BUSINESS PLAN BLUE SHOCK RACE - Fundwise and Prototron
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BLUE SHOCK RACE BUSINESS PLAN
COMPANY OVERVIEW / PRODUCT DESCRIPTION
EXPLAIN YOUR COMPANY VALUE PROPOSITION
Blue Shock Race – Positive Energy Accelerates Here! We believe we have created a key to a new generation of
go kart for the future. Being more powerful, eco-friendly, and more effective are just the physical properties of
our products. Our vision and the goal we are heading to are of the utmost importance – the most efficient racing
platform on the planet from energy, ecology and business perspective.
RENTAL KARTS
Ground breaking design and technology (the only kart on
the market with rapid battery swap technology, unique
design with a golden award in industrial design, wireless
management system for operations).
SPORTS KARTS
One of the fastest and lightest racing karts on the market.
The fastest kart can reach 100km/h in about 2 seconds
with tops speed 150km/h. We are the first company who
launched World’s first national electric kart championship.
We are striving to be the main electric sports kart producer
in future electric racing globally.
FRANCHISE
Last 3 year experience allows us to make low investment,
easy operating and good income generating racing places
for leisure in busy places like shopping centers. BSR racing
centers are advanced leisure centers with latest education
and free time technology from simulations to racing from
educationto parties. We fully provide for technology and
production for these places from a 3D project and busi-
ness planning to physical production and installation.
EXPLAIN THE PROBLEM/PAIN POINT THE COMPANY/PRODUCT/
SERVICE TECHNOLOGY IS TRYING TO SOLVE
BSR technology solves the following problems with its technology:
The possibility to install a karting entertainment platform at any place with lower start-up costs and long-term
maintenance costs due to the absence of necessity to solve traditional combustion kart problems (such as
expensive ventilation for CO2 emissions, expensive noise insulation walls, the creation of a special fuel storage
site, children's fear of noise and vibration, non-adaptive power for customer capabilities).
EXPLAIN THE VALUE PROPOSITION OF OTHER MARKETS (EXAMPLE DUBAI)
Due to the Middle East climatic conditions (heat), many entertainment events take place indoors. For this
reason, the BSR solution is ideally suited to address all of these technical problems, and Dubai is one of the
world's largest technology development metropolises and launching world-class electric cart championships
here would be important from the status point of view – to be one of the first in the world with such sports tech-
nology. The United Arab Emirates is focusing on the acquisition and efficient use of renewable energy which is
fully in line with the BSR's solutions and product vision.
COMPANY OVERVIEW / PRODUCT DESCRIPTION
Customizable for customer
Low noise level abilities and needs
Low energy consumptio Unique design (individual approach)
Low start-up costs Rapid battery swap technology
High power and speed
Low after-sales service costs (customizable for customers)
ELECTRIC KART CHAMPIONSHIP
Latvia will become first country in the World to hold National Karting Championship for electric Karts, when
Round 1 of Latvian Karting Championship kicks off in Kandava go=kart treack on May 1, 2018. All-new ''TK Elec-
tro'' class will have around 15 participants for the very first race and few more are expected over the course of
six-round season.
Latvian Championship status to ''TK Electro'' class has been granted just a few weeks ago after a written approv-
al from ''LMT Autosport Academy'' that not les than 10 electric go-karts will be present in every round of Latvian
Karting Championship. President of Latvian Automobile federation raimonds Kisiels: ''Karting is the essentials
of racing. This is where nation's driving skills and road culture begins, and we will begin with that as well. The
more people we attract to carting, the more skilful new drivers will be, even if they don' t turn into professional
racers. Electric engines - this is future, but now. In case of Latvia - our own created future. I am honoured that
latvian Automobile federation takes part in this project - this is the best way to show that we are innovative and
progressive''
ELECTRIC KARTS
FIRST TIME IN YOUTH OLYMPIC GAMES
PARIS 2024
PARIS 2024
FIA President Jean Todt, Secretary General for Sport Peter Bayer and Secretary General for Automobile Mobility
and Tourism Andrew McKellar, met with IOC President Thomas Bach and Director General Christophe de
Kepper.
The FIA is a member of ARISF (Association of IOC Recognised International Sports Federations), and adheres
to the standards and values of Olympism.
On the Agenda for today’s meeting, a broad spectrum of initiatives for which the FIA is seeking IOC collaboration,
chiefly its Smart Cities programme, addressing sustainable and inclusive growth against the backdrop of trans-
formative urbanisation, and its road safety campaign #3500LIVES, which aims to stanch the escalating human,
economic and social cost of road traffic accidents on a global basis.
The FIA and IOC also confirmed their intention to work in partnership on the Youth Olympic Games 2018, to be
held in Buenos Aires in October. The Games will provide a powerful international stage for showcasing the FIA’s
road safety campaign and introducing the excitement of Electric Karting to both the local community of Buenos
Aires and a vast worldwide audience.
Ex-Formula 1 driver Felipe Massa wants to take motorsport to the 2024 Olympic Games through his role as the
president of the FIA’s karting commission.
Massa assumed the role of CIK-FIA president after retiring from F1 last year.
He has already outlined his vision for the future of a crucial grassroots part of motor racing, and an electric
karting demo is planned as part of the Youth Olympics in Buenos Aires this year.
Massa has now revealed his end goal is to use this new technology to make karting part of the Olympics.
“There are good ideas ahead,” Massa told Brazilian TV show Conversa com Bial.
“There will be an event in Argentina, at the end of the year, an event of the Olympics.
“The idea is to take electric karts to the 2024 Olympics, in Paris.”
Motorsport has never been part of the Olympic Games, but world governing body the FIA is a member of the
International Olympic Committee’s association of recognised international sporting federations.
The rise of electric-powered racing machines has been rapid in recent years, with electric single-seater series
Formula E the precursor to major touring car and rallycross projects.
Several electric kart initiatives have been launched since then and Massa believes it can quickly develop into a
serious discipline. Sorce for articles:
https://www.fia.com/news/fia-and-ioc-align-bring-mobility-and-sport-olympic-stage
https://www.motorsport.com/kart/news/massa-targets-karting-in-2024-olympics/3156982/
MARKET SIZE AND INDUSTRY OVERVIEW
SURVEY THE SIZE OF THE TOTAL ADDRESSABLE MARKET(TAM) FOR
THE PRODUCT/SERVICE/ TECHNOLOGY THAT THE COMPANY OFFERS IN EUR
SODI = 360 outdoor tracks where SWS tournaments take place; each track has an average of 24 karts + around
1200 halls where SODI carts are used.
The global new sports kart market is around 600 million Euros a year with an annual growth of about 3.1% (keep
growing) each year of which we plan to gain around 0.9% in the first 3 years reaching around 5.4 million Euros
(Global Karting Market Research Report 2018).
EXPLAIN THE STATUS OF THE INDUSTRY WHERE
THE PRODUCT/ SERVICE/ TECHNOLOGY BELONGS
Electric go-kart manufacturing belongs to the automotive industry, which is governed by the FIA world motor
sport federation and various national regulations specific to each country.
Karting halls belong to the entertainment industry and are regulated by the Amusement Park Regulations and
consumer protection laws on safety and quality issues.
IF ANY, PLEASE EXPLAIN THE INDUSTRY PROJECTION FOR THE NEXT 10 YEARS.
PLEASE ADD REFERENCES TO ANY RECENT NEWS ARTICLE/PRESS RELEASE
RELATED TO THIS INDUSTRY
Electric go-karts will become the leading kart technology in the next 3-5 years, as the e-formula has already been
in place for 3 years now, and the 2020 World Rallycross will take place with electric karts, and many other motor
racing records are broken by electric vehicles, and the entire car industry is shifting towards electric cars in the
next 10 years. It is driven by global ecological requirements and is able to provide technological solutions.
Articles that prove it:
E-Formula FIA: https://e-racing365.com/formula-e/massa-electric-karting-very-important-for-future/
Electric karts in Youth Olympic games: https://www.crash.net/karting/news/897643/1/karting-demonstra-
tion-youth-olympics-significant-step-fia
WHAT ARE THE DRIVERS THAT ARE FUELING THE MARKET GROWTH?
Market growth drivers:
Cheaper and more available technology for masses.
Technology more suitable for urban places and indoors
Global pushing to reduce CO2 in transports
High end sports like e-formula, World RX electric rally, and others
Electric car industry with flagship Tesla, Nissan, Renault and others
WHO ARE THE USERS OF THE PRODUCT/ TECHNOLOGY AND HOW MANY
OF THEM ARE THERE NOW AND POTENTIALLY IN THE FUTURE?
EXPLAIN THEIR PERSONA.
Racing karts: Product users are auto sports training schools, karting racing teams, sports organizations and
individual pilots. More than 51 000 Pilots (and the number is growing around 3% per year globally).
BSR Racing center visitors profile (users):
Family (e) 700 Euro +
700
21% From 18 to 24
34% From 25 to 34 years 59% Men
600
23% From 35 to 44 years
INCOME
41% Women 500
22% Other
AGE GENDER 400
300
200
100
Others: Families with children, young people,
bachelor or bachelorette parties, tourists
TECHNOLOGY/DEFENSIBILITY/UNIQUE FEATURES/ COMPETITIVE ADVANTAGE
DESCRIBE YOUR PRODUCT/TECHNOLOGY OVER ALL ARCHITECTURE ANDFOUNDATIONS?
IS IT WELL DOCUMENTED? HOW YOU MANAGE DOCUMENTATIONS?
A core team of seven people work in the production, each with their own direct responsibilities and execution
procedures, which should be followed to achieve the common goal.
Production documentation:
- Project estimate documentation
- Materials and components procurement documentation
- Component manufacturing and assembly documentation
- Technical drawings
- Presentation materials
- Sales contracts
- Technical passports for go-karts
- Registered trademarks and designs
- In the development phase (in addition) go-kart assembly manual for increasing produc-
tion capacity, a detailed user’s guide, warehouse records documentation, inventory
documentation of go-karts supplied to customers.
In the Hall team responsibilities and tasks are divided between relevant positions, where everyone follows
particular instructions.
Documentation for halls:
- Presentation materials
- Cash flow calculation documentation
- Internal organization guide (to be supplemented and completed with up-to-date information ).
- Marketing materials and strategies
- Procurement documentation
- Internal hall security regulations
- Licenses and certificates
In the development phase (additional), more detailed internal organization documentation, business strategy
documentation, marketing activities documentation and license and certificate preparation
WHAT LANGUAGES AND FRAMEWORKS HAVE YOU USED? WHY?
During the development stage we use Latvian and English, after finalizing it we translate it completely in English
plus in addition in Russian and other languages as is necessary.
The development phase includes two languages due to terminology, global communication and the proportion
of languages represented by the team. We translate into Russian because the Russian market is one of the clos-
est and largest markets which has a close relationship with the local economy.
DO YOU OWN ALL THE CODE NECESSARY TO RUN THE SYSTEM?
DOES ANYONE ELSE HAVE RIGHTS OVER THE CODE?
COULD ANYONE ELSE CLAIM TO HAVE RIGHTS OVER THE CODE?
About 30% of the components are purchased from other suppliers in the world, for which we have regional or
semi-regional rights to use them only with our consent. We make 60% of our components ourselves thus retain-
ing the absolute right to this development and copyright not to be transferred to others without our permission
and a contract. 10% of development is carried out by our outsourcing partners with cooperation agreements
and non-disclosure agreements if it is related to the protection of intellectual or other property. The aggregate
product is recognized as manufactured in Latvia and Blue Shock Race retains its full intellectual property rights.
PURCHASED COMPONENTS PRODUCED ON PLACE OUTSOURCE SUPPORT
30% 60% 10%
TECHNOLOGY/DEFENSIBILITY/UNIQUE FEATURES/ COMPETITIVE ADVANTAGE
ARE THERE THIRD PARTY OR OPEN SOURCE COMPONENTS THAT MAY BE PROBLEMATIC
FROM THE LEGAL OR TECHNICAL VIEW?
No, all contracting parties have contracts and agreements or, if not, there are other alternatives that allow us to
be sure that we will continue to use them further.
IS THERE ANYTHING IN THE CODE/ARCHITECTURE THAT IS AN IMPEDIMENT TO MEETING
GROWTH OBJECTIVES?
The only factor that can affect the growth of production is increasing production capacity, or a global sanctions
ban in one of the segments of the components purchased, such as battery raw materials that may lead to seek-
ing alternative solutions.
Obstacles to the creation of new halls – the only obstacle in the world at the moment is the documentation for
each particular region and adaptation of product to the requirements of a particular market.
LIST THE FEATURES THAT MAKE YOUR PRODUCT/SERVICE/TECHNOLOGY UNIQUE
Rental go-kart:
- Rapid battery swap system
- Unique body design (with possibility to personalize within the framework of the project)
- Adjusting power for each customer centrally
- No noise, no emissions and no vibration
Racing kart:
- One of the fastest karts in the world
- Lower price than that of other manufacturers
- Able to perform a full racing mode with one charge
- Rapid swap-battery
- Over a year tested in real world competitions – first national electric go-kart championship
Karting halls:
- Possibility to integrate into any premises (without additional investment)
- Lower start-up investment for realization of the project
- Modular track system (for kids karting race tracks)
LIST THE TECHNOLOGICAL BARRIER OF ENTRY FOR COMPETITORS
- 1-2 years ahead in technology developing for indoor solutions
- 1-2 years ahead in technology for sports racing
- We will always be the first company who launched the World’s first national electric kart championship
- Technology solutions currently being developed to currently hold one of the leading positions in the elec-
tric kart industry (go-kart autopilot, centralized control system, capacity limitation and weight reduction)
LIST THE TECHNOLOGICAL BARRIER OF ENTRY FOR COMPETITORS
Strengths:
- Electric motor capability and efficiency
- Controlling capability and future upgrades
- Less maintenance and after-sales service
- Expierence with electric kart rental bussines
Weaknesses:
- Still expensive battery technology
- Battery degradation time
- Steriotypes in sociaty
Opportunities:
- Become most suitable racing kart technology
- Carry out most efficient racing center operations from technology and business aspect
- Be in places where others can’t be (schools, parks, shops and others)
Threats:
- Completely unique battery technology leap and closed access to it
- Copying and overtaking in markets where it is difficult to fight it
TECHNOLOGY/DEFENSIBILITY/UNIQUE FEATURES/ COMPETITIVE ADVANTAGE
HOW DOES THE COMPANY DETERMINE THE PRODUCT ROADMAP AND WHAT WILL ADD
THE MOST BUSINESS VALUE?
The company's roadmap has been built on the basis of 3 years of experience and preparations during the design
and development of the product and halls.
- Prepare production by increasing volume to ensure the delivery of the product to customers who have
already made orders and to conclude new contracts with interested parties who have expressed an inter-
est in buying.
- Create two new BSR karting halls with the latest advancements and tests to prove the full implementa-
tion of the franchising model outside the borders of Latvia (keep them as presentation centers).
- Reproduce the halls to 4 more halls in the neighboring region to consolidate in the home region (Scandi-
navia and Eastern Europe), create a centralized franchising management, monitoring and marketing
team that based on past achievements is launching new franchises around the world.
- Continue to strongly develop the direction of sports karting technology and commercial competitions,
being one of the predominant sports electric kart brands in the world.
- The main business values are to dominate the segments where we have been in the lead and find new
alternatives for breaking into the segments where competitors have been operating for decades. Choose
a strategy: if we are investing then invest where we can steadily dominate for a long time or where a fast
and dynamic low-risk return is possible.
ARE THERE EXISTING SKILLS GAPS THAT INHIBIT EFFICIENT DELIVERY OF THE PRODUCTS?
The core of the team has not changed for almost 3 years that can provide growth and expertise to enter the
global market.
At the moment, taking the next step requires additional expertise and specialists:
- In Mechatronics and Electronics (faster development of new improvements)
- Global franchise documentation development specialists
- Automotive Mass Production Specialists
- Additional control systems programmers.
Knowledge and staff are also needed to successfully increase production volume, optimize production, stream-
line documentation for the global market, and provide for rapid technological development being among the
leaders.
IS THERE A SUITABLE BUSINESS CONTINUITY PLAN IN PLACE, AND IF NOT, WHAT RISK
IS UNDERTAKEN AND WHAT IS REQUIRED TO IMPLEMENT ONE?
The business growth plan for the company includes the creation of a regional hall network plus preparation of
manufacture to generate a constant cash flow from which to cover operating costs plus ensure progressive
development. After a 3-year period, the company has overcome the risk thresholds associated with prototyping,
failure and lack of experience, thus minimizing the risks.
ARE THERE OPPORTUNITIES FOR PRODUCT ENHANCEMENT TO SCALE TO LARGER
NUMBER OF CUSTOMERS REQUIRING LESS ON THE SERVICES SIDE?
Yes it is possible and depends on the customers’ requirements.COMPETITION
LIST ALL THE DIRECT AND INDIRECT (ADJACENT) COMPETITORS
OF THE ASSIGNED COMPANY
Electric sports kart competitors:
ROTAX with SODI (Electric sports kart THUNDER 20kW) / http://www.racelikeneverbefore.com/home
Electri GT Holding (Electric sport kart ElectricGT till 35kW) / http://www.electricgt.co/ekarting/
Cameron karting (Electric sports kart RS8 20kW) / http://www.rattlesnakeelectricsports.com
Others developing their karts
Electric rental kart:
SODI (RTX) / http://www.sodikart.com/en-gb/karts/rental/rtx-8.html
Birel ART (E-kart) / http://www.birelartrental.com/projects/e-kart/
RIMO (Sinus) / https://en.rimo-germany.com/electric-karts.html
BIZkarts (Ecovolt) / http://www.bizkarts.com/new-karts/electric-karts/ecovolt-ng/
OTL (Storm) / https://otlkart.com/
Other small competitors
Kart Racing center franchises:
K1 Speed (USA) / https://www.k1speed.com/
Team Sport karting (UK) / https://www.team-sport.co.uk/
P2R Karting (USA) / https://p2rkarting.com/
Other private racing tracks
LIST THE COMPETITORS’ CURRENT COMPANY STATUS (EXAMPLE: PUBLIC/PRIVATE, FUNDED/
NOT YET FUNDED, IN USA/ OUTSIDE USA, REVENUE GENERATION, REVENUE AMOUNT,
AMOUNT OF FUNDING RECEIVED, INVESTOR NAME, PRODUCT RELEASE STATUS)
Partial replies see above, specific detailed information is not publicly available, cannot be obtained.
HOW DOES THE COMPANY DETERMINE THE PRODUCT ROADMAP AND WHAT WILL ADD
THE MOST BUSINESS VALUE?
SODI, RIMO, BIRELART, BIZ KART, OTL owning approximately 70% of the market are the main brands on the
market.
HOW IS THE COMPANY POSITIONED AGAINST COMPETITIVE THREATS?
Based on the fact that currently the market leaders are the leaders on the basis of internal combustion technolo-
gy, at present, with technology changing, there will be a partial redistribution of the market and new players will
have an opportunity to enter or create new niche solutions and business directions. This is what the Blue Shock
Race focuses on, we are planning to acquire the directions which have not been acquired so far and are free
now. It is a 1-3 year long period to be used pushing with maximum inertia with our share in the market, as well
as to compete directly with technological advancement by pushing in with intellectual strength and minor finan-
cial resources.
The strongest pressure that a competitor can exert is to try to buy the Blue Shock Race, dump the market
depending on the financial resources, or achieve regulatory regimes in certain regions that prevent the entry of
other competitors, or a strong technological leap forward.MONETIZATION/BUSINESS MODEL EXPLAIN THE COMPANY BUSINESS MODEL (REVENUES, CHANNELS, COST, AND PARTNERSHIPS)? HOW DOES IT COMPARE TO THE COMPETITORS? Costs: The technology is being developed so as to reduce franchisees’ investment of 500K + (which is the standard for combustion cartridges) to 200K + for BSR electric kart track, with lower operating costs and efficient personnel management, as in many countries it accounts for up to 35% of hall expenses, and also technological improve- ments are made to create a long-term customers' interest in returning using technological advantages. Partnership: We choose partners based on the principle that they have proven themselves on the market but have not yet taken their steps in the electric goi-kart sector, thus forming a strong partnership based on the acquired market share and knowledge, combining them and creating more power against the dominant players. This applies to component suppliers and other service providers. Channels: We use direct sales to the client approaching them with the final product and present it on the site, demonstrat- ing all the strengths of the product and, as appropriate, improving the aspects important for the customer (power, charging times, track solutions, mileage distances and other topical issues). We pay attention to every customer's need and nuance, solving local or regional problems that big players do not do. Revenues: Revenues are generated by 4 main sources: -Sports go-kart sales and provision of parts for Championships (like for everyone else, the higher the number of your karts on the track, the higher the revenues, the better and more powerful the solution, the greater the inter- est of customers to be your customer). - Rental go kart trade (lower startup investment, due to the battery swap system there is no need for 2x more karts for charging, but only 2x more batteries that are changed after races). - Franchise sales (development of a complete hall from a sketch to a turnkey business transferred to a client. An optimized and well-organized system that generates steady revenues and provides unified marketing all around the world or locally). - After-sales service (battery replacement, replacement of damaged components, repair of tracks, sale of new improvements). EXPLAIN ANY CURRENT REVENUE FOR ITS PRODUCT/SERVICE /TECHNOLOGY BSR has the experience of setting up and working with 2 entertainment centers in Riga and Liepaja. Where the rental Go-kart have been tested and Revenue module for the licensing has been tested. Currently the BSR has 2 revenue streams: 1. From Go-kart entertainment center in Liepāja with 7 Go-karts and 5 additional entertain- ment, where the products and procedures for licensing module are tested. 2. From Go-kart sales to the enter- tainment centers, and other clients. Current revenue looks as follows: Revenue type Entertainment center Go-kart sales Year 2017 2018 6 months 2017 2018 6 months Revenue 112 954 88 905 154 190 91 048 Net result - 4 981 14 382 -44 625 17 780 All values are euro
MONETIZATION/BUSINESS MODEL
EXPLAIN ANY CURRENT REVENUE FOR ITS PRODUCT/SERVICE /TECHNOLOGY
All prices are calculated based on average market price competition plus gross margin rate for karts up to 45%
and racing centers up to 20% in sales + 3% yearly franchise cost.
BSR KIDS KART
5’600 Eur (gross margin 35%)
BSR ADULT KART
8’500 Eur (gross margin 45%)
BSR SPORTS 15KW
6’500 Eur (gross margin 40%)
BSR SPORT 25KW
9’500 Eur (gross margin 45%)
BSR SPORT 35KW (OPTIONAL 50KW)
12’500 Eur (gross margin 45%)
Go-kart rental prices are determined by the market price in each of the locations separately and will be
comparable to the gasoline Go-kart rental prices
EXPLAIN UNIT ECONOMICS? (CUSTOMER ACQUISITION PROCESS AND COST, UNIT PROFIT
MARGINS, BREAKEVEN, ETC.)
For Go-kart there is following pricing and Gross margin:
- BSR Kids kart: 5’600 Eur (gross margin 35%)
- BSR Adult kart: 8’500 Eur (gross margin 45%)
- BSR Sports 15kW: 6’500 Eur (gross margin 40%)
- BSR Sport 25kW: 9’500 Eur (gross margin 45%)
- BSR Sport 35kW (optional 50kW): 12’500 Eur (gross margin 45%)
In order to break even the Go-Kart production business line should produce 5 Adult-Go karts per month (60
Go-karts per year). Currently the customers are acquired through PR activities. Main target customers are
Rental Go-kart halls and racing series. After production of Go-karts for the Worlds first electric Go-kart racing
series there has been a significant interest in the Go-kart purchases for racing series and rental. The acquisition
process is by presentations of the working products to the potential clients and showing the working products
in the action in the working Entertainment centers.MONETIZATION/BUSINESS MODEL CUSTOMER ACQUISITION COSTS? Attraction of one hall costs 2-4 thousand euros, it includes business trips with product demonstration, drawing up of a contract and preparation of other specific documents, re-appointment for execution of the contract and other issues. Contracts are concluded as transactions with an executable order approximately with 3 out of 5 customers per year. The Entertainment centers pricing: The pricing is determined by competitor pricing in the similar region. The pricing level is set per 10 min and costs the same as for gasoline rental go-karts. The revenues are estimated per location based on the size of entertain- ment center and the location (size of the population in the region, purchasing power). CUSTOMER ACQUISITION PROCESS AND COSTS? There are two ways to get new customers: a) Being a promotional face for various motoring events such as ERC, karting championships, super electric kart in blogs and the internet, etc. b) Going directly to the potential selected customers. We are investigating specific halls, find solution and go to make presentations, in 3 out of 5 cases we conclude a deal on the order. It is easy to work this way because we know the needs of the halls, the customers are publicly known, and we can reach the goal quickly by focusing on the target markets. The attraction of a new client costs 2-5 thousand euros depending on the region and the activities to be prepared and carried out in order to convince the client. EXPLAIN HOW THE BUSINESS MODEL IS SCALABLE? Entertainment center business line is scalable by firstly proving the concept by starting with first 2 locations and getting the stable cashflows and profitability and after stable cash inflows adding entertainment centers up to 6 within the close to Latvia and subsequently licensing the concept to different locations. This will allow for the business to get stable cashflows from the Entertainment centers owned, Licensing fees from the licensed loca- tions and repeat customers for the Go-kart production line. In addition as the electric technology is fairly new in go-karting industry there are several advantages that allow creating entertainment centers in the locations where it is not possible by gasoline go-karts (Shopping centers, inside entertainment centers) After the positive PR of the worlds’ first Electric go-kart series the company receives many inquiries from differ- ent buyers interested in purchase both Sports and rental go-karts. Currently the limitation for scalability is work- ing capital, manufacturing equipment. After investment these issues should be solved and in order to scale the company next main goal will be the customer acquisition. The positive aspect is that each new customer brings 10-100 Go-karts. WHAT IS THE POTENTIAL FOR RECURRING REVENUE? For the entertainment centers, there are recurring revenues from daily go-kart rental and other entertainment (Laser tag, Mario Go-kart etc.). In addition as the go-karts need to be renewed every 5 years each licensing site will bring in the repeat customer for Go-kart production line. For the Go-kart production line, the recurring revenues will happen every 5 years for the owners of 1 site as in general the go-karts need to be changed every 5 years, however for the owners of more sites, the recurring reve- nues might be more frequently as the gasoline go-karts are gradually changed to electric, as electric go-karts are more financially interesting for the customer and will increase the rental go-kart profitability.
TEAM MEMBERS
INCLUDE TEAM INFORMATION, EXPERIENCE, AND EDUCATION
Artis Daugins Ģirts Cēlājs Jānis Krastiņš
CEO / FOUNDER BUSINESS DEVELOPING LAF DIRECTOR,
FIA MEMBER, ADVISER
Rihards Lībis Toms Balodis Jānis Lakstīgala Ivars Ostapenko
GRAPHIC DESIGN, BRANDING 3D DESIGN, ENGINEERING TECHNICAL ENGINEER BATTERY DEVELOPING
INCLUDE ADVISORS PROFILES
Andris Dambis Mārtiņš Sesks Jānis Baumanis Dainars Dambergs Ēriks Gasparovičs
Drive eO ERC Opel Racing pilot World RX pilot LMT Auto sports Academy 30 Years world class
kart racing experience
INCLUDE INVESTORS PROFILES
Ģirts Cēlājs (47,5% BSR owner), Invested 180K Eur (Angel investment, early seed money)
Artis Daugins (47,5% BSR owner), Invested 20K EurFINANCIALS
EXPLAIN YOUR PREVIOUS AND CURRENT YEAR(S) FINANCIAL PERFORMANCE (ATTACH P&L)
MAKE 3 NEW BSR MAKE 4 NEW BSR
MAKE OUR BSR TEST MAKE AT LEAST 10 SIGN ORDERS ABOUT RACING CENTERS RACING CENTERS
RACING CENTER MORE PREORDERS 250+ KARTS (FULLY AUTOMATED)
2015 2016 2017 2018 2019 2020 2021 2023 2025
MAKE 2 NEW BSR RACING SIGN ORDERS ABOUT PARTICIPATE IN OLYMPIC GAMES
IMPROVE AND SELL MAKE AND SELL SECOND CENTERS 1000+ KARTS 2024 PARIS
21 KART PROTOTYPE BSR RACING CENTER (HALF AUTOMATED)
LAUNCH WORLD’S FIRST GET ALL CERTIFICATES
NATIONAL ELECTRIC KART AND PATENTS
CHAMPIONSHIP WORLD WIDE PROTECTED SIGN ORDERS ABOUT
MAKE ONE OF THE MAKE AND SELL FIRST
WORLDS FASTEST BSR RACING CENTER 500+ KARTS
SET UP
ELECTRIC KART BSR02 PRODUCTION LINE FOR UP TO
500+ KARTS PER YEAR
EXPLAIN YOUR COMPANY’S FIVE-YEAR FINANCIAL PROJECTIONS?
The goal for the Production business line is to set up production and to sell at least 200 go karts starting from
year 2
For the entertainment centers the main goal is to set up 7 entertainment centers by the end of 2021 as the core
and proof of concept and subsequently provide other interested customers with the licensing module. Currently
licensing module has not been implemented in the projections.
EXPLAIN YOUR MONTHLY PROJECTIONS FOR NEXT 12 MONTHS.
In first 6 months after investment in production company will be focused on buying the manufacturing equip-
ment and completing the orders of clients interested. After 6 months there will be 2 entertainment centers set up.
DO THE COMPANY FINANCIAL PROJECTIONS CONSIST OF THREE SCENARIOS?
For the Go-Kart production company the scenario is realistic worst case as currently company has letters of
intent for more than 100 Go-kart sale, without any marketing costs.
For the entertainment centers it is also realistic worst case scenario, based on the pessimistic projected
volumes each location.
Currently there is one expected scenario.
WHAT IS THE COMPANY PRIOR AND PROJECTED MONTHLY BURN RATE?
The Burn rate for the Blue Shock Race manufacturing is 10k EUR per month without any new project coming in.
The Liepaja entertainment center is working with profit
WHAT DOES THE BREAKDOWN OF REVENUE AND GROSS MARGINS BY PRODUCT
LINE OR SERVICE LOOK LIKE?
Please see attached excel Financial Forecast file : file name ’’Financial Forecast BSR’’
IS THERE ANY OUTSTANDING CONTINGENT LIABILITIES?
No outstanding contingent liabilitiesFUNDING STATUS
EXPLAIN YOUR PREVIOUS AND CURRENT YEAR(S) FINANCIAL PERFORMANCE (ATTACH P&L)
List the funding stage the assigned company is at Seed Round and going for Series A.
EXPLAIN IF THE ASSIGNED COMPANY HAS ALREADY RECEIVED FUNDING
Angel Investor GC Acquisition 180k EUR. ( Ģirts Cēlājs )
EXPLAIN HOW MUCH ARE THEY SEEKING FROM US, AND BY WHEN?
The investment round is planned 2,1 million in 3 tranches.
GM - General margin
EXPLAIN THE TYPE OF INVESTMENT YOU ARE SEEKING (CONVERTIBLE NOTE/VALUED ROUND)
Convertible Note or Buy shares (other options are available).
EXPLAIN HOW THE ASSIGNED COMPANY WILL BE USING THE COLLECTED FUND
The fund usage please see in attached Financial Forecast excel : file name ’’Financial Forecast BSR’’INVESTMENT OFFER INVESTMENTS IN BLUE SHOCK RACE WILL BE MADE BY SPV (SPECIAL PURPOSE VEHICLE) MODEL THROUGH ESTONIAN COMPANY. CURRENT SHARE CAPITAL = 2’800 € (IN 1TH TRANCHE) PRE-MONEY VALUATION = 3’500’000 € (IN 1TH TRANCHE) MINIMUM OFFERED SHAREHOLDING TO ALL INVESTORS (€ NOMINAL VALUE) = 80 SHARES (WE ARE OFFERING 2.78% SHARES FOR 100’000 € / SHARE CAPITAL AFTER CAMPAIGN: 2’880 €) MAXIMUM OFFERED SHAREHOLDING TO ALL INVESTORS (€ NOMINAL VALUE) = 240 SHARES (WE ARE OFFERING 7.89% SHARES FOR 300’000 € / SHARE CAPITAL AFTER CAMPAIGN: 3’040 € ) MAXIMUM OFFERED SHAREHOLDING PER INVESTOR (€ NOMINAL VALUE) = 240 SHARES (MAX INVESTMENT PER INVESTOR: 300’000.00 €) INVESTMENT STEPS FOR A SERIES ROUND COMPANY VALUATION AFTER 1 TRANCHE CAMPAIGN = 3’600’000 – 3’800’000 € COMPANY VALUATION AFTER 2 TRANCHE CAMPAIGN = 7’500’000 – 8’000’000 € (NEXT STEP) COMPANY VALUATION AFTER 3 TRANCHE CAMPAIGN = 12’500’000 – 15’000’000 € (NEXT STEP) CEO AND FOUNDER PROMISE The founder and CEO of Blue Shock Race Artis Daugins offers to re-purchase the shares within 3-5 years at the share price valid at that time, but no less than the purchase price. In this way, investors receive the guarantee from the company’s management that their investment will not reduce; on the contrary, the value of the invest- ment may increase several-fold upon the implementation of the plan. If someone, nevertheless, is willing to remain a member of the company in the long-term, the member can generate revenue from the distribution of annual profit, but no sooner than in 3 years (during the first 3 years all profits are re-invested or invested in the development). Investors from other regions of the world with experience in electric transport, motorsports, wholesale or enter- tainment industry have the opportunity to acquire exclusive distribution rights and earn additionally by selling the BSR products and services. EXPLAIN THE PROPOSED EXIT STRATEGY/VISION OF THE ASSIGNED COMPANY Buyout ( other options are available )
TRACTION AND ACCOMPLISHMENTS TRACTION AND ACCOMPLISHMENTS Until now, Blue Shock Race has: - Developed and tested 21 prototype go-karts for rent (all these go-karts have been sold to end customers); -Staged the world’s first National Electric Kart Championship in Latvia where all participants drive the electric go-karts manufactured and sold by Blue Shock Race; - Established 3 BSR racing halls, two of these have been sold and one has been retained for carrying out tests and prototyping by the company; - Been presented as one of the biggest achievements of Latvia at the International Transport Forum Summit held in Germany in 2018; - Been honoured with the visit of FIA president JEAN TODT to Latvia and congratulations on launching the Cham- pionship; - Received the Export and Innovation Award from the Investment and Development Agency of Latvia for the industrial design of batteries and their technological solution; - In 2016, the Investment and Development Agency of Latvia awarded the company with the Export and Innova- tion Award for the most innovative product; - The company has received the Golden Ratio award for the contribution to industrial design (design of a go-kart); - MOUs on totally almost 300 go-karts have been signed in Canada and Europe within 3 months, and are current- ly being negotiated also in Dubai; - 2 publications about the contribution to technology and science in Forbes Magazine; - The invitation of the USA goverment to attend the Global Entrepreneurship Summit held in San Francisco, the USA, in 2016; - Been the face of ERC Rally Liepāja stage on Eurosport channels in 2016; - Received an invitation to present its product to F1 driver Carlos Sainz; - 3-5 requests of new potential orders are received every month;
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