Use: S.W. Operations Expansion.
Goal: A 5-fold increase in revenue.
Investors receive preferred shares convertible to 14% ownership.
A portion of funds will be used to start the production of biofuel & hand sanitizer.
CEO has 7 years of industry experience. CMO has an MBA from Boston University (summa cum laude).
Key Advisors have 30+ years experience in retail alcohol as well as Deutsche Bank and Merrill Lynch.
Why investors us
$255,192 since our founding
I am proud to lead the investment in Fuego Fino, Inc. (FgFino). As an advisor to the project, I have seen the tremendous progress they have made, not just in our accelerator program, but personally. I look forward to taking part in their growth. I strongly believe that having a wine and spirits house as a part of our portfolio is a big asset.
Barbara BickhamManager At WIF AX, LLC Lead Investor
Investing $25,000 this round
My love for good crafted spirits. Also the future is woman
Graduated Suma Cum Laude with Honors from The University of Georgia with a Bachelor of Arts (BA) Advertising and obtained a full scholarship to Boston University where I graduated with a Master's of Science in Advertising.
The journey began with my Grandmother, who was a Mexican Moonshiner.
Growing Up & Growing The Brand
Growing up, I travelled throughout Mexico gaining the necessary knowledge and experience to launch a successful wine & spirits house.
Sales, Hitting The Pavement To Learn Firsthand
After licensing, I imported my first brand, and hit the pavement running, wanting to learn first hand how to meet the demands of two clients -- first the liquor stores (retailers) -- then the consumers.
Accelerator Completion! Proud WIF AX First Class Graduate
I completed the course with honors, lessons, and relationships which will last a lifetime.
Now Launching Our First Crowd Funded Project
On May 1st, 2020 - we are launching our first crowdfunding campaign, offering investors the same opportunity as we are giving our Venture Capital partners.
What does your company do?
We bottle and distribute the highest quality wine and spirits. We hope to increase our revenue by buying out our suppliers and distributors. We save money by having products bottled closer to where they are consumed. Glass is heavy, so bottling nearer to distribution centers saves costs. We create U.S. jobs by moving operations closer to U.S. consumers, because those that buy local enjoy the fact they their hard earned dollars are providing employment for those in their community.
Where will your company be in 5 years?
The Goal: The largest Planet-Friendly wine & spirits house who specializes in developing the next high-growth product segments. The Growth: Increased profit margins from the reduction of middlemen. Localized facilities in all U.S. states, with consistent job creation in U.S. Qualified Opportunity Zones.The Environment: All delivery vehicles reduced reliance on fossil fuels by using our biofuel. Recycled glass used in 100% of all products produced, with bottle-refund policies in all 50 states.
Why did you choose this idea?
The business was passed down from my grandmother, who was a Mexican Moonshiner.
Why is this a good idea, right now? What changed in the world? Why wasn't this done a few years ago?
Why now? A Recession Proof Product.
Alcohol sells in the good times and bad. Respecting the planet and adding jobs in the U.S. is progressive. Owning larger portions of our supply chain increases growth and revenue.
What changed? The rise of Progress Brands.
Consumers began to demand that companies act more responsibly, caring for their environment and communities.
Why was this not done before? The lazy middleman.
Alcohol was viewed as a product that sold itself. Its supply is controlled by licensing. Middlemen license holders grew fat and lazy, collecting profits like a toll fee. The environment was not a consideration, waste was flushed down the drain, and job creation in U.S. was an afterthought.
How far along are you? What's your biggest obstacle?
I have all licensing, both federal and state. I have succeeded in selling the first pallet, with product in 50 locations. Our business obstacle is access to capital.
Who competes with you? What do you understand that they don't?
Southern Wine and Spirits and importers such as Patron tequila, and Casamigos are our competitors.
We own a larger portion of our supply chain, allowing us to capture twice as much revenue as they do. We learned how to leverage positions in cash on delivery markets, while they still wait to be paid. We are planet friendly, giving us an edge with environmentally aware consumers. We learned to create a scalable local branding model, to spread nationwide while remaining the brand next door.
How will you make money?
From increased sales. We will accomplish this growth by:
1. Expanding From Importer to Distributor: We are currently a licensed importer, and we plan to expand into both wholesale and distribution of wine and spirits. We plan to accomplish this through licensing and the possible acquisition of partners within our distribution chain.
2. Expansion of Product Offerings: In 2018-2019 we had only one product line, tequila. We plan on expanding into all categories of wine and spirits, including whiskey, mezcal, and bacanora.
What are the biggest risks? If you fail, what would be the reason? What has to go right for you to succeed?
Risk factors include lack of access to capital. We also run the risk that younger generations may not consume as much alcohol as older members of the population. Further risks can be found in the risk factors outlined within our regulation CF filing.
This is the largest factor of success -- learning from past mistakes -- and learning to become a forever student, rather than having all the right answers. If we fail, it is because we have forgotten how to continue to learn.
To succeed we have to continue to adapt, adjust and overcome any obstacle that stands in the way of success.
What are some important lessons you have learned that give you an edge?
That being best is more profitable than being the first. That quality speaks volumes, you must have a quality product or all other marketing gets you nowhere. That consumer taste cannot be ignored, and making a product for a hand full of expert drinkers is not the way to go. That liquid and glass have weight -- so locating products closer to the consumer is an edge. That cash on market are better than credit markets.
What are some of the things people do not know about the alcohol market?
1. That licensing is key. Many forget that alcohol is a controlled substance, so a Start-up in the wine and spirits industry which has licensing -- is not a Start-up. They have gone through stringent background checks to obtain licensing, and they have spent good money and time just to be able to offer product. 2. Cash is king! The U.S. has 7 states where sales have to be paid on the spot, the law forbids credit. These markets are key.
What are a few odd facts learned about your products or services?
The age is 25, not 21 -- most people know that you cannot sell alcohol to a minor, but did you also know that you are not supposed to use young people in alcohol ads? The age limit for models and those featured in advertisements for alcohol is not 21, it is 25.
What type of products have you sold? And what lessons did you learn in that experience?
Tequila. I learned that alcohol has two customers: 1. the bar/restaurant/liquor store, etc; and, 2. The ultimate drinker or consumer. You cannot sell to the second one -- the drinker -- if the first (bar, etc) is not a buyer. In this industry, your first customer is a business, and businesses want sales and profits, they want a partner.
What are some funny things you learned about your industry and business?
Let's see: 1. Most taste awards metals you see displayed on labels are paid for, not earned. Every person who pays a fee gets an award, the higher the fee paid, the better the award. This is why I do not enter. 2. Organic fans are better than those who are bought. Having a social media person use your product because they like it, has much more value than paying for fake affection. 3. A good brand has no face. Attaching your brand to a personality is not always a good thing. People make mistakes, and bad choices, so if you attach your brand to a personality -- be ready for that reality. 4. Most alcohol made in Mexico is gluten-free, why? Because it is made from agave syrup. So in some ways, it may be good for you. 5. Alcohol is a form of ethanol, if you make it strong enough -- you can help power a car.
What is the Casamigos model?
Casamigos, partly owned by Actor George Clooney sold for nearly $1 Billion dollars just 4 years after it began with a $1.7M investment. It sold at a multiple of sales, not profit -- so they were focused on growth. More importantly, I learned through research that their sales growth was not solely due to Clooney's fame; but moreover, the fact that they focused on the retailer by giving great product support. For example, they gave away shaved ice machines, glassware and other items which bartenders use. I took this same example to our marketing approach, giving away Jarritos -- authentic glassware -- and other items that made sales to customers easier for our retailers.
Fuego Fino has financial statements ending December 31 2019.
Our cash in hand is $642, as of March 2020. Over the three months prior, revenues averaged $65/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $300/month.
At a Glance
to December 31
Short Term Debt
Raised in 2019
Cash on Hand
As of 03/31/20
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We bottle and distribute the highest quality wine and spirits.
We hope to increase our revenue by buying out our suppliers and distributors.
We intend to save money by having products bottled closer to where they are consumed. Glass is heavy, so bottling nearer to distribution centers saves costs.
We plan on creating U.S. jobs by moving operations closer to U.S. consumers, because those that buy local enjoy the fact they their hard earned dollars are providing employment for those in their community.
The Goal: The largest Planet-Friendly wine & spirits house who specializes in developing the next high-growth product segments.
The Growth: We hope to have increased profit margins from the reduction of middlemen. Localized facilities in all U.S. states, with consistent job creation in U.S. Qualified Opportunity Zones.
The Environment: We hope all delivery vehicles reduce reliance on fossil fuels by using our biofuel. Recycled glass used in 100% of all products produced, with bottle-refund policies in all 50 states.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Fuego Fino, Inc. was incorporated in the State of Florida in May 2017.
Since then, we have:
Use: S.W. Operations Expansion.
Goal: A 5-fold increase in revenue.
A VC Structured Preferred Round:
Investors receive preferred shares convertible to 14% ownership.
a portion of funds will be used to start the production of biofuel & hand sanitizer from alcohol waste usually throw out.
Historical Results of Operations
Our company was organized in May 2017 and has limited operations upon which prospective investors may base an evaluation of its performance.
Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $4,056.42 compared to the year ended December 31, 2018, when the Company had revenues of $7,225.73. Our gross margin was 99.48% in fiscal year 2019, compared to -40.67% in 2018.
Assets. As of December 31, 2019, the Company had total assets of $8,637.45, including $14.71 in cash. As of December 31, 2018, the Company had $10,089.77 in total assets, including $1,467.03 in cash.
Net Loss. The Company has had net losses of $2,179.32 and net losses of $42,823.37 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
Liabilities. The Company's liabilities totaled $0 for the fiscal year ended December 31, 2019 and $0 for the fiscal year ended December 31, 2018.
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
To-date, the company has been financed with $142,250 in equity.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 18 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 1 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Fuego Fino, Inc. cash in hand is $642, as of March 2020. Over the last three months, revenues have averaged $65/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $300/month, for an average burn rate of $235 per month. Our intent is to be profitable in 18 months.
We cut our loss of -42,823.37 at the end of Q4 2018, to a loss of -2,179.32 at the end of Q4 2019. Most of 2018 losses can be attributed to cost related to establishing operations in Arizona, and building a network of clients. Arizona is a cash on demand (COD) market, thus each delivery resulted in an immediate cash infusion. 2018 positioned the company to reap benefits from those relationships in 2019.
Revenues: We expect to have a 5-fold increase in revenue over the next 3-6 months from an expansion of production and distribution relationships, which may or may not include an acquisition of a competitor, supplier, or distributor. Our past financial results are based on one test pallet of product sold. We plan to expand our product offerings and leverage the network which was established in 2018-2019 to increase sales revenue by 500%.
Expenses: We expect expenses to fall over the next 18- months from 82% of Gross Revenue to 55% of Gross Revenue.
Break-even: Total capital raise needed to break-even is $78,284
Other Sources of Capital: Company has current assets of $3,627 of which it can liquidate working capital.
A note from Wefunder. Unlike companies on the NASDAQ, early-stage startups have little operating history. Financial analysis is not as useful when there is limited data. It's more important to predict the size of the future market. If the founder achieves their vision, will enough customers pay the company enough money?
It's also common for fast-growing startups to lose money even faster: they are investing in future growth. In these cases, it's often better to check if the Cost of User Acquisition (CAC) is lower than the Lifetime Value (LTV) of that customer. If one spends $1000 today to make $10,000 over the next five years, that may be a smart bet. Amazon is a famous example of re-investing potential profits to maximize growth over 20 years.
Growth of operations will depend on the acceptance of our products and consumer discretionary spending. The acceptance of our products by customers is critically important to our success. Shifts in user preferences away from our products, our inability to create alcoholic products that appeal to consumers, or changes in our products that eliminate items popular with some consumers could harm our business. Also, our success depends to a significant extent on discretionary user spending, which is influenced by general economic conditions and the availability of discretionary income. Accordingly, we may experience an inability to generate revenue during economic downturns or during periods of uncertainty, where users may decide to purchase beverage products that are cheaper or to forego purchasing any type of alcohol, due to a lack of available capital. Our product will be a more expensive, higher end tequila catering to the present premiumization trends that have been observed. Any material decline in the amount of discretionary spending could have a material adverse effect on our sales, results of operations, business and financial condition. We cannot be certain that the products that we offer will become, or continue to be, appealing and as a result there may not be any demand for these products and our sales could decrease, which would result in a loss of revenue. Additionally, there is no guarantee that interest in our products will continue, which could adversely affect our business and revenues. Demand for products which we sell depends on many factors, including: ▪ the number of customers we are able to attract and retain over time;
▪ the competitive environment in the tequila industry, as well as the alcoholic beverage industry as a whole, may force us to reduce prices below our desired pricing level or increase promotional spending which may have an impact on customer perception; and
▪ the ability to anticipate changes in user preferences and to meet customers’ needs in a timely, cost-effective manner; All of these factors could result in immediate and longer-term declines in the demand for the products we plan to offer, which could adversely affect our sales, cash flows and overall financial condition. An investor could lose his or her entire investment as a result.
We have limited management resources and are dependent on key executives. We are currently relying on key individuals to continue our business and operations and, in particular, the professional expertise and services of Jessica Contreras, Chief Executive Officer, as well as key members of our executive management team and others in key management positions. Our future success depends in large part on the continued service of Ms. Contreras. If our officers and directors chose not to serve or if they are unable to perform their duties, and we are unable to retain a replacement qualified individual or individuals, this could have an adverse effect on our business operations, financial condition and operating results if we are unable to replace the current officers and directors with other qualified individuals.
We face substantial competition in our industry, including many new entrants into spirits and consolidation among beverage alcohol producers, wholesalers, and retailers, could hinder the marketing, sale, or distribution of our products.
In the United States, we intend to sell our products either to distributors for resale to on-premise venues and off-premise retail outlets or, in those states that control alcohol sales, to state governments who then sell them to end customers and consumers. In our non-U.S. markets, we intend use a variety of route-to-consumer models – including, in many markets, reliance on others to market and sell our products. In particular, in jurisdictions that control alcohol sales such as Canada, we intend to sell our products to the provincial liquor control boards who then sell them to end customers and consumers; and in other jurisdictions we intend to sell our products utilizing the aforementioned distributor model. Consolidation among spirits producers, distributors, wholesalers, suppliers, or retailers could create a more challenging competitive landscape for our products. Consolidation at any level could hinder the distribution and sale of our products as a result of reduced attention and resources allocated to our brands both during and after transition periods, because our brands might represent a smaller portion of the new business portfolio. Expansion into new product categories by other suppliers, or innovation by new entrants into the market, could increase competition in our product categories.
Our competitors may respond to industry and economic conditions more rapidly or effectively than we do. Other suppliers, as well as wholesalers and retailers of our brands, offer products that compete directly with ours for shelf space, promotional displays, and consumer purchases. Pricing (including price promotions, discounting, couponing, and free goods), marketing, new product introductions, entry into our distribution networks, and other competitive behavior by other suppliers, and by wholesalers and retailers, could adversely affect our sales, margins, and business and financial results. While we seek to take advantage of the efficiencies and opportunities that large retail customers can offer, they often seek lower pricing and purchase volume flexibility, offer competing own-label products, and represent a large number of other competing products. If the buying power of these large retail customers continues to increase, it could negatively affect our financial results.
Our industry requires the attraction and retention of talented employees. Success in the beverage industry, does and will continue to require the acquisition and retention of highly talented and experienced individuals. Due to the growth in the market segment targeted, such individuals and the talent and experience they possess is in high demand. There is no guarantee that we will be able to attract and maintain access to such individuals. If we fail to attract, train, motivate and retain talented personnel, our business, financial condition, and operating results may be materially and adversely impacted, which could result in the loss of your entire investment.
We will depend on a limited number of suppliers of raw and packaging materials. We rely upon a limited number of suppliers for raw and packaging materials used to make and package our products. Our success will depend in part upon our ability to successfully secure such materials from suppliers that are delivered with consistency and at a quality that meets our requirements. The price and availability of these materials are subject to market conditions. Increases in the price of our products due to the increase in the cost of raw materials could have a negative effect on our business. If we are unable to obtain sufficient quantities of raw and packaging materials, delays or reductions in product shipments could occur which would have a material adverse effect on our business, financial condition and results of operations. The supply and price of raw materials used to produce our products can be affected by a number of factors beyond our control, such as frosts, droughts, other weather conditions, economic factors affecting growing decisions, and various plant diseases and pests. If any of the foregoing were to occur, no assurance can be given that such condition would not have a material adverse effect on our business, financial condition and results of operations. In addition, our results of operations are dependent upon our ability to accurately forecast our requirements of raw materials. Any failure by us to accurately forecast its demand for raw materials could result in an inability to meet higher than anticipated demand for products or producing excess inventory, either of which may adversely affect our results of operations.
The inherent uncertainty in supply/demand forecasting could adversely affect our business, particularly with respect to our aged products.
There is an inherent risk of forecasting imprecision in determining the quantity of aged and maturing products to produce and hold in inventory in a given year for future sale. The forecasting strategies we use to balance product supply with fluctuations in consumer demand may not be effective for particular years or products. There is an inherent risk of forecasting error in determining the quantity of maturing stock to lay down in a given year for future consumption as a result of changes in business strategy, market demand and preferences, macroeconomic conditions, introductions of competing products, and other changes in market conditions. Any forecasting error could lead to our inability to meet the objectives of our business strategy, future demand, or lead to a future surplus of inventory and consequent write down in value of maturing stocks. If we are unable to accurately forecast demand for our products or efficiently manage its inventory, this may have a material adverse effect on our business and financial results. Further, we cannot be certain that we will be successful in using various levers, such as pricing changes, to create the desired balance of available supply and consumer demand for particular years or products. As a consequence, we may be unable to meet consumer demand for the affected products for a period of time. Furthermore, not having our products in the market on a consistent basis may adversely affect our brand equity and future sales.
Changes in consumer preferences and purchases, and our ability to anticipate or react to them, could negatively affect our business results.
We intend to operate as a branded consumer products company in a highly competitive market, and our success depends on our continued ability to offer consumers appealing, high-quality products. Consumer preferences and purchases may shift due to a host of factors, many of which are difficult to predict, including changes in economic conditions, demographic and social trends; public health policies and initiatives; changes in government regulation of beverage alcohol products; the potential legalization of marijuana use on a more widespread basis within the United States or elsewhere which may cannibalize alcohol sales; and changes in travel, leisure, dining, gifting, entertaining, and beverage consumption trends. Consumers may begin to shift their consumption and purchases of our premium and super-premium products, more commonly found in on-premise establishments, in favor of off-premise purchases. This includes consumption at home as a result of various factors, including shifts in social trends, proliferation of smoking bans, and stricter laws relating to driving while under the influence of alcohol. Shifts in consumption channels such as these could adversely impact our profitability. Consumers also may begin to prefer the products of competitors or may generally reduce their demand for brands produced by larger companies. Over the past several years, the number of small, local distilleries in the United States has grown significantly. This is being driven by a trend of consumers showing increasing interest in locally produced, regionally sourced products. As many more competitive brands enter the market, it could have a negative impact on the demand for our premium tequila brands. In addition, we could experience unfavorable business results if we fail to attract consumers from diverse backgrounds and ethnicities in the United States and in our non-U.S. markets. Demographic forecasts in the United States for several years after 2017 indicate a slight decrease in the population segment aged 21 to 24; fewer potential consumers in this age bracket could have a negative effect on industry growth rates and our business. To continue to succeed, we must anticipate or react effectively to shifts in demographics, consumer behavior, consumer preferences, drinking tastes, and drinking occasions.
There may be a detrimental impact to our products’ acceptance if consumer sentiment or perception towards Mexico, the jurisdiction our agave is sourced from, declines.
If we otherwise fail to develop or implement effective business, portfolio, and brand strategies, our growth, stock price, or financial results could suffer. More broadly, if consumers shift away from spirits our financial results could be adversely affected.
We believe that new products, line extensions, label and bottle changes, product reformulations, and similar product innovations by both our competitors and us will compete increasingly for consumer drinking occasions. Product innovation is a significant element of our growth strategy; however, there can be no assurance that we will continue to develop and implement successful line extensions, packaging, formulation or flavor changes, or new products. Unsuccessful implementation or shortlived popularity of our product innovations could result in inventory write-offs and other costs, reduction in profits from one year to the next, and also could damage consumers’ perception of the brand family. Our inability to attract consumers to our product innovations relative to our competitors’ products – especially over time – could negatively affect our growth, business, and financial results.
Costs or unavailability of materials could adversely affect our financial results, as could our inability to obtain certain finished goods or to sell used materials.
Our products use materials and ingredients that we purchase from suppliers. Our ability to make and sell our products depends upon the availability of the raw materials, product ingredients, finished products, wood, glass and PET bottles, cans, bottle closures, packaging, and other materials used to produce and package them. Without sufficient quantities of one or more key materials, our business and financial results could suffer. For instance, only a few glass producers make bottles on a scale sufficient for our requirements, and a single producer supplies most of our glass requirements.
Weather, the effects of climate change, diseases, and other agricultural uncertainties that affect the mortality, health, yield, quality, or price of the various raw materials used in our products also present risks for our business, including in some cases potential impairment in the recorded value of our inventory. Changes in weather patterns or intensity can disrupt our supply chain as well, which may affect production operations, insurance costs and coverage, and the timely delivery of our products.
Water is an essential component of our products, so the quality and quantity of available water is important to our ability to operate our business. If droughts become more common or severe, or if our water supply were interrupted for other reasons, high quality water could become scarce.
If the social acceptability of our products declines, or governments adopt policies disadvantageous to beverage alcohol, our business could be adversely affected.
Our ability to market and sell our products depends heavily on societal attitudes toward drinking and governmental policies that both flow from and affect those attitudes. In recent years, increased social and political attention has been directed at the beverage alcohol industry. For example, there remains continued attention focused largely on public health concerns related to alcohol abuse, including drunk driving, underage drinking, and the negative health impacts of the abuse and misuse of beverage alcohol. While most people who drink enjoy alcoholic beverages in moderation, it is commonly known and well reported that excessive levels or inappropriate patterns of drinking can lead to increased risk of a range of health conditions and, for certain people, can result in alcohol dependence. Some academics, public health officials, and critics of the alcohol industry in the United States, Europe, and other parts of the world continue to seek governmental measures to make beverage alcohol more expensive, less available, or more difficult to advertise and promote. If future high-quality scientific research indicated more widespread serious health risks associated with alcohol consumption – particularly with moderate consumption – or if for any reason the social acceptability of beverage alcohol were to decline significantly, sales of our products could decrease.
Significant additional labeling or warning requirements or limitations on the availability of our products could inhibit sales of affected products.
Various jurisdictions have adopted or may seek to adopt significant additional product labeling or warning requirements or limitations on the availability of our products relating to the content or perceived adverse health consequences of some of our products. Several such labeling regulations or laws require warnings on any product with substances that the state lists as potentially associated with cancer or birth defects. Our products already raise health and safety concerns for some regulators, and heightened requirements could be imposed. If additional or more severe requirements of this type become applicable to one or more of our major products under current or future health, environmental, or other laws or regulations, they could inhibit sales of such products.
We will probably depend on a small number of large retailers for a significant portion of our sales. Food and beverage retailers in the U.S. and other markets have been consolidating, resulting in large, sophisticated retailers with increased buying power. They are in a better position to resist our price increases and demand lower prices. They also have leverage to require us to provide larger, more tailored promotional and product delivery programs. If we and our bottlers and distributors do not successfully provide appropriate marketing, product, packaging, pricing and service to these retailers, our product availability, sales and margins could suffer.
We may depend on third party manufacturers for a portion of our business. A portion of our sales revenue may be dependent on third party manufacturers that we do not control. The majority of these manufacturers’ business comes from producing and/or selling either their own products or our competitors’ products. As independent companies, these manufacturers make their own business decisions. They may have the right to determine whether, and to what extent, they manufacture our products, our competitors’ products and their own products. They may devote more resources to other products or take other actions detrimental to our brands. In most cases, they are able to terminate their manufacturing arrangements with us without cause. We may need to increase support for our brands in their territories and may not be able to pass on price increases to them. Their financial condition could also be adversely affected by conditions beyond our control, and our business could suffer as a result. Deteriorating economic conditions could negatively impact the financial viability of third party manufacturers. Any of these factors could negatively affect our business and financial performance.
Failure of third-party distributors upon which we rely could adversely affect our business. We will rely heavily on third party distributors for the sale of our products to retailers. The loss of a significant distributor could have a material adverse effect on our business, financial condition and results of operations. Our distributors may also provide distribution services to competing brands, as well as larger, national or international brands, and may be to varying degrees influenced by their continued business relationships with other larger beverage companies. Our independent distributors may be influenced by a large competitor if they rely on that competitor for a significant portion of their sales. There can be no assurance that our distributors will continue to effectively market and distribute our products. The loss of any distributor or the inability to replace a poorly performing distributor in a timely fashion could have a material adverse effect on our business, financial condition and results of operations. Furthermore, no assurance can be given that we will successfully attract new distributors as they increase their presence in their existing markets or expand into new markets.
Substantial disruption to production at our manufacturing and distribution facilities could occur. A disruption in production at our beverage manufacturing facility could have a material adverse effect on our business. In addition, a disruption could occur at any of our other facilities or those of our suppliers, bottlers or distributors. The disruption could occur for many reasons, including fire, natural disasters, weather, water scarcity, manufacturing problems, disease, strikes, transportation or supply interruption, government regulation, cybersecurity attacks or terrorism. Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more or may take a significant time to start production, each of which could negatively affect our business and financial performance.
We will most likely be subject to seasonality related to sales of our products. Our business is subject to substantial seasonal fluctuations. Accordingly, our operating results may vary significantly from quarter to quarter. To date, we have not generated any revenues.
We may fail to comply with applicable government laws and regulations. We are subject to a variety of federal, state and local laws and regulations in the U.S. These laws and regulations apply to many aspects of our business including the manufacture, safety, labeling, transportation, advertising and sale of our products. Violations of these laws or regulations in the manufacture, safety, labeling, transportation and advertising of our products could damage our reputation and/or result in regulatory actions with substantial penalties. In addition, any significant change in such laws or regulations or their interpretation, or the introduction of higher standards or more stringent laws or regulations, could result in increased compliance costs or capital expenditures. For example, changes in recycling and bottle deposit laws or special taxes on our beverages and our ingredients could increase our costs. Regulatory focus on the health, safety and marketing of beverage products is increasing. Certain federal or state regulations or laws affecting the labeling of our products, such as California’s “Prop 65,” which requires warnings on any product with substances that the state lists as potentially causing cancer or birth defects, are or could become applicable to our products.
We face various operating hazards that could result in the reduction of our operations. Our operations are subject to certain hazards and liability risks faced by beverage companies that manufacture and distribute alcoholic products, such as defective products, contaminated products and damaged products. The occurrence of such a problem could result in a costly product recall and serious damage to our reputation for product quality, as well as potential lawsuits. Although we maintain insurance against certain risks under various general liability and product liability insurance policies, no assurance can be given that our insurance will be adequate to fully cover any incidents of product contamination or injuries resulting from our operations and our products. We cannot assure you that we will be able to continue to maintain insurance with adequate coverage for liabilities or risks arising from our business operations on acceptable terms. Even if the insurance is adequate, insurance premiums could increase significantly which could result in higher costs to us.
Litigation and publicity concerning product quality, health and other issues could adversely affect our results of operations, business and financial condition. Our business could be adversely affected by litigation and complaints from customers or government authorities resulting from product defects or product contamination. Adverse publicity about these allegations may negatively affect us, regardless of whether the allegations are true, by discouraging customers from buying our products. We could also incur significant liabilities, if a lawsuit or claim results in a decision against us, or litigation costs, regardless of the result. Further, any litigation may cause our key employees to expend resources and time normally devoted to the operations of our business.
Risks Related to our Intellectual Property It is difficult and costly to protect our proprietary rights. Our commercial success will depend in part on obtaining and maintaining trademark protection and trade secret protection of our products and brands, as well as successfully defending these trademarks against third-party challenges. We will only be able to protect our intellectual property related to our trademarks and brands to the extent that we have rights under valid and enforceable trademarks or trade secrets that cover our products and brands. Changes in either the trademark laws or in interpretations of trademark laws in the U.S. and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our issued trademarks or in third-party patents. The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage.
We may face intellectual property infringement claims that could be time-consuming and costly to defend, and could result in our loss of significant rights and the assessment of treble damages. From time to time we may face intellectual property infringement, misappropriation, or invalidity/non-infringement claims from third parties. Some of these claims may lead to litigation. The outcome of any such litigation can never be guaranteed, and an adverse outcome could affect us negatively. For example, were a third party to succeed on an infringement claim against us, we may be required to pay substantial damages (including up to treble damages if such infringement were found to be willful). In addition, we could face an injunction, barring us from conducting the allegedly infringing activity. The outcome of the litigation could require us to enter into a license agreement which may not be under acceptable, commercially reasonable, or practical terms or we may be precluded from obtaining a license at all. It is also possible that an adverse finding of infringement against us may require us to dedicate substantial resources and time in developing non-infringing alternatives, which may or may not be possible. In the case of diagnostic tests, we would also need to include non-infringing technologies which would require us to re-validate our tests. Any such re-validation, in addition to being costly and time consuming, may be unsuccessful. Finally, we may initiate claims to assert or defend our own intellectual property against third parties. Any intellectual property litigation, irrespective of whether we are the plaintiff or the defendant, and regardless of the outcome, is expensive and timeconsuming, and could divert our management’s attention from our business and negatively affect our operating results or financial condition.
We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property. Although we try to ensure that we, our employees, and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we, our employees, or independent contractors have used or disclosed intellectual property in violation of others’ rights. These claims may cover a range of matters, such as challenges to our trademarks, as well as claims that our employees or independent contractors are using trade secrets or other proprietary information of any such employee’s former employer or independent contractors. As a result, we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to management.
Risks Related to this Offering Our officers and directors and their affiliates will exercise significant control over Fuego Fino. Currently, our officers, directors, and other insiders, may have individual interests that are different from yours and will be able to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, which could delay or prevent someone from acquiring or merging with us. It should also be noted that the shares for sale in this Offering have no voting rights and shareholders under this Offering will not be able to vote on any matter for the foreseeable future.
There is no market for our stock and for the foreseeable future, it is unlikely one will develop. Prior to this offering, there has been no public market for shares of our preferred or our common stock. An active market may not develop following completion of this offering, or if developed, may not be maintained.
We have no intention to pay cash dividends on our preferred or common stock for the foreseeable future. We currently expect to retain future earnings, if any, to finance the growth and development of our business and do not anticipate paying any cash dividends for the foreseeable future. Therefore, you possibly will not receive any return on an investment in our preferred or converted common stock unless you sell your preferred or converted common stock for a price greater than which you paid for it.
Our offering price is arbitrary and bears no relationship to our assets, earnings, or book value. There is no current public trading market for the Company's stock and the price at which the Shares are being offered bears no relationship to conventional criteria such as book value or earnings per share. There can be no assurance that the offering price bears any relation to the current fair market value of the stock.
New shareholders will experience immediate dilution. The net tangible book value of the preferred or converted common stock offered hereby will be substantially diluted below the offering price paid by investors. Therefore, new shareholders will experience immediate dilution.
The Company may undertake additional equity or debt financing that may dilute the shares in this offering The Company may undertake further equity or debt financing which may be dilutive to existing shareholders, including you, or result in an issuance of securities whose rights, preferences and privileges are senior to those of existing shareholders, including you, and also reducing the value of shares subscribed for under this offering.
An investment in the shares is speculative and there can be no assurance of any return on any such investment An investment in the Company’s shares is speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.
The shares are offered on a “best efforts” basis and the Company may not raise the maximum amount being offered Since the Company is offering the shares on a “best efforts” basis, there is no assurance that the Company will sell enough shares to meet its capital needs. If you purchase shares in this offering, you will do so without any assurance that the Company will raise enough money to satisfy the full use of proceeds to Company which the Company has outlined in this offering circular or to meet the Company’s working capital needs.
If the maximum offering is not raised, it may increase the amount of long-term debt or the amount of additional equity it needs to raise There is no assurance that the maximum amount of shares in this offering will be sold. If the maximum offering amount is not sold, we may need to incur additional debt or raise additional equity in order to finance our operations. Increasing the amount of debt will increase our debt service obligations and make less cash available for distribution to our shareholders. Increasing the amount of additional equity that we will have to seek in the future will further dilute those investors participating in this offering.
We have not paid dividends in the past and do not expect to pay dividends in the foreseeable future, so any return on investment may be limited to the value of our shares We have never paid cash dividends on our shares and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our shares will depend on earnings, financial condition and other business and economic factors affecting it at such time that management may consider relevant. If we do not pay dividends, our shares may be less valuable because a return on your investment will only occur if its stock price appreciates.
The Company may not be able to obtain additional financing Even if the Company is successful in selling the maximum number of shares in the offering, the Company may require additional funds to continue and grow its business. The Company may not be able to obtain additional financing as needed, on acceptable terms, or at all, which would force the Company to delay its plans for growth and implementation of its strategy which could seriously harm its business, financial condition and results of operations. If the Company needs additional funds, the Company may seek to obtain them primarily through additional equity or debt financings. Those additional financings could result in dilution to the Company’s current shareholders and to you if you invest in this offering.
An investment in the Company's shares could result in a loss of your entire investment An investment in the Company's shares offered in this offering involves a high degree of risk and you should not purchase the shares if you cannot afford the loss of your entire investment. You may not be able to liquidate your investment for any reason in the near future.
Because the Company does not have an audit or compensation committee, shareholders will have to rely on our directors to perform these functions The Company does not have an audit or compensation committee comprised of independent directors or any audit or compensation committee. The board of directors performs these functions as a whole. No members of the board of directors are independent directors. Thus, there is a potential conflict in that board members who are also part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.
The Company has made assumptions in its projections and in forward looking statements that may not be accurate The discussions and information in this offering circular may contain both historical and “forward-looking statements” which can be identified by the use of forward-looking terminology including the terms “believes,” “anticipates,” “continues,” “expects,” “intends,” “may,” “will,” “would,” “should,” or, in each case, their negative or other variations or comparable terminology. You should not place undue reliance on forward-looking statements. These forward-looking statements include matters that are not historical facts. Forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements contained in this offering circular, based on past trends or activities, should not be taken as a representation that such trends or activities will continue in the future. To the extent that the offering circular contains forward-looking statements regarding the financial condition, operating results, business prospects, or any other aspect of the Company’s business, please be advised that the Company’s actual financial condition, operating results, and business performance may differ materially from that projected or estimated by the Company. The Company has attempted to identify, in context, certain of the factors it currently believes may cause actual future experience and results to differ from its current expectations. The differences may be caused by a variety of factors, including but not limited to adverse economic conditions, lack of market acceptance, reduction of consumer demand, unexpected costs and operating deficits, lower sales and revenues than forecast, default on leases or other indebtedness, loss of suppliers, loss of supply, loss of distribution and service contracts, price increases for capital, supplies and materials, inadequate capital, inability to raise capital or financing, failure to obtain customers, loss of customers and failure to obtain new customers, the risk of litigation and administrative proceedings involving the Company or its employees, loss of government licenses and permits or failure to obtain them, higher than anticipated labor costs, the possible acquisition of new businesses or products that result in operating losses or that do not perform as anticipated, resulting in unanticipated losses, the possible fluctuation and volatility of the Company’s operating results and financial condition, adverse publicity and news coverage, inability to carry out marketing and sales plans, loss of key executives, changes in interest rates, inflationary factors, and other specific risks that may be referred to in this offering circular or in other reports issued by us or by third-party publishers.
The Company has significant discretion over the net proceeds of this offering The Company has significant discretion over the net proceeds of this offering. As is the case with any business, particularly one without a proven business model, it should be expected that certain expenses unforeseeable to management at this juncture will arise in the future. There can be no assurance that management's use of proceeds generated through this offering will prove optimal or translate into revenue or profitability for the Company. Investors are urged to consult with their attorneys, accountants and personal investment advisors prior to making any decision to invest in the Company.
You should be aware of the long-term nature of this investment There is not now, and likely will not be in the near future, a public market, for the shares. Because the shares have not been registered under the securities act or under the securities laws of any state or non-united states jurisdiction, the shares may have certain transfer restrictions. It is not currently contemplated that registration under the securities act or other securities laws will be affected. Limitations on the transfer of the shares may also adversely affect the price that you might be able to obtain for the shares in a private sale. You should be aware of the long-term nature of your investment in the Company. You will be required to represent that you are purchasing the securities for your own account, for investment purposes and not with a view to resale or distribution thereof.
You will not have a vote or influence on the management of the Company Substantially all decisions with respect to the management of the Company will be made exclusively by the officers, directors, managers or employees of the Company. You will have a very limited ability, if at all, to vote on issues of Company management and will not have the right or power to take part in the management of the Company and will not be represented on the board of directors or by managers of the Company. Accordingly, no person should purchase shares unless he or she is willing to entrust all aspects of management to the Company.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
IN ADDITION TO THE RISKS LISTED ABOVE, BUSINESSES ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY THE MANAGEMENT. IT IS NOT POSSIBLE TO FORESEE ALL RISKS THAT MAY AFFECT THE COMPANY. MOREOVER, THE COMPANY CANNOT PREDICT WHETHER THE COMPANY WILL SUCCESSFULLY EFFECTUATE THE COMPANY'S CURRENT BUSINESS PLAN. EACH PROSPECTIVE PURCHASER IS ENCOURAGED TO CAREFULLY ANALYZE THE RISKS AND MERITS OF AN INVESTMENT IN THE SECURITIES AND SHOULD TAKE INTO CONSIDERATION WHEN MAKING SUCH ANALYSIS, AMONG OTHER FACTORS, THE RISK FACTORS DISCUSSED ABOVE.
Due to the COVID-19 pandemic, we may face issues acquiring customers and securing distribution partners. It is unknown how this will impact market demands going forward.
Kanisha Davis is a part-time officer. The Company may not make the same progress as if they were full-time.
The Board of Directors
Advisor @ Lakeshore Fundraising, LLC
Communications Director @ Fuego Fino, Inc
Advisor @ WIF AX, LLC
Chief Marketing Officer
Past Equity Fundraises
Related Party Transactions
Founder Friends & Family Seed
Friends and family
Founder Friends & Family Seed
Jay Jay Smith
Friends and family of founders
Friends and family Extended, preferred shares Series A
Sister of Founder
Founder Friends & Family Seed
Founder Friends & Family
Founder Friends & Family Seed
Friends & Family
Founder Friends & Family Seed
Friends and Family of Founders
Friends and family Extended, preferred shares series B
Friends & Family of Founders
Friends & Family Extended, preferred shares series B
Use of Funds
43.5% Supply Chain Investment
35% Investment in Product
10% Operating Expenses
6.5% Wefunder intermediary fee
5% General and Administrative
43.5% Supply Chain Investment
35% Investment in Product
10% Operating Expenses
6.5% Wefunder intermediary fee
5% General and Administrative
Class of Security
Securities (or Amount) Authorized
Securities (or Amount) Outstanding
Series C Preferred
Series B Preferred
Series A Preferred
Form C Filing on EDGAR
The Securities and Exchange Commission hosts the official Form C on their EDGAR web site.
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