Agape s Affections, LLC DBA TonTon s Artisan Affections

Transcription

1 Agape s Affections, LLC DBA TonTon s Artisan Affections An Offering Document for the Sale of Securities in the form of Convertible Notes Offered to Oregon Residents Only Offering opens January 22, 2015 and closes May 22, 2016 [This offering was extended on January 15, 2016.] Contact: Michael Antonopoulos, Owner Address: 932 Tolman Ck Rd, Ashland, Oregon Telephone: artisanaffections@gmail.com Website: TonTon s: P.O. Box 574, Talent, OR OFFERING DISCLOSURE DOCUMENT THESE SECURITIES ARE BEING SOLD IN RELIANCE ON AN EXEMPTION TO THE FEDERAL SECURITIES REGISTRATION REQUIREMENTS UNDER SECTION 3(a)(11) OF THE SECURITIES ACT OF 1933 AND UNDER ORS OF THE OREGON SECURITIES LAW. THESE SECURITIES CAN ONLY BE SOLD TO RESIDENTS OF OREGON AND ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. IN MAKING AN INVESTMENT DECISION, INVESTORS SHOULD RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS REVEALED IN THESE OFFERING DOCUMENTS, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE AUTHORITY OR REGULATORY COMMISSION NOR HAVE THEY CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. BUSINESS TECHNICAL SERVICE PROVIDERS HAVE NOT REVIEWED THE OFFERING DOCUMENTS AND CANNOT DETERMINE THE MERITS OF THIS OFFERING.

2 Executive Summary TonTon s Artisan Affections is a value-added food processor, café, and artisan food incubator located in Talent, Oregon, in the beautiful Rogue Valley. Launched in 2012, it specializes in locally sourced, vegan, non-gmo, gluten-free foods. The offering. TonTon s is raising $150,000 by selling convertible notes for a minimum of $125 and a maximum amount of $2,500 per person. TonTon s has reached its minimum funding goal of $10k. Funds will be used to build out a food manufacturing facility and café located on site. This facility will also help incubate other Rogue Valley gluten-free, non-gmo food artisans.

3 The Team Michael Antonopoulos, CEO, Founder, Food Innovator Michael Antonopoulos, founder of TonTon s, created the business, brand and recipes in response to limited financial opportunities in society with the intention of creating meaningful, fair-paying employment for himself and his community. Before starting the business in 2012, Michael was on food stamps. He used them to create his original recipes, and TonTon s now has four part-time employees, all making a fair living wage. Michael grew up in the kitchen of a Greek home and has been cooking and baking most of his life. During the 90's in Athens, Ohio, Michael was a worker owner at Crumb's Bakery, where he learned the Zen and business of baking. Moving to the West Coast in 2003, Michael became a fitness trainer, integrating fitness theory with martial arts, yoga and healthful nutrition. The foods he creates are always healthy, delicious, and intentional. Board of Advisors Tim Root, Executive Advisor Oregon Manufacturing Extension Program (OMEP) Jack Vitacco, Executive Advisor Southern Oregon Small Business Development Center (SO-SBDC) Chris Cook, Marketing and Leadership Capiche Services Kelly McNamara, Product and Retail Advisor Ashland Food Coop Jessica Klinke, Bookkeeper Grow-Up Bookkeeping Ian Villareal, CPA H&R Block The Business

4 History TonTon s Artisan Affections started production in September 2012 and quickly established a reputation for high-quality foods and business practices that support the greater community. Specializing in fresh, homemade hummus, our focus is gluten-free, locally sourced, non-gmo foods. TonTon s Artisan Affections, now in our 4 th year in business, has become a regional standard and staple throughout the Rogue Valley. In 2016, we signed contracts with our new representative food brokers based in Eugene, Grass Roots Marketing, as their premiere and exclusive hummus brand was a year of major transition for TonTon's that's culminated in the establishing of our new production facility, TonTon's Community Casbah at 109 Talent Ave, in the heart of downtown Talent. TonTon s is passionate about creating delicious, healthy, regionally sourced foods made with integrity while providing meaningful, rewarding employment for our community. Holding to the highest social and environmental standards, we practice cooperative business principles in support of our community and local food system. A Regional Vision The Rogue Valley is known for its wines, cheeses, luscious fruits and vegetables, and other artisan homegrown delicacies. TonTon s Artisan Affections is a valuable addition to the Valley s offerings. Seeing the growing trend for local, non-gmo nutritious foods, TonTon s innovative expansion model is to establish regional production facilities around the nation, starting in the Rogue Valley, to open new markets and compete with national brands to keep food products local, fresh and made with integrity. Using TonTon s infrastructure as a model, we seek to empower regional food systems and create national worker-owned and operated franchise production hubs. With this growth model we will be expanding TonTon s Artisan Affections brand by incorporating franchised kitchens, allowing them to create new innovative product lines utilizing their personal talents and regional resources. Business Health: Sales and Revenue The business was built from the ground up, bootstrapping all product development and marketing, packaging design, sales and distribution through our first four years. With consistent annual revenue averaging $100k since 2013, TonTon s is poised to expand into new regional markets and to establish a strong online marketplace. Growth Plans To facilitate the funding of retail equipment and offset the cost of rent, we are establishing partnerships for the new location to spearhead and manage three elements of our expansion: Retail/Farmers Market, Retail Food Service (the café) and a Wine & Beer Garden.

5 The retail market hosts a year round artisan market in our retail space, selling veggies, breads, cheeses and other local delights. Our venue has a parking lot attached that connects to the new plaza off Talent Ave. There's space for vendors, and we plan to host a weekly evening farmers market. We already have a market manager. The café will have three tables inside and eight tables on the patio for patrons to dine al fresco. The café will have full access to the kitchen and retail equipment, mixer, ovens, etc. We are interviewing candidates to fill this role. We have a contract with a kitchen tenant who will spearhead the retail food services. Portal Brewing Company will sublease our beer and wine garden. With two tenants in the new facility this strengthens our position. Product Lines 1. Super Fresh Hummus: We produce three flavors of super-fresh hummus. 2. Cookies: We produce grain-free Paleo cookies that are unique in the industry (we were first to market) 3. Snackers: We produce a unique line of roasted chickpea Snackers. 4. New Lines: Other gluten-free recipes are poised to launch including pitas and crackers to accompany our hummus, seasonal fruit and veggie turnovers, cakes and pastries. Gluten-Free Pita Bread: Since moving to new kitchen we have created and launched our newest line of foods with great enthusiasm and early success. Our new vegan gluten-free pita bread is made from a sourdough culture we created. This is a true old-world sourdough bread that even people who aren t gluten free are excited about. We have no competitors in this market. Sales Channels and Brand Loyalty Throughout the Rogue Valley we have utilized regional farmers markets, product demos and word of mouth to establish and promote our brand. Retail sales at farmers markets have provided an ideal interface for marketing directly to our

6 community and conducting primary market research for our products. Now that we have our own facility, we have increased our visibility and access to a local, stable market. Our new location and our relationships with customers have created brand loyalty and excitement about our business and established strong public relations and support. Our foods by nature are social and are quite often brought to parties, events and potlucks. Once people taste our foods and hear our story, they become avid supporters. Summary Now in 4 th year in business with an average revenue $100k each year Established reputable brand and line of foods with growing fan base TonTon s has an active, credible Board of Advisors and a committed staff that champions our business. New growth opportunities based on the new location in Talent, Oregon. New model of shared tenancy and tools has strengthened the business. Risks Associated with this Offering Investment in the securities of smaller companies can involve greater risk than is generally associated with investment in larger, more established companies. The OIO laws are new, no public trading market currently exists to sell these Notes in Oregon, nor can we give any assurances that one will exist in the future. Investing in new businesses in rural towns can be risky, with low population and slower economic growth. Benefits of Investing Social and environmental stewards, committed to nurturing community and regional food sheds. Our gluten-free, non-gmo production facility will incubate new food entrepreneurs in rural Southern Oregon. Supporting a new model of artisan food production to empower regions with economic and food integrity. Investors will help bring our products to a store near you. The growth of valuable, fair jobs in southern Oregon. The Offering Objectives and Terms Funding Goals: Maximum: $150,000 Minimum: $10,000 Our minimum funding goal of $10k has been reached, and new production equipment has been purchased.

7 Use of Funds The funds raised supports business development and provides working capital to support the growth of the Company. The maximum funding goal of $150k equips our permanent production facility and café (The Community Casbah) in Southern Oregon. This facility will also serve as a business incubator for other regional glutenfree, non-gmo, Rogue Valley food processors to rent space and build their businesses, adding additional value into Rogue Valley s artisan food ecosystem. Minimum investment is $250 per Oregon resident Maximum investment of $2,500 per Oregon resident If TonTon s Artisan Affections does not raise the minimum amount stated by January 22, 2016, the invested funds will be returned to each investor within 45 days, less the original payment processing fee of one to three percent. Rogue Federal Credit Union will hold investments in a secured savings account until minimum funding amount is reached. Refund will be issued as a check. [UPDATE: TonTon s reached its minimum.] Note Issuance at Closing At closing, a convertible promissory note in the amount invested will be issued to each individual investor in the Company. Closing date is scheduled for May 22, 2016, but may be extended until January 2017 if the company chooses. Maturity Date The Note will be due 36 months from the date of Closing, or if the Participating Company quits the program or if there is an acquisition of the Company, on the date of such event (the Maturity Date ). Convertible Notes As this investment remains a loan, this Note matures and is due 36 months from closing date of this offering. Simple interest will accrue at the rate of 5% per annum and interest only will be paid 12 months from the closing date and again for three years. Upon the third year (36 months from closing) interest plus principal will be paid unless conversion has occurred (see below). Payments will be made by check. The possibility for conversion of notes to Common Stock is possible. This timing may occur at the discretion of the Founder and Principal Michael Antonopoulos, or will occur as a result of a Future Financing Event. Conversion and Future Financing Optional Conversion. The Note and accrued interest will be convertible at the option of the Investor into shares of equity of the next class or series issued by the Company (the "Next Equity Financing") at the time of the Next Equity Financing and at a conversion price equal to 75% of the issue price of the shares sold in the Next Equity Financing (the "Conversion Price"), and

8 otherwise on the same terms and conditions applicable to the other purchasers. Mandatory Conversion. If the Company's Next Equity Financing raises at least $500,000, is led by a venture capital firm or an angel investment group experienced in investing in startup companies, and takes the form of a priced preferred stock financing with industry standard terms and conditions (a Qualified Equity Financing), the Note and accrued interest will automatically convert into shares issued in the Qualified Equity Financing upon its initial closing at the Conversion Price (at discounted price defined above) and otherwise on the same terms and conditions applicable to the other purchasers in such Qualified Equity Financing. Optional Conversion. The Note will be convertible into shares of the Company s Common Stock at any time while the Note is outstanding, at the option of the Investor. The Note will convert into (A) that number of shares of the Company s Common Stock equal to the quotient obtained by dividing (i) the aggregate amount of principal and accrued interest due under this Note, by (ii) the fair market value of the Company s Common Stock (the Common Issue Price ); or, (B) on the Maturity Date, into 1% of the shares of the Company's outstanding stock for each $125 of principal. The Common Issue Price shall be equal to, at the Investor s option, either (X) the fair market value as determined by an independent certified business valuation expert (with ASA or ABV credential) selected by the Company from among a list of three experts provided by the Investor and paid for by the Investor, or (Y) the issue price of most recently issued equity in the Next Equity Financing at the issue price paid for such shares and on the same terms and conditions applicable to the investors purchasing such shares. If the Note has not converted to equity prior to the Maturity Date and the Investor has not otherwise converted the Note into equity, the amount of the Note and accrued interest will be due and payable on the Maturity Date. Discounts At point of incorporation, or any time after in which Investor holds this note, it may convert to general stock in the Corporation at 75% of the issue price of said shares. For every $1 in stock value, Note holder receives $1.25 in stock plus interest applied to an investor s holdings. If the investor chooses not to convert or we remain an LLC, then it is considered a loan at 5% interest paid annually, due in 3 years, as described above. Buy Back Options TonTon s retains the right to buy back these Notes at time of incorporation at the current fair market price.

9 Reporting The Company will provide to the Investor bi-annual financial statements and a biannual summary of business activity after closing of the raise. The Investor may choose to extend the term of the Note upon written notice to the Company prior to the Maturity Date. Protective Provisions Prior written notice will be provided to Investors at least 10 business days prior to the following events: (a) Sale, merger, consolidation, license, transfer, liquidation, dissolution, recapitalization or reorganization of the Company or all or substantially all of its assets. (b) Amendments to the Company s Articles of Incorporation or Bylaws that could adversely affect the rights of the Investor. (c) Insider transactions (including compensation to employee shareholders), unless approved by a majority of the disinterested outside directors. (d) Repurchases or redemptions of equity securities, or payment of dividends or other distributions of equity securities. (e) Acquisition of any company s securities or assets; (f) Material change to Company s core business strategy or its declared use of funds; or (g) Compensation decisions for key employees or payment of salaries to any employee in excess of $100,000. Default The Note will be in default and all principal and accrued interest shall be due in full in the event of any of the following: (a) Failure to pay interest or principal when due; (b) Bankruptcy, insolvency or similar proceedings; or (c) Any material breach by the Company of the terms of the Note or other agreements with the Investor; (d) Borrower takes action to voluntarily dissolves or ceases to exist, or any final and non-appealable order or judgment is entered against Borrower ordering its dissolution. Amendment The Note and any related agreements may be amended with the consent of the Company and the Investor.