|1||Rolled out in 16 states since securing National distribution partnership with Vision Wine & Spirits|
|2||Recent agreement with national retailer.|
|3||2018 and 2019 - Top Ten Craft Specialty Distillery as voted by USA Today readers.|
|4||Investment dollars will go straight to sales activities in order to capitalize on current momentum.|
|5||Craft spirits sales has outpaced the industry for the last 5 years with no signs of slowing down.|
|6||We are releasing an Amaro that will add to top-line growth.|
|7||Our products use half the sugar of competition, micro-batched using the finest selected botanicals.|
I have seen Martin’s passion over many years building his company from a one product seasonal hobby to an award winning 6 product craft spirits business.
He is fanatical about quality and are able to create exceptional taste profiles at lower sugar content than comparable brands. I am a big fan and have converted many more !
His strong finance background is a huge asset to ensure viable pricing and promotional strategies and he understand what it would take to scale. Partnerships are critical in the manufacturing and distribution of spirits - Martin has build up a fantastic network of industry professionals to support him.
I believe Martin has the right combination of passion, product, experience and business acumen to take his business to the next level with the right level of investment.
We started this company to share my Swedish great grandmothers recipe of a glogg. This is the reason that the original business name is Geijer Glogg Inc. We never realized that we would fall in love with the craft spirit space so wholeheartedly and that we would release further niche products for the cocktailing and mixology scene. We originally released our glogg in 2013. In 2017, Geijer Spirits started in earnest with the release of another Swedish spirit - an Aquavit. This was quickly followed by a Fernet, Orange Liqueur and our Spiced Liqueur. In late 2019, we released our Falernum with great reception. We ended up winning best of class at the ADI tasting competition. This is a national tasting competition that is focused on craft sprits - so this is a big deal!.
We have our seventh product ready to be released in the next few months and will turn our attention fully to market penetration and growth (while still tinkering in the kitchen of course).
The single largest challenge that a craft spirit company faces is getting the attention of a distributor. There are so many spirit companies and very few distributors in key markets. This means that the majority of smaller companies are not getting the distribution that their products would deserve. Another challenge is the bars' ordering preferences. They prefer to work with a smaller number of distributors to simplify their ordering and manage their account payables etc. Often the bar manager wants craft products but the back office will not allow a new vendor to be set up in the system.
In 2017, we were self-distributing in California and I was the only sales rep, delivery guy, accounts receivable, warehouse guy and the whole executive team. It was hard finding time for things other than production, sales, delivery and following up on outstanding invoices. This is a tough way of running your business - but you do learn every aspect from the ground up. At the end of 2017, we found a smaller distributor (JVS Imports) that liked our products - and we liked them - and they brought our lineup into their portfolio.
Then in 2018, we won Gold medal in the San Francisco International Spirits Competition. This opened the door for a conversation with Vision Wine and Spirits to bring in the Fernet to be distributed nationally. This is the first large cornerstone that Geijer Spirits has put in place. The national distribution agreement was announced on Sep 17, 2019. We have since opened 16 new states with Vision.
This was quickly followed by the release of the Falernum that went straight to national distribution. The immediate success at the ADI competition also had a great prize. The winners of the best of class category would get a meeting with a national retail chain to discuss placement. We are fortunate to have just signed the agreement with Vision for national distribution, allowing us to take advantage of the opportunity that winning best of class afforded us. On May 15, 2020 we received the go ahead to place both the Falernum and Fernet at large number of stores in multiple states. This is the second large cornerstone that Geijer Spirits has put in place.
We are also releasing our upcoming Amaro straight to national distribution. This time, we have the existing relationships in place and can quickly get the product through the channels and into the market. This is the third cornerstone that will allow for the growth needed to bring Geijer Spirits to the next level - and the reason we are looking for funds. We are looking to get feet on the ground in the key markets to drive the sales and educate the on premise accounts about our products. Essentially, we need to get a salesforce out there in order to capitalize on the building blocks we already have in place. In short, we are looking for investments to help with the final cornerstone (brand ambassadors), the forth and critical stabilizer of the building.
While we have not had time to take full advantage of the foundation described above, we started with a 144% growth in FY18 and and 79% in FY19. We were on track for setting new records in Q1 of FY20 as well, but unfortunately the momentum fell off with the COVID pandemic. We are looking past the short term and want to make sure we have a team in place as soon as possible to ensure that we don't lose out on all the opportunities that we have currently teed up for ourselves. We know that the medium- to long-term holds great growth for us, and we are excited to see all our work come to fruition.
Geijer Spirits has financial statements ending December 31 2019. Our cash in hand is $12,500, as of June 2020. Over the three months prior, revenues averaged $3,491/month, cost of goods sold has averaged $4,099/month, and operational expenses have averaged $376/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 make top quality craft spirits in niche markets and have been recognized by USA Today as a top 10 craft speciality distillery in both 2018 and 2019 while winning Best of Class awards in national tasting competitions.
Our current lineup consists of California branded:
.... and an upcoming Amaro
We are looking to dramatically increase awareness of our products across the US and become more of a household brand while staying true to our roots. What will always set us apart will be our origin story and our hand-crafted products. In terms of volume - we are looking to get to 30-50K 9L cases in the next 5 years, something we have laid the groundwork to be able to do.
Geijer Glogg Inc. was incorporated in the State of California in May 2011.
Since then, we have:
Historical Results of Operations
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 $15,000 in convertibles.
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. We plan to raise capital in 18 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
Geijer Glogg Inc. cash in hand is $12,500, as of June 2020. Over the last three months, revenues have averaged $3,491/month, cost of goods sold has averaged $4,099/month, and operational expenses have averaged $376/month, for an average burn rate of $984 per month. Our intent is to be profitable in 12 months.
The COVID pandemic closed down on-prem accounts and halted sales momentarily. We were heavily tilted towards on-prem sales and have started to pivot into off-prem sales during this period. We believe that this will allow us to come out more balanced from this business interruption as we will have increased off-prem presence, online sales and adding back a strong on-prem business.
Sales will still be depressed due to the on-prem depression as a result from the COVID pandemic. We do however, forecast a slight growth in 2020 from 2019 and foresee a monthly run rate of revenues to be in the $15-$20K per month and expenses at $20-$25K at the end of the year while investing in the business.
This forecasted business case presented here, assumes the minimum investment level being met. This amount will allow us to invest in the business at a higher rate than the revenue growth would allow. Together, the revenue levels (at six figures and growing) and the investments will allow the company to scale up faster than natural revenue growth would allow. However, we do not foresee needing additional capital outside of the investments we ask for and the revenue from the ongoing business.
Even though alcohol sales are relatively recession proof, consumers preferences and tastes fluctuate. There is always a risk when you are producing a consumer product, that the product/taste could fall out of favor for the next innovation. This could result in loss of sales or placements in on-prem accounts.
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.
In light of the current situation in relation to the COVID pandemic there is a clear short-term risk that the on-prem sales will be deflated for the next 12-18 months. This will have a negative impact on a business that have modifier spirits in its portfolio.
The spirit industry is dominated by a few large brands. These brands continuously seek to innovate and disrupt and as a smaller company there is a risk that what they invent could be conceived to be in the craft spirit space and then directly competing with us in one or more product categories.
We are also subject to general risks of smaller companies. These include cash-flow limitation, defaults of larger customers or loss of key customers that directly threatens the business. The smaller a company is, the larger the impact from this external threat would be.
With a minimal marketing budget there is also the risk of not having the consumers mind-share and could result in lost opportunities when a consumer is at an off-prem location selecting from a product range in a certain category to make purchasing decisions. If our product do not come to mind or spark that recognition, the sale can be lost.
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