We have a limited operating history and have generated limited revenues to date.
Our limited operating history makes evaluating the business and future prospects difficult, and may increase the risk of your investment. To date, we have generated limited revenues and since we have just completed our first year, we have not had the opportunity to begin meaningful commercialisation efforts with respect to our products. If you are investing in this company, it is because you believe that a beverage company that offers multiple products to satisfy a range of consumer needs, is a good idea, and that our plan will ultimately lead to products that will sell in the market and succeed. Further, we have yet to turn a profit and there is no assurance that we will ever be profitable.
The market is competitive and is filled with competitors that have more funding than we do.
The beverage market for both alcoholic and non-alcoholic products is extremely saturated and big competitive companies invest a considerable amount of resources towards protecting shelf space. While our products are naturally differentiated in their design, we will need resources, otherwise we may not be able to secure space and compete in store. The Company’s current or new competitors may have better resources or spend more on marketing which may adversely impact the Company. Also, a bigger player may consider one of our brands as a serious threat to their core business and may take an offensive approach towards blocking us in the market, thus affecting our business negatively. Lastly, Federal, State and Local laws that govern alcohol sales may change, which may make it difficult to engage in sales and or conduct marketing in some territories.
We would be adversely affected if we are unable to hire & retain key employees.
The Founder is currently the sole full time employee and our success depends in part on hiring and retaining highly qualified personnel. The loss of the services of key personnel, and the failure to attract highly qualified personnel in the future, may have a negative impact on our business. Moreover, our competitors may hire more employees and further diminish our bandwidth to successfully compete in the market.
Our success depends on the efforts, experience and abilities of our management team.
All of our administrative functions and day-to-day operations will be performed by the Management Team, Strategic Advisors, industry professionals and experts recruited by the Company. Our success will depend in part upon our ability to attract, motivate and retain a sufficient number of qualified employees. The loss of employees, may be difficult to overcome and could adversely affect operating results.
We may not be able to obtain adequate financing to continue our operations.
The financials in our documents reflect the CEO's best estimation of what is required to successfully grow the company through the Seed Round. We expect that we will need to raise additional funds to continue the development, manufacturing, sale and servicing of our products. Even if we successfully raise the Maximum Offering Amount from this offering, we believe that we may need to raise additional capital in the near future to fund our research and development and manufacturing. No assurance can be given that we will be successful in these efforts.
Our existing convertible notes may not convert into equity
The Company may not raise funds sufficient to close a qualifying equity round in the future and convert our existing convertible notes into equity.If sufficient funds are not raised to close a qualifying equity round, the Investors’ only recourse may be to secure the repayment of the principal and interest of their loans from the Company. If expenses and anticipated uses of funds exceed those anticipated by the Company there may be insufficient funds to pay back the Investors’ loans, which may be detrimental to the core business and all investors that have supported the business.
Revenue projections & Customers Acquisitions may not grow as we anticipate
Sales metrics may not grow as we project, thus affecting our ability to grow, pursue subsequent funding round, and or retain employees. Revenue projections for the Company may change or be diminished. If the Company does not generate enough revenue, its business, financial condition, and operating results will be adversely impacted. Lastly, the company may potentially lose current customers for lack of interest, inability to market it’s products, or simply be outperformed by a competitor, which may detrimentally hinder the company from attracting new customers as well.
Terms of subsequent financings may adversely impact your investment.
We may engage in common equity, debt, or preferred units financing in the future. Your rights and the value of your investment in the Securities could be reduced. Interest on debt securities could increase costs and negatively impacts operating results. Preferred units could be issued in series from time to time with such designation, rights, preferences, and limitations as needed to raise capital. The terms of preferred units could be more advantageous to those investors than to the holders of common units. In addition, if we need to raise more equity capital from the sale of common units, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment. Shares of common units which we sell could be sold into any market that develops, which could adversely affect the market price.
SAFE Notes may never convert into equity
The holders of the SAFEs may not have control over when the SAFEs are converted into equity. The SAFEs will be converted into equity upon certain circumstances, with no action on the part of the holder. As a result, the SAFEs may be converted at times or under circumstances that are out of the control of the holders. In certain circumstances, such as the sale of the company, an initial public offering or dissolution or bankruptcy, holders may only have a right to receive cash to the extent available, rather than equity. We are under no obligation to convert the SAFEs into equity. We may never receive a future equity financing or experience a liquidity event, in which case, the holders could be left holding the SAFEs indefinitely. Unlike convertible notes, the SAFEs do not have any “default” provisions permitting the holders to demand repayment. We have the discretion as to whether or not to enter into a transaction that causes the conversion of the SAFEs into equity, and the holders have no right to demand such a conversion. Only in limited circumstances, such as a liquidity or dissolution event, may the holders demand payment and even then, such payment will be limited to the cash available to us to make such payments.