The Sill

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

The Sill is an ecommerce and physical retail location company specializing in various and unique houseplants, ceramic planters, faux plants, flowers, and various items to care for and maintain the plants.  The Company also provides online and hands-on instore workshops and activities for education centered around biophilic design.

Milestones

The Sill, Inc. was incorporated in the State of Delaware in July 2017.  The company started as a NY LLC in 2011.

Since then:

• The Sill is the destination for responsibly-sourced, high-quality houseplants and care accessories.
• We have generated more than $50 million in sales since 2020.
• The Sill's mission is to bring life to people, and people to life.
• The Sill has shipped more than 1 million plants nationwide.
• We are one of the only omni-channel houseplant brand with multiple brick-and-mortar retail stores.
• The Sill has more than 800,000 customers and 780,000+ Instagram followers.
• The Sill has been featured in the New York Times, Wall Street Journal, Today Show, and more.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2022, the Company had revenues of $13,412,118 compared to the year ended December 31, 2021, when the Company had revenues of $16,493,031. Our gross margin was 37.91% in fiscal year 2022, compared to 35.52% in 2021.
• Assets. As of December 31, 2022, the Company had total assets of $5,627,402, including $1,203,814 in cash. As of December 31, 2021, the Company had $5,955,314 in total assets, including $3,269,453 in cash.
• Net Loss. The Company has had net losses of $6,726,587 and net losses of $6,911,049 for the fiscal years ended December 31, 2022 and December 31, 2021, respectively.
• Liabilities. The Company's liabilities totaled $15,825,382 for the fiscal year ended December 31, 2022 and $9,639,174 for the fiscal year ended December 31, 2021.

Liquidity & Capital Resources

To-date, the company has been financed with $6,312,957 in debt, $17,121,207 in equity, and $7,018,865 in convertibles.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 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 6 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 Sill, Inc. cash in hand is $800,000, as of September 2023. Over the last three months, revenues have averaged $839,531/month, cost of goods sold has averaged $396,265/month, and operational expenses have averaged $505,694/month, for an average burn rate of $62,428 per month. Our intent is to be profitable in 3 months.

Our revenue fell from 2021 to 2022 as we reduced our burn rate.  

Our operations have remained consistent since the start of the year. We have brought in $1.5M of capital in an equity raise on the same terms as this campaign. 

We expect revenues to average $900K/month in the next 3-6 months with COGs plus expenses being approximately the same such that we are operating at break even. 

We expect to be profitable in the next 3 months. 

Our primary source of capital is Revenue. As we expect to be profitable in the next 3 months, we have enough cash to cover our short-tern burn. 

All projections in the above narrative are forward-looking and not guaranteed.