|1||We have over $200k in revenue in the first few months of launch.|
|2||Launching on Amazon in June, making Kaffi available to the entire country! Will be D2C in August.|
|3||Our experienced team is led by a passionate founder who knows how to lead to a successful exit.|
|4||Functional coffee drinks is one of the fastest growing segments of the huge beverage market.|
|5||We have perfected Kaffi’s taste profile, creating the best tasting functional drink on the market.|
|6||Our proprietary energy system gives you an immediate kick, with no jitters or crashes.|
|7||Coffee startups have seen great exits with Blue Bottle aquisition valued at over $700M in 2017.|
|8||Same for functional drinks, with Suja being valued at $100M with Investment from Coke in 2015.|
REFRIGERATED COFFEE SALES
- 2016: $205.9M, 13.9% growth
- 2017: $252.9M, 22.3% growth
- 2018: $341.7M, 20.1% growth
- 2019: $405.2M, 26.4% growth
- 18.56% CAGR 2016-2019
SUCCESSES TO DATE
5 REASONS TO INVEST IN SMÁRI, INC.
Kaffi has financial statements ending December 31 2019. Our cash in hand is $82,488, as of March 2020. Over the three months prior, revenues averaged $19,667/month, cost of goods sold has averaged $33,070/month, and operational expenses have averaged $92,889/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 produce Kaffi — a line of incredible tasting, high protein, functional coffee drinks. We currently have 3 SKUs: Keto Latte, New Orleans & Iced Mocha and plan to introduce 3 more plant based SKUs next year.
In 5 years, our goal is to be a national brand on shelves in every grocery store, as well as available direct to consumers.
Smari Organics, Inc. was incorporated in the State of California in December 2011.
Since then, we have:
Historical Results of Operations
Liquidity & Capital Resources
To-date, the company has been financed with $5,227,999 in equity and $50,000 in debt.
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 12 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
Smari Organics, Inc. cash in hand is $82,488, as of March 2020. Over the last three months, revenues have averaged $19,667/month, cost of goods sold has averaged $33,070/month, and operational expenses have averaged $92,889/month, for an average burn rate of $106,292 per month. Our intent is to be profitable in 36 months.
We experience a drop in revenues from 2018 to 2019 because we discontinued the yogurt line in March of 2019 and started up the Kaffi line in April / May 2019.
Since the date of our financials, we have been increasing the number of our accounts so we need working capital for production. We are also taking advantage of online selling in the next two months.
We hope (but not guarantee) that revenues will significantly increase as we add more stores and launch our online presence during the Summer. By the end of this year, our goal is to generate $76,000/month in revenues and $136,000/month in expenses, although COVID19 could have an impact on our revenue and / or supply chain over the next 6 months.
We have two investors high net worth investors that have been supporting the company for several years that we could solicit for additional capital if need be. In addition, we have applied for the SBA emergency loan that which we believe to have a favorable approval rate.
One of the biggest risks to the business could be achieving repeat purchases from consumers.
We manufacture our product at a co-packer. If they go out of business, this could create a short term problem for manufacturing.
An increase in the cost of raw materials or energy could affect the Company’s profitability. Commodity and other price changes may result in unexpected increases in the cost of raw materials, glass bottles and other packaging materials used by the Company. The Company may also be adversely affected by shortages of raw materials or packaging materials. In addition, energy cost increases could result in higher transportation, freight and other operating costs. The Company may not be able to increase its prices to offset these increased costs without suffering reduced volume, sales and operating profit, and this could have an adverse effect on your investment.
Competition. We operate in a highly competitive beverage space. Some of our competitors may be better capitalized and have better brand recognition than we do, which may inhibit our ability to grow.
Costs of goods sold / ingredients could fluctuate in costs given an important of ours is coffee.
COVID19 could have an impact on our revenue and / or supply chain over the next 6 months.
Market shifts away from dairy products faster than we can develop our plant-based SKU. We plan to bring to market three plant-based SKUs mid 2021.
Ken Burke is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
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.
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