|1||Our business will be automated and requires 30 mins of labor per day for projected $1K+ daily profit|
|2||Founders have raised $200k+ and built an amazing technical, business, marketing, and mentoring team|
|3||FoodTech Automation adoption has accelerated due to COVID and we're set to launch and grow quickly|
|4||Founding team has a combined 50+ years in foodservice, manufacturing, and automation design|
We had been tracking Adrian's progress with Octane Coffee for about six months before we decided to make an investment. Here are just some of the reasons why we think that the timing is perfect for Octane Coffee to succeed.
With high vacancy rates within commercial real estate, Octane will be able to secure leases at preferential terms. Additionally, the small footprint of the drive-thru optimized locations allows Octane to place its shops in non-traditional areas such as a corner of a large parking lot. This will also allow Adrian to have reduced operating expenses compared to a traditional coffee shop.
Due to the automated nature of the shop, you can guarantee that your favorite coffee or espresso beverage is prepared consistently and quickly every single time you visit. No more waiting in the drive-thru lane for ten minutes when you are already late to work for an average cup of coffee. You can have your favorite drink pre-loaded into your mobile app and prepared fresh once you reach the drive-thru entrance.
Lastly, Adrian's customer-focused mentality coupled with his drive and determination makes him the perfect founder to turn Octane Coffee into a household name. His passion is contagious and will allow him to recruit the key hires necessary to help make this futuristic coffee shop concept into a modern-day success. We search tirelessly to find founders with the traits necessary to succeed in today's ever-changing world. We have found that with Adrian and are proud to be investors in Octane Coffee.
At its core, Octane Coffee is focused on reimagining the drive-thru coffee experience using a full suite of advanced software and hardware automation. We've built an amazing team of founders, supplier partners, and advisors to help us launch and grow this business.
The COVID-19 pandemic has created huge shifts in customer demand for Quick-Service-Retail (QSR) and Coffee Shops and we're poised to provide a completely contactless drink production and delivery concept that has gotten a lot of good feedback from our early BETA test groups. The drink quality is there and the production automated is proven out, our next step is to scale our unit up into a full size drive-thru location.
Our target market is the 18-45 year old commuter who buys a coffee on-the-go as part of their daily routine. They are typically busy professionals, parents with kids in the car, and students with expendable income. The 'away-from-home' coffee industry is huge, FIVE TIMES bigger than the ‘at-home’ market and estimated at $73.9 Billion dollars per year.
We've always believed that the romantic view of Starbucks WASN'T how most of their customers actually used the service ("I could bring my laptop/book down here and sit with my coffee or have a quick informal meeting."). Starbucks CEO Kevin Johnson came out with a statement in April 2020 when Coronavirus shut most of the companies stores down: "about 80 percent of orders were placed “on-the-go” even before COVID-19" showcasing that customers ACTUALLY used Starbucks in a grab-and-go fashion 80% of the time, even before Coronavirus. We sell to that 80% that doesn't care about luxurious interior build-outs or the sights/smells/sounds/ambiance of the coffee shop experience, they just want their coffee and want to get on with their day.
Our vision is to franchise our automated drive-thru concept nationwide (employee-free!) and we hope to be the first QSR 'drive-thru' company to achieve automated delivery via drones to moving cars on the freeway, it truly is the pinnacle of convenience (obviously lots of safety, logistical, and regulatory hurdles!).
We hope you'll invest in Octane Coffee and we look forward to bringing our concept to your city to be a part of your daily routine!
For more info, please contact me via e-mail --> firstname.lastname@example.org
Octane Coffee has financial statements ending December 31 2019. Our cash in hand is $42,000, as of November 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $4,500/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 sell premium coffee, tea, and juice drinks via a fully automated drive-thru lane. All drinks are ordered, customized, prepared, and delivered via software and hardware automation that we developed in house.
Convenience is key in the drive-thru coffee industry. In 5 years, we hope to be the first 'quick service retail' company to successfully launch drone delivery of drinks to cars driving on the highway at speed (it's the pinnacle of convenience, no need to slow down or stop the vehicle!). These are future projections and are not guaranteed.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Automated Coffee Shop, Inc was incorporated in the State of Delaware in November 2018.
Since then, we have:
Historical Results of Operations
Our company was organized in November 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 $50,000 in debt, $50,000 in equity, $150,000 in SAFEs, and around $39,000 in cash-in capital from the founder.
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 12 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
Automated Coffee Shop, Inc cash in hand is $42,000, as of November 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $4,500/month, for an average burn rate of $4,500 per month. Our intent is to be profitable in 8 months.
Since December 31, 2019, we've brought our burn rate down to around $5k/month. In 2020 we've also raised $150k in investments and secured $50k in commercial equipment financing.
We are actively ramping up our marketing plan, app UI/UX cleanup, final location layout and design plan, and securing the last funding.
Once funded, we will scale-up our equipment and complete the drive-thru location build-out process to the tune of $100k-125k total. This work will take the better part of 3-4 months. We expect the Wefunder minimum raise of $55k, combined with our commercial equipment financing and investments from private investors, to cover these costs.
With our grand-opening scheduled for Q1 2021, we hope to be profitable at ~140 coffees sold per day within the first 3 months (while an average Starbucks in our area does 600-800 daily). We will be spending $8k-10k on marketing during these early launch months to establish the Octane Coffee brand and give customers a 'first-coffee-is-free' promotion ($0.85 COGS) to try our service. One year out from launch we hope to be selling 400+ coffees per day with MRR of $44k and $27k net profit.
The founding team has savings, retirement accounts, and home equity totaling $1M+ that can be tapped if the need arises.
The coffee industry is massive, very established and highly competitive. The big players have huge financial incentives to automate their processes and eliminate labor. Our goal is to become a trusted partner and automation provider to Starbucks, Dunkin', JAB Holdings, etc but there's always a risk that they choose a different technology partner or develop it in-house.
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.
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 automated drive-thrus require prime, convenient, and expensive commercial real estate for our customers to have the quickest and easiest access to our service. We have assembled a team that understands the costs, timelines, and risks associated with CRE but the landscape is quickly being revamped due to COVID-19 and the exodus of customers from traditional brick-and-mortar retail stores and restaurants.
Launching a coffee shop during the COVID-19 pandemic poses a large risk, most service industry businesses are suffering huge declines in customer volume and sales. We can however guarantee customers that there are no human employees involved in drink production and delivery, which will hopefully gain us market share compared to our competitors who rely extensively on human labor.
Our early launch menu is strictly coffee, tea, and juice drinks while food items will be added six to nine months after launch. Brewing coffee and dispensing liquids has much easier storage, traceability, and monitoring for freshness and quality when compared to heat-and-serve or served-cold food items. This may be a turn-off for early customers who also want a snack with their coffee in the morning.
Restaurant and Vending Machine laws and regulations are very strict in certain respects and don't always lend themselves well to interpretation of new and innovative concepts like ours. Legally, our system has been deemed a 'Vending Machine' by the State of Wisconsin (which eliminates many of the pesky restaurant regulations and inspections), but that complicates the drive-thru style application (which are governed by local municipality zoning commissions). We've been in contact with the relevant authorities for our pilot drive-thru launch and we hope to develop an established use case to help streamline future location launches.
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