AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES

HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION

CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR

AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE

ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS

QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER

TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF

THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD

BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH

STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL

OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE

COMPLETION OF THE COMPANY’S SALE TO YOU THAT CONTAINS THE URL WHERE THE

FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL

OFFERING CIRCULAR WAS FILED MAY BE OBTAINED. 

PRELIMINARY OFFERING CIRCULAR DATED AUGUST 17, 2021

HAMMITT, INC.

 2101 PACIFIC COAST HIGHWAY

HERMOSA BEACH, CA 90254

310-292-5200

UP TO 22,727,273 SHARES OF CLASS B COMMON STOCK INCLUDING 831,346 SHARES TO BE

SOLD BY SELLING SHAREHOLDERS(1)(5)

MINIMUM INVESTMENT 500 SHARES OF CLASS B COMMON STOCK ($550.00) 

SEE “SECURITIES BEING OFFERED” AT PAGE 42

This offering will terminate at the earlier of (1) the date at which the maximum offering amount has been sold, (2) the date which is one year from this offering being qualified by the United States Securities and Exchange Commission, or (3) the date at which the offering is earlier terminated by the company at its sole discretion. The company has engaged Prime Trust, LLC (the “Escrow Agent” and “Custodian”) to hold funds tendered by investors and provide other services to our company. The offering is being conducted on a best-efforts basis without any minimum target. Provided that an investor purchases shares in the amount of the minimum investment, $550.00 (500 shares), there is no minimum number of shares that needs to be sold in order for funds to be released to the company and for this offering to close, which may mean that the company does not receive sufficient funds to cover the cost of this offering. The company may undertake one or more closings on a rolling basis. After each closing, funds tendered by investors will be made available to the company. After the initial closing of this offering, we expect to hold closings on at least a monthly basis.

Each holder of the Hammitt Class A Common Stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders. Holders of the Class C Common Stock are entitled to three votes per share of Class C Common Stock and will continue to hold a majority of the voting power of all of the company’s equity stock at the conclusion of this offering and therefore control the board.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION. GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO www.investor.gov.

This offering is inherently risky. See “Risk Factors” on page 7. 

Sales of these securities will commence on approximately                               , 2021.

The company is following the “Offering Circular” format of disclosure under Regulation A.

In the event that we become a reporting company under the Securities Exchange Act of 1934, we intend to take advantage of the provisions that relate to “Emerging Growth Companies” under the JOBS Act of 2012. See “Implications of Being an Emerging Growth company.”

TABLE OF CONTENTS

In this Offering Circular, the term “Hammitt,” “we,” “us, “our” or “the company” refers to Hammitt, Inc., a California corporation. On August 17, 2021 the company effected a 6-for-1 stock split; all the share numbers in this Offering Circular, except in the financial statements and unless indicated otherwise, are on a post-split basis.

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

SUMMARY

Overview

Hammitt, Inc. was organized in the State of California on August 12, 2008. The company designs, markets and sells luxury handbags and accessories. The company’s products are sold through traditional (wholesale) retail channels and online (direct to consumer (“DTC”)). Our handbags and accessories are available on our website at www.hammitt.com. The content on this website are not incorporated by reference into this Offering Circular or in any other report or document we file with the SEC. 

Our mission: A client-focused, functional and fresh approach to modern handbags.

In 2008, a small team of Californians began shaping a new, client-focused initiative to create a handbag company where fashion meets function. Using what we believe to be only the highest quality materials, our experienced design team began creating products where comfort and style reign supreme. Since then, we have committed our design efforts to surprise and delight our clients through innovation and evolving functionality.

Each style starts with an idea to solve a problem – making our clients’ lives easier and also more colorful. Our designs come to life through carefully selected materials and thoughtful development and testing. Over the years, our unique, eye-catching handbags with our signature rivets have developed a loyal and passionate following. We are also happy to report that we believe we have been successful in growing the brand without sacrificing quality or compromising our clients’ needs.

Our products

The company sells luxury handbags and accessories. The products aim to be functional and fashionable and are typically adorned with our signature rivets.

Handbag styles change, but as of the date of this Offering Circular the company sells this current product mix of handbags:

In addition to handbags, the company also sells various accessories, including but not limited to the following:

THE OFFERING

Offering Summary (1)

Implications of Being an Emerging Growth company

As an issuer with less than $1 billion in total annual gross revenues during its last fiscal year, the company will qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and this status will be significant if and when the company becomes subject to the ongoing reporting requirements of the Exchange Act of 1934, as amended. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company Hammitt:

The company intends to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act. The company’s election to use the phase-in periods may make it difficult to compare its financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under Section 107 of the JOBS Act.

Under the JOBS Act, the company may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after its initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended, or such earlier time that the company no longer meet the definition of an emerging growth company. Note that this offering, while a public offering, is not a sale of common equity pursuant to a registration statement, since the offering is conducted pursuant to an exemption from the registration requirements. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if the company has more than $1 billion in annual revenues, have more than $700 million in market value of its common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

Certain of these reduced reporting requirements and exemptions are also available to us due to the fact that the company may also qualify, once listed, as a “smaller reporting company” under the Commission’s rules. For instance, smaller reporting companies are not required to obtain an auditor attestation on their assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

Summary Risk Factors

Our business expects to be subject to a number of risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this summary. These risks include, but are not limited to, the following:

RISK FACTORS

The SEC requires the company to identify risks that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

Risks Related to the company and Its Business

The company is currently operating at a net loss. The company incurred a net loss of $(918,527) and $(628,989) for the years ended December 31, 2020 and December 31, 2019, respectively. The likelihood of the company’s creation of a viable business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the growth of a business, operation in a competitive industry, and the continued development of its products. Further, our planned growth and geographic expansion in brick & mortar may delay the company’s path to profitability. There is no assurance that the company will be profitable in the next three years or generate sufficient revenues to pay dividends to the holders of the shares. You should consider the business, operations and prospects in light of the risks, expenses and challenges faced as an emerging growth company.

If the company cannot raise sufficient capital, it may not succeed. The company is offering up to 22,727,273 shares of Class B Common Stock in this Offering on a best-efforts basis and may not raise the complete amount. Even if the maximum amount is raised, the company is likely to need additional funds in the future in order to grow, and if it cannot raise those funds for whatever reason, including reasons relating to the company itself or to the broader economy, it may not survive. If the company manages to raise a substantially lesser amount than the maximum amount that it seeks, it will have to find other sources of funding for some of the plans outlined in “Use of Proceeds.”

Future fundraising may affect the rights of investors. In order to expand, the company is likely to raise funds again in the future, either by offerings of securities or through borrowing from banks or other sources. The terms of future capital-raising, such as debt securities or loan agreements, may include covenants that give creditors greater rights over the financial resources of the company.

Management discretion as to use of proceeds. The company’s success will be substantially dependent upon the discretion and judgment of its management team with respect to the application and allocation of the proceeds of this Offering. The use of proceeds described in “Use of Proceeds” is an estimate based on the company’s current business plan. The company, however, may find it necessary or advisable to re-allocate portions of the net proceeds reserved for one category to another, and it will have broad discretion in doing so.

Any valuation at this stage is difficult to assess. The valuation for this offering was established by the company. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially early-stage companies, is difficult to assess and you may risk overpaying for your investment.

The company’s founder has control of the Board of Directors. Anthony Drockton holds approximately 56% of the company’s voting stock as of December 31, 2020. Pursuant to the Third Amended and Restated Articles of Incorporation he has certain voting rights. Below is a break-down of those rights:

Our business is subject to the risks inherent in global sourcing activities. As a company engaged in sourcing on a global scale, we are subject to the risks inherent in such activities, including, but not limited to:

We are subject to labor laws governing relationships with employees, including minimum wage requirements, overtime, working conditions, and citizenship requirements. Compliance with these laws may lead to increased costs and operational complexity and may increase our exposure to governmental investigations or litigation

In addition, we require our independent manufacturer and suppliers to operate in compliance with applicable laws and regulations; however, we do not control this manufacturer or suppliers or their labor, environmental or other business practices. The violation of labor, environmental or other laws by an independent manufacturer or supplier, or divergence of an independent manufacturer’s or supplier’s labor practices from those generally accepted as ethical or appropriate in the U.S., could interrupt or otherwise disrupt the shipment of our products, harm our trademarks or damage our reputation. The occurrence of any of these events could materially adversely affect our business, financial condition and results of operations.

We are dependent on a limited number of distribution and sourcing centers. Our ability to meet the needs of our customers and our retail stores and e-commerce sites depends on the proper operation of these centers. If any of these centers were to shut down or otherwise become inoperable or inaccessible for any reason, including as a result of the ongoing Covid-19 pandemic, we could suffer a substantial loss of inventory and/or disruptions of deliveries to our retail and wholesale customers. While we have business continuity and contingency plans for our sourcing and distribution center sites, significant disruption of manufacturing or distribution for any of the above reasons could interrupt product supply, result in a substantial loss of inventory, increase our costs, disrupt deliveries to our customers and our retail stores, and, if not remedied in a timely manner, could have a material adverse impact on our business.

Because our distribution centers include automated and computer controlled equipment, they are susceptible to risks including power interruptions, hardware and system failures, software viruses, and security breaches. We maintain distribution centers in Los Angeles and San Diego operated by Hammitt and G Global. The warehousing of the company's merchandise, store replenishment and processing direct-to-customer orders is handled by these centers and a prolonged disruption in any center’s operation could materially adversely affect our business and operations.

The growth of our business depends on the successful execution of our growth strategies, including our omni-channel expansion efforts and our ability to acquire and retain new customers in a cost effective manner. Our growth depends on our ability to acquire and retain new customers in a cost effective manner via in-store experiences and through effective digital marketing. Omni channel expansion efforts a/k/a digital marketing is costly. The Company must balance the cost of digital marketing with expansion efforts into brick and mortar stores. The continued success of the company is reliant on acquiring and retaining new customers. Failure by the company to successfully utilize digital marketing strategies and/or brick and mortar store locations could adversely affect its business operations.

Our success depends, in part, on attracting, developing and retaining qualified employees, including key personnel. The ability to successfully execute against our goals is heavily dependent on attracting, developing and retaining qualified employees, including our senior management team. Competition in our industry to attract and retain these employees is intense and is influenced by our ability to offer competitive compensation and benefits, employee morale, our reputation, recruitment by other employers, perceived internal opportunities, non-competition and non-solicitation agreements and macro unemployment rates. Our operational efficiency initiatives as well as acquisitions and related integration activity may intensify this risk.

We depend on the guidance of our senior management team and other key employees who have significant experience and expertise in our industry and our operations. There can be no assurance that these individuals will remain with us or that we will be able to identify and attract suitable successors for these individuals. The loss of one or more of our key personnel or the direct or indirect consequences of results thereof, or any negative public perception with respect to these individuals or the loss of these individuals, could have a material adverse effect on our business, results of operations and financial condition. We maintain key-person life insurance policies on Anthony J Drockton the company Chairman.

Significant competition in our industry could adversely affect our business. We face intense competition in the product lines and markets in which we operate, including from many competitors with greater resources than ours. Our competitors are European and American luxury brands, as well as private label retailers. There is a risk that our competitors may develop new products or product categories that are more popular with our customers or that the size and resources of some of our competitors may allow them to compete more effectively. We may be unable to anticipate the timing and scale of such product introductions by competitors, which could harm our business. Our ability to compete also depends on the strength of our brand, whether we can attract and retain key talent, and our ability to protect our trademarks and design patents. A failure to compete effectively could adversely affect our growth and profitability.

Our business may be subject to increased costs due to excess inventories and a decline in profitability as a result of increasing pressure on margins if we misjudge the demand for our products. Our industry is subject to significant pricing pressure caused by many factors, including intense competition and a highly promotional environment, fragmentation in the retail industry, pressure from retailers to reduce the costs of products, and changes in consumer spending patterns. If we misjudge the market for our products or demand for our products are impacted by an unforeseen factor, such as the Covid-19 pandemic, we may be faced with significant excess inventories for some products and missed opportunities for other products. If that occurs, we may be forced to rely on destruction, donation, markdowns or promotional sales to dispose of excess, slow-moving inventory, which may negatively impact our gross margin, overall profitability and efficacy of our brands.

Any interruption or termination with our manufacturer could harm our business, including the impact of COVID-19, and the imposition of duties and tariffs by the United States government on Chinese goods. Most of products are manufactured in China with additional capacity in India and Europe. Our main factory in China is an investor in the company, MGI Enterprises LTD. Some of the challenges we may experience with our manufacturer include: (i) insufficient product capacity, (ii) errors in making products to our specifications, inability to obtain sufficient raw materials, poor quality control, failure to meet production deadlines, increases in manufacturing costs an failure to property use our intellectual property. If our relationship with our manufacturer is interrupted or terminated, whether by us or them, we would need to locate alternative manufacturing sources. Establishing new manufacturing relationships involves numerous uncertainties, and we may not be able to obtain alternative manufacturing sources on a timely basis or on satisfactory terms. If we were required to replace our manufacturer, we would likely experience increased cots, substantial disruption in the manufacturer and shipment of our products and a loss of sales. COVID-19 could have a similar impact if any of our supplier or our manufacturer is required to shut down, suspend manufacturing or otherwise discontinue operations due to COVID-19 and government restrictions. We are required to pay federal tariffs to the US government because or products are foreign made goods. We currently pay federal duties ranging from 15 to 35% on our goods. The federal government has the ability to increase these duties. If additional duties are imposed, our margins and earnings may be negatively affected. We cannot predict the nature of any additional duties or tariffs that are pending but tariffs can be changed without notice to use.

The company is reliant on its third-party manufacturer to maintain an amicable relationship, create products pursuant to exact specifications and protect trade secrets. The company relies on its third-party manufacturers, to produce its products pursuant to specifications provided by the company. The company trusts that the manufacturers will (i) product its products exactly as directed so that the brand integrity of the products are maintained and (ii) use reasonable efforts to protect trade secrets. The company cannot assure you that the manufacturer will (i) produce products that are uniform in design and quality and (ii) not unintentionally or willfully, disclose the company's trade secrets to competitors or other third parties. Variations in the production or failure of the manufacturer to maintain trade secrets could have a material adverse effect on the company’s consolidated financial results and on your investment.

The success of our business relies heavily on price integrity, product integrity, brand integrity, exceptional customer experience and our ability to respond to changing fashion and retail trends in a timely manner. Any misstep in price integrity, product integrity, design, executive leadership, exceptional customer service, and or marketing, could negatively affect the image of our brand with our customers. Furthermore, the products we have historically marketed and those that we plan to market in the future are becoming increasingly subject to rapidly changing fashion trends and consumer preferences, including the increasing shift to digital brand engagement and social media communication. If we do not anticipate and respond promptly to changing customer preferences and fashion trends in the design, production, and styling of our products, as well as create compelling marketing campaigns that appeal to our customers, our sales and results of operations may be negatively impacted. Our success also depends in part on our and our executive leadership team's ability to execute on our plans and strategies. Even if our products, marketing campaigns and retail environments do meet changing customer preferences and/or stay ahead of changing fashion trends, our brand image could become tarnished or undesirable in the minds of our customers or target markets, which could materially adversely impact our business, financial condition, and results of operations.

Our operating results are subject to seasonal and quarterly fluctuations. The company's results are typically affected by seasonal trends. We have historically realized, and expect to continue to realize, higher sales and operating income in the fourth quarter of our fiscal year. Poor sales in the company's fourth fiscal quarter would have a material adverse effect on its full year operating results and result in higher inventories. In addition, fluctuations in net sales, operating income and operating cash flows of the company in any fiscal quarter may be affected by the timing of wholesale shipments and other events affecting retail sales, including adverse weather conditions or other macroeconomic events, including the impact of the Covid-19 pandemic.

Risks Related to Global Economic Conditions and Legal and Regulatory Matters

Economic conditions could materially adversely affect our financial condition, results of operations and consumer purchases of luxury items. Our results can be impacted by a number of macroeconomic factors, including but not limited to consumer confidence and spending levels, tax rates, unemployment, consumer credit availability, raw materials costs, pandemics (such as the ongoing Covid-19 pandemic) and natural disasters, fuel and energy costs (including oil prices), global factory production, commercial real estate market conditions, credit market conditions and the level of customer traffic in malls and shopping centers. The Covid-19 pandemic has severely impacted and will likely continue to impact many of these factors.

Demand for our products, and consumer spending in the premium handbag and accessories categories generally, is significantly impacted by trends in consumer confidence, general business conditions, interest rates, foreign currency exchange rates, the availability of consumer credit, and taxation. Consumer purchases of discretionary luxury items, such as the company's products, tend to decline during recessionary periods or periods of sustained high unemployment, when disposable income is lower.

Unfavorable economic conditions, as well as travel restrictions and potential changes in consumer behavior resulting from the Covid-19 pandemic, may also reduce consumers’ willingness and ability to travel to major cities and vacation destinations in which our stores are located.

Our business is subject to computer system disruption and cyber security threats, including a personal data or security breach, which could damage our relationships with our customers, harm our reputation, expose us to litigation and adversely affect our business. We depend on digital technologies for the successful operation of our business, including corporate email communications to and from employees, customers, stores and vendors, the design, manufacture and distribution of our finished goods, digital marketing efforts, collection and retention of customer data, employee and vendor information, the processing of credit card transactions, online e-commerce activities and our interaction with the public in the social media space. Since the outbreak of the Covid-19 pandemic, the majority of our corporate employees and contractors have worked remotely for some time and many continue to do so, which has increased our dependence on digital technology during this period. The possibility of a cyber-attack on any one or all of these systems is a serious threat. The retail industry, in particular, has been the target of many recent cyber-attacks. As part of our business model, we collect, retain, and transmit confidential information over public networks. In addition to our own databases, we use third party service providers to store, process and transmit this information on our behalf. Although we contractually require these service providers to implement and use reasonable and adequate security measures, we cannot control third parties and cannot guarantee that a personal data or security breach will not occur in the future either at their location or within their systems. We also store all designs, goods specifications, projected sales and distribution plans for our finished products digitally. We have enterprise class and industry comparable security measures in place to protect both our physical facilities and digital systems from attacks. Despite these efforts, however, we may be vulnerable to targeted or random personal data or security breaches, acts of vandalism, computer malware, misplaced or lost data, programming and/or human errors, or other similar events.

Awareness and sensitivity to personal data breaches and cyber security threats by consumers, employees and lawmakers is at an all-time high. Any misappropriation of confidential or personal information gathered, stored or used by us, be it intentional or accidental, could have a material impact on the operation of our business, including severely damaging our reputation and our relationships with our customers, employees and investors. We may also incur significant costs implementing additional security measures to protect against new or enhanced data security or privacy threats, or to comply with current and new state, federal and international laws governing the unauthorized disclosure of confidential and personal information which are continuously being enacted and proposed such as the General Data Protection Regulation (GDPR) in the E.U. and the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA) in the U.S.A., as well as increased cyber security and privacy protection costs such as organizational changes, Covid-19 employee and visitor health checks deploying additional personnel and protection technologies, training employees, engaging third party experts and consultants and lost revenues resulting from unauthorized use of proprietary information including our intellectual property. Lastly, we could face sizable fines, significant breach containment and notification costs to supervisory authorities and the affected data subjects, and increased litigation as a result of cyber security or personal data breaches.

In addition, we have e-commerce in the U.S. Given the robust nature of our e-commerce presence and digital strategy, it is imperative that we maintain uninterrupted operation of our: (i) computer hardware, (ii) software systems, (iii) customer marketing databases, and (iv) ability to email our current and potential customers. Despite our preventative efforts, our systems are vulnerable from time-to-time to damage, disruption or interruption from, among other things, physical damage, natural disasters, inadequate system capacity, system issues, security breaches, email blocking lists, computer malware or power outages. Any material disruptions in our e-commerce presence or information technology systems could have a material adverse effect on our business, financial condition and results of operations.

Failure to adequately protect our intellectual property and curb the sale of counterfeit merchandise could injure our brands and negatively affect sales. We believe our trademarks, copyrights, patents, and other intellectual property rights are extremely important to our success and our competitive position. We devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting efforts worldwide. In spite of our efforts, counterfeiting still occurs and if we are unsuccessful in challenging a third-party’s rights related to trademark, copyright, or patent this could adversely affect our future sales, financial condition, and results of operations. We are aggressive in pursuing entities involved in the trafficking and sale of counterfeit merchandise through legal action or other appropriate measures. We cannot guarantee that the actions we have taken to curb counterfeiting and protect our intellectual property will be adequate to protect the brand and prevent counterfeiting in the future. Our trademark applications may fail to result in registered trademarks or provide the scope of coverage sought. Furthermore, our efforts to enforce our intellectual property rights are often met with defenses and counterclaims attacking the validity and enforceability of our intellectual property rights. Unplanned increases in legal fees and other costs associated with defending our intellectual property rights could result in higher operating expenses. Finally, many countries’ laws do not protect intellectual property rights to the same degree as U.S. laws.

Risks Related to Securities in this Offering

There is no current market for any shares of the company’s stock. You should be prepared to hold this investment for several years or longer. More importantly, there is no established market for these securities and there may never be one. As a result, if you decide to sell these securities in the future, you may not be able to find a buyer. Investors should assume that they may not be able to liquidate their investment for some time, or be able to pledge their shares as collateral.

Investors will hold minority non-voting interests in the company. The company has already issued 6,313,188 shares of its Class A Common Stock and 56,818,698 of its Class C Common Stock. Both of which are voting common stock. Investors will hold minority interests in the company and will not be able to direct its operations.

We may be forced to register with the SEC before we are ready. Some of our investors have registration rights under our Investors’ Rights Agreement, which appears as Exhibit 3.1 to the Offering Statement of which this Offering Circular forms a part. These registration rights may require us to become a reporting company with the SEC. Beginning on December 18, 2023, certain investors may have the right and may decide to make a demand registration for an underwritten public offering of our securities. See “Securities Being Offered – Preferred Stock – Registration Rights” below. The financial and time burdens of registration with, and reporting to, the SEC are considerable, and if we are required to undertake this process before we are ready, it could have a negative effect on our business and operations.

Using a credit card to purchase shares may impact the return on your investment as well as subject you to other risks inherent in this form of payment. Investors in this offering have the option of paying for their investment with a credit card, which is not usual in the traditional investment markets. Transaction fees charged by your credit card company (which can reach 5% of transaction value if considered a cash advance) and interest charged on unpaid card balances (which can reach almost 25% in some states) add to the effective purchase price of the shares you buy. See “Plan of Distribution and Selling Shareholders.” The cost of using a credit card may also increase if you do not make the minimum monthly card payments and incur late fees. Using a credit card is a relatively new form of payment for securities and will subject you to other risks inherent in this form of payment, including that, if you fail to make credit card payments (e.g. minimum monthly payments), you risk damaging your credit score and payment by credit card may be more susceptible to abuse than other forms of payment. Moreover, where a third-party payment processor is used, as in this offering, your recovery options in the case of disputes may be limited. The increased costs due to transaction fees and interest may reduce the return on your investment.

The SEC’s Office of Investor Education and Advocacy issued an Investor Alert dated February 14, 2018 entitled Credit Cards and Investments – A Risky Combination, which explains these and other risks you may want to consider before using a credit card to pay for your investment.

The Subscription Agreement has a forum selection provision that requires disputes be resolved in state or federal courts in the State of California, regardless of convenience or cost to you, the investor. As part of this investment, each investor will be required to agree to the terms of the Subscription Agreement included as Exhibit 4.1 to the Offering Statement of which this Offering Circular is part. In the agreement, investors agree to resolve disputes arising under the subscription agreement in state or federal courts located in the State of California, for the purpose of any suit, action or other proceeding arising out of or based upon the agreement. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. The company believes that the exclusive forum provision applies to claims arising under the Securities Act, but there is uncertainty as to whether a court would enforce such a provision in this context. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. You will not be deemed to have waived the company’s compliance with the federal securities laws and the rules and regulations thereunder. This forum selection provision may limit your ability to obtain a favorable judicial forum for disputes with us. Although we believe the provision benefits us by providing increased consistency in the application of California law in the types of lawsuits to which it applies and in limiting our litigation costs, to the extent it is enforceable, the forum selection provision may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes, may increase investors’ costs of bringing suit and may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the provision inapplicable to, or unenforceable in an action, the company may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition or results of operations.

Investors in this Offering will be required to hold their securities in a custodial account and enter into a custody account agreement under which they will incur an annual account fee. The company will not close on an investment and issue shares to any investor that fails to enter into the custody account agreement. Investors in this Offering will be required to enter into a custody account agreement with Prime Trust, LLC (the “Custodian”), who is also acting as the company’s Escrow Agent. This will occur after investors' subscriptions have been submitted, including placing their funds in escrow, and AML and KYC checks have been completed. The company will notify investors when such checks have been completed so they may complete the process. If an investor fails to complete the subscription process by entering into the custody account agreement before the Offering is terminated, the company will return their funds. See “Plan of Distribution -- Process of Subscribing” for more information. By entering into the custody account agreement, an investor agrees that all securities of the company acquired by the investor will be held in the account and that the Custodian will be recognized on the company’s stock registers as the holder of record of such securities. Investors will be recorded on the Custodian’s books as “beneficial owners” of the securities. Those beneficial owners will need to issue instructions to the Custodian to transfer, buy, sell, or exercise any of their securities held in the custody account.

Risks Related to COVID-19

The Covid-19 pandemic and resulting adverse economic conditions are and may continue to have a material adverse impact on our business, financial condition, results of operations and cash flows. The Covid-19 pandemic has impacted a significant majority of the regions in which we operate, disrupting operations, consumer spending and global supply chains and creating significant disruption and volatility of financial markets. The impacts of Covid-19 have and may continue to materially adversely impact our operations, cash flow and liquidity. In March 2020, the outbreak was labeled a global pandemic by the World Health Organization. National, state and local governments have responded to the Covid-19 pandemic in a variety of ways, including, but not limited to, by declaring states of emergency, restricting people from gathering in groups or interacting within a certain physical distance (i.e., social distancing), requiring individuals to stay at home, and in most cases, ordering non-essential businesses to close or limit operations. The company had temporarily closed the majority of its directly operated stores for some period of time to help reduce the spread of Covid-19 during fiscal 2020. As of the end of the fiscal year, the majority of the company’s stores re-opened for either in-store or curb-side service and they continued to operate since then, however, some store locations have experienced temporary re-closures or are operating under tighter restrictions in compliance with local government regulation. Many of the company’s wholesale partners also closed their bricks and mortar stores as required by government orders during the third and fourth fiscal quarter of fiscal 2020, and while the majority of stores have reopened, they have also been subject to temporarily re-closures and tighter capacity restrictions operating in compliance with the rules of certain local governments.

The global Covid-19 pandemic is continuously evolving and the extent to which the pandemic ultimately impacts our results and our business - including unforeseen increased costs to our business - will depend on future developments, which are highly uncertain and cannot be predicted, including the ultimate duration, severity and sustained geographic resurgence of the virus and the success of actions to contain the virus, including variants of the novel strain, or treat its impact, among others. While the full magnitude of the effects on our business is difficult to predict at this time, the Covid-19 pandemic has and is expected to continue to have a material adverse impact on our business, financial condition, and results of operations. Although the ultimate severity and impact of the Covid-19 pandemic is uncertain at this time and depends on future events outside of our control, our business is expected to continue to be adversely impacted by several factors, including, but not limited to:

DILUTION

Dilution means a reduction in value, control or earnings of the shares the investor owns.

Immediate dilution

An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the company. When the company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is diluted because all the shares are worth the same amount, and you paid more than earlier investors for your shares.

The following table compares the price that new investors are paying for their shares with the effective cash price paid by existing shareholders, giving effect to full conversion of all outstanding convertible notes and assuming that the shares are sold at $1.10 per share. The schedule presents shares and pricing as issued and reflects all transactions since inception, which gives investors a better picture of what they will pay for their investment compared to the company’s insiders than just including such transactions for the last 12 months, which is what the SEC requires.

The following table illustrates the dilution that new investors will experience upon investment in the company relative to existing holders of its securities. Because this calculation is based on the net tangible assets of the company, the company is calculating based on its net tangible book value of ($1,995,642) as of December 31, 2020, as included in its audited financial statements.

The offering costs assumed in the following table includes up to $2,581,000 in commissions as well as marketing, technology, legal, accounting, and Edgarization fees incurred for this offering.

The table presents four scenarios for the convenience of the reader: a $6,250,000 raise, a $12,500,000 raise from this offering, a $18,750,000 raise from this offering, and a fully subscribed $25,000,000 raise from this offering (the maximum offering) on a post-split basis

Future dilution

Another important way of looking at dilution is the dilution that happens due to future actions by the company. The investor’s stake in a company could be diluted due to the company issuing additional shares. In other words, when the company issues more shares, the percentage of the company that you own will go down, even though the value of the company may go up. You will own a smaller piece of a larger company. This increase in number of shares outstanding could result from a stock offering (such as an initial public offering, another crowdfunding round, a venture capital round, angel investment), employees exercising stock options, or by conversion of certain instruments (e.g. convertible bonds, preferred shares or warrants) into stock. 

If the company decides to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share (though this typically occurs only if the company offers dividends, and most early stage companies are unlikely to offer dividends, preferring to invest any earnings into the company).

The type of dilution that hurts early-stage investors most often occurs when the company sells more shares in a “down round,” meaning at a lower valuation than in earlier offerings. An example of how this might occur is as follows (numbers are for illustrative purposes only):

This type of dilution might also happen upon conversion of convertible notes into shares. Typically, the terms of convertible notes issued by early-stage companies provide that in the event of another round of financing, the holders of the convertible notes get to convert their notes into equity at a “discount” to the price paid by the new investors, i.e., they get more shares than the new investors would for the same price. Additionally, convertible notes may have a “price cap” on the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the convertible notes get more shares for their money than new investors. In the event that the financing is a “down round” the holders of the convertible notes will dilute existing equity holders, and even more than the new investors do, because they get more shares for their money. Investors should pay careful attention to number of convertible notes that the company has issued (and may issue in the future, and the terms of those notes.

If you are making an investment expecting to own a certain percentage of the company or expecting each share to hold a certain amount of value, it’s important to realize how the value of those shares can decrease by actions taken by the company. Dilution can make drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.

PLAN OF DISTRIBUTION AND SELLING SHAREHOLDERS

Plan of Distribution

Hammitt is offering a maximum of 22,727,273 shares of Class B Common Stock on a “best efforts” basis.

The cash price per share of the Class B Common Stock is $1.10.

The company intends to market the shares in this offering both through online and offline means. Online marketing may take the form of contacting potential investors through various channels of online and electronic media whereby the Offering Circular may be delivered contemporaneously and posting “testing the waters” materials or the Offering Circular on an online investment platform.

The company’s Offering Circular will be furnished to prospective investors in this offering via download 24 hours per day, 7 days per week on the company’s website www.invest.hammitt.com on a landing page that relates to this offering, www.portal.hammitt.com.

The offering will terminate at the earliest of: (1) the date at which the maximum offering amount has been sold, (2) the date which is one year from this offering being qualified by the Commission, and (3) the date at which the offering is earlier terminated by the company in its sole discretion.

The company may undertake one or more closings on an ongoing basis. After each closing, funds tendered by investors will be available to the company. After the initial closing of this offering, the company expects to hold closings on at least a monthly basis.

The company is offering its securities in all states.

The company has engaged Dalmore Group, LLC (“Dalmore”) a broker-dealer registered with the SEC and a member of FINRA, to perform the following administrative and technology related functions in connection with this offering, but not for underwriting or placement agent services:

As compensation for the services listed above, the company has agreed to pay Dalmore $27,000 in one-time set up fees, consisting of the following:

In addition, the company will pay Dalmore a commission equal to 1% of the amount raised in the offering to support the offering once the SEC has qualified the Offering Statement and the offering commences. Assuming that the offering is open for 12 months, the company estimates that fees due to pay Dalmore, pursuant to the 1% commission would be $250,000 for a fully-subscribed offering. Finally, the total fees that the company estimates that it will pay Dalmore, pursuant to a fully-subscribed offering would be $277,000. These assumptions were used in estimating the fees due in the “Use of Proceeds.”

No Minimum Offering Amount

The shares being offered will be issued in one or more closings. No minimum number of shares must be sold before a closing can occur; however, investors may only purchase shares in minimum increments of $550. Potential investors should be aware that there can be no assurance that any other funds will be invested in this offering other than their own funds.

Process of Subscribing

After the Offering Statement has been qualified by the Securities and Exchange Commission (the “SEC”), the company will accept tenders of funds to purchase whole and fractional shares. The company may close on investments on a “rolling” basis (so not all investors will receive their shares on the same date). Investors may subscribe by tendering funds by check, wire transfer, credit or debit card or ACH transfer to the escrow account to be setup by the company’s Escrow Agent. The funds tendered by potential investors will be held by the Escrow Agent in a segregated account exclusively for the company’s benefit. Funds will be transferred to the company at each Closing. The escrow agreement can be found in Exhibit 8 to the Offering Statement of which this Offering Circular is a part.

There is a minimum investment of $550 per investor in this offering.

Investors will be required to complete a subscription agreement and a custody account agreement in order to invest. The subscription agreement includes a representation by the investor to the effect that, if the investor is not an “accredited investor” as defined under securities law, the investor is investing an amount that does not exceed the greater of 10% of their annual income or 10% of their net worth (excluding the investor’s principal residence).

The custody account agreement will be with Prime Trust, LLC (the “Custodian”), who is also acting as the company’s Escrow Agent. By entering into the custody account agreement, an investor agrees that all securities of the company acquired by investor will be shown on the company’s stock and warrant registers as held in by the Custodian as the holder of record, and the investors will be recorded on the books of the Custodian as the beneficial owners of the securities.

If you decide to subscribe for the Class B Common Stock in this Offering, you should complete the following steps:

Any potential investor will have ample time to review the subscription agreement and the custody account agreement, along with their counsel, prior to making any final investment decision. Dalmore will review all subscription agreements completed by the investor. After Dalmore has completed its review of a subscription agreement and an investor has provided all necessary information to the Custodian and executed the custody account agreement for an investment in the company, the funds may be released by the escrow agent. Forms of the subscription agreement and the custody account agreement are filed as exhibits to the Offering Statement of which this Offering Circular forms a part.

If the subscription agreement and/or the custody account agreement is not complete or there is other missing or incomplete information, the funds will not be released until the investor provides all required information. In the case of a debit card payment, provided the payment is approved, Dalmore will have up to three days to ensure all the documentation is complete. Dalmore will generally review all subscription agreements on the same day, but not later than the day after the submission of the subscription agreement. If an investor fails to complete the subscription process due to failure to enter into the custody account agreement before the Offering is terminated, the company will return their funds.

All funds tendered (by check, wire, debit card, or electronic funds transfer via ACH to the specified account or deliver evidence of cancellation of debt) by investors will be deposited into an escrow account at the Escrow Agent for the benefit of the company. All funds received by wire transfer will be made available immediately while funds transferred by ACH will be restricted for a minimum of three days to clear the banking system prior to deposit into an account at the Escrow Agent.

The company maintains the right to accept or reject subscriptions in whole or in part, for any reason or for no reason, including, but not limited to, in the event that an investor fails to provide all necessary information, even after further requests from the company, in the event an investor fails to provide requested follow up information to complete background checks or fails background checks, and in the event the company receives oversubscriptions in excess of the maximum offering amount.

In the interest of allowing interested investors as much time as possible to complete the paperwork associated with a subscription, the company has not set a maximum period of time to decide whether to accept or reject a subscription. If a subscription is rejected, funds will not be accepted by wire transfer or ACH, and payments made by debit card or check will be returned to subscribers within 30 days of such rejection without deduction or interest. Upon acceptance of a subscription, the company will send a confirmation of such acceptance to the subscriber.

Dalmore has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the Preferred Shares. Dalmore is not participating as an underwriter and under no circumstance will it solicit any investment in the company, recommend the company’s securities or provide investment advice to any prospective investor, or make any securities recommendations to investors. Dalmore is not distributing any offering circulars or making any oral representations concerning this Offering Circular or this offering. Based upon Dalmore’s anticipated limited role in this offering, it has not and will not conduct extensive due diligence of this offering and no investor should rely on the involvement of Dalmore in this offering as any basis for a belief that it has done extensive due diligence. Dalmore does not expressly or impliedly affirm the completeness or accuracy of the Offering Statement and/or Offering Circular presented to investors by the company. All inquiries regarding this offering should be made directly to the company.

Upon confirmation that an investor’s funds have cleared, the company will instruct the Transfer Agent to issue shares to the Custodian on behalf of the investor. The Custodian will notify an investor when shares are ready to be issued or transferred and the Custodian has set up an account for the investor.

Escrow Agent  

The Escrow Agent has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the securities.

The company has agreed to pay the Escrow Agent:

Transfer Agent

The company has also engaged VStock, a registered transfer agent with the SEC, who will serve as transfer agent to maintain shareholder information on a book-entry basis; there are no set up costs for this service, fees for this service will be limited to secondary market activity. The company estimates the aggregate fee due to VStock for the above services to be $12,000 annually.

Custodian

We have engaged Prime Trust, LLC to serve as the Custodian for the securities in this Offering. The form of custody account agreement can be found in Exhibit 3.3 the Offering Statement of which this Offering Circular forms a part.

Selling Shareholders

Our CEO, Andrew Forbes, intends to sell up to 831,346 shares of Class B Common Stock in this offering. He will only participate in the offering after the company has sold 9,090,909 shares of Class B Common Stock and received gross proceeds of $10,000,000 in this offering. Once the company reaches this threshold, the selling shareholder will participate in this Offering at the same time as the company, selling no more than ten percent (10%) of the shares issued to investors at each closing. That means at each closing, one share will be sold by the selling shareholder for each nine shares sold by the company, until all 831,346 shares have been sold by the selling shareholder.

We expect to pay all of the expenses of the offering (other than the 1% commissions charged by Dalmore and payable with respect to the selling shareholder shares sold in the offering) but will not receive any of the proceeds from the sale of selling shareholder shares in the offering.

The following table, sets forth the name of the selling stockholder, the number of shares of Class A Common Stock and Class B Common Stock beneficially owned by him prior to this offering, the number of shares of Class B Common Stock being offered by him in this offering and the number of shares and percentage of outstanding shares of both Class A Common Stock and Class B Common Stock to be beneficially owned by him after this offering, assuming that all of his shares are sold in the offering. The selling stockholder holds vested options for the purchase of Class B Common Stock and will exercise his options and pay for his shares before participating in any closing.

(1) Assumes maximum number of shares are sold in this offering.

(2) “Pro Rata Portion” represents that portion that a shareholder may sell in the offering expressed as a percentage where the numerator is the amount offered by the shareholder divided by the total number of shares offered by all selling shareholders.

(3) Represents shares of Class B Common Stock issuable upon conversion of shares Class A Common Stock after exercise of vested options, including payment for such shares of Class A Common Stock prior to any closing.

The total number of shares owned by the selling shareholders prior to this offering represents 10.25% of the company’s capital stock, on a fully diluted basis.

Provisions of Note in the company’s Subscription Agreement

Forum Selection Provision

The Subscription Agreement that investors will execute in connection with the offering includes a forum selection provision that requires any claims against the company based on the Agreement to be brought in a state or federal court of competent jurisdiction in the State of California, for the purpose of any suit, action or other proceeding arising out of or based upon the Agreement. Although the company believes the provision benefits us by providing increased consistency in the application of California law in the types of lawsuits to which it applies and in limiting the company’s litigation costs, to the extent it is enforceable, the forum selection provision may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. The company has adopted the provision to limit the time and expense incurred by its management to challenge any such claims. As a company with a small management team, this provision allows its officers to not lose a significant amount of time travelling to any particular forum so they may continue to focus on operations of the company. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. The company believes that the exclusive forum provision applies to claims arising under the Securities Act, but there is uncertainty as to whether a court would enforce such a provision in this context. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Investors will not be deemed to have waived the company’s compliance with the federal securities laws and the rules and regulations thereunder.

USE OF PROCEEDS TO ISSUER

Assuming a maximum raise of $25,000,000 the net proceeds of this offering would be approximately $22,419,000 after subtracting the following estimated offering costs:

If the company successfully raises the maximum amount under this raise it intends to use the proceeds for digital advertising, inventory, working capital and opening additional retail locations.

Assuming a maximum raise of $18,750,000 the net proceeds of this offering would be approximately $16,762,750 after subtracting the following estimated offering costs:

If the company successfully raises the maximum amount under this raise it intends to use the proceeds for digital advertising, inventory, working capital and opening additional retail locations.

Assuming a maximum raise of $12,500,000 the net proceeds of this offering would be approximately $11,106,500 after subtracting the following estimated offering costs:

If the company successfully raises the maximum amount under this raise it intends to use the proceeds for digital advertising, inventory, working capital and opening additional retail locations.

Assuming a maximum raise of $6,250,000 the net proceeds of this offering would be approximately $5,675,250 after subtracting the following estimated offering costs:

If the company successfully raises the maximum amount under this raise it intends to use the proceeds for digital advertising, inventory, working capital and opening additional retail locations.

Please see the table below for a summary of the company’s intended uses of net proceeds from this offering:

*Does not include shares sold by selling shareholders and the related proceeds.

The company reserves the right to change the above use of proceeds if management believes it is in the best interest of the company.

THE COMPANY’S BUSINESS

Company Overview

Hammitt, Inc. was organized in the State of California on August 12, 2008. In 2008, a small team of Californians began shaping a new, client-focused initiative to create a handbag company where fashion meets function. Using what we believe to be only the highest quality materials, our experienced design team began creating products where comfort and style reign supreme. Since then, we have committed our design efforts to surprise and delight our clients through innovation and evolving functionality.

Each style starts with an idea to solve a problem – making our clients’ lives easier and also more colorful. Our designs come to life through carefully selected materials and thoughtful development and testing. Over the years, our unique, eye-catching handbags with our signature rivets have developed a loyal and passionate following. We are also happy to report that we believe we have been successful in growing the brand without sacrificing quality or compromising our clients’ needs.

In 2019 and 2020 Hammitt won the Design Excellence Award from the North American Accessories Council in New York.

The Hammitt Difference: Business Model

We believe the following factors set us apart from our competition:

The highest quality materials (lifetime guarantee) and functionality is a top priority in our designs. Digital media and direct-to-consumer is a huge focus. We believe this sets us apart from our competitors. We never discount and pricing falls somewhere in the middle (or slightly higher than some competitors).

BEST SELLING BAG - DANIEL LRG  

Market Overview

There is a large growing U.S. market for women’s handbags - $22 billion in 2021 increasing by $1.43 billion annually resulting in a projected market volume of $27.3 billion by 2025. Buyers usually must choose between a very expensive, European designer handbag or settle for lower quality, heavily discounted American brand. Hammitt offers a quality, non-discounted, luxury U.S. product.

Legacy brands are focused on their wholesale business. Most have less than 15% of their sales online. Hammitt has more than 65% of revenues online (DTC).

According to Statista, as of February, 2020, 30% of online buyers are 25 to 34 years old. Hammitt is focused on 28 to 55 year old buyers.

Products

The company sells luxury handbags and accessories. The products aim to be functional and fashionable and are typically adorned with our signature rivets. We are known for our functional fresh approach to the modern handbag and our lifetime promise of repairs free of charge.

Store Locations

Currently, Hammitt has two store locations. One located in Manhattan Beach, California and the other located in Costa Mesa, California. Our stores offer the fullest expression of our brand, are located in tourist-heavy, densely populated cities in California. The stores carry an assortment of products depending on their size, location and customer preferences. As the company grows we intend to open additional retail stores in locations which we believe will further our loyal customer base and continue to support and drive our DTC business.

When contemplating opening additional facilities, the company looks as the following factors to determine whether the location is suited for the company:

Direct to Consumer

Our Direct to Consumer business accounts for more than 60% of our revenues. In the last 3 years, DTC sales have grown from 24% (in 2018) to 60% as of December 31, 2020. We believe the following factors have contributed to this growth:

Due to the aforementioned factors, we believe digital traffic to our website will reach 10,000,000 visits for the year ended December 31, 2021.

We have grown the DTC business by tracking data and success factors in regards to our digital campaigns. Additionally, our software ecosystem has allowed us to focus on the proper key performance indicators needed to accelerate our DTC growth, such as:

From a digital marketing perspective, we are continuously informed of what is working for us and what needs tweaking.

We believe our exceptional customer experience sets us apart. Virtually, we strive to replicate in-person customer service via virtual personal styling appointments, a professional graphics/digital team and live customer service representatives.

Wholesale Customers

In addition to selling DTC and in retail locations, the company also sells its products wholesale. Pursuant to the company’s wholesale model it obtains products from its third party manufacturer and then sells the products to a third-party business, usually in bulk. This third-party is often a retail business who then sells to the buying public. As of June 30, 2021 the company maintains a wholesale relationship with the following entities:

We work closely with our wholesale partners to ensure a clear and consistent product presentation. We custom tailor our assortments through wholesale product planning and allocation processes to match the attributes of our department store consumers in each local market. We continue to closely manage inventories in this channel given the current highly promotional environment at point-of-sale.

In addition, the company sells its products to boutiques across the country on a wholesale basis. As of June 30, 2021 the company maintains over 400 wholesale relationships with boutiques. Many of these boutiques are located inside luxury hotels. The company intends to grow this wholesale boutique model as it can track demand for product without the capital investment of brick and mortar store fronts. The wholesale business for Hammitt comprised approximately 38% of total segment net sales for fiscal 2020.

Target Audience

The company’s target audience consists of the following characteristics:

Manufacturer and Supplier

The majority of the company’s products are manufactured in China with additional capacity in India and Europe. Our main factory in China is an investor in the company, MGI Enterprises LTD The company has not entered into any agreements with third parties to manufacturer or supply products.

Fulfillment Facilities

We rely on third parties to operate and distribute finished products from our fulfillment facilities located in California. We also utilize third-party logistics providers, such as G-Global to warehouse and distribute finished products from their warehouse locations in the United Sates. We regularly evaluate our distribution infrastructure and consolidate or expand our distribution capacity as we believe appropriate for our operations and to meet anticipated needs.

The company has not entered into any agreements with third parties to operate and distribute finished products from fulfillment facilities or third party logistic providers to warehouse and distribute finished products from their warehouse locations in the United States.

Competition

The global premium women's handbag, and accessories categories are highly competitive. The company competes primarily with European and American luxury and accessible luxury brands as well as private label retailers. Over the last several years these industries have grown, encouraging the entry of new competitors as well as increasing the competition from existing competitors. This increased competition drives interest in these brand loyal categories.

The company’s believes that the brands below are Hammitt’s top competitors:

Employees

The company currently has 38 full-time employees and 10 part-time employees. The company has entered into employment agreements with two executives. The employment agreements are filed as exhibits to the Offering Statement of which this Offering Circular forms a part.

Information Systems

The company relies on the following information systems:

In addition, our manufacturers are linked to our design and ERP Software, NetSuite. All customers are linked to ERP through Shopify, NuOrder or EDI systems. Payments to vendors are made by ACH, write or by check.

Regulation

Most of the company's imported products are subject to duties, indirect taxes, quotas and non-tariff trade barriers that may limit the quantity of products that we may import into the United States and other countries or may impact the cost of such products. The company is not materially restricted by quotas or other government restrictions in the operation of its business, however customs duties do represent a component of total product cost. To maximize opportunities, the company operates complex supply chains through foreign trade zones, bonded logistic parks and other strategic initiatives such as free trade agreements.

Intellectual Property

The company relies on its intellectual property. As of the date of this Offering Circular, the company has the following patents or trademarks granted or pending:

HAMMITT, INC.

WORLDWIDE TRADEMARK STATUS REPORT

HAMMITT, INC.

WORLDWIDE TRADEMARK STATUS REPORT

HAMMITT, INC.

WORLDWIDE TRADEMARK STATUS REPORT

HAMMITT, INC.

WORLDWIDE TRADEMARK STATUS REPORT

HAMMITT, INC.

WORLDWIDE TRADEMARK STATUS REPORT

HAMMITT, INC.

WORLDWIDE TRADEMARK STATUS REPORT

HAMMITT, INC.

WORLDWIDE TRADEMARK STATUS REPORT

HAMMITT, INC.

WORLDWIDE TRADEMARK STATUS REPORT

Litigation

The company has no litigation pending and the management team is not aware of any pending or threatened legal action relating to the company business, intellectual property, conduct or other business issues.

THE COMPANY’S PROPERTY

The company has entered into the following lease agreements:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of the financial statements, consolidated financial statements and financial condition of Hammitt and results of its operations together with its financial statements and related notes appearing at the end of this Offering Circular. This discussion contains forward-looking statements reflecting the company’s current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors” and elsewhere in this Offering Circular. Unless otherwise indicated, the latest results discussed below are as of December 31, 2020.

Overview

The company designs, markets and sells luxury handbags and accessories. The company’s products are sold direct to consumer (“DTC”) online and through our own boutiques as well as traditional wholesale channels, including specialty stores, resorts and select Department Stores.

Results of Operations

Factors Affecting Operating Results

We generate revenue from DTC sales, our own boutiques and wholesale sales of handbags and accessories. Revenue is affected by advertising, discounts and promotions, merchandising, packaging, and in the wholesale channel, the availability of display space at retailers, all of which have a significant impact on consumers’ buying decisions.

We deduct promotional discounts and refunds expected to be issued to determine net revenue. Customers who receive a damaged product or are dissatisfied with a product may receive a full or partial refund, full or partial credit against future purchase, or replacement, at our sole discretion. Continued growth of net revenues and profits will depend, substantially, on the continued popularity of new and existing products, the ability to effectively manage the sales channels, and the ability to maintain sufficient product supply to meet expected growth in demand. We may periodically provide promotional offers, including discounts, such as percentage discounts off current purchases and other similar offers. These offers are treated as a reduction to the purchase price of the related transaction and are reflected as an adjustment to arrive to net revenues. Such offers are discretionary, and we expect incentive offers to vary from period to period as a percentage of sales for the foreseeable future.

The cost of goods sold relates to the cost of materials, manufacturing, inbound shipping, receiving and import duty costs.

Operating expenses largely consist of selling, marketing, advertising, retail operations, and general and administrative expenses.

Other income and expense consist primarily of interest expense associated with a $4 million line of credit and two loans of $500,000. One of the loans is with one of our manufacturer partners and the second loan is with our investment firm, bocm4, LLC (“BCOM”). See “Recent offerings of Securities and Outstanding Debt” below.

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

Statements of Operations For the Years Ended December 31, 2020 and 2019

Revenue

Revenue for the year ended December 31, 2020 as $17,620,085, an increase of 14.8% from revenue of $15,349,520 for the year ended December 31, 2019.

Revenue from DTC or online sales increased 78.6%, to $10,941,513 for the year ended December 31, 2020 from $6,125,265 for the year ended December 31, 2019. This was primarily driven by the increase in new customers and existing customer sales. Order volumes increased as the company continued its planned pivot to a DTC focus company and was helped as states and localities imposed shelter-in-place orders in connection with the coronavirus (“COVID-19”) pandemic discussed further below.

Revenues from wholesale sales decreased by 27.9%, to $6,565,683 million for the year ended December 31, 2020 from $9,111,510. The decrease relates to a general decrease in retails sales due to COVID-19. Specifically, the company had temporarily closed the majority of its directly operated stores for some period of time to help reduce the spread of Covid-19 during fiscal 2020. The vast majority of the company's stores re-opened for either in-store or pick-up service and have continued to operate since then, however, some store locations have experienced temporary re-closures or are operating under tighter restrictions in compliance with local government regulation. Many of the company's wholesale also closed their bricks and mortar stores as required by government orders during the third and fourth quarters of fiscal 2020, and while the majority of stores have reopened, they have also been subject to temporary re-closures and tighter capacity restrictions operating in compliance with the rules of certain local governments.

Other revenues relate to shipping and handling income.

Cost of Goods Sold

Cost of revenues for the year ended December 31, 2020 was $6,975,634, compared to $6,990,892 for the year ended December 31, 2019, a decrease of less than 1%. The decrease in cost of goods sold relates to improved factory process and higher volume. In addition, DTC, which has higher margins, represented a larger portion of the total sales.

Accordingly, our gross profit increased 28.5% to $10,644,451 for the year ended December 31, 2020 from $8,358,628 for the year ended December 31, 2019 and our gross margins increased to 61% for 2020 from 54% in 2019.

Operating Expenses

Selling expenses increased by 41% to $10,162,220 for the year ended December 31, 2020, from $7,200,954 for the year ended December 31, 2019. During this period the amount spent on advertising increased by 56% to $4,764,495 in 2020 from $3,053,898 for the year ended December 31, 2019. The increase in advertising was primarily driven by substantially increased advertising costs during the prime online selling period caused by the general election advertising undertaken by political parties together with increased digital media spending to maintain and grow online DTC sales.

General and administrative expenses net of PPP loan forgiveness decreased by 11% to $1,529,908 from $1,662,588 due to decreased travel and office closures caused by COVID-19.

Other expenses increased 20% to $386,324 for the year ended December 31, 2020 from $321,301 for the year ended December 31, 2019. The increase in other expense was primarily driven by increased borrowing to finance inventory needed to support increased sales.

Accordingly, the company’s net loss increased 46% to $(918,527) for the year ended December 31, 2020 from $(628,989) for the year ended December 31, 2019.

Liquidity and Capital Resources

Our operations have been financed to date by a combination of cash generated from operations, debt, and investment capital. Our primary cash needs have been to fund working capital requirements (primarily marketing to increase growth and inventory to support that growth), debt service payments (interest and principal payments), and operating expenses.

As of December 31, 2020, we had cash on hand of $470,559, inventory of $2,499,496, and accounts receivable (net) of $1,538,242 and total liabilities of $8,739,328. The company maintains a $4,000,000 line of credit with Assembled Brands Capital Funding LLC with approximately $1,833,969 available as of December 31, 2020, see “—Line of Credit” (below).

We expect that our liquidity needs for the next twelve months will be met by continued use of operating cash flows, our line of credit and funds generated from this offering. We believe that we will be able to continue to operate our business for the foreseeable future.

Recent offerings of Securities and Outstanding Debt

Indebtedness

Commitments

The company leases office, warehouse and retail space under noncancelable operation leases which expire between March 2020 and August 2021. Minimum future lease obligations for the year ended December 31, 2021 will be $155,580.

Trend Information

Our company primarily operates in the U.S. luxury leather handbag market This market is estimated by management, based on industry data reports, including from Statista, at $12 billion a year and is expected in grow at 5% per annum for the next five years. The market is fragmented with few barriers to entry.

Within this market, leather bags, the main product of the Company, dominate and account for 48.5% share of the revenue by offering better durability, dustproof, and crack-proof properties. This durability associated with this product attracts consumers to spend on these luxury products. (Grandview Research 2017)

It’s reported by “thatFashion,” clothing and accessories were the leading online shopping category with 71% of women buying a product in the category in the last 3 months and, unlike footwear or apparel, handbags do not face the same challenges of size and fit. Therefore, the Company plans to continue its focus on selling direct to consumers online.,

COVID-19

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. There is uncertainty around the duration and impact of the pandemic. COVID-19 has been a highly disruptive economic and societal event that has affected our business and has had a significant impact on consumer shopping behavior. To serve our customers while also providing for the safety of our team members, we have adapted aspects of our logistics, transportation, supply chain, and purchasing processes. On March 15, 2020, the company issued a shelter-in-place order to its employees based in our Los Angeles headquarters. As the company qualified as an essential business as defined by state regulations, we continued to operate our Pennsylvania and California fulfillment centers with approximately 80% occupancy to maintain social distancing. The reduced manpower in warehouses, together with increased DTC orders, led to minor delivery delays but we have not experienced any significant disruptions in our supply chain or any carrier interruptions or delays.

Since late March 2020, we have experienced a significant increase in demand primarily as a result of changes to consumer behaviors resulting from the various stay-at-home restriction orders. While wholesale sales declined in April and May 2020, they have since returned to pre-COVID-19 levels and have not had a material effect on the company’s revenue.

We cannot predict the duration or severity of the economic impact of the COVID-19 pandemic or its ultimate impact on our wholesale operations. The ultimate impact on the company’s future operating results and consolidated financial statements cannot be reasonably estimated at this time. However, as of the date of this report, the company has experienced increased overall demand for its products and it does not expect this matter will have a material negative impact on its business, results of operations, or financial position.

DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

The table below sets forth the officers and directors of the company as of the date of qualification of this Offering Statement.

Anthony Drockton, Founder, Chairman of the Board of Directors, Secretary

Anthony Drockton has been Chairman and Secretary of Hammitt, Inc. since 2008. As Founder and “Chief Cheerleader,” he is passionate about the business and culture he has created at Hammitt. A lifelong entrepreneur, Tony spent the early part of his career starting and building successful businesses in the construction, real estate and finance sectors before discovering his calling in high fashion. In 2008, Tony founded the company after recognizing the potential of the handbags designed by Stephanie Hammitt. Tony's vision, leadership, and eye for design and craftsmanship has elevated Hammitt Los Angeles from a regional boutique brand to a digital and retail phenomenon. The integration of his creative skills and management expertise, is a powerful, rare amalgam forming the core of Tony's extraordinary insight and abilities. Tony earned his BA and MBA from Bowling Green State University.

Andrew Forbes, CEO, CFO, Treasurer and Director

Andrew Forbes was appointed CEO, CFO and Treasurer of Hammitt, Inc. in January 2018. He provides operational leadership while guiding all corporate initiatives, managing employees and consulting teams, and overseeing financial reporting. Prior to Hammitt, Andrew spent 20 years as CFO of Vidal Sassoon Salons and Schools. From 1997-2004, he served as founding COO of Jimmy Choo North America where he led the iconic brand through record growth. Andrew then went on to have similar successes as CEO of Taryn Rose International and Jupi Corporation (Kardashian Fashion Brands). From 2014-2017, he was COO at Evolution Footwear Inc. (BED|STU). Andrew has a proven track record of growing retail, e-commerce and wholesale consumer fashion brands through the application of strategic planning, performance metrics, financial reporting and operational controls. He is a Fellow of the Institute of Chartered Accountants of England and Wales, a Member of the Massachusetts Society of Certified Public Accountants and received his MBA from Pepperdine University.

Tracy Jankowski, VP Marketing, Advertising and DTC Sales

Tracy Jankowski has led Hammitt’s sales, marketing and advertising initiatives across various customer touchpoints for both the digital and retail sales channels since January 2018. As VP of Direct-to-Consumer, she has been integral to the tremendous growth Hammitt has experienced in that channel over the last 3 years. Previously, from 2015-2018, she served as Director of Marketing at BED|STU. From 2010-2015, she was Global Marketing Director at Chinese Laundry and Head of Marketing at Taryn Rose International from 2005-2010. Her expertise in executing creative, unique and distinctive strategies have successfully distinguished brands in the marketplace and captured consumer interest. Tracy earned her BA in Business Administration from The University of New Mexico.

Hsuan Pai, Director Production and Development

Hsuan Pai has been Director of Production and Development at Hammitt, Inc. since January 2018. Before joining Hammitt, from 2012-2015, Hsuan was Product Director and VP of Accessories at Jupi Corporation. Prior to that, she served as Director of Product Development at both Charles David and Taryn Rose International. In 2014, she co-founded a progressive footwear brand, Wal and Pai. Fluent in Mandarin and with an elite education in fashion and apparel design, Hsuan maximizes efficiency in Hammitt’s day-to-day operations while creating a unique edge in the company’s design efforts. Hsuan earned her Associates Degree from FIDM.

Kenneth Deemer, Director

Kenneth Deemer has served as a Member of the Board of Directors of the company with since January 2019. Kenneth is an executive coach who works with leaders to help them build high performing organizations. He has more than 25 years of experience as a venture capitalist, investing in and serving on the boards of several dozen high-growth companies. His experience includes leadership and mentorship as well as strategic planning, finance, governance and technology. Since 1985, he has been employed by Interven Partners, Inc. (DBA Growth Leaders Group). In addition to the company’s Board, Kenneth currently sits on the board of Environmental Charter Schools and Los Angeles Center of Photography. He earned a SB in Physics and Electrical Engineering from MIT and MBA from Carnegie Mellon University.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

For the fiscal year ended December 31, 2020, we compensated our executive officers and directors as follows.

⁽¹⁾ This value is based on Black-Scholes Model.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

The following table sets out, as of July 29, 2021, Hammitt’s voting securities that are owned by its executive officers, directors and other persons holding more than 10% of the company’s voting securities.

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Management Agreement

In December 2018, the company entered into a management agreement with a stockholder, BCOM. BCOM agrees to provide certain management, strategic and financial consulting services to the company as long as BCOM owns preferred shares equal to at least 13.33% of the voting stock of the company. The agreement calls for monthly payments in the amount of $6,250. The company paid $75,000 and $75,000 for these services for the years ended December 31, 2020 and 2019, respectively.

Stockholder Note Receivable

The company entered into a $131,713 note receivable to Anthony J Drockton. The note bears interest at 3% and is due upon demand and is unsecured. Interest earned totaled $3,951 for the years ended December 31, 2020 and 2019. Interest receivable for the note was $5,869 and $15,021 at December 31, 2020 and 2019, respectively. The balance of the stockholder note receivable was $131,713 at December 31, 2020 and 2019.

Stockholder Notes Payable

Stockholder Loan Agreement and Note Payable

In January 2020, the company entered into an agreement with MGI Enterprises LTD converting $1,500,000 of accounts payable to a note payable. The note was entered into to allow more time to finalize a stock purchase agreement between the company and the vendor. The note is interest free and is not collateralized. In accordance with the loan agreement, all unpaid principal and interest shall be repaid either through the conversion of the note into preferred stock or through monthly payments beginning December 31, 2020 through December 31, 2021. No principal or interest was paid during 2020 and the note was subsequently converted to Series B Preferred Stock in March 2021. Accordingly, the balance of $1,500,000 has been classified as a long-term obligation at December 31, 2020 and 2019.

SECURITIES BEING OFFERED

The following descriptions summarize important terms of our capital stock. This summary reflects the Fourth Amended and Restated Certificate of Incorporation , and does not purport to be complete and is qualified in its entirety by the Fourth Amended and Restated Certificate of Incorporation and the Amended and Bylaws, Forms of which have been filed as Exhibits to the Offering Statement of which this Offering Circular is a part. For a complete description Hammitt’s capital stock, you should refer to our Fourth Amended and Restated Certificate of Incorporation and our Bylaws and applicable provisions of the California General Corporation Law.

Hammitt is offering up to 22,727,273 shares of Class B Common Stock in this offering.

Hammitt’s authorized capital stock consists of the following:

Class A Common Stock

Class B Common Stock

Class C Common Stock

Preferred Stock

The company has authorized two classes of Preferred Stock, Class A Preferred Stock and Class B Preferred Stock (collectively, with the Class A Preferred Stock, the “Preferred Stock”). Except as indicated below, each class of the Preferred Stock contains substantially similar rights and preferences.

Investment Agreements

Pursuant to the Class A Preferred Stock Purchase Agreement dated December 18, 2018 by and among the company and Black Oak-Hammitt Preferred Equity, LLC, the company and the Purchasers agreed to enter into the Investor Rights Agreement, the Right of First Refusal and Co-Sale Agreement and the Voting Agreement, collectively, (the “Investment Agreements”). Below is a summary of the Investment Agreements material terms.

Investor Rights Agreement (Defined terms not otherwise defined herein shall have the meaning ascribed to them in the Investor Rights Agreement).

Right of First Refusal and Co-Sale Agreement (Defined terms not otherwise defined herein shall have the meaning ascribed to them in the Right of First Refusal and Co-Sale Agreement).

Voting Agreement (Defined terms not otherwise defined herein shall have the meaning ascribed to them in the Voting Agreement).

ONGOING REPORTING AND SUPPLEMENTS TO THIS OFFERING CIRCULAR 

The company will be required to make annual and semi-annual filings with the SEC. The company will make annual filings on Form 1-K, which will be due by the end of April each year and will include audited financial statements for the previous fiscal year. The company will make semi-annual filings on Form 1-SA, which will be due by September 28 each year, which will include unaudited financial statements for the six months to June 30. The company will also file a Form 1-U to announce important events such as the loss of a senior officer, a change in auditors or certain types of capital-raising. The company will be required to keep making these reports unless we file a Form 1-Z to exit the reporting system, which it will only be able to do if it has less than 300 shareholders of record and have filed at least one Form 1-K.

Relaxed Ongoing Reporting Requirements

If the company becomes a public reporting company in the future, the company will be required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the Jumpstart Our Business Startups Act of 2012, which the company refers to as the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as the company remains an “emerging growth company”, the company may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies”, including but not limited to:

If the company becomes a public reporting company in the future, the company expects to take advantage of these reporting exemptions until it is no longer an emerging growth company. The company would remain an “emerging growth company” for up to five years, although if the market value of the company’s Common Stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, the company would cease to be an “emerging growth company” as of the following December 31.

If the company does not become a public reporting company under the Exchange Act for any reason, it will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for “emerging growth companies” under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semiannual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer’s fiscal year, and semiannual reports are due within 90 calendar days after the end of the first six months of the issuer’s fiscal year.

In either case, the company will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not “emerging growth companies”, and the company’s shareholders could receive less information than they might expect to receive from more mature public companies.

The company may supplement the information in this Offering Circular by filing a Supplement with the SEC. The company hereby incorporate by reference into this Offering Circular all such Supplements, and the information on any Form 1-K, 1-SA or 1-U filed after the date of this Offering Circular.

All these filings will be available on the SEC’s EDGAR filing system. You should read all the available information before investing.

FINANCIALS 

HAMMITT, INC.

FINANCIAL STATEMENTS

Years Ended December 31, 2020 and 2019 (Restated)

INDEPENDENT AUDITOR'S REPORT

To the Stockholders of

Hammitt, Inc.

We have audited the accompanying financial statements of Hammitt, Inc., which comprise the balance sheets as of December 31, 2020 and 2019 (restated), and the related statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hammitt, Inc. as of December 31, 2020 and 2019 (restated), and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matter

As described in Note 21 to the financial statements, management has restated the 2019 financial statements to reflect the recognition of deferred advertising costs and resulting change to the income tax provision. Our opinion is not modified with respect to this matter.

Orem, Utah

July 21, 2021