|1||28,000+ monthly active users in US, Canada, and Europe since March 2019|
|2||Partnerships with HBO and Warner Bros.|
|3||~$200K revenue since app launch|
|4||Competitive landscape valuations ( $50 Billion)|
The team has built a platform that not only supports passionate communities, but also helps them grow. They've listened to and engaged with their users, built features that enable better communication, collaboration, and connection, and in doing so have cemented a position that will be difficult for competitors to reach. This opens up a world of possibilities for marketplace transactions, tooling for influencers, and partnerships. Their organic word-of-mouth validates their progress, and I'm excited to see the company grow.
There are 3 main features to the streamlined update for our app: Quips, Podchats and Squads.
Our business model is direct to consumer and in-app microtransactions. Similar to other gaming centric platforms, users can buy digital goods or tip their favorite creators with “Snacks”. For math, 1 qoin is $0.03 USD and Snacks cost between 35-250 qoins. These are already actions that users are familiar taking on adjacent platforms like Twitch and Discord.
*Projections in charts above are not guaranteed.
QuirkChat has financial statements ending December 31 2019. Our cash in hand is $16,499.30, as of August 2020. Over the three months prior, revenues averaged $3,980/month, cost of goods sold has averaged $147/month, and operational expenses have averaged $1,578/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.
Quirktastic is the social networking and group live streaming platform for geeks and hobbyists. We are a one stop for anyone exploring or creating the fandom community.
There are a few key features within our app:
Podchats: group livestreaming rooms for creators/panel organizers
Clubs: interest-based voice and text chat channels
Swipe: search community profiles
Screen: watch video content with friends and host screenings
Quirktastic hopes be the one stop for anyone exploring or creating fandom (anime, gaming, k-pop). With that as our goal, we will naturally be shaping and creating the platform for VR connections and friendships. Imagine being able to go to a virtual convention with your friends. Also, our in-app currency, Qoin, will also have partnerships with many different retailers and food delivery services that allow users to cash in the qoins that they've earned for tangibles or high quality virtual goods.
Quirktastic, Inc. was incorporated in the State of Delaware in October 2018.
Since then, we have:
Historical Results of Operations
Our company was organized in October 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 $250,000 in equity and $25,000 in SAFEs.
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 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
Quirktastic, Inc. cash in hand is $16,499.30, as of August 2020. Over the last three months, revenues have averaged $3,980/month, cost of goods sold has averaged $147/month, and operational expenses have averaged $1,578/month, for an average net margin of $2,255 per month. Our intent is to be profitable in 12 months.
We built out our in-app monetization product that would have allowed us to monetize from convention ticket fees, but then the COVID pandemic happened and conventions were cancelled. So we had to scrap any partnerships with conventions and thus change our business plan to focus on e-commerce. Additionally, due to limited international flights, our ecommerce is currently taking 2-4 weeks for orders, which in turn also had an effect on the amount of product that we could ship out.
We are in the process of creating our in-app currency “qoins” that allows for in-app tipping for livestreamers and digital goods (similar to Twitch “flare”). 1 qoin = $0.03 + processing fee and are sold with a starting unit of 100. With this launch, our expected revenue starting November 2020 is projected (but not guaranteed) at $10,500. Starting November, our expected cost of goods sold is averaged at $147/month, and operational expenses have averaged $4,728/month, for an average net margin of $5,625 per month. Though, our main focus is on community growth at this time. Revenue will be our focus Q2 of 2021.
E-commerce and pitch competitions have been our main capital source during the pandemic. We also have around $16.5K in accounts receivable from our partnerships with HBO and Warner Bros.
To remain competitive, we must continue to enhance and improve the functionality and features of our websites and technology infrastructure. As a result, we will need to continue to improve and expand our hosting and network infrastructure and related software capabilities. These improvements may require greater levels of spending than we have experienced in the past. Without such improvements, our operations might suffer from unanticipated system disruptions, slow application performance or unreliable service levels, any of which could negatively affect our reputation and ability to attract and retain customers and contributors. Furthermore, in order to continue to attract and retain new customers, we are likely to incur expenses in connection with continuously updating and improving our user interface and experience. We may face significant delays in introducing new services, products and enhancements.
We may be subject to future governmental regulations. Aspects of our business and our products may be regulated at the local, state, and federal levels. The nature and scope of future legislation, regulations and programs cannot be predicted. While we anticipate that we and our products will be in compliance with all applicable governmental regulations, there still may be risks that such laws and regulations may change with respect to present or future operations. Such additional costs would increase the cost of investments and operations and decrease the demand for services. We and our products will be ultimately responsible for compliance with such regulations and for obtaining and maintaining all required permits and licenses. Such compliance may be time consuming and costly, and such expenses may materially affect our future ability to break even or generate profits.
Management will have broad discretion in determining the specific uses of the net proceeds received from the sale of the Notes, as well as the net proceeds received from any other financing transaction undertaken by the Company. Purchasers will not have the opportunity to evaluate the economic, financial or other information on which decisions on how to use the net proceeds of the current or future offerings are based, nor will they have the opportunity to approve (or influence) such decisions. The failure by management to apply funds effectively could result in financial losses that could have a material adverse effect on, and delay the progress and development of, the business of the Company.
Each investor should consult its own tax advisor regarding the acquisition of the securities of the Company that are being offered pursuant to the SAFE.
We may need to acquire or develop new products, evolve existing ones, address any defects or errors, and adapt to changes in technology in order to continue growing our business.
The Company relies on Amazon Web Services for hosting. Any interruption in the availability of these services could have material negative impact on our ability to deliver service to users, as well as the profitability of these operations. Interruptions could occur due to both Internet outages as well as policy changes or terms violations according to these third parties. The prospect of increased regulation and/or Internet censorship may create access challenges to our users and service offerings.
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.
Temporary Rule 201(z)(2) provides temporary relief from certain financial information requirements by allowing issuers to omit the financial statements required by Rule 201(t) in the initial Form C filed with the Commission. This offering has commenced in reliance of Temporary Rule 201(z)(2).
While the effects of the COVID19 quarantine has helped our community grow, lasting effects of the pandemic could cause unforeseeable impact on the geek convention and OTT landscape.
Even with our investment and priority on data security, there is always a potential of a data breach, as with most social networking apps.
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