Xero Shoes seeks $3M in equity crowdfunding

BROOMFIELD — Feel the World Inc., which does business as Xero Shoes, has filed for an offering of common stock to the public, seeking to raise up to $3 million in equity crowdfunding.

The Form 1-A filing was made Jan. 30 with the U.S. Securities and Exchange Commission. The filing was made under Regulation A+, which allows companies to offer securities to the public, but with more limited disclosure requirements than would be typical for publicly reporting companies.

The filing must be qualified by the SEC before the stock can be offered, which could happen between mid-February and early March.

Xero Shoes’ chief executive, Steven Sashen, said the company opted for this type of equity crowdfunding — authorized by the JOBS Act of 2012 and implemented in 2015 — because of the flexibility it provides for companies to raise money.

Companies filing under Tier 2 of the program can sell up to $50 million within a 12-month period.

“It just allows us to do subsequent raises without starting from scratch,” Sashen said, adding that the company liked the idea of customers becoming owners.

“The short version is that since our customers are what built our company, we’ve always liked the idea of being a customer/owner company,” Sashen said.

Xero Shoes is based at 100 Technology Drive, Suite 315, in the Interlocken business park in Broomfield. The company reported revenue of $2.73 million in 2016, up from $1.4 million in 2015, according to the filing.

More growth might lie ahead, however, with the company projecting revenue of $7 million in 2017 and $21.4 million in 2018.

Xero’s offering states that it will offer 750,000 shares priced at $4 each. Investors can invest as little as $100.

Xero is a lifestyle footwear company, offering minimalist casual and athletic shoes, recreation sandals and other products. It sells its products through its own website, via third-party websites such as Amazon and in some retail stores and kiosks, as well as through wholesale distributors.

The company’s offering circular states that it seeks to increase its market penetration through:

• Focus on expansion of the wholesale channel into national key accounts and new independent retailers with full marketing and point-of-purchase support.
• Expanded digital marketing focused on data analytics and high return on investment.
• Increased global sales through addition of select international distributors.
• Expansion of retail kiosks in shopping malls and international airports.

Proceeds from the offering will be used for new products, marketing, additional production and customer-service staff, expansion of employee benefits, upgrades to the company’s online shopping cart, additional office space and inventory expansion.

“The Company intends to use all proceeds from this Offering to grow the business,” the offering circular states.

Correction: This article originally included incomplete revenue projections for Xero in 2017 and 2018, listing only online projections. BizWest regrets the error.

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