Riot Foods By Ryan Kamins

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About Riot Foods

MA

 

Riot Foods is a new generation food business with an unshakeable commitment to producing wholefoods that taste great, are free from harmful ingredients and accessible to mainstream consumers. 

Through our CleanPaleo and Poppy + Olive brands, we package real food in an attempt to make following a genuinely healthy lifestyle enjoyable and convenient. 

We want to lead the revolution against "non-food" ingredients, and bogus nutritional information.

We want you to be a part of the revolution!

 

 MC

 

 

Why Crowdfunding? 

The Myth

When we developed our first humble cereal in a brown paper bag and offered it to the boutique supermarkets, they were instantly supportive of the concept of whole foods and the unique offer that we could provide.

Then there were the “doubters” & “nay-sayers” – the financiers, the agencies and the competing big brands:

“The world does not need another cereal manufacturer or biltong supplier”

“There are too many protein products and suppliers in the market”

“Paleo is a flash in the pan, a fad – and what will your business have to offer after that?”

 

The Reality

Paleo is one of the pillars of what we know as whole food. The food that is healthy for you to eat, based on your genetic makeup and gut related bacteria. In principle “whole food” is food that has

  • No added flavours
  • No refined sugars
  • No preservatives
  • Minimally processed
  • As close to nature as possible
CP

Riot Foods brands were the early starters in the food riot – and we are still here with increasing products and market share. As a result, we need to setup a second manufacturing facility. We manufacture tasty whole foods under trusted and recognised brands that our wise customer base finds tasty, nutritional and convenient.

PO

To date the current shareholders have invested approximately $3.8 million to develop Riot Foods to this exciting position.

But

It’s the crowd who have helped us prove the nay-sayers wrong. Now we want to invite our crowd in to support us further. This is the opportunity to make this your business too! 

 

  

 

 

 

About our Team

 

 

Ryan Kamins - CEO / Director / Founder Galvanizer & Instigator
Ryan studied Commerce and Law at the University of Canterbury (Undergraduate), and currently oversees and manages the running of all aspects of the business. As the founder, the passion and drive is endless! Say no more! 

Arthur Green - Director / Brand Ambassador Instigator
Art’s bachelor degree in Food Nutrition counted for little during his stint as New Zealand’s first ‘Bachelor’. Art has established a respected following as one of New Zealand’s leading fitness and wellness ambassadors. He’s committed to combatting mediocre nutrition and helping people lead a healthier lifestyle.

 

 

David Craig - Investor / Brand Manager Master Forger
David’s background is in marketing and design management. He has extensive FMCG experience and has worked on both ‘sides of the fence’ – working for the likes of multi nationals such as Cadbury and founding his own company (Sequent) that helped blue chip corporates deliver their brand and retail vision into the market place.

 

 

Tim Holt - Sales Manager Master Trafficker
Tim has recently joined the Riot Foods team with extensive experience in market leading FMCG companies (Unilever, Nestle, Frucor, Beiresdorf, Foodstuffs NI) in roles including National Sales and Marketing Management to CEO. Tim brings a strong result driven focus in competitive and complex environments combined with a high level of commercial astuteness to the Riot Foods business. Tim is responsible for driving Sales strategy across New Zealand and Australia.

  

Marilyn Howard - Operations Manager & Finance Enforcer
Marilyn has extensive experience in operational and financial responsibilities across a wide variety of businesses.

 

 

 

 

Jamie King - Production Manager Rabble-rouser
Jamie is a founding employee. Standing side by side with Ryan through the early days when setting up factories was a real challenge. His elbow grease and dedication has seen him develop to a management position.

 

 

 Food Awards

 

The Offer

We are selling up to 17.8% in Riot Foods Limited to our crowd at a pre-money valuation of $4.6 mil. Shares are priced at $0.27 each and the minimum investment amount for any one investor is $500.04 (1,852 shares).

 

Shareholding stucture

 

Types of shares on offer 

The Constitution provides for two classes of shares: Ordinary Shares and Investor shares The Crowd are being offered Investor Shares, and Ordinary shares for those who invest $150,000+.

The investor shares are non-voting but will have the following rights:

Non-voting shares do not give the holder the right to vote in relation to any resolution of Riot Foods, except on a proposal that will affect the rights attached to the Investor Shares.

Non-voting shares will give the holders:

  • The right to an equal share in any dividends authorized by the board
  • The right to an equal share in the distribution of surplus assets of Riot Foods

Investor shareholders have no rights to vote on removal or appointment of directors.

The ordinary shares are voting shares and have full voting rights attached.

You can read more about the rights attached to ordinary and investor shares in our constitution.

 Choc

 

 

What we're raising the money for?

 

  

 

 

 

What we've done so far

Over the past 3 years, we've gone from being a supplier to niche health and grocery stores whilst making product in the evenings at a rented bakery, to supplying over 250 major supermarkets and producing from our own gluten free manufacturing facility. You can now find our products in online and brick and mortar retailers in countries such as the USA, Australia, and Singapore.  

Having achieved revenue of $1.4m in FY17 (up from $860k in FY16), Riot Foods is forecasting revenue growth of 50% to $2.1m in FY18, and is forecast to generate sales of $7.4m and positive EBITDA of $121k in FY20, with significant continued growth in sales and EBITDA through FY22. 

 

 

What's next?

To achieve our growth strategy we will be focusing on the following 5 marketing objectives:

1. Extend the distribution of existing products through our existing retail channels in NZ

2. Extend the distribution of existing products into major retailers in Australia

3. Establish a presence in the petrol and convenience channels in NZ and AUS

4. Continue to build our brands through existing and new export markets

5. New Product Development - Launch a consolidated portfolio of further products and brands

 

 

Risks and Challenges

Stage of the business – we are young lean business. As a result, we’ve had to become adept at learning and responding to challenges. However, to take us further ahead, we have enlisted the support of specialist consultants and service providers to surround our leadership team with the resources to make informed strategic decisions and hold us accountable to the targets that have been set.

 

Stage of the market – the market for health and wellness foods in New Zealand is still developing and while demand is strong, we need to be considered and deliberate in the categories and market segments we target. Failing to do this will leave our brand stretched and open the door for established brands to sweep in and capitalise on the opportunity.

 

Affordability – 79% of consumers perceive healthy foods to be expensive and 52% believe that these foods are lacking flavor (Mintel). While our food philosophy and product development experience gives us the tools to address the later, we need to ensure we are working towards creating a product portfolio that delivers health and wellness foods at an accessible price-point.

 

Foreign Exchange – currency fluctuations are a factor in our business. At this stage, one of our risk management tools is the natural hedge where the import costs for ingredients are offset by our exports to Australia and the US.

 

Budget – Given our growth trajectory, it is difficult to forecast financial performance and cashflows accurately, especially longer than 12 months out. Our inputs are largely commoditised ingredients which fluctuate in price, and as we enter new export markets, our sales forecasts remain uncertain. To mitigate budget risk we have invested significant time and resource into financial modelling, and accuracy has greatly improved utilising the experience of our new Australasian sales manager. Our financial model is based on what we expect is reasonably achievable in revenue terms, and expense items are modelled accordingly.

 

New markets – the export markers we have identified remain largely untested and this presents uncertainty in the level of earnings we will generate from these markets. We have aimed to mitigate this uncertainty as best we can but engaging external advisors (Katabolt) and spending significant time and effort researching and assessing which markets to enter and when.

 

Staff retention / key person – key person risk arises from the fact that Ryan has been with the company since day one, and has been the driving force behind the growth of Riot Foods to date. We may mitigate key person risk and wider staff retention risk by way of employee share incentives.

From a brand perspective, Art’s role as brand ambassador is a key reason for Riot Foods has strong brand equity and such a loyal following of consumers. The risk of Art parting with the company is largely mitigated by his ownership share in Riot Foods.

 

IP – IP risk is minimal. There is no significant IP involved in our operations other than the manufacturing know-how we have developed. Our custom-built facility (WFM) presents a barrier to entry for competitors as a result of the capital outlay it would require to replicate such a facility.

 

Competition – We have no direct competitors in the pure Paleo Brand space. Large NZ breakfast manufacturers have unsuccessfully tried to launch Paleo products, however large food brands contradict themselves by trying to promote both their existing ranges, as well as free-from products. Furthermore, we believe it would be extremely hard for a competitor to make a cheaper alternative that still tastes good.

 

Scale-up – there is minimal risk that we grow too fast for our existing operation arrangements. The majority of our ingredients are major commodities. Our extended manufacturing facility will have significant capacity with the ability to increase capacity with further capital spend. There are risks related to timing in the set up of the additional manufacturing facility. This will be mitigated by senior management close involvement in the project.

 

Note from PledgeMe

We have completed a Veda check on the company and their directors, as well as a google check. There were no adverse findings. 

Updates

    Big Developments : Campaign Extension

    10:30AM Fri 15/12/17 on Riot Foods

    Hi Rioters,

    We’ve recently had some exciting new developments which, if finalised, helps to underpin the next 5 years of our business model. This opportunity is set to begin in January/February (next month)! 

    Due to this huge opportunity, we’ve decided to extend the campaign and allow our crowd to be right there with us on the next stage of our journey as we execute.

    There’s no doubt this opportunity has come from the help of our crowd, so thank you. Let’s all try to get the Riot even bigger over the next month and continue to revolutionise the food industry!

    Happy Rioting!

    Comment on this update:

    Share Trading and Sale Of Shares

    08:28PM Thu 07/12/17 on Riot Foods

    To clarify some previous questions around share trading:

    As Directors, we cannot provide what would be deemed as financial advice as to what the shares are worth. i.e. We would not set the daily price ourself, but based on the financial results, shareholders could apply a suitable multiple to determine a valuation.
     
    We also do not guarantee any buyback of the shares. We are limited to providing a 'matching facility', which would be ensuring willing buyers are able to communicate with willing sellers. Initially this may just be phone or email communication.
     
    We certainly agree that his could become very time consuming sorting out the trading issues. But if this was the case, we would then look to implement a 3rd party provider or platform, which may be able to facilitate the 'daily trading / price' you have outlined. An example of a solution may be a platform such as 'ShareMart', which would be able to inform shareholders of the last selling price of shares, and allow shareholders to leave shares for sale at a certain price.
     

    An IPO would be dilutionary, as the primary purpose of this would be to raise new money.  However, it may be possible for shareholders to sell down their shares as part of this offer. 

    Comment on this update:

    We're Live and Rioting

    02:39PM Thu 07/12/17 on Riot Foods

    Hi Everyone!

    Thanks for your support so far. We are thrilled to have more and more people joining the Riot.

    A big thank you to everyone who has pledged already!

    We look forward to having a drink with you later today at:

    Brothers Brewery

    5 Akiraho St

    Mt Eden

    Art and myself will be there from 4pm onwards

    Happy Rioting!

    Comment on this update:

    Offer Details

    Current Valuation 4,622,941
    Raise Minimum 600,000
    Raise Maximum 1,000,000
    Share Price 0.27
    Maximum Shares Offered 3,703,703
    Explanation of valuation:

    Riot Foods has set a pre-money valuation of $4.6 mil, based on a 2.2 x multiple of the six months of revenue (May to October 2017), annualised. In the six months from May to October 2017, revenue was $1.05 mil - expanding that out to twelve months, would be $2.1m.
    The share price, and subsequent valuation is unchanged from our last capital raise in November 2017. The table on page 12 of our IM gives a relative comparison between Riot Foods and similar companies from around the globe.


    Financial Summary

    Prev Year Current Year Est. FY 2019 Est. FY 2020
    Revenue $1,383,000 $2,055,000 $3,932,000 $7,366,000
    Operating Expenses $1,535,000 $2,269,000 $2,942,000 $4,412,000
    EBITDA -$640,000 -$974,000 -$465,000 $121,000
    Net Profit -$928,000 -$1,159,000 -$638,000 $7,000

    Company Details

    Company Name: Riot Foods Limited

    Company Number: 5494241

    Company details are currently being synced with the Companies Office, please wait.

    Company Documents

    Business Plan (application/pdf, 14.4 MB, uploaded 15 December 2017)

    Financial Performance (application/pdf, 3.41 MB, uploaded 15 December 2017)

    Financial Projections (application/pdf, 3.41 MB, uploaded 15 December 2017)

    Constitution_27_Nov_17.pdf (application/pdf, 342 KB, uploaded 05 December 2017)

    Certificate_of_Incorporation_-_Riot_Foods_Limited.pdf (application/pdf, 1.68 MB, uploaded 06 December 2017)

    Company_Extract_-_Riot_Foods_Limited.pdf (application/pdf, 3.99 MB, uploaded 06 December 2017)


    Director Details

    Name Role Profile URL Invested?
    Ryan Kamins Galzanizer & Instigator https://nz.linkedin.com/in/ryan-kamins-2ba30764
    Arthur Green Instigator https://www.linkedin.com/in/art-green-7b000360
    Trevor Kamins Tipster & Instigator https://nz.linkedin.com/in/trevor-kamins-7235a217
    Robin Chemaly Chief Regulator & Instigator https://nz.linkedin.com/in/robin-chemaly-aa337419

    Ask a Question (You must login to ask a question)

    Avatar small

    Hi there... couple of things. Once people have bought their shares, how will the trading of those shares be conducted. Usually you have a trading account and you can buy and sell whenever you want for a readily visible price. How does all that work in this case? Also, how did you determine the value of your company and the shares themselves? Cheers.

    Posted on 07-12-2017 by Amanda Maclaren

    Hi Amanda,

    Thanks for the interest in the campaign. There is no current trading account or platform in place by the company, however the Board will facilitate the trading of shares should shareholders wish to do so. If the raise is successful, we will assess whether it is necessary to establish a trading account / platform to facilitate this rather than doing so via direct communication. The number of shareholders coming on board and demand for sale / purchase will likely dictate this.

    In terms of Valuation, you will see in the IM that we have set this at 2.2x previous 6 months revenue (1 May 2017 to 31 October 2017), annualised, which is $2.1m. This has also been matched against a Discounted Cash Flow valuation, which puts the $4.6m valuation in the lower to middle range of that.

    Hope this has helped you

    Answered on 07-12-2017 by Ryan Kamins

    Hi again - thanks for the previous answer (I can email if multiple questions are going to be annoying). So... if you guys are, in theory, going to handle the ongoing trading of shares once you've raised the amount of money you want, how are you going to set the daily price, and where will this be advertised? Will you guarantee to buy them back, or will someone have to wait until somebody puts their hand up for them? If, say, you wound up with a couple of thousand people who had bought a minimum amount of shares, you may find yourself with a full-time job taking calls and sorting out trading issues. Obviously, in the short-medium-term absence of dividends, the 'investment' is the likely increase in the value of the company, so it seems crucial that the share value be regularly assessed and that people be able to buy and sell in a timely fashion. Also, if you do consider an IPO in the future, how will that affect existing shareholders i.e. a presumable dilution in their shareholding? Sorry, that was lots of questions. Cheers.

    Posted on 07-12-2017 by Amanda Maclaren

    Hi Amanda,

    Do you mind sending me an email to ryan@riotfoods.com?
    Will probably be easier to address all the questions
    Thanks!

    Answered on 07-12-2017 by Ryan Kamins

    Hi Ryan, can you please send me the second response that was sent to Amanda?? Many thanks, Andrew

    Posted on 07-12-2017 by Andrew Hibbert Hindin-Miller

    Hi Andrew,

    Yes not a problem. As soon as I am able to reply to Amanda, I will also respond to you with a summary of the key points. Will also most likely provide an update to the campaign page around these questions

    Thanks for your patience

    Answered on 07-12-2017 by Ryan Kamins

    Hi, can you please help me understand the valuation? You have used 6 months revenue. Why not a full year or average of the last two years when you have this information. Also, why have you used revenue and not NPAT or adjusted NPAT? Thanks!

    Posted on 09-12-2017 by Belinda Skinner

    Hi Belinda,

    Thats a really good question. Our valuation method is a typical one for early stage FMCG (Fast Moving Consumer Goods) companies. This is because in the early stages, particularly ones that also manufacture, marketing and overhead costs are high in order to win shelf space and be able to keep up with demand.
    We have had valuations done using similar methodology by 3rd parties over the course of business. A lot of companies similar to ours actually base their valuation on a multiple of the next years forecasted revenue, where in our case we have tried to use an actual results method.

    A useful website to see valuations of similar companies to ours is: https://circleup.com/data/

    Although these have been based on transactions occurring in the USA, you can see that our valuation is on the conservative side of these comparable transactions.

    I hope this has helped you? If you would like some more detail or have further questions, please send me an email to ryan@riotfoods.com

    Answered on 09-12-2017 by Ryan Kamins

    The cash flow model looks flawed. For example, under the operating movements for the FY18 year it has cash inflows $951K, outflows -$2K (must be a cheap year) and then net movements of -$658K. Struggling to interpret that.

    Posted on 13-12-2017 by Hamish Baker

    Hi Hamish – thank you for that – good pick up.
    The summary model line “Outflow from Operating Activity” had picked up the wrong line off the detailed supporting model. This has been corrected. All the other lines including net movements etc are the same

    Answered on 15-12-2017 by Ryan Kamins

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      Investor Perks

      NZ $500 - $999

      Nibble

      10% discount on all Riot Foods' brands' online stores

      NZ $1,000 - $2,499

      Taster

      All of the above | A free sample of every new product developed (NPD) in FY19

      NZ $2,500 - $6,999

      Snack

      All of the above | A free sample of every ongoing NPD launched

      NZ $7,000 - $14,999

      Meal

      All of the above | Involvement twice a year in NPD and new brand development (NBD) brainstorms

      NZ $15,000 - $149,999

      Feast

      All of the above | Additional involvement in the process after the brainstorming (ability to provide feedback on designs / concepts / tasting of NPD and NBD)

      NZ $150,000+

      Ordinary shares

      All of the above | Ordinary shares

      Warning statement about equity crowdfunding

      Equity crowdfunding is risky.

      Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative and carries high risks.

      You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

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