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

Amplified creates world-class beer and serves it in a communal beer garden environment beside thoughtfully prepared Mediterranean cuisine, all while focusing our support on local musicians and the live music experience. 

Once our Lemon Grove production facility is established in 2020, we intend to set our sights on selectively developing Amplified beer garden & music venues in Las Vegas, Phoenix, LA, Orange County, & north county San Diego. Our East Village San Diego location (opened Aug 2018) provides the ideal template for this business model.

Milestones

California Kebab PB Restaurant LLC was incorporated in the State of California in April 2011.

Since then, we have:

• 7 years of revenue growth, grossing $3.7 million in 2019.
• 2,000 barrels produced annually. Purchasing a former bakery in the under-developed Lemon Grove market to scale production by more than 5x.
• Popular direct-to-consumer beer garden + kitchens in Pacific Beach and East Village San Diego sub-markets.
• Intimate music venues at Amplified locations highlight and benefit local musicians. Weekly events + shows. Welcomes ~65 people.
• Future canning line amplifies growth of collaboration beer releases.
• The Lemon Grove facility will be our 3rd beer garden, hosting live music and food trucks to create a community-centric environment.
• International medals for the best "American Lager," "American Wheat Ale," "Vienna Lager," and "Barrel-Aged Stout."

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $2,904,698 compared to the year ended December 31, 2017, when the Company had revenues of $2,408,656. Our gross margin was 65.78% in fiscal year 2018, compared to 67.41% in 2017.
• Assets. As of December 31, 2018, the Company had total assets of $791,493, including $129,654 in cash. As of December 31, 2017, the Company had $533,930 in total assets, including $81,130 in cash.
• Net Loss. The Company has had net losses of $230,426 and net income of $8,676 for the fiscal years ended December 31, 2018 and December 31, 2017, respectively.
• Liabilities. The Company's liabilities totaled $733,036 for the fiscal year ended December 31, 2018 and $232,918 for the fiscal year ended December 31, 2017.

Liquidity & Capital Resources

To-date, the company has been financed with $925,000 in debt.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 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. 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

California Kebab PB Restaurant LLC cash in hand is $85,000, as of January 2020. Over the last three months, revenues have averaged $311,000/month, cost of goods sold has averaged $100,000/month, and operational expenses have averaged $200,000/month, for an average net margin of $11,000 per month. Our intent is to be profitable in 6 months.

We generate greater revenues in the summer.  Once we finalize our books for 2019, we believe we'll be slightly profitable for the year, but tend to be profitable in the summer and lose money in the winter.

We opened our second brewpub in August of 2018.  During the ramp-up, we operated at a loss, and during the winter of 2019 we operated at a loss.  Because of our revenues in the summer, we expect to be profitable for 2019 (but our end of year books have yet to be finalized).   We have no plans to raise further capital immediately.

We are planning to add another tasting room and beer garden in 6 - 8 months, which we hope to generate about ~$20k of additional monthly revenue for the business next year.  We also hope that our downtown location will continue to generate accelerating revenues (it's increased in revenue 25% from last year).  We also hope to increase our off premise sales and distribution in the coming year.