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

VC Dry Goods currently specializes in gourmet beef jerky. What really separates us from the crowd is that we take a unique approach to the snacking occasion. We take into account the entire multisensory experience - the smell, the taste, the appearance - as you would expect with a gourmet meal. This gourmet mindset leads us to push the flavor envelope by using ingredients that you don’t typically find in beef jerky, or snacks in general, like smoked sea salt and fresh (not dried) ingredients.

VC Dry Goods hopes to be a national snack food brand, known for pushing the limits of flavor and innovation. We currently specialize in beef jerky, but that’s just the start. We hope to expand beyond that into different areas of the meat snack segment first, then into other snack categories where we can have a disruptive impact. We also hope to create a small production facility of our own so that we can get really creative with smaller batch/seasonal flavors, and impact the segment even further.

Milestones

Van Cleave Dry Goods LLC was incorporated in the State of Texas in February 2014.

Since then, we have:

• Sold in 300+ locations, including Total Wine & More, Albertsons, United Supermarkets/Market Street, among others.
• Distributed through UNFI, largest natural foods distributor in the nation. 
• Met with Walmart and Target. Both have already expressing interest based on samples given, and we are expecting to be set up as vendors shortly.
• Entered into licensing agreement with Valiant Comics to debut cobranded beef jerky with release of Bloodshot movie feat. Vin Diesel.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $168,855 compared to the year ended December 31, 2017, when the Company had revenues of $109,012. Our gross margin was 142.11% in fiscal year 2018, compared to 178.75% in 2017.
• Assets. As of December 31, 2018, the Company had total assets of $100,709, including $35,323 in cash. As of December 31, 2017, the Company had $21,891 in total assets, including $8,815 in cash.
• Net Income. The Company has had net income of $21,660 and net losses of $41,993 for the fiscal years ended December 31, 2018 and December 31, 2017, respectively.
• Liabilities. The Company's liabilities totaled $47,333 for the fiscal year ended December 31, 2018 and $38,747 for the fiscal year ended December 31, 2017.

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 $46,610 in debt and $80,500 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 24 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

Van Cleave Dry Goods LLC cash in hand is $35,323, as of December 2018. Over the last three months, revenues have averaged $32,003.97/month, cost of goods sold has averaged $6,173.68/month, and operational expenses have averaged $9,945.63/month, for an average net margin of $15,884.66 per month. Our intent is to be profitable in 3 months.

Our sales have increased steadily since the date that our financials cover. We have increased our online revenue and received several reorders from existing customers. We expect this trend to continue throughout 2019 because we are working with larger companies with larger numbers of stores. 

We expect revenues to increase, as well as COGS in line with the additional volume. Thanks to our Wefunder investors, the money raised has allowed us to successfully launch in the Albertsons Southern Division. We are also currently in talks with several other divisions of Albertsons/Safeway and Walmart. We are expecting to close several of these deals, so we expect sales to increase accordingly.