Prepared for Stearns Bank · Austin Financial Services
Inventory position & turns: what the collateral is doing, and why it is built this way
The Neato Company · Updated July 24, 2026 · All inventory stated at cost
Inventory at cost
$15.55M
Snapshot 2026-07-23: FBA, inbound, staged, and warehouse
Monthly revenue
$4.96M
Jun 2026, complete month
Subscription revenue
21.3%
Peak 28.6% in May 2026
Aging inside 90 days
76.8%
Across current focus-brand FBA aging snapshots
Demand captured
27.6% / 28.7%
illy / SureFire share of monthly brand demand
Next-day metros
16 of 17
Same-day or next-day promise, observed on the illy flagship
The build is the plan
Inventory grew by design: contracted positions were bought ahead of the revenue they were signed to serve
Inventory at cost stands at $15.55M, up from $7.46M of system-visible inventory in July 2025 (approximately $9M including warehouse stock that predates warehouse tracking, per management records). The increase is not drift — it is three signed, exclusive brand positions bought forward: the illy transition to Neato as retail partner, the SureFire launch in February 2026, and Giant Snacks signed in July 2026.
Monthly revenue over the same window rose $558K per month, from $4.40M to $4.96M. The distance between inventory growth and trailing revenue growth is the launch build itself: trailing sales cannot yet include the demand the inventory was purchased to serve. That demand is contracted, and the sections below track it landing.
The positions carry defined economics. On sell-through, illy returns 35.0% and SureFire 38.0%, net of Amazon selling costs, and sale proceeds settle directly to the collections account at Stearns Bank.
Collateral
Inventory at cost, by brand and by fulfillment bucket
Thirteen months of month-end positions. The step-up concentrates in the two focus brands; the bucket view shows where the units physically sit.
Warehouse (NEATOLV1) history begins June 18, 2026 and staged-for-FBA detail begins June 25, 2026; earlier months show FBA-visible balances only, which understates early-period totals.
Sell-through
Revenue, against the size of the markets it is growing into
Internal revenue by month, alongside third-party estimates of total brand demand on Amazon. The gap between the two is the reason the inventory exists.
illy market, monthly
$3.39M
SmartScout estimate; trailing-12-month market $48.69M
Neato illy, latest month
$2.39M
Jun 2026 — 27.6% of monthly brand demand captured
SureFire market, monthly
$846K
SmartScout estimate; trailing-12-month market $16.03M
Neato SureFire, latest month
$31K
Launch ramp is early against available category demand
Focus positions
illy and SureFire: the two positions the build is made of
Each position with its cost basis, net sell-through economics, current share of brand demand against the 90% exclusive-retailer target, age profile, and the contracted ramp that resolves it.
Focus brand
illy
Position at cost
$7.61M
266,569 units across FBA, inbound, staged, and warehouse
Net return on sell-through
35.0%
≈ $10.27M expected proceeds, net of Amazon selling costs
Share of brand demand captured
38,419 of 139,344 monthly market unitsilly inventory age
FBA snapshot 2026-07-2190.5% of units are inside 90 days; none are older than one year.
Contracted demand ramp
Full pace by Nov 2026Aug 2026
51,036 units/mo pace
180,078
units remaining
Sep 2026
62,357 units/mo pace
117,721
units remaining
Oct 2026
73,679 units/mo pace
44,042
units remaining
Focus brand
SureFire
Position at cost
$2.34M
43,786 units across FBA, inbound, staged, and warehouse
Net return on sell-through
38.0%
≈ $3.23M expected proceeds, net of Amazon selling costs
Share of brand demand captured
1,986 of 6,923 monthly market unitsSureFire warehouse inventory is case-packed; revenue realizes as cases are repacked into sellable units. Economics shown use the net sell-through basis supplied for the launch position.
SureFire inventory age
FBA snapshot 2026-07-21100.0% of units are inside 90 days; none are older than one year.
Contracted demand ramp
Full pace by Sep 2026Aug 2026
4,437 units/mo pace
35,053
units remaining
Sep 2026
6,923 units/mo pace
28,130
units remaining
Oct 2026
6,923 units/mo pace
21,207
units remaining
Nov 2026
6,923 units/mo pace
14,284
units remaining
Dec 2026
6,923 units/mo pace
7,361
units remaining
Turns
How turns are measured matters — here are all three, from the same COGS
Every figure below uses the same trailing-12-month product-cost COGS. The formulas differ only in the inventory denominator, and the difference between them is exactly where a mid-build snapshot misleads.
RMA / bank convention
1.8×
$27.35M T12 COGS ÷ $15.55M current inventory — a point-in-time read taken mid-build
Field-exam turn-days
207.5 days
365 ÷ RMA turns; the same point-in-time read, in days
Accounting convention
3.4×
$27.35M T12 COGS ÷ $8.10M average inventory over 13 months
FBA days of supply
70.1 days
Unit velocity within FBA only — not a dollar-turns measure
Core catalog vs. launch cohort
Splitting the same accounting-basis calculation by cohort shows the blend is a composition effect, not a velocity problem: the established catalog turns 3.9×, while the illy and SureFire launch cohort reads 2.6× only because its inventory arrived ahead of its contracted revenue ramp.
Blended
3.4×
All brands
Core catalog
3.9×
Established brands
Launch cohort
2.6×
illy + SureFire, mid-ramp
RMA's Annual Statement Studies cautions that a point-in-time turns figure "could indicate a planned inventory buildup," since it compares one day's inventory to a full year of cost of goods sold.
Calibrating the target by product type
A single turn-days target misreads a mixed catalog. The operating targets Neato manages to:
| Product type | Healthy target |
|---|---|
| Fast-turn consumables (coffee, pet consumables, candy) | ~45 turn-days |
| Durable and long-dated goods (batteries, housewares) | ~120 turn-days |
| Launch positions | Forward velocity vs. contracted ramp |
Launch positions are measured against the demand they are contracted to serve, not trailing sales — today's sell rate is the floor, not the run-rate.
FBA unit velocity, trailing 13 months
Age of the collateral
76.8% inside 90 daysField exams scrutinize inventory older than one year. The focus-brand positions have no units older than one year — this is fresh inventory bought against contracts, not aged stock waiting for a market.
illy inventory age
FBA snapshot 2026-07-2190.5% of units are inside 90 days; none are older than one year.
SureFire inventory age
FBA snapshot 2026-07-21100.0% of units are inside 90 days; none are older than one year.
Recurring demand
A growing share of revenue is subscription — pre-sold before the inventory ships
Amazon Subscribe & Save replenishment revenue, measured weekly. Subscription inventory is demand already committed: the most predictable sell-through a lender can look at.
Revenue share
21.3%
Jun 2026, complete month; units share 16.1%
Trajectory
14.3% → 28.6%
Jul 2025 to peak May 2026 — share has roughly doubled in a year
illy subscription share
28.0%
Peak 38.8% in May 2026 — the flagship ran above one-third of revenue on subscription from Feb through May
Why the blend reads low
Launch dilution
SureFire and other launches sell into the blend before their subscriber bases exist — the same builds shown above
Subscription share of revenue, complete months
By brand, Jun 2026
Subscription-anchored brands carry the base: Earth Animal, Wiley Wallaby, and illy — as TropiClean did before its exit (10.0% share in July 2025 within available history). New launches join this base as their subscriber cohorts build.
Placement
The flagship illy unit reaches nearly every major metro same-day or next-day
Real Amazon delivery promises for ASIN B07HRVYPJ7 (illy Classico Whole Bean, 6-pack, featured offer $89.94), observed against residential ZIP codes in 17 metros.
Metros observed
17 of 17
Every promise recorded verbatim from Amazon
Same-day or next-day
16
Most promises are overnight, arriving by 8 AM
Within two days
17 of 17
Coverage of every observed metro
| Metro | Fastest promise | Amazon's own wording |
|---|---|---|
| Dallas-Fort Worth, TX | Same-day | Today 5 PM - 10 PM |
| Houston, TX | Same-day | Today 5 PM - 10 PM |
| Las Vegas, NV | Same-day | Today 5 PM - 10 PM |
| Phoenix, AZ | Same-day | Today 5 PM - 10 PM |
| Atlanta, GA | Next-day | Tomorrow, July 25 |
| Boston, MA | Next-day | Overnight 4 AM - 8 AM |
| Chicago, IL | Next-day | Overnight 7 AM - 11 AM |
| Denver, CO | Next-day | Overnight 4 AM - 8 AM |
| Los Angeles, CA | Next-day | Tomorrow, July 25 |
| Miami, FL | Next-day | Overnight 7 AM - 11 AM |
| Minneapolis, MN | Next-day | Overnight 4 AM - 8 AM |
| New York, NY | Next-day | Overnight 4 AM - 8 AM |
| Philadelphia, PA | Next-day | Overnight 4 AM - 8 AM |
| San Francisco, CA | Next-day | Overnight 4 AM - 8 AM |
| Seattle, WA | Next-day | Overnight 5 AM - 8 AM |
| Washington, DC | Next-day | Tomorrow, July 25 |
| Baltimore, MD | Two-day | Sunday, July 26 |
Method
Each observation is Amazon's own delivery promise for ASIN B07HRVYPJ7, read from the product page against a residential ZIP code in that metro on July 24, 2026. Promises are recorded verbatim and bucketed — never estimated. 17 of 17 metros observed; pending metros are shown pending until a real observation lands.
This is what the FBA position buys: inventory pre-positioned inside Amazon's fulfillment network, promised to customers in hours. Inventory that can be promised overnight across the country is inventory positioned to sell — not stock waiting in a warehouse for a buyer.
Documents
Brand contracts and Series A materials
Executed brand agreements and the Advantage Capital Series A detail sit behind document authentication. Credentials are provided by The Neato Company.