Investors in the first $100,000 of the campaign will receive 10% of revenues each quarter until 100% of your principal is returned plus 125% on top.
|1||We are a highly rated, established brand with "steady" growth since 2014|
|2||Upgrading from a 2.5 barrel brew house to a new 15 barrel brew house will increase our production by over 500%|
|3||The new brew house will eliminate the need to contract brew reducing our per batch cost by over 50%|
|4||We will be able to put out 140 barrels a month.|
|5||New location is highly visible and centrally located in the ever growing Connecticut craft beer scene.|
|6||The brewery space is designed to allow for easy expansion|
In April 2014, Steady Habit Brewing Company was established. It opened its doors to the public in January 2015, brewing on a 2.5 barrel system, in Haddam, Connecticut, just off the banks of the Connecticut River. Steady Habit was a "Grab & Go" growler fills only for nearly three years. The current ownership group purchased the brewery in April of 2017 and quickly filed the necessary paperwork to open up a full-service taproom. We also began to distribute our products across the state establishing over 250 accounts. By September 2017 we realized we would quickly outgrow the original location and began the long tedious search for a new home. Finally in May of 2019, with the help from our First Select Woman and our Town Planner, we found our new location, just minutes up the road in the same town. We purchased a brand new Alpha Brewing Operations 15 Barrel, fully automated, brew house that will be put into place in our new home.
We have been working on relationships across the country to expand our presence into new markets outside of our area so when our new system comes online, we will be in the appropriate position move the increased product.
Steady Habit Brewing Company has financial statements ending December 31 2019. Our cash in hand is $65,000, as of May 2020. Over the three months prior, revenues averaged $5,000/month, cost of goods sold has averaged $6,000/month, and operational expenses have averaged $14,000/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.
We are a manufacturer & distributor of top quality, hand crafted beer. We also operate a tap room that can accommodate over 200 guests.
In five years, our goal is to be manufacturing and distributing product from multiple locations throughout the United States. We also have designs to open a second tap room in the South Eastern region of the US.
SHBC Group Inc. was incorporated in the State of Connecticut in March 2017.
Since then, we have:
Historical Results of Operations
Our company was organized in March 2017 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 $290,000 in equity.
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. 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
SHBC Group Inc. cash in hand is $65,000, as of May 2020. Over the last three months, revenues have averaged $5,000/month, cost of goods sold has averaged $6,000/month, and operational expenses have averaged $14,000/month, for an average burn rate of $15,000 per month. Our intent is to be profitable in 6 months.
We scaled down our activity in April of 2019 leading up to our relocation. Our brewery is currently closed while we are building out our new location. We continue to brew offsite with other breweries in our collective. (Connecticut Brewery Collective), in order to hit the ground running when our new taproom is open.
Our revenues decrease from 2018 to 2019, since we toned down distribution in preparation of our move. Our brewery lease ended July 2019. Since then, we have been making beer out of a third-party brewing facility which does not allow for the same quality or quantity that we would like.
Do to COVID-19, we have planned taproom activity. We are still able to sell product to distributors. We expect to open our new taproom end of July 2020. We expect to need approximately $35,000-40,000 in capital to get the new taproom operational. In six months, we hope to generate $43,000/month in revenue from distribution and taproom sales. We expect expenses to be $26,000/month six months from now.
For additional capital, our previous investors have pledged additional funds if needed. We also have other investors in our close network that we can solicit.
We are subject to governmental regulations affecting our business. The production and distribution of beer is a business that is highly regulated at the federal, state and local levels. Our operations may be subject to more restrictive regulations and increased taxation than are those of non-alcohol related businesses. For example, the distribution and sale of beer requires various federal, state and local licenses, permits and approvals. If one or more regulatory authorities determines that we have not complied with applicable licensing or permitting regulations or have not maintained approvals necessary for us to conduct our business within their jurisdiction, our business and results of operations could be materially adversely affected. Similarly, the loss or revocation of any existing licenses, permits or approvals, or the failure to timely obtain any additional licenses, permits or approvals when required, could have a material adverse effect on our ability to conduct our business. In addition, if any taxes or fees imposed on our business by applicable regulatory authorities are increased, our profit margins could be negatively affected.
The Company has made a key assumption that the market for craft beer will continue to grow. If market demands unexpectedly shift and craft beer does not continue to grow in popularity, the Company may not be able to support its expanded operations and may need to scale back its productions.
We face competition from larger breweries who are well established and have far greater resources. Attracting and retaining customers in this climate may be difficult.
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.
Companies in the beverage alcohol industry are, from time to time, exposed to class action or other litigation relating to alcohol advertising, product liability, alcohol abuse problems or health consequences from the misuse of alcohol. It is also possible that governments could assert that the use of alcohol has significantly increased government funded health care costs. Litigation or assertions of this type have adversely affected companies in the tobacco industry, and it is possible that we, as well as our suppliers, could be named in litigation of this type.
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.
Matthew Belcher 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.
Ken Siani 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.
Amy Venditti 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.
COVID-19 imposes a risk to our future success. Specifically, shelter-in-place restrictions can last longer than expected, which would impact our ability to open our new taproom and generate revenues. There is also a risk that the pandemic will adversely affect customer demand even after the restrictions are lifted.
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