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Mosaic Distributors, LLC

Cosmetic products which enhance the look of brows and eyes

Up to $2,000,000

Min. investment – $5,000

Preferred Membership Interests

An Equity Investment

investment overview video
(3 min watchtime)

  • Equity investment in a growing consumer product category
  • Emerging brand, expanding distribution, experienced entrepreneur
  • Clear strategic exit path

Eyebrow and eye makeup beauty products are projected to grow 6% annually through 2025 - no dominant brand has emerged. Chella produces one of the world’s most extensive lines in this category (50+ SKU’s), with U.S. and international sales through Amazon.com, QVC.com, chella.com and a growing variety of “brick and mortar” retailers.

Why We Like This Company

Business Opportunity

Rapidly growing, global consumer market – clear strategic exit path
  • Eyebrow and eye makeup products are one of the fastest growing categories within the prestige makeup sector ($8.1B in 2018) – U.S. and worldwide sales are expected to grow further at 6% annually through 2025.
  • No dominant single brand in this beauty industry category has emerged.
  • Retailers around the world, both online and “brick & mortar”, are now selecting their first eye and brow product offerings.
  • A strong M&A market drives exits within the beauty industry exists for emerging companies with compelling products and global brand recognition.

Chella Product Line & Distribution

Successful product line in place – Distribution is expanding broadly
  • Mosaic Distributors, LLC (dba “Chella”) has a highly regarded brand with a growing presence in the eye and brow category of the beauty industry.
  • Chris Kolodziejski, founder and CEO, is a seasoned entrepreneur (the last 17 years in beauty).
  • 50+ SKU’s with exceedingly strong and consistent levels of consumer appeal. 3,000,000+ millennial and other consumers around the world have received Chella products, many delivering enthusiastic, highly rated reviews.
  • Product use is supported by Chella’s industry leading “How to Brow in 3 Easy Steps” and ChellaPRO website instructional programs.
  • Sales are poised to grow substantially from a just-launched “demand-generation” digital advertising program and expanding distribution channels.
  • Products are sold online (Amazon Exclusives product offering), Macys.com (launching 4Q19), via “Glam Bags” (Ipsy, Birchbox, Boxycharm, etc.) and across 250+ salons and spas internationally (Ritz Carlton, Four Seasons, Spavia, etc.).

AN INVESTMENT IN THE PREFERRED INTERESTS IS SPECULATIVE AND IS SUITABLE ONLY FOR PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT AND HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT.

NOTE: By registering with Carofin, Members have access to more extensive due diligence materials, additional private investment opportunities, and can proceed with making an investment.

Issuer

Mosaic Distributors, LLC (“Chella”)

Since 2012, Chella has built a well-recognized brand and growing position within the eye and brow category of the beauty industry. Products are sold both online and through specialty retail, spa, salon, hospitality outlets and independent distributors.

Extensive product line

Currently comprised of 50+ SKU’s, among the broadest available.

Growing customers

3,000,000+ have received Chella products in the U.S. and internationally, with very strong social media approval ratings.

Securities Offered

Preferred Equity

Up to $2,000,000 of Series B Participating Preferred Equity.

$15,000,000 pre-money valuation

Representing 11.8% fully diluted post-money ownership in Mosaic Distributors, LLC.

Security description

6% preferred return and a full return of invested capital, followed by pro-rata common equity participation in further distributions by the Company.

Projected investment return

Potential capital gain following the sale of the Company, IPO or recapitalization. Projected returns are not guaranteed.

Positives

Chella product satisfaction

As reflected via social media, consumers consistently find Chella products exceptional and recommend them to others.

Underlying worldwide increase in consumer demand

Eyebrow and eye make-up products and services demand is now driving salons and spas, and online distribution platforms (TMall (China), Seven-Hub (Asia-Pacific) and independent distributors, worldwide (e.g., China, India, Europe, Middle East, Canada, Australia and New Zealand), to contract with Chella for expanding their product offerings.

Limited competition within category

Only two established brands with distribution.

Near-term Chella sales growth

Poised to grow substantially from new demand-generation advertising program, Social Media Team push and from distributors now adding the Chella product line.

Multi-channel distribution

Online via Amazon, (Macys.com to open 4th Qtr. 2019), QVC.com, Chella.com and others to follow. Through traditional retailers targeting the top 10% (over 28,000) of high-end salons and spas, multiple online channels, specialty retailers, domestic and international distributors. “Glam Bags” partners including Ipsy, Birchbox, Boxycharm, etc.

AN INVESTMENT IN THE PREFERRED INTERESTS IS SPECULATIVE AND IS SUITABLE ONLY FOR PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT AND HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT.

Background

Led by founder and CEO Chris Kolodziejski, Mosaic Distributors, LLC (“Mosaic” or the “Company”) was established in Southern California in October 2012 to acquire all assets associated with the Chella brand. Mr. Kolodziejski has over thirty years of experience in business as an entrepreneur, the last 17 within the beauty industry with a focus on branding, marketing and sales.

Under the Chella brand, Mosaic formulates its proprietary line of products across the brow and eye care product spectrum. The Company prides itself on its ability to distribute its prestige cosmetic brands to leading retailers throughout the United States and around the world. The Company also provides a comprehensive level of product development, marketing, sales, wholesale customer training and other support for all Chella beauty products. This line is promoted as the Chella Brow & Eye Collection. This brand has been actively and successfully sold into the “Prestige” target market, since its development and launch in 2011.

Building a Successful Brand

Success in the beauty industry is centered around building a strong brand:

Consumer loyalty to a brand generates sales even during economic downturns – Skincare product sales grew from 2008 to 2010.

Makeup products must be consistently replenished by the consumer.

Cosmetics consumers are increasingly inclined to try niche products.

What Sets Chella Apart

Superior quality, long lasting and multifunctional products.

Packaging aesthetic design is based upon targeted affinity group analysis.

Personalized attention and education, both online and in salons.

Numerous industry awards as well as consistently positive consumer satisfaction ratings.

Chella Products

Chella’s Brow & Eye Collection includes over 50+ SKUs, including:

  • Eyebrow Pencils (9 colors)
  • Eyebrow Creams (9 colors)
  • Highlighter Pencils (4 colors)
  • Eyeliner Pens (4 colors)
  • Mascara
  • Eyebrow and Eyelash Tools (Plus kits)
  • Anti-Fatigue Eye Masks
  • Eyebrow and Eyelash Treatments
  • Lipstick Pencils (6 colors)
  • Eyeshadow Pallets (Launching 1st . Qtr 2020. Over 450,000 pre-sold.

Growth Strategy: Demand-Generation Advertising

Chella has recently launched a highly targeted Demand-Generation (“Demand-Gen”) advertising program to further drive sales. Multi-channel digital marketing activities drive customers to three distribution channels: 1) Chella.com through Facebook, Instagram & Pinterest ads and its own internal Social Media outreach via serial influencer campaigns; 2) Amazon.com through Amazon Media Group and Chella’s Beauty Box sales; and 3) QVC.com and soon Macys to similar customers via Curalate, a Social Media platform. All are viable and proven strategies which, with increased marketing expenditure, can accelerate sales growth.

Demand-Gen describes constantly evolving, multi-channel, highly integrated online marketing programs designed to drive awareness and sales of products or services - leading them to buying opportunities.

Advertisers track data quickly and closely, determining precisely which audience, ad and feature resulted in the desired reactions. If properly executed, it dynamically adapts its advertising strategy to achieve the optimum results.

The more money that is spent effectively in this program, the faster it determines how to achieve the highest Return on Advertising Spend (“ROAS”); more and better data equals better sales results.

Chella has retained Chief Digital Advisors as its Demand Gen. manager which allows Chella to have independent 3 rd party resources, advice and council as it partners with Advertisers to execute on its Demand-Generation plans.

These financial projections reflect Mosaic Distributors, LLC’s best estimate forecasts and are not guaranteed to be accurate. These figures are forward-looking and reflect the Company’s views about various future events or expectations. Known and unknown risks, uncertainties and other factors and assumptions may cause the Company’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by this forward-looking investment return profile. Historical financial figures have not been audited by a third party and do not reflect an opinion as to their accuracy. A full version of the financial model pertaining to this offering is available on carofin.com.

Assumptions

  • Mosaic’s revenues fall broadly into three categories; Direct via chella.com (88% gross margin), through online and traditional retailers (89% margin, based upon wholesale sales revenues) and glam bags (3% gross margin).
  • Chella.com direct sales are projected to grow at a 4% monthly rate through 11/2021 and then a 2% monthly rate through 7/2023
  • A 2.5x gross revenue to demand-generation advertising spend yield is projected through 2023
  • 48.8% of gross profits are to be reinvested in demand-generation advertising and related working capital requirements
  • Demand-gen related revenues are projected to grow from 26% of total sales in 2019 to 64% in 2023
  • International sales are projected to grow from $9,948 (1.4%) of full margin revenues in 2019 to $1,738,048 (6.1%) in 2013
  • No additional equity financings are projected after the Series B Preferred

Associated Risks

  • Demand-generation growth is highly dependent on 1) the efficiency of a constantly changing online advertising environment, 2) the speed with which advertising is modified in response to customer interactions and 3) capital allocated by the company toward online advertising.
  • Ongoing customer receptivity to Chella product line
  • Consumer trends for eyebrow enhancement
  • Product fulfillment is not materially disrupted, particularly from overseas suppliers and associated costs (e.g, transportation, tariffs, etc.)

The preceding financial projections reflect the Company’s best estimated forecasts and are not guaranteed to be accurate. The timing of performance is estimated post-funding. These figures are forward-looking statements and reflect the Company’s views about various future events or expectations. These figures take into account known and unknown risks, uncertainties and other factors and assumptions which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by this forward-looking financial projection. Please see the note on page 3 regarding forward-looking statements.

Chris Kolodziejski
Founder & CEO
  • Oversees all aspects of the Chella brand, product development, marketing & sales
  • Thirty years’ experience in business - the last 17 as an entrepreneur within the beauty industry
  • Finance Degree - Un. of Wyoming. Played professional football for the Pittsburgh Steelers
Lola Ferrer
VP Operations
  • Leads inventory and supply chain management
  • Supports the sales and marketing while driving production efficiency
  • Substantial prior experience in project management: includes biomedical and beauty industry companies
Sarah Siegel
Sales/Business Dev.
  • Manages all inside sales including house accounts, international and territory driven domestic sales and trade shows, while supporting marketing and social media
  • Began her career in fashion as a model working for Elle Magazine
  • Experience in real estate business development and sales at Sotheby’s International
Marisa Syhlman
Social Media Mgr.
  • Creates strategy and content used in social media execution, paid advertising, website, and email marketing efforts
  • Expertise in graphic and print design, email marketing, and eCommerce platforms Specialized in advancing beauty and fashion specific digital marketing for 7 years
Carmella Papaleo
Sales Representative
  • Manage and recruit new inside sales for Chella. Also support the educational team in creating new webinars plus onsite classes.
  • Background in applying self-advanced skill and first-hand operational experience in the areas of lead prospecting, facility needs evaluation, product presentation, sales formula positioning and application, training and skills workshop scheduling
Bill Parkes
Strategic Consultant
  • Focused on the intersection of business strategy, technology and the customer
  • Spoken nationally at Search Engine Strategies, Search Marketing Expo and SXSW Interactive on a range of topics including social media strategy, search marketing, Facebook strategy and SEO
  • Brands impacted: BestBuy, Cabella's, Comerica Bank, Hershey's, Hammitt, Nortel Networks, Procter and Gamble, SanDisk, Samsung, Taleo, Toshiba and Zippo
Larry La Porta
Strategic Consultant
  • Proven international General Manager and brand builder
  • Broad commercial experience many sectors in both entrepreneurial settings and blue-chip multinational CPG companies
  • Developed, implemented and advanced focused long-term vision, strategic plans, brand repositioning and innovations based on market dynamics, analytics and insight Prior experience as General Manager - Beiersdorf Canada Inc., Kraft, Colgate Palmolive and Revlon

Securities Offered

Series B Participating Preferred Membership Interests in Mosaic Distributors, LLC (the “Series B Preferred”) representing an equity ownership interest in the Company and the rights and benefits described in the Company’s 3rd Amended & Restated Operating Agreement.

Offering Amount

Up to $2,000,000 of Series B Preferred will be issued on a continuous basis.

Valuation

$15,000,000 pre-money, with Series B Preferred ownership representing 11.8% of the Company on a fully diluted basis.

Preferred Return on Investment

6.0% accruing and compounding annual return on investment, payable as the Company generates cash to do so. These returns cannot be guaranteed.

Preferred Return of Capital

A preferred return of all of invested capital before distributions are made to holders of Common Interests. These returns cannot be guaranteed.

Conversion to Common

Once all Preferred Return on Investment and Preferred Return of Capital has been received by investors, the Series B Preferred automatically continues to participate on an as-converted-basis, pro-rata in common membership distributions.

Fees & Expenses

Up to $120,000 of the Offering proceeds have been allocated to pay a placement fee to Carolina Financial Securities, LLC (CFS) equal to 6.0% of new equity funds raised from investors. Additionally, CFS will receive warrants to purchase common equity of the Company equal to 6.0% of the membership interests purchased by the Series B Preferred Interests investors, for a purchase price of $100 and with an exercise price equal to 1/3 of the price per unit of the Preferred Interests. CFS may share up to 50% of its fees and warrants with Carofin, LLC, an affiliated Broker-Dealer, for its assistance in the placement of the Offering.

AN INVESTMENT IN THE PREFERRED INTERESTS IS SPECULATIVE AND IS SUITABLE ONLY FOR PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT AND HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT. AN INVESTMENT IN THE SECURITIES OFFERED HEREIN SHOULD NOT BE A MAJOR PART OF YOUR INVESTMENT PORTFOLIO. YOU SHOULD REVIEW THE RISKS OF THIS INVESTMENT WITH YOUR LEGAL OR FINANCIAL ADVISORS.

THIS OFFERING INVOLVES SUBSTANTIAL RISKS. THESE RISKS INCLUDE, BY WAY OF ILLUSTRATION AND NOT LIMITATION, THE FOLLOWING: RISKS ASSOCIATED WITH THE FACT THAT THE MEMBERS WILL NOT HAVE THE RIGHT TO VOTE ON OR APPROVE MOST DECISIONS REGARDING THE BUSINESS AND, AS SUCH, WILL NOT BE IN CONTROL OF THEIR INVESTMENTS IN THE PREFERRED INTERESTS OF THE COMPANY AND THE BUSINESS; AND THE OPERATION OF THE COMPANY INVOLVES TRANSACTIONS BETWEEN THE COMPANY, THE MANAGER, AND THE OWNER WHICH MAY INVOLVE CONFLICTS OF INTEREST.

THE PREFERRED INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM, AND WITH THE PRIOR CONSENT OF THE MANAGER, WHICH CONSENT MAY BE WITHHELD IN THE MANAGER’S SOLE DISCRETION. PROSPECTIVE INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

SOME OF THE INFORMATION IN THIS PRESENTATION MAY CONTAIN “FORWARD-LOOKING” STATEMENTS. YOU CAN IDENTIFY SUCH STATEMENTS BY THE USE OF FORWARD-LOOKING WORDS SUCH AS “MAY,” “ANTICIPATE,” “ESTIMATE,” “COULD,” “SHOULD,” “WOULD,” “EXPECT,” “BELIEVE,” “WILL,” “PLAN,” “INTEND,” “PROJECT,” “PREDICT,” “POTENTIAL” OR OTHER SIMILAR WORDS. THESE TYPES OF STATEMENTS DISCUSS FUTURE EXPECTATIONS OR CONTAIN PROJECTIONS OR ESTIMATES WHICH MAY OR MAY NOT HAPPEN AS PROJECTED HEREIN. WHEN CONSIDERING SUCH FORWARD-LOOKING STATEMENTS, YOU SHOULD KEEP IN MIND THE RISK FACTORS LISTED BELOW, WHICH COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT.

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN CONJUNCTION WITH THE OTHER INFORMATION ABOUT THE PREFERRED INTERESTS BEFORE PARTICIPATING IN THIS OFFERING. THE RISKS DISCUSSED IN THIS PRESENTATION CAN ADVERSELY AFFECT THE COMPANY’S OPERATION, OPERATING RESULTS, FINANCIAL CONDITION AND PROSPECTS FOR SUCCESS. THIS COULD CAUSE THE VALUE OF THE SECURITIES OFFERED HEREIN TO DECLINE AND COULD CAUSE YOU TO LOSE PART OR ALL OF YOU INVESTMENT. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES THE COMPANY FACES BUT DO REPRESENT THOSE RISKS AND UNCERTAINTIES KNOWN TO THE COMPANY AND THAT THE COMPANY BELIEVES ARE MATERIAL TO THE COMPANY’S FUTURE OPERATING PERFORMANCE.

A. Investment Related Risks

Early Stage Company; Limited Operating History

The Company has a limited history of operations upon which an evaluation of the Company’s business and prospects can be based. No assurances can be given that the Company will ever be profitable or generate revenues sufficient to make distributions. This makes evaluating the Company’s business operations and validating its financial projections difficult. In assessing the Company’s prospects, a potential investor must consider the risks and difficulties frequently encountered by early-stage companies. These risks include the Company’s ability to: raise sufficient capital to fund operations, and other general corporate purposes; manage changing and expanding operations; establish and increase awareness of the Company’s brand and strengthen loyalty among prospective customers; implement and successfully execute the Company’s business and marketing strategies; respond effectively to competitive pressures and developments; continue to enhance the Company’s products and services; and attract, retain and motivate qualified personnel. The Company’s failure in any of these areas could adversely affect the Company’s financial condition and results of operation.

Speculative Investment

The Preferred Interests being offered should be considered a speculative investment. The ability of the Borrower to achieve its objectives may be determined by factors beyond its control that cannot be predicted at this time. Consequently, there can be no assurance that the Borrower’s efforts to continue its business operations will prove to be sufficient to enable the Borrower to generate the funds required to make distributions. Anyone investing in the Preferred Interests should do so only if they are financially able to sustain the loss of their entire investment and should recognize that such a possibility exists.

Possibility of Material Differences Between Actual and Projected Results

The Company’s financial projections are dependent on the successful implementation of management’s business strategies and are based on assumptions and events over which the Company only has partial or no control, and may prove to be inaccurate.

Ability to perform to Business Plan

This Offering is associated with a plan to grow the sales and marketing capability of the Company, provide working capital, and to add staff as necessary to serve a growing client base. Any inability to manage this process effectively would have a material adverse effect on the Company’s business.

Competition

Competitors with greater financial resources could use pricing or other strategies to prevent the Company from achieving its objectives and may gain market share. This may have a material adverse impact on the financial position of the Company.

Existing Secured Debt

The Company currently has existing senior secured promissory notes in the amount of $663,500, governed by a Loan and Security Agreement. Some of this debt is intended to be repaid with the proceeds of this Offering. Should the Company default on any of the payments owed to the senior secured lenders, they may take actions which could affect the Company’s ability to make distributions.

Potential Conflict of Interest - Outstanding Debt

Peter S. Milhaupt, the chairman of Carolina Financial Securities, the placement agent for this offering, currently owns senior secured notes issued by Mosaic Distributors, with the initial principal value of these notes totaling $423,500. Mr. Milhaupt’s notes are senior in liquidation preference to the Preferred Interests offered herein. Some of the proceeds from this offering may be used to prepay Mr. Milhaupt’s notes, which may create a conflict of interest.

Potential Conflict of Interest - Warrant Position

As compensation for acting as a Placement Agent in the Offering, Carolina Financial Securities is receiving warrants to purchase common equity in the Company in an amount that is dependent on how many units of Preferred Interests are sold. As such warrants traditionally require a “change of control” or liquidity event before they can be exercised, Carolina Financial Securities may have an interest in the Company being subject to such event at a time that may not maximize return for investors. Such risk is mitigated by the warrants carrying no voting rights until they are exercised. In addition to this conflict, the warrants also carry a strike price lower than those paid by investors in the Offering to reflect such need for a “change of control” or liquidity event.

Royalty Payment Obligations

The Company has outstanding Incremental Revenue Royalty Notes of $382,000, which require the Company to make royalty payments equal to 8% of revenues above $300,000 per quarter, until 1.5x the principal has been paid.

The Company, through the Asset Purchase Agreement between it and Mosaic Marketing Partners, LLC (MMP), a predecessor company, is also committed, at its sole election as to the timing of same, to make royalty payments on full-margin revenues above $140,000 each month, payable quarterly. This payment obligation of the Company could affect the Company’s cash flow and ability to make distributions. Furthermore, should the Company default on the terms of the current royalty payments to MMP, MMP could take actions which would affect the Company’s ability to make distributions.

B. Industry Related Risks

General Risks of the Cosmetics Industry

There are certain risks inherent in the ownership of a business in the cosmetic industry. The underlying value of the business depends on the ability of the Company to secure distribution channels and have a product that is both marketable and desirable. Changes and risks beyond the Company’s control may adversely affect the Company’s income from operations. These risks include the following: operating expenses and fixed costs may exceed revenues; adverse changes in national or international economic conditions; adverse changes in the market due to changes in economic and/or social conditions; changes in laws; adverse changes in governmental rule and fiscal policies, including FDA and environmental laws; acts of God (which may result in uninsured losses); strikes, condemnation and other factors which are beyond the control of the Company; product litigation, and unanticipated governmental regulation. There can be no assurance of profitable operations because the costs of operations may exceed the gross revenue.

The Beauty Business is Highly Competitive

The Company faces vigorous competition from companies throughout the world, including multinational consumer product companies. Some of these competitors have greater resources and that Company may be able to respond to changing business and economic conditions more quickly. Competition in the beauty business is based on pricing of products, innovation, perceived value, service to the consumer, promotional and other activities. It is difficult to predict the timing and scale of competitors’ actions in these areas. The ability to compete also depends on the visibility and strength of the brand, ability to attract and retain key talent and other personnel, the quality of sourcing, the efficiency of the manufacturing and distribution facility, and ability to maintain and protect intellectual property and those other rights used in the business.

Anticipating and Responding to Market Trends and Consumer Preferences

Success depends on the ability to anticipate and react in a timely and cost-effective manner to changes in consumer tastes for skin care, makeup, brow and lash products, consumer attitude toward the industry and brands, as well as where consumers shop for those products. The Company must continually work to develop, manufacture and market new products. The Company must also maintain and enhance the recognition of the brand, achieve a favorable mix of products, and refine an approach as to how and where to market and sell products. While the Company will devote considerable effort to analyze and respond to consumer preferences as well as to anticipate same, the Company recognizes that consumer tastes cannot be predicted with certainty and can change rapidly. The issue is compounded by the increasing use of social digital media by consumers and the speed by which information and opinions are shared and how products are rated by consumers. An inability to anticipate and respond to sudden challenges in the marketplace and changing consumer demands will negatively impact financial results.

Quality and Safety of the Products

Success depends, in part, on the quality and safety of the Company’s products. If the products are found to be defective or unsafe, or if they otherwise fail to meet consumer’s standards, relationships with customers or consumers could suffer. Furthermore, the appeal of the brand could be diminished, and the Company could lose sales and/or become subject to liability claims, any of which could result in a material adverse effect on the business.

Government Regulation

The Company is subject to federal, state and local laws, regulations and ordinances. Difficulties or failures in complying with these regulations could adversely affect the operations of the Company. In addition, changes to such laws, regulations or ordinances may adversely affect the Company's performance by increasing the Company's costs or affecting its sales of certain products, or both.

Changes in Laws, Regulations and Policies

Changes in the laws, regulations and policies including the interpretation or enforcement thereof, that are germane to the Borrower’s industry, can affect its business including changes in accounting standards, tax laws, data privacy as well as anti-corruption laws. Additionally, as the Borrower continues to sell and expand its international business, it may be subject to laws relating to selective distribution, trade accords and customs regulations which could adversely affect the Borrower’s distribution endeavors.

Competition

The Borrower competes with others in the cosmetics and beauty industry. Competitors include companies that may have greater financial and other resources than the Borrower. Additionally, these competitors could use pricing or other strategies to prevent the Company from achieving its objectives and may gain market share. This may have a material adverse impact on the financial position of the Company.

C. Performance Related Risks

Possibility of Material Differences between Actual and Projected Results

The financial projections contained in this Summary Offering Material and any supplements represent the Borrower’s estimated results of operations. These projections are dependent on the successful implementation of management’s business strategies and are based on assumptions and events over which the Company only has partial or no control and may prove to be inaccurate. The financial projections have been prepared upon the basis of assumptions and estimates which may differ from actual events and/or circumstances.

Need for Additional Capital

No assurance can be given that the Company will be able to conduct its operations without incurring costs in excess of those estimated. If the revenues generated from the Company’s operations are insufficient to satisfy the Company’s operating costs, the Company may seek to sell additional equity or secure debt financing.

Negative Changes in Economic Conditions

Any negative changes in economic conditions could have a material adverse effect on the Company’s business.

D. Personnel Risks

Management of the Company

The Investors will have limited ability to participate in any manner in the management of the Company or its day-to-day decisions.

Reliance on Key Personnel

Due to the size of the organization, the Company has a significant reliance on certain key personnel, particularly Chris Kolodziejski. If the Company is unable to retain key personnel it could jeopardize the Company’s ability to implement its business plan, its relationships with its customers, and its financial stability.

Ability to Manage Growth

The Company may experience a period of growth that could place a significant strain on its resources. The Company’s ability to manage growth successfully will require the Company to continue to improve its operational, management and financial systems and controls, expand its work force, and require substantial other resources, including but not limited to more capital.

Limitation of Liability and Indemnification

The Company’s officers and managers will not be liable for the obligations of the Company solely by reason of being officers or managers or participating in the management and control of the Company’s business and affairs.

E. Offering Related Risks

Acceptance of Investors on a First-Come, First-Serve Basis

The Borrower reserves the right to accept or reject any proposed investment in its sole discretion. Subject to this discretion, it intends to accept investments on a “first-come, first-served” basis, with the consequence that Investors will be allocated a portion of the total Offering, based upon the amounts they have committed, in the order in which such commitments have been accepted. The Borrower is not required to accept all commitments tendered to it. There is no assurance, therefore, that your commitment will necessarily be accepted in whole or in part by it should it raise more or less funds than are needed to make its investments.

Possibility of Material Differences Between Projected and Actual Results

The financial projections contained in this Summary Offering Material and any supplements represent the Borrower’s estimated results of operations. These projections are dependent on the successful implementation of management’s business strategies and are based on assumptions and events over which the Company only has partial or no control and may prove to be inaccurate. The financial projections have been prepared upon the basis of assumptions and estimates which may differ from actual events and/or circumstances.

Ability to perform to Business Plan

This Offering is associated with a plan to grow the sales and marketing capability of the Company, provide working capital, and to add staff as necessary to serve a growing customer base. Any inability to manage this process effectively would have a material adverse effect on the Company’s business.

Use of Proceeds

Management will have some flexibility in applying the net proceeds from this Offering and may apply the proceeds in ways with which investors may disagree. The failure to apply these funds effectively could materially harm the Company’s business.

Availability of Information

The Company is not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Reliance on Aspects of the Offering

Potential investors should not rely exclusively on one aspect of the security structure, such as the royalty service capacity of the Borrower, when making an investment decision in order to participate in this Offering.

F. Regulatory, Governmental & Legal Risks

Change in Regulatory or Legal Environment

To the extent there is a change in the legal or regulatory framework in the location where the Company operates as well as the health and agricultural authorities, there is the possibility that the Company’s business or financial conditions could be negatively impacted.

Future Federal Income Tax Legislation and Regulations

No assurance can be given that the current Congress or any future Congress will not enact federal income tax legislation that could adversely affect the tax consequences of participating in the Offering.

Risk of Audit to Investors

There is a possibility that the IRS will audit the Borrower’s income tax returns. If the Borrower’s income tax returns are audited, your return might also be audited.

Lack of Rulings and Opinions; Possibility of IRS Challenge of Borrower Tax Positions

The Borrower has not requested and will not request any tax ruling from the IRS regarding the tax consequences of the Borrower’s activities. Accordingly, there is no certainty as to the tax consequences of participating in the Preferred Interests. The Borrower has not sought or obtained a legal opinion with respect to the tax treatment of the offering proceeds or issuance of the Preferred Interests. Accordingly, Investors are urged to consult your own tax advisor with respect to the federal and state tax consequences arising from participation in this Offering.

G. Other Risks

Unforeseen Risks

In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. Prospective investors reviewing this Presentation should keep in mind other possible risks that could be important to the success of their investment in the Notes.

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Risk vs. Return Considerations for Alternative Investments

This information summarizes important risk-related considerations for Investors making Alternative Investments. Evaluating a potential investment is, arguably, the most important aspect of any investing activity, whether as part of a private Securities Offering or for a publicly registered investment. No investment is riskless, and losses will inevitably happen within a portfolio. Limiting losses and achieving... Read More

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Important Disclosures

These securities have not been registered with the Securities and Exchange Commission (the “SEC” or the “Commission”), or with any state securities commission or any other regulatory authority. The securities are being offered in reliance upon an exemption from the registration requirement of federal and state securities laws and cannot be resold unless the securities are subsequently registered under such laws or unless an exemption from registration is available. Neither the SEC nor any other agency has passed on, recommended or endorsed the merits of this offering (this “Offering”) or the accuracy or adequacy of this webpage (the “Offering Package”). Any representation to the contrary is unlawful.

These securities are offered through Carolina Financial Securities, LLC and Carofin, LLC, Members of FINRA/SIPC. Carolina Financial Securities is an affiliate of Carofin and both Broker-Dealers are affiliates of Carolina Financial Group, LLC. Documents have been prepared by Carolina Financial Securities and have been reviewed and approved by the management of Mosaic Distributors, LLC (the “Issuer” or the “Company”). The information contained herein has not been independently verified and is dependent on information provided by Mosaic Distributors, LLC, to Carolina Financial Securities, LLC.

The information contained herein is for informational purposes only and is not intended for further distribution. The information does not constitute a complete description of any investment or investment performance. This document is in no way a solicitation nor is it an offer to sell securities nor is it advice or recommendation regarding any investment. The information is not directed to any person who is not believed to qualify under the definition of an Accredited Investor under the rules of Regulation D of the 1933 Securities and Exchange Act. No security listed in this document or otherwise offered through Carolina Financial Securities, LLC or Carofin, LLC may be purchased without prior receipt of a complete Private Placement Memorandum or other official offer to sell.

The Company will not offer, sell or issue any Series B Preferred in any jurisdiction where it is unlawful to do so or where laws, rules, regulations or orders would require the Company, in its sole discretion, to incur costs, obligations or time delays disproportionate to the net proceeds the Company will realize from such offers, sales or issuances. Neither this Offering Package nor any subscription agreement shall constitute an offer to sell or a solicitation of an offer to purchase any Series B Preferred in any jurisdiction in which such transactions would be unlawful.

Private placements are high risk and illiquid investments. As with other investments, you can lose some or all of your investment. Nothing in this document should be interpreted to state or imply that past results indicate future performance, nor should it be interpreted that FINRA, the SEC or any other securities regulator approves of any of these securities. Additionally, there are no warranties expressed or implied as to accuracy, completeness, or results obtained from any information provided in this document. Investing in private securities transactions bears risk, in part due to the following factors: there is no secondary market for the securities; there is credit risk; where there is collateral as security for the investment, its value may be impaired if it is sold. Please see the Private Placement Memorandum (PPM), and the complete list of contents of this Offering Package for a more detailed explanation of the securities Summary of Terms, Investor Suitability Standards, Confidentiality, Securities Matters and Risk Factors.

Caution Regarding Forward-Looking Statements

Certain statements on this webpage may be “Forward-looking” in that they do not discuss historical facts but instead note future expectations, projections, intentions, or other items relating to the future. We caution you to be aware of the speculative nature of forward-looking statements as these statements are not guarantees of performance or results.

Forward-looking statements, which are generally prefaced by the words “may,” “anticipate,” “estimate,” “could,” “should,” “would,” “expect,” “believe,” “will,” “plan,” “project,” “intend,” and similar terms, are subject to known and unknown risks, uncertainties and other facts that may cause our actual results or performance to differ materially from those contemplated by the forward-looking statements.

Although these forward-looking statements reflect our good faith belief based on current expectations, estimates and projections about, among other things, the industry and the markets in which we operate, they are not guarantees of future performance. Whether actual results will conform to our expectations and predictions is subject to several known and unknown risks and uncertainties, including risks and uncertainties discussed on this webpage.

Consequently, all the forward-looking statements made on this webpage are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. Risks, uncertainties, and factors that could cause actual results to differ materially from those projected are discussed in the “Risk Factors” section of this Webpage. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Considering these risks, uncertainties, and assumptions, the forward-looking events discussed on this webpage might not occur.

OFFERING TEAM

Nash Roberts

Chistian Rudd

17% FUNDED

Securities offered through Carolina Financial Securities, LLC and Carofin, LLC, Members FINRA/SIPC. Carolina Financial Securities is an affiliate of Carofin and both Broker-Dealers are affiliates of Carolina Financial Group, LLC. This site is published for residents of the United States only. Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all services referenced on this site are available in every state and through every advisor listed. For additional information, please contact Craig Gilmore at 828.393.0088 x 520 and/or cgilmore@carofin.com

The information contained herein is for informational purposes only and is not intended for further distribution. The information does not constitute a complete description of any investment or investment performance. The presentation is in no way a solicitation nor is it an offer to sell securities nor is it advice or recommendation regarding any investment. The information is not directed to any person who is not believed to qualify under the definition of an Accredited Investor under the rules of Regulation D of the 1933 Securities and Exchange Act. No security listed in this presentation or otherwise offered through Carolina Financial Securities, LLC or Carofin, LLC may be purchased without prior receipt of a complete Private Placement Memorandum or other official offers of sale. Carolina Financial Securities and Carofin only offer one type of alternative investment, those sold as private placements.

Private placements are high risk and illiquid investments. As with other investments, you can lose some or all of your investment. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance nor should it be interpreted that FINRA, the SEC or any other securities regulator approves of any of these securities. Additionally, there are no warranties expressed or implied as to accuracy, completeness, or results obtained from any information provided on this website. Investing in private securities transactions bears risk, in part due to the following factors: there is no secondary market for the securities; there is credit risk; where there is collateral as security for the investment, its value may be impaired if it is sold.