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Althea Brands LLC

Althea Brands LLC

Ayurveda-inspired hydration with the power of ancient herbs and antioxidants, in 0 sugar, 0 calorie, Vegan, Non-GMO and gluten-free blends.

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Deal Type

Convertible Note

Funding Goal

$750,000

Current Reservations

$200,000

Minimum Reservation

$25,000

Deal Stage

Seed

Interest (% per year)

6.00%

Term Length (Months)

36 months

Valuation Cap

$3,000,000

Conversion Discount (%)

20%

Warrant Coverage (%)

N/A

Open Date

03/15/2019

Maximum Reservation

$200,000

Closing Date

05/13/2019

Elevator Pitch

Inspired by Ayurveda, Béla wellness drinks harness the power of ancient herbs to provide healthy hydration that complements the lifestyles of active women pursuing holistic mind-and-body goals.

KPIs

$>100 cases/mth Transaction Volume

Company Overview

Althea Brands brings together traditional medicine and contemporary scientific research to develop natural and healthy foods and beverages.

Our first line of products - branded Béla - leverage the 5000 year old Indian system of holistic health and medicine - Ayurveda - to provide enhanced hydration by combining ancient herbs with contemporary scientific knowledge.

Béla combines traditional herbs like Turmeric, Tulsi, Ginger etc. with electrolytes and vitamins, and has 0 sugar, 0 calories, 0 protein, 0 caffeine, 0 carbs, 0 fat and no artificial ingredients.

With most if not all energy drinks containing sugar, calories and/or caffeine, they are not the drink-of-choice for active women. Moreover, these are predominantly branded for men - evidenced by Monster, Red Bull, Bang etc.

Béla is arguably the first-ever drink positioned around holistic mind-and-body harmony goals exemplified by Yoga, one of the fastest growing wellness disciplines in the country.

We launched in March 2018 and quickly attained over 50 local studios/gyms/stores as retail partners around metro Atlanta, and recently signed on Life Time Athletic as our first national customer.

Traction

  • Signed first national customer - Life Time Athletic - a marquee national fitness club with 140 locations and growing

    April, 2019
  • Crossed 50 retail locations in greater Atlanta

    April, 2019
  • Launched B2B and B2C eCommerce channels on blockchain-powered platform

    March, 2019
  • Commercial-scale production run with improved labels

    November, 2018
  • Crossed 25 retail locations in greater Atlanta

    September, 2018
  • Amazon store launched

    March, 2018
  • Béla Harmony Launched in 2 flavors

    March, 2018
  • Successful Pilot production run of 2 flavors

    February, 2018

Press Mentions

Key Customers & Partners

Savi Provisions - 4 locations Sevananda - one of the oldest local retailers YogaWorks - 4 locations Dancing Dogs Yoga - 3 locations Grant Park Market Candler Park Market City Provisions Over 50 retail partners around Atlanta

Testimonials

Diana DeLatour
Diana DeLatour
Co-owner, Be Hot Yoga, Atlanta, GA
"We carry Bela drinks at our yoga studio. They are very tasty and because of all the good stuff that is in them, they make you feel so good when you drink them!!!"
Erin Gravely
Erin Gravely
Manager, YogaWorks Dunwoody, Atlanta, GA
"I am so happy Atul came into our studio and introduced Bela to us! After the first sip I knew we had to carry Bela. It's so refreshing and tasty. Atul and his team have been so helpful with everything and even came to our studio for a sampling event! I highly recommend this product to everyone!"
Tani Woodlief
Tani Woodlief
Manager, Yoga Pilates Barre, McDonnough, GA
"Met the Bela folks at the SE Yoga Conference and they were kind enough to provide hydration to us all weekend with their delicious and healthy drinks. Love the fact that they are natural and lo cal. And on top of that, they taste great. Looking forward to the release - want this in our studio!"
Ilona Moore
Ilona Moore
Owner, Peachtree Yoga Center, Sandy Springs,
"Bela is a healthy drink that is unfused with herbs and minerals that hydrate your body and support its functions. It is a healthy alternative to both soft drinks and water. I love that there is an unsweetened version of the drink, which tastes great. The company is locally owned and the owners take pride in their product and develop personal relationships with their buyers, a lot of whom are yoga studio owners, which helps the community and the environment."
Facebook Reviews - 5 stars
Facebook Reviews - 5 stars
Various
"Visit https://www.facebook.com/drinkbela/reviews"
Amazon Reviews - 4.9 stars
Amazon Reviews - 4.9 stars
Various
"Visit https://amzn.to/2OlZpq2"

Previous Funding

  • $125,000 Equity
  • Raise Source: Self
  • October 2017
  • $25,000 Debt
  • Raise Source: Bank
  • August 2018
  • $50,000 Debt
  • Raise Source: Self
  • September 2018

Risks & Disclosures

General Risk Factors

The following risk factors are not intended as a substitute for professional legal, tax or financial advice. These risks factors are non-exhaustive and are intended to highlight certain risks associate with investing in start-ups and securities (equity) that are not registered with the Securities and Exchange Commission. This investment is highly speculative and should not be made by anyone who cannot afford to risk their entire capital contribution. In addition to these risks, you should carefully consider the specific information and risks disclosed by Althea Brands LLC (referred to herein as the "Company"). We strongly advise you to consult an independent financial advisor before investing.

The Term Sheet for the investment might contain additional risk factors that will be shared with investors before they sign the Term Sheet to finalize their investment.

The Company is not subject to Sarbanes-Oxley regulations and may lack the financial controls and procedures of public companies.

The Company may not have the internal control infrastructure that would meet the standards of a public company, including the requirements of the Sarbanes Oxley Act of 2002. As a privately-held (non-public) Company, the Company is currently not subject to the Sarbanes Oxley Act of 2002, and it's financial and disclosure controls and procedures reflect its status as a development stage, non-public company. There can be no guarantee that there are no significant deficiencies or material weaknesses in the quality of the Company's financial and disclosure controls and procedures. If it were necessary to implement such financial and disclosure controls and procedures, the cost to the Company of such compliance could be substantial and could have a material adverse effect on the Company's results of operations.

Investments in small businesses and start-up companies are often risky.

The Company's management may be inexperienced and investors will not be able to evaluate the Company's operating history. Small businesses may also depend heavily upon a single customer, supplier, or employee whose departure would seriously damage the company's profitability. The demand for the company's product may be seasonal or be impacted by the overall economy, or the company could face other risks that are specific to its industry or type of business. The Company may also have a hard time competing against larger companies who can negotiate for better prices from suppliers, produce goods and services on a large scale more economically, or take advantage of bigger marketing budgets. Furthermore, a small business could face risks from lawsuits, governmental regulations, and other potential impediments to growth.

State and federal security laws

The securities being offered have not been registered under the Securities Act of 1933 (the "Securities Act"), in reliance, among other exemptions, on the exemptive provisions of article 4(2) of the Securities Act and Regulation D under the Securities Act. Similar reliance has been placed on apparently available exemptions from securities registration or qualification requirements under applicable state securities laws. No assurance can be given that any offering currently qualifies or will continue to qualify under one or more of such exemptive provisions due to, among other things, the adequacy of disclosure and the manner of distribution, the existence of similar offerings in the past or in the future, or a change of any securities law or regulation that has retroactive effect. If, and to the extent that, claims or suits for rescission are brought and successfully concluded for failure to register any offering or other offerings or for acts or omissions constituting offenses under the Securities Act, the Securities Exchange Act of 1934, or applicable state securities laws, the Company could be materially adversely affected, jeopardizing the Company's ability to operate successfully. Furthermore, the human and capital resources of the Company could be adversely affected by the need to defend actions under these laws, even if the Company is ultimately successful in its defense.

Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex, especially in respect of those exemptions affording flexibility and the elimination of trading restrictions in respect of securities received in exempt transactions and subsequently disposed of without registration under the Securities Act or state securities laws.

The Securities will not be registered, and no one has passed upon either the adequacy of the disclosure contained herein or the fairness of the terms of the offering.

No governmental agency has reviewed this offering and no state or federal agency has passed upon either the adequacy of the disclosure contained herein or the fairness of the terms of any offering. The exemptions relied upon for such offerings are significantly dependent upon the accuracy of the representations of the investors to be made to the Company in connection with the offering. In the event that any such representations prove to be untrue, the registration exemptions relied upon by the Company in selling the securities might not be available and substantial liability to the Company would result under applicable securities laws for rescission or damages.

There is no public trading market for the securities, and none may develop. The securities sold in this offering are restricted and not freely transferable.

There has been no public or private market for the Company's securities, and there can be no assurance that any such market would develop in the foreseeable future. There is, therefore, no assurance that the securities can be resold at all, or near the offering price. You will be required to represent that it is acquiring such securities for investment and not with a view to distribution or resale, that it understands that the securities are not freely transferable and, in any event, that it must bear the economic risk of an investment in the securities for an indefinite period of time because the securities have not been registered under the Act or applicable state Blue Sky or securities laws. The securities cannot be resold unless they are subsequently registered or an exemption from registration is available.

There is no active trading market for the securities being offered and no market may develop in the foreseeable future for any of such securities. Further, there can be no assurance that the Company will ever consummate a public offering of any of the Company's securities. Accordingly, investors must bear the economic risk of an investment in the securities for an indefinite period of time. Even if an active market develops for such securities, Rule 144 promulgated under the Securities Act ("Rule 144"), which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions, for resales of securities acquired in a non public offering without having to satisfy such registration requirements, a six-month holding period following acquisition of and payment in full for such securities assuming the issuer of such securities has filed periodic reports with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act") for a period of 90 days prior to the proposed sale. If the issuer of such securities has not made such filings, such securities will be subject to a one-year holding period before they can be resold under Rule 144. There can be no assurance that the Company will fulfill any reporting requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning the Company, as is required by Rule 144 as part of the conditions of its availability.

Accordingly, you should be prepared to hold the securities acquired in such offerings indefinitely and cannot expect to be able to liquidate any or all of their investment even in case of an emergency. In addition, any proposed transfer must comply with restrictions on transfer imposed by the Company and by federal and state securities laws. The Company may permit the transfer of such securities out of a subscriber's name only when his or her request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Securities Act or any applicable state securities or "blue sky" laws.

THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL EVER FILE A REGISTRATION STATEMENT TO REGISTER SUCH SECURITIES, THAT SUCH REGISTRATION STATEMENT WILL BECOME EFFECTIVE, OR THAT ONCE EFFECTIVE, SUCH EFFECTIVENESS WILL BE MAINTAINED.

The Company has limited operating history.

The Company is still in an early phase, and is just beginning to implement its business plan. There can be no assurance that it will ever operate profitably. The likelihood of its success should be considered in light of the problems, expenses, difficulties, complications and delays usually encountered by companies in their early stages of development, with low barriers to entry. The Company may not be successful in attaining the objectives necessary for it to overcome these risks and uncertainties.

The Company may not be able to successfully implement its business plans, and in turn to make its Series A offering. In such a case, the expected conversion of the Investors’ debt into an equity security would not take place and the anticipated benefit of equity ownership would not occur.

The Company may not raise sufficient funds to close the Series A offering and the investor may not be able to convert its debt to equity.

The Company may not raise funds sufficient to close the Series A Round. If sufficient funds are not raised to close the Series A Round, the Investors’ only recourse may be to secure the repayment of the principal and interest of their loans from the Company.

The Company may need additional capital, which may not be available, and it may default on the Convertible Notes.

The Company’s working capital will consist of the funds secured from the sale of the Convertible Note. If expenses and anticipated uses of these funds exceed those anticipated by the Company there may be insufficient funds to pay back the Investors’ loans.

The Company may require funds in excess of its existing cash resources to fund operating deficits, develop new products or services, establish and expand its marketing capabilities, and finance general and administrative activities.

Due to market conditions at the time the Company may need additional funding, or due to its financial condition at that time, it is possible that the Company will be unable to obtain additional funding as and when it needs it. If the Company is unable to obtain additional funding, it may not be able to repay debts when they are due and payable. If the Company is able to obtain capital it may be on unfavorable terms or terms which excessively dilute then-existing equity holders. If the Company is unable to obtain additional funding as and when needed, it could be forced to delay its development, marketing and expansion efforts and, if it continues to experience losses, potentially cease operations.

In the event of default on the notes, the assets of the Company pledged as collateral in the Security Agreement would not be sufficient to repay all of the Investors’ loans.

The Company has provided a Security Agreement for each Convertible Note which encumbers all of the assets of the Company. If the assets were liquidated pursuant to a default and foreclosure, there would not be sufficient cash generated to pay off the principal or interest due on the Convertible Promissory Notes.

The offering price of the securities offered on the Site has been arbitrarily determined and may not be indicative of its actual value or future market prices.

The offering price was not established in a competitive market, but was determined by the Company. The offering price bears no relationship to the Company's assets, book value, historical results of operations or any other established criterion of value. The offering price should not be considered as an indication of the Company's actual value or the value of the securities.

The Company's management may have broad discretion in how the Company use the net proceeds of an offering.

Unless the Company has agreed to a specific use of the proceeds from an offering, the Company's management will have considerable discretion over the use of proceeds from their offering. You may not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.

The Company may not be able to manage its potential growth.

For the Company to succeed, it needs to experience significant expansion. There can be no assurance that it will achieve this expansion. This expansion, if accomplished, may place a significant strain on the Company's management, operational and financial resources. To manage any material growth, the Company will be required to implement operational and financial systems, procedures and controls. It also will be required to expand its finance, administrative and operations staff. There can be no assurance that the Company's current and planned personnel, systems, procedures and controls will be adequate to support its future operations at any increased level. The Company's failure to manage growth effectively could have a material adverse effect on its business, results of operations and financial condition.

The Company faces significant competition

The Company faces competition from other companies, some of which might have received more funding than the Company has. One or more of the Company's competitors could offer services similar to those offered by the Company at significantly lower prices, which would cause downward pressure on the prices the Company would be able to charge for its services. If the Company is not able to charge the prices it anticipates charging for its services, there may be a material adverse effect on the Company's results of operations and financial condition. In addition, while the Company believes it is well-positioned to be the market leader in its industry, the emergence of one of its existing or future competitors as a market leader may limit the Company's ability to achieve national brand recognition, which could also have a material adverse effect on the Company's results of operations and financial condition.

The Company's growth relies on market acceptance.

While the Company believes that there will be significant customer demand for its products/services, there is no assurance that there will be broad market acceptance of the Company's offerings. There also may not be broad market acceptance of the Company's offerings if its competitors offer products/services which are preferred by prospective customers. In such event, there may be a material adverse effect on the Company's results of operations and financial condition, and the Company may not be able to achieve its goals.

The Company may not pay dividends or interest for the foreseeable future.

Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any interest or dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.

THE COMPANY IS OFFERING THE SECURITIES PURSUANT TO AVAILABLE EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES LAWS. IF THE INVESTORS’ PROMISSORY NOTES ARE CONVERTED, ADDITIONAL RISKS WILL BE DISCLOSED ACCORDING TO A PRIVATE PLACEMENT MEMORANDUM AT THE TIME OF THE CONVERSION. THESE SECURITIES WHEN ISSUED WILL BE RESTRICTED SECURITIES AND GENERALY MUST BE HELD INDEFINATELY. THEY MAY NOT BE TRANSFERRED UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN AVAILABLE EXEMPTION FROM REGISTRATION WITH AN OPINION FROM LEGAL COUNSEL TO THAT EFFECT SATISFACTORY TO THE COMPANY. THE COMPANY IS UNDER NO OBLIGATION AND HAS NO INTENTION, TO REGISTER THE SECURITIES AND IS UNDER NO OBLIGATION TO ATTEMPT TO SECURE AN EXEMPTION FOR ANY SUBSEQUENT SALE.

Documents

Confidential

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