|
6950 Central Highway
Pennsauken, New Jersey, 08109
(856) 488-9333
www.powersportsfactory.com
slandgraf@powersportsfactory.com
Power Sports Factory, (“PSF”) imports, markets, distributes and sells motorbikes and scooters. All our motorbikes and scooters are manufactured in China, exclusively for Power Sports Factory.
On May 15, 2007 PSF signed an exclusive, ten-year, licensing agreement with Andretti IV, LLC, to brand a quality line of scooters and motorcycles worldwide. Andretti IV holds and contracts the personal name, likeness and endorsement rights of Mario, Jeff and John Andretti.
Market Analysis
While there are over 2.5 million people using scooters in the United States, research shows that more Americans are buying scooters for the following reasons:
- Volatile gas prices
- Rising cost of automobiles and insurance
- Increased road congestion and hard-to-find parking
- Environmental concerns
- A desire to return to a simpler lifestyle
As a result, the current market does not accurately reflect the potential market size. The potential scooter market in the United States is virtually untapped. As more potential buyers realize the benefits of buying a scooter given the reasons mentioned above, the market size will grow dramatically.
Research has identified several major trends affecting the consumer’s move to buy a scooter:
- Volatility in gasoline prices is driving demand in the scooter market
- Personal expression of style: constantly looking for the new material thing to express who they are
- Innovation plus convenience: seamless combination of cool and quick
- Dose of reality: this group is grounded in reality.
- Counter culture: tight knit, alternative communities counter the fragmentation of American life
Other than Vespa, no other brand in the scooter market motivates a consumer to think about purchasing a scooter. No other brand identifies with a lifestyle in the United States market. Total advertising expenditures targeted at the United States scooter market is miniscule compared to the market size potential.
Given the wide ranging demographic in the United States (which only makes the potential market larger), a clear identifiable brand needs to be established. The first brand to make an aggressive, focused pursuit of the scooter market in the United States will capture the most incremental market share. PSF believes the identifiable brand will be Andretti.
Demographics in the scooter market are a tide of conflicting currents. The age demographic falls between 16 and 70. High school students, college students, “thirty-somethings” and retirees are the four major category groups buying new scooters. Income demographics are just as spread out: low-income households buy scooters for basic transportation, middle-class families buy to battle commuter traffic, and the wealthy buy for weekend toys.
Scooter Industry Competitors
Japanese, Taiwanese, and Korean brands demand higher pricing from dealers and the consumer. Most Chinese brands have been thought to be of lower quality and without product support, hence leading to lower pricing. PSF has placed its brand as the value player who offers the highest quality Chinese brand at a discount to non-Chinese competitors. PSF’s vehicles are viewed as high quality, high performance, quality styling, with the best dealer support. PSF model’s have a fit, finish and performance that closely rivals Vespa, but at a 30% discount to their pricing
Andretti Brand
We are currently creating a marketing plan that will invest in traditional forms of advertising such as cable TV, print, and out of home advertising.
We will also look to creative non-traditional marketing plans through experiential marketing programs such as a mobile marketing tour that visits with dealers across the country and corporate partnerships with travel, car rental and media companies that enable the Andretti brand to be seen where scooters have not been seen before.
PSF believe that Americans typically identify best with a brand name they recognize. Given Vespa’s long history in the United States marketplace, they have an established name that most people think of when scooters are mentioned. The only other way in which a brand can quickly be established is by using a “personality” on a product (such as the George Forman grill and Nike’s “Air Jordan” branding with Michael Jordan). We chose Andretti because Mario Andretti is well known in the United States and European markets. His Q-Score rating is higher than the average race car driver, sports personality and performer (see Appendix A and B).
According to the US Census Bureau for the year 2000, there are 86,584,742 men and 87,551,599 women between the ages of 18 and 64. According to the Q Score Rating System for Mario Andretti which was conducted in March, 2007, 91% of the men in America between the ages of 18 and 64 know who Mario Andretti is. Of that number 74%, or 64,072,709 have a “Good”, “Very Good” or “Favorite” rating about him.
According to the same report, 80% of the women in America between the ages of 18 and 64 know who Mario Andretti is. Of that number 62%, or 54,281,991 have a “Good”, “Very Good” or “Favorite” rating about him.
PSF believes the creation of a brand with a high quality product will enable PSF to charge an acceptable premium for the Andretti models. PSF believes the American consumer is less sensitive to price differentiation and is willing to pay more for a branded, high quality product, regardless of where it is made. PSF believes its competition for the Andretti brand will be Yamaha, Honda, Vespa, Kymco and Genuine.
Qianjiang Motorcycles, (“QJ”) is the second largest producer of motorcycles and scooters in China. In 2006, QJ acquired the well-respected Italian motorcycle designer and manufacturer, Benelli Motorcycles. PSF provides high quality scooters with fresh, new, innovative, and attractive designs. Although PSF could accomplish its goals to provide a quality product for the Andretti line with a number of manufacturers, we believe there is a unique opportunity with Benelli designs that will enhance the brand’s ability to aggressively penetrate the market in the next three years.
The combination Andretti/Benelli presentation to the marketplace is a formidable new competitor that will capture significant market share from the current major players in the scooter space. PSF has negotiated an exclusive manufacturing relationship with QJ for the Andretti line.
Bike Share Source Division
On May 1st, 2009, Power Sports Factory formed an Alternative Transportation Division named "BikeShareSource (TM)". This newly launched division will provide sustainable transportation solutions to municipalities and transit agencies, property managers and real estate developers, colleges and universities, hotels, parks and other transportation related businesses. Our Bike Sharing System combines the latest CELL/RFID technology, is Eco freindly and competitively priced.
We intend to plan, develop, distribute and operate solar powered Bike Sharing Stations, enabling bicycle sharing to be an integral part of the transportation system. In addition, we intend to partner with major car sharing companies to facilitate our bike sharing solution. Our services will include sustained transportation consulting and customized solutions development, software licensing, equipment manufacturing and distribution.
The main focus of the division will be on Bicycle Sharing Market, which is an emerging form of environmentally friendly public transportation that is growing at a significant pace. The number of bike sharing programs worldwide nearly doubled over the last 12 months, according to research information provided by CityRyde, LLC. Continued growth is expected primarily due to increased environmental impact awareness, increased usage of public transit systems and greater need for decreased traffic congestion.
Many cities, including Denver, San Francisco, Chicago, Philadelphia, Phoenix, Minnesota, Miami, Boston, Portland are considering Bike Sharing Programs. Just a few months ago, NYC Dept of City Planning released a Feasibility Study describing a city wide Bike-Share Opportunity in New York City and estimating the cost for initial stage to be $58 million.
On May 29th, 2009 Power Sports Factory, Inc. announced that it has entered into a Joint Venture Agreement with CityRyde LLC, the premier Bike Share Consulting Company. CityRyde will provide Power Sports Factory with product design, RFP development, and help grow PSF’s “Bike Share Source’ Division.
CityRyde LLC, is a sustainable transportation consulting company that specializes in bicycle sharing, headquartered in Philadelphia, PA. Company's mission is to enable and maximize the environmental, economic, and social benefits of bicycle-sharing by consulting on best practices to ensure self-sustaining and successful program implementations. CityRyde is in final stages of developing a collaborative back-end information management solution mash-up (code name Oyster) that will enable bike sharing, car sharing, and other sustainable transportation models a way to intelligently manage their programs. Company has recently won the prestigious Top Green Business of the Year Award and its Co-Founder, Timothy Ericson, was recently featured in the June 2009 issue of Entrepreneur Magazine. With over 3 million readers, CityRyde has been listed amongst some of the most innovative companies in the Entrepreneurial World. Additional information about the company is available at http://www.cityryde.com.
Our History
Power Sports Factory, Inc., is a Delaware corporation formed in June, 2003. PSF imports, markets, distributes and sells scooters. Our Product is marketed under the “Andretti” and “Yamati” brands. Pricing for scooters to dealers and distributors ranges from $750 to $2,800 depending on size and specification.
PSF finished 2008 with $2.3mm in revenue as we changed our product mix and took the company public. Additionally, we finished the restructuring of PSF which included raising new equity capital, finding a inventory financing partner, bringing in new management and cutting our operational budget.
2008/2009 Highlights
· Closed a $1,000,000 inventory financing line
· Restructured our Andretti deal to convert $1,340,000 in AP to $150,000
· Converted a $510,000 in loan to equity
· Converted $250,000 in AP to our manufacturing partner into equity
· Hired the top public relations firm in the US
· Formed a new division focused on the rapidly growing Bike Sharing Industry
Management
On August 14, 2008, the Board of Directors of the Company appointed Shawn Landgraf, who was elected to the Board of Directors on July 29, 2008, as Chief Executive Officer and Secretary.
Shawn Landgraf, age 36, graduated with honors from The Smeal College of Business at the Pennsylvania State University in 1995. From 2001 to present, he has served as Chairman and CEO of Magnus Associates, a Management Consulting firm with advisory expertise in domestic and international private equity, investment banking, and business development matters. From 1996 to 2001, Mr. Landgraf was the founder, President, and Chief Operations Officer of TSI Broadband. Within five years of market entry, TSI Broadband became the leader in commercial broadband services. From 1997 to 2001, Mr. Landgraf also served as Chairman of Aptegra Services, a premier provider of network integration and consulting services. Aptegra Services enabled small to medium-sized companies to leverage technology in order to gain an edge over the competition. Prior to 1996, Mr. Landgraf served as a financial analyst in the equity research division of Prudential-Vector Securities, in Chicago, IL, where he covered technology, biotechnology and healthcare companies.
Public Relations
We recently hired 5WPR located in New York City. 5WPR is an entrepreneurial, full service agency, 5W Public Relations has core competencies in media relations and corporate communications. They are the fastest growing public relations agency in the U.S. They will provide the following services:
· Message development and refinement
· Hot media trends and competitive research
· Coordination of local public relations teams
· Media services, including targeting, outreach, monitoring editorial opportunities, editorial calendars and opinion editorial placement opportunities
· Media communications, including daily contact with media and coordination of all interviews
· Story direction and creation
Moving Forward
Sales will be supported with an advertising and marketing budget. In order to penetrate a larger number of dealers and take advantage of the increase in advertising spending, PSF will increase its national sales force to 6 people.
PSF has lined up a logistics partner in the United States that are capable of handling our physical distribution needs on an upward scaling basis for both scooters and parts storage and delivery. The implementation of our new inventory management technology will greatly assist in our rapid but controlled growth.
Future Opportunities: North America
The most immediate opportunity is the ability to sell QJ bikes in California. California accounted for 13.2% of all scooter sales in 2008. We are currently investing the money to get the proper CARB testing completed for the QJ 50cc, 150cc and 250cc engine. We anticipate California sales will begin in September of 2009.
Additionally, PSF believes there are alternative distribution channels that are untapped. While there are over 17,000 motorcycle/scooter dealers in the United States, we currently have relationships with a small percentage of that number. In addition to penetrating more dealers, PSF believes there are other distribution points in the United States where scooters can be sold:
- Car Dealers
- Colleges & Universities
- Auto Parts Retailers
- Outdoor Equipment Stores/Lawn Shops
- Speed Shops
- RV Dealers
Appendix A – Mario Andretti Resume
Career Highlights
- Four-time Champ Car National Champion (1965, 1966, 1969, 1984)
- Formula One World Champion (1978)
- Daytona 500 winner (1967)
- Indianapolis 500 winner (1969)
- Pikes Peak Hill Climb winner (1969)
- Three-time 12 Hours of Sebring winner (1967, 1970, 1972)
- USAC National Dirt Track champion (1974)
- IROC Champion/International Race of Champions (1979)
- Named Driver of the Century by The Associated Press (December 10, 1999)
- Named Driver of the Century by RACER magazine (January, 2000)
- Second all-time in Champ Car victories (52)
- First driver to win both Champ Car and Formula One championships; others to do so since are Emerson Fittipaldi, Nigel Mansell and Jacques Villeneuve.
- Inducted into the International Motorsports Hall of Fame in Talladega April 13, 2000
- Inducted into the Automotive Hall of Fame in Dearborn, Michigan October 11, 2005
Appendix B – Andretti Q-Score
|
SPRING 2007 SPORTS Q
|
|
|
|
|
|
|
M. Andretti
|
Avg. for Race Car Drivers
|
Avg. for Sports Personalities
|
Avg. for All Performers
|
|
|
POSITIVE
|
POSITIVE
|
POSITIVE
|
POSITIVE
|
|
|
Q SCORE
|
Q SCORE
|
Q SCORE
|
Q SCORE
|
|
TOTAL SAMPLE
|
21
|
16
|
17
|
18
|
|
|
|
|
|
|
|
12 - 17 YEARS
|
20
|
25
|
26
|
25
|
|
18 - 34 YEARS
|
20
|
15
|
17
|
23
|
|
35 - 49 YEARS
|
20
|
16
|
13
|
18
|
|
50 - 64 YEARS
|
25
|
16
|
18
|
15
|
|
18 - 49 YEARS
|
20
|
15
|
15
|
16
|
|
25 - 54 YEARS
|
21
|
16
|
16
|
17
|
|
18 - 64 YEARS
|
21
|
16
|
16
|
17
|
|
|
|
|
|
16
|
|
TOTAL MALES (12 - 64)
|
22
|
16
|
16
|
|
|
12 - 17 YEARS
|
26
|
28
|
29
|
|
|
18 - 34 YEARS
|
19
|
14
|
15
|
16
|
|
35 - 49 YEARS
|
21
|
17
|
13
|
17
|
|
50 - 64 YEARS
|
24
|
14
|
18
|
14
|
|
18 - 49 YEARS
|
20
|
15
|
14
|
14
|
|
25 - 54 YEARS
|
20
|
16
|
15
|
16
|
|
18 - 64 YEARS
|
21
|
15
|
15
|
15
|
|
|
|
|
|
15
|
|
TOTAL FEMALES (12 - 64)
|
20
|
17
|
18
|
|
|
12 - 17 YEARS
|
11
|
17
|
18
|
|
|
18 - 34 YEARS
|
22
|
16
|
20
|
19
|
|
35 - 49 YEARS
|
16
|
13
|
15
|
18
|
|
50 - 64 YEARS
|
32
|
26
|
16
|
16
|
|
18 - 49 YEARS
|
19
|
15
|
19
|
17
|
|
25 - 54 YEARS
|
21
|
18
|
20
|
17
|
|
18 - 64 YEARS
|
21
|
17
|
18
|
17
|
|
|
|
|
|
17
|
|
HOUSEHOLD INCOME
|
|
|
|
|
|
UNDER $20,000
|
29
|
26
|
20
|
21
|
|
$20,000 - $39,999
|
22
|
16
|
18
|
19
|
|
$40,000 - $59,999
|
18
|
15
|
14
|
16
|
|
$60,000 AND OVER
|
18
|
11
|
16
|
17
|
|
$75,000 AND OVER
|
16
|
9
|
12
|
16
|
|
EDUCATION (ADULT)
|
|
|
|
|
|
HIGH SCHOOL OR LESS
|
27
|
19
|
18
|
18
|
|
SOME COLLEGE/DEGREE
|
14
|
11
|
13
|
15
|
|
OCCUPATION (ADULT)
|
|
|
|
|
|
WHITE COLLAR
|
19
|
15
|
15
|
15
|
|
BLUE COLLAR
|
27
|
16
|
17
|
17
|
|
RACE
|
|
|
|
|
|
NON-BLACK
|
21
|
16
|
15
|
17
|
|
BLACK
|
24
|
18
|
25
|
23
|
|
ETHNICITY
|
|
|
|
|
|
HISPANIC
|
15
|
16
|
16
|
18
|
|
COUNTY SIZE
|
|
|
|
|
|
A
|
16
|
12
|
16
|
18
|
|
B
|
22
|
16
|
18
|
17
|
|
C & D
|
27
|
21
|
17
|
18
|
|
REGION
|
|
|
|
|
|
NORTHEAST
|
20
|
12
|
14
|
16
|
|
NORTH CENTRAL
|
17
|
14
|
16
|
16
|
|
SOUTH
|
24
|
20
|
20
|
20
|
|
WEST
|
23
|
16
|
14
|
17
|
|
|
|
|
|
|
|
Feed Entries
