Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
Botanical inspired nonalcoholic spirits, bringing sophistication & flavor to every drinking occasion
Milestones
Curated Beverages USA Inc. was incorporated in the State of Delaware in April 2022.
Since then, we have:
- $550K revenue run rate in 2024, our second year of operations, with 103% growth in DTC
- 50,000 bottles shipped to date, and growing
- Updated to all-natural preservatives, perfectly positioning product for natural grocery channel
- Two products awarded Gold and Double Gold at the prestigious San Francisco World Spirits Competition
- Our Blood Orange Aperitif was named a must-try aperitif in both alc and non-alc categories by SFWSC
- Team with CPG and retail expertise from SAB Miller, e.l.f. Cosmetics, and Walmart
Historical Results of Operations
Our company was incorporated in April 2022 and has limited operations upon which prospective investors may base an evaluation of its performance.
- Revenues & Gross Margin. For the period ended December 31, 2023, the Company had revenues of $356,085 compared to the year ended December 31, 2022, when the Company had revenues of $33,049. Our gross margin was 56.43% in fiscal year 2024, and 44.15% in 2023.
- Assets. As of December 31, 2023, the Company had total assets of $205,784, including $86,727 in cash. As of December 31, 2022, the Company had $114,677 in total assets, including $65,383 in cash.
- Net Loss. The Company has had net losses of $263,833 and net losses of $64,469 for the fiscal years ended December 31, 2023 and December 31, 2022, respectively.
- Liabilities. The Company's liabilities totaled $292,391 for the fiscal year ended December 31, 2023 and $15,451 for the fiscal year ended December 31, 2022.
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
To-date, the company has been financed with $241,695 in equity, $392,500 in SAFEs, and $25,000 in debt.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 12 months. 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. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Curated Beverages USA Inc. cash in hand is $37,407, as of April 2025. Over the last three months, revenues have averaged $37,774/month, cost of goods sold has averaged $9,025/month, and operational expenses have averaged $56,489/month, for an average burn rate of $27,740 per month. Our intent is to be profitable in 24 months.
Since December 31, 2023, our business has maintained steady growth while significantly reducing net losses. We project closing the year with a 55% year-over-year increase in top-line revenue and a Net Loss Percentage of 45%, a notable improvement from 75% in 2022. This enhanced profitability is driven by higher sales, effectively covering fixed costs, alongside cost savings from strategic investments in warehousing and shipping.
Due to the seasonality of our business, August and September temporarily reduced our reported 3-month average revenue. Year-to-date, we’re averaging $44K per month in revenue, and we’re optimistic this will increase significantly through December and Dry January. Over the next 3 to 6 months, we expect our Operating Expenses will be about $50K per month with Net Losses averaging $12.5K per month. Looking ahead, we anticipate reaching $80K to $100K in monthly revenue by summer 2025.
We are not currently profitable. Our primary focus is growth and building brand awareness to secure placement in chain retail. While we have a path to profitability with the capital raised through our community campaign on Wefunder, we plan to raise additional funds toward the end of 2025 or early 2026. This additional capital will enable us to capture market share faster and work towards being the number one botanical spirit brand in the non-alcoholic space. We expect to need $500k in funding in order to reach profitability.
We currently have sufficient funds to cover our operating expenses through the end of the campaign. Additionally, our supplier has agreed to extend payment terms if any shortfalls arise, ensuring we can maintain operations without disruption.
All projections in the above narrative are forward-looking and not guaranteed.
