10 Year Old Coloroado Extractions LLC in Wheatridge Colorado

ManufacturingFor Sale in

Listing ID: 34856 | Broker Listing ID: BLP376549

Financial & Assets Details

Revenues: $358,000

Cash Flow: $194,000

FF&E: $30,000

Inventory: $400,000

Inventory Inc. in Price: Yes

Square Feet: 4697+/-

About the Business

Year Established: 2014

Employees: 2

Business Description

This company designs, manufactures, and sells their patented extraction, separation, evaporation, distillation, and isolation equipment which is used in the cannabis (marijuana and hemp) industry, biopharmaceuticals industry, and botanical extractions industry (essential oils like lavender for soap, etc). However, their equipment can be used at R&D facilities, universities, agriculture, laboratories, etc. This company was worth $18M in early 2020 then COVID killed it by eliminating the trade shows where 100% of their revenues came from. In 2019, they did 8.6M in revenue and 4.5M in earnings. Most of these earnings came from the red-hot Cannabis industry because this was what most of the trade shows focused on which was the low hanging fruit to sell their equipment pre-Covid.

The owners were already successful before they started this company 10 years ago with one having a large family glass business and the other several other interests and properties. In short, when Covid killed trade shows, they decided to temporarily focus on other things and revisit this once things returned to normal. They never did and now they have 3 choices: get back in the saddle and market their equipment differently and to more than one industry, liquidate which might get them 300K to 400K, or find someone to buy or partner with them to pick up the pieces with what they know is the best equipment in the industry. They have inventory, tools/equipment, patents, trademarks, a customer base, market position, data driven sector leading knowledge, and most importantly design build skills 2nd to none in the extraction/isolation manufacturing industry.

Botanical extraction is the process of separating and removing soluble components from a plant using a solvent. The result is a concentrated extract that contains the desired compounds from the plant, without the solid plant material. Botanical extracts can be used to create concentrated herbal products with targeted effects. They can also be used to isolate specific compounds from plants like hemp, such as CBD, CBG, and terpenes. Some popular floral extracts include calendula, chamomile, rose, jasmine, lavender, and vanilla. These extracts can be used for aromatherapy or as ingredients in a variety of products. This advanced technology equipment processes with maximum efficiency and consistency in product quality with cost reduction in mind.

A new product with potentially big pharmaceutical needs is “Kratom”. Colorado lawmakers passed regulation on kratom. Effective July 1, 2024, the new law prohibits a person from selling or offering to sell a kratom product to anyone under 21.

Keep in mind that they did 8.6M in revenue with 4.5M in earnings in 2019 with only 5 employees who were mostly family, no salespeople, and only a 5,000 square foot location. After 4 years without trade shows and no significant sales, they want to pursue option #3 above and find a partner to re-start the magic. They want to partner or sell to a group that already has inhouse marketing preferably with experience and salespeople who have connections with the Biopharmaceutical, Essential Oils, and/or CBD/Kratom industries.

There is nothing wrong with their proprietary equipment. They need someone to counter their failures and grow the business like they know it will again, preferably, an expert marketing company to handle online sales, trade shows, distributors, vlogs, pod casts, etc. This will include new marketing for their 43,500 LinkedIn followers with the ability to order their products online or schedule appointments to see in person demonstrations. The owners will sell between 50% to 100% of the company which shows their confidence in their products and ability to create new ones. They want to see their baby grow while they want focus on design build and have the new owner market their products and let them know how they may want the equipment changed.

The sales price for 100% of the company is only 975K. They will consider any offers that require less money up front and one or both keeping some ownership and potentially one of them(Quinton), staying employed (salary and bonus). Keep in mind that this company had grown steadily while expanding their product lines, revenues, profitability, and market share UNTIL COVID happened. Details below especially in the data room where you will find several video interviews and a walkthrough of the business and its products.

The below link is a story written by a company that uses our SprayVap equipment. This is just one of hundreds of articles.
https://herb.co/learn/ethanol-extraction-vs-co2-extraction/

This is a video of their latest piece of Equipment being demonstrated: https://vimeo.com/user22701413/review/591241554/28379f32f6

The company’s website is: https://www.coloradoextraction.com

The 2019 revenues were 8,625,277 with 4,500,492 in earnings. 2018’s revenues were 5.4M with 2.7M in earnings. This is now just a historical context because currently they are not marketing the company because of the impact Covid had on their marketing and business. The trailing 12 months to Sept 30 2024 had revenues of 358K with 194K in earnings. The company started from zero in 2014. The company had grown with no debt except short term payables, has had no debt, and 100% of signed contracts had been executed. The company had very consistent growth until 2020.

They added of 2 new products representing a leap forward in the industry in 2020. Please watch all of the videos in the data room link above. The data room also has a pro-forma that they think is accurate except the processing portion(pricing has softened a little for processing since they made the pro-forma).

Their processing equipment was sold after they received leads from a trade show, then an in person/on-site demonstration, which led to a closing rate of 37%. They were frustrated by the shutdown of conferences because they had just developed two exciting new products which have the potential for high revenue with solid margins for years to come. The new equipment’s accuracy, quality, and efficiency will complement their existing product lines; solidifying them as market leaders. Keep in mind that this company was growing over 100% per year until COVID.

The company has a significant following and customer base with over 43,500 Instagram followers and customers in 21 states and multiple countries. They are confident of strong growth, given their new products, new markets, strength of existing products and states yet to fully legalize. An additional 29 states should become fully legal in the next couple of years, which indicates they have yet to see full market potential. Additionally, with, their knowledge, demonstration equipment, they could process cannabis in their facility with revenues between 2.2M/yr. (crude oil) to 15.6M/yr. (d8 acetate), which is in addition to equipment sells and manufacturing. While they have historically marketed to the cannabis industry and it is the largest market for their equipment currently, there are other untapped and very lucrative markets (i.e. essential oils (botanicals), laboratory sciences, education, pharmaceuticals, and beer/wine industry). Their products can be used in many other industries and would be the most modern and accurate extraction and evaporation equipment in many industries. They believe their ability to accurately create an exact formula to industry standards should be mandated throughout the world. In fact, the SprayVap® has the ability to efficiently perform liquid-liquid separation on a many different types of solvents. Lastly, the owners have proved their equipment demand, ability to stay ahead of the market with new products, and overall business viability, but want support to go to the next level so they can spend more time on design which is what they enjoy and what will take this company to a much higher level.

This company has a great back story. Childhood friends who grew up in Colorado and have had a passion for science since they became friends in the 3rd grade. After years of developing high tech products and services in the medical, pharmaceutical, aerospace, and nuclear industries, these best friends developed and patented a best in class evaporation system, which included never before seen spray technology.

They have earned a reputation as an industry leader and believe that the company would have done over 12M in revenues in 2020 without COVID AND without their new products. However, the owners did not fair well and let down the business by not shifting with the market. They believe new management with better direction and focus, will take their new and existing products to higher revenues and profitability substantially.

This company focuses on using “Made in America” components and use locally owned and operated suppliers, whenever possible. The high end quality combined with the creativeness, expertise, and genius of the owners is why they have become industry leaders so quickly. Quinton has designed and they have built their next generation of equipment and Quinton will stay for two years or permanently after the closing to assist with the success of the company. This is a “Fun” business to own that is growing and the Owners wants to make sure the new owner(s) continues their growth and success.

They were and will increasingly be a leader in accurate and scalable extractions which will only see a long term increase in demand. Quinton wants to stay long term to make sure the company recovers. They believe the future is extremely bright with an expected doubling of states and demand expected over the next couple of years. This is a LLC and will most likely be an Asset Sale. The business will be offered with the Sellers keeping their cash and AR they earned before the closing and will be transferring the business debt free.

Details:

They have a great reputation for the quality of work, dependability, and for fair dealings. The seller will agree to full Reps and Warranties to a solid legal and business standing. They have no legal battles. The seller will offer “to off-set” against the sales price for any liabilities originating before the closing and indemnify their financials.

Growth Opportunities: There are so many ways to grow revenues and profits for this company. To put that in perspective, they did 8.6M in revenue with 3 employees not including them while none of them are/were salespeople or on any commission structure. In fact, only the owners went to the conferences and did the demonstrations at their location. They also only manufactured their products after a sale was made. The new owner can hire a sales force, fund fully functional product inventory ready to ship after a sale, increase the number of states and industries that they market to, allow them to continue to develop new products, etc, etc. A new owner can use their 5 star reputation to advertise for more work, create articles pointing out their quality and the positive impact their products could have in not just Cannabis but in pharmaceuticals, beauty products, laboratories of many types, etc. Please see the video interview to fully understand this opportunity. The owner(s) actually prefer to keep some ownership and/or a partial earn out based on the huge equity building potential of this business.

They have 2 trustworthy, competent, and reliable employees. Quinton, one of the owners will offer a full time transition or stay up to two years from the closing depending upon the structure of the purchase.

Their location is leased in Wheat Ridge, Colorado. The building is 4,697 square feet and they pay 11.38 per square foot which is 4,454 per month triple net. The building has many custom improvements including 400 AMP 230V, 3 phase service with 75 KVA 480V 3 phase transformer. The business has a full camera set up in and around the business and the building. There is 15 months left on the lease which can be renewed and/or renegotiated, or the units may be purchased for additional monies. Keep in mind that they did their 8.6M from this 5,000 square foot location in 2019 and they will need approximately 20,000 square feet to do their predicted 40M to 100M.

The broker is available at any time to discuss your interest in this offering.

Growth & Expansion

There are so many ways to grow revenues and profits for this company. To put that in perspective, they did 8.6M in revenue with 3 employees not including them while none of them are/were salespeople or on any commission structure. In fact, only the owners went to the conferences and did the demonstrations at their location. They also only manufactured their products after a sale was made. The new owner can hire a sales force, fund fully functional product inventory ready to ship after a sale, increase the number of states and industries that they market to, allow them to continue to develop new products, etc, etc. A new owner can use their 5 star reputation to advertise for more work, create articles pointing out their quality and the positive impact their products could have in not just Cannabis but in pharmaceuticals, beauty products, laboratories of many types, etc. Please see the video interview to fully understand this opportunity. The owner(s) actually prefer to keep some ownership and/or a partial earn out based on the huge equity building potential of this business.

Market Competition:

Location Details:

Their location is leased in Wheat Ridge, Colorado. The building is 4,697 square feet and they pay 11.38 per square foot which is 4,454 per month triple net. The building has many custom improvements including 400 AMP 230V, 3 phase service with 75 KVA 480V 3 phase transformer. The business has a full camera set up in and around the business and the building. There is 15 months left on the lease which can be renewed and/or renegotiated, or the units may be purchased for additional monies. Keep in mind that they did their 8.6M from this 5,000 square foot location in 2019 and they will need approximately 20,000 square feet to do their predicted 40M to 100M.