Management’s Discussion and Analysis of Financial Condition and Results of OperationsYou 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.OverviewSavannah Sauce Company’s product line includes hot sauces, ketchups, BBQ sauce, marinades, and other assorted sauces. We allocate profits from sales to go towards helping Veterans and their families.Our ambition is to be sold in stores across the country; we want to be known for not only our delicious products, but for also being good stewards of our planet and fellow man.MilestonesSavannah Sauce Company, Inc. was incorporated in the State of Georgia in September 2014.Since then, we have:
- In less than 24 months, we on-boarded Savannah Sauce Company's signature sauces into 46 Whole Foods Market stores in the Southern Region
- Named one of the "2016 Woman Vetrepreneurs We Love" by the National Veteran-Owned Business Association
- Created the "Tiny Homes for Big Heroes" cookbook to sustain tiny house communities for homeless Veterans
- Created the "Tiny Homes for Big Heroes" Project
Historical Results of Operations
- Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $137,051 compared to the year ended December 31, 2018, when the Company had revenues of $96,515. Our gross margin was 68.17% in fiscal year 2019, compared to 84.56% in 2018.
- Assets. As of December 31, 2019, the Company had total assets of $134,983, including $89,679 in cash. As of December 31, 2018, the Company had $91,199 in total assets, including $36,047 in cash.
- Net Income. The Company has had net income of $43,788 and net income of $18,667 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
- Liabilities. The Company's liabilities totaled $0 for the fiscal year ended December 31, 2019 and $0 for the fiscal year ended December 31, 2018.
Related Party TransactionRefer to Question 26 of this Form C for disclosure of all related party transactions.Liquidity & Capital ResourcesAfter the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 3 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 8 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 ExpensesSavannah Sauce Company, Inc. cash in hand is $18,000, as of May 2020. Over the last three months, revenues have averaged $7,400/month, cost of goods sold has averaged $2,100/month, and operational expenses have averaged $1,430/month, for an average net margin of $3,870 per month. Our intent is to be profitable in 12 months.
After our FOX and Friends interview we experienced a huge spike in sales. We hope this trend to continue, although it not be guaranteed. We are also in talks with Cracker Barrel and Bass Pro Shops, which could increase our sales by 4 times.
In 6 months, we hope (but not guarantee), to have revenues of $40,000.00/month with expenses estimated at $19,450.00/month.
We are applying for grant free incubators which will provide us with an injection of capital. We also plan on fundraising again in 12 months.
