- Completed an initial pilot program for its Automated Pizza Kitchens (APKs), serving real customers delicious pizza in multiple locations across the U.S.
- 75% of Basil Street’s customer survey respondents say they are likely to return again
- IP includes one granted and one pending patent covering food product storage and vending kiosk
- Purchase orders for 50 APKs targeting deployment in the field by fall 2021
- Team has more than 50 years of combined experience in self-serve kiosks, pizza making, and Silicon Valley finance; investors include the former CEO of Sleep Number and the founder and CEO of TRX Training
- Total Round Size: US $20,000,000
- Series B :
- Minimum Investment: US $998 per investor
- : Preferred Equity
- US $40,000,000 :
- : US $1,500,000
Everyone loves pizza, and everyone loves quality, convenience, speed, and friendly prices. Basil Street marries all the things people love in 22-square feet of advanced, robotic technology to provide high-quality, brick-oven style pizza at the touch of a button.
Basil Street's Automated Pizza Kitchen (APK) uses patented technology that gives customers a piping hot, delicious, 10-inch, Italian-style pizza that cooks in about 3-minutes. With our robotics technology, we are able to reduce labor costs and create a low-cost, scalable business model.
Our seasoned team has decades of experience in not only designing, manufacturing, deploying, and scaling automated kiosks, but also in pizza making, menu development, and specialty retail. Basil Street is a story of delicious, convenient pizza and advanced robotics designed to scale throughout the US and abroad. We believe this is a once-in-a-lifetime investment opportunity. Basil Street is in discussions with some of the world's largest food companies and distributors to provide hot, delicious pizza to hungry customers around the globe. We plan to announce our future partnerships and location placement successes throughout our fundraise, as they are finalized. Now is the time to get your "slice of the pie!"
We aren't just a concept. Basil Street has live APK's in the field with real customers buying our brick-oven pizza, providing us feedback, and testing our pilot units. We've learned so much and there is no replacement for real-world experience. We plan to have 50 APK's in the field this fall, and, depending on fundraising success, we expect to have up to 100 APK's in universities, amusement parks, casinos, hospitals, airports, military bases, manufacturing facilities, movie theaters, and many other locations by year-end 2021.
SI Securities, LLC has the authority to prevent a closing from occurring if it determines, in its sole discretion, that this investment is no longer suitable at the time of the closing, which includes, but is not limited to, the Company raising at least US 1,500,000 in connection to the current round.
Investors who invest less than $99,997.20 will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information.
- Invest $2,500 and receive a "my slice of the pie" t-shirt and 10 free pizzas.
- Invest $5,000 and receive the above, plus another 20 pizzas.
- Invest $10,000 and receive the above, plus an annual voice call with management and another 50 pizzas.
- Invest $25,000 and receive the above, plus spend the day with a brand ambassador interacting with active APKs in the field.
- Invest $100,000 and receive the above, plus the opportunity to meet with management at our APK manufacturing plant.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
Please note that due to share price calculations, some final investment amounts may be rounded down to the nearest whole share - these will still qualify for the designated perk tier. Additionally, investors must complete the online process and receive an initial email confirmation by the deadline stated above in order to be eligible for perks.
The graph below illustrates theor the of Basil Street Cafe's prior rounds by year.
About 1 in 8 Americans eat pizza on a typical day, and the average American is going to eat 46 pizzas over the course of the next 12 months.
The increasing need for contact-free concepts and robot delivery models are being tested around the country, presenting an opportunity in the market.
Although there are competitors such as Pizzaforno, Pizza ATM, and Piestro, what makes Basil Street unique is the fact that we have units in the field already being used. Moreover, we believe we are the first company in this space to be UL/NSF certified, which is required in order to be able to place APKs in most locations.
Our kiosks provide restaurant-quality pizza in about 3 minutes. We use only the finest ingredients including vine-ripened tomatoes, 100% fresh mozzarella, and real olive oil. In addition, we are continually updating our menu to include new artisan pizza flavors including our very popular breakfast pizza and buffalo chicken pizza.
Our company has been built by the top professionals in the business, who have over 50 years of proven experience growing and scaling automated kiosk, food and retail, funding, supply chain and operations, marketing, and IT businesses. In addition, our top-notch engineering team designs our APKs in-house, which allows us to easily plan for future modifications.
Unlike competitors, we believe our business is more scalable because our APKs are built domestically to be the highest quality, to be rapidly deployable, and to minimize costs. We are in discussions with Celestica and Prepango for exclusive partnerships. In addition, our pizzas are flash-frozen, which allows us to offer a premium product at an affordable price with less waste.
The rights of holders of Series B Preferred Stock may be limited. The Series B Preferred Stock of the Company does not include certain protective provisions. Corporate actions including, but not limited to altering the rights, powers or privileges of the Preferred Stock set forth in the Restated Certificate or Bylaws, increase or decrease the authorized number of shares, and other actions like adverse changes to preferred stockholder rights, redemptions and repurchases of any stock are not subject to approval of the preferred stockholders voting as a separate class. The lack of these preferred stock protective provisions means that holders of the Company’s common shares may vote to proceed with some of these actions, which may detriment the holders of the Series B Preferred Stock. - Is that accurate or are some of those listed included?
A majority of the Company is owned by a small number of stockholders. Prior to the Offering, a small group of directors and executive officers and their related entities consisting of Deglin Kenealy, Thomas FitzGerald, John Laspia, Jeff Klemp and Robert Dalton owned or controlled through their affiliates approximately 34.8 % of the Company’s outstanding voting securities. Even if we raise the maximum offering amount, these persons will continue to own or control approximately 20.4% of the Company’s outstanding voting securities immediately following the Offering. Subject to any fiduciary duties owed to our other stockholders or investors under Delaware law, these stockholders may be able to exercise significant influence over matters requiring stockholder approval, including the election of managers or managers and approval of significant Company transactions, and will have significant control over the Company’s management and policies. Some of these persons may have interests that are different from yours. For example, these stockholders may support proposals and actions with which you may disagree. The concentration of share ownership could delay or prevent a change in control of the Company or otherwise discourage a potential acquirer from attempting to obtain control of the Company, which in turn could reduce the price potential investors are willing to pay for the Company or its stock. In addition, these stockholders could use their voting influence to maintain the Company’s existing management, delay or prevent changes in control of the Company, or support or reject other management and board proposals that are subject to stockholder approval.
The COVID-19 pandemic may materially and adversely affect our business and operations. The impact on our business from the outbreak of the COVID-19 coronavirus is unknown at this time and difficult to predict. While vaccines are currently being administered in the United States and other countries throughout the world, at the current time the federal government and local states have instituted restrictions which could adversely affect the Company’s operations. The impact of COVID-19 has also created global supply chain challenges. These challenges create risk in the timing of delivery of kiosks and products. As outbreaks happen in certain areas of the supply chain it will create delays. Having redundancies in these areas to minimize timeline creep is not cost effective.Additionally, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity. Other potential adverse effects of COVID-19 might include, for example, our ability to meet projected goals through the continued availability of our workforce; adverse impacts from new laws and regulations affecting our business or increased cyber risks and reliance on technology. infrastructure to support our business and operations, including through remote-work protocols. The specific impact that COVID-19 could have on these risks remains uncertain.
We have a limited operating history and have not yet generated profits. Our entry into the market is relatively recent and we do not have a track record of involvement in the APK niche beyond a limited number of self-serve kiosks in the field at this time. The likelihood of creating a viable business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the growth of a business, its operation in a competitive industry, and the continued development of its technology and products. We anticipate that our operating expenses will increase for the near future, and there is no assurance that we will be profitable in the near future. You should consider the business, operations, and prospects in light of the risks, expenses, and challenges faced as an emerging growth company.
The Company operates in a highly competitive market. In addition to competition from large well-established competitors in the food-service industry, including pizza franchises, we face competition from an array of food delivery concepts and aggregators delivering for quick service, using new delivery technologies or delivering for competitors who previously did not have delivery capabilities, some of which may have more effective marketing. The emergence or growth of competitors, in the pizza category or in the food service industry generally, could negatively impact demand for our APKs and future sales. As a result, our sales may be directly and negatively impacted by actions of our competitors, the emergence or growth of new competitors, consumer sentiment or other factors outside our control.
Food safety and quality concerns may negatively impact our business and profitability. Incidents or reports of food-or water-borne illness or other food safety issues, investigations or other actions by food safety regulators, food contamination or tampering, employee hygiene and cleanliness failures, improper employee conduct, or presence of communicable disease at our facilities or those of our suppliers could lead to product liability or other claims. If we were to experience any such incidents or reports, our brand and reputation could be negatively impacted. This could result in a significant decrease in customer traffic and could negatively impact our revenues and profits. Similar incidents or reports could likewise create negative publicity, which could negatively impact consumer behavior towards us. We rely on our suppliers to provide quality ingredients, provide proper storage of our products, and to comply with applicable laws and industry standards. A failure of one of our suppliers to meet our quality or storage standards, or meet food industry standards, could result in a disruption in our supply chain and negatively impact our brand and our results.
Changes in privacy or data protection laws could adversely affect our ability to generate revenue. We expect to generate a significant portion of our revenue from targeted advertising to customers made possible by software in our APKs that analyzes foot traffic through facial recognition. Any future restrictions in federal, state or foreign laws regarding marketing and solicitation or domestic or international data protection laws that govern these activities could adversely affect the continuing effectiveness of our targeted advertising and could impact the amount and timing of our revenues.
We may not be able to protect our intellectual property. Although we have received the rights to issued patents in the United States, we may not be successful in obtaining issued patents for currently pending technology patent applications in the United States or internationally. Our success will depend on our ability to secure additional patent protection for our core technologies and ability to enforce those patents. The patent applications that are pending may not result in issued patents. Even though the Company has issued patents and pending patent applications, an issued patent may later be narrowed, invalidated or held unenforceable for a variety of reasons. Further, the outsourcing of the manufacture of our APKs may result in the unauthorized use of our intellectual property and trade secrets.
The Company relies on third party service providers. The Company relies on third parties, and in particular on Commercial Automation LLC, a Nevada limited liability company (“Commercial Automation”), to provide a variety of essential business functions. It is possible some of these third parties will fail to perform their services or will no perform them to our expectations, which could have a material adverse impact on the Company.
The auditor included a “going concern” note in its audit report. We may not have enough funds to sustain the business until it becomes profitable. At December 31, 2020, the Company had an accumulated deficit of $9,696,859 and negative working capital of $693,028. For the years ended December 31, 2020, and 2019, the Company incurred net losses of $3,145,376 and $2,737,286, respectively, and used net cash of $3,378,741 and $1,813,729 in operations, respectively. In addition, as of May 31, 2021, the Company has outstanding secured debt totaling $5.25 million that matures in September 2021. These conditions raise substantial doubt about the Company's ability to continue as a going concern. While the Company expects to be able to extend the maturity date of these notes if necessary, the extension is contingent on certain factors.
The Company has conducted Related Party Transactions. Various term notes with total face value of $1,358,500 issued from November 2017 through December 2019 with the Company’s CEO and a shareholder (Commercial Automation), interest of 6%, of which $1,231,500 in principal and $41,318 in related accrued interest were converted to into two convertible notes totaling $762,721 and $510,097. In connection with these notes, the Company issued to the holders warrants to purchase 142,952 shares of the Company’s common stock. In February 2020, the Company increased the total warrants issued as part of a note purchase agreement by 257,069. The warrants mature in five (5) years. The warrant has an exercise price equal $0.51 per share. On February 7, 2020, the full amount of principal and interest were converted into shares of Series A-1 preferred stock and shares of common stock of the Company.
Commercial Automation, the Company’s largest vendor, is also a holder of the Company’s preferred and common shares during the years ended December 31, 2020 and 2019. During the years ended December 31, 2020 and 2019, the Company had $1,772,210 and $1,253,408 in transactions and $3,305 and $370,272 in payables with Commercial Automation, respectively. In August 2020, $252,582 in accounts payable owed to Commercial Automation, were converted to a convertible note. The interest rate is 12% per annum and the maturity date is August 31, 2022.
From September 2016 through November 2019, the Company issued various convertible notes to multiple parties including the Company’s CEO, CTO, COO, and other shareholders for a total of $3,207,818 that mature on September 12, 2019 and March 8, 2020. The notes bear interest rates ranging from 6% to 8% and are convertible into shares of the Company’s common stock ranging from at the lesser of 80% of the price paid per share by the investors in the next equity financing and the quotient resulting from dividing $10,000,000 by the number of shares outstanding common stock immediately prior to the closing of the next equity financing assuming the conversion of all convertible instruments into common stock on that day and 100% of the price paid per share by the investors in the next equity financing. On February 7, 2020, the full amount of principal and interest were converted into shares of Series A-1 preferred stock and shares of common stock of the Company.
The Company has outstanding liabilities. This may require the Company to dedicate a substantial portion of its cash flow from operations or the capital raise to pay principal of, and interest on, indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, or other general corporate purposes, or to carry out other business strategies. As of May 31, 2021, the Company has outstanding debt totaling $5.25 million that is secured with a continuing security interest in all the Company’s assets.
From September 12, 2016 through November 7, 2018, the Company issued convertible notes to multiple parties for a total of $3,525,000 that matured on September 12, 2019. The notes bore a 6% interest rate per annum and were convertible into shares of the Company’s preferred and common stock at the lesser of 80% of the price paid per share by the investors in the next equity financing and the quotient resulting from dividing $10,000,000 by the number of shares outstanding common stock immediately prior to the closing of the last equity financing assuming the conversion of all convertible instruments into common stock on that day. Because the conversion price which ranged from $1.34 to $1.67 per share was higher than per share value of shares on issuance date, no BCF was recorded.
From March 8, 2019 through November 18, 2019, the Company issued convertible notes to multiple parties for total proceeds of $1,985,000 with a maturity date of March 8, 2020. In addition, during this period, certain previously issued convertible notes and accrued interest totaling $1,272,818 were converted into new convertible notes, that also matured on March 8, 2020. These notes bore an 8% interest rate per annum and were convertible into shares of the Company’s preferred stock at 100% of the price paid per share by the investors in the next equity financing.
On February 7, 2020, certain outstanding convertible notes with an aggregate principal and interest amount equal to $7,500,578 were converted into 2,073,974 shares of Series A-1 Preferred Stock, 2,406,081 shares of Series A-2 Preferred Stock and 601,664 shares of Common Stock of the Company.
In August 2020, $252,582 in accounts payable to Commercial Automation, were converted to a convertible note agreement. The interest rate is 12% per annum and the maturity date is August 31, 2022.
As of December 31, 2020 and 2019, total convertible notes were $252,582 and $6,782,818, respectively, and accrued interest on the convertible notes payable totaled $11,282, and $671,065, respectively. Interest expense on the convertible notes payable for the years ended December 31, 2020 and 2019 totaled $11,864 and zero, respectively.
The company currently has approximately $5.25 million in secured debt as of May 31, 2021. This may require the Company to dedicate a substantial portion of its cash flow from operations or the capital raise to pay principal of, and interest on, indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, or other general corporate purposes, or to carry out other business strategies. The Loan is personally guaranteed by the Founder. In addition, the terms of the Loan clarify that upon any event of default, the Lender may declare all or any portion of the Loan to be immediately due and payable. One of the Events of Default, as defined in that agreement is a general inability to pay its debts. The Loan is secured with a continuing security interest in all the Company’s assets
The Company has outstanding litigation. In 2015, the Company entered into a mutual nondisclosure and non-circumvention agreement (the “NDA”) with a consulting firm for the purpose of exploring business opportunities of mutual interest, including the development and commercialization of an automated-pizza kiosk based on technology belonging to a third party with which the consulting firm had an existing relationship. The Company ultimately decided to partner with Commercial Automation for the development of its own APK and did not pursue development of an automated-pizza kiosk with the consulting company. However, the Company subsequently entered into a consulting agreement with the same consulting firm pursuant to which the Company would issue to the consulting firm warrants to purchase shares of the Company’s capital stock subject to specific commercial deliverables which the Company has not received.On November 30, 2020, the Company was contacted by an attorney representing the consulting firm. The attorney alleged that the Company had breached its obligations under the NDA, demanded the Company issue the consulting firm shares of the Company’s capital stock equal to fifteen percent (15%) of the Company’s total outstanding capital as liquidated damages, and threatened to commence immediate legal action if the parties were unable to come to a resolution. The Company has not resolved the dispute with the consulting firm and, to the Company’s knowledge, no legal action has been initiated by the consulting firm. The Company believes the consulting firm’s claims are without merit.
Our Chief Operating Officer and Chief Technology Officer also own and operate Commercial Automation, which is responsible for the development of the APK and our proprietary oven solution and technology. Jeff Klemp, our COO and a member of our board of directors, is also the COO of, and has a fifty percent ownership interest in, Commercial Automation. John Laspia, our CTO, is also the CTO or, and holds an ownership interest in, Commercial Automation. Commercial Automation was engaged by the Company to develop its APK and while all rights to the APK and the proprietary oven are owned by the Company, Commercial Automation owns the base Kiosk Management Software that the Company licenses for use in each APK. While there is a certain alignment of interests between the Company and Commercial Automation in that Messrs. Klemp and Laspia own equity in both companies, there may be instances in the future when those interests are no longer aligned. In such cases, Messrs, Klemp and Laspia may face a conflict in selecting between the Company and Commercial Automation. As a result, our business and results of operations could be materially adversely affected. We have not formulated a formal policy for the resolution of such conflicts.
The directors and executive officers of the Corporation also serve as directors and/or officers of, and investors in, other companies, and there exists the possibility for such directors and officers to be in a position of conflict. Certain of the officers and directors of the Company are and may in the future become involved in other business activities and opportunities. If a specific business opportunity becomes available, such person(s) may face a conflict in selecting between the Company and his or her other business interests. If such a conflict arises, our business and results of operations could be adversely affected.
*Please refer to Offering Circular for full list of Risk Factors
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for theseshares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a "liquidation event" occurs. A "liquidation event" is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events \u2014 through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company's board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Frequently Asked Questions
"The SEC has qualified this offering" means the SEC has permitted Basil Street Cafe to offer for sale the securities described in the Offering Circular to investors such as you. The SEC is not judging the merits, accuracy, or completeness of the offering and information in the Offering Circular.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by Basil Street Cafe. Once Basil Street Cafe accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Basil Street Cafe in exchange for your securities. At that point, you will be a proud owner in Basil Street Cafe.
Preferred equity is usually issued to outside investors and carries rights and conditions that are different from that of common stock. For example, preferred equity may include rights that prevent or minimize the effects of dilution or grants special privileges in situations when the company is sold.
A convertible note is a unique form of debt that converts into equity, usually in conjunction with a future financing round. The investor effectively loans money to a startup with the expectation that they will receive equity in the company in the future at a discounted price per share when the company raises its next round of financing.
To learn more about startup investment types check out “How to Choose a Startup Investment” in our academy.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or passport
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
Until a closing occurs, you may cancel your investment at any time, for any reason. You will receive an email when the closing occurs and your securities have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page by clicking your profile icon in the top right corner.
Currently there is no market or liquidity for these securities. Right now Basil Street Cafe does not plan to list these securities on a national exchange or another secondary market. At some point Basil Street Cafe may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when Basil Street Cafe either lists their securities on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement.
This is Basil Street Cafe's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. You will also find a copy of the Basil Street Cafe's Offering Circular, which has been qualified by the SEC. The Offering Circular includes important details about Basil Street Cafe's fundraise that you should review before investing.
This investment is highly speculative and should not be made by anyone who cannot afford to risk the entire investment amount. In addition to these risks, you should carefully consider the specific information and risks disclosed in Basil Street Cafe’s profile and Offering Circular.