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Bofat Investments, Inc.

Bofat Investments, Inc.
Short Description
Bofat is offering 2.5 million shares for $2 a share by way of Reg A+ Tier II for up to $5 million. Minimum purchase of 100 shares for $200. Bofat is on a mission to carry out its plan of creating a 70% return on investment as it develops its power plant and provides much needed energy production services to the Jamaican economy.
  • Deal Description
  • Financials
  • Industry And marketing Analysis
  • Executive Team

Deal Description

Bofat saw an opportunity and demand for electricity power in the Jamaican economy and sought to create success by filling in the gap. Jamaica's high electricity costs and low energy supply sparked Bofat's plan to develop a power plant using clean gas burning furnaces in order to produce and sell electricity back into Jamaica's power grid. 


Currently, such electricity production is only provided by the Jamaican government. Because they are beginning to see a value in private sector energy solutions, Jampro (an investment government agency) is working closely with us on our project and we have been able to develop a formidable and distinctly valuable relationship with them which will be key for Bofat's execution. This will be of great value in moving smoothly through regulatory approval and compliance, which would otherwise be the company's largest obstacle. As a private company, we will have the capacity to work through a streamlined cost structure, minimizing expenditure and reducing waste.


The company's business model offers a stability in profit with a simultaneous probability for growth and expansion. Bofat will be able to see the fruition of our calculated projections (70% return on investment) in producing 6 megawatts of electricity from natural gas through the operation of power plant facilities. Our vision going forward is set in our aggressive three-year growth strategy. Post-offering, Bofat's power plant location will be developed, the first six months of operation will be financed, and capital will be used to purchase clean gas fired turbines. 


Because there is a demand for electricity power due to lack of supply, combined with the fact that electricity will always be a fundamental need, Bofat has its foot in the door to be in a favorable and solidifying position as a key electricity supplier.  


Bofat plans to run its gas powered plant for 330 days a year round the clock. The plant will cost $3 million to build and its total operation expenses (including wages) are to be at $50/MWH; currently the retail energy price of electricity is $69 MWH. The Company will sell its energy to local utilities and municipalities. To create a steady stream of income, Bofat will develop relationships with core purchasers and maintain ongoing divestiture and purchase agreements. Management expects that in targeting two core groups of purchasers, government agencies and electricity wholesalers, will result in the acquisition of large scale electricity delivery contracts for use of energy in large scale applications.




Financials

Financing will be used for the following:

  • Development of the Company’s Power plant location
  • Financing for the first six months of operation
  • Capital to purchase clean gas fired turbines



Projected Startup Costs

 

Initial Lease Payments and Deposits

$100,000

Working Capital

$300,000

FF&E

$250,000

Leasehold Improvements

$250,000

Security Deposits

$25,000

Insurance

$50,000

Clean Gas Facility

$2,000,000

Marketing Budget

$20,000

Miscellaneous and Unforeseen Costs

$5,000

Total Startup Costs

$3,000,000


Mr. Jinadu intends to aggressively solicit additional rounds of capital and concurrently reinvest a significant portion of the Company’s after tax income into the acquisition of new locations in frontier markets.

Mr. Jinadu expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.


Proforma Profit and Loss (Yearly)

 

 

Year

1

2

3

Sales

$3,278,880

$3,278,880

$3,278,880

Expenses

$2,376,000

$2,376,000

$2,376,000

EBITDA

$1,273,289

$1,273,289

$1,273,289

Taxes, Interest, and Depreciation

$370,409

$370,409

$370,409

Net Profit

$902,880

$902,880

$902,880



The Company has based its proforma financial statements on the following:


  •      The Power Plant will have an annual revenue growth rate of 5% after 3 years.
  •       The Owner will solicit $3,000,000 of equity funds to develop the business.
  •      The Company will invest 25% of its after-tax profits back into the Company’s operating infrastructure.



Sensitivity Analysis: Bofat's revenues are moderately sensitive to changes in the economy. In the event that electricity prices decline, the Company may see a reduction in its revenues. However, price of oil is expected to continue to remain weak as reserves are bloated and the price of oil has decreased significantly over the last two years.







Industry And marketing Analysis

Economic Outlook

The current geopolitical environment has led Bofat to believe that energy prices will continue to remain low in the near future. The general Middle Eastern and OPEC over production of oil and gas has led many economists to believe that there is a sixty percent discount associated with the price of crude oil and natural gas and related energy products. When it comes to the frontier market economy, we see a significant opportunity to enter the Jamaican market with a source of clean gas energy. Many politicians and special interest groups have promoted the development of clean energy solutions to take advantage of the low natural gas prices.


Inflation is also a concern for the Company. As the inflation rate decreases, the purchasing power parity of the Jamaican currency decreases in relation to other currencies. This may pose a significant risk to the Company should rampant inflation, much like the inflation experienced in the late 1970s, occur again. In this event, the Company will enlist the services of a qualified derivatives focused investment bank to manage large scale currency transactions that would offset the risks normally associated with the importation of natural gas into the Jamaican market. The primary risk of rapid inflation in the economy would contribute to a slowdown in spending among consumers, but it would also effect the Company’s ability to borrow funds for the expansion of the number of clean gas fired turbines operated by the business.


Industry Analysis

Many energy companies provide power generation to the general public in the frontier market country - Jamaica. The trend among these natural gas powered electricity producer is expected to grow significantly as the need for power grows. Currently, the price of oil and other fossil fuels are at an all-time low and this can provide consumers with cheap, reliable and clean gas power electricity.


Investing in frontier market – Jamaica energy industry will help the country because of the following reasons:

1. Due in part to the central role of the bauxite and alumina industry, Jamaica has a high energy intensity, consuming an average of over 4,800 kWh per US$1,000 of GDP compared to other Latin American and Caribbean countries.

2. The hotel & tourism sector faces high electricity costs due to lighting and air-conditioning needs (up to 10% of revenue for some hotels).



Executive Team

Olukayode Jinadu – President/CEO, Director


Olu is an experienced project management executive with expertise in global frontier marketing project execution. Over his 17 year career in corporate America he has held numerous leadership positions. He has worked on 250+ projects. He has lived and worked in Lagos, Vancouver, San Diego, Minneapolis, and Indianapolis. Mr. Olukayode Jinadu has worked at, United Technologies, East Hartford, CT - Senior Manager 2014 – 2017, and Cummins Inc, Columbus, IN - Project Leader 2007 – 2014


Olu serves as the President and CEO of Bofat Inc. and he is responsible for overall plan of operations for our energy production strategy. He is also responsible for ensuring all frontier government regulations are followed.


Olu earned a Bachelor of Science in Engineering from the University Of Lagos, Nigeria in 1999. After moving to the United States, he obtained his MS from the San Diego State University. Upon graduation in 2007 he began analyzing undervalued investments globally. He is also a 2016 Executive MBA graduate from the University of North Carolina at the Kenan-Flagler School of business.

Olu’s personal interests include spending time with his wife enjoying family hobbies such as Broadway plays and fine dining. Olu is widely travelled to 15 countries in 5 continents. His passionate about soccer having played it since childhood up to the collegiate level. He is a regular volunteer at the Redeemed Christian Church of God in Minneapolis.

 

Gbeminiyi Jinadu - Officer


Niyi serves a consultant for Bofat Inc. His role is the comprehensive monitoring of operations.


Niyi earned a Bachelor of Science second class division from Lagos State University, Nigeria in 2011. Upon graduation in 2011 he began consulting for frontier market businesses in the area of operations and project management. Niyi also consults in the project management for businesses in frontier markets. Mr. Gbeminiyi Jinadu worked at CA Consultants, Lagos, Nigeria - Project Engineer - 2015 to 2017.


Niyi’s personal interests include spending time with family, reading and writing. His passionate about basketball having played it since childhood up to the collegiate level. He is a youth minister at the Redeemed Christian Church of God in Lagos, Nigeria. In addition, Niyi is widely travelled in frontier markets and in Europe.




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