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.

Overview

KT Winery creates wine for health conscious women and their community.
Milestones

KT Winery Inc. (the “Company”) was originally organized as a Colorado LLC on August 13, 2020. On July 22, 2022, the Company converted to a Delaware C-Corporation.
Since then, we have:

• Experienced 1800% Growth from 2022 to 2023 already and a 5x in Revenue
• Received an Investment from Pharell William's Fund, Black Ambition on Nov 9th (in updates w/ photo)
• Present in 400+ stores. Projecting to hit 500+ stores by the end of the year in CO, NC, and TN.
• Large retailers want us: Target, Albertsons, Total Wine & Harris Teeter
• Featured in WWD, FORBES, the Today Show, and Bravo's Real Housewives of Potomac.
• In conversations with distributors to scale IL and WI, Q1 2024
• We are in the beginning stages of negotiating a brand ambassador deal w/ a BIPOC Female influencer.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2023, the Company had revenues of $328,195.05 compared to the year ended December 31, 2022, when the Company had revenues of $82,111.11.
• Assets. As of December 31, 2023, the Company had total assets of $462,831.60, including $13,139.47 in cash. As of December 31, 2022, the Company had $109,559.68 in total assets, including $4,177.01 in cash.
• Net Loss. The Company has had net losses of $120,810.64 and net losses of $329,989.43 for the fiscal years ended December 31, 2023 and December 31, 2022, respectively.
• Liabilities. The Company's liabilities totaled $187,792 for the fiscal year ended December 31, 2023 and $36,461.30 for the fiscal year ended December 31, 2022.

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 $154,100 in debt and $1,100,000 in SAFEs.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 3 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 3 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

KT Winery Inc. cash in hand is $19,000, as of January 2025. Over the last three months, revenues have averaged $25,000/month, cost of goods sold has averaged $5,600/month, and operational expenses have averaged $17,000/month, for an average net margin of $2,400 per month. Our intent is to be profitable in 36 months.

Since the date of our financials, our revenues are expected to increase due to new markets opening as we changed over from self-distribution to mass retail we have to weather the difference in monthly revenues vs. larger purchase orders.

We expect funding to hit $250,000 in revenue in the next 3-6 months. We need to raise an additional $1M to get over the $1M annual revenue target. We expect expenses to be around $275,000 in the same period.

We are not yet profitable. We are working towards profitability in 3 years and will require an additional $5M in funding to make that a reality. 

We are revenue generating which is our other source of capital. We cover the short-term burn with our revenue and the income generated from our event series.

All projections in the above narrative are forward-looking and not guaranteed.