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

Our trendsetting and award-winning products are sold direct to consumers online and through a network of 5 Event Sales Representatives, on QVC, in 5,500 retail food stores including Walmart, Acme, and Shop-rite and served in 1,000 restaurants. Totally bootstrapped, we went from $100k Year 1 revenue to just under $1 million in Year 5. We are raising capital to fuel the fire following our proven roadmap: tesingt new products, restaurants to drive product awareness, retail for the win. 

Our goal is to have our 3 SKUs in  all 38,000 grocery stores within 5 years including Whole Foods, Kroger, Publix, Albertsons. We plan to continue driving category expectance via food service by adding national distribution of 3 SKUs in national distribution through Sysco Foods. We plan to expand our network of Event Sales Representatives from 5 to 15, adding even more outlets to test market our expanding lines. 

Milestones

The Bacon Jams LLC was incorporated in the State of Pennsylvania in August 2013.

Since then, we have:

• 90% Revenue Growth last year.
• $3M in total revenue. Bootstrapped AND profitable since inception.
•  Products on 5,500 grocery stores shelves (14% penetration in just 5 years). 
• 1,000 restaurants serving our bacon jam.
• We already have national distribution in both food service and retail-wholesale channels.
• Award-winning, best in class products.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $950,351 compared to the year ended December 31, 2017, when the Company had revenues of $537,661. Our gross margin was 46% in fiscal year 2018, compared to 44% in 2017.
• Assets. As of December 31, 2018, the Company had total assets of $197,091, including $31,233 in cash. As of December 31, 2017, the Company had $107,585 in total assets, including $23,362 in cash.
• Net Loss. The Company has had net losses of $9,454 and net income of $19,809 for the fiscal years ended December 31, 2018 and December 31, 2017, respectively.
• Liabilities. The Company's liabilities totaled $186,906 for the fiscal year ended December 31, 2018 and $87,946 for the fiscal year ended December 31, 2017.

Liquidity & Capital Resources

To-date, the company has been financed with $122,500 in debt and $120,000 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 14 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 48 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

The Bacon Jams LLC cash in hand is $23,557, as of March 2019. Over the last three months, revenues have averaged $34,670/month, cost of goods sold has averaged $14,221/month, and operational expenses have averaged $21,239/month, for an average burn rate of $790 per month.  

We have been running close to a break even for several months. We pay ourselves, not lavishly, and put everything back into marketing. Once we get to 50-65% penetration we will pull back our marketing budget to 15% of revenue and the rest will be profit.  We expect (although cannot guarantee) to be profitable in 2 - 3 years.

We are finalizing a move to 3PL (third-party logistics) fulfillment and have not renewed the lease on our warehouse location. This will result in lower overhead and reduced expenses with greater flexibility with respect to managing warehouse operations.

A key part of the 3PL transition is our expectation that it will allow us to remove focus from the daily functions of shipping and receiving so we can concentrate on sales and marketing efforts. We are preparing for the summer event and show season.

At this time we have a significant number of opportunities with major stores and require the fundraising to move forward and maximize these opportunities. If we do not get the funding we will have to grow slowly in specialty markets but funding will enable us to move forward with larger opportunities. We do not at this time have other sources of capital available to us, so our growth decisions will be based upon the results of the Wefunder campaign. A successful funding campaign will result in marketing efforts and customer visits to major players and promotion when we get in the store.