reef grows

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

Revolutionizing the cannabis industry with home grown craft cannabis

The current landscape is controlled by "Big Cannabis" who controls everything from price to the chemicals and fertilizers and has a severely negative environmental impact. Our mission is to return flower to the people by delivering a product that allows consumers to be self-reliant and confident in the quality and sustainability of their medicine.

At reef, we're sparking a revolution in the way consumers think about plant medicine through the marriage of automated indoor grow technology and human-centered design. Our flagship product is a designer home grow system that stands out in any modern living space.

In the next five years, we plan to reef will be in 50,000+ households nationwide collecting data on as many as 200,000 full grow-cycles per year in order to optimize and revolutionize our knowledge of plant medicine grow science. Think Peloton for growing, with a passionate, connected community who are sharing and competing to improve their grows.

Milestones

reef Grow Technology, Inc. was originally organized as an LLC in June 2016. In September 2021, the company converted to a Delaware C Corp.

Since then, we have:

• 🌱 reef automates the cannabis grow process from seed to flower.
• ⚙️ Hardware designs currently undergoing beta testing to be ready for launch
• 💻 Electronics designed and tested by expert team with 40+ years industry experience
• 📱 Companion app designed, developed, and ready to deploy
• 🔗 Connect to your community of locally grown cannabis and home growers
• 🥦 Developed proprietary Super Soil in partnership with master cannabis grower
• 🪵 Made out of ethically harvested wood & 100% recyclable aluminum

The Company is subject to risks and uncertainties common to early-stage companies. Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2022, the Company had revenues of $0 compared to the year ended December 31, 2021, when the Company had revenues of $0. 
• Assets. As of December 31, 2022, the Company had total assets of $16,081, including $16,081 in cash. As of December 31, 2021, the Company had $18,781 in total assets, including $18,781 in cash.
• Net Loss. The Company has had net losses of $60,301 and net losses of $52,505 for the fiscal years ended December 31, 2022 and December 31, 2021, respectively.
• Liabilities. The Company's liabilities totaled $132,580 for the fiscal year ended December 31, 2022 and $74,982 for the fiscal year ended December 31, 2021.
• reef Grow Technology, Inc. was incorporated in the State of Delaware in September 2021.  The company was previously an LLC under the name of Infinitry, LLC.

Liquidity & Capital Resources

To-date, the company has been financed with $77,500 in convertibles.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 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 6 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

reef Grow Technology, Inc. cash in hand is $7,500, as of March 2023. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $3,166/month, for an average burn rate of $3,166 per month. Our intent is to be profitable in 18 months.

We have not identified any material changes since December 31, 2022. We are continuing to progress through the R&D phase.

We expect to start generating revenue shortly after the 6-month window provided that we raise the $124K target associated with our WeFunder. We estimate that our first $50,000 tranche of funding will allow us to make our first batch of sales and enter a revenue-generating state. 

We are not currently profitable. We expect to be profitable within 18 months of our first sales.

We have offered convertible notes on the same terms as Wefunder to friends and family through which we've raised $97,500 that has accelerated our progress through the R&D phase.

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