Highly Competitive Market

In order to respond to market changes, the Company’s management may from time to time make changes to the business of the Company. There are certain risks associated with such changes. As a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service or marketing decisions or business combinations that could have a material adverse effect on the Company’s business, results of operations and financial condition.

Raising Future Funds

The Company might not sell enough securities in this offering to meet its operating needs and fulfill its plans, in which case the Company might need to reduce sales & marketing, engineering, or other expenses. Were recurring revenue to decrease, further cuts would be needed and hurt the Company’s ability to meet its goals. Even if the Company raises the entire round successfully, we may need to raise more capital in the future in order to continue. Even if we do make successful offering(s) in the future, the terms of that offering might result in your investment in the company being worth less because of the terms of future investment rounds.

Raising Future Funds

The Company expects that it will need at least $8 million in additional capital to grow and expand the business successfully, with additional inventory and distribution reach. As such, it is absolutely certain that the Company will need additional financing. The ability of the Company to secure future capital will depend on many factors, including continued progress in product success, the cost of manufacturing and production, market requirements, advertising costs and fluctuations in raw material prices. The Company does not know whether additional financing will be available when needed, or whether it can be obtained on terms favorable to the Company or its existing investors - particularly in light of current economic conditions, the availability of credit, and other sources of capital. The Company may raise any necessary funds through public or private equity offerings, debt financings or additional corporate collaboration and licensing arrangements. To the extent the Company raises additional capital by issuing equity securities, the Company’s members will experience dilution.

Raising Future Funds

We have minimal operating capital and, even if we raise $800,000 in this offering, for the foreseeable future we will be dependent upon our ability to finance our operations from the sale of additional equity or other financing alternatives. We have a history of accumulated deficits that may continue into the foreseeable future. Startups often depend on raising several rounds of additional capital until they’re profitable. There can be no assurance that we can successfully raise operating capital. The failure to successfully raise operating capital could result in our bankruptcy or other event which would have a material adverse effect on us and our stockholders. We have no significant assets or financial resources, so the failure to raise sufficient operating capital could put your investment dollars at significant risk.

Founding/Managing Team

As a startup organization, the company is still very dependent on its co-founders. If anything catastrophic were to happen to the company's founding team, the future of the company may be compromised.

Kyle Watts (Co-Founder, CEO) owns 4,000,000 shares of common stock, which represents 50% of outstanding common stock. Jon Gabayzadeh (Co-Founder, President) owns 4,000,000 shares of common stock, which represents 50% of outstanding common stock. 

The Company’s founders may not be able to work on the venture full-time in the event of health, family, or other extenuating circumstances thus slowing the company’s progress and potential downturn.

Reliance on Third Party Platforms

We rely on one third party contract manufacturer for the production of Tally Kids Chickpea Milk and one third party contract manufacturer for the production of Tally Organic Oatmilk Toddler Formula. If we are unable to maintain our relationship with these contract manufacturing partners, our business could be significantly harmed. Furthermore, if the contract manufacturing facilities were to experience any problems in its business, particularly in connection with its ability to manufacture or ship products, our ability to produce and sell Tally Kids Chickpea Milk and Tally Organic Oatmilk Toddler Formula could also be significantly harmed.

Operating Costs

We are subject to income taxes and non-income-based taxes, such as payroll, sales, use, value-added, net worth, property, and goods and services taxes, in the US. Changes in employment laws or regulations could harm our performance.

Operating Costs (Quality)

Any defects in the products we manufacture, whether caused by a design, manufacturing, or component failure or error, may result in returns, claims, delayed shipments to customers, or reduced or canceled customer orders. If these defects occur, we will incur additional costs, and if they occur in large quantities or too frequently, we may sustain a loss of business, loss of reputation, and may incur liability.

Operating Costs

An increase in raw materials or energy costs 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 could adversely affect your investment.

Accuracy of Business Projections

Regarding revenue, it could be that our financial projections are inaccurate or that it takes longer (if at all) to meet projections. If this is the case, our investors may experience a lengthy period on their rate of return or lack of return that is well below that of other investment opportunities.

Return to Investors

We do not plan to pay dividends to its shareholders in the near future and there is no guarantee it will ever receive any profit from its operations so as to be able to declare and pay dividends to its shareholders.

The Company currently intends to retain any future earnings and does not expect to make any distributions for the foreseeable future.

The company currently has more liabilities than assets so investors are unlikely to be returned any capital should the company close down. 

Share Type 

Purchasers will not become equity holders until the company converts the Securities into equity in a future equity financing round.  

Purchasers cannot declare the Security in “default” and demand repayment. Unlike convertible notes and some other securities, the Securities do not have any “default” provisions upon which the Purchasers can demand repayment of their investment. The Company has ultimate discretion regarding whether or not to convert the Securities upon a future equity financing, and Purchasers have no right to demand such conversion. Only in limited circumstances, such as a liquidity event, may the Purchasers demand payment and even then, such payments will be limited to the amount of cash available to the Company.

Return to Investors

The Company may never elect to convert the Securities or undergo a liquidity event.

The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions. In addition to the risks listed above, businesses are often subject to risks not foreseen or fully appreciated by the management. It is not possible to foresee all risks that may affect us. Moreover, the Company cannot predict whether the Company will successfully effectuate the Company’s current business plan. Each prospective Purchaser is encouraged to carefully analyze the risks and merits of an investment in the Securities and should take into consideration when making such analysis, among other, the Risk Factors discussed above. 

THE SECURITIES OFFERED INVOLVE A HIGH DEGREE OF RISK AND MAY RESULT IN THE LOSS OF YOUR ENTIRE INVESTMENT. ANY PERSON CONSIDERING THE PURCHASE OF THESE SECURITIES SHOULD BE AWARE OF THESE AND OTHER FACTORS SET FORTH IN THIS FORM C AND SHOULD CONSULT WITH HIS OR HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT IN THE SECURITIES. THE SECURITIES SHOULD ONLY BE PURCHASED BY PERSONS WHO CAN AFFORD TO LOSE ALL OF THEIR 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.