of $16,250 per month. If necessary, the Founder can self-fund to maintain short-term operations.
We have finished with research and Development and Pilots, next phase are deployments of permanent locations. We hope (but not guarantee) to deploy 30 kiosks within 6 months, which translate to approximately $84,000 in monthly revenue. We also expect (but not guarantee) to average $200,000/month in expenses in 6 months, before hitting profitability in 10 months. Each kiosk will cost approximately $6,400 to manufacture and deploy.
We will be investing 60% of capital raised in manufacturing kiosks for deployments. We hope revenue will restart in 3 months through deployments at a rate of 10-20 kiosks per month.
We need to secure enough viable locations across the US. We currently have a relationship with property managers that have 100 viable locations and we hope be developing the other 250 in 2020. Failure to meet these goals will impede our plans for future growth.
Negotiating location contracts can take longer than 3 months due to external reasons. We are assuming similar average conditions to what we encountered in Boston and Orlando however local difference may result in longer times to secure the locations.
If we do not raise this round fast enough to deploy the minimum number of kiosks, our future revenues may not be sufficient to fund additional growth.
Ramp up of revenue in each location might not be as predicted due to local differences in seasonality.
We might have to adjust product offering depending on local preferences to optimize revenue, resulting in longer revenue ramp up.
Unpredicted consumer trends might require an adjustment in product offerings in each location, resulting in longer revenue ramp up.
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.
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