|1||Ground floor investment opp in an early-stage disrupter with exponential growth potential in a rapidly emerging market|
|2||HUGE market upside with an anticipated expansion to $22B with $3.5T total market reach and 240+ million new customers|
|3||Launching 40+ experience-tested products in the body care, wellness, and athletic care verticals|
|4||No snake oil here — a Public Benefit Corp dedicated to the highest standards of transparency and trust|
|5||Unrivaled industry commitment to product safety and quality with our “Never, Ever Promise”|
|6||Team and Advisory Board with more than 60 years in CPG, e-comm, healthcare, life sciences & cannabis|
|7||Innovative, effective formulas with oversight from medical and scientific pros. It's Clean/Science.|
|8||Market-leading formulations using THC-free CBD and other, highly-beneficial phytocannabinoids (e.g. CBG & CBN)|
CBD. So much promise, so much confusion. Which brand is right? Which one refuses to use any of the 1,400 toxic ingredients, banned in the European Union and Canada, but allowed in the U.S.? Which one is leading the market with transparency, innovation, and science-backed formulations? Which one can help you ban the bad and let the good shine through?
Elēment Apothēc. Our “Never, Ever Promise” means we won’t use harmful or toxic substances, ever. Our steadfast belief in the power of nature to soothe and provide balance guides us to innovate new products and look beyond CBD to utilize other supportive phytocannabinoids and beneficial plant-based remedies. And our proprietary (never white labeled) products are overseen by Medical Doctors. So ban the doubt over which CBD brand is right for you. It's clean. It's science. It's Clean/Science.
Elēment Apothēc. Never, ever anything but good.
Nearly a decade ago, our co-founder (our current CEO calls her, "Auntie") was suffering from several debilitating medical issues, leading to muscle aches, eczema, severe headaches, insomnia and a realization — the products she depended on didn't seem to be doing the job.
For the next several years, she immersed herself in the science of plant-based remedies, crafting formulations that helped soothe her symptoms and give her the relief she had sought, ultimately leading to the creation of more than 40 custom products for herself and others— lotions, balms, oil rollers, inhalers, bath salts and more.
At a time of increased stressors and negative environmental and lifestyle factors, we're bringing this prolific and successful, home-based business, from the kitchen to the world. Rebranding and expanding, adding serious science to our mantra of "clean," we're driving the standard we call, Clean/Science. It's all in an effort to offer these amazing and highly-effective products on a larger scale in order to help many more people experience their life-changing benefits.
Introducing: Element Apothec.
There are currently more than 1,400 toxic or harsh ingredients, banned in the EU and Canada, yet still widely used in the U.S. beauty, wellness, and supplement markets. Why? Money?
Maybe. After all, consumers are anxious to experience the promise of CBD and Phytocannabinoids — and when demand is this high, corners can be cut. Some use questionable, cheap ingredients to maximize profits. Some even buy "white label" products, simply adding a logo and packaging to products available to anyone. Few partner with medical professionals to provide oversight to their products. At best, these practices are short-sighted and careless. At worst, they’re dangerous with long-lasting, harmful effects.
The beauty and wellness industries have abandoned their customers in the name of higher profits. Element Apothec aims to change that.
Beauty and wellness brands have failed the consumer by pushing out low-quality products that contain toxic, harmful, and ineffective ingredients that can do more harm than good. Element Apothec’s mission is to create products that actually help the consumer and are safe for both the user and the environment. Our products are superior to anything we've seen in the market. They're safe and effective. We hold ourselves accountable to unparalleled standards of safety and quality. We have transparency at every level.
In the end, quality wins.
Our product formulations are truly unique, utilizing a proprietary blend of THC-free, hemp-derived Phytocannabinoids CBD, CBN and CBG, essential oils, and natural ingredients to provide soothing relief.
We believe consumer education is key. That's why we plan to educate consumers about making the best possible decisions when it comes to their health and wellness. We’re creating a platform to share information about the numerous therapeutic benefits of Phytocannabinoids and other plant-based ingredients.
As an early-stage investor, you have the opportunity to back a company with huge market growth potential. With the convergence of the emerging hemp/CBD market, natural wellness and clean beauty movements, need for sustainable practices, and consumer desire for evidence-based products, the time is now for Element Apothec — and you.
Element Apothec has a keen understanding of current market dynamics and drivers, and we are well positioned to lead the projected $22+ billion market materializing through 2023 (Brightfield Group).
Below are key drivers and opportunities we believe will affect market and brand outcomes:
Element Apothec's products are disruptive and unique to the Hemp/CBD space - our Chief Product Officer, Lola Daleo along with our Chief Science Officer, Dr. Swathi Varanasi, and Advisory Board Member, Dr. Marvin Singh, bring 25+ years of product innovation, integrative medicine, pharmacology, and alternative medicine experience to the Element Apothec brand.
The Element Apothec line contains innovative skin care, wellness, and athletic care products that are natural and organic, Phytocannabinoid-infused and plant-based, utilizing the healing powers of nature coupled with scientific innovation.
WELLNESS: Promoting a whole-body approach to wellness, our tinctures and topicals are crafted to enhance wellbeing, provide relief from daily stressors and allow for even deeper relaxation. Each formula harnesses the natural restorative power of Phytocannabinoids and plant-based oils to aid in sleep, anxiety, digestion, fatigued muscles and joints, and so much more.
SKIN CARE: Crafted from nourishing oils and plant-based ingredients, our skin care delivers naturally powerful results — moisturizing skin, softening lines and wrinkles, and soothing common skin ailments like eczema and psoriasis.
ATHLETIC CARE: Formulated to enhance joint and muscle recovery, our Athletic Care line supports the wellness of athletes inside and out. From topicals to tinctures, our products tap into the beneficial properties of Phytocannabinoids and essential oils to offer focused pain relief and whole body relaxation.
PHASE 1 PRODUCTS
With 10+ SKUs ready for our Phase I (Q3 2020) launch and many more (30+) SKUs in various formats (tinctures, topicals, capsules, and nutraceuticals) across multiple consumer categories (body care, wellness, athletic care, sports nutrition, etc.) ready for Phase II and beyond — combined with out unique brand position, Element Apothec is poised and primed to be the next big disruptor in the health, wellness and clean beauty markets.
We will be taking a multi-pronged approach to our sales and marketing strategy.
We look at our customers from a psychographic perspective. Our customers want to take (better) care of themselves and live better lives. This means wanting better sleep, less tension, better recovery after exercise, relief from daily stressors - both physical and emotional, or simply desiring to look their best.
They want products that improve their lives without harmful effects. They're educated or want knowledge to better understand that what goes on their bodies is just as impactful as what goes in their bodies. They want a company they can trust.
Clean Beauty and Clean Wellness isn’t just a trend; it’s a movement that impacts virtually every element of the beauty and wellness industry. Modern consumers are better informed and are demanding transparency.
Current Traction includes a Loyal base of customers from the home-based business, who remain engaged, eagerly awaiting the new products; Retail commitments from several retail locations, medical offices, gyms, and marketplaces; strong social media following.
Current Milestones include building a talented and knowledgable advisory board with over sixty years of combined experience; signed a letter of intent to be featured in a new, innovative pop-up retail store in Boston later this year; confirmed commitment for inclusion in subscription box service focused on wellness; retained the services of leading marketing and PR agencies; ready to launch with 10 SKUs.
Future Milestones include the launch of 2-3 new products per quarter over the next 18-24 months; develop new, innovative products in coordination with our medical team; secure additional retail locations including big box and mass retail; add additional 1-2 subscription box service; continue to build out our management and advisory teams; continue to develop a robust consumer knowledge base and education platform;
We are raising a convertible note of up to $500,000 at a market cap of $4M.We will use the funds for:Product Inventory, Marketing, General Operating Costs, Business Development (incl. R&D), and WeFunder Fees
Element Apothec, Inc., founded in 2020, is a Delaware Public Benefit Corporation startup operation with four entrepreneurial founders who have established our unique brand, IP portfolio (including proprietary formulas, domains, and trademarks) and a full infrastructure from operations to finance. We have a team with decades of e-commerce, branding, marketing, human resources, executive leadership, operational management, integrative medicine, pharmacology, fitness, and CPG experience and are poised to become a market-leading brand in the soon-to-be $22+ billion-dollar Hemp/CBD industry*.
*Source: Brightfield Group
Element Apothec has financial statements ending April 30 2020. Our cash in hand is $0, as of April 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $1,200/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.
Element Apothec develops, formulates, and sells all-natural, plant-based body care and wellness products infused with beneficial phytocannabinoids.
In five years Element Apothec hopes to be a leader in the CBD/hemp-based wellness space with sales over $350 million (this cannot be guaranteed). At that point we would look to a strategic acquisition by a large, multinational brand, giving us the working capital and reach to extend our product lines and boost customer accessibility.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Element Apothec, Inc. was incorporated in the State of Delaware in February 2020.
Since then, we have:
Historical Results of Operations
Our company was organized in February 2020 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
To date, the Company has been funded with $8,600 in equity.
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 6 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
Element Apothec, Inc. cash in hand is $0, as of April 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $1,200/month, for an average burn rate of $1,200 per month. Our intent is to be profitable in 6 months.
Since April 30, 2020 we have spent a total of $1500 on marketing expenses. Additionally, we will have a monthly expense of $600 for advisory services which commenced on April 1, 2020.
As a pre-revenue brand launching to market in the near future, our financial position is about to rapidly change as we bring in investment funds and launch our Phase 1 products. We anticipate significant increases in sales and expenses over the next 3-6 month. We believe that we'll be able to reach consistent profitability through our omni channel approach within 6 months. We expect needing a minimum of $50,000 to reach profitability in that time frame. These projections cannot be guaranteed.
Our primary expenses will be manufacturing costs, packaging, public relations, business development and marketing efforts.
There are no other sources of capital in the immediate future, although the founders can contribute capital to the business, if needed.
The Company is still in an early phase and is just beginning to implement its business plan. There can be no assurance that it will ever operate profitably. The likelihood of its success should be considered in light of the problems, expenses, difficulties, complications and delays usually encountered by companies in their early stages of development. The Company may not be successful in attaining the objectives necessary for it to overcome these risks and uncertainties.
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.
The Company’s success depends in large part on its ability to maintain consumer confidence in the safety and quality of all its products. The Company has rigorous product safety and quality standards. However, if products taken to market are or become contaminated or adulterated, the Company may be required to conduct costly product recalls and may become subject to product liability claims and negative publicity, which would cause its business to suffer. In addition, regulatory actions, activities by nongovernmental organizations, public debate, and concerns about perceived negative safety and quality consequences of certain ingredients in our products may erode consumers’ confidence in the safety and quality issues, whether or not justified, and could result in additional governmental regulations concerning the marketing and labeling of the Company’s products, negative publicity, or actual or threatened legal actions, all of which could damage the reputation of the Company’s products and may reduce demand for the Company’s products.
The Corporation's business will be subject to the risks inherent in the ownership and operation of hemp-related business. These risks include, but are not limited to, general and local economic conditions; changes in supply of and demand for hemp and hemp CBD products; the financial resources of consumers; changes in hemp policy or other laws; supply shortages; various uninsured or uninsurable risks; natural disasters; changes in hemp-related taxes; environmental liabilities; and other factors that are beyond the control of the Corporation's board of directors and officers.
The amount of capital the Company is attempting to raise in this Offering may not be enough to sustain the Company’s current business plan. In order to achieve the Company’s near and long-term goals, the Company may need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital in the future, we may not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
Changes in government regulation could adversely impact our business. The Company is subject to legislation and regulation at the federal and local levels and, in some instances, at the state level. The FCC and/or Congress may attempt to change the classification of or change the way that our online content platforms are regulated and/or change the framework under which Internet service providers are provided Safe Harbor for claims of copyright infringement, introduce changes to how digital advertising is regulated and consumer information is handled, changing rights and obligations of our competitors. We expect that court actions and regulatory proceedings will continue to refine our rights and obligations under applicable federal, state and local laws, which cannot be predicted. Modifications to existing requirements or imposition of new requirements or limitations could have an adverse impact on our business.
Laws and Regulations affecting the regulated cannabis/hemp industry are constantly changing, which could materially and adversely affect our proposed operation and growth. Local, state and federal cannabis laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our operations. It is also possible that regulations may be enacted in the future that will be directly applicable to our proposed business. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.
Damage to our reputation could negatively impact our business, financial condition and results of operations. Our reputation and the quality of our brand are critical to our business and success in existing markets, and will be critical to our success as we enter new markets. Any incident that erodes consumer loyalty for our brand could significantly reduce its value and damage our business. We may be adversely affected by any negative publicity, regardless of its accuracy. Also, there has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet- based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact. Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction.
We may implement new lines of business or offer new products and services within existing lines of business. As an early-stage company, we may implement new lines of business at any time. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract clients, or be subject to cost increases. As a result, our business, financial condition or results of operations may be adversely affected.
Reliance on Third Party Suppliers and Manufacturers. The Corporation relies on third-party suppliers and manufacturers for the production of their products. Any disruption to the supply chain could negatively impact the Company and its ability to produce and sell said products.
Restrictions on Promoting Hemp/CBD Products. The FDA has grown increasingly concerned at the growing trend of CBD products claiming to treat or cure certain diseases or conditions. Existing and future restrictions and controversies over what can and cannot be legally stated about a Hemp/CBD product could negatively impact sales and expose the Corporation to sanctions and/or litigation.
General Economic and Market Conditions. Th Hemp/CBD industry generally and the success of the Corporation's business activities both will be affected by general economic and market conditions, as well as by changes in laws and national, international and state political and socioeconomic circumstances. A sustained downturn in the United States or global economy (or any particular segment thereof) could adversely affect the Corporation's profitability or impede the Corporation's ability to maintain or continue any growth in sales.
Public Benefit Corporation Risks. The Corporation is a Public Benefit Corporation, meaning the Corporation takes into account the interest of all stakeholders, not just shareholders. As such, the Corporation will make decisions based on the morality and efficacy of the issue at hand, and not necessarily the profitability of such decision. Therefore, there can be no assurance that the Corporation will continue to remain profitable after its social initiatives are accounted for and realized.
Banking Risks. There have been many stories of certain banks suddenly shutting down and freezing certain accounts. A financial event may occur that will negatively impact the operation of the Corporation and its profitability. Such risks include having funds frozen by the Corporation's bank, shutting down the payment processor so that transactions fail to process, and charging higher prices to provide banking and financing services that may be out of the realm of profitability for the Corporation.
COVID-19's effect on the economy could cause a negative impact to the Hemp/CBD industry due to a decrease in consumer spending.
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