Mother Kombucha

Restricted securities.  Any securities purchased through this offering are subject to limitations on transfers as established by the U.S. Securities and Exchange Commission (the “SEC”). This means that the securities cannot be resold for a period of one year. The exception to this rule is if you are transferring the securities back to the Company, to an “accredited investor” as part of an offering registered with the SEC, or, subject to further compliance and the receipt of a legal opinion attesting to such transfer, to a member of your family, trust created for the benefit of your family, or in connection with your death or divorce.

Marketplace acceptance.  Our growth projections are based in part on an assumption that with an increased advertising and marketing budget, our products will gain traction in the marketplace. It is possible that our current or new products could fail to gain market acceptance for any number of reasons. If our products fail to achieve significant sales and acceptance in the marketplace, this could materially and adversely affect the value of your investment.

Employees and personnel.  To be successful, the Company requires qualified people to guide the day-to-day operations of the Company. As the Company grows, we will continually need to attract and hire additional personnel in sales, marketing, design, development, operations, finance, legal, human resources and other areas. Depending on the economic environment and the Company’s performance, we may not be able to identify or attract qualified individuals for such positions when necessary. We may also make hiring errors, which can be costly in terms of the resources spent recruiting, hiring and investing in certain individuals. If we are unable to attract, hire and retain talent or if we make repeated and substantial errors in our hiring efforts, the Company will be likely be adversely affected. This may adversely affect the value of your investment.

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.

If the Company cannot raise sufficient funds it may not succeed.  The Company is offering securities in an amount of up to $1,000,000.00 in this offering, and may close on any investments that are made. Even if the maximum amount is raised, the Company may need additional funds in the future in order to facilitate continued growth of its operations, and if it cannot raise those funds for whatever reason, including reasons relating to the Company itself or general economic factors, the Company may need to cease its operations. If the Company manages to raise only the minimum amount of funds sought, it may have to identify and pursue alternative sources of funding.

The Company’s success is subject to economic factors.  The beverage industry is intensely competitive and sensitive to national and regional economic conditions. Demand for our products may be adversely affected by consumer spending, which may be adversely impacted by economic conditions such as consumer confidence in future economic and business conditions, interest and tax rates, employment levels, salary and wage levels and weather patterns affecting food production. Although purchasing food is a necessity, a decrease in consumer spending in the natural food space could cause our sales to decrease, which could have a material adverse effect on our financial condition and results of operations.

Increased costs could affect the Company.  An increase in the costs associated with 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, which may adversely affect your investment.

Losses due to product recalls. We may be required from time to time to recall products entirely or those derived from specific batches, or reformulate certain of our products if such products become contaminated, damaged, mislabeled, defective or otherwise materially non-compliant with applicable regulatory requirements. A material product recall could adversely affect our profitability, brand image and corporate reputation. We do not maintain recall insurance.

Market Competition.  We will compete with larger, more established companies that currently produce and/or market products similar to our products. Such companies may have greater financial resources and human capital than we do. They may succeed in developing and marketing competing products earlier than we may, or may succeed in developing and marketing products superior to or more desirable than our products. Competition in the industry in which we operate will likely continue to intensify, which may adversely affect your investment.

Changes in consumer preferences.  The beverage industry is subject to changing consumer preferences, and substantial shifts in consumer preferences may adversely affect the Company. Consumers are seeking greater variety in their beverages. Our future success will depend, in part, upon our continued ability to develop and introduce different and innovative beverages that appeal to consumers.

The Company’s revenue model may be impaired or change.  The Company’s success depends mainly on its ability to sell the products we offer. The Company may generate earnings, but retain some or all of the earnings for growth and development of its business and, accordingly, not make distributions to its equityholders. If the Company does not generate revenue, its business, financial condition, and operating results will be materially adversely affected.

Use of the proceeds from this offering.  The Company’s management, subject to the supervisory powers of its managers, has absolute discretion to spend the proceeds of this offering for any general corporate purpose, including but not limited to providing a salary to officers and/or employees, advertising and marketing efforts, or for any other purpose that management deems to be in the best interest of the Company. As a result of the foregoing, the Company’s success will be substantially dependent upon the discretion and judgment of management with respect to application and allocation of the proceeds of this offering. The Company may utilize proceeds in ways that do not necessarily improve the results of the Company’s operations or enhance the value of your investment. The failure of our management to apply these funds effectively could result in financial losses, and ultimately cause you to lose all or a portion of your investment.

The Company is highly regulated in the United States by the federal, state and local governments.   The Company produces and distributes ingestible products and therefore is highly regulated by the U.S. Food and Drug Administration and other federal and state regulatory agencies.  The regulations adopted by these authorities govern numerous aspects of the Company’s expected operations, including production, transportation, distributor relations and sales. The Company could be subject to compliance with and/or review or audits by various regulatory agencies and bodies, which could substantially burden the operations of the Company. There can be no assurance that the Company will not incur material costs or liability in connection with compliance with applicable regulatory requirements, or that such regulation will not interfere with the Company’s business and any products the Company produces in the future.

Reliance on third parties to provide services essential to the success of our business.  We rely on third parties to provide a variety of essential business functions for us, including distribution, shipping, public relations and advertising. It is possible that some or all of these third parties will fail to perform their services or will perform them in an unacceptable manner. It is possible that we will experience delays, defects, errors or other problems with their work that will materially impact our operations and we may have little or no recourse to recover damages for these losses. A disruption in these key or other suppliers’ operations could materially and adversely affect our business. As a result, your investment could be adversely affected by our reliance on third parties and their performance.

We rely on distributors to distribute our products.  Our distributors are affiliated with and manufacture and/or distribute other beverage products. In many cases, such products compete directly with our products. Unilateral decisions by distributors, buying groups, convenience chains, grocery chains, mass merchandisers, specialty chain stores, club stores, e-commerce retailers, e-commerce websites and other customers, including retailer disagreements with our distributors, to discontinue carrying our products that they are carrying at any time, restrict the range of our products they carry, impose restrictions or limitations on the sale of our products and/or the sizes of containers of our products and/or devote less resources to the sale of our products could adversely affect the Company.

The cost of enforcing our trademarks could prevent us from enforcing them.  Trademark litigation has become extremely expensive. Even if we believe that a competitor is infringing on our trademarks, we may choose not to file suit because we lack the cash to successfully prosecute a multi-year litigation with an uncertain outcome, because we believe that the cost of enforcing our trademark(s) outweighs the value of prevailing in the suit in light of the risks and consequences of not prevailing, or for some other reason. Choosing not to enforce our trademarks could have adverse consequences on the Company, including undermining the credibility of our intellectual property, reducing our ability to enter into sublicenses, and weakening our ability to prevent competitors from entering the market. As a result, if we are unable to enforce our trademarks because of the cost of enforcement, your investment in the Company could be adversely affected.