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Hoplite Power

Smartphone “charge-sharing” network of kiosks and rentable battery packs

$10,400

Raised from 57 investors

Min: $25,000

Max: $107,000

Security Offered

Convertible Note

Minimum Investment: $100

  • Pilot program of five second-generation Hoplite Hubs at Citi Field (NY Mets), starting July 2019

  • Received over $1 million in funding since inception

  • Launched original NYC pilot program of 16 first-generation Hoplite Hubs in early 2017, with over $25,000 in revenue generated since inception

  • Plans to release advertising and sponsorship model in late 2019 or early 2020

Terms

Investment Terms

Security Type: Crowd Notes

Round Size: Min: $25,000 Max: $107,000

Valuation Cap: $5.5 million or $6 million

Discount: 20% 

Conversion Provisions: In connection with equity financing of at least $1,000,000, the Company has the option to convert the Crowd Note into non-voting preferred units (Conversion Units) at a price based on the lower of (A) a 20% discount to the price per unit paid for Preferred Units by investors in the Qualified Equity Financing or (B) the price per unit based on a $5.5 million or $6 million valuation cap. Please refer to the Crowd Note for a complete description of the terms of the Crowd Note, including the conversion provisions.

Transaction Type: Primary

Perks

Investors that purchase the first 53,500 Crowd Notes, and thereby fund the first $53,500, will receive Crowd Notes with a conversion provision based on a $5.5 million valuation cap instead of a $6 million valuation cap. That means, in connection with equity financing of at least $1,000,000, the company has the option to convert the Crowd Note into non-voting preferred shares (Conversion Shares) at a price based on the lower of (A) a 20% discount to the price per unit paid for Preferred Shares by investors in the Qualified Equity Financing or (B) the price per share based on a $5.5 million valuation cap (instead of $6 million).

The company is also offering the following perks to all investors. Perks are meant to be a thank you from the company for investing in a Crowd Note. The perks below are not inclusive of lower dollar amount perks.

$250+ (Bronze): Unique discount code for five free rentals*. Feature your name on the Investors & Partners page of the Hoplite Power website.

$500+ (Silver): Unique discount code for 10 free rentals*. Feature your name on the Investors & Partners page of the Hoplite Power website.

$1,000+ (Gold): Unique discount code for 20 free rentals*. Feature your name on the Investors & Partners page of the Hoplite Power website.

$2,500+ (Platinum): Unique discount code for 50 free rentals*. Feature your name on the Investors & Partners page of the Hoplite Power website.

$25,000+ (Ruby): Install up to three Hoplite Hubs at your facilities for free**. No service or maintenance fees for up to one year***. Feature your company’s name on the Investors & Partners page of the Hoplite Power website.

$50,000+ (Diamond): Install up to five Hoplite Hubs at your facilities for free**. No service or maintenance fees for two years***. Feature your company’s name on the Investors & Partners page of the Hoplite Power website.

*Free rentals are still subject to Hoplite Power’s standard Terms and Conditions

**Any additional Hoplite Hubs installed may be subject to installation and set-up costs as determined by Hoplite.

***The exclusion from any service and maintenance fees will commence from the date Hoplite institutes a standard fee schedule for partners, and not from the date of Hub(s) installation.

Overview

Opportunity

A 2019 study by Pew Research Center found that 96% of Americans own a cell phone of some kind and 81% of Americans own a smartphone, up from 35% in 2011.i According to a 2018 study on smartphone users, Morning Consult found that battery life was the most important smartphone feature for users across all brands. 95% of respondents also claimed that battery life is one of the most important factors when purchasing a new phone.ii Even though users state that battery is the most important feature, smartphone manufacturers have not done much about battery size in the past five years.iii In fact, a recent survey by LG Electronics found that 90% of respondents reported feeling panic when their cell phone batter dropped to 20% or lower, a phenomenon dubbed “low battery anxiety.”iv

Many companies have attempted to solve this “low battery anxiety” problem by implementing public charging stations in airports, stadiums, and other high-traffic locations. These public charging stations require the user to physically plug-in their device using integrated charging cables. Users have to stand by the station and wait while their phones charge, which can prove difficult and inconvenient when on the go. Further, while useful in certain scenarios, security experts suggest avoiding public charging stations. Charging stations at an airport or stadium can easily be hacked, allowing hackers to steal data from phones using it to charge. Called “juice-jacking,” cybercriminals are able to use the USB plugs to download data and install malware without the user knowing. Instead, security experts suggest utilizing a portable battery pack.v

Founded in September 2014, and based in New York City, Hoplite Power has built an on-demand smartphone charging network geared towards sports stadiums, large venues, events, and more. The company designs, manufactures, and operates autonomous vending kiosks, called Hoplite Hubs, that distribute universal, external smartphone chargers, which are known as Hoplites. Hoplites are rented directly from Hoplite Hubs and are compatible with most iPhone and Android devices. The Hubs have been engineered to dispense, reaccept, and recharge Hoplites automatically.

Press

Product

Hoplites are manufactured to be compact, portable, and compatible with all iPhone and Android devices. Customers can find Hoplite Hubs both on the company’s website or other Hoplite Hubs in the network. Hoplite Hubs accept various payment options including credit card, debit card, Apple Pay, Google Pay, and more. Each kiosk is designed to be completely autonomous and can accept and recharge returned Hoplites.

How it works:

Rent a Hoplite

Users can rent a Hoplite from any Hub in the Hoplite network. The kiosks are fully autonomous and accept various payment methods.

Recharge

Hoplite chargers are designed to be compact and portable so customers can take them anywhere while charging their device. Customers can keep the Hoplite for up to 24 hours.

Return

Once the customer has fully charged their device, they can return the Hoplite to any Hub in the network. The customer can simply drop off the Hoplite and the Hoplite Hub will take care of the rest.

Each Hoplite Hub features a 19” HD touchscreen, contactless payments that accept EMV chip and Magnetic stripes, and the capacity to store and recharge up to 48 Hoplites concurrently. Hoplite Hubs accept all major credit cards, debit cards, and digital wallets including Discover, MasterCard, Visa, American Express, Apple Pay, Google Pay, Android Pay, and Samsung Pay. Hoplite Hubs can be mounted to a wall or can be configured as a stand-alone kiosk, similar to an ATM. Each Hub contains a single slot for Hoplites to be dispensed and easily returned. If users forget to return a Hoplite to any Hub in the network, they can simply mail them back to the company.

Each Hoplite contains a 3,000 mAh lithium ion polymer battery and provides a 5V 1.2A quick charge, which means that a Hoplite can provide up to 1.5x charge capacity and can fully charge a smartphone in roughly 90 minutes. Hoplites feature a single, integrated charging cable, and users are able to choose the appropriate Hoplite based on their phone type at the time of rental - Hoplites with Lightning for iPhone devices and Hoplites with USB-C or MicroUSB for Android devices. The Hoplites also have a power button and LED indicator lights showing the remaining charge level. Customers can keep a Hoplite for up to 24 hours before returning, otherwise they are subjected to additional usage fees and can hold on to it for up to seven days before being charged the full price for the Hoplite. Each Hoplite has a unique ID number and a corresponding internal RFID tag so that the Hubs know when a user has returned the specific Hoplite they received.

Businesses of all sizes can easily become a Hoplite location partner and deploy a single Hoplite Hub or a series of Hoplite Hubs on their premises. Hoplite Power takes care of installing the Hubs, connecting to the network, and servicing every kiosk. Each Hoplite Hub connects to the network via an on-board wireless 4G LTE router which also features high-speed data connectivity and a built-in firewall for extra security so that businesses do not have to share their internet connection with the Hoplite Hub(s). Hosting Hoplite Hubs does not cost a business anything, as Hoplite Power retains ownership over the physical assets, and Hoplite gives each location partner a share of the revenue.

Use of Proceeds

Hoplite Power plans to use the majority of proceeds from this raise for general marketing, research and development, general working capital, and manufacturing. If the minimum amount is raised, the company plans to allocate $15,000 towards general marketing and the remaining $10,000 towards general working capital. The company plans on utilizing various B2B and B2C marketing campaigns, including but not limited to exhibiting at industry conferences and tradeshows, placing content and advertisements in industry journals, pitching to news media and other outlets, social media and email campaigns, etc. If the maximum is raised, the company plans to allocate $50,000 towards manufacturing to build more Hubs. The company also plans on allocating $25,000 towards general marketing, $15,000 for general working capital, and $10,000 towards research and development, which will primarily revolve around software development and testing of digital advertising tools, as described in the following section.

Upcoming Products & Services

The company is currently in the process of developing tools and features needed to turn the Hoplite Charging Network into a digital advertising and sponsorship platform providing exposure to targeted audiences and demographics. Advertisers and marketers will be able to design and launch multi-layered and immersive campaigns including digital advertising on Hubs’ touchscreens, and physical branding on both Hubs’ and Hoplites’ exteriors. Hoplite Power expects to roll-out its branding and sponsorship capabilities in late 2019 and its digital advertising capabilities in mid-2020. The company previously ran successful proof-of-concept sponsorship pilots in 2017 and was able to generate advertising and sponsorship revenue during these pilots. During these pilots, the company had two separate branding activations; one for branding on the Hoplite Hub installations and one for branding on the Hoplite chargers.

Business Model

Currently, Hoplites cost $20.00 per unit to produce, but these costs are expected to decrease as Hoplite production increases.

Hoplite rentals start at $2.99 per day; however, rental pricing can be modified based on partner locations’ input. Customers can keep a Hoplite for up to six additional days for $1.99 per additional day. If a device is not returned within seven days of the rental, the customer is charged $60.00, including the initial rental price. The various prices and fees charged by the company are readily disclosed to users in the company’s Terms & Conditions.

Hoplite also gives a portion of revenue to each partner that hosts a Hoplite Hub. The revenue split is negotiable per partner. For every Hoplite rental that occurs in their establishment, they will receive a portion of the rental fee. Hoplite also provides usage data to the partner including transaction volume, user phone types, user credit card types, repeat customer numbers, opt-in user contact information, etc. Currently, Hoplite provides this data free to its partners via a real-time online dashboard.

User Traction

Hoplite Power launched its first pilot program in New York City in early 2017 and currently has 16 Hubs installed in bars and venues across Manhattan and Brooklyn where users can rent and return Hoplites. Since inception, the company has rented over 4,200 Hoplites. In 2018, the company rented out 2,092 Hoplites, a 33% increase from 1,578 in 2017. In the first six months of 2019, the company rented 566 Hoplites. The decline in Hoplite rentals in 2019 is due to the company’s current focus on the production of its second-generation Hubs and launching them in Citi Field.

In May 2019, Hoplite Power announced a signed pilot program with the New York Mets to implement five second-generation Hoplite Hubs in Citi Field. The pilot program is planned to begin in July 2019. The company plans to seek out other potential location partners, including professional sports teams, arenas, and other venues.  

Historical Financials

Hoplite began generating revenue in January 2017. In 2018, the company generated revenue of $9,724, down from $13,344 in 2017. In 2017, the company had a spike in revenue due to advertising and sponsorship pilots conducted using the first-generation Hoplite Hubs and Hoplites. The company received $5,000 in sponsorship income during a pilot program in March and April 2017. So far in 2019, the company has generated roughly $2,300 as of June 30, 2019. In 2019, the company has experimented placing Hoplite Hubs in different locations to see which generate the most traction.

In 2018, the company incurred expenses of $384,926, up from $137,003 in 2017. In March and May 2018, the company spent a combined $145,450 on research and development in order to develop its second-generation Hoplite Hub that can recharge Hoplites autonomously, among other features, and the fabrication of prototype units. The next largest expense in 2018 was $144,495 for payroll and wages followed by $23,421 for rent, and $11,190 for insurance. So far in 2019, the company has incurred expenses of $126,908 as of June 30. The company has increased its marketing efforts in 2019, spending over $8,100 as of June 30.

In 2018, the company incurred a net loss of $387,240, down from a net loss of $133,014 in 2017. So far in 2019, the company has incurred a net loss of $129,724 as of June 30, 2019.

Industry

Americans are increasingly connected to the world of digital information while “on-the-go”. A 2019 study by Pew Research Center found that 96% of Americans own a cell phone of some kind and 81% of Americans own a smartphone, up from 35% in 2011. Americans between the ages of 18 and 49 are more likely to own a cellphone or smartphone as well. 99% of Americans between the ages of 18 and 49 own a cellphone, 96% of Americans between 18 and 29 own a smartphone, and 92% of Americans aged 30-49 own a smartphone. A growing number of Americans are also using a smartphone as their primary online access at home. Roughly 20% of American adults do not have a traditional home broadband service and use a smartphone as their primary means of online access at home.vi

Although smartphone battery life has been slowly increasing over the past five years, advancements in connectivity, among other features, consume more power than ever. Today, smartphones are equipped with larger, brighter, and higher-resolution screens. In addition, smartphones have more apps operating in the background than ever. While this is great because we consistently receive notifications on time and are always connected to 3G, 4G, LTE, Wi-Fi, Bluetooth, or other options, it means that our devices are continuously consuming power.vii 

Despite the reported 90% of Americans claiming, “low battery anxiety,” 72% of do not carry any type of backup charger at all.viii Instead of smart-phone manufacturers increasing the battery size in smart phones, many have sought faster charging speeds. Phones can charge much faster now than five years ago, and wireless charging is also becoming more ubiquitous, although the technology still lags wired charging solutions in terms of charging efficiency. Instead of including larger batteries, smartphone manufacturers are able to push features that improve the charging experience, but these do not fully address the battery anxiety issue for many.ix

Total funding in mobile charging companies reached over $408 million across 39 deals in 2018, down from $870 million across 54 deals in 2017. In the past five years, the average funding in mobile charging companies has been $390 million across 51 deals. As of June 2019, VC investment in mobile charging companies has reached $380 million across 19 deals so far.

Competitors

NRG Energy (NYSE: NRG)

Founded in 1992, NRG Energy is engaged in producing, selling, and delivering electricity and related products and services in the United States. In 2016, the company launched NRG Go Portable Power solutions that provide on-the-go portable smartphone chargers. The company initially placed twelve self-service stations in NRG stadium and six stations across Katy, TX where customers can choose their phone type, complete the touchscreen rental transaction, and charge their phone anywhere. The portable chargers cost $3 per day and customers can return the chargers to any self-service station in the network.xi

ChargeItSpot

Founded in 2012, ChargeItSpot provides charging kiosks where customers can charge their phones and secure it in steel lockers. Each kiosk features a 17” touchscreen, secure lockers, and three charging cables including Lightning, micro-USB, and USB-C. Customers must include their email and phone number in order to access their locker. Brands that partner with ChargeItSpot are able to capture key data from customers including email, phone number, and survey responses. ChargeItSpot has locations in 40 states in the U.S. and as well as locations in Canada, Mexico, and Australia. In 2015, the company raised $5.2 million from investors including Robin Hood Ventures and SoundBoard Angel Fund.xii

MobileQubes

Founded in 2013, MobileQubes provides automated kiosks that dispense smartphone battery charging packs. The battery packs can be rented for $4.99 for the first day and $.99 for every additional day. The packs can also be purchased for $49.99.xiii MobileQubes kiosks accept major credit and debit cards and customers can deposit a used battery at any kiosk in the network. In 2016, the company raised $1 million in funding led by the NO/LA Angel Network.xiv

FuelRod

Founded in 2011, FuelRods are portable charging systems that can be recharged or swapped out for a new one. FuelRod has over 90 self-service kiosks in the U.S., France, and Switzerland where users can purchase the battery packs or swap out an uncharged battery for a new one at a FuelRod SwapBox. Users can purchase a FuelRod for $20-$30 depending on the location. Each FuelRod comes with a cable and connectors for Micro-USB, USB-C, and Apple Lightning.xv

InCharged

Founded in 2010, InCharged manufactures custom mobile charging stations that are modular, scalable, and compatible with almost every device on the market. InCharged manufactures 14 different charging stations including lockers, tables, vending machines, and more that are all suitable for different environments. All charging stations are designed to be customized so businesses can advertise while users stand close by and charge their phones. InCharged customers include Citi Field, the PGA, KC Royals, ESPN, the NFL, Chicago Cubs, Chicago White Sox, Penn State, NYU, Coachella, MasterCard, McDonalds, Google, Forbes, Starbucks, and many more.xvi

Team

Jordan Mayerson

Co-founder and CEO

Jordan graduated from the Jerome Fisher Program in Management and Technology at the University of Pennsylvania where he received both a B.S. in Economics with concentrations in Finance and Operations Management from The Wharton School of Business, and a B.A.S. in Computer Science from The School of Engineering and Applied Science. At Hoplite Power, Jordan focuses on getting stuff done, primarily focusing on biz dev, growth, and overall strategy. Additionally, he serves as Hoplite’s lead full-stack developer and systems architect, is a self-taught electrical engineer, and manages Hoplite’s network operations. Previously he spent 5+ years in corporate finance, including working in credit research at Goldman Sachs and investment banking advisory at Guggenheim Partners. In these various roles, he focused primarily on the Technology, Media, and Telecom sectors. When not in the office, Jordan enjoys playing golf, hitting the gym, experimenting in the kitchen, and expanding his extensive colorful sock collection.

Nikolas Schreiber

Co-Founder and CTO

Nikolas graduated from the University of Delaware’s College of Engineering with a B.S.E. in Mechanical Engineering with minors in Materials Science, Sustainable Energy Technology, and Electrical Engineering, and is currently pursuing his M.B.A at NYU’s Stern School of Business where he is focusing on Entrepreneurship and Global Business. At Hoplite Power, Nikolas focuses on designing products, solving engineering challenges, negotiating sales, and managing business partners. Given his background, he was able to take an idea on a piece of paper and turn it into a fully-fledged product in-market, working on everything from customer discovery and design to manufacturing and operations. Previously, he spent several years in material science research at Opila Group at the University of Delaware, in operations at a waste to renewable energy plant called Wheelabrator Technologies, and in energy modeling and consulting at EME Group. Nikolas still finds the time to be the captain of several soccer teams, rock climb and boulder at Brooklyn Boulders, travel frugally throughout the world, and cook one to two meals a day.

Past Financing

Since inception, the company has raised a total of $1,022,500 in funding. In 2015, 2016, and 2017, the company raised a total of $472,500 in Friends & Family convertible notes on a $2,250,000 valuation cap with a 15% discount. In 2017 the company raised an additional $300,000 in Seed convertible notes on a $3.5 million valuation cap with a 20% discount; the company received cash proceeds in two tranches: $175,000 in 2017 and $125,000 in 2018. In 2018 the company raised $250,000 in follow-on Seed convertible notes on a $5 million valuation cap and 20% discount.

Discussion

Risks

Investment Risk

An investment in the company is speculative, and as such is not suitable for anyone without a high tolerance for risk and a low need for liquidity. You should invest only if you are able to bear the risk of losing your entire investment. There can be no assurance that that investors will receive any return of capital or profit. Investors should have the financial ability and willingness to accept the risks (including, among other things, the risk of loss of their entire investment and the risks of lack of liquidity) that are characteristic of private placement investments. There will be no public market for the securities being offered, applicable securities laws will restrict any transfer of the securities, and the securities will not be transferable without the company’s consent.

The information provided herein is not intended to be, nor should it be construed or used as, investment, tax or legal advice, a recommendation to purchase, or an offer to sell securities of the company. You should rely on the offering statement and documents attached as exhibits to the offering statement when making any investment decision. An investment in the company is not suitable for all investors.

Company Risk

The company’s industry is highly competitive, and the company may not be able to compete effectively against the other businesses in its industry. The company is subject to a number of significant risks that could result in a reduction in its value and the value of the company securities, potentially including, but not limited to:

  • Rapidly changing consumer preferences and market trends,
  • Inability to expand and maintain market acceptance for the company’s services and products,
  • Inability to gain access to international markets and comply with all applicable local laws and regulations,
  • Inability to achieve management’s projections for growth, to maintain or increase historical rates of growth, to achieve growth based on past or current trends, or to effectively manage rapid growth,
  • Inability to develop, maintain and expand successful marketing relationships, affiliations, joint ventures and partnerships that may be needed to continue and accelerate the company’s growth and market penetration,
  • Inability to keep pace with rapid industry, technological and market changes that could affect the company’s services, products and business,
  • Technological problems, including potentially widespread outages and disruptions in Internet and mobile commerce,
  • Potential costs and business disruption that may result if the company’s customers complain or assert claims regarding the company’s technology,
  • Failure to adequately address data security and privacy concerns in compliance with U.S. and international laws, rules and policies,
  • Performance issues arising from infrastructure changes, human or software errors, website or third-party hosting disruptions, network disruptions or capacity constraints due to a number of potential causes including technical failures, cyber-attacks, security vulnerabilities, natural disasters or fraud,
  • Inability to adequately secure and protect intellectual property rights,
  • Potential claims and litigation against the company for infringement of intellectual property rights and other alleged violations of law,
  • Difficulties in complying with applicable laws and regulations, and potential costs and business disruption if the company becomes subject to claims and litigation for legal non-compliance,
  • Changes in laws and regulations materially affecting the company’s business,
  • Liability risks and labor costs and requirements that may jeopardize the company’s business,
  • Dependence on and inability to hire or retain key members of management and a qualified workforce,
  • Ongoing need for substantial additional capital to support operations, to finance expansion and/or to maintain competitive position,
  • Issuance of additional company equity securities at prices dilutive to existing equity holders,
  • Potential significant and unexpected declines in the value of company equity securities, including prior to, during, and after an initial public offering, and
  • Inability of the company to complete an initial public offering of its securities, merger, buyout or other liquidity event.

Endnotes

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