The SEC likes us to make sure that we provide the same information to all investors so I'll occasionally be sharing some messages and responses sent directly to us. We have always been fully transparent with our investors and have stayed in steady contact with them. Some have become close friends of SapientX and have generated business leads for us. We see your involvement as an asset... not a burden. Thank you to those of you who have stayed by our side and helped us! David Colleen, CEO
Q - I have used Start Engine previously & am a current investor. I think that was a great move since they have a huge following! I will probably invest again, with Sapient, since I love how you are a straight shooter & have a great vision of where the company is heading. Just a quick side note, I never received a t-shirt.
A (David Colleen) - We sent out several emails asking people to confirm their shipping address. Many did not respond. If I may have your address, I’ll make sure that you get your shirt.
Q - Hi David, thanks for the update! I hope you are doing well. All of this may be on startengine, which I have not yet had time to review, but what are the valuation and terms under which you are currently raising funds, and how do they differ from your most recent campaign in Wefunder?
A (David Colleen) - The terms are largely the same except that Start Engine could not have a fractional share value so we rounded it up to the nearest cent. The market cap is the same as last time plus the money raised at Wefunder.
Q - Hi, I wonder why you are raising more money now - are the money from the investors from the previous round already spent? What have those money gone to? I see that there are gifts for the new investors, maybe i have bad memory - shall i not get gift from my previous investment?
A (David Colleen) - Thanks for investing in us. Our last raise was for working capital to carry us past our customer delays caused by Covid. While business has started to resume, we are still not past all of the Covid and related supply chain issues. This has forced us to raise more money to bring us to our first strong customer revenues.
Last year and the first half of this year were awful for sales. Customers were not responding. We used the time productively to take advantage of new market segments created because of Covid such as voice enabled vending machines, an assistant for Zoom and other teleconferencing systems and life-sized assistants for digital signage in retail and transportation systems. We also completed patent submissions for the US, Japan and International patent offices.
Sorry if you didn’t receive your gift. We sent out several emails asking for address confirmation. Many people did not respond, and some emails bounced. Some of the packages that were sent were returned to us. Some investors asked for gifts, but they had not invested the amounts needed for those gifts. Please send me your address and I’ll make sure that you gift is sent.
Q - Is there any info on how you see your biz dev efforts translating into revenue, and timeframe, etc? Ie what is a realistic pro-forma if, say, you raise a min of $1mm?
A (David Colleen) - I hate to make excuses, but Covid and related issues have made it difficult to generate projections. Our revenue goals are $500k for 2022. Ordinarily, this would be a pretty achievable but there are a number of economic factors that could create new headwinds. The good news is that David Urbanic has returned to head sales and Emily Troutner just agreed to head marketing. Now, it’s up to them to execute. We have a solid product and it just needs to be sold.
Q - Understand, but if the product is compelling, should be able to find some revenue opportunities with shorter lead times than vehicle integration, etc?
How are Urbanic and Troutner being compensated? What does the expense side of the ledger look like on a monthly basis, and how do you see that changing over the next 12 months?
A (David Colleen) - Yes, vehicles are a long lead. That’s why we expanded to some other markets in 2020. We have written a number of proposals in health, appliances, consumer electronics, vending and digital signage. Most of these markets have 6-24 month product cycles. Given the current market climate, we have to push hard to get our software to ship in our customers products. That’s our 2022 focus.
I’m happy to discuss company finance at a macro level but we do not disclose individual compensation levels. Our Board keeps a close watch on compensation and please be assured that we do salary surveys to determine normal market ranges for startup level compensation. Most of our monthly burn goes to paying our team, followed by legal expenses focused on patent and funding activities.
As we gain business, we will need to ramp up our labor to support that new business. Much of our team is part time and we will be asking some to go full time as we grow. We also promote from within including Nasir accepting our CTO role this year. Our team is also quite diverse, including about 1/3 women. More and more women are entering engineering roles so perhaps we will be able to hit 50% in the coming years. BTW, our first CTO was Nicole Anderson.