Editing Drink LMNT

== Summary<ref name=":0">Source: the company and Republic.</ref> ==

== Problem<ref name=":0" /> ==

Many drinks in the hydration category are loaded with sugar and desperately low in a key functional ingredient: '''SALT.'''

High sugar intake and misinformation around sodium has contributed to some of its most challenging health issues.

'''Public perception is catching up, ''and new knowledge around functional'' ''ingredients creates new winners:'''''

== Solution<ref name=":0" /> ==

'''LMNT'''

'''''Drink LMNT is owning SALT as a revolution'' ''in hydration and functional beverages.'''''

=== Drink LMNT knows its salt ===

Its '''products are science-backed'''; and Drink LMNT '''publishes in-depth content on electrolytes informed by the latest scientific literature'''. LMNT also consults with '''professional sports teams, elite military units''', and '''numerous healthcare practitioners''' in support of nutritional interventions for optimal health.

== Product<ref name=":0" /> ==

=== A tasty electrolyte drink mix ===

== Traction<ref name=":0" /> ==

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Drink LMNT is honoured to collaborate with some of the very best in their respective fields.

== Customers<ref name=":0" /> ==

=== Over 25K+ reviews and a 4.5+ rating ===

LMNT has generated over 25K+ reviews with key customer metrics showing avid loyalty. Now with over 250k customers, Drink LMNT impacts a vast spectrum of demographics and health circumstances.

Its launch focused on low-carb tribes because diabetes and obesity are two of its most significant health challenges.

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== Market<ref name=":0" /> ==

=== The 'hydration' market alone is a $9.2B+ opportunity. ===

== Competition<ref name=":0" /> ==

=== Drink LMNT is salt- and science-backed, not sugar-loaded ===

In a crowded space, '''Drink LMNT has a differentiated formula and flavour profile''': salty, not sugary. Each packet of LMNT contains '''1 gram''' of salt and absolutely no sugar, '''providing a unique and bold product to the market.'''

=== It's both what's inside... ===

=== ...and what isn't... ===

== Vision and strategy<ref name=":0" /> ==

 

Its fundraise is focused on bringing in additional investor-allies to make an even bigger splash.

As you reflect on your potential investment, consider that Drink LMNT is a company committed to health. At times what this means is that Drink LMNT might make decisions to support the health of its customers or community over what might be a profit-driven consideration. Some also call this a risk, Drink LMNT sees it as the right thing to do, and will continue to be guided by this. Drink LMNT has also found it's good business.

== Risks<ref name=":0" /> ==

'''Drink LMNT may implement new lines of business or offer new products and services within existing lines of business.'''

Drink LMNT may implement new lines of business at any time. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, Drink LMNT may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. Drink LMNT may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, Drink LMNT could lose business, be forced to price products and services on less advantageous terms to retain or attract clients or be subject to cost increases. As a result, its business, financial condition or results of operations may be adversely affected.

'''Drink LMNT relies on other companies to provide components for its products.'''

Drink LMNT depends on suppliers and contractors to meet its contractual obligations to its customers and conduct its operations. Its ability to meet its obligations to its customers may be adversely affected if suppliers or contractors do not provide the agreed-upon supplies or services in compliance with customer requirements and in a timely and cost-effective manner. Likewise, the quality of its products may be adversely impacted if companies to whom Drink LMNT delegates the production of its products, or from whom Drink LMNT acquires such items, do not provide the products which meet required specifications and perform to our, and its customers’, expectations. Its suppliers may also be unable to quickly recover from natural disasters and other events beyond their control and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk of these adverse effects may be greater in circumstances where Drink LMNT relies on only one or two contractors or suppliers for a particular product or service. Its products may utilize custom ingredients available from few worldwide sources. Continued availability of those products at acceptable prices, or at all, may be affected for any number of reasons, including if those suppliers decide to concentrate on the production of common products instead of products customized to meet its requirements. The supplies needed for a new or existing product could be delayed or constrained, or a key manufacturing vendor could delay shipments of completed products to the company adversely affecting its business and results of operations.

'''Drink LMNT relies on various intellectual property rights, including trademarks, in order to operate its business.'''

The Company relies on certain intellectual property rights to operate its business. The Company’s intellectual property rights may not be sufficiently broad or otherwise may not provide the company a significant competitive advantage. In addition, the steps that Drink LMNT has taken to maintain and protect its intellectual property may not prevent it from being challenged, invalidated, circumvented or designed-around, particularly in countries where intellectual property rights are not highly developed or protected. In some circumstances, enforcement may not be available to the company because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of its intellectual property. Its failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect its intellectual property or detect or prevent circumvention or unauthorized use of such property, could adversely impact its competitive position and results of operations. Drink LMNT&nbsp;also relies on nondisclosure and noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights. There can be no assurance that these agreements will adequately protect its trade secrets and other proprietary rights and will not be breached, that Drink LMNT will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to its trade secrets or other proprietary rights. As Drink LMNT expands its business, protecting its intellectual property will become increasingly important. The protective steps Drink LMNT has taken may be inadequate to deter its competitors from using its proprietary information. In order to protect or enforce its intellectual property rights, Drink LMNT may be required to initiate litigation against third parties, such as infringement lawsuits. Also, these third parties may assert claims against the company with or without provocation. These lawsuits could be expensive, take significant time and could divert management’s attention from other business concerns. Drink LMNT cannot assure you that it will prevail in any of these potential suits or that the damages or other remedies awarded, if any, would be commercially valuable.

In particular, Drink LMNT is dependent on James Murphy, its Chief Executive Officer, Robb Wolf, its Vice President, and Brianna Segerson, its Chief Operating Officer. The Company does not have direct employment agreements with Mr. Murphy, Mr. Wolf and Ms. Segerson, and there can be no assurance that it will do so or that any or all of them will continue to provide services to the Company for a particular period of time. Mr. Murphy, Mr. Wolf and Ms. Segerson are employees of an affiliated entity, Proton Fitness, LLC, and services provided on behalf of the Company are performed under a Services Agreement. Moreover, each of its executives are involved with other initiatives and may not devote their full time to the Company. The loss of Mr. Murphy, Mr. Wolf or Ms. Segerson, or any other key personnel, could harm the Company’s business, financial condition, cash flow and results of operations.

Drink LMNT is dependent on certain key personnel in order to conduct its operations and execute its business plan, however, the Company has not purchased any insurance policies with respect to those individuals in the event of their death or disability. Therefore, if any of these personnel die or become disabled, the Company will not receive any compensation to assist with such person’s absence. The loss of such person could negatively affect the Company and its operations. Drink LMNT has no way to guarantee key personnel will stay with the Company, as many states do not enforce non-competition agreements, and therefore acquiring key man insurance will not ameliorate all of the risk of relying on key personnel.

'''Drink LMNT has substantial reliance on Proton Fitness, LLC to provide its personnel and support services.'''

Recruiting and retaining highly qualified personnel is critical to its success. These demands may require the company to hire additional personnel and will require its existing management and other personnel to develop additional expertise. Drink LMNT faces intense competition for personnel, making recruitment time-consuming and expensive. The failure to attract and retain personnel or to develop such expertise could delay or halt the development and commercialization of its product candidates. If Drink LMNT experiences difficulties in hiring and retaining personnel in key positions, Drink LMNT could suffer from delays in product development, loss of customers and sales and diversion of management resources, which could adversely affect operating results. Its consultants and advisors may be employed by third parties and may have commitments under consulting or advisory contracts with third parties that may limit their availability to us, which could further delay or disrupt its product development and growth plans.

'''Its environment is intensely competitive, demanding and rapidly changing.'''

To succeed in its intensely competitive industry, Drink LMNT must continually improve, adapt and cater its product offerings to meet the needs and demands of consumers. Drink LMNT must accurately anticipate changing customer needs and trends, or its business operations may be adversely affected.

'''The development and commercialization of its products is highly competitive.'''  

Drink LMNT faces competition with respect to any products that it may seek to develop or commercialize in the future. Its competitors include major companies worldwide. Many of its competitors have significantly greater financial, technical and human resources than Drink LMNT has and superior expertise in research and development and marketing approved products and thus may be better equipped than the company to develop and commercialize products. These competitors also compete with the company in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, its competitors may commercialize products more rapidly or effectively than Drink LMNT is able to, which would adversely affect its competitive position, the likelihood that its products will achieve initial market acceptance, and its ability to generate meaningful additional revenues from its products.

'''Drink LMNT faces various risks as an e-commerce retailer.'''  

As part of its growth strategy, Drink LMNT has made significant investments to grow its e-commerce business. Drink LMNT may require additional capital in the future to grow its e-commerce business. Business risks related to its e-commerce business include its inability to keep pace with rapid technological change, failure in its security procedures or operational controls, failure or inadequacy in its systems or labour resource levels to effectively process customer orders in a timely manner, government regulation and legal uncertainties with respect to e-commerce, and collection of sales or other taxes by one or more states or foreign jurisdictions. If any of these risks materialize, they could have an adverse effect on its business. In addition, Drink LMNT faces competition from other internet retailers, and more retailers could enter the market. Its failure to positively differentiate its product and services offerings or customer experience from these internet retailers could have a material adverse effect on its business, financial condition and results of operations.

'''Its inability to secure, maintain and increase its presence on e-commerce platforms could adversely impact its revenue, and in turn its business, financial condition, results of operations and prospects could be adversely affected.'''  

Its operations include selling products to consumers through third party e-commerce platforms, including Amazon and Shopify. The success of its business is largely dependent on its continuing development of strong relationships with such platforms and abiding by their established rules and regulations for sellers. The loss of its relationship with any large e-commerce platform partner could have a significant impact on its revenue. Consequently, growth opportunities through its e-commerce and direct-to-consumer channel may be limited and its revenue, business, financial condition, results of operations and prospects could be adversely affected if Drink LMNT is unable to successfully establish relationships with e-commerce platforms in new or current markets.

Some of its competitors have made or may make acquisitions or may enter into partnerships or other strategic relationships to offer more comprehensive services than they individually had offered or achieve greater economies of scale. In addition, new entrants not currently considered to be competitors may enter its market through acquisitions, partnerships or strategic relationships. Drink LMNT expects these trends to continue as companies attempt to strengthen or maintain their market positions. The potential entrants may have competitive advantages over us, such as greater name recognition, longer operating histories, more varied services and larger marketing budgets, as well as greater financial, technical and other resources. The companies resulting from combinations or that expand or vertically integrate their business to include the market that Drink LMNT addresses may create more compelling service offerings and may offer greater pricing flexibility than Drink LMNT can or may engage in business practices that make it more difficult for the company to compete effectively, including on the basis of price, sales and marketing programs, technology or service functionality. These pressures could result in a substantial loss of its customers or a reduction in its revenue.

'''Increases in raw materials, packaging, oil and natural gas costs and volatility in the commodity markets may adversely affect its results of operations.'''  

Its financial results depend to a large extent on the costs of raw materials, packaging, oil and natural gas, and its ability to pass the costs of these materials onto its customers. Historically, market prices for commodities have fluctuated in response to a number of factors, including economic conditions such as inflation, changes in U.S. government support programs, changes in international trading policies, impacts of disease outbreaks on material sources and the potential effect on supply and demand as well as weather conditions. Fluctuations in paper and oil prices affect its costs for packaging materials. In addition, Drink LMNT has exposure to changes in the pricing of oil and natural gas, which affects its manufacturing, transportation and packaging costs. If there is any increase in the cost of raw materials, packaging, or oil and natural gas expenses, Drink LMNT may be required to charge higher selling prices for its products to avoid margin deterioration. Drink LMNT cannot provide any assurances regarding the timing or the extent of its ability to successfully charge higher prices for its products, or the extent to which any price increase will affect future sales volumes. Its results of operations may be materially and adversely affected by this volatility.

'''Damage to its reputation could negatively impact its business, financial condition and results of operations.'''

Its reputation and the quality of its brand are critical to its business and success in existing markets and will be critical to its success as Drink LMNT enters new markets. Any incident that erodes consumer loyalty for its brand could significantly reduce its value and damage its business. Drink LMNT may be adversely affected by any negative publicity, regardless of its accuracy. Also, there has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact. Information posted may be adverse to its interests or may be inaccurate, each of which may harm its performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording the company an opportunity for redress or correction.

The Company believes it has adequate capital to support its current business plan and near-term goals. In the event, the Company makes substantial changes or additions to its current business plan, the Company may need to procure funds in addition to the amount raised in the Offering to achieve its long-term goals. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If adequate funds are unavailable, Drink LMNT may be required to delay, reduce the scope of or eliminate one all or part of its plans, product launches or marketing efforts, any of which may materially harm its business, financial condition and results of operations.

'''Its business could be negatively impacted by cyber security threats, attacks and other disruptions.'''

Drink LMNT may face advanced and persistent attacks on its information infrastructure where it manages and store various proprietary information and sensitive/confidential data relating to its operations. These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack its products or otherwise exploit any security vulnerabilities. These intrusions sometimes may be zero-day malware that are difficult to identify because they are not included in the signature set of commercially available antivirus scanning programs. Experienced computer programmers and hackers may be able to penetrate its network security and misappropriate or compromise its confidential information or that of its customers or other third-parties, create system disruptions, or cause shutdowns. Additionally, sophisticated software and applications that Drink LMNT produces or procure from third-parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the information infrastructure. A disruption, infiltration or failure of its information infrastructure systems or any of its data centers as a result of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or misuse, power disruptions, natural disasters or accidents could cause breaches of data security, loss of critical data and performance delays, which in turn could adversely affect its business.

'''Security breaches of confidential customer information, in connection with its electronic processing of credit and debit card transactions, or confidential employee information may adversely affect its business.'''

Its business requires the collection, transmission and retention of personally identifiable information, in various information technology systems that Drink LMNT maintains and in those maintained by third parties with whom Drink LMNT contracts to provide services. The integrity and protection of that data is critical to us. The information, security and privacy requirements imposed by governmental regulation are increasingly demanding. Its systems may not be able to satisfy these changing requirements and customer and employee expectations, or may require significant additional investments or time in order to do so. A breach in the security of its information technology systems or those of its service providers could lead to an interruption in the operation of its systems, resulting in operational inefficiencies and a loss of profits. Additionally, a significant theft, loss or misappropriation of, or access to, customers’ or other proprietary data or other breach of its information technology systems could result in fines, legal claims or proceedings.

'''The use of individually identifiable data by its business, its business associates and third parties is regulated at the state, federal and international levels.'''

The regulation of individual data is changing rapidly, and in unpredictable ways. A change in regulation could adversely affect its business, including causing its business model to no longer be viable. Costs associated with information security – such as investment in technology, the costs of compliance with consumer protection laws and costs resulting from consumer fraud – could cause its business and results of operations to suffer materially. Additionally, the success of its online operations depends upon the secure transmission of confidential information over public networks, including the use of cashless payments. The intentional or negligent actions of employees, business associates or third parties may undermine its security measures. As a result, unauthorized parties may obtain access to its data systems and misappropriate confidential data. There can be no assurance that advances in computer capabilities, new discoveries in the field of cryptography or other developments will prevent the compromise of its customer transaction processing capabilities and personal data. If any such compromise of its security or the security of information residing with its business associates or third parties were to occur, it could have a material adverse effect on its reputation, operating results and financial condition. Any compromise of its data security may materially increase the costs Drink LMNT incurs to protect against such breaches and could subject the company to additional legal risk.

'''Changes in federal, state or local laws and government regulation could adversely impact its business.'''

The Company is subject to legislation and regulation at the federal and local levels and, in some instances, at the state level. New laws and regulations may impose new and significant disclosure obligations and other operational, marketing and compliance-related obligations and requirements, which may lead to additional costs, risks of non-compliance, and diversion of its management's time and attention from strategic initiatives. Additionally, federal, state and local legislators or regulators may change current laws or regulations which could adversely impact its business. Further, court actions or regulatory proceedings could also change its rights and obligations under applicable federal, state and local laws, which cannot be predicted. Modifications to existing requirements or imposition of new requirements or limitations could have an adverse impact on its business.

'''Drink LMNT operates in a highly regulated environment, and if Drink LMNT is found to be in violation of any of the federal, state, or local laws or regulations applicable to us, its business could suffer.'''

Drink LMNT is also subject to a wide range of federal, state, and local laws and regulations. The violation of these or future requirements or laws and regulations could result in administrative, civil, or criminal sanctions against us, which may include fines, a cease and desist order against the subject operations or even revocation or suspension of its license to operate the subject business. As a result, Drink LMNT may incur capital and operating expenditures and other costs to comply with these requirements and laws and regulations.

'''Changes in employment laws or regulation could harm its performance.'''  

Various federal and state labour laws govern its relationship with its employees and affect operating costs. These laws include minimum wage requirements, overtime pay, healthcare reform and the implementation of the Patient Protection and Affordable Care Act, unemployment tax rates, workers’ compensation rates, citizenship requirements, union membership and sales taxes. A number of factors could adversely affect its operating results, including additional government- imposed increases in minimum wages, overtime pay, paid leaves of absence and mandated health benefits, mandated training for employees, increased tax reporting and tax payment requirements for employees who receive tips, a reduction in the number of states that allow tips to be credited toward minimum wage requirements, changing regulations from the National Labor Relations Board and increased employee litigation including claims relating to the Fair Labor Standards Act.

The Company has determined that it was required to pay sales and use tax on products sold to end-use consumers in various state jurisdictions. Accordingly, the Company recorded liabilities of $413,000 as of December 31, 2021 and $94,000 as of December 31, 2020, for the amount it estimates that it did not collect from customers at the time of sale, which includes estimated penalties and interest. The Company is in the process of filing voluntary disclosure agreements with certain jurisdictions, filing back returns and remitting the estimated sale and use tax that it did not collect from customers. If these jurisdictions determine that additional amounts of sales and use tax are necessary, the Company will be required to pay accordingly, which could impact its financial results.

'''Global crises, such as COVID-19, can have a significant effect on its business operations and revenue projections.'''

A significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, including the United States where Drink LMNT principally operates, resulting in an economic downturn that could reduce the demand for its products and services and impair its business prospects, including as a result of being unable to raise additional capital on acceptable terms to us, if at all.

You should not rely on the fact that its Form C is accessible through the U.S. Securities and Exchange Commission’s EDGAR filing system as an approval, endorsement or guarantee of compliance as it relates to this Offering. The U.S. Securities and Exchange Commission has not reviewed this Form C, nor any document or literature related to this Offering.

'''There is no present market for the Securities and Drink LMNT has arbitrarily set the price.'''

The Offering price was not established in a competitive market. Drink LMNT has arbitrarily set the price of the Securities with reference to the general status of the securities market and other relevant factors. The Offering price for the Securities should not be considered an indication of the actual value of the Securities and is not based on its asset value, net worth, revenues or other established criteria of value. Drink LMNT cannot guarantee that the Securities can be resold at the Offering price or at any other price.