|1||Disruptive new consumer brand that is changing the household cleaner industry.|
|2||Strong team of seasoned professionals driven to build a successful, non-concessionary impact company.|
|3||We believe we have a clear exit strategy in 3-5 years.|
|4||Support a creative new eco-brand that has a direct and measurable environmental impact.|
|5||Proof of Concept - sold 12,000 units in <11 minutes on the Home Shopping Network (U.S. home shopping channel).|
|6||Award-winning products. Received the Global Innovation Award from the IHH Assoc, and an Addy award for our brand and packaging.|
|7||Our Founder has 30+ years of industry experience.|
|8||Lead Investor: Raging Bull invested $75,000|
Frustrated by the plastic waste generated by my industry, in 2012, I had a dream to disrupt the household cleaner industry. I set out to create an alternative to traditional, ready-to-use spray cleaners. I wanted to create a product that would allow consumers to easily make their own cleaners at home using plain water and the same bottle over-and-over again. In researching this opportunity, I also noticed a very interesting dilemma; the same plastic bottles causing the trash issue, were also keeping sales of household cleaners relegated to brick-and-mortar retail. Their heavy weight and issues with leaking made direct-to-consumer sales challenging.
1. Limited Sales Channels. The household cleaner industry has lagged behind other industries in it's online / direct-to-consumer growth. With nothing to leak and being small and light weight, DAZZ will open up this market segment.
2. Plastic Waste. DAZZ ends the use-and-discard cycle that has defined the household cleaner industry since 1947.
Working on the weekends and evenings from the laundry room in our house, I spent almost 9 months formulating, testing, and perfecting our three core product. Using mineral and plant based ingredients, my goal was to create cleaners that were not only safe, but also cleaned well. My final products were independently tested at the TURI Lab at the University of Mass and found to outperform the leading brands in each of our categories.
After failed attempts at finding a suitable contract manufacturer, I decided to do it on my own. First, I went back to school... tableting school (yes, that's a thing). I enrolled in the Tablet Pro certification course at Techceuticals. Next, I leased a small, ugly yellow building where I built my dry room and begun the process of figuring out how to get my formulas into tablet form.
The trick was to get my formulas into a powdered form, that could be pressed into tablets, that would disintegrate fully and quickly in water to form a solution that performed well and smelled terrific. This all had to be done in a carefully controlled dry room at 6% humidity or less, in the middle of hot, humid Florida. Unable to afford the proper dry room equipment, I had to engineer and build my own air processing systems.
With the help of award winning graphic designer Curtis Elliott, the DAZZ logo and brand came to life. With our bright, fresh design, we were awarded an ADDY (American Advertising Federation) for creative excellence in brand/packaging design.
After months of persistent persuasion (I bugged them to death), the Home Shopping Network (HSN) agreed to give us a shot. On our debut show, we sold 12,000 units in under eleven minutes. Setting an HSN record for new products on their American Dreams show. Proof of concept... in the bag!
One of the more challenging parts of bringing this new, disruptive product to market is educating consumers on this new way to clean. Our White Board animation video has helped spread this message.
On January 1st, 2020, we moved into our new office, production, and warehouse facility in beautiful Broomfield CO.
Our modest digital campaign launched in May 2019 has added hundreds of new customers.
With a strong team of seasoned professionals focused on the future, SunState Labs is poised to make DAZZ a household name in 2020 and an international brand over the next 3-5 years. Here are our plans for investing these funds:
SunState Laboratories has financial statements ending December 31 2018. Our cash in hand is $7,900, as of January 2020. Over the three months prior, revenues averaged $4,300/month, cost of goods sold has averaged $1,032/month, and operational expenses have averaged $4,395/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 develop sustainable cleaning products in effervescent tablet form. Now consumers can make their own cleaner at home using plain tap water and the same bottle over-and-over again. DAZZ ends the use-and-discard cycle associated with traditional ready to use cleaners, and by eliminating the bottle & water, DAZZ has created a cleaning product that can easily be mailed; opening up a world of opportunity for direct to consumer / eCommerce sales.
We hope (although cannot guarantee) that DAZZ will be purchased by an international Consumer Packaged Goods (CPG) company that can scale DAZZ to become a global brand and a global solution to plastic waste. We're on-track with this goal as we have already begun distribution in South Africa and Singapore. We are currently in discussions with distributors from 16 additional foreign markets, eager to bring DAZZ to their countries. Additionally, we have interest from home shopping channels in Japan, Germany, and the UK.
SunState Laboratories, Inc. was incorporated in the State of Colorado in January 2020. We were originally organized as SunState Laboratories, LLC in 2012. In 2020 the LLC was fully dissolved and the Corporation assumed all assets and liabilities.
Since 2012, we have:
Historical Results of Operations
Our company was organized in January 2020 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 9 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 12 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
SunState Laboratories, Inc. cash in hand is $7,900, as of January 2020. Over the last three months, revenues have averaged $4,300/month, cost of goods sold has averaged $1,032/month, and operational expenses have averaged $4,395/month, for an average burn rate of $1,127 per month. Our intent is to be profitable in 22 months.
For Sales, we've noticed a significant increase in Amazon and website sales since beginning our digital marketing campaign. Additionally, we have begun our wholesale distribution to South Africa and Singapore. For Expenses, we've entered a lease for our new office and manufacturing facility.
We anticipate significant increases in sales and expenses over the next 3-6 months. On the sales side, we're already seeing a 152% increase over December numbers. As we continue to grow our digital campaign, we believe this trend will continue to increase. We also plan to begin our retail distribution program starting with 130 Camping World Stores in March, which we hope will boost our revenue. With our plant expansion, we also plan on growing our international distribution to include Australia, New Zealand, France, Spain, and India in the next 6 months. And finally, our goal is to launch our next 3 products before 3rd quarter 2020. For expenses, we will be scaling our manufacturing capabilities with new equipment and packaging labor. We also plan on hiring 1 sales position, 1 admin, and 1 production person. Additionally, we will be refreshing the DAZZ brand, website, and packaging material.
Limited Team - Although I have 30+ years experience in cleaning chemicals, and I have decades of experience managing sales teams in service industries, I have been a solopreneur since the inception of SunState Labs. I have utilized contract and fractional employees to accomplish many of our milestones, while preserving my limited capital resources. To scale the business and achieve the market penetration required to make DAZZ a success, I will need to build an enthusiastic, highly capable team around me.
Consumer adoption. Customers may not be willing to give up the convenience they've become accustomed to with ready-to-use household cleaners.
Too broad of a consumer market focus. Unlike our competition, we are not limiting our marketing toward a particular consumer group (i.e. eco-friendly green shoppers). We are taking a broad approach to capture as many shopper segments as possible (i.e. value shoppers, green shoppers, performance shoppers, etc.). Some advertising experts have cautioned us against this "shotgun" approach.
Competition. Although it's unlikely, it is possible for a larger CPG company to step in with their own product and overwhelm the market with a huge advertising spend. Manufactures of established eco-brands (7th generation, Method, Ms. Meyers, etc.) may develop and begin offering concentrated refills of their successful brands.
Innovations in plastic waste disposal/processing that minimize this environmental concern. Our greatest point of differentiation is our sustainability feature. This is a big selling feature now because of the seriousness of plastic waste. If advancements in compostable/biodegradable plastics continue and our "plastic problem" is resolved (or at least minimized to the point of public acceptance, sustainable alternatives like DAZZ may lose some of it's appeal.
Direct to consumer approach. Less than 5% of household cleaner purchases occur online. We are betting that this is because of the high shipping cost to MSRP ratio for household cleaners, plus the issues with leaking bottles. DAZZ resolves both of these challenges and online sales will be our focus for the next 12-24 months. If consumers will not change their buying behavior and continue to buy in stores, DAZZ will struggle until it is able to secure retail distribution.
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.
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