We like to refer to it as “nature's miracle crop”. Why would we say that? Well imagine a crop that produced both an abundance of sugar like sugarcane, AND an abundance of grain like corn, but can be grown in places neither can AND is gluten free. That's sorghum.

Environmentally respectful and spartan in its use of inputs yet generous in its bounty.

Biologically, sorghum bicolor, is an ancient grass (at least 10,000 years old)
indigenous to dry semiarid regions in places like Africa, China, Australia and India. It is the fifth most important cereal grain on earth. Because it can grow in harsh environments, and is usually grown without fertilizer or irrigation, it is one
of the most important staple foods for millions of poor rural people in the semiarid tropics of Asia and Africa. It is an incredibly efficient user of sunlight, water and soil nutrients. It can grow from seed to 12' – 14' in around 100 days.

Agriculturally, the United States Department of Agriculture (“USDA”), classifies
sorghum as a grain. In 2015, the US planted over 8 million acres and harvested nearly 600 million bushels of grain (aka “milo”).

First record of sorghum in the US comes from a Ben Franklin journal in 1757 in which he writes about using sorghum to make brooms. Nearly a century later, sweet sorghum entered the US in 1854 when the US Patent Office, seeking an alternative to southern grown sugar cane made with slave labor, imported seeds from China. The plan? Hand out sweet sorghum to “free state” farmers, north of the Mason – Dixon line, and have them develop a sugar industry independent of
slave labor.

Three years into this effort a Massachusetts horticulturist, penned the first authoritative “best practices” book for planting, growing, harvesting and processing sweet sorghum. The book, “The Chinese Sugar Cane”, published in 1857, and the horticulturist turned author, our namesake, Mr James FC Hyde. Hyde would later become Newton MA first mayor in 1874.

I would be remiss if I didn't talk about Chinese baijiu in the context of what is sorghum and its presence in spirits market? Chinese baijiu is one of the oldest spirits on earth, dating back at least 5,000 years. And shockingly to most Americans, it is the best selling spirit on earth. Its primary ingredient is sorghum.
In 2016 baijue sold 1.1 billion cases globally. Second place, vodka, less than half baijiu's volume with just under 500 million cases.

First, Yogi Berra is credited with having said, “It's tough to make predictions, especially about the future”.

That said, let's start with a few historical facts to consider when thinking about the potential for Sorgho Whiskey. According to the Distilled Spirits Council the “American Whiskey Boom Continues”. “American whiskey – Bourbon, Tennessee and Rye – continued to captivate U.S. consumers with volumes up 6.8 percent to 21.8 million cases and revenues up 7.7 percent to $3.1 billion” in 2016.

Then consider:

1) We've developed a disruptive spirit. What we call, “The most unique and innovative American spirit since the Civil War – a whiskey like no other - made from 100% American grown sorghum”;

2) Its exceptional smoothness; its uncanny quality, it's made from one of the most environmentally friendly crops in the world, and it's gluten free;

3) We've been granted trademark protection for “Sorgho Whiskey“ and our ambition is to elevate it to new American whiskey category akin to bourbon or rye;

4) We've made substantial investment in a our Sorgho Whiskey supply chain,
securing a strategic choke hold on the critical sorghum technology necessary to scale Sorgho Whiskey production to several hundred thousand cases per year;

5) While the American market for sorghum spirits is virtually untapped, sorghum is the primary ingredient used in the globe's most popular spirit, Chinese baijiu, shipping over 1.1 BILLION cases in 2016.

We like to think we've exercised a lot of foresight, anticipated the evolution of the disruptive market we're developing and we've laid a solid foundation capable of supporting a tall skyscraper. If we're as successful as we expect, we expect to be acquired by one of the big guys. And because we're a whiskey company that's built on a cornerstone of intellectual property, and because our potential is nearly unlimited, we expect the acquirer to acknowledge such with an unprecedented price multiple.

We started with some early experimentation in late 2013. We already had the sorghum farm and thought we were going to make biofuel. Then these cool sugars came out and it suddenly seemed like it would be a waste to burn them in cars. It made a lot more sense for us to say we should try to make a spirit out of this. If someone can make a good spirit out of sugarcane sugar, and our sugar's better than theirs, we should be able to make a good spirit out of sorghum.

We started doing some experiments with different distillers, and different leafs, and different leeching techniques. We did a bunch of that and finally settled on a formulation. It not only specified the sorghum syrup but the kind of yeast to use and the proof when it comes off the still. Then we put it in barrels. We always use new American oak, like what’s required for bourbon. With the exception of starting with corn, we follow all of same the rules as the bourbon guys.

Our first label was approved as something other than whiskey. We had a legal label, bottled up some samples, and took them to an event called the Security Traders Association of New York. They were hosting a bootlegger event and it was the summer of 2015. It became our coming out party. We didn't sell anything and just shared samples. At that time we were calling the product sorghrum, a name we had trademarked. And when people asked us what it was we said it was kind of like whiskey. Mentally we had started to already position it as a whiskey. Next we applied to change our label and get into the whiskey family, and that happened very early in 2016.

Sales began last spring for us from a standing start. It's no secret I'm an Internet geek (with a patent to prove it) and a Wall Street heavy (having been a Governor on the American Stock Exchange) but I'm new to this game. But like other games there are rules that govern it. Learn the rules. Learn to leverage core competencies and unique assets within the confines of the rule book, and the stage is set to compete and win.

One lesson I learned is that there is a fairly complex distribution channel consisting of a limited number of either state owned or state licensed distributors moving the vast majority of spirits from distilleries to retail outlets. They are the gateways to the 50 separate state markets. They are inventory warehouses. And they are logistics operations, buying in large quantities from distillers, then moving small quantities into the retail outlets. Manage the distribution channel and a spirit is well on its way to success. Simultaneously, stimulate consumers to buy it, and a spirit is a grand slam.

We've had some early success with distribution in our home state of NJ. We were picked up in our first year of sales by one of the largest in NJ, BreakThru Beverages servicing over 5,700 NJ accounts. In 2017 we've added some smaller niche players. But because of the nature of the distribution system (distributors place warehouse stocking orders which can last 3-9 months); when only a limited number of distributors are distributing a brand, sales are inconsistent. Months in which stocking orders are placed - sales spike up, months without stocking orders are near zero. As a for instance we had our first 100 case quarter in Q4 2016 (seasonality at work there too). Then had a 10 case single stocking order from a small distributor in Q1 2017.

But at this point in our development, stocking orders to distributors are nice - but they're not our critical metric. The metrics we focus on are: 1) new placement orders from distributors to retailers (they expand the availability of our Sorgho Whiskey and brand awareness of James FC Hyde throughout the distribution channel); 2) replenishment orders from those same retailers (indicates consumers are buying our whiskey - pulling it off the shelf); and 3) high profile strategic accounts that lend credibility to our James FC Hyde Sorgho Whiskey brand making future placements throughout the three tier distribution channel (distributor, retailers & consumers) easier. To maximize our return on marketing and sales dollars invested, and leverage the distributors sales force, we see our role as directly supporting their sales force with new account placements (#1) and a constant barrage of targeted digital advertising, creating brand awareness and consumer demand (#3).

With only a spartan budget for advertising and sales, we've still been able to increase our placements from about 30 retail accounts at the end of 2016 to more than double that (over 60) before the first half of 2017 is over. Included in those 65 accounts are four high profile strategic ones. Two Applebee's (a chain of 2,000 restaurants in North America) in Tinton Falls and Manalapan; Ocean Place Resort & Spa in Long Branch - the most luxurious beach front hotel in NJ, and we debuted on the virgin voyage of Seabourn's Encore cruise ship - the most luxurious cruise ship in the world. And we're seeing replenishment orders throughout our accounts.

2017 has been an eventful year for us so far.

On the financing front, we began the year using a traditional financing strategy of Private Placements to limited number of high net worth accredited investors, and then discovered Wefunder and crowdfunding as an alternative. Now we're convinced that, in the era of crowdfunding, any business plan or business model predicated on brand building and consumer marketing, enhances its probability for success exponentially, can reduce the capital needed and can accelerate the process dramatically, by adopting a “community owned” form of ownership via WeFunder.

On the product marketing, distribution and sales front. we began 2017 with 35 retail outlets in our home market of NJ. We've nearly doubled that in the first six months of 2017. We began the year with about 14,000 Facebook likes. We more than doubled that in the first half of 2017.

On the supply chain partner front, we began the year with a third party distiller, Jersey Artisan Distilling, as the producer of our James FC Hyde Sorgho Whiskey
brand. We've since entered into a binding Letter of Intent to acquire JAD, further integrating our sorghum supply chain model from seed (planted in Memphis Tennessee by Delta BioRenewables) to bottle of James FC Hyde Sorgho Whiskey.

It's a long haul kind of approach. Brand building is a long deliberate exercise.

What's new is the power of social media. We use a layered hybrid model. A heavy dose of online brand building / brand awareness campaigns, paired with a support the brick and mortar folks on the ground campaign. Think in military terms. The online campaign is the air force preparing the ground or battle field for the army and marines, to make their job on the ground a lot easier.

It means we're running a coherent campaign. Every ad we run, has clear goals and objectives. We may not succeed with what it is we're trying to accomplish with an ad, but we know exactly why we're doing it. And every ad, complements every other ad.

What does that mean in plain English. Consider two states we're trying to break into because we perceive a home field advantage. Kansas (because it's the largest sorghum growing state in the U.S.) and Tennessee (because our whiskey begins life as Memphis sorghum). Even though we don't yet have distributors there permitting legal on the ground sales, we're running general brand awareness ads. Purpose? Create the conditions on the ground such that a distributor in one or both of those states will want to distribute James FC Hyde Sorgho Whiskey.

Once we acquire a distributor in a state like Kansas, we'll continue with the same statewide campaign, only amped up. Purpose? Help distributor sell to retailers. As retailers come aboard, another layer is added to the campaign. We bring a layer that is geographically targeted to consumers that live in the surrounding area to the retail establishments. Purpose? To help the retailers sell Sorgho Whiskey to consumers.

The case can be made, that my lack of experience and knowledge of the old formula for success in the spirit business, is an asset and not a liability. Why? Because the future path to success in this business is almost certainly dramatically different than the old formula. And I came into this with no preconceived notions about the right way to do it, only a desire to do it, an open mind and a great deal of insight into what was possible with digital marketing and advertising.

Brian Van Flandern is a real celebrity in the industry. Brian is an American mixologist and an award-winning author who’s been on TV. His most recent book featured recipes using Casamigos tequila, the tequila owned by George Clooney and Rande Gerber. When we do our promotional video, Brian gives us a lot of credibility. He's the spirits guy who is going to describe why sorgho whiskey and sorghum in general is such an important product.

That's probably true.

I'm guessing there are few other leaders who are Internet geeks, including the necessary Internet patent (granted 1999, USPTO #5884309). I'm also guessing there are few other leaders who were sitting governors of a national Stock Exchange – the American Stock Exchange, where I chaired its Technology Committee and served on its Audit and Finance Committees from 2005 – 2008.

But maybe – just maybe, given the world we live in in 2017, having a heavy Internet background plus a heavy Wall street background, are big pluses when trying to launch a new spirit? If one thinks about it, launching our new Sorgho Whiskey spirit requires building a brand. Plus it requires an inventory buildup
because aging delays time to market. And both brand building and inventory accumulation require substantial capital.

A leader, not so steeped in Internet technology or at home with Wall Street, the Securities and Exchange Commission and securities law would likely approach the brand building, and financing task, relying on traditional methods.

But in 2017, we're living in an age in which digit brand building and marketing, with social networking (like Facebook) and search (like Google & Bing), has fundamentally altered the dynamics of advertising. We're all familiar now with the concept of something going “viral”. I'm not implying we're relying on “viral” behavior to drive our campaigns, but I point to the phenom of “viral” to illustrate
the full potential of the digital world. Unknown content can go from standing start, to huge “consumer” awareness, in an accelerated fashion, at a near zero cost basis.

The key, is to have a coherent strategy which takes full advantage of digital
capabilities, to accomplish marketing / brand building campaign goals at an accelerated pace, and a minimal cost, relative to more traditional practices. An example? In less than one year, we've taken our James FC Hyde Sorgho Whiskey
brand from a standing start, to have surpassed star craft, super premium. whiskey brands High West, Hudson Whiskey and most recently Angel's Envy, with nearly 30,000 Facebook “Likes”. And on a four digit budget (ie under $10K).

Equally as relevant is how to approach the financing challenge in 2017. In
a word, Crowdfunding. With about a year of history behind it now, the contours of crowdfunding are becoming visible. When it's the right tool to use, there's been substantial prior success. From our vantage point there's two aspects to consider before going forward with crowdfunding. The first consideration: is it likely to achieve the fundraising goals? Second consideration: are there any
collateral benefits to be reaped by a successful crowdfunding campaign?

With our strategic focus on digital marketing, and our success with nearly 30,000 Facebook “Likes”, a campaign to digitally market our stock, to both existing fans and beyond, seems right in our wheelhouse of core competency. As far as collateral benefits go, first one I see, is a digital outreach effort to market our stock, will naturally add to our existing digital brand building effort, allowing us to raise capital while brand building. The second one I see is a bit more subtle.

We know the path to success for a new retail brand is to rapidly expand the pool of people that like / care about it. As that pool expands, more people consuming more product guide sales higher, and more people advocating for the brand, talking and sharing and sampling with their friends, expands the size of the pool
even more. We expect even small investors, those investing as little as $100, will have a positive impact as new brand ambassadors and advocates.

In Robert Browning's world of literature, "a man’s reach should exceed his grasp". But in the real world, if a man's got an 8' gap to cross a chasm below, his reach better not be 7'11" or tragedy will follow.

The biggest worry I have, is the scope of our challenge / opportunity, and its potential to be beyond our grasp.

The nature of what we're doing developing the James FC Hyde Sorgho Whiskey brand, requires us to drag along the developing sorghum molasses supply chain. Developing a new whiskey brand, within a new whiskey category is a pretty heavy lift. Having to drag along the supply chain to insure available raw materials adds another layer of difficulty and another potential point of failure.

While I was developing ground breaking Internet technology, I followed one simple philosophy: buy what we can, invent what we must. That philosophy hasn't changed. The reality is, if we don't develop the supply chain for our raw material, nobody will, and our growth will be constrained. It's a non optional mission that goes hand in glove with success building the James FC Hyde Sorgho Brand.

But if we're able to successfully build the Sorgho Whiskey brand AND carry along the supply chain, our strategic advantage in the spirits industry is unmatched. And we should expect a sales multiple even more attractive than George Clooney's Casamigos Tequila.

Success begins with transforming our ownership structure into a “community based” form with a successful and dynamic WeFunder offering. A successful offering not only delivers the necessary capital to forge ahead with our development plans, but brings with it an army of loyal supporters, committed to help make THEIR company successful.

Success is completing the acquisition of Jersey Artisan Distilling – our third party producer of James FC Hyde Sorgho Whiskey;

Success is continuing to expand the number of retail establishments in our home state of New Jersey, and to continue to amp up consumer demand there so our whiskey gets pulled off of shelves, and replenishment order flow expands and accelerates;

Success is breaking into several other key states we're pursuing because of perceived “home field advantages”. Among these states are Kansas, Texas, Tennessee, Massachusetts and Nevada;

Success is rolling out Sorgho Whiskey from the Seabourn's Encore, fleet wide to include its other four ultra luxury cruise ships;

Success is further strengthening our relationship with America's sorghum growers, in the form of potential market development resources from United Sorghum Checkoff Program;

Success is completing the integration of google and bing search into our digital marketing campaign while continuing to enhance the impact of our social network brand building and advertising activities;

Success is continuing to build up our inventory in anticipating of surging demand for James FC Hyde Sorgho Whiskey;

And success is continuing to develop and strengthen our key supply chain partners – Delta BioRenewables and Jersey Artisan Distilling.

The baijiu and the sorghum point, is that the largest selling spirit on earth is made from sorghum. In the states we don't do anything. If you can get that point across, there's a huge untapped opportunity, and there's no real competition. We've got all of these advantages to dominate the space. It's a no brainer if you're betting on futures, which is really what it's about.

We'd like to think we laid the right foundation by having control of the supply, of the material that you need to build it, and having the intellectual property that assures that if we are successful we will own a trademark on sorgho whiskey. We really like to think we've done a lot of forethought and that we've laid a lot of the foundation in preparation for building a really tall building. If we're successful I expect to get bought out, because I'm not going to run this thing. When it turns into just running the trains on time, you need another leader. You need somebody not me.

Presently, Epec has a proprietary interest in the following companies in Delta Bio Renewables, LLC, The Sorgho Alliance, Inc., and Epic Spirits, Inc. Moreover, the Company entered into a binding Letter of Intent in June 2017 with Jersey Artisan Distilling, Inc. relating to the acquisition of the Distillery. More information on each entity and the anticipated acquisition is provided herein.

1. Delta Bio Renewables, LLC

The foundation of our SCP effort began with our investment in Delta BioRenewables, LLC (“DBR”) in 2012. As of the date of this Offering, Epec owns an approximately 14% equity stake of DBR and manages its interests through Board seats held by our Executive Chairman Steven Vanechanos and CEO Ron Miller. DBR has entered into a license agreement with Epec under which DBR and Epec collectively establishing quality standards for the sorghum syrup that can be used to make licensed Sorgho Whiskey® and DBR is required to pay Epec a 5% fee on all syrup sold for the production of licensed Sorgho Whiskey®.

Since 2009, DBR's focus has been to become the high volume and quality, low cost producer of sorghum sugar/syrup. It's been doing so by first incorporating as much sugar cane automated production equipment and technologies as practical into its own sorghum sugar processing operation. Further, it has developed proprietary technology, methods, best practices and techniques that are sorghum sugar extraction/processing specific (not necessarily applicable to sugar cane industry). Located in Memphis, Tennessee, DBR plants, grows and harvests sorghum on its own controlled acreage. It then crushes the harvested sorghum into sugar juice and other byproducts. Taking the raw sugar juice through a proprietary clarification and evaporation process, DBR is able to produce a clear, high quality distiller's syrup. DBR distiller's syrup is what we used to produce Sorgho Whiskey®.


2. The Sorgho Alliance, Inc.

The Company formed a wholly-owned subsidiary, The Sorgho Alliance, Inc. (f/k/a the Sorghrum™ Alliance, Inc.), for the purpose of launching our Sorgho Whiskey® brand and to handle all future licensing opportunities of the mark to sorghum sugar producers and Sorgho Whiskey® distillers, which will then be responsible for: 1) developing product standards (for both sorghum distiller's sugar and Sorgho Whiskey® spirits); 2) licensing use of the trademark to producers of sorghum sugar and distillers of Sorgho Whiskey®; and 3) managing compliance and the enforcement of its mark and licensing agreements. The Sorgho Alliance, Inc. will receive license fees from trademark users and other companies seeking to market Sorgho Whiskey® spirit products.

The Sorgho Alliance, Inc. (“SA”), on July 18, 2015, entered into a certain licensing agreement with Jersey Artisan Distilling, Inc.. Under terms of the licensing agreement, SA granted Jersey Artisan the license and privilege to use the brand and mark “Sorgho Whiskey®” in connection with the manufacturing, marketing, sale and distribution of approved spirits products pursuant to the product ingredient standards adopted by SA. The license is paid on a semi-annual basis, terminates December 31, 2017, and shall be automatically renewed for consecutive one (1) year periods thereafter, unless terminated sooner in accordance with the terms of said agreement.

3. Epic Spirits, Inc.

The Company formed Epic Spirits, Inc. (“Epic Spirits”) as a wholly-owned subsidiary to ensure that the first effort to launch the Sorgho Whiskey® spirit will be well resourced and highly dedicated. To that end, Epic Spirits will manage the production, marketing, and distribution of its own branded Sorgho Whiskey® – James F.C. Hyde Sorgho Whiskey®.

Epic Spirits, Inc., on July 18, 2015, entered into a certain licensing agreement with Jersey Artisan Distilling, Inc.. Under terms of the licensing agreement, Epic Spirits, Inc. granted Jersey Artisan the license and privilege to use the brand and mark “James FC Hyde” in connection with the manufacturing, marketing, sale and distribution of Sorgho Whiskey® spirit products. Jersey Artisan provides all of the production, regulatory, logistics and administrative services necessary to support the distribution of James F.C. Hyde Sorgho Whiskey®. Under the agreement, Jersey Artisan is further responsible for sales and distribution as well as maintaining compliance with the Federal Alcohol Tax and Trade Bureau and all other government regulatory agencies, including obtaining formula and label approvals; securing all necessary permits and licenses for the purpose of being the legal “bottler”; and obtaining and maintaining all necessary state and federal government approvals for the production and sale of James F.C. Hyde products. Epic Spirits, in turn, at its discretion, may provide Jersey Artisan with the necessary working capital to finance the initial and on-going inventory needs, and additionally shall be responsible for market and brand development, as well as demand generation. The license was renewed on December 31, 2016, and is eligible to renew for two (2) additional one (1) year periods unless terminated sooner in accordance with the terms of the agreement.

By leveraging Jersey Artisan's existing infrastructure assets on an outsourced basis, we believe the terms of the agreement are consistent with Epec's overarching strategy of continuing to execute our business plan while minimizing our risk profile and capital expenditures permitting us to maintain a capital lite footprint.


4. Jersey Artisan Distilling, Inc.

Jersey Artisan Distilling, Inc. (“JAD” or the “Distillery”) is a craft Distillery owned and operated by master distiller Brant Braue. JAD was founded in 2011 and currently has no employees and engages independent contractors to provide services to the Distillery. JAD manufactures four traditional brands of spirits, including James F.C. Hyde Sorgho Whiskey®. It prides itself as making spirits in classic styles, using modernized versions of the techniques that have made spirits great since colonial times. The Distillery is located at 32C Pier Lane West, Fairfield, NJ 07004. For more information on the Distillery, visit its website available at: https://www.jerseyartisandistilling.com/ or schedule a tour or tasting room session with Master Distiller Brant Braue.

On May 30, 2017, Epec and JAD entered into a binding letter agreement relating to the potential acquisition of JAD. The letter agreement outlined an all stock deal in which 100% of JAD’s assets, including the assumption of liabilities, contracts, licenses, and permits would be acquired by Epec for $400,000, payable in common shares of stock of Epec, at the strike price of $.05 per share. JAD’s book value at the time of the purchase and sale transaction shall be no less than $84,000; however, in such event, the purchase price shall be reduced respectively. Epec is in the process of performing a comprehensive due diligence inspection on JAD in relationship to the contemplated transaction. The parties are required to enter into a definitive Stock Sale Agreement upon closing.

Sales of distilled spirits reached nearly $72B in 2016, as strong growth in the whiskey segment drove demand for super-premium alcohol brands. The spirits sector saw volume growth of 2.4%, revenue growth up 4.5% and export volume growth up 6.8%. High end premium and Super Premium categories drove case growth and revenue growth. In the American whiskey segment, High End Premium revenues were up 5.7% to $1.8B as the price category’s revenue leader, Super-Premium volume sales were up 11.8% as the price category’s volume increase leader, according to The Distilled Spirits Council. Overall, American whiskey sales were up 6.8% in volume to 21.8M cases, and revenues were up 7.7% to $3.1B in sales.


The Distilled Spirits Council has determined that several factors are contributing to the spirits industry’s steady growth, including:
• the American Whiskey trend has plenty of room for growth, with the country trending back to historic levels of whiskey consumption.
• Consumer demand for brands with authentic, interesting backstories.
• Local distilleries drive interest in overall spirits category and help modernize state and local laws.
• Cocktails uniquely positioned to meet adult millennials’ demand for unique experiences.
• Spirits are now a fixture in popular culture and have become part of the norm.

Over the past decade plus, the U.S. wine and spirits industry has undergone dramatic consolidation and realignment of brands and brand ownership. The number of major importers in the U.S. has declined significantly. Today there are eight major companies: Diageo PLC, Pernod Ricard S.A., Bacardi Limited, Brown-Forman Corporation, Beam Suntory Inc., Davide Campari Milano-S.p.A., Remy Cointreau S.A. and Constellation Brands, Inc. A proliferation of new products and new expressions of existing brands within some of these companies, such as Smooth Amber by Pernod Ricard and Westland Distillery by Remy Countreau, demonstrates strength of the industry.

The beverage alcohol industry is highly competitive. We believe that we can compete on the basis of a unique product, quality, and by building brand recognition. Sorgho Whiskey® is positioned as a super premium brand – a category showing significant annual growth in revenue and volume sales, with room to grow. Our product will compete with other alcoholic and nonalcoholic beverages for consumer purchases, retail shelf space, restaurant presence and wholesaler attention. We will be competing with numerous multinational producers and distributors of beverage alcohol products, many of which have greater resources than us.

We have four direct competitors in the sorghum whiskey space, including:

1. SS Sorghum Whiskey, distilled by Still 630.
2. Southern Revival Brand Sorghum Whiskey, distilled by High Wire Distilling Co.
3. Queen Jennie, distilled by Old Sugar Distillery.
4. Brown Dog Sorghum Whiskey, distilled by AeppelTreow.

Of all the commercially produced and sold spirits today, we are not aware of any that require a feedstock as scarce or as expensive as sorghum sugar. Those facts alone, are enough to drive our management’s decision to position James F.C. Hyde Sorgho Whiskey® as a super-premium whiskey.

Premium and Super Premium spirits of all kinds generally justify their premium pricing because of expensive production costs and supply scarcity. Some premium spirits, like Tito's, claim to distill its Vodka six times – the effect: improve product quality and add to production cost. Others, like single malt scotch producer Macallan, use extended barrel aging periods to add to production costs, improve product quality and create supply scarcity. A recent price for a bottle of Macallan 15-year-old scotch carries a suggested retail price of $100 per 750ml bottle.

Also, by tracing sorghum's sugar history back to its abolitionist roots, and bringing prominent sorghum advocate, James F.C. Hyde, back to life with our brand, we are injecting a sense of ‘old and traditional’ into the whiskey – again to appeal to consumers of other super premium whiskeys.

Our plan is to focus our marketing effort on a single test market, New Jersey, while preparing the ground for certain states we believe afford us a “home field advantage”. Within New Jersey our campaign will target opinion leaders in the spirits industry – while expanding our multi-tiered integrated digital advertising paired with our brick and mortar, distributor friendly strategy. Success in our test market of New Jersey, becomes the blue print for success – in derivative form – in other home field advantage states in which ground preparation activities are presently underway.

The challenge any new consumer brand faces is the need to simultaneously stimulate consumer demand while driving product availability throughout a distribution channel. In that context, we view our marketing, advertising, brand development & brand awareness activities as part of a larger campaign to serve to stimulate consumer demand. To meet this demand, we plan to increase product availability via our increasing distributor network who will promote and place the product for retail purchase and consumption.

Our go to market strategy is predicated on the unprecedented capability and value of digital advertising. From the capability perspective, social media platforms such as Facebook enables us to: 1) tailor messaging to various targeted audiences based on demographics, interests and geography; 2) build a database from the targeted audience that offered a positive response for future harvesting; and 3) execute on a cost basis that is a mere fraction of traditional media. Search advertising offers a different kind of targeting and conversion, for example by "interest" predicated on search terms, such as “sorghum whiskey” or “gluten free whiskey”—direct descriptors of our James FC Hyde Sorgho Whiskey®. Again at an deeply discounted cost compared to traditional marketing methods.

With an exclusive focus in the U.S. Market, our campaign to drive brand awareness and demand will continue to depend on digital advertising, and on an increasingly larger scale. We will continue with Facebook as the foundation, both tapping into and growing our almost 28,000 Facebook "Like" fans. We intend to tap into search engines Google and Bing (63% & 21% of search market share respectively), aligning certain search terms (like "sorghum whiskey", "sorgho whiskey", "gluten free whiskey") with a "Shop for ....." online capability. One of the great aspects of the "Shop for ...." search term is its value as a brand builder/demand stimulator, as well as demand fulfiller. The brand building aspect is achieved when the search engine result prominently features a picture of our product, with a description & price. The search engine user then has an immediate purchase and consumption opportunity— effectively fulfilling demand.

Our on the ground, brick and mortar activities are prioritized according to states in which we believe we possess some kind of Home Field Advantage ("HFA"). Examples include New Jersey, the state in which we manufacture our product, Tennessee, where our sorghum is sourced, and Kansas, the country’s leading producer of sorghum. Once a state is classified as having a HFA , we work to identify potential distributors who may be a good fit with our brand and mission. We target distributors that specialize in selling craft brands as opposed to the well-known, national brands. In pitching to distributors, our goal is to be the most distributor friendly brand in the industry. We then work to support our distributors by intensifying the relevant digital ad campaign, facilitating the movement of Sorgho Whiskey® from the distributor's warehouse to retail outlets.
In addition to our integrated strategy of digital ads supporting on the ground brick and mortar distributors, we expect to do "traditional" on the ground event and activities. These include trade shows, whiskey tasting events, distributor sales force training, bartender events, and product tastings organized within retail outlets. While we believe there is still a need for these events, and there is value in them when properly utilized, we fully expect the lion's share of our marketing budget will will be invested in our integrated campaign of coordinated digital advertising supporting actual events on the ground.

The United Sorghum Checkoff Program (“USCP”) represents America's sorghum growers nationally. It is a “producer-funded organization dedicated to improving the sorghum industry through research, promotion and education.” See http://www.simplysorghum.com We have been a participant in USCP'S Cooperative Branding program since 2016 and recipient of a $5,000 subsidy in 2016 and $2,500 subsidy in 2017. The Cooperative Branding program affords advertising subsidies to active participants.

As our progress with James FC Hyde Sorgho Whiskey® has advanced, our relationship with USCP has strengthened. Witness, our recent invitation to attend the 2017 Commodity Classic in San Antonio, cosponsored by USCP, and to pour samples of our Sorgho Whiskey® in their booth. Our intention is to continue to strengthen this relationship, striving for the greatest level of advocacy we can earn from USCP. With USCP in the lead, we believe we can gain vast and endearing support within the sorghum grower community through this network.

We also intend to pursue co-marketing relationships with other producers of sorghum value added products. An example is Silver Palate Kitchen of Dumont NJ, which is now marketing a cereal brand, Grain Berry, with ONYX Sorghum. We believe anybody that spreads the word of the virtue of sorghum benefits the sorghum community as a whole. Our goal is to coordinate these campaigns and activities to leverage up the value of each advertising dollar invested.

The Company relies upon a third party licensed distiller –Jersey Artisan Distilling— for production and sales. Distilleries in the United States are subject to extensive federal, state and local laws and regulations, which are subject to change over time, including but not limited to the Federal Alcohol Administration Act, U.S. Customs Laws, Internal Revenue Code of 1986, and the Alcoholic Beverage Control Laws of all fifty states. The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulates the production, blending, bottling, sales and advertising, and transportation of alcohol products. The Distillery’s production operations are regulated by the state of New Jersey, and its sales and marketing activities are regulated by each state in which it markets products. Also, each state regulates the advertising, promotion, transportation, sale and distribution of alcohol products within its jurisdiction. The TTB Permit does not need to be renewed annually, whereas the New Jersey distiller’s license is renewed every 12-month period.

The Company and JAD are also subject to U.S. regulations on the advertising, marketing and sale of beverage alcohol. Labeling of spirits is also regulated in many markets, varying from health warning labels to importer identification, alcohol strength and other consumer information. All beverage alcohol products sold in the U.S. must include warning statements related to risks of drinking beverage alcohol products. The distribution of alcohol-based beverages is also subject to extensive federal and state taxation in the U.S. The Distillery’s licenses and permits could be revoked, suspended, or denied renewal cause at any time if the government determines that the Distillery’s conduct violates applicable regulations. The Company believes that it and JAD is/are in material compliance with applicable federal, state and other regulations. However, the Company and JAD operate in a highly regulated industry which may be subject to more stringent interpretations of existing regulations. Future compliance costs due to regulatory changes could be significant.

The Distillery is dependent on the following regulatory approvals:

• Distillery’s TTB Basic Permit, which was first granted in 2013.
• Distillery’s NJ Craft Distillery license, which was first granted in 2013.

Expenditures for compliance with federal, state and local environmental laws and regulations are fairly consistent from year to year and are not material to the Company and/or JAD. Such expenditures were approximately $1,000 for JAD in 2016. No material change is expected in fiscal year 2017.

Ongoing Reporting Compliance
The Company has not previously been subject to the ongoing reporting requirements of Regulation Crowdfunding and, as such, has not previously failed to comply with the requirements of Rule 202.

On June 30, 2017 the Company had approximately $14,500 in available cash and averages a burn rate of approximately below $12,500 per month. Our current runway is approximately one month.