We’ve been making gelato since 2002, when we opened our first scoop shop in Downtown Berkeley. Over the years, we developed our own flavors made from the native, high-quality ingredients Northern California is known for. Our local customers have noticed, as we’ve been listed in the San Francisco Business Times’ fastest-growing private company list each year from 2013-2017.
Our Signature “Gelato on a Stick” is Sold in 250+ Stores
When Whole Foods stopped featuring in-store gelato stations in 2011, we created a brand new product for the market – Bar Gelato. It’s the same great Naia gelato, just in a portable, easy-to-consume design, and it makes up a quarter of our revenues.
We Source Ingredients from Dozens of Local Partners
“Real, simple gelato” isn’t just a marketing gimmick. While most industrial ice cream factories use a squirt of “natural flavor goo,” we use real ingredients from the best local producers we can find, whether it’s pistachios from Fiddyment Farms or coffee beans from Philz. And we do it ourselves, from developing our own recipes from scratch to delivering it on our own truck.
Find Us in 250+ Local Northern California Stores
A Three-Stage Business Model Designed for Resilience
About 45% of our business comes from developing, manufacturing, and distributing our own products. As we grew, we became a great delivery option for other brands, a branch that now accounts for 45% of our sales. The last 10% comes from leveraging our expertise to develop and manufacture products for other brands.
Vertical 3-stage pipeline from ideation to shelves.
We make Bar Gelato.
Our First Store Opens in Berkeley, CA
5th Scoop Shop Opens
All of them supplied by our own small, central kitchen.
Scooping In-Store Gelato at Nine Whole Foods Markets
We’ve also got dozens of other foodservice accounts.
Bar Gelato, Our First Consumer Packaged Product, Launches
Our Distribution Arm, Naia DSD, Launches
By adding other ice cream brands to our delivery trucks we start doing distribution.
Construction Begins on Expanded Kitchen
Nationwide Distribution Starts
Plus, we made San Francisco Business Times’ Fastest-Growing Private Companies List each year between 2013 and 2017!
$2.9 million in 2017. More than a quarter of that comes from Bar Gelato. After a few years we have also been turning our attention to traditional pints and tubs of Naia gelato which have nearly doubled in sales year-on-year which bring our Naia branded sales, along with wholesale gelato sales, to
45% of our total sales. Another
45% of sales come from the distribution of third-party products. As we grew, we became a great delivery option to those 250 accounts for ice cream brands like McConnell’s Ice Cream, Humphry Slocombe, Clover Ice Cream, and Double Rainbow. The last
10% comes from both R&D and manufacturing for other brands such as Clover-Sonoma and St. Benoît Creamery.
51% profit margin for our branded products. With the new creamery, we will be able to work towards a higher margin, both with the machinery efficiencies as well as increasing our co-packing business to address overhead. More importantly, our cash flow is negative, because of our expensive loans for things like distribution vehicles. Our SBA lender strategized with us on this and came up with a great plan – part of their capital will wipe out that high-payment debt and amortize it over the 25-year loan, which turns our cash flow positive immediately.
Naia has financial statements ending December 31 2019. Our cash in hand is $25,272, as of December 2019. Over the three months prior, revenues averaged $150,088/month, cost of goods sold has averaged $106,778/month, and operational expenses have averaged $87,987/month.
At a Glance
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.
Sixteen years ago, we opened a scoop shop in Downtown Berkeley to bring great tasting gelato with simple, real ingredients to Northern CA. Now we sell gelato tubs and Bar Gelato, our signature “gelato on a stick,” in 250+ retailers across Northern CA. We were named one of the San Francisco Business Times’ fastest-growing businesses five years in a row, and with the capital to update and expand our creamery, we’re primed to break into the national market.
We are here to leverage the success we have had with our products in Northern California and grow our company to a national level and beyond. Given the success of our flavors there’s no reason why Naia’s products should not be in every major retailer.
Naia, Inc. was incorporated in the State of California in January 2013.
Since then, we have:
- Sold in 250+ Northern California stores.
- 51% profit margin for branded products.
- 18 years in operation.
- Named in the San Francisco Business Times’ fastest-growing private company list each year from 2013-2017.
- Won three national awards for coffee, pistachio, and burnt caramel flavors.
Historical Results of Operations
- Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $1,801,050 compared to the year ended December 31, 2018, when the Company had revenues of $2,368,688. Our gross margin was 28.86% in fiscal year 2019, compared to 38.46% in 2018.
- Assets. As of December 31, 2019, the Company had total assets of $2,534,206, including $25,272 in cash. As of December 31, 2018, the Company had $2,099,488 in total assets, including $11,376 in cash.
- Net Loss. The Company has had net losses of $708,971 and net losses of $465,734 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
- Liabilities. The Company’s liabilities totaled $4,890,394 for the fiscal year ended December 31, 2019 and $2,276,163 for the fiscal year ended December 31, 2018.
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 $3,654,154 in debt and $352,500 in equity.
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 order to perform operations over the lifetime of the Company. We plan to raise capital within 24 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
Naia, Inc. cash in hand is $25,272, as of December 2019. Over the last three months, revenues have averaged $150,088/month, cost of goods sold has averaged $106,778/month, and operational expenses have averaged $87,987/month, for an average burn rate of $44,677 per month. Our intent is to be profitable in 12 months.
As with many businesses, Naia is materially affected, since the date that our financials cover, by the global COVID-19 pandemic and its subsequent effects, including but not limited to: shutdown of approximately fifty accounts such as schools, corporate campuses, and entertainment venues, supply chain and finished product distribution friction, and increased company awareness and vigilance for COVID-19 in the workplace.
The microeconomic and macroeconomic effects of the pandemic are larger than the seasonal changes of business for consumer ice cream, gelato, and novelties.
We do have additional lines of business post-pandemic that we expect to reach at least 15% growth of revenue. Expenses are also expected to reach at least inline with last year given the additional COVID-19 employee protections that we put in place.
SBA Disaster Relief loans are additional sources of capital on which we we rely on this year.
A note from Wefunder. Unlike companies on the NASDAQ, early-stage startups have little operating history. Financial analysis is not as useful when there is limited data. It’s more important to predict the size of the future market. If the founder achieves their vision, will enough customers pay the company enough money?
It’s also common for fast-growing startups to lose money even faster: they are investing in future growth. In these cases, it’s often better to check if the Cost of User Acquisition (CAC) is lower than the Lifetime Value (LTV) of that customer. If one spends $1000 today to make $10,000 over the next five years, that may be a smart bet. Amazon is a famous example of re-investing potential profits to maximize growth over 20 years.
Naia gelato We’ve been making gelato since 2002, when we opened our first scoop shop in Downtown Berkeley. Over the years, we developed our own flavors made from the native, high-quality
Truth In Flavor
Bar Gelato is a new way to enjoy Naia’s® hand-crafted, artisanal gelato. Made from locally-sourced ingredients, our Bar Gelato is crafted in small batches in the traditional Italian manner, then frozen into a bar form that’s easy and convenient to take with you, wherever you are going.
See us now on Instagram.
We now are on Instagram, please follow us there.
What is Gelato?
If you’ve never had gelato before, you are in for a treat. Gelato is a traditional Italian frozen dessert that is made mainly with milk and not cream. This means that gelato has more flavor with fewer calories. No artificial flavoring, no corn syrup (high fructose or otherwise), our gelato is made from a few simple ingredients and real flavor. When you bite into Bar Gelato, for example our Blue Bottle Coffee Bar Gelato, that’s real, cold-pressed coffee you are tasting. Nothing less and certainly nothing more.
Bar Gelato is authentic, hand-made, premium gelato made by Naia, crafted in a bar form so you can enjoy our gelato wherever you go, whenever you go.