|1||Co-Founders have 25+ years of combined experience in the dairy industry and are first-moovers 🐄|
|2||Patent-pending technology will decrease labor costs and increase immunity and pregnancy rates 📊|
|3||~$12.3M potential revenue from 41 non-binding LOIs for purchase agreements across 4 countries 💰|
|4||Investment partnership with Siemens Industry Inc. to help develop the prototype and brand marketing 🚀|
|5||Strategic partnership with a SaaS company who manages data for ~60% of the cows in the US 💻|
|6||Equipped with 4 advisory board members who mentor in dairy equipment, SaaS, and sustainability 🌎|
|7||Established relations with DFA, the largest cooperative in the US representing 8,500+ dairy farms 👨🌾|
|8||Teamed up with CSU, Chico to design our gate system through their Capstone Design Program 🏫|
The team and technology are addressing a real need in the market for better management of farm dispensed valuable pharmacological resources, to improving animal health and productivity. Delivering the correct dosage at the right time to the correct animal. Reducing the errors and over and under dosing of a manual system. Less stress for animals and better use of skilled animal care attendants. The system is organically developed by real farmers solving their unique challenges for their environment. Well received by the industry facing an extreme shortage of affordable quality labor to care for their herd. Its an opportunity to solve the challenges economically. Saving time and waste of misapplication of valuable medicines. Documentation is improved for data collection and outcome analysis is more measurable and reliable. They have a solid smart management team that is committed to building world class solution deliverable at the farm level, one cow at at time. This system makes herd health compliance easier and more cost effective. Veterinary resources are benefiting from prescriptions being delivered as directed with 100% accuracy. Better herd health management benefits all the stakeholders. Very few assets on the expense side of the farm are as well positioned be this well managed. Labor costs are a motivation, herd health and better production outcomes are now highly documented and measurable against objectives. Thus targeted spending on pharmacological resource inputs is better correlated to salable output changes. The challenge is understood and the team brings to bear the best partners and suppliers.
In 2017, Marinus was a dairy farmer overseeing multiple operations within the agriculture industry as well as serving as a mentor to Alexander. Alexander was an undergraduate student and manager for Marinus' compost operation. One day, Marinus approached Alexander with the idea of improving animal health standards for cows and creating a sustainable economic future for farmers by automating the shot delivery process carried out by thousands of dairy farmers around the world. Marinus and Alexander decided to accept this new challenge and created a patent for the invention entitled, "The Robotic Injection System for Domestic Herd Animals."
After the idea became intellectual property, the two decided to participate in an accelerator program sponsored by Dairy Farmers of America and Sprint. During the accelerator program, Marinus and Alexander learned through many industry experts on how to tackle the market they were about to enter. After the accelerator program ended, the team had an arsenal of knowledge to build a strategic business model. Pharm Robotics was then established in February of 2019.
Pharm Robotics is developing a robotic injection system that will help farmers with the shot delivery process for their cows. The robotic system will record when the cow was given a shot, what kind of shot she was given, the dose of shot given, and how much she weighs at that point in time. We then send this information to the cloud, where we will then provide farmers with real-time data to make better-informed decisions pertaining to herd protocols and labor usage. This leads to an increase in immunization and pregnancy rates, reduced labor and replacement costs, and better milk quality.
This is a 3D animation and is used for demonstration purposes only. The actual design of the prototype may differ from the design shown in this demo video.
Dairy farmers around the world have to give millions of vaccines, reproductive products, trace minerals, and liquid vitamins by hand. A shortage in labor also exists throughout the industry, which makes it challenging for farmers feed the world by 2050.
Now, this creates two problems: One, to administer these shots, it requires a lot of labor and training. Two, many of the cows in the industry do not achieve more than a 95% compliance rate, meaning they don’t receive the full required schedule of the vaccines or reproductive products. Marinus has had over 20 years of experience with these problems.
Sureshot automates the entire process by identifying and validating shot records, robotically giving shots, and recording health-related data important to the farmer to make better decisions for their farm.
Missing these cows’ reproduction schedules and the additional cost of labor, dairy farms potentially miss out on up to $285/cow/year. $85/cow/year could be saved on labor and up to $200/cow/year could be gained from increased pregnancy rates and herd performance. Sureshot will be utilized, data will be uploaded in real-time, and the dairy farmer can then view the data and make better-informed decisions for their operation.
Our team has a lot of experience in the dairy business and have deep connections throughout the industry. Our unique skill sets and areas of specialization make us the perfect team to build this technology and take it to market. We also have four part-time business advisors who joined the Pharm Robotics team in which we will leverage their capabilities in the dairy equipment, software, and renewable energy space to transform the animal health side of the industry. We have two part-time employees and one full-time employee. Our plan is to pay the salaries for two full-time employees once we receive funding.
Co-Founder and Chief Financial Officer Alexander Chuck presenting at the 2018 DFA/Sprint Accelerator Demo Day in Kansas City, MO.
Now that we have been given the tools and resources to moo-ve to the next step, we began attending industry-specific events such as the World Agri-Tech Innovation Summit, Animal AgTech Innovation Summit, the Connect Summit by VAS, and the World Ag Expo. Here we networked with both producers and thought leaders within AgTech and the dairy industry while we continued to raise our seed round. At these tradeshows, we were able to gain significant interest from dairy farmers. We currently have 41 signed non-binding letters of interest to approach these dairy farmers at a later time to carry out discussions regarding early adoption and purchasing agreements.
Co-Founders Marinus Dijkstra and Alexander Chuck attending the 2019 World AgriTech Innovation Summit in San Francisco, CA
May of 2020 was a huge month for the team to say the least as we accepted our investment partnership with Siemens! Siemens is the largest industrial manufacturing company in Europe. We accepted this partnership to help develop our prototype and move from conceptual to production. We look forward to working with Siemens to advance our technology inside Sureshot and expand our global branding together.
Future plans include entering the $138.9B Global Big Data Market, offering our system to other animal types within the $49.6B Global Animal Health Market, and eventually creating new opportunities within hospitals for the $7.2B Global Medical Robots Market.
Co-Founder and Chief Financial Officer Alexander Chuck presenting at the 2020 virtual Global Dairy Tech Start-up Spotlight Event endorsed by the World Dairy Expo
Pharm Robotics has financial statements ending December 31 2019. Our cash in hand is $0, as of October 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $1,466/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 robotic systems to deliver shots to dairy cows and ensure that all cows get shots correctly and on time. Once a shot has been given in the neck region of a cow, her medical records will be updated in real-time where the dairy farmer can then view and make better decisions based on accurate and current data. The dairy farmer will no longer need labor to administer shots and manually record data within this area of the business which will result in a healthier, more productive herd.
In 5 years, we aim to be a household name in the animal health space within Agriculture Technology. We plan to also offer our solution to the beef industry with an overall vision of expanding to other animal species globally. Our system will allow us to develop predictive modeling capabilities and optimize the shot delivery process for animals based on individual characteristics and historical events. These projections 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.
PHARM ROBOTICS, LLC was organized in the State of Delaware in February 2019.
Since then, we have:
Historical Results of Operations
The Company was organized in February 2019 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 $20,000 in equity and $125,000 through an OEM pricing investment partnership with Siemens Industry Inc (considered neither debt or equity).
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 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 6 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
PHARM ROBOTICS, LLC cash in hand is $0, as of October 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $1,466/month, for an average burn rate of $1,466 per month. Our intent is to be profitable in 24 months.
Since December 31, 2019, we are still in the R&D and pre-revenue phase of operations and therefore have incurred some expenses pertaining to legal, accounting, and marketing but have not begun producing or selling units.
We expect our revenue to remain at zero until we have created additional units and commercialize after one fully functioning prototype has been developed. Once we raise at least $175,000, we can develop a significant portion of the prototype as well as marketing expenses. This includes the robotic arm and vision integration. Once we raise at least $550,000, we can produce a fully functioning prototype in 6 months and deploy for testing on Marinus' dairy in Nuevo, CA as well as covering marketing expenses. Once we raise at least $800,000, we can develop our prototype and pay the salary of the full-time employee as well as cover any necessary R&D and marketing expenses. Once we raise at least $1,070,000 we can develop our prototype, pay salary for two full-time employees, cover R&D expenses, pay for marketing, legal, accounting, and travel expenses, and begin producing future units to commercialize. These milestones will also include the fees paid to Wefunder.
Regarding expenses, we plan to pay for remaining filing fees for our non-provisional utility patent. We are expecting our patent to be granted by mid-2021. Additionally, we plan for at least $4,000 to be spent on marketing and promotional materials to continue gaining traction with potential customers. Lastly, we foresee having to spend $2,000 in legal fees to ensure everything is carried out properly during our Reg. CF Offering. In total, we expect that we will have about $6,000 in general admin and supplies expenses over the next 6 months plus any additional marketing expenses we incur during the campaign.
Once we produce additional units and commercialize, we project units will be produced at $180,000/unit and will have a base price of $300,000/unit as this is competitive with other robotics companies in the dairy space. Depending on the size and build-out of the dairy, the base price will increase to support different herd sizes. Other sources of revenue will include installation fees, software subscription, licensing, and pharmaceutical sales as we plan to become a distributor of products for veterinary pharma companies.
As of May 2020, we accepted an OEM pricing investment partnership with Siemens Industry Inc. This was neither a debt or equity deal. Siemens invested $125,000 through their Siemens Customer Investment Program (SCIP) where they applied their investment directly to the quote that was provided by their integrators, Symation. Symation quoted our prototype to be $673,200.
With the cash that Siemens applied, this brought the cost of the prototype down to $548,200. That being said, we anticipate the actual cost of the prototype to be $498,200 since $25,000 allocated towards data acquisition integration and $25,000 towards deployment and field testing are now being covered by our partnership and sponsorship with Valley Agriculture Software (VAS) and California State University, Chico's (CSU Chico) Mechanical Engineering and Mechatronic Capstone Design Program.
The OEM pricing partnership with Siemens also includes additional support for advertising and tradeshows, co-branding “Sureshot Powered by Siemens”, covers all the automation & control pieces in 1st pass BOM along with training facility for R&D/future customers, and we can use our agreement with any Siemens distributor for local stock and support. Siemens will be an exclusive supplier for the Company. There is also potential for raising more funds with VCs that we are currently in conversations with.
An investment in the Company involves a high degree of risk and many uncertainties. You should carefully consider the specific factors listed below, together with the other information included, before purchasing in this Offering. If one or more of the possibilities described as risks below actually occur, our operating results and financial condition would likely suffer and our shares could fall, causing you to lose some or all of your investment. The following is a description of what we consider the key challenges and material risks to our business and an investment in our securities.
Our limited operating history makes evaluating the business and future prospects difficult and may increase the risk of your investment. We were organized in February 2019 and we have not yet begun producing or delivering our first robotic injection system. To date, we have no revenues. Our robot requires significant investment prior to commercial introduction, and may never be successfully developed or commercially successful.
We face significant barriers as we attempt to produce our robotic injection system. We do not yet have any prototypes and do not have a final design or a manufacturing facility for future units. The raise for this round may be successful but due to the nature of the industry we face, there's a possibility that the business concept may not ever become successful. Investors could be left with nothing if this is the case and therefore the contract that Investors part-take in will be unsecured with no one being required to repay equity upon conversion. Expanding further, the contract we are issuing securities for will not have voting rights until conversion. Once the conversion has taken place, the Lead Investor will act on behalf of all Investors participating in this round of funding and will sign off on any corporate actions.
Marinus Dijkstra and Alexander Chuck are part-time officers. As such, it is likely that the Company will not make the same progress as it would if that were not the case.
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. Furthermore, our business model is based on a growing agriculture robotics market assuming current consumer behaviors and trends, if that changes the robot delivery model will be affected.
We need to raise $5M by the end of 2022 to reach a point of scalability. Should we be unable to secure those funds we may not be able to generate additional revenues or make any return on your investment. Additionally, there will be no market for resale of the Notes or, upon conversion, the units. All Investors should first assess the level of risk associated with investing in the Company and should also be aware of any applicable tax considerations.
Building hardware is incredibly hard, and there are few companies that have ever scaled the manufacture of robots like we intend to. If this proves more expensive than we plan, our unit economics or timelines might be adversely affected.
We are a pre-prototype and pre-revenue company since we haven't proved our concept yet. The capital we are raising will go towards developing one fully-functioning prototype. Furthermore, our competition in this industry is the labor force that performs these tasks by hand. We are aiming to create a system that is more cost-effective and efficient than the current solution offered to the market.
If the current dairy market doesn't improve and stabilize, farmers could have a more difficult time purchasing our system. According to the Wisconsin State Farmer, at-home cooking and eating is making up for the demand missing from the foodservice industry, which has been decimated by the COVID-19 pandemic. Source: https://www.wisfarmer.com/story/news/2020/10/27/dairy-markets-not-stabilize-until-summer-2021-expert...
The adoption of our technology may take longer than projections of the agriculture robotics market forecast. Additionally, our management team believes we are abiding by all federal, state, and local laws and regulations impacting how animals are to be administered injections.
We are projecting that if high accuracies of giving shots can be achieved and maintained on dairy farms, the average time for a farmer to recoup their initial purchase price will range between 1 to 3 years depending on the size of the operation as well as their specific labor and reproductive/immunization needs.
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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