Hopsters Eyes Philadelphia Expansion, Seeks $1 Million via Wefunder

Massachusetts-based brew-it-yourself bar and restaurant Hopsters has once again turned to equity crowdfunding in an effort to help finance a planned $4 million expansion into Philadelphia.

One year after securing $1.3 million from 713 investors via Wefunder, which enabled the company to open its Boston Seaport location, Hopsters is again looking to raise more than $1 million from unaccredited investors.

According to an SEC filing, the company is seeking a minimum of $300,000 via the sale of individual series A4 preferred units valued at $500 each.

To date, Hopsters has secured about $1.87 million via three crowdraising efforts, according to filings.

“Back in 2016 we raised almost 2 million dollars from over 500 investors from all over the country, these investors have been loyal stakeholders and our guests and we want them to share in our growth,” Hopsters founder and CEO Lee Cooper said via a press release.

Also according to the release, Hopsters is “in negotiation with PMC Property group” to bring its concept to 2400 Market Street in Philadelphia, the new world headquarters for Aramark Corporation, a foodservice company.

But the company’s plan to build in Philadelphia could hinge on its ability to secure additional investment beyond the crowdfunding campaign. According to the filing, Hopsters believes it will “likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company.”

“Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy,” the filing notes.

Despite bringing in more than $1.1 million in revenue in 2017, Hopsters recorded a net loss of more than $530,000 last year, according to financial statements. Over the last three months, the company has averaged about $351,000 of monthly revenue, but just $24,000 in net margin. Operational expenses have averaged $259,000 per month, while costs of goods sold have averaged $68,000 per month, the documents note.

The company’s new Seaport location brought in about $1.1 million in revenue during the first quarter of 2018, however, and Hopsters said it anticipates generating “almost” $6 million in revenue at both locations in 2018.

In an investor deck, Hopsters also outlined potential exit strategies, including a sale to a private equity firm, a restaurant group or other strategic investors. Potential buyers named in the deck include Roark Capital Group, which owns Buffalo Wild Wings; Darden Restaurants, which owns Yard House; and Samuel Adams maker Boston Beer Company, among others.

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