|1||$245k in net profit AND all reinvested!|
|2||$700k in revenue since starting Sept. 2019|
|3||Number 1 for the search term "Hemp Buds" on Google|
|4||Top 5 CBD hemp flower bands in America|
|6||Over 10,000 customers|
After meeting Kyle, I was quite impressed with his explanation on how to stay so economically viable in his industry. I did not know the many holistic benefits CBD flower had until trying some of the products for myself. I believe in supporting companies who don't price gouge for a product that can help so many people. Dr. Strains CBD retains customers by continuously giving them quality customer service and products at such an amazing price. Kyle's insight in marketing and business strategy reflects on the success of the business and responses from happy customers! I cannot wait to watch this business grow.
"Your number 1 source for organically grown affordable hemp flower."
Our story begins with the founder and CEO Kyle Scott. Kyle stumbled upon hemp flower by accident! After living in Europe for almost 8 years he decided to return home to the US and help his family with their restaurant located in downtown Orlando. While working there he went shopping for hookahs for an event at the restaurant. Upon entering a hookah retailer he stumbled upon the cbd section of the store. He inquired with the store owner to see if those products were legal and in fact they were. Kyle then placed a $500 order with the store owner and decided to see if there was a market for the products. He tested this by placing the products on Facebook marketplace. Within 24 hours he had sold all the products and had earned 100% return on investment! (100% invested funds and 100% profit). And like that Dr. Strains CBD was created.
Over the next few months Kyle used his marketing techniques and built rapport with other merchants to source higher quality products and decided to take his business online. It's been 10 month since the start of Dr. Strains CBD but in such a short time it has grown to being one of the top 5 CBD flower brands in America! With over $700,000 in revenue since starting 10 months ago!
Dr Strains LLC. has financial statements ending December 31 2019. Our cash in hand is $15,703.09, as of May 2020. Over the three months prior, revenues averaged $117,000/month, cost of goods sold has averaged $55,000/month, and operational expenses have averaged $83,000/month.
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.
We are an online retailer of hemp flower and cbd. We rank top 5 in the nation; with over 15,000 customers and $700k in revenue since starting in Sep. 2019.
We've invested our profits into vertical integration by purchasing a farm and infrastructure which not only lower our COGS but also increases our company equity.
Our current focus is to commence our first harvest this year and to purchase a warehouse to expand our offline footprint as well as double as a nationwide distribution hub.
Over the next 5 years we have three major goals.
1. To expand product lines into other CBD related products; including: pet food and treats, topicals, edibles such as vitamins and so on.
2. To increase our brand's offline presence throughout the southeast.We have incredible online success and believe that an offline presence is just as crucial to continue our momentum.
3. We plan lastly plan to focus our efforts on medical research. We believe this will be the future of CBD.
Dr Strains LLC was organized in the State of Florida in July 2019.
Since then, we have:
Historical Results of Operations
Our company was organized in July 2019 and has limited operations upon which prospective investors may base an evaluation of its performance.
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 60 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
Dr strains LLc cash in hand is $15,703.09, as of May 2020. Over the last three months, revenues have averaged $117,000/month, cost of goods sold has averaged $55,000/month, and operational expenses have averaged $83,000/month, for an average burn rate of $21,000 per month. Our intent is to be profitable in 0 months.
There have been no material changes since the date of our financials.
Within the next 3 months we expect our revenues to be at least 125k-150k per month. As of June 2020 our revenue has hit six figures!
No, at this time there are no other sources of capital that we Dr. Strains CBD relies on. However we do also own a farm in which our revenue stream will be expanded through the wholesale of our product. Also our cost of goods sold will be reduced by 75% due to vertical expansion. Through this raise we will use our farm to harvest our own product cutting our $277k COGS for 2020 thus far down 75%.
Cash on hand is low due to overstocking on inventory; we are going into harvest which is October for new products on the market. We have 2 months of harvest on hand to give us a runway if there is a shortage. But now this has been done and we have a free 17k+ per month to use for a campaign. We also have 10k+ customers who I can target for free and access to a B2B list for $7k which has over 440k hemp / industry related companies on it all organically sourced.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
Initial raise might not be sufficient to achieve warehouse purchase. In that case we will use the funds to lease a warehouse and continue with our distribution plans.
Due to Covid-19 there are unforeseen circumstances that could arise, such as but not limited to: a mass number of people being unemployed with little to no income which would affect sales. As of now June 10th 2020 our sales have increased and this month is the highest ever ($91k in revenue so far this month).
We may stall purchasing a warehouse for 2-3 months due to Covid-. This may happen if the property market starts to crash. If that happens we will purchase a warehouse a few months into the crash in hopes to source a short-sale. If we decide to wait the 2-3 months the funds will be kept in an interest bearing savings account and untouched.
Until shares are listed on a public stock exchange the sale, trade or exchange of those shares maybe hard. We do aim to take this company public within 18-24 months but depending on the market and growth of the economy this could be delayed.
Temporary Rule 201(z)(2) provides temporary relief from certain financial information requirements by allowing issuers to omit the financial statements required by Rule 201(t) in the initial Form C filed with the Commission. This offering has commenced in reliance of Temporary Rule 201(z)(2) and, as a result, the following must be disclosed: (i) the financial information that has been omitted is not otherwise available and will be provided by an amendment to the offering materials; (ii) the investor should review the complete set of offering materials, including previously omitted financial information, prior to making an investment decision; and (iii) no investment commitments will be accepted until after such financial information has been provided.
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