|1||Contacted by several US and global companies who are extremely interested in our tech.|
|2||CEO is a proven leader for 10 years. CTO has a PhD in Nanotech and MBA from MIT.|
|3||Healing the environment by cutting CO2 emissions from two of the biggest sources.|
|4||Can significantly reduce landfill tires.|
|5||Board w/ industry experts with decades of experience scaling technologies and raising millions of $.|
|6||Carbon black market size is expected to reach $20 billion by 2022 — yet shortage expected as well.|
|7||Proprietary process produces carbon black, oils, and gas (carbon black being the most valuable).|
I chose to invest in Smart Tire Recycling because of four factors: Team, Technology, Timing and Mission. The team is top notch. Mendel is a CEO who knows how to get things done, condense difficult to digest concepts to their core, and most importantly, who can identify top-talent. He has assembled an impressive team that brings a wide variety of disciplines under one roof. From engineering to technology, marketing to finance, operations to commercialization: STR's team has thought through most-every eventuality. On the technology front, they have a pending published patent on their unique process. Additionally, they have a first-rate real-world understanding of the waste tire pyrolysis process that has been developed over the course of years of trial and error. On the timing front, I see STR as a leading company with the best chance of getting to market at precisely the right moment. With aggressive environmental and sustainability goals, manufacturers who use Carbon Black (and other chemical tire components) are eager for a solution such as ours, produced by a well-run team that can ensure a ready supply. And finally, the success of STR's mission will truly represent a success for mankind in general and the environment in particular. By un-baking the tire and commercializing the vast amounts of used tire rubber currently being burned as fuel or dumped in landfills, Smart Tire Recycling will make the world a better place for our children.
In fact, this is one of the most serious global environmental problems. Fortunately, we know how to recover the precious components within the tires and completely reuse them. Already, we have been contacted by several companies and states, in the US and other countries, who are extremely interested in our technology.
We developed an economical and continuous green chemistry process to breaking down scrap tires into reusable, raw materials — with carbon black being the most valuable (a major component in the manufacturing of tires and all rubber-based
products). Reducing the need to manufacture carbon black will reduce CO2 emissions by a significant measure.
We are taking a waste product (shredded rubber) that is being sold at $50 per ton and turning it into material worth $250 per ton. We can license our technology (or sell turn-key plants,) to major tire shredders and enable them to fully recycle their rubber, adding significant value to their product. An alternative plan to licensing would be for Smart Tire Recycling to commercialize our system and sell our carbon black.
In 2010 when Smart Tire Recycling CEO Mendel Bassman was starting out in the recycling industry, everyone knew tires were a problem. Fast forward 10 years and not much has changed. Landfills are teaming with tires, the toxic fumes emitted to produce or destroy them are overwhelming, and the number of tires being discarded annually, over 1 Billion, is just staggering.
But now... there is a solution.
Four years ago Mendel teamed up with the renowned chemist and inventor Dr. Abdulhaq Alkhalidi to found Smart Tire Recycling with the single-minded goal of creating a clean, sustainable recycling ecosystem for tires.
The road to developing a zero-emission process to recycle tires has been challenging and exciting in ways we could not have imagined at the outset. An early milestone was a real validation of our hard work as we were able to win the TiE start-up award. But we wondered, can we really disrupt the $50 Billion global tire industry? We had an obligation to ourselves, and to the globe to push ahead and find out.
Along the way, we have been gratified to be joined by partners, advisers, and supporters who have helped enable Smart Tire Recycling to reach our most critical milestone to date. It works!
It was a brisk day in February 2020 when Smart Tire Recycling went from being a promising technology to an exciting reality. With Dr. Alkhalidi's work leaving the realm of the theoretical and, with the guidance of Dr. Lacramiora Shulte and a team of engineers, becoming tangible right before our eyes. It is one thing to know that something works on paper, but quite another to see the results in the lab for yourself. That turning point made us realize it was time for the next step to bring our product to market. The technology is proven, but we're not at commercial scale, yet.
With the funds we are currently raising, we will be able to replicate this new, zero-emission tire recycling process on a massive scale, which will in turn allow us to start accepting orders to recycle tires from every major tire manufacturer, landfill, and auto parts provider in the world. The landscape of the global tire industry will never be the same.
We started this campaign in the hopes of finding supporters who will help us move out of the lab and into the factory. Being able to replicate our process on a commercial scale will allow us to start emptying landfills and filling orders from some of the world's largest tire manufacturers.
And, we have a lot more in store. The materials we produce in our recycling process have the ability to be further refined and developed to have many commercial applications from cosmetics to pharmaceuticals.
We're on the cusp of something big.
Smart Tire Recycling has financial statements ending December 31 2019. Our cash in hand is $17,970.08, as of July 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $3,000/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.
Smart Tire Recycling Inc. has developed a pioneering, zero-emission process to cleanly recycle tires into reusable materials. Our process un-bakes the tire back into its original components, which can be used to manufacture new tires, thereby creating a truly circular economy. Our goal is to help solve the major global problem of the 1 billion tires disposed of annually.
Our goal is to be at the forefront of the clean, tire-recycling industry and to be processing more than 18 Million tires annually contributing to the reduction in toxic emissions by nearly half a million metric tons of carbon dioxide and producing revenue in excess of $44 Million. These projections cannot be guaranteed.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Smart Tire Recycling, Inc. was incorporated in the State of Pennsylvania in August 2016.
Since then, we have:
Historical Results of Operations
Liquidity & Capital Resources
To date, the company has been financed with a combination of preferred stock ($220,000), convertible notes ($70,000) and notes with preferred stock ($15,000).
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 4 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
Smart Tire Recycling, Inc. cash in hand is $17,970.08, as of July 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $3,000/month, for an average burn rate of $3,000 per month. Our intent is to be profitable in 24 months.
If we're able to raise $150,000 we'll be able to complete critical testing needed to provide customers with data required to place an order (this is a 90-day process). $50,000 raised allows us to provide the proper in-depth testing to start having conversations with potential customers. The carbon black is a very sophisticated product and the customers need a lot of data to validate the material.
Post 90 days, we hope to meet with potential customers to do a “first-order pilot” with an expectation of a minimum first order of ~3-ton tires to process. To fulfill this order, an additional infusion of capital ($350,000) will be needed to complete the purchase of a plant and equipment for scale.
Expenses 3 - 6 months following the raise:
Salaries - $60,000
Lab testing - $30,000
Equipment - $30,000
Misc. - $25,000
Rent & Utilities - $5,000
We don't expect to begin generating revenue until late 2021.
We are receiving $8,000 in an EIDL loan. We have many investors that are able to lend us additional funds if we need it to continue operations.
The Company was organized in 2016 and it has not yet generated revenues or any profits. The Company's business will be subject to the risks inherent in the development of a new business enterprise. The likelihood of success should be considered in light of the difficulties of attracting and retaining experienced qualified personnel, as well as the problems, expenses, difficulties, complications, and delays which frequently are encountered in connection with the development stages of a new technology-based business, including regulatory issues.
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.
We have identified a process for potentially recycling rubber into its base components in an environmentally friendly manner. The initial research has been conducted based on the licensing of two patents, with limited remaining useful life. We expect to develop our own intellectual property portfolio and to secure patent protection on the major aspects of such a process. There can be no assurance that our technology development will be successful. If the technology is successfully developed, there is no assurance that we will be able to secure patent protection in the United States and abroad sufficient to protect the rights to such developed technology. And, if such technology is secured, our intellectual property strategy may require the expenditure of substantial resources to protect our rights.
Smart Tire Recycling's Additional Disclosures provided to prospective investors contain "forward-looking statements" regarding the Company's anticipated business and financial results. The Company's actual business and financial results could be different from those set forth in such materials due to various factors including general economic conditions, specific economic conditions in cardiac-related software, the introduction of new products or services or enhanced versions of existing products or services by the Company and/or its competitors, and the degree to which the Company successfully implements its strategies. Pro forma financial statements contained in such materials or otherwise prepared by or for the Company are mere illustrations and are not to be considered commitments, guarantees, representations, or warranties as to future business prospects of the Company.
As noted, the Company will need substantial additional funds to implement its business plans and is currently negotiating terms with an investment group. The terms secured by such an investment group may be more favorable to those investors than the terms in this offering.
The Company may seek additional funds by making one or more additional private placement offerings (the "Follow-on Offerings") of shares of stock or Convertible Notes in the Company. In addition, the Company may investigate strategic alliances with other firms that may also include an investment in the Company. There can be no assurance that the Company will be able to secure such funds on terms acceptable to the Company, if at all, or to arrange any such strategic alliances. Any such investment will result in dilution of the Investor's anticipated ownership percentage
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
COVID-19 and the uncertainties it presents to the general economy poses a risk to our business. We may have difficulty attracting and retaining key personnel.
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