1% of revenues per $125k raised | 1.5x investment amount
Investors in the first $100k also receive:
For California Residents: 12 bottles of our flagship wines from fruit (pick up at our San Diego storefront or shipping can be charged for California residents). 4 bottles of semi-sweet pomegranate wine, 4 bottles of semi-sweet cranberry wine, and 4 bottles of semi-sweet cherry/pomegranate wine.
For Out of State Residents: $120 in store credit for future mail order products (*Each state requires our corporation to get a license to mail alcoholic beverages into their state. Can be applied to Hand Sanitizer at present. Shipping costs would be the responsibility of the investor.)
REVENUE SHARE @ 1.5X RETURN
The company will use 1% of its gross revenues per $125,000 raised to pay back investors each quarter until 100% of your principal is returned plus 50% on top.
|1||We began turning a monthly profit in Oct. 2019 with over $70k in revenue. Up from $31,927 Oct. 2018|
|2||We're the only concept with mead, cider, seltzer, wine, kombucha and spirits all made in-house|
|3||Annual Revenue = $342k in 2017, $472k in 2018, $687k in 2019|
|4||Our founders are donating their shares to make the company community-owned|
|5||Conscious consumption is mainstreaming. 63% of consumers prefer to buy from purpose-driven brands|
|6||When existing shareholders require liquidity Wefunder investors will have opportunity to purchase|
|7||You can help the company succeed by voting on future business development opportunities|
|8||You can help improve the social value cooperative model to maximize the impact of conscious business|
As a leading progressive thinker, Alan’s passion and creativity only accentuate his entrepreneurial DNA. His timely expansion into the private event industry pairs perfectly with the tasting room’s core demographic and the distilleries vast product offering. It’s just one of many examples of his courageous leadership and effective guidance of FruitCraft, pivoting as necessary while remaining steadfastly committed to the company's principles.
FruitCraft undoubtedly has a phenomenal product line, revered by their loyal customer base and incidental consumers alike. My own personal anecdote would recall my very first visit to the fermentery. Before I finished my first glass that night, I was frantically conceiving how I would transport 10 cases of this flavor packed, refreshing and one-of-a-kind fruit wine from San Diego back home to Boston.
Alan has fast-tracked FruitCraft’s progress by incorporating its devoted community in a joint effort to model a reformed version of capitalism that seeks to benefit all of its contributors, not just the upper echelon. The School of Social Value is not a short-term trend. Corporations across the globe have begun adopting aspects of the social enterprise model and in turn they continue to fuel a seismic transformation in the way for-profit companies operate.
In my decade of investing, I have only come to know one thing for certain. That when all else fails, companies run by creative people delivering a high-quality product will always find a way to thrive. The most lucrative investments originated when an investor believed wholeheartedly in a driven, innovative and charismatic entrepreneur. The combination of people, product and profit margin has previously sufficed as grounds to invest in a blossoming enterprise. But as significant capital moves towards socially conscious investing and ESG funds (Environmental, Social and Governance), it is imperative that we incorporate a fourth “P” during our due diligence, by far the most critical – Purpose.
Prioritizing where I distribute my investment capital has always been essential. I seek to find companies whose underlying purpose is to better the quality of life for their consumers, employees and most importantly their community. I will only commit to founders and owners who allow their mission to steer their decision making process. Alan embodies that prerequisite to the fullest extent and I would put my money behind any venture with his name attached to it. When there is an obstacle, he envisions a solution. When things are static, he embraces flexibility and adjusts willingly. When there is an opportunity, he capitalizes and executes upon his strategy. I am proud to support FruitCraft and all that they stand for, but more importantly I support Alan. He has a knack for making this world a better place through meaningful change and a glass of vino.
We welcome you to join our community and embrace FruitCraft's initiative by raising a glass to good!
Here For A Purpose,
P.S. – The wine rocks!!
Over the past 30 years, new value propositions of organic, local, fair trade, and vegan have become mainstream concepts and have disrupted the marketplace causing large migrations of consumers who want to use their economic choices to make a difference.
As the negative consequences of our collective consumption become more visible it is apparent that there is a growing interest among conscious consumers to minimize any collateral damage and maximize the potential impact of our choices.
To this end, we've pursued designing a business model, a social value cooperative, that meets the need of the conscious consumer and allows them to participate in a way they never have before.
A social value cooperative is a company that is owned and run by a community of laborers, consumers and investors that uses its profits to create social value (or societal wealth).
At the core of the social value movement is a belief that life has purpose and that we find that purpose by helping one another. In essence, we're made happy, not by what we get, but by what we give.
If giving in this way helps us find meaning in this life, why are we building business to "get" instead of "give"?
It's from this place that the founders of FruitCraft have committed their founder's shares, representing 100% of the voting control of the company, to forming a social value cooperative. This cooperative will be designed to democratize the ownership of business by adding economic participants who take the social value pledge to a community-owned trust as owners. This will ensure that those who have voting control of the company are making decisions that map to creating social value, preventing negative outcomes attributable to self-interested decision making.
While we see some effect from political protests and calls to boycott big corporations, we don't often realize that we have other sources of power that can effect change. For those who want to to realize a more equitable world what's needed is a mass migration of consumers, investors, and laborers to prefer doing business with companies that are actively sharing wealth instead of hoarding it.
For those who want to use their economic power as a force for good and who want to join the ownership of the FruitCraft Social Value Cooperative we've come up with the social value pledge.
1. Consume Social Value: Join the Monthly Membership at $35 per month (link)
2. Invest Social Value: Invest $500 or more in this campaign
3. Labor Social Value: Email the founder to join a committee or our social media army
As we overhaul our agreements and we "demand" these changes through our economic choices, businesses in the market will "supply" what's being asked of them.
This will help democratize the marketplace and prevent future damage caused by enterprises that are too focused on producing profits at any societal cost.
Like with any good movement people need something to rally behind.
And FruitCraft Fermentery & Distillery is that brand.
Innovating in the alcohol industry (perhaps the most consumer facing of all industries), the FruitCraft concept is bringing to market the highest quality and most diverse array of craft alcohol offerings.
As manufacturers of hard cider, hard seltzer, hard kombucha, mead, wine made from fruits, traditional wine, and craft spirits, FruitCraft Fermentery & Distillery can open up locations in every major metropolitan market in the country.
This type of "blue ocean" growth is rare to find in entrepreneurship and represents a huge opportunity for the social value movement to mainstream social value capitalism through franchising the FruitCraft concept.
In doing so, FruitCraft can represent the first "alternative" for economic activists who want to use their consumer spending, investment dollars and labor to create the type of world we all deserve to live in.
It's no small task to organize thousands of people to migrate their consumption, investments and labor in a conscious way.
To date, calls from activists to change one's economic activity in order to affect change has been unspecific. We have been called to stop consuming with companies who are destroying our planet, but that call lacks power if we do not have viable alternatives to migrate our activity.
This is why we need to launch thousands of other social value cooperatives to allow consumers to open up the rest of their "wallet share" to allow for a comprehensive disruption of all consumer facing industries.
To this end, once FruitCraft has grown across the country it'll donate 100% of it's uncommitted profits to the School of Social Value, so that it can function as an incubator of social value cooperatives.
Until that time, the School will focus on mainstreaming social value capitalism through the production and publishing of social media content along with supporting the incubation and launch of new FruitCraft franchises in order to reach the required critical mass to make a difference at scale.
Anyone who wants to partner with FruitCraft is encouraged to subscribe to The School of Social Value YouTube linked here.
The aim of social value entrepreneurship is to design a business model that makes social value cooperatives the most competitive in the marketplace by appealing to conscious investors, laborers, and consumers.
This model has been refined and perfected after many years of first-hand entrepreneurship, but we're inviting investors on Wefunder to actually help codify its form and function.
Not only can prospective investors participate in group zoom meetings with the founder to answer questions ahead of investing, but once you've become an investor in FruitCraft we'll invite your input in zoom "brain-trust" committees so that you can help contribute to the system design and architecture of the social value cooperative business model.
And your opportunity for involvement won't stop there. We're currently beta-testing a system to encourage your participation and validation of future business development opportunities. Once rolled out, investors will have a level of control over the performance outcomes of the company, and will be able to nominate and vote on other opportunities FruitCraft is considering developing for growth.
Check out the video series below to gain more context for what FruitCraft and the School of Social Value are working on and consider being a part of our movement.
Thanks for your consideration,
FruitCraft Fermentery & Distillery has financial statements ending December 31 2019. Our cash in hand is $58,585.72, as of June 2020. Over the three months prior, revenues averaged $70,000/month, cost of goods sold has averaged $5,873/month, and operational expenses have averaged $64,879/month.
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 are makers of the newest types of craft alcoholic beverages. Cider, Mead, Hard Kombucha, Wine from Fruit & Craft Spirits/Cocktails. We dispense these beverages in our flagship San Diego location where we recently launched a robust membership program and host all types of events from birthdays to weddings.
I'd like to see the FruitCraft concept grow in 4 major marketplaces (San Diego, Orange County, Los Angeles & the Bay Area). In each market FruitCraft expects to plant several tasting room locations and to build inroads into restaurant and retail distribution.
California Fruit Wine Corp. was incorporated in the State of California in May 2013.
Since then, we have:
Historical Results of Operations
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 $715,937 in debt and $3,762,254 in equity.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 60 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 12 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
California Fruit Wine Corp. cash in hand is $58,585.72, as of June 2020. Over the last three months, revenues have averaged $70,000/month, cost of goods sold has averaged $5,873/month, and operational expenses have averaged $64,879/month, for an average burn rate of $752 per month. We're currently cash flow positive.
Our monthly revenue has been trending upwards since we opened our tasting room at the beginning of 2017. When we first opened, our monthly revenue was around $15,000 per month. As of February 2020 our monthly revenue reached $73,000. This is due in large part because of the transactional nature of the private events we've been hosting. The most meaningful part of our private events are weddings. We've created a perfect storm for the core decision makers when inquiries explore booking their wedding with FruitCraft. Our venue is beautiful and has multiple instagram worthy photo opps. We also are a one-stop shop as we do all the food and beverage service in house. Lastly, our craft beverages are well aligned with the preferences and lifestyle of 20 to 30 something year old brides that are considering our venue alongside many others.
For the first time in our company's history we're cash flow positive with regular recurring revenue. I expect the free cash from our cash flows to be a game changer in how we develop the business further. It has been painstaking driving our revenue from $15k per month to over $70k per month with limited free cash available. Now with cash to deploy for business development I expect our revenue to continue to increase with limited increase in our expenses. We'll move to hire a few key people, but the added expenses will be offset by the increased business those positions will bring in for us. We have capacity to fill up our calendar with weddings and other private events. This will continue to be our focus as there's potential to reach $200k per month in monthly sales at our flagship location in San Diego. At the same time, we expect monthly expenses to be about $140,000.
We have 3 core revenue channels that we've diversified and rely on to meet our cash flow requirements.
1. Private Events/ Weddings
2. Tasting Room/Restaurant Sales
We'll continue to diversify in the future with distribution sales and with mail order/deliver sales. We have no other sources of capital to rely on outside of existing revenues.
While we have developed 10 years of commercial expertise in the manufacturing (fermentation & distillation) of our products. Competitors with fermentation experience and/or capacity are widespread. And while many don't veer from their core products, there is nothing that can be patented that would prevent competitors from creating similar products.
We cannot be certain that the laws of various municipalities would allow for the expansion of our concept into certain regions. While we are familiar with the laws of the State of California, any growth projected in other states would require an assessment of compliance to do business in those states and we cannot guarantee we'll be able to expand into each market as we'll be required to comply with local laws and ordinances.
We expect to significantly expand our operations in the near future. Our anticipated future operations will place a strain on our management systems and resources. Our ability to successfully continue to market the Company’s products and services and implement our business strategy in a rapidly evolving market requires an effective planning and management process. We expect that we will need to continue to improve our transaction-processing, operational, financial and managerial controls and reporting systems and procedures, and will need to continue to expand, train and manage our workforce. Furthermore, we expect that we will be required to manage multiple relationships with various customers and other third parties. We cannot be certain that our current and planned personnel, systems, procedures and controls will be adequate to support our future operations, that management will be able to hire, train, retain, motivate and manage required personnel or our management will be able to successfully identify, manage and exploit existing and potential market opportunities.
We believe that our ability to attract customers, facilitate broad market acceptance of our products and our brand and enhance our sales and marketing capabilities depend on our ability to develop and maintain strategic relationships with key partners. If we are unable to develop or maintain key relationships, we may have difficulty attracting customers.
We rely or may in the future rely on a combination of patent, trademark, trade secret and copyright law and contractual restrictions to protect the proprietary aspects of our products. These legal protections afford only limited protection for our intellectual property and trade secrets. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or sales formats or to obtain and use information that we regard as proprietary. Litigation may be necessary in the future to enforce our intellectual property rights. If third parties prepare and file applications in the United States that claim trademarks used or registered by us, we may oppose those applications and be required to participate in proceedings before the United States Patent and Trademark Office to determine priority of rights to the trademark, which could result in substantial costs to us. Any litigation or adverse priority proceeding could result in substantial costs and diversion of resources and could seriously harm our business and operating results. Finally, we may in the future sell our products internationally, and the laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the United States. Many countries have a "first-to-file" trademark registration system. As a result, we may be prevented from registering or using our trademarks in certain countries if third parties have previously filed applications to register or have registered the same or similar trademark. Our means of protecting our proprietary rights may not be adequate, and our competitors could independently develop similar products.
The Company contemplates that it will raise additional capital. There can be no assurance that the Company will be successful in raising additional amounts, which may result in delays or even loss of profits, business or assets. There is no corporate requirement that a minimum amount of funds will be raised from this Offering, and the Company is unable to predict the amount of funds, if any, that it may receive from this Offering. The Company believes that if substantially all of the funds in this Offering are raised successfully, then the proceeds from this Offering, combined with other sources of liquidity, will be sufficient to fund the Company’s capital requirements for at least twelve months following the completion of this Offering. The Company may be required to obtain additional financing. If the board of directors of the Company determines to obtain additional capital through the issuance of equity securities of the Company it is permitted to do so. Likewise, if the Company is permitted to issue subordinated debentures to obtain additional capital. Subordinated debentures represent unsecured obligations of the Company, which are subordinate to the payment of more senior debts. Debentures do not dilute the Company’s earnings.
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.
This offering is being conducted on an expedited basis due to circumstances relating to COVID-19 and pursuant to the SEC’s temporary regulatory COVID-19 relief. [Rule 201(z)(1)(i)]
COVID-19 may have material impacts on our business. While we've maintained break even during the pandemic, the future impacts of the virus are unknown.
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