Question 1

Hello Mr. Robinson, I have a couple of questions: - Having in consideration the shortage in production caused by the change in facilities, are there any business partnerships that were lost? Any major accounts? Best regards, Miguel Costa

Accepted Answer

Hi Miguel, it's great to hear from you. The relationships with our distributors and accounts took us a lot of time and work to establish. Fortunately, the effort we put into building their trust paid off when we ran into the supply issues last season. We have not lost a single distributor. It also helped that production challenges are quite common in this industry. We were surprised when distributors told us stories of similar complications experienced by brands of all sizes. The individual r...

Question 2

Cool product. What were revenue for 2018? 2019? Thanks!

Accepted Answer

Hi Dillon, thanks for the compliment. You can find detailed revenue info in the attached pitch deck file. Basically in 2018 about $1.3mm of product was sold, and 2019 was approximately $500k. While we had grown in orders for 2019, we had an interruption in production which prevented us from keeping up with demand. We've moved to a new production facility to handle the growth of 2020. Thanks for reaching out!

Question 3

This is effectively a licensing agreement with another distributor then? However it seems like you are also selling? Who is responsible for what exactly? Do you have any guarantees in place that SB1 will sell X amount of product with contingencies in place if they do not? If y...

Accepted Answer

Hey Justin, good to hear from you. SB1 is not a distributor, it has a brewery license. Here's why there is a licensing agreement in place, and this should clear up the relationship: - I own SB1, which operates restaurants and a brewery. Hoop Tea products were created and sold through that brewery. When we decided to take investors in the Hoop Tea brand, we understood that investors did not want to be involved with the brick & mortar establishments. Therefore, we created a new entity, Hoop...

Question 4

Hi Justin, Why raise equity vs debt? Who would buy you to pay out shareholders/get you your hard earned windfall? What's an exit look like in this space? Thanks! Wes

Accepted Answer

Hey Wesley, thanks for the question. Yes, we could have taken on debt instead, but that would have affected our cash flow, therefore slowing growth a little. We may still use the debt option in the future. Typically a buy out / exit for a company like this would happen when a larger brand in the same industry sees us as an acquisition target. Larger brands are not very good at creating and cultivating new brands or products, but they are experts at scaling products that are proven in the mark...

Question 5

Hey Danny, Love the product and the Promo video! I get that you want the locals to feel that they have part ownership in your brand, but what will be the true ROI for a large investor? I understand there is always risk involved. I guess the bottom line is what will an investor...

Accepted Answer

Hi Joe, glad to hear you love the product! It sounds like you're asking how and when you will see a return from your investment. You said you understand the risk, but I just want to reiterate that start-up companies have a high rate of failure. We have no intention of going out of business, but you have to keep in mind that statistic. Investors will see a return in the event of an exit for our company. This is typically when a larger brand acquires Hoop Tea and makes the brand a part of their...

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