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
Baru Inc. allows customers design custom furniture with our augmented reality app. When shoppers can customize each piece while seeing it in their home, shopping is easier.
Custom cabinet workshops throughout the United States and Europe underuse their machinery and often struggle to have enough business. Workshop machines are commonly only used two hours per day. BARU gives those workshops profitable business and uses the otherwise idle machines.
BARU has the opportunity to be selling $1 billion of furniture in 5 years (this cannot be guaranteed).
We hope to have 200 workshops in our network in the largest 60 metropolitan areas in the US and Europe. Over 250 million shoppers live in those regions.
With just four hours of machine time working for BARU, the 200 workshops will be able to make over $1 billion of custom furniture.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Milestones
Baru Inc. was incorporated in the State of Delaware in April 2019.
Since then, we have:
- The app connects to idle manufacturing automation in your hometown. Think Airbnb for machines.
- Buying local helps your community and the environment. You get the furniture in under two weeks!
- No inferior imported materials.
Historical Results of Operations
Our company was organized in April 2019 and has limited operations upon which prospective investors may base an evaluation of its performance.
Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $2,220.
Assets. As of December 31, 2019, the Company had total assets of $2,492, including $565 in cash.
Net Loss. The Company has had net losses of $128,008 for 2019.
Liabilities. The Company's liabilities totaled $5,500 for 2019.
Liquidity & Capital Resources
After 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 1 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
Baru Inc. cash in hand is $1,507, as of May 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $5,000/month, for an average burn rate of $5,000 per month. Our intent is to be profitable in 18 months.
Since the date of our financials, we have raised an additional $53,135 in capital.
We hope to be generating revenues in July, 2020. We expect (but not guarantee) to need $50,000 from this raise in order to go to market. At the end 2020, we aim to have generated $1.5M in revenues and incurred $1.3M in expenses.
In order to cover short-term burnrate, we can pause operations to halt our expenses to $0.
For additional sources of capital outside of this Wefunder offering, we can rely on angel investors in our own network.
