|1||🔑 Our patented tech reduces food waste, unlocks innovation, and generates profit across F&B sectors|
|2||💰 Invest alongside key strategic players: MolsonCoors (leading round), Griffith Foods, & Barilla|
|3||💵 Proven model validated by strategic investors who provide support beyond capital|
|4||📈 Upcycled Food Market valued at $47B, with strong consumer trends accelerating growth|
|5||🍫 CPG success builds market, but long-term upside driven by tech platform & strategic relationships|
|6||🤝Active partnership development moving forward with 60+ companies across 20+ F&B sectors|
|7||💡 Founder has given TED Talk, awarded Forbes 30 Under 30, co-founded Upcycled Food Association|
|8||♻ Mission Driven: Certified B. Corp, 1% For The Planet, Sustainable Packaging Collaborative|
ReGrained is revolutionizing the way we think about waste and ingredients. They've pioneered a patented technology to turn otherwise wasted outputs of the supply chain into better-for-you ingredients that can be used in almost any consumer product. What better way to reduce waste than re-purposing it into something delicious? Puffs and bars are just the start! I fully expect to see ReGrained as an ingredient in every consumer product within the next decade.
ReGrained is the leading food upcycling technology and ingredient platform. We deploy patented technology and culinary science to do more with less and improve the way we value our planet's resources.
Upcycling fights food waste by helping undervalued byproducts realize full potential as innovative food and revenue streams, like the nutritious grain used to brew beer. We are a Public Benefit Corporation that creates tangible benefits to the environment, society, and shareholders.
We have now engineered, developed and produced our commercial scale processing machinery, have partnerships in play with Food and Beverage (F&B) industry leaders like Barilla Group to bring "Powered by ReGrained" products to market, and co-founded the Upcycled Food Association. To prove our model, we launched a rapidly growing and award-winning consumer snack brand on track to deliver $1M+ in revenue in 2020.
With this pending round of capital, we will finish the scale-up of our plant to meet demand and build on our Intellectual Property (IP). We are raring to commercialize our innovations, accelerate sales, and fuel our growth—which will further validate our model for subsequent fundraising rounds, and ultimately achieve mission success.
Deal terms were set by MolsonCoors Ventures (more on our strategic investors below), and we have already closed $1.5+M. We reserved this $535k WeFunder round so you can have an opportunity to level up with us one last time as the company grows.
In college we learned how to make our own beer. Every 6-pack we brewed left us with 1 pound of grain. We were hauling this grain out to the dumpster until we started baking bread with it in order to sell loaves to brew for free.
We soon realized the opportunity was much bigger: if we upcycle this grain at scale into a "flour" for sale via a partnership model with leading food companies, this new supply chain could be the foundation for a sustainable and profitable food revolution. Think the "Intel-inside" model for food. Thus, the idea for our flagship ingredient platform, ReGrained SuperGrain+®, was born.
To overcome prior technical barriers and develop a scalable solution, we partnered with the USDA under a collaborative research agreement. Together we created ReGrained's exclusive patent-protected upcycling technology, which powers our business model and protects our market leadership position. ReGrained's technology is uniquely suited to safely, efficiently, and economically create novel upcycled ingredients like SuperGrain+.
To build demand for our ingredient platform, educate the market, generate near-term cash flow, and collect market data we launched a consumer brand of packaged goods including bars and puffs. ReGrained products are now nationally distributed at retailers like Whole Foods and REI and sold online. We are on track to deliver $1M in sales this year.
Our vision is to grow a profitable business that reduces food waste, producing benefits for the environment and human health.
The brewing industry in the United States alone produces tens of billions of pounds of grain each year. Upcycling just 10% of this supply into ReGrained SuperGrain+® could be a billion-dollar business and bring nutritious food that was destined to be discarded to millions of people.
Through dedicated research and development, we valorize not just brewer's "spent" grain (BSG), but also other "food waste" streams including oats from milking, pressings from juice, pomace, and more.
ReGrained’s patented food upcycling technology, is uniquely suited to safely, efficiently, and economically process "waste" streams like BSG, fruit/vegetable pulp, and other byproducts into valuable food ingredients.
The 20 BILLION POUNDS per annum of BSG is our initial commercial focus.
After it has been used to brew, this grain incredible nutritional value, functional properties, and flavor. The sugars go into the beer, leaving behind plant protein (about as much an almond), dietary fiber (3.4x Whole Wheat), prebiotics, phenolic compounds, and other beneficial nutrients like iron, manganese, magnesium and others.
With our technology, the incredible properties of this unique ingredient are commercially available for the first time. ReGrained SuperGrain+® is a premium, versatile, functional, and flavorful “flour.”
ReGrained SuperGrain+® is a functional food that features a surprisingly impressive nutritious profile, with superior levels of protein and fiber and other nutrients with fewer calories relative to other grains:
It is also a great source of prebiotic fiber. Prebiotic fiber supports digestive health by providing food for the probiotic bacteria that live in your gut:
At a competitive price:
Food companies hunt for novel “better for you and the planet” ingredients to create products modern consumers demand. That focus has created a robust marketplace for specialty, functional, and other value-added ingredients. ReGrained’s food upcycling platform meets this market need with a versatile, economical, and nutrient-dense innovation portfolio.
ReGrained SuperGrain+®, our flagship offering, delivers with:
We are working with a diverse and growing range of partners and prospects across many applications such as:
As an ingredient and development partner, we upcycle at scale by activating co-branded, product development with many of the brands you know and love. We would list them here, but confidentiality agreements do not allow.
SuperGrain+ is just ReGrained’s first platform. Our second platform, derived from upcycled oats rescued from milking have similar benefits, with high protein and a unique allergen-free profile. Our prototypes of this product have generated strong interest several of our large development partners. Other streams from pulp to pomace and more are in development.
We rolled out branded, consumer-facing puffs and bars, made with SuperGrain+, to build demand, educate the market, generate near-term cashflow, and collect market data. Our Consumer Packaged Goods (CPG) products are now available in thousands of stores and online. Our consumer brand is on track to deliver $1M in revenue in 2020 (more detail further below).
Today’s consumers demand more from their food than everyday low prices and convenience. ReGrained SuperGrain+® is meeting this need as a nutritious, delicious better for you, and better for the planet brand.
For global food and beverage companies looking to innovate, we offer an opportunity to tap the ReGrained revolution through co-branded partnerships.
ReGrained has raised strategic capital from Griffith Foods, MolsonCoors, and Barilla with additional operating capital from angel investors.
Our strategic investors represent stakeholder groups from supply chain through shopping cart. Each hold a minority position in the company, but deliver major value beyond the money.
Griffith Foods is a global food science, product development, and ingredient innovation leader. For food companies around the world, Griffith Foods is the product development partner that specializes in ingredients and blends that meet the evolving needs and desires of consumers in ways that respect and sustain the planet. Griffith Food's invested in ReGrained for strategic alignment they incorporate our offerings within their portfolio and scale industrial sales.
Molson Coors is a one of the world's largest brewery conglomerates. For ReGrained, this represents nearly infinite global supply. TAP Ventures is their investment arm, focused on early stage entrepreneurs. They invested because they believe in our ability to build a market that will increases the value of their largest waste stream by volume, and supports their sustainability and environmental stewardship priorities.
Barilla is a multi-national Italian food company with a number of wholly owned of brands outside the pasta category. ReGrained fits within Barilla's "Good for You. Good for The Planet." mission. We were one of their BLU1877 funds first investments, and continue to work with together on new product development and commercialization.
We also see our strategic investors. In 2018 we conducted a record-setting equity crowdfunding campaign on MicroVentures. With over 700 consumer investors, we have democratized our capitalization in a very innovative way. We turn to this community (which you may already be a part of) for feedback, to launch new products, and generally champion our mission. Ultimately you own our success with us.
We have created and demonstrated the value and consumer acceptance of a new ingredient category. ReGrained has closed this loop via the development of our patented technology solution and innovative processing methodology. We are recognized thought leaders in the space, own the tech, and are poised for stellar growth—but we aren’t looking to do it alone.
Since inception we've really been in development mode, and really only started focusing on revenue for the CPG business in 2020 with the launch of the puff. As you can see, things are off to a strong start. Our dramatic increase in revenue is largely attributed to the launch of our puff product with great success in online grocery channels such as Imperfect Foods.
On the ingredient side, despite a strong pipeline, due to the nature of the long sales cycles, revenue sales won't likely be material until 2021, and then really start ramping in 2022.
Looking ahead, the following shows our projected growth for the CPG business relative to the ingredients. By 2022 we expect ingredient sales to surpass CPG.
Note: these slides contains forward looking projections which cannot be guaranteed.
We are actively raising several million in capital.
Equity financing deal terms were set by MolsonCoors TAP Ventures, and we have already closed $1.53M from a mix of investors.
This $535k tranche is carved out from the capital stack to make sure our equity crowdfunding angels have an opportunity to grow with us.
We have now engineered, developed and produced our commercial scale processing machinery. With this round, we will be able to finish our plant to meet our customer’s demand, commercialize additional ingredient streams, stay on the cutting edge of R&D, and support the growth of our CPG line.
The negative environmental impacts of our food supply chains are staggering.
The single most impactful lifestyle choices we make every day are in what and how we choose to eat. According to the cross-sectoral experts that conducted Project Drawdown, shifting our diets to be less wasteful and more plant-based is the most pressing solution within our individual control.
If global food waste was a country, it would be the third-largest producer of greenhouse gases.
"Upcycling" is all about putting nutritious delicious food to its best use—feeding people.
The Upcycled Food Association, a non-profit we cofounded recently released this formal definition: "Upcycled foods use ingredients that otherwise would not have gone to human consumption, are procured and produced using verifiable supply chains, and have a positive impact on the environment."
The ReGrained platform uniquely creates new foods from crops that have already been cultivated, harvested, and “used.” This is truly found food—meaning that all the costs and impact have already been absorbed, yielding more from less.
Upcycled foods are made from ingredients that would otherwise have ended up in a food waste destination. According to the Food Loss and Waste Protocol, the food waste destinations are when food ends up in places like incinerators, as animal feed, or in landfill. By avoiding these destinations, upcycled food makes better use of the energy expended in growing, transporting, and preparing that food.
Upcycled foods are value-added products: Globally, we lose around $1 trillion per year on food that is wasted or lost. Upcycled food captures that value, and leverages it to create a sustainable and resilient food system.
Upcycled foods are for human consumption: elevating food to its highest and best use.
More than half of consumers want to buy more upcycled foods. Upcycled food gives everyday people the ability to vote with their dollars to end food waste. By indicating which ingredients are upcycled, consumers know they are spending their money in a way that aligns with their values.
ReGrained has financial statements ending December 31 2019. Our cash in hand is $699,500, as of June 2020. Over the three months prior, revenues averaged $77,000/month, cost of goods sold has averaged $9,600/month, and operational expenses have averaged $51,000/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.
ReGrained is food technology company and ingredient platform helping to lead the upcycled food revolution. Our mission is to help the world do more with less and to improve the health of people and planet. By Upcycling, we can all do our part to reduce waste, eliminate food insecurity and conserve our limited resources.
We identify healthy food that is overlooked in the manufacturing process, and rescue it, in-line, using our patented technology to create delicious, versatile, “better for you” ingredients and our own branded products.
It all started with recovering the billions of pounds of brewer’s grain, but our vision extends to other ingredients conventionally considered byproducts, like oats and juice pulp, currently going to animal feed, compost, or landfill.
The ReGrained platform uniquely creates new foods from crops that have already been cultivated, harvested, and “used.” This is truly found food—meaning that all the cultivation, production costs and impact have already been absorbed, yielding more from less.
ReGrained LLC in was formed in 2014. ReGrained Inc was incorporated in the State of Delaware in February 2019, and all assets and liabilities from the LLC were transferred to the Corporation. Patents are co-owned between the USDA and ReGrained Inc. ReGrained owns exclusive commercial rights in perpetuity.
Since inception, we have:
-Developed and patented proprietary food upcycling technology that reduces waste and feeds people. Geminating revenue via both B2B partnerships and innovative finished goods products.
-Commercialized SuperGrain+, our first ingredient offering upcycled from the nutritious grain that has already been used to brew beer.
-Engineered, developed and produced our commercial scale processing machinery.
-Secured industry leading strategic investors including Griffith Foods, Molson Coors Brewing Company's TAP Ventures, and Barilla Group's BLU1877.
-Established active ingredient development partnerships with global food and beverage companies to bring "powered by ReGrained" products to market
-Launched an award-winning consumer packaged goods brand with two product lines, puffs and bars, both in national distribution.
-Awarded Forbes 30 Under 30
-Established ReGrained as thought leader for Upcycled Food. Co-founded the Upcycled Foods Association, the global trade group to support the development of markets for upcycled foods.
-Certified as B. Corp and 1% For The Planet member. Active member and pioneering brand in OSC2's Sustainable Packaging Collaborative.
Historical Results of Operations
Our company was organized in February 2019 and has limited operations upon which prospective investors may base an evaluation of its performance.
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 $2,285,000 in equity and $2,334,061 in convertibles.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 18 months assuming no additional financing is secured and monthly burn remains the same.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". Concurrent with this financing, we are engaging in a Regulation D offering.
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 begin to raise capital for the next financing round in 15 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
ReGrained Inc cash in hand is $699,500, as of June 2020. Over the last three months, revenues have averaged $77,000/month, cost of goods sold has averaged $9,600/month, and operational expenses have averaged $51,000/month, for an average net margin of $16,400 per month. Our intent is to be profitable in 24 months.
We have closed approximately $335k on a priced round in 2020. We launched a new product in March, which also caused a spike in revenue (as well as expenses as we increased the size of our production run). We received a PPP loan as well as a EIDL loan as a result of COVID. Since COVID started we've seen an increase in online sales, which has compensated for lower retail sales. We've had some operational complications as a result of COVID, including pausing construction on a production facility in Berkeley.
With COVID19, revenue on our CPG lines in 2020 have proven difficult to project. As one illustration of why, we have commitments from a number of retailers for the puffed snack that predate the pandemic. However, it remains unclear when we will hit the retail shelves. That said, our various eCommerce channels are exceeding our pre-COVID projections. For our nutrition bar, we have retail distribution, but the velocity of the whole category is down. If growth rates continue to accelerate, we should do somewhere around $1-1.5M in revenue this year.
As we are in long cycle contractual development cycles with large companies, we do not expect material revenue from ingredient sales within the next 3-6 months, with our best case in the $50k-$100k range. As discussed, sales cycles for our B2B deals are long, but when the land, volume will make up for lost time. Revenue for ingredients will begin to ramp up in 2021, and then ramp quickly in 2022.
On top of operating expenses, we plan to spend approximately $250k finishing our plant buildout and $150k on R&D.
We are continuing to close checks from angel investors, and are in diligence process with institutional investors. We are hoping to raise $1.5M in this round, but may increase our raise size to $2.5M. We're also looking into additional loans and grants.
We rely on other companies to provide raw materials, major components, and basic ingredients for our products. We depend on these suppliers and subcontractors to meet our contractual obligations to our customers and conduct our operations. Our ability to meet our obligations to our customers may be adversely affected if suppliers or subcontractors do not provide the agreed-upon supplies or perform the agreed upon services in compliance with customer requirements and in a timely and cost-effective manner. Likewise, the quality of our products may be adversely impacted if companies to whom we delegate manufacture of major components or subsystems for our products, or from whom we acquire such items, do not provide raw materials or basic ingredients which meet required specifications and perform to our and our customers’ expectations. Our suppliers may be less likely than us to be able to quickly recover from natural disasters and other events beyond their control and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk of these adverse effects may be greater in circumstances where we rely on only one or two subcontractors or suppliers for a particular raw material or basic ingredient.
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.
We face competition with respect to any products that we may seek to develop or commercialize in the future. Many of our competitors have significantly greater financial, technical and human resources than we have and superior expertise in research and development and marketing approved products and thus may be better equipped than us to develop and commercialize products.
We depend on third-party service providers and outsource providers for a variety of services and we outsource a number of our non-core functions and operations. If production or service was interrupted and we were not able to find alternate third-party providers, we could experience disruptions.
In general, demand for our products and services is highly correlated with general economic conditions. A substantial portion of our revenue is derived from discretionary spending by individuals, which typically falls during times of economic instability. Declines in economic conditions in the U.S. or in other countries in which we operate may adversely impact our consolidated financial results. Because such declines in demand are difficult to predict, we or the industry may have increased excess capacity as a result. An increase in excess capacity may result in declines in prices for our products and services.
We rely on various intellectual property rights, including trademarks in order to operate our business. Such intellectual property rights, however, may not be sufficiently broad or otherwise may not provide us a significant competitive advantage. In addition, the steps that we have taken to maintain and protect our intellectual property may not prevent it from being challenged, invalidated, circumvented or designed-around, particularly in countries where intellectual property rights are not highly developed or protected. In some circumstances, enforcement may not be available to us because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of our intellectual property. Our failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect our intellectual property or detect or prevent circumvention or unauthorized use of such property, could adversely impact our competitive position and results of operations. We also rely on nondisclosure and noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights. There can be no assurance that these agreements will adequately protect our trade secrets and other proprietary rights and will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets or other proprietary rights. As we expand our business, protecting our intellectual property will become increasingly important. The protective steps we have taken may be inadequate to deter our competitors from using our proprietary information. In order to protect or enforce our patent rights, we may be required to initiate litigation against third parties, such as infringement lawsuits. Also, these third parties may assert claims against us with or without provocation. These lawsuits could be expensive, take significant time and could divert management’s attention from other business concerns. The law relating to the scope and validity of claims in the technology field in which we operate is still evolving and, consequently, intellectual property positions in our industry are generally uncertain. We cannot assure you that we will prevail in any of these potential suits or that the damages or other remedies awarded, if any, would be commercially valuable.
Ingredient and packaging costs are volatile and may rise significantly, which may negatively impact the profitability of our business. Any material upward movement in raw materials pricing could negatively impact our margins, if we are not able to pass these costs on to our customers, or sales if we are forced to increase our prices, which would adversely affect our business, results of operations and financial condition.
As a food production company, all of our products must be compliant with regulations by the Food and Drug Administration (FDA). We must comply with various FDA rules and regulations, including those regarding product manufacturing, food safety, required testing and appropriate labeling of our products. It is possible that regulations by the FDA and its interpretation thereof may change over time. As such, there is a risk that our products could become non-compliant with the FDA’s regulations and any such non-compliance could harm our business.
The loss of our third-party distributors could impair our operations and substantially reduce our financial results. We continually seek to expand distribution of our products by entering into distribution arrangements with regional bottlers or other direct store delivery distributors having established sales, marketing and distribution organizations.
The existence of COVID-19 may have material impacts on ReGrained, such as disruptions to supply chains, change in consumer habits and preferences, and general economic recessions. The future impacts of COVID-19 are presently unknown.
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